Disclosure of Financial and Other Information by FDIC-Insured State Nonmember Banks, 9698-9702 [2019-04944]

Download as PDF 9698 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations access to Government information and services, and for other purposes. Executive Order 12988, Civil Justice Reform This final rule has been reviewed under E.O. 12988, Civil Justice Reform. Under this rule: (1) All State and local laws and regulations that are inconsistent with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) no administrative proceedings will be required before parties may file suit in court challenging this rule. Executive Order 13175 This rule has been reviewed in accordance with the requirements of E.O. 13175, ‘‘Consultation and Coordination with Indian Tribal Governments.’’ E.O. 13175 requires Federal agencies to consult and coordinate with tribes on a governmentto-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes. FSIS has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under E.O. 13175. If a Tribe requests consultation, FSIS will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress. USDA Non-Discrimination Statement No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/ parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA. How To File a Complaint of Discrimination To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at http:// www.ocio.usda.gov/sites/default/files/ VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 docs/2012/Complain_combined_6_8_ 12.pdf, or write a letter signed by you or your authorized representative. Send your completed complaint form or letter to USDA by mail, fax, or email: Mail: U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW, Washington, DC 20250–9410, Fax: (202) 690–7442 Email: program.intake@usda.gov. Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA’s TARGET Center at (202) 720–2600 (voice and TDD). Additional Public Notification Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this Federal Register publication online through the FSIS web page located at: http:// www.fsis.usda.gov/federal-register. FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to our constituents and stakeholders. The Constituent Update is available on the FSIS web page. Through the web page, FSIS is able to provide information to a much broader, more diverse audience. In addition, FSIS offers an email subscription service which provides automatic and customized access to selected food safety news and information. This service is available at: http:// www.fsis.usda.gov/subscribe. Options range from recalls to export information, regulations, directives, and notices. Customers can add or delete subscriptions themselves, and have the option to password protect their accounts. List of Subjects in 9 CFR Part 316 Food labeling, Food packaging, Meat inspection. For the reasons set forth in the preamble, FSIS is amending 9 CFR part 316 as follows: PART 316—MARKING PRODUCTS AND THEIR CONTAINERS 1. The authority citation for part 316 is revised to read as follows: ■ Authority: 21 U.S.C. 601–695; 7 CFR 2.18, 2.55. 2. In § 316.9, revise paragraph (a), redesignate paragraphs (b) through (d) as paragraphs (c) through (e), ■ PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 respectively, and add a new paragraph (b) to read as follows: § 316.9 Products to be marked with official marks. (a) Each carcass that has been inspected and passed in an official establishment must be marked at the time of inspection with the official inspection legend containing the number of the official establishment, if the carcass is to be shipped into commerce from the establishment without further processing. (b) A passed and inspected carcass that is to be further processed in the slaughtering establishment need not be marked with the official inspection legend at the time of inspection. * * * * * Done in Washington, DC. Carmen M. Rottenberg, Administrator. [FR Doc. 2019–04993 Filed 3–15–19; 8:45 am] BILLING CODE 3410–DM–P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 350 RIN 3064–AE65 Disclosure of Financial and Other Information by FDIC-Insured State Nonmember Banks Federal Deposit Insurance Corporation. ACTION: Final rule. AGENCY: SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending its regulations by rescinding and removing its regulations entitled Disclosure of Financial and Other Information By FDIC-Insured State Nonmember Banks. Upon the removal of the regulations, all insured state nonmember banks and insured statelicensed branches of foreign banks (collectively, ‘‘banks’’) would no longer be subject to the annual disclosure statement requirement set out in the existing regulations. The financial and other information that has been subject to disclosure by individual banks under the regulations is publicly available through the FDIC’s website. DATES: This rule will be effective April 17, 2019. FOR FURTHER INFORMATION CONTACT: Robert Storch, Chief Accountant, Division of Risk Management Supervision, (202) 898–8906 or rstorch@ fdic.gov; Andrew Overton, Examination Specialist (Bank Accounting), Division of Risk Management Supervision, (202) E:\FR\FM\18MRR1.SGM 18MRR1 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations 898–8922 or aoverton@fdic.gov; Michael Condon, Counsel, Legal Division, (202) 898–6536 or mcondon@fdic.gov. SUPPLEMENTARY INFORMATION: I. Policy Objectives The policy objective of the final rule is to simplify the FDIC’s regulations by removing unnecessary or redundant regulations. The final rule rescinds and removes part 350 from the Code of Federal Regulations. Technological advancements over the past 30 years provide the public with ready access to more extensive and timely information on the condition and performance of individual banks, obviating the need for the annual disclosure statement requirements in part 350. II. Background Part 350 was adopted by the FDIC Board of Directors on December 17, 1987, and took effect February 1, 1988.1 In general, part 350 requires FDICinsured state nonmember banks and FDIC-insured state-licensed branches of foreign banks (collectively, ‘‘banks’’) to prepare, and make available on request, annual disclosure statements consisting of: (1) Required financial data comparable to specified schedules in the Consolidated Reports of Condition and Income (Call Report) filed for the previous two year-ends; (2) information that the FDIC may require of particular banks, which could include disclosure of enforcement actions; and (3) other information at a bank’s option. Part 350 also permits the use of certain alternatives to the Call Report as a disclosure statement. Part 350 does not apply to the insured state savings associations that are supervised by the FDIC. The annual disclosure statement for a particular year must be prepared, and made available to the public, by March 31 of the following year, or the fifth day after an organization’s annual report covering the year is sent to shareholders, whichever occurs first. Banks are required to announce the availability of the disclosure statements in lobby notices in each of their offices and in notices of annual meetings sent to shareholders. In adopting part 350, the FDIC’s intent was to improve public awareness and understanding of the financial condition of individual banks. In the preamble to the December 1987 final rule, the FDIC stated that ‘‘improved financial disclosure should reduce the likelihood of the market or bank customers overreacting to incomplete information.’’ The FDIC also said it 1 See 52 FR 49379 (December 31, 1987). VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 believed the disclosure requirement ‘‘will complement its supervisory efforts and enhance public confidence in the banking system.’’ With limited resources available for the public to gather, analyze, and understand information about the financial condition of individual banks before and during the 1980s, the FDIC’s adoption of part 350 provided the public with an opportunity to obtain certain basic bank financial information. After the FDIC adopted part 350, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB) adopted similar disclosure regulations. When initially adopted, the disclosure regulations adopted by the FDIC (12 CFR part 350), the FRB (12 CFR 208.17), and the OCC (12 CFR part 18) were substantially uniform. These regulations required institutions to make almost identical information available to the public upon request. The former Office of Thrift Supervision (OTS) had a similar, but not identical, disclosure regulation (12 CFR 562.3). As a result of its review of regulations pursuant to Section 303(a) of the Riegle Community Development and Regulatory Improvement Act of 1994, the OTS repealed 12 CFR 562.3 as unnecessary in 1995.2 In 1998, the FRB eliminated 12 CFR 208.17, Disclosure of Financial Information by State Member Banks, from its regulations on the basis that Call Report information for banks had become available through the internet.3 In 2017, the OCC removed 12 CFR part 18 from its regulations, noting that the information it required national banks to disclose is contained in other publicly available documents, which meant that 12 CFR part 18 is duplicative and unnecessary.4 With advancements in information technology since part 350 was adopted, including widespread public access to the internet (including through public libraries for individuals without their own direct personal access to the internet), information about the financial condition of individual insured depository institutions is now reliably and directly offered to the public through the FDIC’s and the Federal Financial Institutions Examination Council’s (FFIEC) websites. For example, information about the financial condition and performance of all insured depository institutions is publicly available each quarter through the Call Report and the Uniform Bank Performance Report (UBPR). In addition, enforcement 2 See 60 FR 66866 (December 27, 1995). 3 See 63 FR 37630 (July 13, 1998). 4 See 82 FR 8082 (January 23, 2017). PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 9699 actions taken by the FDIC are readily available to the public from the FDIC’s website. The Call Report contains an institution’s balance sheet, income statement, and supplemental schedules that disclose additional details about the major categories of assets and liabilities, regulatory capital, and other financial information. Since the successful deployment of the FFIEC’s Central Data Repository (CDR) Public Data Distribution (PDD) website,5 the public has had ready access to financial information for each insured depository institution. The public is able to obtain more current Call Report data for individual institutions in various formats from the FFIEC’s CDR PDD website than the financial information available in the annual disclosure statement required by part 350. Individual institution Call Report data generally are posted on this website within 24 hours after the data have been submitted to and accepted by the CDR. The UBPR is an analytical tool created for bank supervisory, examination, and management purposes that shows the impact of management decisions and economic conditions on a bank’s performance and balance-sheet composition. The content of the UBPR is calculated each quarter primarily from Call Report data. UBPRs for individual institutions are available to the public via the CDR PDD website. An institution’s UBPR is usually published online within a day after its Call Report has been filed with and accepted by the CDR. Online access to an institution’s UBPR each quarter complements the public’s use of the institution’s Call Report and further expands upon the amount of publicly available financial data for an institution beyond the limited financial information provided in the annual disclosure statement required by part 350. The public is able to easily locate the Call Report and the UBPR for a bank through the FDIC BankFind tool, which is available on the FDIC’s website.6 In addition, on a monthly basis, the FDIC publishes a press release listing the administrative enforcement actions it has taken against banks and individuals during the preceding month. Enforcement actions taken by the FDIC since 1990 are available to the public on the FDIC’s website.7 Interested parties may also obtain 5 https://cdr.ffiec.gov/public/Manage Facsimiles.aspx. 6 https://research.fdic.gov/bankfind/. 7 https://www5.fdic.gov/EDO/index.html. E:\FR\FM\18MRR1.SGM 18MRR1 9700 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations administrative orders through the FDIC’s Public Information Center. III. The Proposal Under section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA),8 the FDIC is required to conduct a review at least once every 10 years to identify any outdated or otherwise unnecessary regulations. As part of the EGRPRA review completed in 2017, part 350 was included in the third EGRPRA Federal Register notice of regulatory review.9 The FDIC did not receive any comments on this regulation in response to that notice. Nevertheless, upon review, the FDIC has determined that part 350 is outdated and no longer necessary and therefore should be eliminated. Part 350 places a burden on insured state nonmember banks and insured statelicensed branches of foreign banks by requiring them to prepare an annual disclosure statement and make available to the public a potentially unlimited number of copies of these statements. This burden was justified in the past because disclosure statements were an effective means for the public to obtain information concerning a bank’s financial condition. However, with widespread public access to the internet where more extensive and timely financial information about individual banks, as well as administrative enforcement actions, can be readily obtained, the incremental burden on banks of providing an annual disclosure statement in accordance with a regulation that has become outdated is no longer justified. Furthermore, because part 350 does not apply to insured state savings associations, for which the FDIC became the primary federal regulatory agency in 2011, the proposal would eliminate a difference in the regulatory requirements and resulting regulatory burden imposed on insured state nonmember banks and insured state-licensed branches of foreign banks compared to insured state savings associations. Finally, because regulations similar to part 350 have been rescinded by the FRB and the OCC (as well as the former OTS), the preparation and availability of annual disclosure statements are no longer required by the other federal banking agencies for the institutions under their supervision. IV. Comments Consistent with the objectives of section 2222 of EGRPRA, on October 17, 8 Public Law 104–208 (1996), codified at 12 U.S.C. 3311. 9 See 80 FR 32046 (June 5, 2015). VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 2018, the FDIC Board authorized publication of a notice of proposed rulemaking (NPR) to rescind and remove part 350 from the Code of Federal Regulations. The NPR was published in the Federal Register on October 25, 2018, with a 30-day comment period.10 The FDIC received nine comments addressing the proposed rescission and removal of part 350 from bankers, banking associations, and a consultant. The nine commenters fully supported the proposal. One additional comment was received from an individual, but it did not specifically address the proposed rescission and removal. After considering the comments received, the FDIC is adopting as proposed the rescission and removal of part 350 from the Code of Federal Regulations. V. Expected Effects The removal of the requirement that each FDIC-insured state nonmember bank and insured state-licensed branch of a foreign bank prepare, and make available on request, annual disclosure statements will lessen the burden the FDIC imposes on these institutions. As of September 30, 2018, there were 3,493 FDIC-insured state nonmember banks and insured state-licensed branches of foreign banks that would be affected by this final rule.11 The final rule is expected to reduce recordkeeping, reporting, and disclosure requirements for FDIC-insured state nonmember banks and insured statelicensed branches of foreign banks. As discussed in Section III: The Proposal, part 350 requires institutions to prepare an annual disclosure statement and make it available to the public. By removing part 350, the final rule will remove this disclosure burden. The FDIC assumes that 15 percent of the institutions covered by part 350 provide a management discussion and analysis in their annual disclosure statement, and estimates that preparing this material takes each institution 1.5 hours. Assuming the time spent preparing the material is divided equally between a financial analyst and a manager, each earning the 75th percentile wage for their occupation, the estimated annual cost per institution to prepare the material is $157.82.12 Based 10 See 83 FR 53829 (October 25, 2018). from the September 30, 2018, Call Report and FFIEC 002 report. 12 The annual cost per institution is estimated using the 75th percentile hourly wage for financial analysts and management occupations in the depository credit intermediation industry as of May 2017. This hourly wage is adjusted for inflation, and grossed-up to include benefits, through June 2018. The 75th percentile inflation and benefit11 Data PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 on the FDIC’s estimation that 15 percent of institutions prepare this material, the total annual cost is estimated to be $82,695, or approximately 0.0001 percent of noninterest expenses for covered institutions.13 In addition to the directly measurable cost savings, another potential benefit of the final rule is that it frees up institution staff time that would otherwise have been spent complying with part 350. Theoretically, time previously spent complying with part 350 may now be spent on another task of higher value to the institution. This potential effect is difficult to accurately estimate with available information, but it is likely to be small given that the disclosure burden imposed by part 350 is a relatively small percentage of noninterest expenses. The final rule removes a disclosure requirement for affected institutions; however, the FDIC believes that the reduction will not have material effects for customers, investors, or counterparties. As discussed in Section III: The Proposal, extensive and timely financial information about individual banks, as well as administrative enforcement actions, can be readily obtained by the public on the internet. Therefore, the FDIC believes that removal of this disclosure requirement will not have substantive effects on financial market participants. VI. Alternatives Considered The FDIC considered alternatives, but believes that the rescission and removal of part 350 represents the most appropriate option. In particular, the FDIC considered whether to (1) retain the existing disclosure statement requirement, but to extend it to the adjusted hourly wage of management occupations as of June 2018 is $125.21, and for financial analysts is $85.21. Assuming the 1.5 hours are equally divided between a manager and an analyst, this yields an estimated total annual cost per institution of (0.75 * $125.21) + (0.75 * $85.21) = $157.82. Hourly wages are from the Bureau of Labor Statistics (BLS) May 2017 National IndustrySpecific Occupational Employment and Wage Estimates, https://www.bls.gov/oes/current/ oessrci.htm. Wages are adjusted for inflation through June 2018 using the Seasonally Adjusted All-items Consumer Price Index for All Urban Consumers, https://data.bls.gov/PDQWeb/cu. The hourly wages are grossed-up to include benefits based on Employer Cost for Employee Compensation data as of June 2018, https:// www.bls.gov/news.release/pdf/ecec.pdf. June 2018 is the latest available period of Employer Cost for Employee Compensation data. The data on hourly wages, inflation, and employer cost for employee compensation was extracted on December 14, 2018. 13 This equals 524 * $157.82, i.e., (3,493 * 0.15) * $157.82, rounded to the nearest dollar. Noninterest expenses are calculated from data reported in the September 30, 2018, Call Report, and annualized. E:\FR\FM\18MRR1.SGM 18MRR1 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations insured state savings associations now supervised by the FDIC, (2) require that disclosure statements be updated quarterly instead of annually, and/or (3) require the inclusion in disclosure statements of either the entire Call Report (excluding a limited number of items accorded confidential treatment) or financial data comparable to a greater number of specified Call Report schedules. However, with the timely public availability of each institution’s quarterly Call Report and UBPR via the FDIC’s and the FFIEC’s websites, and with the public disclosure of information about enforcement actions taken by the FDIC routinely made available on the FDIC’s website, the FDIC believes any extension of part 350 to other institutions, increase in the frequency of disclosure, increase in the scope of disclosure, or combination of these alternatives, imposes additional cost without any corresponding public benefit in terms of access to financial and other information on institutions. Moreover, the FDIC is not aware of any difficulties encountered by the public in obtaining current financial and enforcement action information on institutions supervised by the FRB and the OCC (and those institutions previously supervised by the OTS) via public websites since these agencies eliminated their respective disclosure statement requirements. VII. Regulatory Analysis and Procedure A. The Paperwork Reduction Act In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501–3521), the FDIC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. Part 350 is currently an approved information collection with OMB Control No. 3064–0090. Removing part 350 obviates the need for this collection of information pursuant to the PRA, and FDIC will seek to discontinue its use. B. The Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) generally requires that, in connection with a rulemaking, an agency prepare and make available for public comment a final regulatory flexibility analysis describing the impact of the final rule on small entities.14 A regulatory flexibility analysis is not required; however, if the agency certifies that the rule will not have a significant 14 5 U.S.C. 601 et seq. VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 economic impact on a substantial number of small entities. The U.S. Small Business Administration (SBA) has defined ‘‘small entities’’ to include banking organizations with total assets less than or equal to $550 million.15 As of September 30, 2018, there are 3,493 FDIC-insured state nonmember banks and FDIC-insured state-licensed branches of foreign banks.16 Of these, 2,689 are considered small entities for the purposes of RFA. Thus, the FDIC concludes the proposed rule will affect a substantial number of small entities. The final rule is expected to reduce recordkeeping, reporting, and disclosure requirements for small FDIC-supervised banks. As discussed in Section III: The Proposal, part 350 requires institutions to prepare an annual disclosure statement and make it available to the public. By removing part 350, the final rule will remove this disclosure burden. As discussed in Section IV: Expected Effects, the FDIC estimates the annual cost per institution to prepare the material is $157.82.17 Based on the FDIC’s estimation that 15 percent of institutions prepare this material, the total annual cost for small FDIC15 The SBA defines a small banking organization as having $550 million or less in assets, where an organization’s ‘‘assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year.’’ See 13 CFR 121.201 (as amended, effective December 2, 2014). In its determination, the ‘‘SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates.’’ See 13 CFR 121.103. Following these regulations, the FDIC uses a covered entity’s affiliated and acquired assets, averaged over the preceding four quarters, to determine whether the covered entity is ‘‘small’’ for the purposes of RFA. 16 Data from the September 30, 2018, Call Report and FFIEC 002 report. 17 The annual cost per institution is estimated using the 75th percentile hourly wage for financial analysts and management occupations in the depository credit intermediation industry as of May 2017. This hourly wage is adjusted for inflation, and grossed-up to include benefits, through June 2018. The 75th percentile inflation and benefitadjusted hourly wage of management occupations as of June 2018 is $125.21, and for financial analysts is $85.21. Assuming the 1.5 hours are equally divided between a manager and an analyst, this yields an estimated total annual cost per institution of (0.75 * $125.21) + (0.75 * $85.21) = $157.82. Hourly wages are from the Bureau of Labor Statistics (BLS) May 2017 National IndustrySpecific Occupational Employment and Wage Estimates, https://www.bls.gov/oes/current/ oessrci.htm. Wages are adjusted for inflation through June 2018 using the Seasonally Adjusted All-items Consumer Price Index for All Urban Consumers, https://data.bls.gov/PDQWeb/cu. The hourly wages are grossed-up to include benefits based on Employer Cost for Employee Compensation data as of June 2018, https:// www.bls.gov/news.release/pdf/ecec.pdf. June 2018 is the latest available period of Employer Cost for Employee Compensation data. The data on hourly wages, inflation, and employer cost for employee compensation was extracted on December 14, 2018. PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 9701 supervised institutions is estimated to be $63,599, or less than 0.0005 percent of noninterest expenses for such institutions.18 Also as described in Section IV above, in addition to the directly measurable cost savings, another potential benefit of the final rule is that it frees up institution staff time that would otherwise have been spent complying with part 350. While this potential effect is difficult to accurately estimate with available information, it is likely to be small given that the disclosure burden imposed by part 350 is a relatively small percentage of noninterest expenses for small FDIC-supervised institutions. The final rule removes a disclosure requirement for affected institutions; however, the FDIC believes that the reduction will not have material effects for customers, investors, or counterparties. As discussed in Section III: The Proposal, extensive and timely financial information about individual banks, as well as administrative enforcement actions, can be readily obtained by the public on the internet. Therefore, the FDIC believes that removal of this disclosure requirement with have not substantive effects on financial market participants. Based on the information above, the FDIC certifies that the final rule will not have a significant economic impact on a substantial number of small entities. 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, Public Law 106–102, 113 Stat. 1338, 1471, 12 U.S.C. 4809, requires each Federal banking agency to use plain language in all of its proposed and final rules published after January 1, 2000. As a Federal banking agency subject to the provisions of this section, the FDIC has sought to present the final rule to rescind part 350 in a simple and straightforward manner. 18 This equals 403 * $157.82, i.e., (2,689 * 0.15) * $157.82, rounded to the nearest dollar. Noninterest expenses are calculated from data reported in the September 30, 2018, Call Report, and annualized. 19 5 U.S.C. 801 et seq. E:\FR\FM\18MRR1.SGM 18MRR1 9702 Federal Register / Vol. 84, No. 52 / Monday, March 18, 2019 / Rules and Regulations E. The Economic Growth and Regulatory FEDERAL HOUSING FINANCE Paperwork Reduction Act AGENCY Under section 2222 of EGRPRA, the FDIC is required to conduct a review at least once every 10 years to identify any outdated or otherwise unnecessary regulations. The FDIC completed its most recent comprehensive review of its regulations under EGRPRA in 2017 and did not receive any comments from the public concerning part 350. The burden reduction evidenced in this final rule is consistent with the objectives of the EGRPRA review process. F. Riegle Community Development and Regulatory Improvement Act Under section 302(b) of the Riegle Community Development and Regulatory Improvement Act, 12 U.S.C. 4802(b), new regulations and amendments to regulations prescribed by a Federal banking agency which impose additional reporting, disclosures, or other new requirements on insured depository institutions shall take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form. Because this rule rescission does not impose additional reporting, disclosures, or other requirements, but rather relieves banks of a disclosure requirement, this rule may take effect prior to the start of the next calendar quarter. List of Subjects in 12 CFR Part 350 Accounting, Banks, Banking, Reporting and recordkeeping requirements. Authority and Issuance PART 350—[REMOVED AND RESERVED] For the reasons stated in the preamble, and under the authority of 12 U.S.C 1817(a)(1), 1819 ‘‘Seventh’’ and ‘‘Tenth,’’ the Board of Directors of the Federal Deposit Insurance Corporation removes and reserves 12 CFR part 350. ■ Dated at Washington, DC, on March 12, 2019. By order of the Board of Directors. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2019–04944 Filed 3–15–19; 8:45 am] BILLING CODE 6714–01–P 12 CFR Parts 1209, 1217, and 1250 RIN 2590–AB01 Rules of Practice and Procedure; Civil Money Penalty Inflation Adjustment Federal Housing Finance Agency. ACTION: Final rule. AGENCY: SUMMARY: The Federal Housing Finance Agency (FHFA) is adopting this final rule amending its Rules of Practice and Procedure and other agency regulations to adjust each civil money penalty within its jurisdiction to account for inflation, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. DATES: Effective date: April 17, 2019. FOR FURTHER INFORMATION CONTACT: Stephen E. Hart, Deputy General Counsel, at (202) 649–3053, Stephen.Hart@fhfa.gov, or Frank R. Wright, Assistant General Counsel, at (202) 649–3087, Frank.Wright@fhfa.gov (not toll-free numbers); Federal Housing Finance Agency, 400 7th Street SW, Washington, DC 20219. The telephone number for the Telecommunications Device for the Hearing Impaired is: (800) 877–8339 (TDD only). SUPPLEMENTARY INFORMATION: I. Background FHFA is an independent agency of the Federal government, and the financial safety and soundness regulator of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises), as well as the Federal Home Loan Banks (collectively, the Banks) and the Office of Finance under authority granted by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act).1 FHFA oversees the Enterprises and Banks (collectively, the regulated entities) and the Office of Finance to ensure that they operate in a safe and sound manner and maintain liquidity in the housing finance market in accordance with applicable laws, rules and regulations. To that end, FHFA is vested with broad supervisory discretion and specific civil administrative enforcement powers, similar to such authority granted by Congress to the Federal bank regulatory 1 See Safety and Soundness Act, 12 U.S.C. 4513 and 4631–4641. VerDate Sep<11>2014 15:57 Mar 15, 2019 Jkt 247001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 agencies.2 Section 1376 of the Safety and Soundness Act (12 U.S.C. 4636) empowers FHFA to impose civil money penalties under specific conditions. FHFA’s Rules of Practice and Procedure (12 CFR part 1209) (the Enforcement regulations) govern cease and desist proceedings, civil money penalty assessment proceedings, and other administrative adjudications.3 FHFA’s Flood Insurance regulation (12 CFR part 1250) governs flood insurance responsibilities as they pertain to the Enterprises.4 FHFA’s Implementation of the Program Fraud Civil Remedies Act of 1986 regulation (12 CFR part 1217) sets forth procedures for imposing civil penalties and assessments under the Program Fraud Civil Remedies Act (31 U.S.C. 3801 et seq.) on any person that makes a false claim for property, services or money from FHFA, or makes a false material statement to FHFA in connection with a claim, where the amount involved does not exceed $150,000.5 The Adjustment Improvements Act The Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Adjustment Improvements Act), requires FHFA, as well as other federal agencies with the authority to issue civil money penalties (CMPs), to adjust by regulation the maximum amount of each CMP authorized by law that the agency has jurisdiction to administer.6 The Adjustment Improvements Act required agencies to make an initial ‘‘catch-up’’ adjustment of their CMPs upon the statute’s enactment,7 and further requires agencies to make additional adjustments on an annual basis following the initial adjustment.8 The Adjustment Improvements Act sets forth the formula that agencies must apply when making annual adjustments, based on the percent change between the October Consumer Price Index for All Urban Consumers (the CPI–U) preceding the date of the last adjustment and the October CPI–U for the year before that. 2 Id. 3 See 12 CFR part 1209. 12 CFR part 1250. 5 See generally, 31 U.S.C. 3801 et seq. 6 See 28 U.S.C. 2461 note. 7 FHFA promulgated its catch-up adjustment of its CMPs with an interim final rule published July 1, 2016. 81 FR 43028. 8 FHFA promulgated its first annual adjustment of its CMP with a final rule published August 29, 2018. 83 FR 43965. 4 See E:\FR\FM\18MRR1.SGM 18MRR1

Agencies

[Federal Register Volume 84, Number 52 (Monday, March 18, 2019)]
[Rules and Regulations]
[Pages 9698-9702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04944]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 350

RIN 3064-AE65


Disclosure of Financial and Other Information by FDIC-Insured 
State Nonmember Banks

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending 
its regulations by rescinding and removing its regulations entitled 
Disclosure of Financial and Other Information By FDIC-Insured State 
Nonmember Banks. Upon the removal of the regulations, all insured state 
nonmember banks and insured state-licensed branches of foreign banks 
(collectively, ``banks'') would no longer be subject to the annual 
disclosure statement requirement set out in the existing regulations. 
The financial and other information that has been subject to disclosure 
by individual banks under the regulations is publicly available through 
the FDIC's website.

DATES: This rule will be effective April 17, 2019.

FOR FURTHER INFORMATION CONTACT: Robert Storch, Chief Accountant, 
Division of Risk Management Supervision, (202) 898-8906 or 
rstorch@fdic.gov; Andrew Overton, Examination Specialist (Bank 
Accounting), Division of Risk Management Supervision, (202)

[[Page 9699]]

898-8922 or aoverton@fdic.gov; Michael Condon, Counsel, Legal Division, 
(202) 898-6536 or mcondon@fdic.gov.

SUPPLEMENTARY INFORMATION:

I. Policy Objectives

    The policy objective of the final rule is to simplify the FDIC's 
regulations by removing unnecessary or redundant regulations. The final 
rule rescinds and removes part 350 from the Code of Federal 
Regulations. Technological advancements over the past 30 years provide 
the public with ready access to more extensive and timely information 
on the condition and performance of individual banks, obviating the 
need for the annual disclosure statement requirements in part 350.

II. Background

    Part 350 was adopted by the FDIC Board of Directors on December 17, 
1987, and took effect February 1, 1988.\1\ In general, part 350 
requires FDIC-insured state nonmember banks and FDIC-insured state-
licensed branches of foreign banks (collectively, ``banks'') to 
prepare, and make available on request, annual disclosure statements 
consisting of: (1) Required financial data comparable to specified 
schedules in the Consolidated Reports of Condition and Income (Call 
Report) filed for the previous two year-ends; (2) information that the 
FDIC may require of particular banks, which could include disclosure of 
enforcement actions; and (3) other information at a bank's option. Part 
350 also permits the use of certain alternatives to the Call Report as 
a disclosure statement. Part 350 does not apply to the insured state 
savings associations that are supervised by the FDIC.
---------------------------------------------------------------------------

    \1\ See 52 FR 49379 (December 31, 1987).
---------------------------------------------------------------------------

    The annual disclosure statement for a particular year must be 
prepared, and made available to the public, by March 31 of the 
following year, or the fifth day after an organization's annual report 
covering the year is sent to shareholders, whichever occurs first. 
Banks are required to announce the availability of the disclosure 
statements in lobby notices in each of their offices and in notices of 
annual meetings sent to shareholders.
    In adopting part 350, the FDIC's intent was to improve public 
awareness and understanding of the financial condition of individual 
banks. In the preamble to the December 1987 final rule, the FDIC stated 
that ``improved financial disclosure should reduce the likelihood of 
the market or bank customers overreacting to incomplete information.'' 
The FDIC also said it believed the disclosure requirement ``will 
complement its supervisory efforts and enhance public confidence in the 
banking system.'' With limited resources available for the public to 
gather, analyze, and understand information about the financial 
condition of individual banks before and during the 1980s, the FDIC's 
adoption of part 350 provided the public with an opportunity to obtain 
certain basic bank financial information.
    After the FDIC adopted part 350, the Office of the Comptroller of 
the Currency (OCC) and the Federal Reserve Board (FRB) adopted similar 
disclosure regulations. When initially adopted, the disclosure 
regulations adopted by the FDIC (12 CFR part 350), the FRB (12 CFR 
208.17), and the OCC (12 CFR part 18) were substantially uniform. These 
regulations required institutions to make almost identical information 
available to the public upon request. The former Office of Thrift 
Supervision (OTS) had a similar, but not identical, disclosure 
regulation (12 CFR 562.3). As a result of its review of regulations 
pursuant to Section 303(a) of the Riegle Community Development and 
Regulatory Improvement Act of 1994, the OTS repealed 12 CFR 562.3 as 
unnecessary in 1995.\2\ In 1998, the FRB eliminated 12 CFR 208.17, 
Disclosure of Financial Information by State Member Banks, from its 
regulations on the basis that Call Report information for banks had 
become available through the internet.\3\ In 2017, the OCC removed 12 
CFR part 18 from its regulations, noting that the information it 
required national banks to disclose is contained in other publicly 
available documents, which meant that 12 CFR part 18 is duplicative and 
unnecessary.\4\
---------------------------------------------------------------------------

    \2\ See 60 FR 66866 (December 27, 1995).
    \3\ See 63 FR 37630 (July 13, 1998).
    \4\ See 82 FR 8082 (January 23, 2017).
---------------------------------------------------------------------------

    With advancements in information technology since part 350 was 
adopted, including widespread public access to the internet (including 
through public libraries for individuals without their own direct 
personal access to the internet), information about the financial 
condition of individual insured depository institutions is now reliably 
and directly offered to the public through the FDIC's and the Federal 
Financial Institutions Examination Council's (FFIEC) websites. For 
example, information about the financial condition and performance of 
all insured depository institutions is publicly available each quarter 
through the Call Report and the Uniform Bank Performance Report (UBPR). 
In addition, enforcement actions taken by the FDIC are readily 
available to the public from the FDIC's website.
    The Call Report contains an institution's balance sheet, income 
statement, and supplemental schedules that disclose additional details 
about the major categories of assets and liabilities, regulatory 
capital, and other financial information. Since the successful 
deployment of the FFIEC's Central Data Repository (CDR) Public Data 
Distribution (PDD) website,\5\ the public has had ready access to 
financial information for each insured depository institution. The 
public is able to obtain more current Call Report data for individual 
institutions in various formats from the FFIEC's CDR PDD website than 
the financial information available in the annual disclosure statement 
required by part 350. Individual institution Call Report data generally 
are posted on this website within 24 hours after the data have been 
submitted to and accepted by the CDR.
---------------------------------------------------------------------------

    \5\ https://cdr.ffiec.gov/public/ManageFacsimiles.aspx.
---------------------------------------------------------------------------

    The UBPR is an analytical tool created for bank supervisory, 
examination, and management purposes that shows the impact of 
management decisions and economic conditions on a bank's performance 
and balance-sheet composition. The content of the UBPR is calculated 
each quarter primarily from Call Report data. UBPRs for individual 
institutions are available to the public via the CDR PDD website. An 
institution's UBPR is usually published online within a day after its 
Call Report has been filed with and accepted by the CDR. Online access 
to an institution's UBPR each quarter complements the public's use of 
the institution's Call Report and further expands upon the amount of 
publicly available financial data for an institution beyond the limited 
financial information provided in the annual disclosure statement 
required by part 350. The public is able to easily locate the Call 
Report and the UBPR for a bank through the FDIC BankFind tool, which is 
available on the FDIC's website.\6\
---------------------------------------------------------------------------

    \6\ https://research.fdic.gov/bankfind/.
---------------------------------------------------------------------------

    In addition, on a monthly basis, the FDIC publishes a press release 
listing the administrative enforcement actions it has taken against 
banks and individuals during the preceding month. Enforcement actions 
taken by the FDIC since 1990 are available to the public on the FDIC's 
website.\7\ Interested parties may also obtain

[[Page 9700]]

administrative orders through the FDIC's Public Information Center.
---------------------------------------------------------------------------

    \7\ https://www5.fdic.gov/EDO/index.html.
---------------------------------------------------------------------------

III. The Proposal

    Under section 2222 of the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 (EGRPRA),\8\ the FDIC is required to conduct a 
review at least once every 10 years to identify any outdated or 
otherwise unnecessary regulations. As part of the EGRPRA review 
completed in 2017, part 350 was included in the third EGRPRA Federal 
Register notice of regulatory review.\9\ The FDIC did not receive any 
comments on this regulation in response to that notice. Nevertheless, 
upon review, the FDIC has determined that part 350 is outdated and no 
longer necessary and therefore should be eliminated. Part 350 places a 
burden on insured state nonmember banks and insured state-licensed 
branches of foreign banks by requiring them to prepare an annual 
disclosure statement and make available to the public a potentially 
unlimited number of copies of these statements. This burden was 
justified in the past because disclosure statements were an effective 
means for the public to obtain information concerning a bank's 
financial condition. However, with widespread public access to the 
internet where more extensive and timely financial information about 
individual banks, as well as administrative enforcement actions, can be 
readily obtained, the incremental burden on banks of providing an 
annual disclosure statement in accordance with a regulation that has 
become outdated is no longer justified. Furthermore, because part 350 
does not apply to insured state savings associations, for which the 
FDIC became the primary federal regulatory agency in 2011, the proposal 
would eliminate a difference in the regulatory requirements and 
resulting regulatory burden imposed on insured state nonmember banks 
and insured state-licensed branches of foreign banks compared to 
insured state savings associations. Finally, because regulations 
similar to part 350 have been rescinded by the FRB and the OCC (as well 
as the former OTS), the preparation and availability of annual 
disclosure statements are no longer required by the other federal 
banking agencies for the institutions under their supervision.
---------------------------------------------------------------------------

    \8\ Public Law 104-208 (1996), codified at 12 U.S.C. 3311.
    \9\ See 80 FR 32046 (June 5, 2015).
---------------------------------------------------------------------------

IV. Comments

    Consistent with the objectives of section 2222 of EGRPRA, on 
October 17, 2018, the FDIC Board authorized publication of a notice of 
proposed rulemaking (NPR) to rescind and remove part 350 from the Code 
of Federal Regulations. The NPR was published in the Federal Register 
on October 25, 2018, with a 30-day comment period.\10\
---------------------------------------------------------------------------

    \10\ See 83 FR 53829 (October 25, 2018).
---------------------------------------------------------------------------

    The FDIC received nine comments addressing the proposed rescission 
and removal of part 350 from bankers, banking associations, and a 
consultant. The nine commenters fully supported the proposal. One 
additional comment was received from an individual, but it did not 
specifically address the proposed rescission and removal. After 
considering the comments received, the FDIC is adopting as proposed the 
rescission and removal of part 350 from the Code of Federal 
Regulations.

V. Expected Effects

    The removal of the requirement that each FDIC-insured state 
nonmember bank and insured state-licensed branch of a foreign bank 
prepare, and make available on request, annual disclosure statements 
will lessen the burden the FDIC imposes on these institutions. As of 
September 30, 2018, there were 3,493 FDIC-insured state nonmember banks 
and insured state-licensed branches of foreign banks that would be 
affected by this final rule.\11\
---------------------------------------------------------------------------

    \11\ Data from the September 30, 2018, Call Report and FFIEC 002 
report.
---------------------------------------------------------------------------

    The final rule is expected to reduce recordkeeping, reporting, and 
disclosure requirements for FDIC-insured state nonmember banks and 
insured state-licensed branches of foreign banks. As discussed in 
Section III: The Proposal, part 350 requires institutions to prepare an 
annual disclosure statement and make it available to the public. By 
removing part 350, the final rule will remove this disclosure burden. 
The FDIC assumes that 15 percent of the institutions covered by part 
350 provide a management discussion and analysis in their annual 
disclosure statement, and estimates that preparing this material takes 
each institution 1.5 hours. Assuming the time spent preparing the 
material is divided equally between a financial analyst and a manager, 
each earning the 75th percentile wage for their occupation, the 
estimated annual cost per institution to prepare the material is 
$157.82.\12\ Based on the FDIC's estimation that 15 percent of 
institutions prepare this material, the total annual cost is estimated 
to be $82,695, or approximately 0.0001 percent of noninterest expenses 
for covered institutions.\13\
---------------------------------------------------------------------------

    \12\ The annual cost per institution is estimated using the 75th 
percentile hourly wage for financial analysts and management 
occupations in the depository credit intermediation industry as of 
May 2017. This hourly wage is adjusted for inflation, and grossed-up 
to include benefits, through June 2018. The 75th percentile 
inflation and benefit-adjusted hourly wage of management occupations 
as of June 2018 is $125.21, and for financial analysts is $85.21. 
Assuming the 1.5 hours are equally divided between a manager and an 
analyst, this yields an estimated total annual cost per institution 
of (0.75 * $125.21) + (0.75 * $85.21) = $157.82.
    Hourly wages are from the Bureau of Labor Statistics (BLS) May 
2017 National Industry-Specific Occupational Employment and Wage 
Estimates, https://www.bls.gov/oes/current/oessrci.htm. Wages are 
adjusted for inflation through June 2018 using the Seasonally 
Adjusted All-items Consumer Price Index for All Urban Consumers, 
https://data.bls.gov/PDQWeb/cu. The hourly wages are grossed-up to 
include benefits based on Employer Cost for Employee Compensation 
data as of June 2018, https://www.bls.gov/news.release/pdf/ecec.pdf. 
June 2018 is the latest available period of Employer Cost for 
Employee Compensation data. The data on hourly wages, inflation, and 
employer cost for employee compensation was extracted on December 
14, 2018.
    \13\ This equals 524 * $157.82, i.e., (3,493 * 0.15) * $157.82, 
rounded to the nearest dollar. Noninterest expenses are calculated 
from data reported in the September 30, 2018, Call Report, and 
annualized.
---------------------------------------------------------------------------

    In addition to the directly measurable cost savings, another 
potential benefit of the final rule is that it frees up institution 
staff time that would otherwise have been spent complying with part 
350. Theoretically, time previously spent complying with part 350 may 
now be spent on another task of higher value to the institution. This 
potential effect is difficult to accurately estimate with available 
information, but it is likely to be small given that the disclosure 
burden imposed by part 350 is a relatively small percentage of 
noninterest expenses.
    The final rule removes a disclosure requirement for affected 
institutions; however, the FDIC believes that the reduction will not 
have material effects for customers, investors, or counterparties. As 
discussed in Section III: The Proposal, extensive and timely financial 
information about individual banks, as well as administrative 
enforcement actions, can be readily obtained by the public on the 
internet. Therefore, the FDIC believes that removal of this disclosure 
requirement will not have substantive effects on financial market 
participants.

VI. Alternatives Considered

    The FDIC considered alternatives, but believes that the rescission 
and removal of part 350 represents the most appropriate option. In 
particular, the FDIC considered whether to (1) retain the existing 
disclosure statement requirement, but to extend it to the

[[Page 9701]]

insured state savings associations now supervised by the FDIC, (2) 
require that disclosure statements be updated quarterly instead of 
annually, and/or (3) require the inclusion in disclosure statements of 
either the entire Call Report (excluding a limited number of items 
accorded confidential treatment) or financial data comparable to a 
greater number of specified Call Report schedules. However, with the 
timely public availability of each institution's quarterly Call Report 
and UBPR via the FDIC's and the FFIEC's websites, and with the public 
disclosure of information about enforcement actions taken by the FDIC 
routinely made available on the FDIC's website, the FDIC believes any 
extension of part 350 to other institutions, increase in the frequency 
of disclosure, increase in the scope of disclosure, or combination of 
these alternatives, imposes additional cost without any corresponding 
public benefit in terms of access to financial and other information on 
institutions. Moreover, the FDIC is not aware of any difficulties 
encountered by the public in obtaining current financial and 
enforcement action information on institutions supervised by the FRB 
and the OCC (and those institutions previously supervised by the OTS) 
via public websites since these agencies eliminated their respective 
disclosure statement requirements.

VII. Regulatory Analysis and Procedure

A. The Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA) (44 U.S.C. 3501-3521), the FDIC may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (OMB) control number. Part 350 is currently an 
approved information collection with OMB Control No. 3064-0090. 
Removing part 350 obviates the need for this collection of information 
pursuant to the PRA, and FDIC will seek to discontinue its use.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in 
connection with a rulemaking, an agency prepare and make available for 
public comment a final regulatory flexibility analysis describing the 
impact of the final rule on small entities.\14\ A regulatory 
flexibility analysis is not required; however, if the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. The U.S. Small Business 
Administration (SBA) has defined ``small entities'' to include banking 
organizations with total assets less than or equal to $550 million.\15\
---------------------------------------------------------------------------

    \14\ 5 U.S.C. 601 et seq.
    \15\ The SBA defines a small banking organization as having $550 
million or less in assets, where an organization's ``assets are 
determined by averaging the assets reported on its four quarterly 
financial statements for the preceding year.'' See 13 CFR 121.201 
(as amended, effective December 2, 2014). In its determination, the 
``SBA counts the receipts, employees, or other measure of size of 
the concern whose size is at issue and all of its domestic and 
foreign affiliates.'' See 13 CFR 121.103. Following these 
regulations, the FDIC uses a covered entity's affiliated and 
acquired assets, averaged over the preceding four quarters, to 
determine whether the covered entity is ``small'' for the purposes 
of RFA.
---------------------------------------------------------------------------

    As of September 30, 2018, there are 3,493 FDIC-insured state 
nonmember banks and FDIC-insured state-licensed branches of foreign 
banks.\16\ Of these, 2,689 are considered small entities for the 
purposes of RFA. Thus, the FDIC concludes the proposed rule will affect 
a substantial number of small entities.
---------------------------------------------------------------------------

    \16\ Data from the September 30, 2018, Call Report and FFIEC 002 
report.
---------------------------------------------------------------------------

    The final rule is expected to reduce recordkeeping, reporting, and 
disclosure requirements for small FDIC-supervised banks. As discussed 
in Section III: The Proposal, part 350 requires institutions to prepare 
an annual disclosure statement and make it available to the public. By 
removing part 350, the final rule will remove this disclosure burden. 
As discussed in Section IV: Expected Effects, the FDIC estimates the 
annual cost per institution to prepare the material is $157.82.\17\ 
Based on the FDIC's estimation that 15 percent of institutions prepare 
this material, the total annual cost for small FDIC-supervised 
institutions is estimated to be $63,599, or less than 0.0005 percent of 
noninterest expenses for such institutions.\18\
---------------------------------------------------------------------------

    \17\ The annual cost per institution is estimated using the 75th 
percentile hourly wage for financial analysts and management 
occupations in the depository credit intermediation industry as of 
May 2017. This hourly wage is adjusted for inflation, and grossed-up 
to include benefits, through June 2018. The 75th percentile 
inflation and benefit-adjusted hourly wage of management occupations 
as of June 2018 is $125.21, and for financial analysts is $85.21. 
Assuming the 1.5 hours are equally divided between a manager and an 
analyst, this yields an estimated total annual cost per institution 
of (0.75 * $125.21) + (0.75 * $85.21) = $157.82.
    Hourly wages are from the Bureau of Labor Statistics (BLS) May 
2017 National Industry-Specific Occupational Employment and Wage 
Estimates, https://www.bls.gov/oes/current/oessrci.htm. Wages are 
adjusted for inflation through June 2018 using the Seasonally 
Adjusted All-items Consumer Price Index for All Urban Consumers, 
https://data.bls.gov/PDQWeb/cu. The hourly wages are grossed-up to 
include benefits based on Employer Cost for Employee Compensation 
data as of June 2018, https://www.bls.gov/news.release/pdf/ecec.pdf. 
June 2018 is the latest available period of Employer Cost for 
Employee Compensation data. The data on hourly wages, inflation, and 
employer cost for employee compensation was extracted on December 
14, 2018.
    \18\ This equals 403 * $157.82, i.e., (2,689 * 0.15) * $157.82, 
rounded to the nearest dollar. Noninterest expenses are calculated 
from data reported in the September 30, 2018, Call Report, and 
annualized.
---------------------------------------------------------------------------

    Also as described in Section IV above, in addition to the directly 
measurable cost savings, another potential benefit of the final rule is 
that it frees up institution staff time that would otherwise have been 
spent complying with part 350. While this potential effect is difficult 
to accurately estimate with available information, it is likely to be 
small given that the disclosure burden imposed by part 350 is a 
relatively small percentage of noninterest expenses for small FDIC-
supervised institutions.
    The final rule removes a disclosure requirement for affected 
institutions; however, the FDIC believes that the reduction will not 
have material effects for customers, investors, or counterparties. As 
discussed in Section III: The Proposal, extensive and timely financial 
information about individual banks, as well as administrative 
enforcement actions, can be readily obtained by the public on the 
internet. Therefore, the FDIC believes that removal of this disclosure 
requirement with have not substantive effects on financial market 
participants.
    Based on the information above, the FDIC certifies that the final 
rule will not have a significant economic impact on a substantial 
number of small entities.

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, Public Law 106-102, 113 
Stat. 1338, 1471, 12 U.S.C. 4809, requires each Federal banking agency 
to use plain language in all of its proposed and final rules published 
after January 1, 2000. As a Federal banking agency subject to the 
provisions of this section, the FDIC has sought to present the final 
rule to rescind part 350 in a simple and straightforward manner.

[[Page 9702]]

E. The Economic Growth and Regulatory Paperwork Reduction Act

    Under section 2222 of EGRPRA, the FDIC is required to conduct a 
review at least once every 10 years to identify any outdated or 
otherwise unnecessary regulations. The FDIC completed its most recent 
comprehensive review of its regulations under EGRPRA in 2017 and did 
not receive any comments from the public concerning part 350. The 
burden reduction evidenced in this final rule is consistent with the 
objectives of the EGRPRA review process.

F. Riegle Community Development and Regulatory Improvement Act

    Under section 302(b) of the Riegle Community Development and 
Regulatory Improvement Act, 12 U.S.C. 4802(b), new regulations and 
amendments to regulations prescribed by a Federal banking agency which 
impose additional reporting, disclosures, or other new requirements on 
insured depository institutions shall take effect on the first day of a 
calendar quarter which begins on or after the date on which the 
regulations are published in final form. Because this rule rescission 
does not impose additional reporting, disclosures, or other 
requirements, but rather relieves banks of a disclosure requirement, 
this rule may take effect prior to the start of the next calendar 
quarter.

List of Subjects in 12 CFR Part 350

    Accounting, Banks, Banking, Reporting and recordkeeping 
requirements.

Authority and Issuance

PART 350--[REMOVED AND RESERVED]

0
For the reasons stated in the preamble, and under the authority of 12 
U.S.C 1817(a)(1), 1819 ``Seventh'' and ``Tenth,'' the Board of 
Directors of the Federal Deposit Insurance Corporation removes and 
reserves 12 CFR part 350.

    Dated at Washington, DC, on March 12, 2019.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2019-04944 Filed 3-15-19; 8:45 am]
BILLING CODE 6714-01-P