Transferred OTS Regulations Regarding Fiduciary Powers of State Savings Associations and Consent Requirements for the Exercise of Trust Powers, 60333-60337 [2018-25659]
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60333
Rules and Regulations
Federal Register
Vol. 83, No. 227
Monday, November 26, 2018
I. Background
companies.1 Beginning July 21, 2011,
the transfer date established by section
311 of the Dodd-Frank Act, 12 U.S.C.
5411, the powers, duties, and functions
formerly performed by the Office of
Thrift Supervision (OTS) were divided
between 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, as to savings and loan
holding companies. Section 316(b) of
the Dodd-Frank Act, 12 U.S.C. 5414(b),
provides the manner of treatment for all
orders, resolutions, determinations,
regulations, and advisory materials, that
were issued, made, prescribed, or
allowed to become effective by the OTS.
The section provides that, if such
regulatory issuances 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superseded in accordance with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,
12 U.S.C. 5414(c), further directed the
FDIC and OCC to consult with one
another and to publish a list of the
continued OTS regulations that would
be enforced by each agency. 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, 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 DoddFrank Act, 12 U.S.C. 5412(c), amended
the definition of ‘‘appropriate Federal
The Dodd-Frank Act provided for a
substantial reorganization of the
regulation of State and Federal savings
associations and their holding
1 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010) (12 U.S.C. 5301 et seq.).
2 76 FR 39247 (July 6, 2011).
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 303, 333, and 390
RIN 3064–AE23
Transferred OTS Regulations
Regarding Fiduciary Powers of State
Savings Associations and Consent
Requirements for the Exercise of Trust
Powers
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to rescind and
remove regulations entitled Fiduciary
Powers of State Savings Associations,
from the Code of Federal Regulations,
and to amend current FDIC regulations
regarding consent to exercise trust
powers to reflect the applicability of
these parts to both State savings
associations and State nonmember
banks.
SUMMARY:
The final rule is effective January
1, 2019.
FOR FURTHER INFORMATION CONTACT:
Michael W. Orange, Senior Examination
Specialist-Trust, Division of Risk
Management and Supervision, 678–
916–2289, morange@fdic.gov; Karen J.
Currie, Senior Examination Specialist,
Division of Risk Management and
Supervision, 202–898–3981, kcurrie@
fdic.gov; Annmarie Boyd, Counsel,
Legal Division, 202–898–3714, aboyd@
fdic.gov; or Alexander S. Bonander,
Attorney, Legal Division, 202–898–
3621, abonander@fdic.gov; Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
DATES:
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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’’
for State savings associations and State
nonmember banks, as it does here, the
FDIC is authorized to issue, modify, and
rescind regulations involving such
institutions.
On June 14, 2011, pursuant to this
authority, the FDIC’s Board of Directors
reissued and redesignated certain
transferred regulations of the former
OTS as FDIC regulations. When these
transferred OTS regulations were
published as new FDIC regulations in
the Federal Register on August 5, 2011,3
the FDIC specifically noted that it
would evaluate the transferred OTS
regulations and might later incorporate
them into other FDIC rules, amend
them, or rescind them, as appropriate.
II. Part 390 Subpart J: Fiduciary Powers
of State Savings Associations
The OTS regulation formerly found at
12 CFR 550.10(b)(1), which covered the
fiduciary powers (also known as trust
powers) of State savings associations,
was transferred to the FDIC with only
nominal changes and is now found in
the FDIC’s rules at 12 CFR part 390,
subpart J (Subpart J). Subpart J provides
that a State savings association must
conduct its fiduciary operations in
accordance with applicable State law
and must exercise its fiduciary powers
in a safe and sound manner.
III. State Nonmember Banks and Trust
Powers
Unlike the explicit requirement
applicable to State savings associations
in Subpart J, there is no express rule
requiring State nonmember banks to
conduct fiduciary operations in
accordance with applicable State law
and to exercise their fiduciary powers in
a safe and sound manner. However, the
FDIC has long recognized that State
nonmember banks, like State savings
associations, must comply with State
law when exercising trust or fiduciary
powers.4 This reflects a widely
3 76
FR 47652 (Aug. 5, 2011).
Trust Examination Manual, https://
www.fdic.gov/regulations/examinations/
4 FDIC
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understood industry principle that the
trust powers of State chartered
institutions are granted under State law
and are primarily administered by the
State chartering authority.5
State nonmember banks are generally
required to file an application for
consent to exercise trust powers.6
Therefore, if a State nonmember bank
seeks to change the nature of its current
business to include trust activities,
section 333.2 requires the bank to obtain
the FDIC’s prior written consent.7 Under
section 333.101(b), however, prior
written consent is not required when a
State nonmember bank seeks to act as
trustee or custodian of certain qualified
retirement, education, and health
savings accounts, or other similar
accounts in which the bank’s duties are
essentially custodial or ministerial in
nature and the acceptance of such
accounts without trust powers is not
contrary to applicable State law.8
Section 303.242 contains application
procedures that a State nonmember
bank must follow to obtain the FDIC’s
prior written consent before engaging in
trust activities.9 Prior to granting such
consent, the FDIC considers whether the
bank will conduct trust operations in a
safe and sound manner, consistent with
State law.
IV. The Proposed Rule
On April 10, 2018, the FDIC issued a
Notice of Proposed Rulemaking (NPR or
Proposed Rule) entitled Transferred
trustmanual/section_10/section_x.html#B1. (The
trust powers of State nonmember banks are granted
under State law and the administration of trust
powers primarily rests with the State as a State
nonmember bank’s chartering authority.).
5 Id.
6 Banks granted trust powers by statute or charter
prior to December 1, 1950, are considered
grandfathered from the requirement to obtain
consent to exercise trust powers. See 12 CFR
303.242(a).
7 A State nonmember bank is required to obtain
the FDIC’s prior written consent before changing its
general character or type of business. 12 CFR 333.2.
8 These accounts include Individual Retirement
Accounts (IRAs), Self-Employed Retirement Plans,
Roth IRAs, Coverdell Education Savings Accounts,
Health Savings Accounts, and other accounts in
which: (1) The bank’s duties are essentially
custodial or ministerial in nature; (2) the bank is
required to invest the funds from such plans only
in its own time or savings deposits or in any other
assets at the direction of the customer; and (3) the
bank’s acceptance of such accounts without trust
powers is not contrary to applicable State law. See
12 CFR 333.101(b).
9 State nonmember banks must file an application
to obtain the FDIC’s prior written consent to
exercise trust powers unless: (1) The bank received
authority to exercise trust powers by its chartering
authority prior to December 1, 1950; or (2) the
insured depository institution continues to conduct
trust activities pursuant to the authority granted to
it by its chartering authority subsequent to a charter
conversion or withdrawal from membership in the
Federal Reserve System. 12 CFR 303.242(a).
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OTS Regulations Regarding Fiduciary
Powers of State Savings Associations
and Consent Requirements for the
Exercise of Trust Powers.10 The NPR
proposed to: (1) Rescind Subpart J in its
entirety; (2) add a new section 333.3
explicitly providing that State savings
associations and State nonmember
banks must obtain the FDIC’s prior
written consent before exercising trust
powers by following the procedures
contained in section 303.242; (3) revise
section 333.101 to provide that State
savings associations, as well as State
nonmember banks, are not considered to
be exercising trust powers when acting
as trustees or custodians for certain
qualified retirement, education, and
health savings accounts, or other similar
accounts in which the bank’s duties are
essentially custodial or ministerial in
nature and the acceptance of such
accounts without trust powers is not
contrary to applicable State law; and (4)
revise section 303.242 to make its
application procedures applicable to
both State savings associations and State
nonmember banks and incorporate a
listing of documents required to be
submitted with the application for
consent to exercise trust powers.
V. Comments
The FDIC issued the NPR with a 60day comment period that closed on June
11, 2018. The FDIC requested comments
on all aspects of the Proposed Rule,
including whether Subpart J should be
retained and what positive or negative
impacts could result from the proposed
revisions to parts 333 and 303,
including the impact on State savings
associations not currently exercising
trust powers that would need to obtain
FDIC consent if they chose to do so in
the future. The FDIC received no
comments on the Proposed Rule.
Accordingly, the FDIC is adopting the
Proposed Rule largely as proposed, but
without incorporating the listing of
documents in section 303.242. As
discussed further below, this change is
intended to avoid unnecessary
duplication or confusion with the
existing application form and further
regulatory revisions in the event of any
future changes to the documentation
listed on the form.
VI. Explanation of the Final Rule
As discussed in the NPR, the FDIC
concluded that the rescission of Subpart
J would streamline the FDIC rules and
regulations, and no comments were
received on this issue. Therefore, the
final rule removes and rescinds 12 CFR
part 390, subpart J in its entirety.
10 83
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FR 15327 (Apr. 10, 2018).
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The final rule adds a new section
333.3, unchanged from the NPR,
explicitly requiring State savings
associations and State nonmember
banks to obtain the FDIC’s prior written
consent before exercising trust powers.
For State nonmember banks, section
333.3 makes explicit the FDIC’s existing
requirement that State nonmember
banks receive the FDIC’s consent before
initially exercising trust powers, as such
an action would constitute a change in
the bank’s general character or business
under 12 CFR 333.2. For State savings
associations, Section 333.3 adds a new
requirement to obtain the FDIC’s prior
written consent should they choose in
the future to exercise trust powers
granted by their State chartering
authorities. In effect, section 333.3
makes the requirement to file an
application consistent for both State
savings associations and State
nonmember banks.
The final rule, like the NPR, also
revises section 333.101(b) to permit both
State savings associations and State
nonmember banks to act as custodians
for qualifying retirement, education, and
health savings accounts, or other similar
accounts without being deemed to
exercise trust powers, and therefore
without obtaining the FDIC’s prior
written consent.
The final rule, like the NPR, makes
the application procedures in section
303.242 applicable to both State savings
associations and State nonmember
banks. Accordingly, under section
303.242(a) of the final rule, neither State
savings associations nor State
nonmember banks are required to
receive the FDIC’s prior written consent
to exercise trust powers when: (1) The
institution received authority to exercise
trust powers from its chartering
authority prior to December 1, 1950; or
(2) the institution continues to conduct
trust activities pursuant to authority
granted by its chartering authority
subsequent to a charter conversion or
withdrawal from membership in the
Federal Reserve System. The NPR
originally proposed to amend section
303.242 (c) to list specific documents
typically filed as part of an application
to exercise trust powers.11 Upon further
consideration, the FDIC determined not
to list these items in the final rule in
order to avoid duplication with the
items already listed in the instructions
on the existing application form for
consent to exercise trust powers and the
need for additional, corresponding
changes to section 303.242(c) to reflect
any future updates to the existing
11 83
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FR 15327, 15320.
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form.12 Accordingly, the final rule does
not change section 303.242(c), which
continues to provide that the required
filing shall consist of the completed
application form.13
VII. Regulatory Process
A. The Paperwork Reduction Act
Certain provisions of the final rule
contain ‘‘collection of information’’
requirements within the meaning of the
Paperwork Reduction Act (PRA) of
1995, codified at 44 U.S.C. 3501–3521.
In accordance with the PRA, 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 OMB control number for
this collection of information is 3064–
0025.14 As required by the PRA and
OMB implementing regulations (5 CFR
part 1320), when the NPR was
published, the FDIC submitted the
information collection requirements
contained in this final rulemaking to
OMB for review and approval. OMB
filed its Notice of Action preapproving
this submission on May 16, 2018.
The final rule, like the NPR, would
rescind and remove Part 390, Subpart J
from Title 12 of the Code of Federal
Regulations, amend Parts 303 and 333 to
clarify the existing consent
requirements for State nonmember
banks, and incorporate references to
State savings associations into those
parts. These changes would not add
additional burden to the FDIC’s current
information collection under OMB
control number 3064–0025, Application
for Consent to Exercise Trust Powers.
However, the revision of Parts 303 and
333 to include State savings associations
as potential filers would add additional
burden to the FDIC’s current
information collection under OMB
control number 3064–0025, as State
Type of burden
Estimated
number of
respondents
Estimated
hours per
response
60335
savings associations would be required
to complete the designated application
and submit required documentation to
comply with Parts 303 and 333.
Currently, there are a total of forty one
State savings associations. There is only
one State savings association currently
exercising trust powers, so there are
forty State savings associations that
would potentially need to seek the
FDIC’s consent pursuant to the
proposed revisions to Parts 303 and 333
before exercising trust powers.15
In the NPR, the FDIC proposed to
revise this information collection as
follows:
Title: Application for Consent to
Exercise Trust Powers.
OMB Number: 3064–0025.
Form Number: FDIC 6200/09.
Affected Public: Insured State
nonmember banks and insured State
savings associations wishing to exercise
trust powers.
Frequency of response
Total annual
estimated
burden
(hours)
Eligible depository institutions
Not-eligible depository institutions.
Reporting ..............................
Reporting ..............................
9
4
8
24
On Occasion .........................
On Occasion .........................
72
96
Totals ..............................
...............................................
13
........................
...............................................
168
The FDIC did not receive any
comments on its proposed revisions to
this information collection.
Accordingly, the information collection
revisions are adopted as proposed in the
NPR and replicated in the chart above.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 16 requires that, in connection
with a final rulemaking, an agency
prepare and make available for public
comment a final regulatory flexibility
analysis that describes the impact of the
proposed rule on small entities (defined
in regulations promulgated by the
United States Small Business
Administration to include banking
organizations with total assets of less
than or equal to $550 million). 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
12 FDIC, Application for Consent to Exercise Trust
Powers, https://www.fdic.gov/formsdocuments/
6200-09.pdf.
13 12 CFR 303.242(c).
14 The information collection for Application for
Consent to Exercise Trust Powers, OMB No. 3064–
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statement in the Federal Register
together with the rule.17 As discussed
above and in the NPR, the FDIC has
authority to issue, modify and rescind
regulations as the appropriate Federal
banking agency for State savings
associations and State nonmember
banks. In addition to the approach taken
in the NPR and final rule, the FDIC also
considered the alternative of
maintaining the status quo, which
would have retained the separate
regulatory regimes for State savings
associations and State non-member
banks.
The final rule amends part 333 to
state that both State savings associations
and State nonmember banks seeking to
exercise trust powers must obtain FDIC
consent. The final rule is not expected
to impact State nonmember banks, as it
results in no substantive changes for
those institutions. Prior to the final rule,
State nonmember banks were subject to
the longstanding interpretation that the
initial exercise of trust powers granted
by a chartering authority constituted a
change in the character of the bank’s
business under 12 CFR 333.2, and
thereby required the FDIC’s prior
written approval. The final rule clarifies
this issue by explicitly stating the
longstanding requirement that State
nonmember banks obtain the FDIC’s
prior written approval before exercising
trust powers for the first time.
As discussed above, the revisions to
part 333 require a filing by those State
savings associations that seek to
exercise trust powers in the future.
However, a State savings association’s
application for the FDIC’s consent to
exercise trust powers would be a onetime process that is not anticipated to
create a significant economic impact.
The information requested on the
application form would require a State
savings association to identify the type
of trust power it seeks to exercise and
to provide documentation that includes
0025, was renewed by OMB on August 30, 2017,
and now expires on August 31, 2020.
15 Call Report Data, June 2018.
16 5 U.S.C. 601 et seq.
17 The FDIC supervises 3,675institutions, of
which 2,850 are ‘‘small entities’’ according to the
terms of RFA. There are 2,832 small state nonmember banks and 38 small state savings
associations. See Call Report Data, June 2018.
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proof of the adoption of the FDIC’s
Statement of Principles of Trust
Department Management, identification
of the applicable trust officer, trust
committee, trust counsel, servicing
arrangements, proof of the requisite
approvals by the appropriate State
authority, a projection of the proposed
trust activity’s three-year performance,
and a statement of its impact on the
applicant.18
Based on the FDIC’s supervisory
experience, most of the documentation
required, such as State approval,
servicing arrangements, and designation
of personnel to serve as appropriate
trust counsel, trust officer, and trust
committee directors, is based on
information and resources that a State
savings association applicant would
already possess or have to establish in
order to exercise trust powers,
regardless of whether it seeks the FDIC’s
prior written consent. Submitting
existing information is not expected to
create significant, additional expenses
for a State savings association seeking
the FDIC’s prior written consent to
exercise trust powers. The FDIC
estimates that it will receive relatively
few applications, given the small overall
number of State savings associations
(40) that would be affected by the rule
if they sought to exercise trust powers.
In addition, no comments were received
pertaining to the RFA discussion in the
NPR.
For these reasons, the FDIC certifies
that the final rule would not have a
significant economic impact on a
substantial number of small entities,
within the meaning of those terms as
used in the RFA. Accordingly, a
regulatory flexibility analysis is not
required.
C. Small Business Regulatory
Enforcement Fairness Act
The OMB 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).19 As required by
SBREFA, the FDIC will submit the final
rule and other appropriate reports to
Congress and the Government
Accountability Office for review.
D. Plain Language
Section 722 of the Gramm-LeachBliley Act 20 requires each Federal
banking agency to use plain language in
all of its proposed and final rules
published after January 1, 2000. In the
6200/09 (10–05).
U.S.C. 801 et seq.
20 Public Law 106–102, section 722, 113 Stat.
1338, 1471 (1999).
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 no comments
were received, the FDIC has sought to
present the final rule in a simple and
straightforward manner.
E. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act
(RCDRIA),21 in determining the effective
date and administrative compliance
requirements for a new regulation that
imposes additional reporting,
disclosure, or other requirements on
insured depository institutions, each
Federal banking agency must consider,
consistent with principles of safety and
soundness and the public interest, any
administrative burdens that such
regulations would place on depository
institutions, including small depository
institutions, and customers of
depository institutions, as well as the
benefits of such regulations. In addition,
section 302(b) of RCDRIA requires new
regulations and amendments to
regulations that impose additional
reporting, disclosure, or other new
requirements on insured depository
institutions generally to take effect on
the first day of a calendar quarter that
begins on or after the date on which the
regulations are published in final
form.22
In accordance with these provisions,
the FDIC considered any administrative
burdens, as well as benefits, that the
final rule would place on depository
institutions and their customers in
determining the effective date and
administrative compliance requirements
of the final rule. The final rule imposes
a new requirement on State savings
associations to obtain the FDIC’s
consent before exercising trust powers
granted by State chartering authorities
and, in accordance with RCDRIA and
the Administrative Procedure Act,23
will be effective no earlier than the first
day of the calendar quarter that is at
least 30 days following the date on
which the final rule is published in the
Federal Register. However, as discussed
above, the application primarily
requires submission of pre-existing
documentation and is not expected to be
burdensome for depository institutions
or their customers. The final rule also
provides greater clarity to FDICsupervised institutions and results in
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F. 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 ten years
in order to identify any outdated or
otherwise unnecessary regulations
imposed on insured institutions.24 The
FDIC, along with the other Federal
banking agencies, submitted a Joint
Report to Congress on March 21, 2017
(EGRPRA Report), discussing how the
review was conducted, what has been
done to date to address regulatory
burden, and further measures to address
issues identified during the review
process. As noted in the EGRPRA
Report, the FDIC is continuing to
streamline and clarify its regulations
through the OTS rule integration
process. By removing outdated or
unnecessary regulations, such as
Subpart J, and amending Parts 303 and
333, this rule complements other
actions the FDIC has taken, separately
and with the other Federal banking
agencies, to further the EGRPRA
mandate.
List of Subjects
12 CFR Part 303
Administrative practice and
procedure, Bank deposit insurance,
Banks, banking, Reporting and
recordkeeping requirements, Savings
associations, Trusts and trustees.
12 CFR Part 333
Banks, banking, Corporate powers,
Savings associations, Trusts and
trustees.
12 CFR Part 390
Administrative practice and
procedure, Advertising, Aged, Civil
rights, Conflict of interests, Credit,
Crime, Equal employment opportunity,
Fair housing, Government employees,
Individuals with disabilities, Reporting
and recordkeeping requirements,
Savings associations.
Authority and Issuance
For the reasons stated in the
preamble, the Federal Deposit Insurance
Corporation amends 12 CFR parts 308,
333, and 390 as follows:
PART 303—FILING PROCEDURES
1. The authority citation for part 303
is revised to read as follows:
■
18 FDIC
19 5
greater consistency in the application
process.
21 12
U.S.C. 4802(a).
22 12 U.S.C. 4802.
23 5 U.S.C. 553(d).
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24 Public
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Law 104–208, 110 Stat. 3009 (1996).
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Authority: 12 U.S.C. 378, 1464, 1813, 1815,
1817, 1818, 1819(a) (Seventh and Tenth),
1820, 1823, 1828, 1831a, 1831e, 1831o,
1831p–1, 1831w, 1835a, 1843(l), 3104, 3105,
3108, 3207, 5414, 5415 and 15 U.S.C. 1601–
1607.
■
2. Revise § 303.242 to read as follows:
§ 303.242
Exercise of trust powers.
(a) Scope. This section contains the
procedures to be followed by a State
nonmember bank or State savings
association that seeks to obtain the
FDIC’s prior written consent to exercise
trust powers. The FDIC’s prior written
consent to exercise trust powers is not
required in the following circumstances:
(1) Where a State nonmember bank or
State savings association received
authority to exercise trust powers from
its chartering authority prior to
December 1, 1950; or
(2) Where the institution continues to
conduct trust activities pursuant to
authority granted by its chartering
authority subsequent to a charter
conversion or withdrawal from
membership in the Federal Reserve
System.
(b) Where to file. Applicants shall
submit to the appropriate FDIC office a
completed form, ‘‘Application for
Consent to Exercise Trust Powers.’’ This
form may be obtained from any FDIC
regional director.
(c) Content of filing. The filing shall
consist of the completed trust
application form.
(d) Additional information. The FDIC
may request additional information at
any time during processing of the filing.
(e) Expedited processing for eligible
depository institutions. An application
filed under this section by an eligible
depository institution as defined in
§ 303.2(r) will be acknowledged in
writing by the FDIC and will receive
expedited processing, unless the
applicant is notified in writing to the
contrary and provided with the basis for
that decision. The FDIC may remove an
application from expedited processing
for any of the reasons set forth in
§ 303.11(c)(2.). Absent such removal, an
application processed under expedited
procedures will be deemed approved 30
days after the FDIC’s receipt of a
substantially complete application.
(f) Standard processing. For those
applications that are not processed
pursuant to the expedited procedures,
the FDIC will provide the applicant
with written notification of the final
action when the decision is rendered.
PART 333—EXTENSION OF
CORPORATE POWERS
3. The authority citation for part 333
is revised to read as follows:
16:13 Nov 23, 2018
■
4. Add § 333.3 to read as follows:
§ 333.3 Consent required for exercise of
trust powers.
Except as provided in 12 CFR
303.242(a), a State nonmember bank or
State savings association seeking to
exercise trust powers must obtain prior
written consent from the FDIC.
Procedures for obtaining the FDIC’s
prior written consent are set forth in 12
CFR 303.242.
■ 5. Revise § 333.101(b) to read as
follows:
§ 333.101
Prior consent not required.
*
*
*
*
*
(b) An insured State nonmember bank
or State savings association, not
exercising trust powers, may act as
trustee or custodian of Individual
Retirement Accounts established
pursuant to the Employee Retirement
Income Security Act of 1974 (26 U.S.C.
408), Self-Employed Retirement Plans
established pursuant to the SelfEmployed Individuals Retirement Act of
1962 (26 U.S.C. 401), Roth Individual
Retirement Accounts and Coverdell
Education Savings Accounts established
pursuant to the Taxpayer Relief Act of
1997 (26 U.S.C. 408A and 530
respectively), Health Savings Accounts
established pursuant to the Medicare
Prescription Drug Improvement and
Modernization Act of 2003 (26 U.S.C.
223), and other similar accounts without
the prior written consent of the
Corporation provided:
(1) The bank’s or savings association’s
duties as trustee or custodian are
essentially custodial or ministerial in
nature,
(2) The bank or savings association is
required to invest the funds from such
plans only
(i) In its own time or savings deposits,
or
(ii) In any other assets at the direction
of the customer, provided the bank or
savings association does not exercise
any investment discretion or provide
any investment advice with respect to
such account assets, and
(3) The bank’s or savings association’s
acceptance of such accounts without
trust powers is not contrary to
applicable State law.
PART 390—REGULATIONS
TRANSFERRED FROM THE OFFICE OF
THRIFT SUPERVISION
6. The authority citation for part 390
is revised to read as follows:
■
■
VerDate Sep<11>2014
Authority: 12 U.S.C. 1816; 1817(i); 1818;
1819(a) (‘‘Seventh’’, ‘‘Eighth’’, and ‘‘Tenth’’),
1828, 1828(m), 1831p–1(c), 5414 and 5415.
Jkt 247001
Authority: 12 U.S.C. 1819.
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
60337
Subpart J—[Removed and reserved]
7. Remove and reserve subpart J,
consisting of § 390.190.
■
Dated at Washington, DC, on November 20,
2018.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2018–25659 Filed 11–23–18; 8:45 am]
BILLING CODE 6714–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2018–0582; Product
Identifier 2018–NM–085–AD; Amendment
39–19503; AD 93–14–19R1]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule; removal.
AGENCY:
We are removing
Airworthiness Directive (AD) 93–14–19,
which applied to certain The Boeing
Company Model 767–200 and –300
series airplanes. AD 93–14–19 required
inspections for disbonding of the
trailing edge wedge of the leading edge
slat; and repair, if necessary. We issued
AD 93–14–19 to prevent the loss of a
trailing edge wedge, which could result
in reduced maneuver margins, reduced
speed margins to stall, and unexpected
roll before stall warning, all of which
would adversely affect the
controllability of the airplane. Since we
issued AD 93–14–19, an updated
stability and control analysis showed
that the worst-case scenario of a trailing
edge wedge disbond in-flight would not
adversely affect the controllability of the
airplane. Accordingly, AD 93–14–19 is
removed.
DATES: This AD becomes effective
November 26, 2018.
ADDRESSES:
SUMMARY:
Examining the AD Docket
You may examine the AD docket on
the internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0582; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this AD, the
E:\FR\FM\26NOR1.SGM
26NOR1
]]>Agencies
[Federal Register Volume 83, Number 227 (Monday, November 26, 2018)]
[Rules and Regulations]
[Pages 60333-60337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25659]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 83 , No. 227 / Monday, November 26, 2018 /
Rules and Regulations
[[Page 60333]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 303, 333, and 390
RIN 3064-AE23
Transferred OTS Regulations Regarding Fiduciary Powers of State
Savings Associations and Consent Requirements for the Exercise of Trust
Powers
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is adopting a
final rule to rescind and remove regulations entitled Fiduciary Powers
of State Savings Associations, from the Code of Federal Regulations,
and to amend current FDIC regulations regarding consent to exercise
trust powers to reflect the applicability of these parts to both State
savings associations and State nonmember banks.
DATES: The final rule is effective January 1, 2019.
FOR FURTHER INFORMATION CONTACT: Michael W. Orange, Senior Examination
Specialist-Trust, Division of Risk Management and Supervision, 678-916-
2289, [email protected]; Karen J. Currie, Senior Examination Specialist,
Division of Risk Management and Supervision, 202-898-3981,
[email protected]; Annmarie Boyd, Counsel, Legal Division, 202-898-3714,
[email protected]; or Alexander S. Bonander, Attorney, Legal Division,
202-898-3621, [email protected]; Federal Deposit Insurance
Corporation, 550 17th Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Act provided for a substantial reorganization of the
regulation of State and Federal savings associations and their holding
companies.\1\ Beginning July 21, 2011, the transfer date established by
section 311 of the Dodd-Frank Act, 12 U.S.C. 5411, the powers, duties,
and functions formerly performed by the Office of Thrift Supervision
(OTS) were divided between 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, as to savings and loan holding companies. Section 316(b) of the
Dodd-Frank Act, 12 U.S.C. 5414(b), provides the manner of treatment for
all orders, resolutions, determinations, regulations, and advisory
materials, that were issued, made, prescribed, or allowed to become
effective by the OTS. The section provides that, if such regulatory
issuances 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) (12 U.S.C. 5301 et seq.).
---------------------------------------------------------------------------
Section 316(c) of the Dodd-Frank Act, 12 U.S.C. 5414(c), further
directed the FDIC and OCC to consult with one another and to publish a
list of the continued OTS regulations that would be enforced by each
agency. 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, 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, 12 U.S.C.
5412(c), 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'' for State savings associations and State nonmember
banks, as it does here, the FDIC is authorized to issue, modify, and
rescind regulations involving such institutions.
On June 14, 2011, pursuant to this authority, the FDIC's Board of
Directors reissued and redesignated certain transferred regulations of
the former OTS as FDIC regulations. When these transferred OTS
regulations were published as new FDIC regulations in the Federal
Register on August 5, 2011,\3\ the FDIC specifically noted that it
would evaluate the transferred OTS regulations and might later
incorporate them into other FDIC rules, amend them, or rescind them, as
appropriate.
---------------------------------------------------------------------------
\3\ 76 FR 47652 (Aug. 5, 2011).
---------------------------------------------------------------------------
II. Part 390 Subpart J: Fiduciary Powers of State Savings Associations
The OTS regulation formerly found at 12 CFR 550.10(b)(1), which
covered the fiduciary powers (also known as trust powers) of State
savings associations, was transferred to the FDIC with only nominal
changes and is now found in the FDIC's rules at 12 CFR part 390,
subpart J (Subpart J). Subpart J provides that a State savings
association must conduct its fiduciary operations in accordance with
applicable State law and must exercise its fiduciary powers in a safe
and sound manner.
III. State Nonmember Banks and Trust Powers
Unlike the explicit requirement applicable to State savings
associations in Subpart J, there is no express rule requiring State
nonmember banks to conduct fiduciary operations in accordance with
applicable State law and to exercise their fiduciary powers in a safe
and sound manner. However, the FDIC has long recognized that State
nonmember banks, like State savings associations, must comply with
State law when exercising trust or fiduciary powers.\4\ This reflects a
widely
[[Page 60334]]
understood industry principle that the trust powers of State chartered
institutions are granted under State law and are primarily administered
by the State chartering authority.\5\
---------------------------------------------------------------------------
\4\ FDIC Trust Examination Manual, https://www.fdic.gov/regulations/examinations/trustmanual/section_10/section_x.html#B1.
(The trust powers of State nonmember banks are granted under State
law and the administration of trust powers primarily rests with the
State as a State nonmember bank's chartering authority.).
\5\ Id.
---------------------------------------------------------------------------
State nonmember banks are generally required to file an application
for consent to exercise trust powers.\6\ Therefore, if a State
nonmember bank seeks to change the nature of its current business to
include trust activities, section 333.2 requires the bank to obtain the
FDIC's prior written consent.\7\ Under section 333.101(b), however,
prior written consent is not required when a State nonmember bank seeks
to act as trustee or custodian of certain qualified retirement,
education, and health savings accounts, or other similar accounts in
which the bank's duties are essentially custodial or ministerial in
nature and the acceptance of such accounts without trust powers is not
contrary to applicable State law.\8\
---------------------------------------------------------------------------
\6\ Banks granted trust powers by statute or charter prior to
December 1, 1950, are considered grandfathered from the requirement
to obtain consent to exercise trust powers. See 12 CFR 303.242(a).
\7\ A State nonmember bank is required to obtain the FDIC's
prior written consent before changing its general character or type
of business. 12 CFR 333.2.
\8\ These accounts include Individual Retirement Accounts
(IRAs), Self-Employed Retirement Plans, Roth IRAs, Coverdell
Education Savings Accounts, Health Savings Accounts, and other
accounts in which: (1) The bank's duties are essentially custodial
or ministerial in nature; (2) the bank is required to invest the
funds from such plans only in its own time or savings deposits or in
any other assets at the direction of the customer; and (3) the
bank's acceptance of such accounts without trust powers is not
contrary to applicable State law. See 12 CFR 333.101(b).
---------------------------------------------------------------------------
Section 303.242 contains application procedures that a State
nonmember bank must follow to obtain the FDIC's prior written consent
before engaging in trust activities.\9\ Prior to granting such consent,
the FDIC considers whether the bank will conduct trust operations in a
safe and sound manner, consistent with State law.
---------------------------------------------------------------------------
\9\ State nonmember banks must file an application to obtain the
FDIC's prior written consent to exercise trust powers unless: (1)
The bank received authority to exercise trust powers by its
chartering authority prior to December 1, 1950; or (2) the insured
depository institution continues to conduct trust activities
pursuant to the authority granted to it by its chartering authority
subsequent to a charter conversion or withdrawal from membership in
the Federal Reserve System. 12 CFR 303.242(a).
---------------------------------------------------------------------------
IV. The Proposed Rule
On April 10, 2018, the FDIC issued a Notice of Proposed Rulemaking
(NPR or Proposed Rule) entitled Transferred OTS Regulations Regarding
Fiduciary Powers of State Savings Associations and Consent Requirements
for the Exercise of Trust Powers.\10\ The NPR proposed to: (1) Rescind
Subpart J in its entirety; (2) add a new section 333.3 explicitly
providing that State savings associations and State nonmember banks
must obtain the FDIC's prior written consent before exercising trust
powers by following the procedures contained in section 303.242; (3)
revise section 333.101 to provide that State savings associations, as
well as State nonmember banks, are not considered to be exercising
trust powers when acting as trustees or custodians for certain
qualified retirement, education, and health savings accounts, or other
similar accounts in which the bank's duties are essentially custodial
or ministerial in nature and the acceptance of such accounts without
trust powers is not contrary to applicable State law; and (4) revise
section 303.242 to make its application procedures applicable to both
State savings associations and State nonmember banks and incorporate a
listing of documents required to be submitted with the application for
consent to exercise trust powers.
---------------------------------------------------------------------------
\10\ 83 FR 15327 (Apr. 10, 2018).
---------------------------------------------------------------------------
V. Comments
The FDIC issued the NPR with a 60-day comment period that closed on
June 11, 2018. The FDIC requested comments on all aspects of the
Proposed Rule, including whether Subpart J should be retained and what
positive or negative impacts could result from the proposed revisions
to parts 333 and 303, including the impact on State savings
associations not currently exercising trust powers that would need to
obtain FDIC consent if they chose to do so in the future. The FDIC
received no comments on the Proposed Rule. Accordingly, the FDIC is
adopting the Proposed Rule largely as proposed, but without
incorporating the listing of documents in section 303.242. As discussed
further below, this change is intended to avoid unnecessary duplication
or confusion with the existing application form and further regulatory
revisions in the event of any future changes to the documentation
listed on the form.
VI. Explanation of the Final Rule
As discussed in the NPR, the FDIC concluded that the rescission of
Subpart J would streamline the FDIC rules and regulations, and no
comments were received on this issue. Therefore, the final rule removes
and rescinds 12 CFR part 390, subpart J in its entirety.
The final rule adds a new section 333.3, unchanged from the NPR,
explicitly requiring State savings associations and State nonmember
banks to obtain the FDIC's prior written consent before exercising
trust powers. For State nonmember banks, section 333.3 makes explicit
the FDIC's existing requirement that State nonmember banks receive the
FDIC's consent before initially exercising trust powers, as such an
action would constitute a change in the bank's general character or
business under 12 CFR 333.2. For State savings associations, Section
333.3 adds a new requirement to obtain the FDIC's prior written consent
should they choose in the future to exercise trust powers granted by
their State chartering authorities. In effect, section 333.3 makes the
requirement to file an application consistent for both State savings
associations and State nonmember banks.
The final rule, like the NPR, also revises section 333.101(b) to
permit both State savings associations and State nonmember banks to act
as custodians for qualifying retirement, education, and health savings
accounts, or other similar accounts without being deemed to exercise
trust powers, and therefore without obtaining the FDIC's prior written
consent.
The final rule, like the NPR, makes the application procedures in
section 303.242 applicable to both State savings associations and State
nonmember banks. Accordingly, under section 303.242(a) of the final
rule, neither State savings associations nor State nonmember banks are
required to receive the FDIC's prior written consent to exercise trust
powers when: (1) The institution received authority to exercise trust
powers from its chartering authority prior to December 1, 1950; or (2)
the institution continues to conduct trust activities pursuant to
authority granted by its chartering authority subsequent to a charter
conversion or withdrawal from membership in the Federal Reserve System.
The NPR originally proposed to amend section 303.242 (c) to list
specific documents typically filed as part of an application to
exercise trust powers.\11\ Upon further consideration, the FDIC
determined not to list these items in the final rule in order to avoid
duplication with the items already listed in the instructions on the
existing application form for consent to exercise trust powers and the
need for additional, corresponding changes to section 303.242(c) to
reflect any future updates to the existing
[[Page 60335]]
form.\12\ Accordingly, the final rule does not change section
303.242(c), which continues to provide that the required filing shall
consist of the completed application form.\13\
---------------------------------------------------------------------------
\11\ 83 FR 15327, 15320.
\12\ FDIC, Application for Consent to Exercise Trust Powers,
https://www.fdic.gov/formsdocuments/6200-09.pdf.
\13\ 12 CFR 303.242(c).
---------------------------------------------------------------------------
VII. Regulatory Process
A. The Paperwork Reduction Act
Certain provisions of the final rule contain ``collection of
information'' requirements within the meaning of the Paperwork
Reduction Act (PRA) of 1995, codified at 44 U.S.C. 3501-3521. In
accordance with the PRA, 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 OMB control number for this collection of
information is 3064-0025.\14\ As required by the PRA and OMB
implementing regulations (5 CFR part 1320), when the NPR was published,
the FDIC submitted the information collection requirements contained in
this final rulemaking to OMB for review and approval. OMB filed its
Notice of Action preapproving this submission on May 16, 2018.
---------------------------------------------------------------------------
\14\ The information collection for Application for Consent to
Exercise Trust Powers, OMB No. 3064-0025, was renewed by OMB on
August 30, 2017, and now expires on August 31, 2020.
---------------------------------------------------------------------------
The final rule, like the NPR, would rescind and remove Part 390,
Subpart J from Title 12 of the Code of Federal Regulations, amend Parts
303 and 333 to clarify the existing consent requirements for State
nonmember banks, and incorporate references to State savings
associations into those parts. These changes would not add additional
burden to the FDIC's current information collection under OMB control
number 3064-0025, Application for Consent to Exercise Trust Powers.
However, the revision of Parts 303 and 333 to include State savings
associations as potential filers would add additional burden to the
FDIC's current information collection under OMB control number 3064-
0025, as State savings associations would be required to complete the
designated application and submit required documentation to comply with
Parts 303 and 333. Currently, there are a total of forty one State
savings associations. There is only one State savings association
currently exercising trust powers, so there are forty State savings
associations that would potentially need to seek the FDIC's consent
pursuant to the proposed revisions to Parts 303 and 333 before
exercising trust powers.\15\
---------------------------------------------------------------------------
\15\ Call Report Data, June 2018.
---------------------------------------------------------------------------
In the NPR, the FDIC proposed to revise this information collection
as follows:
Title: Application for Consent to Exercise Trust Powers.
OMB Number: 3064-0025.
Form Number: FDIC 6200/09.
Affected Public: Insured State nonmember banks and insured State
savings associations wishing to exercise trust powers.
----------------------------------------------------------------------------------------------------------------
Estimated Estimated Total annual
Type of burden number of hours per Frequency of estimated
respondents response response burden (hours)
----------------------------------------------------------------------------------------------------------------
Eligible depository Reporting....... 9 8 On Occasion.... 72
institutions.
Not-eligible depository Reporting....... 4 24 On Occasion.... 96
institutions.
----------------------------------------------------------------
Totals................... ................ 13 .............. ............... 168
----------------------------------------------------------------------------------------------------------------
The FDIC did not receive any comments on its proposed revisions to
this information collection. Accordingly, the information collection
revisions are adopted as proposed in the NPR and replicated in the
chart above.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \16\ requires that, in
connection with a final rulemaking, an agency prepare and make
available for public comment a final regulatory flexibility analysis
that describes the impact of the proposed rule on small entities
(defined in regulations promulgated by the United States Small Business
Administration to include banking organizations with total assets of
less than or equal to $550 million). 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.\17\ As
discussed above and in the NPR, the FDIC has authority to issue, modify
and rescind regulations as the appropriate Federal banking agency for
State savings associations and State nonmember banks. In addition to
the approach taken in the NPR and final rule, the FDIC also considered
the alternative of maintaining the status quo, which would have
retained the separate regulatory regimes for State savings associations
and State non-member banks.
---------------------------------------------------------------------------
\16\ 5 U.S.C. 601 et seq.
\17\ The FDIC supervises 3,675institutions, of which 2,850 are
``small entities'' according to the terms of RFA. There are 2,832
small state non-member banks and 38 small state savings
associations. See Call Report Data, June 2018.
---------------------------------------------------------------------------
The final rule amends part 333 to state that both State savings
associations and State nonmember banks seeking to exercise trust powers
must obtain FDIC consent. The final rule is not expected to impact
State nonmember banks, as it results in no substantive changes for
those institutions. Prior to the final rule, State nonmember banks were
subject to the longstanding interpretation that the initial exercise of
trust powers granted by a chartering authority constituted a change in
the character of the bank's business under 12 CFR 333.2, and thereby
required the FDIC's prior written approval. The final rule clarifies
this issue by explicitly stating the longstanding requirement that
State nonmember banks obtain the FDIC's prior written approval before
exercising trust powers for the first time.
As discussed above, the revisions to part 333 require a filing by
those State savings associations that seek to exercise trust powers in
the future. However, a State savings association's application for the
FDIC's consent to exercise trust powers would be a one-time process
that is not anticipated to create a significant economic impact. The
information requested on the application form would require a State
savings association to identify the type of trust power it seeks to
exercise and to provide documentation that includes
[[Page 60336]]
proof of the adoption of the FDIC's Statement of Principles of Trust
Department Management, identification of the applicable trust officer,
trust committee, trust counsel, servicing arrangements, proof of the
requisite approvals by the appropriate State authority, a projection of
the proposed trust activity's three-year performance, and a statement
of its impact on the applicant.\18\
---------------------------------------------------------------------------
\18\ FDIC 6200/09 (10-05).
---------------------------------------------------------------------------
Based on the FDIC's supervisory experience, most of the
documentation required, such as State approval, servicing arrangements,
and designation of personnel to serve as appropriate trust counsel,
trust officer, and trust committee directors, is based on information
and resources that a State savings association applicant would already
possess or have to establish in order to exercise trust powers,
regardless of whether it seeks the FDIC's prior written consent.
Submitting existing information is not expected to create significant,
additional expenses for a State savings association seeking the FDIC's
prior written consent to exercise trust powers. The FDIC estimates that
it will receive relatively few applications, given the small overall
number of State savings associations (40) that would be affected by the
rule if they sought to exercise trust powers. In addition, no comments
were received pertaining to the RFA discussion in the NPR.
For these reasons, the FDIC certifies that the final rule would not
have a significant economic impact on a substantial number of small
entities, within the meaning of those terms as used in the RFA.
Accordingly, a regulatory flexibility analysis is not required.
C. Small Business Regulatory Enforcement Fairness Act
The OMB 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).\19\ As required by SBREFA, the FDIC will
submit the final rule and other appropriate reports to Congress and the
Government Accountability Office for review.
---------------------------------------------------------------------------
\19\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------
D. Plain Language
Section 722 of the Gramm-Leach-Bliley Act \20\ 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 no comments were received, the FDIC has sought to
present the final rule in a simple and straightforward manner.
---------------------------------------------------------------------------
\20\ Public Law 106-102, section 722, 113 Stat. 1338, 1471
(1999).
---------------------------------------------------------------------------
E. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (RCDRIA),\21\ in determining the effective
date and administrative compliance requirements for a new regulation
that imposes additional reporting, disclosure, or other requirements on
insured depository institutions, each Federal banking agency must
consider, consistent with principles of safety and soundness and the
public interest, any administrative burdens that such regulations would
place on depository institutions, including small depository
institutions, and customers of depository institutions, as well as the
benefits of such regulations. In addition, section 302(b) of RCDRIA
requires new regulations and amendments to regulations that impose
additional reporting, disclosure, or other new requirements on insured
depository institutions generally to take effect on the first day of a
calendar quarter that begins on or after the date on which the
regulations are published in final form.\22\
---------------------------------------------------------------------------
\21\ 12 U.S.C. 4802(a).
\22\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
In accordance with these provisions, the FDIC considered any
administrative burdens, as well as benefits, that the final rule would
place on depository institutions and their customers in determining the
effective date and administrative compliance requirements of the final
rule. The final rule imposes a new requirement on State savings
associations to obtain the FDIC's consent before exercising trust
powers granted by State chartering authorities and, in accordance with
RCDRIA and the Administrative Procedure Act,\23\ will be effective no
earlier than the first day of the calendar quarter that is at least 30
days following the date on which the final rule is published in the
Federal Register. However, as discussed above, the application
primarily requires submission of pre-existing documentation and is not
expected to be burdensome for depository institutions or their
customers. The final rule also provides greater clarity to FDIC-
supervised institutions and results in greater consistency in the
application process.
---------------------------------------------------------------------------
\23\ 5 U.S.C. 553(d).
---------------------------------------------------------------------------
F. 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 ten years in order to identify any
outdated or otherwise unnecessary regulations imposed on insured
institutions.\24\ The FDIC, along with the other Federal banking
agencies, submitted a Joint Report to Congress on March 21, 2017
(EGRPRA Report), discussing how the review was conducted, what has been
done to date to address regulatory burden, and further measures to
address issues identified during the review process. As noted in the
EGRPRA Report, the FDIC is continuing to streamline and clarify its
regulations through the OTS rule integration process. By removing
outdated or unnecessary regulations, such as Subpart J, and amending
Parts 303 and 333, this rule complements other actions the FDIC has
taken, separately and with the other Federal banking agencies, to
further the EGRPRA mandate.
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\24\ Public Law 104-208, 110 Stat. 3009 (1996).
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List of Subjects
12 CFR Part 303
Administrative practice and procedure, Bank deposit insurance,
Banks, banking, Reporting and recordkeeping requirements, Savings
associations, Trusts and trustees.
12 CFR Part 333
Banks, banking, Corporate powers, Savings associations, Trusts and
trustees.
12 CFR Part 390
Administrative practice and procedure, Advertising, Aged, Civil
rights, Conflict of interests, Credit, Crime, Equal employment
opportunity, Fair housing, Government employees, Individuals with
disabilities, Reporting and recordkeeping requirements, Savings
associations.
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends 12 CFR parts 308, 333, and 390 as follows:
PART 303--FILING PROCEDURES
0
1. The authority citation for part 303 is revised to read as follows:
[[Page 60337]]
Authority: 12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819(a)
(Seventh and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o, 1831p-1,
1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5414, 5415 and 15
U.S.C. 1601-1607.
0
2. Revise Sec. 303.242 to read as follows:
Sec. 303.242 Exercise of trust powers.
(a) Scope. This section contains the procedures to be followed by a
State nonmember bank or State savings association that seeks to obtain
the FDIC's prior written consent to exercise trust powers. The FDIC's
prior written consent to exercise trust powers is not required in the
following circumstances:
(1) Where a State nonmember bank or State savings association
received authority to exercise trust powers from its chartering
authority prior to December 1, 1950; or
(2) Where the institution continues to conduct trust activities
pursuant to authority granted by its chartering authority subsequent to
a charter conversion or withdrawal from membership in the Federal
Reserve System.
(b) Where to file. Applicants shall submit to the appropriate FDIC
office a completed form, ``Application for Consent to Exercise Trust
Powers.'' This form may be obtained from any FDIC regional director.
(c) Content of filing. The filing shall consist of the completed
trust application form.
(d) Additional information. The FDIC may request additional
information at any time during processing of the filing.
(e) Expedited processing for eligible depository institutions. An
application filed under this section by an eligible depository
institution as defined in Sec. 303.2(r) will be acknowledged in
writing by the FDIC and will receive expedited processing, unless the
applicant is notified in writing to the contrary and provided with the
basis for that decision. The FDIC may remove an application from
expedited processing for any of the reasons set forth in Sec.
303.11(c)(2.). Absent such removal, an application processed under
expedited procedures will be deemed approved 30 days after the FDIC's
receipt of a substantially complete application.
(f) Standard processing. For those applications that are not
processed pursuant to the expedited procedures, the FDIC will provide
the applicant with written notification of the final action when the
decision is rendered.
PART 333--EXTENSION OF CORPORATE POWERS
0
3. The authority citation for part 333 is revised to read as follows:
Authority: 12 U.S.C. 1816; 1817(i); 1818; 1819(a) (``Seventh'',
``Eighth'', and ``Tenth''), 1828, 1828(m), 1831p-1(c), 5414 and
5415.
0
4. Add Sec. 333.3 to read as follows:
Sec. 333.3 Consent required for exercise of trust powers.
Except as provided in 12 CFR 303.242(a), a State nonmember bank or
State savings association seeking to exercise trust powers must obtain
prior written consent from the FDIC. Procedures for obtaining the
FDIC's prior written consent are set forth in 12 CFR 303.242.
0
5. Revise Sec. 333.101(b) to read as follows:
Sec. 333.101 Prior consent not required.
* * * * *
(b) An insured State nonmember bank or State savings association,
not exercising trust powers, may act as trustee or custodian of
Individual Retirement Accounts established pursuant to the Employee
Retirement Income Security Act of 1974 (26 U.S.C. 408), Self-Employed
Retirement Plans established pursuant to the Self-Employed Individuals
Retirement Act of 1962 (26 U.S.C. 401), Roth Individual Retirement
Accounts and Coverdell Education Savings Accounts established pursuant
to the Taxpayer Relief Act of 1997 (26 U.S.C. 408A and 530
respectively), Health Savings Accounts established pursuant to the
Medicare Prescription Drug Improvement and Modernization Act of 2003
(26 U.S.C. 223), and other similar accounts without the prior written
consent of the Corporation provided:
(1) The bank's or savings association's duties as trustee or
custodian are essentially custodial or ministerial in nature,
(2) The bank or savings association is required to invest the funds
from such plans only
(i) In its own time or savings deposits, or
(ii) In any other assets at the direction of the customer, provided
the bank or savings association does not exercise any investment
discretion or provide any investment advice with respect to such
account assets, and
(3) The bank's or savings association's acceptance of such accounts
without trust powers is not contrary to applicable State law.
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
6. The authority citation for part 390 is revised to read as follows:
Authority: 12 U.S.C. 1819.
Subpart J--[Removed and reserved]
0
7. Remove and reserve subpart J, consisting of Sec. 390.190.
Dated at Washington, DC, on November 20, 2018.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2018-25659 Filed 11-23-18; 8:45 am]
BILLING CODE 6714-01-P
