Removal of Transferred OTS Regulations Regarding Management Official Interlocks and Amendments to FDIC's Rules and Regulations, 79250-79255 [2015-31940]
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Federal Register / Vol. 80, No. 244 / Monday, December 21, 2015 / Rules and Regulations
(C) The names of the supplied
materials, including beef components
and any materials carried over from one
production lot to the next;
(D) The date and time each lot of raw
ground beef product is produced; and
(E) The date and time when grinding
equipment and other related foodcontact surfaces are cleaned and
sanitized.
(ii) Official establishments and retail
stores covered by this part that prepare
ground beef products that are ground at
an individual customer’s request must
keep records that comply with
paragraph (b)(4)(i) of this section.
(iii) For the purposes of this section
of the regulations, a lot is the amount of
ground raw beef produced during
particular dates and times, following
clean up and until the next clean up,
during which the same source materials
are used.
*
*
*
*
*
■ 3. Revise § 320.2 to read as follows:
§ 320.2
Place of maintenance of records.
(a) Except as provided in paragraph
(b) of this section, any person engaged
in any business described in § 320.1 and
required by this part to keep records
must maintain such records at the place
where such business is conducted,
except that if such person conducts
such business at multiple locations, he
may maintain such records at his
headquarters’ office. When not in actual
use, all such records must be kept in a
safe place at the prescribed location in
accordance with good commercial
practices.
(b) Records required to kept under
§ 320.1(b)(4) must be kept at the location
where the raw beef was ground.
■ 4. Revise § 320.3 to read as follows:
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§ 320.3
Record retention period.
(a) Except as provided in paragraphs
(b) and (c) of this section, every record
required to be maintained under this
part must be retained for a period of 2
years after December 31 of the year in
which the transaction to which the
record relates has occurred and for such
further period as the Administrator may
require for purposes of any investigation
or litigation under the Act, by written
notice to the person required to keep
such records under this part.
(b) Records of canning as required in
subpart G of part 318 of this chapter,
must be retained as required in
§ 318.307(e); except that records
required by § 318.302(b) and (c) must be
retained as required by those sections.
(c) Records required to be maintained
under § 320.1(b)(4) must be retained for
one year.
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Done in Washington, DC, on: December 14,
2015.
Alfred V. Almanza,
Acting Administrator.
[FR Doc. 2015–31795 Filed 12–18–15; 8:45 am]
BILLING CODE 3410–DM–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 348 and 390
RIN 3064–AE20
Removal of Transferred OTS
Regulations Regarding Management
Official Interlocks and Amendments to
FDIC’s Rules and Regulations
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (‘‘FDIC’’) is
adopting a final rule to rescind and
remove from the Code of Federal
Regulations the transferred OTS
regulation entitled ‘‘Management
Official Interlocks.’’ 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 regulation are
substantively similar to those in the
FDIC’s regulation, 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.
DATES: The final rule is effective on
January 20, 2016.
FOR FURTHER INFORMATION CONTACT:
Jennifer Maree, Counsel, Legal Division,
(202) 898–6543; Mark Mellon, Counsel,
Legal Division, (202) 898–3884; Karen
Currie, Senior Examination Specialist,
(202) 898–3981.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
A. The Dodd-Frank Act
The Dodd-Frank Act 1 provided for a
substantial reorganization of the
regulation of State and Federal savings
associations and their holding
companies. Beginning July 21, 2011, the
1 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Pub. L. 111–203, 124 Stat. 1376
(2010).
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transfer date established by section 311
of the Dodd-Frank Act, codified at 12
U.S.C. 5411, the powers, duties, and
functions formerly performed by the
OTS were divided among the FDIC, as
to State savings associations, the Office
of the Comptroller of the Currency
(‘‘OCC’’), as to Federal savings
associations, and the Board of
Governors of the Federal Reserve
System (‘‘FRB’’), as to savings and loan
holding companies. Section 316(b) of
the Dodd-Frank Act, codified at 12
U.S.C. 5414(b), provides the manner of
treatment for all orders, resolutions,
determinations, regulations, and
advisory materials that had been issued,
made, prescribed, or allowed to become
effective by the OTS. The section
provides that if such materials were in
effect on the day before the transfer
date, they continue to be in effect and
are enforceable by or against the
appropriate successor agency until they
are modified, terminated, set aside, or
superseded in accordance with
applicable law by such successor
agency, by any court of competent
jurisdiction, or by operation of law.
Section 316(c) of the Dodd-Frank Act,
codified at 12 U.S.C. 5414(c), further
directed the FDIC and the OCC to
consult with one another and to publish
a list of the continued OTS regulations
that would be enforced by the FDIC and
the OCC, respectively. On June 14, 2011,
the FDIC’s Board of Directors approved
a ‘‘List of OTS Regulations to be
Enforced by the OCC and the FDIC
Pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act.’’
This list was published by the FDIC and
the OCC as a Joint Notice in the Federal
Register on July 6, 2011.2
Although section 312(b)(2)(B)(i)(II) of
the Dodd-Frank Act, codified at 12
U.S.C. 5412(b)(2)(B)(i)(II), granted the
OCC rulemaking authority relating to
both State and Federal savings
associations, nothing in the Dodd-Frank
Act affected the FDIC’s existing
authority to issue regulations under the
Federal Deposit Insurance Act (‘‘FDI
Act’’) and other laws as the ‘‘appropriate
Federal banking agency’’ or under
similar statutory terminology. Section
312(c) of the Dodd-Frank Act amended
the definition of ‘‘appropriate Federal
banking agency’’ contained in section
3(q) of the FDI Act, 12 U.S.C. 1813(q),
to add State savings associations to the
list of entities for which the FDIC is
designated as the ‘‘appropriate Federal
banking agency.’’ As a result, when the
FDIC acts as the designated
‘‘appropriate Federal banking agency’’
(or under similar terminology) for State
2 76
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FR 39247 (July 6, 2011).
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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 governs OTS oversight of
management official interlocks in the
context of State savings associations.
The OTS rule, formerly found at 12 CFR
part 563f, was transferred to the FDIC
with only minor nonsubstantive
changes and is now found in the FDIC’s
rules at 12 CFR part 390, subpart V
(‘‘part 390, subpart V’’), entitled
‘‘Management Official Interlocks.’’
Before the transfer of the OTS rules and
continuing today, the FDIC’s rules
contained 12 CFR part 348 (‘‘part 348’’),
also entitled ‘‘Management Official
Interlocks,’’ a rule governing FDIC
oversight of management official
interlocks with respect to IDIs for which
the FDIC has been designated the
appropriate Federal banking agency.
After careful review and comparison of
part 390, subpart V and part 348, the
FDIC has decided to (1) rescind part
390, subpart V, because, as discussed
below, it is substantively redundant to
existing part 348; and (2)
simultaneously make technical
conforming edits to part 348.
II. Proposed Rule
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A. Removal of Part 390, Subpart V
(Former OTS 12 CFR Part 563f)
On July 21, 2014, the FDIC published
a Notice of Proposed Rulemaking
(‘‘NPR’’ or ‘‘Proposed Rule’’) regarding
the removal of part 390, subpart V,
which governs management official
interlocks for State savings associations
and their affiliates.4 The former OTS
rule was transferred to the FDIC with
only nominal changes. The NPR
proposed removing part 390, subpart V
from the CFR in an effort to streamline
3 76
4 79
FR 47652 (Aug. 5, 2011).
FR 42225 (July 21, 2014).
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FDIC regulations for all FDIC-supervised
institutions. As discussed in the
Proposed Rule, the FDIC carefully
reviewed the transferred rule, part 390,
subpart V, and compared it with part
348, an FDIC regulation that existed
before the transfer of part 390, subpart
V and that continues to remain in effect
today. Like the transferred rule, part 348
governs management official interlocks
for State nonmember insured banks and
their affiliates. Although the two rules
were substantively the same, minor
technical and conforming amendments
were proposed.
B. Amendments to Part 348
The FDIC proposed 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
proposed to add two new definitions
into section 348.2. A newly created
subsection (i) would have defined an
‘‘FDIC-supervised institution’’ as ‘‘either
an insured nonmember bank or a State
savings association.’’ A newly created
subsection (p) would have defined
‘‘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 proposal would
also have inserted an exemption from
part 390, subpart V, section 390.403(i),
into a newly created subsection (j) of
section 348.4. The exemption would
have allowed certain interlocking
relationships for any 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 (‘‘HOLA’’).
If these proposals are finalized,
oversight of management official
interlocks in part 348 will apply to all
FDIC-supervised institutions, including
State savings associations, and part 390,
subpart V would be removed because it
is largely redundant 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. Comments
The FDIC issued the NPR with a 60day comment period, which closed on
September 19, 2014. The FDIC received
no comments on its Proposed Rule, and
consequently the final rule (‘‘Final
Rule’’) is adopted as proposed without
any changes.
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IV. Explanation of the Final Rule
As discussed in the NPR, part 390,
subpart V is substantively similar to part
348, and the designation of part 348 as
a single authority of management
official interlocks for all FDICsupervised institutions will serve to
streamline the FDIC’s rules and
eliminate unnecessary regulations. To
that effect, the Final Rule removes and
rescinds 12 CFR part 390, subpart V in
its entirety.
Consistent with the Proposed Rule,
the Final Rule also amends section
348.1(c) to modify the scope of part 348.
The modified scope, reflecting the
FDIC’s current supervisory
responsibilities as the appropriate
Federal banking agency includes State
savings associations and their
subsidiaries. The Final Rule also adds
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 Final Rule also
inserts 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 that has issued stock
in connection with a qualified stock
issuance pursuant to section 10(q) of
HOLA.
V. Administrative Law Matters
A. The Paperwork Reduction Act
In accordance with the requirements
of the Paperwork Reduction Act
(‘‘PRA’’) of 1995, 44 U.S.C. 3501–3521,
the FDIC may not conduct or sponsor,
and the respondent is not required to
respond to, an information collection
unless it displays a currently valid
Office of Management and Budget
(‘‘OMB’’) control number. The
information collections contained in
part 348 are cleared by OMB under the
FDIC’s ‘‘Management Official
Interlocks’’ information collection (OMB
No. 3064–0118). The FDIC’s burden
estimates were updated in connection
with the collection’s 2012 renewal to
include State savings associations
transferred from the OTS to the FDIC.
The FDIC reviewed its burden estimates
for the collection at the time it assumed
responsibility for supervision of State
savings associations transferred from the
OTS and determined that no changes to
the burden estimates were necessary.
This Final Rule does not modify the
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FDIC’s existing collection and does not
create any new collections of
information pursuant to the PRA.
Therefore, no information collection
request has been submitted to the OMB
for review.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act
(‘‘RFA’’), 5 U.S.C. 601 et seq., generally
requires an agency to consider whether
a final rule will have a significant
economic impact on a substantial
number of small entities (defined in
regulations promulgated by the Small
Business Administration to include
banking organizations with total assets
of less than or equal to $550 million).5
Pursuant to section 605(b) of the RFA,
a final regulatory flexibility analysis is
not required if the agency certifies that
the rule will not have a significant
economic impact on a substantial
number of small entities, and publishes
its certification and a short explanatory
statement in the Federal Register
together with the rule. For the reasons
provided below, the FDIC certifies that
the Final Rule will not have a
significant economic impact on a
substantial number of small entities.
Accordingly, a regulatory flexibility
analysis is not required.
As discussed in the notice of
proposed rulemaking, part 390, subpart
V was transferred from OTS part 563f,
which governed management official
interlocks. OTS part 563f had been in
effect since 1979, and all State savings
associations were required to comply
with it. Because it is redundant 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 for management official
interlocks. Because all State savings
associations and their affiliates have
been required to comply with
substantially similar management
official interlocks rules since 1979, the
FDIC certifies that the Final Rule will
have no significant economic impact on
small entities or State savings
associations.
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C. Small Business Regulatory
Enforcement Fairness Act
The Office of Management and Budget
has determined that the Final Rule is
not a ‘‘major rule’’ within the meaning
of the Small Business Regulatory
Enforcement Fairness Act of 1996
(‘‘SBREFA’’), 5 U.S.C. 801 et seq.
55
U.S.C. 601 et seq.
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D. Plain Language
Section 722 of the Gramm-LeachBliley Act, 12 U.S.C. 4809, requires each
Federal banking agency to use plain
language in all of its proposed and final
rules published after January 1, 2000. In
the NPR, the FDIC invited comments on
whether the Proposed Rule was clearly
stated and effectively organized, and
how the FDIC might make it easier to
understand. Although the FDIC did not
receive any comments, the FDIC sought
to present the Final Rule in a simple
and straightforward manner.
348.2 Other definitions and rules of
construction.
348.3 Prohibitions.
348.4 Interlocking relationships permitted
by statute.
348.5 Small market share exemption.
348.6 General exemption.
348.7 Change in circumstances.
348.8 Enforcement.
Authority: 12 U.S.C. 3207, 12 U.S.C.
1823(k).
§ 348.1
Purpose and scope.
(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.
E. The Economic Growth and Regulatory
Paperwork Reduction Act
Under section 2222 of the Economic
Growth and Regulatory Paperwork
Reduction Act of 1996 (‘‘EGRPRA’’), the
FDIC is required to review all of its
regulations, at least once every 10 years,
in order to identify any outdated or
otherwise unnecessary regulations
imposed on insured depository
institutions.6 The FDIC completed the
last comprehensive review of its
regulations under EGRPRA in 2006 and
is commencing the next decennial
review, which is expected to be
§ 348.2 Other definitions and rules of
completed by 2016. The NPR solicited
construction.
comments on whether the proposed
For purposes of this part, the
rescission of part 390, subpart V and
following definitions apply:
amendments to part 348 would impose
(a) Affiliate. (1) The term affiliate has
any outdated or unnecessary regulatory
the meaning given in section 202 of the
requirements on insured depository
Interlocks Act (12 U.S.C. 3201). For
institutions. No comments on this issue purposes of section 202, shares held by
were received. Upon review, the FDIC
an individual include shares held by
does not believe that part 348, as
members of his or her immediate family.
amended by the Final Rule, imposes any ‘‘Immediate family’’ means spouse,
outdated or unnecessary regulatory
mother, father, child, grandchild, sister,
requirements on any insured depository brother or any of their spouses, whether
institutions.
or not any of their shares are held in
trust.
List of Subjects
(2) For purposes of section 202(3)(B)
12 CFR Part 348
of the Interlocks Act (12 U.S.C.
3201(3)(B)), an affiliate relationship
Banks, banking; Management official
involving an FDIC-supervised
interlocks; Savings associations
institution based on common ownership
12 CFR Part 390
does not exist if the FDIC determines,
after giving the affected persons the
Management official interlocks
opportunity to respond, that the
Authority and Issuance
asserted affiliation was established in
For the reasons stated in the
order to avoid the prohibitions of the
preamble, the Board of Directors of the
Interlocks Act and does not represent a
Federal Deposit Insurance Corporation
true commonality of interest between
amends parts 348 and 390 of title 12 of
the depository organizations. In making
the Code of Federal Regulations as
this determination, the FDIC considers,
follows:
among other things, whether a person,
■ 1. Revise part 348 to read as follows:
including members of his or her
immediate family whose shares are
PART 348—MANAGEMENT OFFICIAL
necessary to constitute the group, owns
INTERLOCKS
a nominal percentage of the shares of
one of the organizations and the
Sec.
percentage is substantially
348.1 Purpose and scope.
disproportionate to that person’s
ownership of shares in the other
6 Public Law 104–208, 110 Stat. 3009 (Sept. 30,
1996).
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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79253
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
VerDate Sep<11>2014
15:24 Dec 18, 2015
Jkt 238001
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.
PO 00000
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Fmt 4700
Sfmt 4700
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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Federal Register / Vol. 80, No. 244 / Monday, December 21, 2015 / Rules and Regulations
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
2. The authority citation for part 390
is revised to read as follows:
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 L also issued under 12 U.S.C.
1831p–1.
Subpart M also issued under 12 U.S.C.
1818.
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; 78 l; 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).
Subpart V—[Removed and reserved]
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List of Subjects in 14 CFR Part 11
14 CFR Part 11
Administrative practice and
procedure, Reporting and recordkeeping
requirements.
BILLING CODE 6714–01–P
Registration and Marking
Requirements for Small Unmanned
Aircraft
Authority: 12 U.S.C. 1819.
3. Remove and reserve subpart V
consisting of §§ 390.400 through
390.408.
■
Dated at Washington, DC, this 15th day of
December 2015.
By order of the Board of Directors.
Jkt 238001
Federal Aviation Administration
[FR Doc. 2015–31940 Filed 12–18–15; 8:45 am]
RIN 2120–AK82
■
15:24 Dec 18, 2015
DEPARTMENT OF TRANSPORTATION
December 16, 2015, and assigned the
information collection OMB Control
Number 2120–0765. This final rule
provides the control number of that
information collection and adds the
information collection to the list of
FAA’s approved information collections
in 14 CFR part 11.
[Docket No.: FAA–2015–7396; Amdt. No.
11–58]
Subpart V—Management Official
Interlocks
VerDate Sep<11>2014
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; OMB approval of
information collection.
AGENCY:
This document notifies the
public of the Office of Management and
Budget’s (OMB’s) approval of the
information collection requirement
contained in the FAA’s interim final
rule, Registration and Marking
Requirements for Small Unmanned
Aircraft, which was published on
December 16, 2015.
DATES: Effective December 21, 2015.
FOR FURTHER INFORMATION CONTACT: Earl
Lawrence, Director, FAA UAS
Integration Office, 800 Independence
Avenue SW., Washington, DC 20591;
telephone (202) 267–6556; email
UASRegistration@faa.gov.
SUPPLEMENTARY INFORMATION: On
December 16, 2015, the Department of
Transportation and the Federal Aviation
Administration published the interim
final rule Registration and Marking
Requirements for Small Unmanned
Aircraft (80 FR 78593). That rule
provided an alternative, streamlined
and simple, web-based aircraft
registration process for the registration
of small unmanned aircraft, including
small unmanned aircraft operated as
model aircraft, to facilitate compliance
with the statutory requirement that all
aircraft register prior to operation.
That rule contained an information
collection, Registration of Small
Unmanned Aircraft. That information
collection requirement had not been
approved by OMB at the time of
publication of the interim final rule.
In accordance with the Paperwork
Reduction Act, the FAA submitted a
copy of the new information collection
requirements to OMB for its review.
OMB approved the collection on
SUMMARY:
PO 00000
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Fmt 4700
Sfmt 9990
The Amendment
In consideration of the foregoing, the
Federal Aviation Administration
amends chapter I of title 14, Code of
Federal Regulations as follows:
PART 11—GENERAL RULEMAKING
PROCEDURES
1. The authority citation for part 11
continues to read as follows:
■
Authority: 49 U.S.C. 106(f), 106(g), 40101,
40103, 40105, 40109, 40113, 44110, 44502,
44701–44702, 44711, and 46102.
2. In § 11.201, amend paragraph (b) by
adding an entry for part 48 to read as
follows:
■
§ 11.201 Office of Management and Budget
(OMB) control numbers assigned under the
Paperwork Reduction Act.
*
*
*
(b) * * *
*
*
14 CFR part or section
identified and described
*
*
*
Part 48 ..................................
*
*
*
Current OMB
control No.
*
*
2120–0765
*
*
Issued in Washington, DC, under the
authority of 49 U.S.C. 106(f), on December
16, 2015.
Lirio Liu,
Director, Office of Rulemaking.
[FR Doc. 2015–31993 Filed 12–18–15; 8:45 am]
BILLING CODE 4910–13–P
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]]>Agencies
[Federal Register Volume 80, Number 244 (Monday, December 21, 2015)]
[Rules and Regulations]
[Pages 79250-79255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31940]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 348 and 390
RIN 3064-AE20
Removal of Transferred OTS Regulations Regarding Management
Official Interlocks and Amendments to FDIC's Rules and Regulations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is
adopting a final rule to rescind and remove from the Code of Federal
Regulations the transferred OTS regulation entitled ``Management
Official Interlocks.'' 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 regulation are
substantively similar to those in the FDIC's regulation, 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.
DATES: The final rule is effective on January 20, 2016.
FOR FURTHER INFORMATION CONTACT: Jennifer Maree, Counsel, Legal
Division, (202) 898-6543; Mark Mellon, Counsel, Legal Division, (202)
898-3884; Karen Currie, Senior Examination Specialist, (202) 898-3981.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Dodd-Frank Act
The Dodd-Frank Act \1\ provided for a substantial reorganization of
the regulation of State and Federal savings associations and their
holding companies. Beginning July 21, 2011, the transfer date
established by section 311 of the Dodd-Frank Act, codified at 12 U.S.C.
5411, the powers, duties, and functions formerly performed by the OTS
were divided among the FDIC, as to State savings associations, the
Office of the Comptroller of the Currency (``OCC''), as to Federal
savings associations, and the Board of Governors of the Federal Reserve
System (``FRB''), as to savings and loan holding companies. Section
316(b) of the Dodd-Frank Act, codified at 12 U.S.C. 5414(b), provides
the manner of treatment for all orders, resolutions, determinations,
regulations, and advisory materials that had been issued, made,
prescribed, or allowed to become effective by the OTS. The section
provides that if such materials were in effect on the day before the
transfer date, they continue to be in effect and are enforceable by or
against the appropriate successor agency until they are modified,
terminated, set aside, or superseded in accordance with applicable law
by such successor agency, by any court of competent jurisdiction, or by
operation of law.
---------------------------------------------------------------------------
\1\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Pub. L. 111-203, 124 Stat. 1376 (2010).
---------------------------------------------------------------------------
Section 316(c) of the Dodd-Frank Act, codified at 12 U.S.C.
5414(c), further directed the FDIC and the OCC to consult with one
another and to publish a list of the continued OTS regulations that
would be enforced by the FDIC and the OCC, respectively. On June 14,
2011, the FDIC's Board of Directors approved a ``List of OTS
Regulations to be Enforced by the OCC and the FDIC Pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act.'' This list
was published by the FDIC and the OCC as a Joint Notice in the Federal
Register on July 6, 2011.\2\
---------------------------------------------------------------------------
\2\ 76 FR 39247 (July 6, 2011).
---------------------------------------------------------------------------
Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act,
codified at 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking
authority relating to both State and Federal savings associations,
nothing in the Dodd-Frank Act affected the FDIC's existing authority to
issue regulations under the Federal Deposit Insurance Act (``FDI Act'')
and other laws as the ``appropriate Federal banking agency'' or under
similar statutory terminology. Section 312(c) of the Dodd-Frank Act
amended the definition of ``appropriate Federal banking agency''
contained in section 3(q) of the FDI Act, 12 U.S.C. 1813(q), to add
State savings associations to the list of entities for which the FDIC
is designated as the ``appropriate Federal banking agency.'' As a
result, when the FDIC acts as the designated ``appropriate Federal
banking agency'' (or under similar terminology) for State
[[Page 79251]]
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).
---------------------------------------------------------------------------
One of the OTS rules transferred to the FDIC governs OTS oversight
of management official interlocks in the context of State savings
associations. The OTS rule, formerly found at 12 CFR part 563f, was
transferred to the FDIC with only minor nonsubstantive changes and is
now found in the FDIC's rules at 12 CFR part 390, subpart V (``part
390, subpart V''), entitled ``Management Official Interlocks.'' Before
the transfer of the OTS rules and continuing today, the FDIC's rules
contained 12 CFR part 348 (``part 348''), also entitled ``Management
Official Interlocks,'' a rule governing FDIC oversight of management
official interlocks with respect to IDIs for which the FDIC has been
designated the appropriate Federal banking agency. After careful review
and comparison of part 390, subpart V and part 348, the FDIC has
decided to (1) rescind part 390, subpart V, because, as discussed
below, it is substantively redundant to existing part 348; and (2)
simultaneously make technical conforming edits to part 348.
II. Proposed Rule
A. Removal of Part 390, Subpart V (Former OTS 12 CFR Part 563f)
On July 21, 2014, the FDIC published a Notice of Proposed
Rulemaking (``NPR'' or ``Proposed Rule'') regarding the removal of part
390, subpart V, which governs management official interlocks for State
savings associations and their affiliates.\4\ The former OTS rule was
transferred to the FDIC with only nominal changes. The NPR proposed
removing part 390, subpart V from the CFR in an effort to streamline
FDIC regulations for all FDIC-supervised institutions. As discussed in
the Proposed Rule, the FDIC carefully reviewed the transferred rule,
part 390, subpart V, and compared it with part 348, an FDIC regulation
that existed before the transfer of part 390, subpart V and that
continues to remain in effect today. Like the transferred rule, part
348 governs management official interlocks for State nonmember insured
banks and their affiliates. Although the two rules were substantively
the same, minor technical and conforming amendments were proposed.
---------------------------------------------------------------------------
\4\ 79 FR 42225 (July 21, 2014).
---------------------------------------------------------------------------
B. Amendments to Part 348
The FDIC proposed 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 proposed to add two new
definitions into section 348.2. A newly created subsection (i) would
have defined an ``FDIC-supervised institution'' as ``either an insured
nonmember bank or a State savings association.'' A newly created
subsection (p) would have defined ``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 proposal would also have
inserted an exemption from part 390, subpart V, section 390.403(i),
into a newly created subsection (j) of section 348.4. The exemption
would have allowed certain interlocking relationships for any 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 (``HOLA'').
If these proposals are finalized, oversight of management official
interlocks in part 348 will apply to all FDIC-supervised institutions,
including State savings associations, and part 390, subpart V would be
removed because it is largely redundant 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. Comments
The FDIC issued the NPR with a 60-day comment period, which closed
on September 19, 2014. The FDIC received no comments on its Proposed
Rule, and consequently the final rule (``Final Rule'') is adopted as
proposed without any changes.
IV. Explanation of the Final Rule
As discussed in the NPR, part 390, subpart V is substantively
similar to part 348, and the designation of part 348 as a single
authority of management official interlocks for all FDIC-supervised
institutions will serve to streamline the FDIC's rules and eliminate
unnecessary regulations. To that effect, the Final Rule removes and
rescinds 12 CFR part 390, subpart V in its entirety.
Consistent with the Proposed Rule, the Final Rule also amends
section 348.1(c) to modify the scope of part 348. The modified scope,
reflecting the FDIC's current supervisory responsibilities as the
appropriate Federal banking agency includes State savings associations
and their subsidiaries. The Final Rule also adds 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 Final Rule also inserts 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 that has issued stock in connection
with a qualified stock issuance pursuant to section 10(q) of HOLA.
V. Administrative Law Matters
A. The Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
(``PRA'') of 1995, 44 U.S.C. 3501-3521, the FDIC may not conduct or
sponsor, and the respondent is not required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (``OMB'') control number. The information
collections contained in part 348 are cleared by OMB under the FDIC's
``Management Official Interlocks'' information collection (OMB No.
3064-0118). The FDIC's burden estimates were updated in connection with
the collection's 2012 renewal to include State savings associations
transferred from the OTS to the FDIC. The FDIC reviewed its burden
estimates for the collection at the time it assumed responsibility for
supervision of State savings associations transferred from the OTS and
determined that no changes to the burden estimates were necessary. This
Final Rule does not modify the
[[Page 79252]]
FDIC's existing collection and does not create any new collections of
information pursuant to the PRA. Therefore, no information collection
request has been submitted to the OMB for review.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq.,
generally requires an agency to consider whether a final rule will have
a significant economic impact on a substantial number of small entities
(defined in regulations promulgated by the Small Business
Administration to include banking organizations with total assets of
less than or equal to $550 million).\5\ Pursuant to section 605(b) of
the RFA, a final regulatory flexibility analysis is not required if the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities, and publishes its
certification and a short explanatory statement in the Federal Register
together with the rule. For the reasons provided below, the FDIC
certifies that the Final Rule will not have a significant economic
impact on a substantial number of small entities. Accordingly, a
regulatory flexibility analysis is not required.
---------------------------------------------------------------------------
\5\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------
As discussed in the notice of proposed rulemaking, part 390,
subpart V was transferred from OTS part 563f, which governed management
official interlocks. OTS part 563f had been in effect since 1979, and
all State savings associations were required to comply with it. Because
it is redundant 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 for
management official interlocks. Because all State savings associations
and their affiliates have been required to comply with substantially
similar management official interlocks rules since 1979, the FDIC
certifies that the Final Rule will have no significant economic impact
on small entities or State savings associations.
C. Small Business Regulatory Enforcement Fairness Act
The Office of Management and Budget has determined that the Final
Rule is not a ``major rule'' within the meaning of the Small Business
Regulatory Enforcement Fairness Act of 1996 (``SBREFA''), 5 U.S.C. 801
et seq.
D. Plain Language
Section 722 of the Gramm-Leach-Bliley Act, 12 U.S.C. 4809, requires
each Federal banking agency to use plain language in all of its
proposed and final rules published after January 1, 2000. In the NPR,
the FDIC invited comments on whether the Proposed Rule was clearly
stated and effectively organized, and how the FDIC might make it easier
to understand. Although the FDIC did not receive any comments, the FDIC
sought to present the Final Rule in a simple and straightforward
manner.
E. The Economic Growth and Regulatory Paperwork Reduction Act
Under section 2222 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all
of its regulations, at least once every 10 years, in order to identify
any outdated or otherwise unnecessary regulations imposed on insured
depository institutions.\6\ The FDIC completed the last comprehensive
review of its regulations under EGRPRA in 2006 and is commencing the
next decennial review, which is expected to be completed by 2016. The
NPR solicited comments on whether the proposed rescission of part 390,
subpart V and amendments to part 348 would impose any outdated or
unnecessary regulatory requirements on insured depository institutions.
No comments on this issue were received. Upon review, the FDIC does not
believe that part 348, as amended by the Final Rule, imposes any
outdated or unnecessary regulatory requirements on any insured
depository institutions.
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\6\ Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996).
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List of Subjects
12 CFR Part 348
Banks, banking; Management official interlocks; Savings
associations
12 CFR Part 390
Management official interlocks
Authority and Issuance
For the reasons stated in the preamble, the Board of Directors of
the Federal Deposit Insurance Corporation amends parts 348 and 390 of
title 12 of the Code of Federal Regulations as follows:
0
1. Revise part 348 to read as follows:
PART 348--MANAGEMENT OFFICIAL INTERLOCKS
Sec.
348.1 Purpose and scope.
348.2 Other definitions and rules of construction.
348.3 Prohibitions.
348.4 Interlocking relationships permitted by statute.
348.5 Small market share exemption.
348.6 General exemption.
348.7 Change in circumstances.
348.8 Enforcement.
Authority: 12 U.S.C. 3207, 12 U.S.C. 1823(k).
Sec. 348.1 Purpose and scope.
(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.
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 79253]]
(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 79254]]
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 79255]]
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 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 L also issued under 12 U.S.C. 1831p-1.
Subpart M also issued under 12 U.S.C. 1818.
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; 78 l; 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).
Subpart V--[Removed and reserved]
0
3. Remove and reserve subpart V consisting of Sec. Sec. 390.400
through 390.408.
Dated at Washington, DC, this 15th day of December 2015.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2015-31940 Filed 12-18-15; 8:45 am]
BILLING CODE 6714-01-P
