Transferred OTS Regulations and FDIC Regulations Regarding Management Official Interlocks, 42225-42231 [2014-16976]
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Federal Register / Vol. 79, No. 139 / Monday, July 21, 2014 / Proposed Rules
applicant for implementation of the
proposed regulations. The draft
guidance document is intended for use
by applicants, licensees, Agreement
States, and the NRC staff. The draft
guidance document (ADAMS Accession
No. ML13172A189) has three parts: The
first two are revisions to existing
guidance in the NUREG–1556,
‘‘Consolidated Guidance About
Materials Licenses’’, series of volumes
for medical uses and commercial
nuclear pharmacies; and the third part
is a series of questions and answers to
assist licensees in understanding and
implementing the new proposed
regulatory changes. The NUREG–1556
documents mainly provide guidance to
applicants in the completion and
submission of materials license
applications. The documents also
include model procedures that an
applicant may want to use when
developing its radiation safety program,
as well as tools that licensees may
employ when completing the
corresponding material license
applications.
Parts 1 and 2 of the draft guidance
document will be incorporated into the
next comprehensive revision of relevant
volumes of NUREG–1556.
Part 3 of the draft guidance document
will be added to the NRC’s Medical
Uses Licensee Toolkit Web site (https://
www.nrc.gov/materials/miau/med-usetoolkit.html) when the questions and
answers are finalized.
Dated at Rockville, Maryland, this 10th day
of March 2014.
Laura A. Dudes,
Director, Division of Materials Safety and
State Agreements, Office of Federal and State
Materials, and Environmental Management
Programs.
[FR Doc. 2014–16752 Filed 7–18–14; 8:45 am]
BILLING CODE 7590–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 348 and 390
RIN 3064–AE20
Transferred OTS Regulations and FDIC
Regulations Regarding Management
Official Interlocks
Federal Deposit Insurance
Corporation.
ACTION: Notice of proposed rulemaking.
tkelley on DSK3SPTVN1PROD with PROPOSALS
AGENCY:
In this notice of proposed
rulemaking, the Federal Deposit
Insurance Corporation (‘‘FDIC’’)
proposes to rescind and remove parts of
our regulations, entitled ‘‘Management
SUMMARY:
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Official Interlocks’’ relating to State
savings associations. This subpart was
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
(‘‘Dodd-Frank Act’’). The requirements
for State savings associations in the
transferred OTS regulations are
substantively similar to those in the
FDIC’s regulations, which is also
entitled ‘‘Management Official
Interlocks’’ and is applicable for all
insured depository institutions (‘‘IDIs’’)
for which the FDIC has been designated
the appropriate Federal banking agency.
Upon removal of the transferred OTS
regulations applicable for all IDIs for
which the FDIC has been designated the
appropriate Federal banking agency will
be found in our 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–AE20 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:
Martha L. Ellett, Legal Division, (202)
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898–6765; Mark Mellon, Legal Division,
(202) 898–3884; Jennifer Maree, Legal
Division, (202) 898–6543; Deborah S.
Calvert, Division of Risk Management
Supervision, (703) 254–0976.
SUPPLEMENTARY INFORMATION:
I. Background
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, (‘‘Transfer Date’’), the
powers, duties, and functions formerly
performed by the OTS were respectively
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.
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
1 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010) (codified at 12 U.S.C. 5301 et seq.).
2 76 FR 39247 (July 6, 2011).
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Federal Register / Vol. 79, No. 139 / Monday, July 21, 2014 / Proposed Rules
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.
One of the OTS rules transferred to
the FDIC governed management official
interlocks. The OTS rule, formerly
found at 12 CFR part 563f (‘‘part 563f’’),
was transferred to the FDIC with only
minor, nonsubstantive changes and is
now found in the FDIC’s rules at part
390, subpart V, entitled ‘‘Management
Official Interlocks.’’ Before the transfer
of the OTS rules and continuing today,
the FDIC’s rule contained in part 348,
also entitled ‘‘Management Official
Interlocks,’’ prohibits a management
official from serving two nonaffiliated
depository organizations in situations
where the management interlock likely
would have an anticompetitive effect.
After careful review and comparison of
part 390, subpart V and part 348, the
FDIC proposes to rescind part 390,
subpart V, because, as discussed below,
it is substantively redundant to existing
part 348. Simultaneously we propose to
make technical conforming edits to our
existing rule and add an exemption to
part 348 applicable to State savings
associations which have issued stock in
connection with a qualified stock
3 76
FR 47652 (Aug. 5, 2011).
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issuance pursuant to section 10(q) of
HOLA.4
FDIC’s Existing 12 CFR Part 348 and
Former OTS’s Part 563f (Transferred, In
Part, to FDIC’s Part 390, Subpart V)
The Depository Institution
Management Interlocks Act (‘‘Interlocks
Act’’) 5 was enacted as Title II of the
Financial Institutions Regulatory and
Interest Rate Control Act of 1978.6 The
Interlocks Act generally prohibits bank
management officials from serving
simultaneously with two unaffiliated
depository institutions or their holding
companies (‘‘depository organizations’’).
The purpose of the Interlocks Act and
the rules governing management
interlocks generally is to foster
competition between unaffiliated
institutions. Thus, the Interlocks Act
seeks to prohibit interlocks that could
enable two institutions to engage in
anticompetitive behavior. The scope of
the prohibition depends on the size and
location of the organizations involved.
For example, the Interlocks Act
prohibits interlocks between
unaffiliated depository organizations,
regardless of size, if each organization
has an office in the same community
(the ‘‘community prohibition’’).
Interlocks are also prohibited between
unaffiliated depository organizations if
each organization has total assets of $50
million or more and has an office in the
same relevant metropolitan statistical
area (‘‘RMSA’’) (the ‘‘RMSA
prohibition’’). The Interlocks Act also
prohibits interlocks between
unaffiliated depository organizations,
regardless of location, if each
organization has total assets exceeding
specified thresholds (the ‘‘major assets
prohibition’’).
On July 19, 1979, the FDIC, the OTS,7
the OCC, and the FRB (collectively, the
‘‘Federal banking agencies’’), published
a joint final rule to implement the
statutory mandates of the Interlocks
Act.8 On August 2, 1996, in order to
comply with the mandate of section
303(a) of the Riegle Community
Development and Regulatory
Improvement Act of 1994 (‘‘CDRI
Act’’),9 the Federal banking agencies
published a joint final rule 10 to
implement revisions to the Management
Official Interlocks regulations.
Section 303(a) of the CDRI Act,
requires the Federal banking agencies to
conduct a systematic review of their
regulations and written policies in order
to streamline and modify them to
improve efficiency, reduce unnecessary
costs, and eliminate constraints on
credit availability.11 Section 303(a) also
instructs the Federal banking agencies
to remove inconsistencies and
outmoded and duplicative
requirements.12 Finally, section 303(a)
requires the Federal banking agencies to
consult and coordinate with one another
‘‘to make uniform all regulations and
guidelines implementing common
statutory or supervisory policies.’’ 13
Pursuant to the CDRI’s mandate, the
Federal banking agencies consulted and
coordinated with respect to this
rulemaking and on an interagency basis
jointly issued rules that are
substantively similar with regard to
management official interlocks.14
Accordingly, the portion of the OTS
regulations that applied to State savings
associations and their affiliates,
originally codified at 12 CFR part 563f
and subsequently transferred to FDIC’s
part 390, subpart V, is substantively
similar to the current FDIC regulations
in part 348, with the following
exceptions. Specifically, part 348 of the
FDIC regulations applies to management
officials of insured nonmember banks
and their affiliates,15 while part 390,
subpart V applies to management
officials of State savings associations
and their affiliates.16 part 390, subpart V
also contains an exception from the
prohibition against management
interlocks that is not included in part
348. This exception, found in
390.403(i), allows a State savings
association that has issued stock in
connection with a qualified stock
issuance pursuant to section 10(q) of
HOLA to be exempt from the
prohibition against management
interlocks.17 By amending part 348 and
rescinding part 390, subpart V, the FDIC
will streamline its regulations and
reduce redundancy.
11 12
U.S.C. 4308(a)(1)(A).
U.S.C. 4308(a)(1)(B).
13 12 U.S.C. 4308(a)(3).
14 61 FR 40293 (Aug. 2, 1996).
15 12 CFR 348.1.
16 12 CFR 390.400.
17 The Interlocks Act contains an additional
exemption for interlocks as a result of an emergency
acquisition of a savings association authorized in
accordance with section 13(k) of the Federal
Deposit Insurance Act (12 U.S.C. 1823(k)) if the
FDIC has given its approval to the interlock. The
FDIC will continue to list this additional exemption
in its management interlocks regulation in part 348.
12 12
Owners’ Loan Act, Public Law 101–73;
§ 301, 103 Stat. 277, (1989) (codified at 12 U.S.C.
1461 et seq.)
5 12 U.S.C. 3201 et seq.
6 Public Law 95–630, 92 Stat. 3665 (Nov. 10,
1978).
7 The joint rulemaking included the Federal
Home Loan Bank Board, the OTS’s predecessor
agency.
8 44 FR 42152 (July 19, 1979).
9 12 U.S.C. 4803(a).
10 61 FR 40293 (Aug. 2, 1996).
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Federal Register / Vol. 79, No. 139 / Monday, July 21, 2014 / Proposed Rules
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Although the former OTS rule part
563f applies to management officials of
savings and loan holding companies,
the FDIC does not supervise savings and
loan holding companies for purposes of
this rule. Section 312 of the Dodd-Frank
Act 18 divides and transfers the
functions of the former OTS to the FDIC,
OCC, and FRB by amending section
1813(q) of the FDI Act. Specifically,
section 312 transfers the former OTS’s
power to regulate State savings
associations to the FDIC, while it
transfers the power to regulate savings
and loan holding companies to the
FRB.19 As a result, whereas the former
OTS part 563f applied to savings
associations and their affiliates as well
as to savings and loan holding
companies,20 upon transfer of part 563f
to FDIC’s Part 390, subpart V, only the
authority over State savings associations
and their affiliates was transferred to the
FDIC for purposes of this rule.21 The
FRB currently has jurisdiction over the
regulation and supervision of
management official interlocks as it
applies to savings and loan holding
companies.22
After careful comparison of the FDIC’s
part 348 with the transferred OTS rule
in part 390, subpart V, the FDIC has
concluded that, with the exception of
the scope of the two sections and the
newly created section 348.4(j) that
carries over the qualified stock issuance
exemption from the former OTS rule,
the transferred OTS rules governing
management official interlocks are
substantively redundant. Therefore,
based on the foregoing, the FDIC
proposes to rescind and remove from
the Code of Federal Regulations the
rules located at 12 CFR part 390, subpart
V; to make minor conforming changes to
part 348 to incorporate State savings
associations; and to insert the OTS’s
exemption for State savings associations
which have issued stock in connection
with a qualified stock issuance pursuant
to section 10(q) of HOLA located in
section 390.403(i) into a newly created
section 348.4(j) in the FDIC’s rule. 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,
18 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010) (codified at 12 U.S.C. 5412 et seq.).
19 12 U.S.C. 5412.
20 12 CFR 563f.
21 12 CFR 390.400.
22 12 CFR 212.1.
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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 rules currently found in
part 390, subpart V, the FDIC, as the
appropriate Federal banking agency for
State savings associations, proposes to
rescind part 390, subpart V in its
entirety.
The FDIC also proposes to modify the
scope of part 348, section 348.1(c), to
apply to ‘‘management officials of FDICsupervised institutions and their
affiliates’’ to conform to and reflect the
scope of the FDIC’s current supervisory
responsibilities as the appropriate
Federal banking agency. The FDIC also
proposes to add two new definitions
into section 348.2. A newly created
subsection (i) would define an ‘‘FDICsupervised institution’’ as ‘‘either an
insured nonmember bank or a State
savings association.’’ A newly created
subsection (p) 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 FDIC would also
make conforming amendments
throughout the regulation to reflect the
new scope of the regulation. These
amendments would conform to and
reflect the scope of the FDIC’s current
supervisory responsibilities as the
appropriate Federal banking agency.
Finally, the proposal would insert an
exemption from part 390, subpart V,
section 390.403(i), into a newly created
subsection (j) of section 348.4. The
exemption allows certain interlocking
relationships for any State savings
association which has issued stock in
connection with a qualified stock
issuance pursuant to section 10(q) of
HOLA. Because the Interlocks Act
provides for this statutory
requirement,23 the qualified stock
issuance exemption in section
390.403(i) must carry forward to the
FDIC’s rule in part 348.
If the proposal is finalized, oversight
of management official interlocks in part
348 would apply to all FDIC-supervised
institutions, including State savings
associations and their affiliates, and part
390, subpart V would be removed
because it is largely duplicative of those
rules found in part 348. Rescinding part
390, subpart V will serve to streamline
the FDIC’s rules and eliminate
unnecessary regulations.
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23 12
U.S.C. 3204(9).
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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) Are there any specific provisions
of part 348 that are outdated or obsolete,
or are behind industry standards? If so,
please describe and recommend
alternate disclosure and reporting
methodology.
(2) Are the provisions of proposed
part 348 sufficient to provide adequate
disclosure and reporting of CRA-related
agreements? Are the provisions of
proposed part 348 overly burdensome?
Please substantiate your answer.
(3) What impacts, positive or negative,
can you foresee in the FDIC’s proposal
to rescind part 390, subpart V?
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 V. 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 V is largely
redundant of the FDIC’s existing part
348 regarding disclosure and reporting
of CRA-related agreements. The
information collection contained in part
348 is cleared by OMB under the FDIC’s
‘‘Management Official Interlocks’’
information collection (OMB No. 3064–
0118). The FDIC reviewed its burden
estimate for the collection at the time it
assumed responsibility for supervision
of State savings associations transferred
from the OTS and obtained OMB
approval to adjust the burden estimates
as necessary.
This Proposed Rule will not modify
the FDIC’s existing collection and does
not involve any new collections of
information pursuant to the PRA.
Finally, the Proposed Rule would
amend part 348 to include State savings
associations and their affiliates and
would amend section 348.2 to define
‘‘State savings association.’’ These
measures clarify that State savings
associations and their affiliates, as well
as insured nonmember banks and their
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affiliates are subject to part 348. The
Proposed Rule would also insert the
qualified stock issuance exemption in
section 390.403(i) into a newly created
subsection (j) of section 348.4. These
provisions of the Proposed Rule will not
involve any new collection 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.
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B. The Regulatory Flexibility Act
The Regulatory Flexibility Act
(‘‘RFA’’),24 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).25
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.
As discussed in this notice of
proposed rulemaking, part 390, subpart
V was transferred from OTS’s part 563f,
which governed management official
interlocks. OTS’s part 563f had been in
effect since 1979, and all savings
associations were required to comply
with it. Because it is duplicative of
existing part 348 of the FDIC’s rules, the
FDIC proposes rescinding and removing
part 390, subpart V. As a result, all
FDIC-supervised institutions—including
State savings associations and their
affiliates—would be required to comply
with part 348. Because all State savings
associations and their affiliates have
been required to comply with
substantially similar management
official interlocks rules since 1979,
today’s Proposed Rule would have no
significant economic impact on any
State savings association.
24 5
U.S.C. 601 et seq.
FR 37409, 37411 (June 20, 2013).
25 78
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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
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.26 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. As part of that review, the
FDIC invites comments concerning
whether the Proposed Rule would
impose any outdated or unnecessary
regulatory requirements on insured
depository institutions. If you provide
such comments, please be specific and
provide alternatives whenever
appropriate.
List of Subjects
12 CFR Part 348
Banks, banking; management official
interlocks; savings associations.
12 CFR Part 390, Subpart V
Management Official Interlocks.
Authority and Issuance
For the reasons stated in the
preamble, the Board of Directors of the
26 Public Law 104–208, 110 Stat. 3009 (Sept. 30,
1996).
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Federal Deposit Insurance Corporation
proposes to amend part 348 of title 12
of the Code of Federal Regulations and
amend part 390, of title 12 of the Code
of Federal Regulations by removing
subpart V as set forth below:
■ 1. Revise part 348 to read as follows:
PART 348—MANAGEMENT OFFICIAL
INTERLOCKS
§ 348.1
Purpose and scope of this part.
(a) Authority. This part is issued
under the provisions of the Depository
Institution Management Interlocks Act
(Interlocks Act) (12 U.S.C. 3201 et seq.),
as amended.
(b) Purpose. The purpose of the
Interlocks Act and this part is to foster
competition by generally prohibiting a
management official from serving two
nonaffiliated depository organizations
in situations where the management
interlock likely would have an
anticompetitive effect.
(c) Scope. This part applies to
management officials of FDICsupervised institutions and their
affiliates.
§ 348.2 Other definitions and rules of
construction used in this part.
For purposes of this part, the
following definitions apply:
(a) Affiliate. (1) The term affiliate has
the meaning given in section 202 of the
Interlocks Act (12 U.S.C. 3201). For
purposes of section 202, shares held by
an individual include shares held by
members of his or her immediate family.
‘‘Immediate family’’ means spouse,
mother, father, child, grandchild, sister,
brother or any of their spouses, whether
or not any of their shares are held in
trust.
(2) For purposes of section 202(3)(B)
of the Interlocks Act (12 U.S.C.
3201(3)(B)), an affiliate relationship
involving an FDIC-supervised
institution based on common ownership
does not exist if the FDIC determines,
after giving the affected persons the
opportunity to respond, that the
asserted affiliation was established in
order to avoid the prohibitions of the
Interlocks Act and does not represent a
true commonality of interest between
the depository organizations. In making
this determination, the FDIC considers,
among other things, whether a person,
including members of his or her
immediate family whose shares are
necessary to constitute the group, owns
a nominal percentage of the shares of
one of the organizations and the
percentage is substantially
disproportionate to that person’s
ownership of shares in the other
organization.
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(b) Area median income means:
(1) The median family income for the
metropolitan statistical area (MSA), if a
depository organization is located in an
MSA; or
(2) The statewide nonmetropolitan
median family income, if a depository
organization is located outside an MSA.
(c) Community means a city, town, or
village, and contiguous or adjacent
cities, towns, or villages.
(d) Contiguous or adjacent cities,
towns, or villages means cities, towns,
or villages whose borders touch each
other or whose borders are within 10
road miles of each other at their closest
points. The property line of an office
located in an unincorporated city, town,
or village is the boundary line of that
city, town, or village for the purpose of
this definition.
(e) Depository holding company
means a bank holding company or a
savings and loan holding company (as
more fully defined in section 202 of the
Interlocks Act (12 U.S.C. 3201)) having
its principal office located in the United
States.
(f) Depository institution means a
commercial bank (including a private
bank), a savings bank, a trust company,
a savings and loan association, a
building and loan association, a
homestead association, a cooperative
bank, an industrial bank, or a credit
union, chartered under the laws of the
United States and having a principal
office located in the United States.
Additionally, a United States office,
including a branch or agency, of a
foreign commercial bank is a depository
institution.
(g) Depository institution affiliate
means a depository institution that is an
affiliate of a depository organization.
(h) Depository organization means a
depository institution or a depository
holding company.
(i) FDIC-supervised institution means
either an insured state nonmember bank
or a State savings association.
(j) Low- and moderate-income areas
means census tracts (or, if an area is not
in a census tract, block numbering areas
delineated by the United States Bureau
of the Census) where the median family
income is less than 100 percent of the
area median income.
(k) Management official. (1) The term
management official means:
(i) A director;
(ii) An advisory or honorary director
of a depository institution with total
assets of $100 million or more;
(iii) A senior executive officer as that
term is defined in 12 CFR 303.101(b).
(iv) A branch manager;
(v) A trustee of a depository
organization under the control of
trustees; and
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(vi) Any person who has a
representative or nominee serving in
any of the capacities in this paragraph
(j)(1).
(2) The term management official
does not include:
(i) A person whose management
functions relate exclusively to the
business of retail merchandising or
manufacturing;
(ii) A person whose management
functions relate principally to the
business outside the United States of a
foreign commercial bank; or
(iii) A person described in the
provisos of section 202(4) of the
Interlocks Act (12 U.S.C. 3201(4))
(referring to an officer of a Statechartered savings bank, cooperative
bank, or trust company that neither
makes real estate mortgage loans nor
accepts savings).
(l) Office means a principal or branch
office of a depository institution located
in the United States. Office does not
include a representative office of a
foreign commercial bank, an electronic
terminal, or a loan production office.
(m) Person means a natural person,
corporation, or other business entity.
(n) Relevant metropolitan statistical
area (RMSA) means an MSA, a primary
MSA, or a consolidated MSA that is not
comprised of designated Primary MSAs
to the extent that these terms are
defined and applied by the Office of
Management and Budget.
(o) Representative or nominee means
a natural person who serves as a
management official and has an
obligation to act on behalf of another
person with respect to management
responsibilities. The FDIC will find that
a person has an obligation to act on
behalf of another person only if the first
person has an agreement, express or
implied, to act on behalf of the second
person with respect to management
responsibilities. The FDIC will
determine, after giving the affected
persons an opportunity to respond,
whether a person is a representative or
nominee.
(p) 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).
(q) Total assets. (1) The term total
assets includes assets measured on a
consolidated basis and reported in the
most recent fiscal year-end Consolidated
Report of Condition and Income.
(2) The term total assets does not
include:
(i) Assets of a diversified savings and
loan holding company as defined by
section 10(a)(1)(F) of the Home Owners’
Loan Act (12 U.S.C. 1467a(a)(1)(F))
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42229
other than the assets of its depository
institution affiliate;
(ii) Assets of a bank holding company
that are exempt from the prohibitions of
section 4 of the Bank Holding Company
Act of 1956 pursuant to an order issued
under section 4(d) of that Act (12 U.S.C.
1843(d)) other than the assets of its
depository institution affiliate; or
(iii) Assets of offices of a foreign
commercial bank other than the assets
of its United States branch or agency.
(r) United States means the United
States of America, any State or territory
of the United States of America, the
District of Columbia, Puerto Rico,
Guam, American Samoa, and the Virgin
Islands.
§ 348.3
Prohibitions.
(a) Community. A management
official of a depository organization may
not serve at the same time as a
management official of an unaffiliated
depository organization if the
depository organizations in question (or
a depository institution affiliate thereof)
have offices in the same community.
(b) RMSA. A management official of
a depository organization may not serve
at the same time as a management
official of an unaffiliated depository
organization if the depository
organizations in question (or a
depository institution affiliate thereof)
have offices in the same RMSA and each
depository organization has total assets
of $50 million or more.
(c) Major assets. A management
official of a depository organization
with total assets exceeding $2.5 billion
(or any affiliate of such an organization)
may not serve at the same time as a
management official of an unaffiliated
depository organization with total assets
exceeding $1.5 billion (or any affiliate of
such an organization), regardless of the
location of the two depository
organizations. The FDIC will adjust
these thresholds, as necessary, based on
the year-to-year change in the average of
the Consumer Price Index for the Urban
Wage Earners and Clerical Workers, not
seasonally adjusted, with rounding to
the nearest $100 million. The FDIC will
announce the revised thresholds by
publishing a final rule without notice
and comment in the Federal Register.
§ 348.4 Interlocking relationships
permitted by statute.
The prohibitions of § 348.3 do not
apply in the case of any one or more of
the following organizations or to a
subsidiary thereof:
(a) A depository organization that has
been placed formally in liquidation, or
which is in the hands of a receiver,
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conservator, or other official exercising
a similar function;
(b) A corporation operating under
section 25 or section 25A of the Federal
Reserve Act (12 U.S.C. 601 et seq. and
12 U.S.C. 611 et seq., respectively) (Edge
Corporations and Agreement
Corporations);
(c) A credit union being served by a
management official of another credit
union;
(d) A depository organization that
does not do business within the United
States except as an incident to its
activities outside the United States;
(e) A State-chartered savings and loan
guaranty corporation;
(f) A Federal Home Loan bank or any
other bank organized solely to serve
depository institutions (a bankers’ bank)
or solely for the purpose of providing
securities clearing services and services
related thereto for depository
institutions and securities companies;
(g) A depository organization that is
closed or is in danger of closing as
determined by the appropriate Federal
depository institutions regulatory
agency and is acquired by another
depository organization. This exemption
lasts for five years, beginning on the
date the depository organization is
acquired;
(h) A savings association whose
acquisition has been authorized on an
emergency basis in accordance with
section 13(k) of the Federal Deposit
Insurance Act (12 U.S.C. 1823(k)) with
resulting dual service by a management
official that would otherwise be
prohibited under the Interlocks Act
which may continue for up to 10 years
from the date of the acquisition
provided that the FDIC has given its
approval for the continuation of such
service;
(i)(1) A diversified savings and loan
holding company (as defined in section
10(a)(1)(F) of the Home Owners’ Loan
Act (12 U.S.C. 1467a(a)(1)(F))) with
respect to the service of a director of
such company who is also a director of
an unaffiliated depository organization
if:
(i) Both the diversified savings and
loan holding company and the
unaffiliated depository organization
notify their appropriate Federal
depository institutions regulatory
agency at least 60 days before the dual
service is proposed to begin; and
(ii) The appropriate regulatory agency
does not disapprove the dual service
before the end of the 60–day period.
(2) The FDIC may disapprove a notice
of proposed service if it finds that:
(i) The service cannot be structured or
limited so as to preclude an
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anticompetitive effect in financial
services in any part of the United States;
(ii) The service would lead to
substantial conflicts of interest or unsafe
or unsound practices; or
(iii) The notificant failed to furnish all
the information required by the FDIC.
(3) The FDIC may require that any
interlock permitted under this
paragraph (h) be terminated if a change
in circumstances occurs with respect to
one of the interlocked depository
organizations that would have provided
a basis for disapproval of the interlock
during the notice period; and
(j) Any FDIC-supervised institution
which is a State savings association that
has issued stock in connection with a
qualified stock issuance pursuant to
section 10(q) of the Home Owners’ Loan
Act, except that this paragraph (j) shall
apply only with regard to service as a
single management official of such State
savings association or any subsidiary of
such State savings association by a
single management official of a savings
and loan holding company which
purchased the stock issued in
connection with such qualified stock
issuance, and shall apply only when the
FDIC has determined that such service
is consistent with the purposes of the
Interlocks Act and the Home Owners’
Loan Act.
§ 348.5
Small market share exemption.
(b) Presumptions. In reviewing an
application for an exemption under this
section, the FDIC will apply a rebuttable
presumption that an interlock will not
result in a monopoly or substantial
lessening of competition if the
depository organization seeking to add a
management official:
(1) Primarily serves low- and
moderate-income areas;
(2) Is controlled or managed by
persons who are members of a minority
group, or women;
(3) Is a depository institution that has
been chartered for less than two years;
or
(4) Is deemed to be in ‘‘troubled
condition’’ as defined in § 303.101(c).
(c) Duration. Unless a shorter
expiration period is provided in the
FDIC approval, an exemption permitted
by paragraph (a) of this section may
continue so long as it does not result in
a monopoly or substantial lessening of
competition, or is unsafe or unsound. If
the FDIC grants an interlock exemption
in reliance upon a presumption under
paragraph (b) of this section, the
interlock may continue for three years,
unless otherwise provided by the FDIC
in writing.
(d) Procedures. Procedures for
applying for an exemption under this
section are set forth in 12 CFR 303.249.
§ 348.7
Change in circumstances.
(a) Exemption. A management
interlock that is prohibited by § 348.3 is
permissible, if:
(1) The interlock is not prohibited by
§ 348.3(c); and
(2) The depository organizations (and
their depository institution affiliates)
hold, in the aggregate, no more than 20
percent of the deposits in each RMSA or
community in which both depository
organizations (or their depository
institution affiliates) have offices. The
amount of deposits shall be determined
by reference to the most recent annual
Summary of Deposits published by the
FDIC for the RMSA or community.
(b) Confirmation and records. Each
depository organization must maintain
records sufficient to support its
determination of eligibility for the
exemption under paragraph (a) of this
section, and must reconfirm that
determination on an annual basis.
(a) Termination. A management
official shall terminate his or her service
or apply for an exemption if a change
in circumstances causes the service to
become prohibited. A change in
circumstances may include an increase
in asset size of an organization, a change
in the delineation of the RMSA or
community, the establishment of an
office, an increase in the aggregate
deposits of the depository organization,
or an acquisition, merger, consolidation,
or reorganization of the ownership
structure of a depository organization
that causes a previously permissible
interlock to become prohibited.
(b) Transition period. A management
official described in paragraph (a) of this
section may continue to serve the FDICsupervised institution involved in the
interlock for 15 months following the
date of the change in circumstances.
The FDIC may shorten this period under
appropriate circumstances.
§ 348.6
§ 348.8
General exemption.
(a) Exemption. The FDIC may by
agency order exempt an interlock from
the prohibitions in § 348.3 if the FDIC
finds that the interlock would not result
in a monopoly or substantial lessening
of competition and would not present
safety and soundness concerns.
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Enforcement.
Except as provided in this section, the
FDIC administers and enforces the
Interlocks Act with respect to FDICsupervised institutions and their
affiliates and may refer any case of a
prohibited interlocking relationship
involving these entities to the Attorney
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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:
Frm 00008
Fmt 4702
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
PO 00000
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Sfmt 4702
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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]]>Agencies
[Federal Register Volume 79, Number 139 (Monday, July 21, 2014)]
[Proposed Rules]
[Pages 42225-42231]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16976]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 348 and 390
RIN 3064-AE20
Transferred OTS Regulations and FDIC Regulations Regarding
Management Official Interlocks
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 parts
of our regulations, entitled ``Management Official Interlocks''
relating to State savings associations. This subpart was 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 (``Dodd-Frank Act'').
The requirements for State savings associations in the transferred OTS
regulations are substantively similar to those in the FDIC's
regulations, which is also entitled ``Management Official Interlocks''
and is applicable for all insured depository institutions (``IDIs'')
for which the FDIC has been designated the appropriate Federal banking
agency.
Upon removal of the transferred OTS regulations applicable for all
IDIs for which the FDIC has been designated the appropriate Federal
banking agency will be found in our 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-
AE20 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: Martha L. Ellett, Legal Division,
(202) 898-6765; Mark Mellon, Legal Division, (202) 898-3884; Jennifer
Maree, Legal Division, (202) 898-6543; Deborah S. Calvert, Division of
Risk Management Supervision, (703) 254-0976.
SUPPLEMENTARY INFORMATION:
I. Background
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, (``Transfer Date''), the powers, duties, and functions formerly
performed by the OTS were respectively 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.
---------------------------------------------------------------------------
\1\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010) (codified at 12 U.S.C.
5301 et seq.).
---------------------------------------------------------------------------
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
[[Page 42226]]
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.
---------------------------------------------------------------------------
\3\ 76 FR 47652 (Aug. 5, 2011).
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One of the OTS rules transferred to the FDIC governed management
official interlocks. The OTS rule, formerly found at 12 CFR part 563f
(``part 563f''), was transferred to the FDIC with only minor,
nonsubstantive changes and is now found in the FDIC's rules at part
390, subpart V, entitled ``Management Official Interlocks.'' Before the
transfer of the OTS rules and continuing today, the FDIC's rule
contained in part 348, also entitled ``Management Official
Interlocks,'' prohibits a management official from serving two
nonaffiliated depository organizations in situations where the
management interlock likely would have an anticompetitive effect. After
careful review and comparison of part 390, subpart V and part 348, the
FDIC proposes to rescind part 390, subpart V, because, as discussed
below, it is substantively redundant to existing part 348.
Simultaneously we propose to make technical conforming edits to our
existing rule and add an exemption to part 348 applicable to State
savings associations which have issued stock in connection with a
qualified stock issuance pursuant to section 10(q) of HOLA.\4\
---------------------------------------------------------------------------
\4\ Home Owners' Loan Act, Public Law 101-73; Sec. 301, 103
Stat. 277, (1989) (codified at 12 U.S.C. 1461 et seq.)
---------------------------------------------------------------------------
FDIC's Existing 12 CFR Part 348 and Former OTS's Part 563f
(Transferred, In Part, to FDIC's Part 390, Subpart V)
The Depository Institution Management Interlocks Act (``Interlocks
Act'') \5\ was enacted as Title II of the Financial Institutions
Regulatory and Interest Rate Control Act of 1978.\6\ The Interlocks Act
generally prohibits bank management officials from serving
simultaneously with two unaffiliated depository institutions or their
holding companies (``depository organizations''). The purpose of the
Interlocks Act and the rules governing management interlocks generally
is to foster competition between unaffiliated institutions. Thus, the
Interlocks Act seeks to prohibit interlocks that could enable two
institutions to engage in anticompetitive behavior. The scope of the
prohibition depends on the size and location of the organizations
involved. For example, the Interlocks Act prohibits interlocks between
unaffiliated depository organizations, regardless of size, if each
organization has an office in the same community (the ``community
prohibition''). Interlocks are also prohibited between unaffiliated
depository organizations if each organization has total assets of $50
million or more and has an office in the same relevant metropolitan
statistical area (``RMSA'') (the ``RMSA prohibition''). The Interlocks
Act also prohibits interlocks between unaffiliated depository
organizations, regardless of location, if each organization has total
assets exceeding specified thresholds (the ``major assets
prohibition'').
---------------------------------------------------------------------------
\5\ 12 U.S.C. 3201 et seq.
\6\ Public Law 95-630, 92 Stat. 3665 (Nov. 10, 1978).
---------------------------------------------------------------------------
On July 19, 1979, the FDIC, the OTS,\7\ the OCC, and the FRB
(collectively, the ``Federal banking agencies''), published a joint
final rule to implement the statutory mandates of the Interlocks
Act.\8\ On August 2, 1996, in order to comply with the mandate of
section 303(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (``CDRI Act''),\9\ the Federal banking agencies
published a joint final rule \10\ to implement revisions to the
Management Official Interlocks regulations.
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\7\ The joint rulemaking included the Federal Home Loan Bank
Board, the OTS's predecessor agency.
\8\ 44 FR 42152 (July 19, 1979).
\9\ 12 U.S.C. 4803(a).
\10\ 61 FR 40293 (Aug. 2, 1996).
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Section 303(a) of the CDRI Act, requires the Federal banking
agencies to conduct a systematic review of their regulations and
written policies in order to streamline and modify them to improve
efficiency, reduce unnecessary costs, and eliminate constraints on
credit availability.\11\ Section 303(a) also instructs the Federal
banking agencies to remove inconsistencies and outmoded and duplicative
requirements.\12\ Finally, section 303(a) requires the Federal banking
agencies to consult and coordinate with one another ``to make uniform
all regulations and guidelines implementing common statutory or
supervisory policies.'' \13\ Pursuant to the CDRI's mandate, the
Federal banking agencies consulted and coordinated with respect to this
rulemaking and on an interagency basis jointly issued rules that are
substantively similar with regard to management official
interlocks.\14\ Accordingly, the portion of the OTS regulations that
applied to State savings associations and their affiliates, originally
codified at 12 CFR part 563f and subsequently transferred to FDIC's
part 390, subpart V, is substantively similar to the current FDIC
regulations in part 348, with the following exceptions. Specifically,
part 348 of the FDIC regulations applies to management officials of
insured nonmember banks and their affiliates,\15\ while part 390,
subpart V applies to management officials of State savings associations
and their affiliates.\16\ part 390, subpart V also contains an
exception from the prohibition against management interlocks that is
not included in part 348. This exception, found in 390.403(i), allows a
State savings association that has issued stock in connection with a
qualified stock issuance pursuant to section 10(q) of HOLA to be exempt
from the prohibition against management interlocks.\17\ By amending
part 348 and rescinding part 390, subpart V, the FDIC will streamline
its regulations and reduce redundancy.
---------------------------------------------------------------------------
\11\ 12 U.S.C. 4308(a)(1)(A).
\12\ 12 U.S.C. 4308(a)(1)(B).
\13\ 12 U.S.C. 4308(a)(3).
\14\ 61 FR 40293 (Aug. 2, 1996).
\15\ 12 CFR 348.1.
\16\ 12 CFR 390.400.
\17\ The Interlocks Act contains an additional exemption for
interlocks as a result of an emergency acquisition of a savings
association authorized in accordance with section 13(k) of the
Federal Deposit Insurance Act (12 U.S.C. 1823(k)) if the FDIC has
given its approval to the interlock. The FDIC will continue to list
this additional exemption in its management interlocks regulation in
part 348.
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[[Page 42227]]
Although the former OTS rule part 563f applies to management
officials of savings and loan holding companies, the FDIC does not
supervise savings and loan holding companies for purposes of this rule.
Section 312 of the Dodd-Frank Act \18\ divides and transfers the
functions of the former OTS to the FDIC, OCC, and FRB by amending
section 1813(q) of the FDI Act. Specifically, section 312 transfers the
former OTS's power to regulate State savings associations to the FDIC,
while it transfers the power to regulate savings and loan holding
companies to the FRB.\19\ As a result, whereas the former OTS part 563f
applied to savings associations and their affiliates as well as to
savings and loan holding companies,\20\ upon transfer of part 563f to
FDIC's Part 390, subpart V, only the authority over State savings
associations and their affiliates was transferred to the FDIC for
purposes of this rule.\21\ The FRB currently has jurisdiction over the
regulation and supervision of management official interlocks as it
applies to savings and loan holding companies.\22\
---------------------------------------------------------------------------
\18\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010) (codified at 12 U.S.C.
5412 et seq.).
\19\ 12 U.S.C. 5412.
\20\ 12 CFR 563f.
\21\ 12 CFR 390.400.
\22\ 12 CFR 212.1.
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After careful comparison of the FDIC's part 348 with the
transferred OTS rule in part 390, subpart V, the FDIC has concluded
that, with the exception of the scope of the two sections and the newly
created section 348.4(j) that carries over the qualified stock issuance
exemption from the former OTS rule, the transferred OTS rules governing
management official interlocks are substantively redundant. Therefore,
based on the foregoing, the FDIC proposes to rescind and remove from
the Code of Federal Regulations the rules located at 12 CFR part 390,
subpart V; to make minor conforming changes to part 348 to incorporate
State savings associations; and to insert the OTS's exemption for State
savings associations which have issued stock in connection with a
qualified stock issuance pursuant to section 10(q) of HOLA located in
section 390.403(i) into a newly created section 348.4(j) in the FDIC's
rule. 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 rules currently found in part 390, subpart V, the FDIC,
as the appropriate Federal banking agency for State savings
associations, proposes to rescind part 390, subpart V in its entirety.
The FDIC also proposes to modify the scope of part 348, section
348.1(c), to apply to ``management officials of FDIC-supervised
institutions and their affiliates'' to conform to and reflect the scope
of the FDIC's current supervisory responsibilities as the appropriate
Federal banking agency. The FDIC also proposes to add two new
definitions into section 348.2. A newly created subsection (i) would
define an ``FDIC-supervised institution'' as ``either an insured
nonmember bank or a State savings association.'' A newly created
subsection (p) 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 FDIC would also make
conforming amendments throughout the regulation to reflect the new
scope of the regulation. These amendments would conform to and reflect
the scope of the FDIC's current supervisory responsibilities as the
appropriate Federal banking agency.
Finally, the proposal would insert an exemption from part 390,
subpart V, section 390.403(i), into a newly created subsection (j) of
section 348.4. The exemption allows certain interlocking relationships
for any State savings association which has issued stock in connection
with a qualified stock issuance pursuant to section 10(q) of HOLA.
Because the Interlocks Act provides for this statutory requirement,\23\
the qualified stock issuance exemption in section 390.403(i) must carry
forward to the FDIC's rule in part 348.
---------------------------------------------------------------------------
\23\ 12 U.S.C. 3204(9).
---------------------------------------------------------------------------
If the proposal is finalized, oversight of management official
interlocks in part 348 would apply to all FDIC-supervised institutions,
including State savings associations and their affiliates, and part
390, subpart V would be removed because it is largely duplicative of
those rules found in part 348. Rescinding part 390, subpart V will
serve to streamline the FDIC's rules and eliminate unnecessary
regulations.
III. Request for Comments
The FDIC invites comments on all aspects of this proposed
rulemaking, and specifically requests comments on the following:
(1) Are there any specific provisions of part 348 that are outdated
or obsolete, or are behind industry standards? If so, please describe
and recommend alternate disclosure and reporting methodology.
(2) Are the provisions of proposed part 348 sufficient to provide
adequate disclosure and reporting of CRA-related agreements? Are the
provisions of proposed part 348 overly burdensome? Please substantiate
your answer.
(3) What impacts, positive or negative, can you foresee in the
FDIC's proposal to rescind part 390, subpart V?
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 V. 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 V is largely redundant of
the FDIC's existing part 348 regarding disclosure and reporting of CRA-
related agreements. The information collection contained in part 348 is
cleared by OMB under the FDIC's ``Management Official Interlocks''
information collection (OMB No. 3064-0118). The FDIC reviewed its
burden estimate for the collection at the time it assumed
responsibility for supervision of State savings associations
transferred from the OTS and obtained OMB approval to adjust the burden
estimates as necessary.
This Proposed Rule will not modify the FDIC's existing collection
and does not involve any new collections of information pursuant to the
PRA.
Finally, the Proposed Rule would amend part 348 to include State
savings associations and their affiliates and would amend section 348.2
to define ``State savings association.'' These measures clarify that
State savings associations and their affiliates, as well as insured
nonmember banks and their
[[Page 42228]]
affiliates are subject to part 348. The Proposed Rule would also insert
the qualified stock issuance exemption in section 390.403(i) into a
newly created subsection (j) of section 348.4. These provisions of the
Proposed Rule will not involve any new collection 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''),\24\ 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).\25\ 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.
---------------------------------------------------------------------------
\24\ 5 U.S.C. 601 et seq.
\25\ 78 FR 37409, 37411 (June 20, 2013).
---------------------------------------------------------------------------
As discussed in this notice of proposed rulemaking, part 390,
subpart V was transferred from OTS's part 563f, which governed
management official interlocks. OTS's part 563f had been in effect
since 1979, and all savings associations were required to comply with
it. Because it is duplicative of existing part 348 of the FDIC's rules,
the FDIC proposes rescinding and removing part 390, subpart V. As a
result, all FDIC-supervised institutions--including State savings
associations and their affiliates--would be required to comply with
part 348. Because all State savings associations and their affiliates
have been required to comply with substantially similar management
official interlocks rules since 1979, 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.\26\ 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. As part of
that review, the FDIC invites comments concerning whether the Proposed
Rule would impose any outdated or unnecessary regulatory requirements
on insured depository institutions. If you provide such comments,
please be specific and provide alternatives whenever appropriate.
---------------------------------------------------------------------------
\26\ Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996).
---------------------------------------------------------------------------
List of Subjects
12 CFR Part 348
Banks, banking; management official interlocks; savings
associations.
12 CFR Part 390, Subpart V
Management Official Interlocks.
Authority and Issuance
For the reasons stated in the preamble, the Board of Directors of
the Federal Deposit Insurance Corporation proposes to amend part 348 of
title 12 of the Code of Federal Regulations and amend part 390, of
title 12 of the Code of Federal Regulations by removing subpart V as
set forth below:
0
1. Revise part 348 to read as follows:
PART 348--MANAGEMENT OFFICIAL INTERLOCKS
Sec. 348.1 Purpose and scope of this part.
(a) Authority. This part is issued under the provisions of the
Depository Institution Management Interlocks Act (Interlocks Act) (12
U.S.C. 3201 et seq.), as amended.
(b) Purpose. The purpose of the Interlocks Act and this part is to
foster competition by generally prohibiting a management official from
serving two nonaffiliated depository organizations in situations where
the management interlock likely would have an anticompetitive effect.
(c) Scope. This part applies to management officials of FDIC-
supervised institutions and their affiliates.
Sec. 348.2 Other definitions and rules of construction used in this
part.
For purposes of this part, the following definitions apply:
(a) Affiliate. (1) The term affiliate has the meaning given in
section 202 of the Interlocks Act (12 U.S.C. 3201). For purposes of
section 202, shares held by an individual include shares held by
members of his or her immediate family. ``Immediate family'' means
spouse, mother, father, child, grandchild, sister, brother or any of
their spouses, whether or not any of their shares are held in trust.
(2) For purposes of section 202(3)(B) of the Interlocks Act (12
U.S.C. 3201(3)(B)), an affiliate relationship involving an FDIC-
supervised institution based on common ownership does not exist if the
FDIC determines, after giving the affected persons the opportunity to
respond, that the asserted affiliation was established in order to
avoid the prohibitions of the Interlocks Act and does not represent a
true commonality of interest between the depository organizations. In
making this determination, the FDIC considers, among other things,
whether a person, including members of his or her immediate family
whose shares are necessary to constitute the group, owns a nominal
percentage of the shares of one of the organizations and the percentage
is substantially disproportionate to that person's ownership of shares
in the other organization.
[[Page 42229]]
(b) Area median income means:
(1) The median family income for the metropolitan statistical area
(MSA), if a depository organization is located in an MSA; or
(2) The statewide nonmetropolitan median family income, if a
depository organization is located outside an MSA.
(c) Community means a city, town, or village, and contiguous or
adjacent cities, towns, or villages.
(d) Contiguous or adjacent cities, towns, or villages means cities,
towns, or villages whose borders touch each other or whose borders are
within 10 road miles of each other at their closest points. The
property line of an office located in an unincorporated city, town, or
village is the boundary line of that city, town, or village for the
purpose of this definition.
(e) Depository holding company means a bank holding company or a
savings and loan holding company (as more fully defined in section 202
of the Interlocks Act (12 U.S.C. 3201)) having its principal office
located in the United States.
(f) Depository institution means a commercial bank (including a
private bank), a savings bank, a trust company, a savings and loan
association, a building and loan association, a homestead association,
a cooperative bank, an industrial bank, or a credit union, chartered
under the laws of the United States and having a principal office
located in the United States. Additionally, a United States office,
including a branch or agency, of a foreign commercial bank is a
depository institution.
(g) Depository institution affiliate means a depository institution
that is an affiliate of a depository organization.
(h) Depository organization means a depository institution or a
depository holding company.
(i) FDIC-supervised institution means either an insured state
nonmember bank or a State savings association.
(j) Low- and moderate-income areas means census tracts (or, if an
area is not in a census tract, block numbering areas delineated by the
United States Bureau of the Census) where the median family income is
less than 100 percent of the area median income.
(k) Management official. (1) The term management official means:
(i) A director;
(ii) An advisory or honorary director of a depository institution
with total assets of $100 million or more;
(iii) A senior executive officer as that term is defined in 12 CFR
303.101(b).
(iv) A branch manager;
(v) A trustee of a depository organization under the control of
trustees; and
(vi) Any person who has a representative or nominee serving in any
of the capacities in this paragraph (j)(1).
(2) The term management official does not include:
(i) A person whose management functions relate exclusively to the
business of retail merchandising or manufacturing;
(ii) A person whose management functions relate principally to the
business outside the United States of a foreign commercial bank; or
(iii) A person described in the provisos of section 202(4) of the
Interlocks Act (12 U.S.C. 3201(4)) (referring to an officer of a State-
chartered savings bank, cooperative bank, or trust company that neither
makes real estate mortgage loans nor accepts savings).
(l) Office means a principal or branch office of a depository
institution located in the United States. Office does not include a
representative office of a foreign commercial bank, an electronic
terminal, or a loan production office.
(m) Person means a natural person, corporation, or other business
entity.
(n) Relevant metropolitan statistical area (RMSA) means an MSA, a
primary MSA, or a consolidated MSA that is not comprised of designated
Primary MSAs to the extent that these terms are defined and applied by
the Office of Management and Budget.
(o) Representative or nominee means a natural person who serves as
a management official and has an obligation to act on behalf of another
person with respect to management responsibilities. The FDIC will find
that a person has an obligation to act on behalf of another person only
if the first person has an agreement, express or implied, to act on
behalf of the second person with respect to management
responsibilities. The FDIC will determine, after giving the affected
persons an opportunity to respond, whether a person is a representative
or nominee.
(p) 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).
(q) Total assets. (1) The term total assets includes assets
measured on a consolidated basis and reported in the most recent fiscal
year-end Consolidated Report of Condition and Income.
(2) The term total assets does not include:
(i) Assets of a diversified savings and loan holding company as
defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) other than the assets of its depository institution
affiliate;
(ii) Assets of a bank holding company that are exempt from the
prohibitions of section 4 of the Bank Holding Company Act of 1956
pursuant to an order issued under section 4(d) of that Act (12 U.S.C.
1843(d)) other than the assets of its depository institution affiliate;
or
(iii) Assets of offices of a foreign commercial bank other than the
assets of its United States branch or agency.
(r) United States means the United States of America, any State or
territory of the United States of America, the District of Columbia,
Puerto Rico, Guam, American Samoa, and the Virgin Islands.
Sec. 348.3 Prohibitions.
(a) Community. A management official of a depository organization
may not serve at the same time as a management official of an
unaffiliated depository organization if the depository organizations in
question (or a depository institution affiliate thereof) have offices
in the same community.
(b) RMSA. A management official of a depository organization may
not serve at the same time as a management official of an unaffiliated
depository organization if the depository organizations in question (or
a depository institution affiliate thereof) have offices in the same
RMSA and each depository organization has total assets of $50 million
or more.
(c) Major assets. A management official of a depository
organization with total assets exceeding $2.5 billion (or any affiliate
of such an organization) may not serve at the same time as a management
official of an unaffiliated depository organization with total assets
exceeding $1.5 billion (or any affiliate of such an organization),
regardless of the location of the two depository organizations. The
FDIC will adjust these thresholds, as necessary, based on the year-to-
year change in the average of the Consumer Price Index for the Urban
Wage Earners and Clerical Workers, not seasonally adjusted, with
rounding to the nearest $100 million. The FDIC will announce the
revised thresholds by publishing a final rule without notice and
comment in the Federal Register.
Sec. 348.4 Interlocking relationships permitted by statute.
The prohibitions of Sec. 348.3 do not apply in the case of any one
or more of the following organizations or to a subsidiary thereof:
(a) A depository organization that has been placed formally in
liquidation, or which is in the hands of a receiver,
[[Page 42230]]
conservator, or other official exercising a similar function;
(b) A corporation operating under section 25 or section 25A of the
Federal Reserve Act (12 U.S.C. 601 et seq. and 12 U.S.C. 611 et seq.,
respectively) (Edge Corporations and Agreement Corporations);
(c) A credit union being served by a management official of another
credit union;
(d) A depository organization that does not do business within the
United States except as an incident to its activities outside the
United States;
(e) A State-chartered savings and loan guaranty corporation;
(f) A Federal Home Loan bank or any other bank organized solely to
serve depository institutions (a bankers' bank) or solely for the
purpose of providing securities clearing services and services related
thereto for depository institutions and securities companies;
(g) A depository organization that is closed or is in danger of
closing as determined by the appropriate Federal depository
institutions regulatory agency and is acquired by another depository
organization. This exemption lasts for five years, beginning on the
date the depository organization is acquired;
(h) A savings association whose acquisition has been authorized on
an emergency basis in accordance with section 13(k) of the Federal
Deposit Insurance Act (12 U.S.C. 1823(k)) with resulting dual service
by a management official that would otherwise be prohibited under the
Interlocks Act which may continue for up to 10 years from the date of
the acquisition provided that the FDIC has given its approval for the
continuation of such service;
(i)(1) A diversified savings and loan holding company (as defined
in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F))) with respect to the service of a director of such
company who is also a director of an unaffiliated depository
organization if:
(i) Both the diversified savings and loan holding company and the
unaffiliated depository organization notify their appropriate Federal
depository institutions regulatory agency at least 60 days before the
dual service is proposed to begin; and
(ii) The appropriate regulatory agency does not disapprove the dual
service before the end of the 60-day period.
(2) The FDIC may disapprove a notice of proposed service if it
finds that:
(i) The service cannot be structured or limited so as to preclude
an anticompetitive effect in financial services in any part of the
United States;
(ii) The service would lead to substantial conflicts of interest or
unsafe or unsound practices; or
(iii) The notificant failed to furnish all the information required
by the FDIC.
(3) The FDIC may require that any interlock permitted under this
paragraph (h) be terminated if a change in circumstances occurs with
respect to one of the interlocked depository organizations that would
have provided a basis for disapproval of the interlock during the
notice period; and
(j) Any FDIC-supervised institution which is a State savings
association that has issued stock in connection with a qualified stock
issuance pursuant to section 10(q) of the Home Owners' Loan Act, except
that this paragraph (j) shall apply only with regard to service as a
single management official of such State savings association or any
subsidiary of such State savings association by a single management
official of a savings and loan holding company which purchased the
stock issued in connection with such qualified stock issuance, and
shall apply only when the FDIC has determined that such service is
consistent with the purposes of the Interlocks Act and the Home Owners'
Loan Act.
Sec. 348.5 Small market share exemption.
(a) Exemption. A management interlock that is prohibited by Sec.
348.3 is permissible, if:
(1) The interlock is not prohibited by Sec. 348.3(c); and
(2) The depository organizations (and their depository institution
affiliates) hold, in the aggregate, no more than 20 percent of the
deposits in each RMSA or community in which both depository
organizations (or their depository institution affiliates) have
offices. The amount of deposits shall be determined by reference to the
most recent annual Summary of Deposits published by the FDIC for the
RMSA or community.
(b) Confirmation and records. Each depository organization must
maintain records sufficient to support its determination of eligibility
for the exemption under paragraph (a) of this section, and must
reconfirm that determination on an annual basis.
Sec. 348.6 General exemption.
(a) Exemption. The FDIC may by agency order exempt an interlock
from the prohibitions in Sec. 348.3 if the FDIC finds that the
interlock would not result in a monopoly or substantial lessening of
competition and would not present safety and soundness concerns.
(b) Presumptions. In reviewing an application for an exemption
under this section, the FDIC will apply a rebuttable presumption that
an interlock will not result in a monopoly or substantial lessening of
competition if the depository organization seeking to add a management
official:
(1) Primarily serves low- and moderate-income areas;
(2) Is controlled or managed by persons who are members of a
minority group, or women;
(3) Is a depository institution that has been chartered for less
than two years; or
(4) Is deemed to be in ``troubled condition'' as defined in Sec.
303.101(c).
(c) Duration. Unless a shorter expiration period is provided in the
FDIC approval, an exemption permitted by paragraph (a) of this section
may continue so long as it does not result in a monopoly or substantial
lessening of competition, or is unsafe or unsound. If the FDIC grants
an interlock exemption in reliance upon a presumption under paragraph
(b) of this section, the interlock may continue for three years, unless
otherwise provided by the FDIC in writing.
(d) Procedures. Procedures for applying for an exemption under this
section are set forth in 12 CFR 303.249.
Sec. 348.7 Change in circumstances.
(a) Termination. A management official shall terminate his or her
service or apply for an exemption if a change in circumstances causes
the service to become prohibited. A change in circumstances may include
an increase in asset size of an organization, a change in the
delineation of the RMSA or community, the establishment of an office,
an increase in the aggregate deposits of the depository organization,
or an acquisition, merger, consolidation, or reorganization of the
ownership structure of a depository organization that causes a
previously permissible interlock to become prohibited.
(b) Transition period. A management official described in paragraph
(a) of this section may continue to serve the FDIC-supervised
institution involved in the interlock for 15 months following the date
of the change in circumstances. The FDIC may shorten this period under
appropriate circumstances.
Sec. 348.8 Enforcement.
Except as provided in this section, the FDIC administers and
enforces the Interlocks Act with respect to FDIC-supervised
institutions and their affiliates and may refer any case of a
prohibited interlocking relationship involving these entities to the
Attorney
[[Page 42231]]
General of the United States to enforce compliance with the Interlocks
Act and this part. If an affiliate of an FDIC-supervised 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
0
2. 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 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.
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).
0
Remove from the authority citation for part 390, the sentence ``Subpart
V also issued under 12 U.S.C. 3201-3208.''
0
3. Subpart V--[Removed and reserved]
0
Remove and reserve Subpart V consisting of Sec. Sec. 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
