Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures, 66166-66167 [2018-27786]

Download as PDF 66166 Federal Register / Vol. 83, No. 246 / Wednesday, December 26, 2018 / Proposed Rules in the request—one that extends beyond the public’s right to know about government activity generally. The existence of numerous articles published on a given subject can be helpful in establishing the requirement that there be an ‘‘urgency to inform’’ the public on the topic. As a matter of administrative discretion, IMLS may waive the formal certification requirement. (4) IMLS must notify the requester within 10 calendar days of the receipt of a request for expedited processing of its decision whether to grant or deny expedited processing. If expedited processing is granted, the request must be given priority, placed in the processing track for expedited requests, and must be processed as soon as practicable. If a request for expedited processing is denied, IMLS must act on any appeal of that decision expeditiously. ■ 13. Amend § 1184.5 by: ■ a. Redesignating paragraphs (c), (d), and (e) as paragraphs (d), (e), and (f); ■ b. Adding a new paragraph (c); and ■ c. In newly redesignated paragraph (f): ■ i. Removing ‘‘FOIA Officer’’ and adding in its place ‘‘FOIA Public Liaison;’’ and ■ ii. Adding a sentence at the end of the paragraph. The additions read as follows: § 1184.5 How will my request be processed? amozie on DSK3GDR082PROD with PROPOSALS1 * * * * * (c) Estimated dates of completion and interim responses. Upon request, IMLS will provide an estimated date by which the agency expects to provide a response to the requester. If a request involves a voluminous amount of material, or searches in multiple locations, IMLS may provide interim responses, releasing the records on a rolling basis. * * * * * (f) * * * In addition, IMLS will provide information about the mediation services provided by the Office of Government Information Services of the National Archives and Records Administration. ■ 14. Amend § 1184.6 by: ■ a. Revising paragraph (a); and ■ b. In paragraph (b), removing the term ‘‘Office of Government Services (OGIS)’’ and adding in its place ‘‘Office of Government Information Services.’’ The revision reads as follows: § 1184.6 How can I appeal a denial of my request? (a) Submission of an appeal. If your FOIA request has been denied in whole or in part, or if the agency has not found VerDate Sep<11>2014 17:37 Dec 21, 2018 Jkt 247001 any records in response to your request, you may file an appeal no later than ninety (90) calendar days following the date of the notification of denial. Your appeal must include a description of the initial request, the reason for the appeal, and why you believe the agency’s response was incorrect. Your appeal must be in writing, signed, and filed with the IMLS Director, c/o Office of the General Counsel, 955 L’Enfant Plaza North SW, Suite 4000, Washington, DC 20024–2135. Appeals may also be sent via email to foia@imls.gov, or via facsimile to (202) 653–4625. * * * * * ■ 15. Amend § 1184.7 by revising paragraphs (f)(3)(ii) and (g) to read as follows: § 1184.7 How will fees be charged? * * * * * (f) * * * (3) * * * (ii) When IMLS requests an advance payment, the time limits described in section (a)(6) of the FOIA will begin only after IMLS has received advanced full payment in full. (g) Failure to comply. In the absence of unusual or exceptional circumstances, IMLS will not assess fees if the agency fails to comply with any time limit set forth in these regulations, unless the agency has determined that unusual circumstances apply and more than 5,000 pages are necessary to respond to the request. * * * * * ■ 16. Amend § 1184.8 by revising the second sentence of paragraph (b) to read as follows: § 1184.8 How can I address concerns regarding my request? * * * * * (b) * * * If you seek information regarding OGIS and/or the services it offers, please contact OGIS directly at Office of Government Information Services, National Archives and Records Administration, 8601 Adelphi RoadOGIS, College Park, MD 20740–6001, Email: ogis@nara.gov, Phone: (202) 741– 5770 or toll free (877) 684–6448, Fax: (202) 741–5769. * * * § 1184.9 [Amended] 16. Amend § 1184.9(b)(2) by adding a comma after ‘‘local’’. ■ Dated: December 12, 2018. Danette Hensley, Staff Assistant. [FR Doc. 2018–27219 Filed 12–21–18; 8:45 am] BILLING CODE 7036–01–P PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 3 [Docket ID OCC–2018–0026] RIN 1557–AE48 Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures Office of the Comptroller of the Currency, Treasury (OCC). ACTION: Notice of proposed rulemaking; correction. AGENCY: This document corrects OCC’s Regulatory Flexibility Act certification for the proposed rule that was published in the Federal Register on September 28, 2018, entitled ‘‘Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures.’’ DATES: The proposed rule published on September 28, 2018 at 83 FR 48990 is corrected as of December 26, 2018. Comments must be received by January 25, 2019. FOR FURTHER INFORMATION CONTACT: Carl Kaminski, Special Counsel, or Rima Kundnani, Attorney, (202) 649–5490 or, for persons who are deaf or hearing impaired, TTY, (202) 649–5597. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background This document supplements the OCC’s Regulatory Flexibility Act (RFA) certification for the notice of proposed rulemaking entitled ‘‘Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures’’ (proposed rule) published on September 28, 2018, Federal Register Document 2018–20875 (83 FR 48990), by the OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation. The sections of this correction document are effective as if they had been included in the SUPPLEMENTARY INFORMATION section of the proposed rule. II. Summary of Supplemental Language The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires an agency, in connection with a proposed rule, to prepare an Initial Regulatory Flexibility Analysis describing the impact of the rule on small entities (defined by the SBA for purposes of the RFA to include commercial banks and savings institutions with total assets of $550 million or less and trust companies with E:\FR\FM\26DEP1.SGM 26DEP1 Federal Register / Vol. 83, No. 246 / Wednesday, December 26, 2018 / Proposed Rules total assets of $38.5 million of less) or to certify that the proposed rule would not have a significant economic impact on a substantial number of small entities. In the OCC’s portion of the SUPPLEMENTARY INFORMATION section titled ‘‘Regulatory Flexibility Act Analysis’’ of the proposed rule, ‘‘Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures,’’ the OCC stated that the proposal likely would impact a substantial number of small entities. However, the OCC determined that the impact of the proposal would not be economically significant. Therefore, the OCC certified, for the purpose of the RFA, that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities. The United States Small Business Administration, which monitors compliance with the RFA, has asked the OCC to provide additional detail to support its certification. Therefore, the OCC is revising the administrative record to include additional information. Correction amozie on DSK3GDR082PROD with PROPOSALS1 In the third column on page 48996 and the first column on page 48997, revise the section following ‘‘B. Regulatory Flexibility Act Analysis’’ to read as follows: ‘‘OCC: The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., (RFA), requires an agency, in connection with a notice of proposed rulemaking, to prepare a Final Regulatory Flexibility Analysis describing the impact of the proposed rule on small entities (defined by the Small Business Administration (SBA) for purposes of the RFA to include banking entities with total assets of $550 million or less) or to certify that the proposed rule would not have a significant economic impact on a substantial number of small entities. As of June 30, 2018, the OCC supervised 886 small entities.1 Currently, 211 small OCC-supervised institutions hold high volatility commercial real estate (HVCRE) exposures and thus will be directly impacted by the proposed rule. Therefore, the proposed rule potentially 1 The OCC calculated the number of small entities using the SBA’s size thresholds for commercial banks and savings institutions, and trust companies, which are $550 million and $38.5 million, respectively. Consistent with the General Principles of Affiliation, 13 CFR 121.103(a), the OCC counted the assets of affiliated financial institutions when determining whether to classify a national bank or Federal savings association as a small entity. VerDate Sep<11>2014 17:37 Dec 21, 2018 Jkt 247001 affects a substantial number of small entities. The proposed rule would impact two principal areas: (1) The impact associated with implementing revisions to the capital rule to make the definition of an HVCRE exposure consistent with the new statutory definition and, (2) the impact associated with the time required to update policies and procedures and to re-evaluate HVCRE loan portfolios. As described in the SUPPLEMENTARY INFORMATION section in the preamble to this proposed rule, the OCC believes the change to the definition of HVCRE exposure would result in fewer loans being deemed HVCRE exposures. Therefore, the amount of capital required would decrease for impacted OCC-supervised entities. Further, the OCC believes no currently reported non-HVCRE acquisition, development, or construction (ADC) exposures would be reclassified as HVCRE exposures, and thus there would be no additional compliance burden to OCC-supervised entities for the non-HVCRE component of their ADC portfolios. The proposed rule would not require OCC-supervised entities to amend previously filed reports as OCC-supervised entities adjust their estimates of existing HVCRE exposures. This would serve to minimize the compliance burden for OCC-supervised entities. Compliance burdens that OCCsupervised entities may face could include: (1) Updating policies and procedures to classify newly issued HVCRE loans; and (2) time spent reevaluating existing HVCRE exposures in order to determine if any are eligible to be reclassified and thus receive a lower risk-weight of 100 percent. Based on the OCC’s supervisory experience, OCC staff estimates that it would take an OCCsupervised institution, on average, a one-time investment of one business week, or 40 hours, to update policies and procedures and to re-evaluate their HVCRE exposures for loans originated after January 1, 2015. The OCC’s threshold for a significant effect is whether cost increases associated with a proposed rule are greater than or equal to either 5 percent of a small bank’s total annual salaries and benefits or 2.5 percent of a small bank’s total non-interest expense. The estimated compliance costs of $4,680 per institution (40 hours × $117 per hour) 2 would not exceed either of these 2 To estimate average hourly wages we review data from May 2017 for wages (by industry and occupation) from the U.S. Bureau of Labor Statistics (BLS) for depository credit intermediation (NAICS PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 66167 thresholds for a significant impact on any of the 886 OCC-supervised small entities. For this reason, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities.’’ Dated: December 18, 2018. William A. Rowe, Chief Risk Officer. [FR Doc. 2018–27786 Filed 12–21–18; 8:45 am] BILLING CODE 4810–33–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2016–8501; Product Identifier 2014–SW–042–AD] RIN 2120–AA64 Airworthiness Directives; Sikorsky Aircraft Corporation Helicopters Federal Aviation Administration (FAA), DOT. ACTION: Supplemental notice of proposed rulemaking (SNPRM); reopening of comment period. AGENCY: We are revising an earlier proposal for Sikorsky Aircraft Corporation (Sikorsky) Model S–92A helicopters. This action revises the notice of proposed rulemaking (NPRM) by increasing the estimated costs of compliance and removing the daily inspection requirements. We are proposing this airworthiness directive (AD) to address the unsafe condition on these products. Since these actions would impose an additional economic burden over that proposed in the NPRM, we are reopening the comment period to allow the public the chance to comment on this change. DATES: The comment period for the NPRM published in the Federal Register on July 15, 2016 (81 FR 46002), is reopened. We must receive comments on this SNPRM by February 11, 2019. ADDRESSES: You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods: • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments. SUMMARY: 522100). To estimate compensation costs associated with the rule, we use $117 per hour, which is based on the average of the 90th percentile for seven occupations adjusted for inflation, plus an additional 34.2 percent to cover private sector benefits. E:\FR\FM\26DEP1.SGM 26DEP1

Agencies

[Federal Register Volume 83, Number 246 (Wednesday, December 26, 2018)]
[Proposed Rules]
[Pages 66166-66167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27786]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 3

[Docket ID OCC-2018-0026]
RIN 1557-AE48


Regulatory Capital Treatment for High Volatility Commercial Real 
Estate (HVCRE) Exposures

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC).

ACTION: Notice of proposed rulemaking; correction.

-----------------------------------------------------------------------

SUMMARY: This document corrects OCC's Regulatory Flexibility Act 
certification for the proposed rule that was published in the Federal 
Register on September 28, 2018, entitled ``Regulatory Capital Treatment 
for High Volatility Commercial Real Estate (HVCRE) Exposures.''

DATES: The proposed rule published on September 28, 2018 at 83 FR 48990 
is corrected as of December 26, 2018. Comments must be received by 
January 25, 2019.

FOR FURTHER INFORMATION CONTACT: Carl Kaminski, Special Counsel, or 
Rima Kundnani, Attorney, (202) 649-5490 or, for persons who are deaf or 
hearing impaired, TTY, (202) 649-5597.

SUPPLEMENTARY INFORMATION: 

I. Background

    This document supplements the OCC's Regulatory Flexibility Act 
(RFA) certification for the notice of proposed rulemaking entitled 
``Regulatory Capital Treatment for High Volatility Commercial Real 
Estate (HVCRE) Exposures'' (proposed rule) published on September 28, 
2018, Federal Register Document 2018-20875 (83 FR 48990), by the OCC, 
the Board of Governors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation. The sections of this correction document 
are effective as if they had been included in the SUPPLEMENTARY 
INFORMATION section of the proposed rule.

II. Summary of Supplemental Language

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires an 
agency, in connection with a proposed rule, to prepare an Initial 
Regulatory Flexibility Analysis describing the impact of the rule on 
small entities (defined by the SBA for purposes of the RFA to include 
commercial banks and savings institutions with total assets of $550 
million or less and trust companies with

[[Page 66167]]

total assets of $38.5 million of less) or to certify that the proposed 
rule would not have a significant economic impact on a substantial 
number of small entities.
    In the OCC's portion of the SUPPLEMENTARY INFORMATION section 
titled ``Regulatory Flexibility Act Analysis'' of the proposed rule, 
``Regulatory Capital Treatment for High Volatility Commercial Real 
Estate (HVCRE) Exposures,'' the OCC stated that the proposal likely 
would impact a substantial number of small entities. However, the OCC 
determined that the impact of the proposal would not be economically 
significant. Therefore, the OCC certified, for the purpose of the RFA, 
that the proposed rule would not have a significant economic impact on 
a substantial number of OCC-supervised small entities.
    The United States Small Business Administration, which monitors 
compliance with the RFA, has asked the OCC to provide additional detail 
to support its certification. Therefore, the OCC is revising the 
administrative record to include additional information.

Correction

    In the third column on page 48996 and the first column on page 
48997, revise the section following ``B. Regulatory Flexibility Act 
Analysis'' to read as follows:
    ``OCC: The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., (RFA), 
requires an agency, in connection with a notice of proposed rulemaking, 
to prepare a Final Regulatory Flexibility Analysis describing the 
impact of the proposed rule on small entities (defined by the Small 
Business Administration (SBA) for purposes of the RFA to include 
banking entities with total assets of $550 million or less) or to 
certify that the proposed rule would not have a significant economic 
impact on a substantial number of small entities.
    As of June 30, 2018, the OCC supervised 886 small entities.\1\ 
Currently, 211 small OCC-supervised institutions hold high volatility 
commercial real estate (HVCRE) exposures and thus will be directly 
impacted by the proposed rule. Therefore, the proposed rule potentially 
affects a substantial number of small entities.
---------------------------------------------------------------------------

    \1\ The OCC calculated the number of small entities using the 
SBA's size thresholds for commercial banks and savings institutions, 
and trust companies, which are $550 million and $38.5 million, 
respectively. Consistent with the General Principles of Affiliation, 
13 CFR 121.103(a), the OCC counted the assets of affiliated 
financial institutions when determining whether to classify a 
national bank or Federal savings association as a small entity.
---------------------------------------------------------------------------

    The proposed rule would impact two principal areas: (1) The impact 
associated with implementing revisions to the capital rule to make the 
definition of an HVCRE exposure consistent with the new statutory 
definition and, (2) the impact associated with the time required to 
update policies and procedures and to re-evaluate HVCRE loan 
portfolios.
    As described in the Supplementary Information section in the 
preamble to this proposed rule, the OCC believes the change to the 
definition of HVCRE exposure would result in fewer loans being deemed 
HVCRE exposures. Therefore, the amount of capital required would 
decrease for impacted OCC-supervised entities.
    Further, the OCC believes no currently reported non-HVCRE 
acquisition, development, or construction (ADC) exposures would be 
reclassified as HVCRE exposures, and thus there would be no additional 
compliance burden to OCC-supervised entities for the non-HVCRE 
component of their ADC portfolios. The proposed rule would not require 
OCC-supervised entities to amend previously filed reports as OCC-
supervised entities adjust their estimates of existing HVCRE exposures. 
This would serve to minimize the compliance burden for OCC-supervised 
entities.
    Compliance burdens that OCC-supervised entities may face could 
include: (1) Updating policies and procedures to classify newly issued 
HVCRE loans; and (2) time spent re-evaluating existing HVCRE exposures 
in order to determine if any are eligible to be reclassified and thus 
receive a lower risk-weight of 100 percent. Based on the OCC's 
supervisory experience, OCC staff estimates that it would take an OCC-
supervised institution, on average, a one-time investment of one 
business week, or 40 hours, to update policies and procedures and to 
re-evaluate their HVCRE exposures for loans originated after January 1, 
2015.
    The OCC's threshold for a significant effect is whether cost 
increases associated with a proposed rule are greater than or equal to 
either 5 percent of a small bank's total annual salaries and benefits 
or 2.5 percent of a small bank's total non-interest expense. The 
estimated compliance costs of $4,680 per institution (40 hours x $117 
per hour) \2\ would not exceed either of these thresholds for a 
significant impact on any of the 886 OCC-supervised small entities.
---------------------------------------------------------------------------

    \2\ To estimate average hourly wages we review data from May 
2017 for wages (by industry and occupation) from the U.S. Bureau of 
Labor Statistics (BLS) for depository credit intermediation (NAICS 
522100). To estimate compensation costs associated with the rule, we 
use $117 per hour, which is based on the average of the 90th 
percentile for seven occupations adjusted for inflation, plus an 
additional 34.2 percent to cover private sector benefits.
---------------------------------------------------------------------------

    For this reason, the OCC certifies that the proposed rule would not 
have a significant economic impact on a substantial number of OCC-
supervised small entities.''

    Dated: December 18, 2018.
William A. Rowe,
Chief Risk Officer.
[FR Doc. 2018-27786 Filed 12-21-18; 8:45 am]
 BILLING CODE 4810-33-P