Removal of Transferred OTS Regulations Regarding Deposits, 65276-65280 [2019-25697]
Download as PDF
<![CDATA[
65276
Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
remaining assessment credits in a single
lump-sum payment to such institution
in the next assessment period in which
the reserve ratio is at least 1.35 percent.
*
*
*
*
*
■ 3. Amend § 327.35 by adding
paragraph (c) to read as follows:
§ 327.35
Application of credits.
*
*
*
*
*
(c) Remittance of credits. Subject to
the limitations in paragraph (b) of this
section, in the same assessment period
that the FDIC remits the full nominal
value of small bank assessment credits
pursuant to § 327.11(c)(13), the FDIC
shall remit the full nominal value of an
institution’s remaining one-time
assessment credits provided under this
subpart B in a single lump-sum payment
to such institution.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on November 19,
2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019–25566 Filed 11–26–19; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 390
RIN 3064–AF07
Removal of Transferred OTS
Regulations Regarding Deposits
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to rescind and
remove a subpart from the Code of
Federal Regulations entitled ‘‘Deposits,’’
applicable to State savings associations,
because the subpart is duplicative of
other rules and statutes and is
unnecessary to the regulation of State
savings associations. The FDIC did not
receive any comments on the Notice of
Proposed Rulemaking (NPR) and is
finalizing the rule as proposed.
DATES: The final rule is effective on
December 27, 2019.
FOR FURTHER INFORMATION CONTACT:
Karen J. Currie, Senior Examination
Specialist, (202) 898–3981, KCurrie@
FDIC.gov, Division of Risk Management
Supervision; Christine M. Bouvier,
Assistant Chief Accountant, (202) 898–
7289, Division of Risk Management
Supervision; Cassandra Duhaney,
Senior Policy Analyst, (202) 898–6804,
SUMMARY:
VerDate Sep<11>2014
17:24 Nov 26, 2019
Jkt 250001
Division of Depositor and Consumer
Protection; Laura J. McNulty, Counsel,
Legal Division, (202) 898–3817; or
Jennifer M. Jones, Counsel, Legal
Division (202) 898–6768.
SUPPLEMENTARY INFORMATION:
I. Policy Objective
The policy objective of the rule is to
remove unnecessary and duplicative
regulations in order to simplify them
and improve the public’s understanding
of them. Thus, the FDIC is rescinding
the regulations in part 390, subpart M
and reserving the subpart for future use.
II. Background
Part 390, subpart M, was included in
the regulations that were transferred to
the FDIC from the Office of Thrift
Supervision (OTS) on July 21, 2011, in
connection with the implementation of
applicable provisions of title III of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank
Act).1
A. The Dodd-Frank Act
As of July 21, 2011, the transfer date
established by section 311 of the DoddFrank Act,2 the powers, duties, and
functions formerly performed by the
OTS were divided among the FDIC, as
to State savings associations, the Office
of the Comptroller of the Currency
(OCC), as to Federal savings
associations, and the Board of
Governors of the Federal Reserve
System (FRB), as to savings and loan
holding companies. Section 316(b) of
the Dodd-Frank Act 3 provides the
manner of treatment for all orders,
resolutions, determinations, regulations,
and other advisory materials that have
been issued, made, prescribed, or
allowed to become effective by the OTS.
The section provides that if such
materials were in effect on the day
before the transfer date, they continue 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.
Pursuant to section 316(c) of the
Dodd-Frank Act,4 on June 14, 2011, the
FDIC’s Board of Directors (Board)
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
1 12
U.S.C. 5301 et seq.
U.S.C. 5411.
3 12 U.S.C. 5414(b).
4 12 U.S.C. 5414(c).
2 12
PO 00000
Frm 00018
Fmt 4700
Sfmt 4700
the OCC as a Joint Notice in the Federal
Register on July 6, 2011.5
Although § 312(b)(2)(B)(i)(II) of the
Dodd-Frank Act 6 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) 7 and other laws
as the ‘‘appropriate Federal banking
agency’’ or under similar statutory
terminology. Section 312(c)(1) of the
Dodd-Frank Act 8 revised the definition
of ‘‘appropriate Federal banking
agency’’ contained in § 3(q) of the FDI
Act,9 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 appropriate
Federal banking agency (or under
similar terminology) for State savings
associations, as it does here, the FDIC is
authorized to issue, modify, and rescind
regulations involving such associations,
as well as for State nonmember banks
and insured State-licensed branches of
foreign banks.
As noted above, on June 14, 2011,
operating pursuant to this authority, the
Board issued a list of regulations of the
former OTS that the FDIC would enforce
with respect to State savings
associations. On that same date, the
Board reissued and redesignated certain
regulations transferred from the former
OTS. These transferred OTS regulations
were published as new FDIC regulations
in the Federal Register on August 5,
2011.10 When the FDIC republished the
transferred OTS regulations as new
FDIC regulations, it specifically noted
that its staff would evaluate the
transferred OTS rules and might later
recommend incorporating the
transferred OTS regulations into other
FDIC regulations, amending them, or
rescinding them, as appropriate.11
B. Transferred OTS Regulations
(Transferred to the FDIC’s Part 390,
Subpart M)
One of the regulations transferred to
the FDIC from the OTS was former 12
CFR 557.20, concerning the
maintenance of deposit records by State
savings associations.12 That provision
was transferred to the FDIC and now
comprises part 390, subpart M. The OTS
had issued § 557.20 as part of a
5 76
FR 39246 (July 6, 2011).
U.S.C. 5412(b)(2)(B)(i)(II).
7 12 U.S.C. 1811 et seq.
8 12 U.S.C. 5412(c)(1).
9 12 U.S.C. 1813(q).
10 76 FR 47652 (Aug. 5, 2011).
11 See 76 FR 47653.
12 See 76 FR 47659.
6 12
E:\FR\FM\27NOR1.SGM
27NOR1
Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
streamlining of its regulations in 1997.13
At that time, the OTS regulations
included several specific deposit
recordkeeping requirements, and the
OTS sought to replace those with one
provision. In the associated NPR, the
OTS explained that ‘‘[a]s part of its
reinvention effort, OTS is endeavoring
to eliminate regulations that are
outdated or micromanage thrift
operations. For example, OTS proposes
to replace several specific depositrelated recordkeeping requirements
with a general recordkeeping regulation
that is tied more closely to safety and
soundness.’’ 14
III. Proposed Rule
Removal of Part 390, Subpart M—
Deposits
On August 26, 2019, the FDIC
published an NPR regarding the removal
of part 390, subpart M (former OTS
regulation 12 CFR 557.20), which
addressed deposits at State savings
associations.15 The former OTS rule was
transferred to the FDIC with only
nominal changes. The NPR proposed
removing part 390, subpart M from the
Code of Federal Regulations, because,
after careful review and consideration,
the FDIC believes it is unnecessary,
redundant, and duplicative of existing
statutes and regulations currently
applicable to State savings associations.
IV. Comparison of Other Applicable
Statutes and Regulations With the
Transferred OTS Regulations To Be
Rescinded
The following is a description of
existing statutes and regulations that
provide for complete and accurate
recordkeeping of deposits and account
transactions at State savings
associations, obviating the need for a
new regulation or amendment of
existing regulations upon rescission of
part 390, subpart M. Accordingly, the
FDIC proposed that §§ 390.230 and
390.231, part 390, subpart M, be
rescinded as unnecessary, redundant of,
or otherwise duplicative of the
provisions of law delineated in 12
U.S.C. 1817(a)(9); 31 CFR
1020.410(c)(2); 12 CFR part 364,
Appendix A II; 12 CFR 330.1(e); and 12
CFR 1005, each discussed individually
below.
FR 55759 (Oct. 22, 1997).
FR 15627 (Apr. 2, 1997).
15 84 FR 44558 (Aug. 26, 2019).
A. Former OTS Safety and Soundness—
Part 390, Subpart M, Sections 390.230
and 390.231
1. § 390.230—What does this subpart
do?
Section 390.230 simply states that
subpart M ‘‘applies to the deposit
activities of State savings associations.’’
There is no substantively similar
provision in the FDIC’s regulations, nor
is one necessary. Accordingly, the FDIC
proposed that section 390.230 be
rescinded.
2. § 390.231—What records should I
maintain on deposit activities?
Former OTS § 557.20, as modified by
the FDIC in transferred § 390.231,
provided general information on what
records should be maintained by State
savings associations on their deposit
activities. Existing statutes and
regulations that are applicable to State
savings associations (discussed in
greater detail below) already require the
maintenance of accurate records of
deposits and transactions by State
savings associations.
B. Data Collection at Insured Depository
Institutions
Section 7(a)(9) of the FDI Act 16
provides that ‘‘the Corporation shall
take such action as may be necessary to
ensure that—(A) each insured
depository institution maintains; and
(B) the Corporation receives on a regular
basis from such institution, information
on the total amount of all insured
deposits, preferred deposits, and
uninsured deposits at the institution.’’
In issuing regulations under that
statutory provision, the FDIC has stated
that it ‘‘has a right and a duty’’ under
§ 7(a)(9) to require the maintenance of
accurate deposit account records and
that ‘‘requiring covered institutions to
maintain complete and accurate records
regarding the ownership and
insurability of deposits . . . will
facilitate the FDIC’s prompt payment of
deposit insurance and enhance the
ability to implement the least costly
resolution of these institutions.’’ 17 Due
to the requirements for accurate
recordkeeping pursuant to its existing
statutory authority, the FDIC takes the
position that no new regulation will be
needed upon the rescission of part 390,
subpart M.
13 62
14 62
VerDate Sep<11>2014
17:24 Nov 26, 2019
16 12
17 81
Jkt 250001
PO 00000
U.S.C. 1817(a)(9).
FR 87735 (Dec. 5, 2016).
Frm 00019
Fmt 4700
Sfmt 4700
65277
C. Treasury Department Bank Secrecy
Act Regulations 18
Section 1020.410(c)(2) of title 31,
Code of Federal Regulations, requires
banks (defined to include savings
associations 19) to maintain certain
records, including ‘‘[e]ach statement,
ledger card or other record on each
deposit or share account, showing each
transaction in, or with respect to, that
account.’’ This rule specifically requires
that such records be maintained at State
savings associations, rather than the
merely suggestive language included in
part 390, subpart M.
D. Activities Implicating Safety and
Soundness; Part 364 20
In 1995, the FDIC published 12 CFR
364 as a final rule with an appendix that
implements section 39(a) of the FDI
Act 21 regarding standards for safety and
soundness (Appendix A).22 The OCC,
the FRB, and the OTS also issued their
versions of Appendix A.23 The FDIC’s
Appendix A II (Operational and
Managerial Standards) provides that an
institution should have internal controls
and information systems that are
appropriate to the size of the institution
and the nature, scope, and risk of its
activities and that provide for, among
other things: ‘‘timely and accurate
financial, operational and regulatory
reports.’’ An Appendix B (regarding
information security) was also
published to implement § 39 of the FDI
Act.24 Section 364.101 of part 364
provides that Appendix A and
Appendix B apply to all insured State
nonmember banks, State-licensed
insured branches of foreign banks, and
State savings associations. FDICsupervised institutions are required to
file quarterly Reports of Condition.25 In
18 31
CFR 1020.
CFR 1010.100(d)(3).
20 12 CFR part 364, Appendix A II.
21 12 U.S.C. 1831p–1. § 132 of the Federal Deposit
Insurance Corporation Improvement Act of 1991,
Public Law 102–242, 105 Stat. 2236 (codified at 12
U.S.C. 1831p–1) added § 39 to the FDI Act. Section
39 was later amended by § 956 of the Housing and
Community Development Act of 1992, Public Law
102–550, 106 Stat. 3672, and § 318 of the Riegle
Community Development and Regulatory
Improvement Act of 1994, Public Law 103–325, 108
Stat. 2160.
22 60 FR 35674 (July 10, 1995).
23 See 12 CFR part 30, Appendix A, 60 FR 35678;
12 CFR part 208, Appendix D–1, 60 FR 35682;
(former) 12 CFR part 570, Appendix A, 60 FR
35687, respectively (July 10, 1995).
24 Appendix B was added in accordance with
section 501 of the Gramm-Leach-Bliley Financial
Modernization Act of 1999, Public Law 106–102,
113 Stat. 1338, codified at 15 U.S.C. 6801, which
statute required the agencies to establish
appropriate information security standards in order
to protect nonpublic personal information.
25 12 U.S.C. 1817(a)(3)–(6); 12 U.S.C. 1464(v).
19 31
E:\FR\FM\27NOR1.SGM
27NOR1
65278
Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
addition, the accounting principles
applicable to reports or statements that
insured depository institutions file with
the Federal banking agencies are
required to be uniform and consistent
with generally accepted accounting
principles.26
Taken together, part 364 and
appendix A constitute the FDIC’s longstanding expectations for all prudently
managed insured depository
institutions, but leave specific methods
of achieving these objectives to each
institution. These regulations provide a
framework for sound corporate
governance and the supervision of
operations designed to prompt an
institution to identify emerging
problems and correct deficiencies before
capital becomes impaired. Pursuant to
§ 39(e) of the FDI Act,27 an FDICsupervised institution’s failure to meet
the standards may cause the FDIC to
require the institution to submit a safety
and soundness compliance plan, and if
the institution does not comply with its
plan, the FDIC will issue an order to
correct safety and soundness
deficiencies.28 Hence, in order to
accurately report their financial
condition, including deposit liabilities,
and to meet applicable safety and
soundness criteria, insured depository
institutions, including State savings
associations, must keep accurate and
up-to-date records of account
transactions and balances.
E. FDIC’s Deposit Insurance Coverage
Criteria 29
Part 330 of the FDIC’s regulations
governs the criteria for deposit
insurance coverage at insured
depository institutions, including
insured State savings associations.
Section 330.3(h) of part 330 states that
deposit insurance coverage is ‘‘a
function of the deposit account records
of the insured depository institution
. . . which, in the interest of uniform
national rules for deposit insurance
coverage, are controlling for purposes of
determining deposit insurance
coverage.’’ Further, § 330.1(e) defines
the term ‘‘deposit account records’’ to
include documents such as ‘‘account
ledgers . . . and other books and
records of the insured depository
institution . . . which relate to the
insured depository institution’s deposit
taking function.’’ This existing
regulation on criteria for deposit
insurance also requires State savings
26 12
U.S.C. 1831n.
U.S.C. 1831p–1(e).
28 See 12 U.S.C. 1831p–1(e); 12 CFR 308.300, et
seq.
29 12 CFR 330.
associations to maintain records of their
deposit transactions, eliminating the
need for part 390, subpart M.
F. Bureau of Consumer Financial
Protection—Regulation E
Regulation E,30 issued by the Bureau
of Consumer Financial Protection,
relates to electronic fund transfers at
financial institutions, including any
savings association.31 It states that ‘‘[f]or
an account to or from which electronic
fund transfers can be made, a financial
institution shall send a periodic
statement for each monthly cycle in
which an electronic fund transfer has
occurred; and shall send a periodic
statement at least quarterly if no transfer
has occurred.’’ 32 Thus, in order to
comply with existing Regulation E, a
State savings association must be
capable of generating periodic
statements for each of its deposit
accounts, whether or not electronic
transfers are made from that account,
again serving the intended purpose of
part 390, subpart M.
Accordingly, as explained in the
analysis above, the FDIC proposed
removing §§ 390.230 and 390.231,
subpart M because these sections are
unnecessary, redundant of, or otherwise
duplicative of the safety and soundness
and other standards described above.
V. Comments
The FDIC issued the NPR with a 30day comment period, which closed on
September 25, 2019. The FDIC received
no comments on its Proposed Rule, and
consequently the final rule is adopted as
proposed.
VI. Explanation of the Final Rule
As discussed in the NPR, the
requirements for State savings
associations in part 390, subpart M, are
duplicative of the regulations and
statutes described in Section IV above.
To that effect, the Final Rule removes
and rescinds 12 CFR part 390, subpart
M, in its entirety.
VII. Expected Effects
As explained in detail in Section III
of this Supplemental Information
section, certain OTS regulations
transferred to the FDIC by the DoddFrank Act relating to records of deposit
transactions and activities are either
unnecessary or effectively duplicate
existing regulations. This rule would
eliminate one of those transferred OTS
regulations.
As of June 30th, 2019, the FDIC
supervises 3,424 insured depository
27 12
VerDate Sep<11>2014
17:24 Nov 26, 2019
Jkt 250001
30 12
CFR part 1005.
CFR 1005.2(i).
32 12 CFR 1005.9(b).
31 12
PO 00000
Frm 00020
Fmt 4700
Sfmt 4700
institutions, of which 38 (1.1%) are
State savings associations.33 The rule
primarily would affect regulations that
govern State savings associations.
As explained previously, the rule
would remove sections §§ 390.230 and
390.231, subpart M, because these
sections are unnecessary, redundant of,
or otherwise duplicative of other
statutes and regulations, including those
relating to safety and soundness.
Because these regulations are
redundant, rescinding them will not
have any substantive effects on FDICsupervised institutions.
VIII. Alternatives
The FDIC has considered alternatives
to the rule but believes that the
amendments represent the most
appropriate option for covered
institutions. As discussed previously,
the Dodd-Frank Act transferred certain
powers, duties, and functions formerly
performed by the OTS to the FDIC. The
FDIC’s Board reissued and redesignated
certain transferred regulations from the
OTS, but noted that it would evaluate
them and might later incorporate them
into other FDIC regulations, amend
them, or rescind them, as appropriate.
The FDIC has evaluated the existing
regulations relating to the maintenance
of deposit account records. The FDIC
considered the status quo alternative of
retaining the current regulations, but
did not choose to do so. The FDIC
believes it would be procedurally
complex for FDIC-supervised
institutions to continue to refer to these
separate sets of regulations, and is
therefore amending and streamlining
them in accordance with this final
rulemaking.
IX. Regulatory Analysis and Procedure
A. The Paperwork Reduction Act
In accordance with the requirements
of the Paperwork Reduction Act of 1995
(PRA),34 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 final rule rescinds and removes
from FDIC regulations part 390, subpart
M. The final rule will not create any
new or revise any existing collections of
information under the PRA. Therefore,
no information collection request will
be submitted to the OMB for review.
33 Based on data from the June 30, 2019,
Consolidated Reports of Condition and Income (Call
Report) and Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks.
34 44 U.S.C. 3501–3521.
E:\FR\FM\27NOR1.SGM
27NOR1
Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
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 rule on small
entities.35 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.
The Small Business Administration
(SBA) has defined ‘‘small entities’’ to
include banking organizations with total
assets of less than or equal to $600
million.36 37 Generally, the FDIC
considers a significant effect to be a
quantified effect in excess of 5 percent
of total annual salaries and benefits per
institution, or 2.5 percent of total
noninterest expenses. The FDIC believes
that effects in excess of these thresholds
typically represent significant effects for
FDIC-supervised institutions. For the
reasons provided below, the FDIC
certifies that the final rule would not
have a significant economic impact on
a substantial number of small banking
organizations. Accordingly, a regulatory
flexibility analysis is not required.
As of June 30, 2019, the FDIC
supervised 3,424 insured depository
institutions, of which 2,665 are
considered small banking organizations
for the purposes of RFA. The proposed
rule primarily affects regulations that
govern State savings associations. There
are 36 State savings associations
considered to be small banking
organizations for the purposes of the
RFA.38
As explained previously, the rule
would remove §§ 390.230 and 390.231,
35 5
U.S.C. 601 et seq.
SBA defines a small banking organization
as having $600 million or less in assets, where ‘‘a
financial institution’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 by 84 FR 34261, effective
August 19, 2019). ‘‘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
FDIC-supervised institution is ‘‘small’’ for the
purposes of RFA.
37 The FDIC supplemented the original notice of
proposed rulemaking with updated supporting
information for the RFA section that reflected
changes to the SBA’s monetary-based size standards
which were adjusted for inflation as of August 19,
2019. See 84 FR 52834 (Oct. 3, 2019).
38 Based on data from the June 30, 2019, Call
Report and Report of Assets and Liabilities of U.S.
Branches and Agencies of Foreign Banks.
36 The
VerDate Sep<11>2014
17:24 Nov 26, 2019
Jkt 250001
part 390, subpart M, because these
sections are unnecessary, redundant of,
or otherwise duplicative of other
statutes and regulations, including
safety and soundness standards.
Therefore, rescinding subpart M would
not have any substantive effects on
small FDIC-supervised institutions.
Based on the information above, the
FDIC certifies that the rule would not
have a significant economic impact on
a substantial number of small entities.
C. The Congressional Review Act
For purposes of Congressional Review
Act, the OMB makes a determination as
to whether a final rule constitutes a
‘‘major’’ rule.39 If a rule is deemed a
major rule by the OMB, the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.40
The Congressional Review Act defines
a ‘‘major rule’’ as any rule that the
Administrator of the Office of
Information and Regulatory Affairs of
the OMB finds has resulted in or is
likely to result in—(A) an annual effect
on the economy of $100,000,000 or
more; (B) a major increase in costs or
prices for consumers, individual
industries, Federal, State, or local
government agencies or geographic
regions, or (C) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
on the ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.41
The OMB has determined that the
final rule is not a major rule for
purposes of the Congressional Review
Act and the FDIC will submit the final
rule and other appropriate reports to
Congress and the Government
Accountability Office for review.
65279
Reduction Act of 1996 (EGRPRA), the
FDIC is required to review all of its
regulations, at least once every 10 years,
in order to identify any outdated or
otherwise unnecessary regulations
imposed on insured institutions.43 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 the FDIC
will take to address issues that were
identified.44 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 part
390, subpart M, this final rule
complements other actions that the
FDIC has taken, separately and with the
other Federal banking agencies, to
further the EGRPRA mandate.
F. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act of 1994
(RCDRIA),45 in determining the effective
date and administrative compliance
requirements for new regulations that
impose additional reporting, disclosure,
or other requirements on insured
depository institutions (IDIs), 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
D. Plain Language
regulations that impose additional
Section 722 of the Gramm-Leachreporting, disclosures, or other new
Bliley Act 42 requires the Federal
requirements on IDIs generally to take
banking agencies to use plain language
effect on the first day of a calendar
in all proposed and final rules
quarter that begins on or after the date
published after January 1, 2000. The
on which the regulations are published
FDIC has sought to present the final rule in final form.46
in a simple and straightforward manner
Because the final rule does not
and did not receive any comments on
impose additional reporting, disclosure,
the use of plain language.
or other new requirements on IDIs,
E. The Economic Growth and Regulatory section 302 of the RCDRIA does not
apply.
Paperwork Reduction Act
Under section 2222 of the Economic
Growth and Regulatory Paperwork
U.S.C. 801 et seq.
40 5 U.S.C. 801(a)(3).
41 5 U.S.C. 804(2).
42 Public Law 106–102, 113 Stat. 1338, 1471
(1999).
List of Subjects in 12 CFR Part 390
Deposits.
39 5
PO 00000
Frm 00021
Fmt 4700
Sfmt 4700
43 Public
Law 104–208, 110 Stat. 3009 (1996).
FR 15900 (March 31, 2017).
45 12 U.S.C. 4802(a).
46 Id.
44 82
E:\FR\FM\27NOR1.SGM
27NOR1
65280
Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
Authority and Issuance
For the reasons stated in the
preamble, the Federal Deposit Insurance
Corporation amends 12 CFR 390 as
follows:
PART 390—REGULATIONS
TRANSFERRED FROM THE OFFICE OF
THRIFT SUPERVISION
1. The authority citation for part 390
is revised to read as follows:
■
Authority: 12 U.S.C. 1819.
Subpart F also issued under 5 U.S.C. 552;
559; 12 U.S.C. 2901 et seq.
Subpart G also issued under 12 U.S.C. 2810
et seq., 2901 et seq.; 15 U.S.C. 1691; 42 U.S.C.
1981, 1982, 3601–3619.
Subpart O also issued under 12 U.S.C.
1828.
Subpart Q also issued under 12 U.S.C.
1462; 1462a; 1463; 1464.
Subpart R also issued under 12 U.S.C.
1463; 1464; 1831m; 1831n; 1831p–1.
Subpart S also issued under 12 U.S.C.
1462; 1462a; 1463; 1464; 1468a; 1817; 1820;
1828; 1831e; 1831o; 1831p–1; 1881–1884;
3207; 3339; 15 U.S.C. 78b; 78l; 78m; 78n;
78p; 78q; 78w; 31 U.S.C. 5318; 42 U.S.C.
4106.
Subpart T also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78w.
Subpart W also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w.
Subpart Y also issued under 12 U.S.C.
1831o.
Subpart M—[Removed and Reserved]
2. Remove and reserve subpart M,
consisting of §§ 390.230 and 390.231.
■
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on November 19,
2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019–25697 Filed 11–26–19; 8:45 am]
BILLING CODE 6714–01–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1022
Fair Credit Reporting Act Disclosures
Bureau of Consumer Financial
Protection.
ACTION: Final rule; official
interpretation.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is issuing
this final rule amending an appendix for
Regulation V, which implements the
Fair Credit Reporting Act (FCRA). The
Bureau is required to calculate annually
SUMMARY:
VerDate Sep<11>2014
18:36 Nov 26, 2019
Jkt 250001
the dollar amount of the maximum
allowable charge for disclosures by a
consumer reporting agency to a
consumer pursuant to FCRA Section
609; this final rule establishes the
maximum allowable charge for the 2020
calendar year.
DATES: This final rule is effective
January 1, 2020.
FOR FURTHER INFORMATION CONTACT:
Rachel Ross, Attorney-Advisor; Kristen
Phinnessee, Senior Counsel, Office of
Regulations, at (202) 435–7700. If you
require this document in an alternative
electronic format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION: The
Bureau is amending appendix O for
Regulation V, which implements the
FCRA, to establish the maximum
allowable charge for disclosures by a
consumer reporting agency to a
consumer for 2020. The maximum
allowable charge will remain at $12.50
for 2020.
I. Background
Under section 609 of the FCRA, a
consumer reporting agency must, upon
a consumer’s request, disclose to the
consumer information in the consumer’s
file.1 Section 612(a) of the FCRA gives
consumers the right to a free file
disclosure upon request once every 12
months from the nationwide consumer
reporting agencies and nationwide
specialty consumer reporting agencies.2
Section 612 of the FCRA also gives
consumers the right to a free file
disclosure under certain other, specified
circumstances.3 Where the consumer is
not entitled to a free file disclosure,
section 612(f)(1)(A) of the FCRA
provides that a consumer reporting
agency may impose a reasonable charge
on a consumer for making a file
disclosure. Section 612(f)(1)(A) of the
FCRA provides that the charge for such
a disclosure shall not exceed $8.00 and
shall be indicated to the consumer
before making the file disclosure.4
Section 612(f)(2) of the FCRA also
states that the $8.00 maximum amount
shall increase on January 1 of each year,
based proportionally on changes in the
Consumer Price Index, with fractional
changes rounded to the nearest fifty
cents.5 Such increases are based on the
1 15
U.S.C. 1681g.
U.S.C. 1681j(a).
3 15 U.S.C. 1681j(b)–(d). The maximum allowable
charge announced by the Bureau does not apply to
requests made under section 612(a)–(d) of the
FCRA. The charge does apply when a consumer
who orders a file disclosure has already received a
free annual file disclosure and does not otherwise
qualify for an additional free file disclosure.
4 15 U.S.C. 1681j(f)(1)(A).
5 15 U.S.C. 1681j(f)(2).
2 15
PO 00000
Frm 00022
Fmt 4700
Sfmt 4700
Consumer Price Index for All Urban
Consumers (CPI–U), which is the most
general Consumer Price Index and
covers all urban consumers and all
items.
II. Adjustment
For 2020, the ceiling on allowable
charges under section 612(f) of the
FCRA will be $12.50, unchanged from
2019. The Bureau is using the $8.00
amount set forth in section
612(f)(1)(A)(i) of the FCRA as the
baseline for its calculation of the
increase in the ceiling on reasonable
charges for certain disclosures made
under section 609 of the FCRA. Since
the effective date of section 612(a) was
September 30, 1997, the Bureau
calculated the proportional increase in
the CPI–U from September 1997 to
September 2019. The Bureau then
determined what modification, if any,
from the original base of $8.00 should
be made effective for 2020, given the
requirement that fractional changes be
rounded to the nearest fifty cents.
Between September 1997 and
September 2019, the CPI–U increased by
59.28 percent from an index value of
161.2 in September 1997 to a value of
256.759 in September 2019. An increase
of 59.28 percent in the $8.00 base figure
would lead to a figure of $12.74.
However, because the statute directs
that the resulting figure be rounded to
the nearest $0.50, the maximum
allowable charge is $12.50. The Bureau
therefore determines that the maximum
allowable charge for the year 2020 will
remain at $12.50.
III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure
Act, notice and opportunity for public
comment are not required if the Bureau
finds that notice and public comment
are impracticable, unnecessary, or
contrary to the public interest.6
Pursuant to this final rule, in Regulation
V, appendix O, is amended to update
the maximum allowable charge for 2020
under section 612(f). The amendments
in this final rule are technical and nondiscretionary, as they merely apply the
method previously established in
Regulation V for determining
adjustments to the thresholds. For these
reasons, the Bureau has determined that
publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary.
The amendments therefore are adopted
in final form.
65
U.S.C. 553(b)(B).
E:\FR\FM\27NOR1.SGM
27NOR1
]]>Agencies
[Federal Register Volume 84, Number 229 (Wednesday, November 27, 2019)]
[Rules and Regulations]
[Pages 65276-65280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25697]
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 390
RIN 3064-AF07
Removal of Transferred OTS Regulations Regarding Deposits
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is adopting a
final rule to rescind and remove a subpart from the Code of Federal
Regulations entitled ``Deposits,'' applicable to State savings
associations, because the subpart is duplicative of other rules and
statutes and is unnecessary to the regulation of State savings
associations. The FDIC did not receive any comments on the Notice of
Proposed Rulemaking (NPR) and is finalizing the rule as proposed.
DATES: The final rule is effective on December 27, 2019.
FOR FURTHER INFORMATION CONTACT: Karen J. Currie, Senior Examination
Specialist, (202) 898-3981, [email protected], Division of Risk
Management Supervision; Christine M. Bouvier, Assistant Chief
Accountant, (202) 898-7289, Division of Risk Management Supervision;
Cassandra Duhaney, Senior Policy Analyst, (202) 898-6804, Division of
Depositor and Consumer Protection; Laura J. McNulty, Counsel, Legal
Division, (202) 898-3817; or Jennifer M. Jones, Counsel, Legal Division
(202) 898-6768.
SUPPLEMENTARY INFORMATION:
I. Policy Objective
The policy objective of the rule is to remove unnecessary and
duplicative regulations in order to simplify them and improve the
public's understanding of them. Thus, the FDIC is rescinding the
regulations in part 390, subpart M and reserving the subpart for future
use.
II. Background
Part 390, subpart M, was included in the regulations that were
transferred to the FDIC from the Office of Thrift Supervision (OTS) on
July 21, 2011, in connection with the implementation of applicable
provisions of title III of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank Act).\1\
---------------------------------------------------------------------------
\1\ 12 U.S.C. 5301 et seq.
---------------------------------------------------------------------------
A. The Dodd-Frank Act
As of July 21, 2011, the transfer date established by section 311
of the Dodd-Frank Act,\2\ the powers, duties, and functions formerly
performed by the OTS were divided among the FDIC, as to State savings
associations, the Office of the Comptroller of the Currency (OCC), as
to Federal savings associations, and the Board of Governors of the
Federal Reserve System (FRB), as to savings and loan holding companies.
Section 316(b) of the Dodd-Frank Act \3\ provides the manner of
treatment for all orders, resolutions, determinations, regulations, and
other advisory materials that have been issued, made, prescribed, or
allowed to become effective by the OTS. The section provides that if
such materials were in effect on the day before the transfer date, they
continue 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.
---------------------------------------------------------------------------
\2\ 12 U.S.C. 5411.
\3\ 12 U.S.C. 5414(b).
---------------------------------------------------------------------------
Pursuant to section 316(c) of the Dodd-Frank Act,\4\ on June 14,
2011, the FDIC's Board of Directors (Board) 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.\5\
---------------------------------------------------------------------------
\4\ 12 U.S.C. 5414(c).
\5\ 76 FR 39246 (July 6, 2011).
---------------------------------------------------------------------------
Although Sec. 312(b)(2)(B)(i)(II) of the Dodd-Frank Act \6\
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) \7\ and other laws as the ``appropriate Federal
banking agency'' or under similar statutory terminology. Section
312(c)(1) of the Dodd-Frank Act \8\ revised the definition of
``appropriate Federal banking agency'' contained in Sec. 3(q) of the
FDI Act,\9\ 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 appropriate Federal
banking agency (or under similar terminology) for State savings
associations, as it does here, the FDIC is authorized to issue, modify,
and rescind regulations involving such associations, as well as for
State nonmember banks and insured State-licensed branches of foreign
banks.
---------------------------------------------------------------------------
\6\ 12 U.S.C. 5412(b)(2)(B)(i)(II).
\7\ 12 U.S.C. 1811 et seq.
\8\ 12 U.S.C. 5412(c)(1).
\9\ 12 U.S.C. 1813(q).
---------------------------------------------------------------------------
As noted above, on June 14, 2011, operating pursuant to this
authority, the Board issued a list of regulations of the former OTS
that the FDIC would enforce with respect to State savings associations.
On that same date, the Board reissued and redesignated certain
regulations transferred from the former OTS. These transferred OTS
regulations were published as new FDIC regulations in the Federal
Register on August 5, 2011.\10\ When the FDIC republished the
transferred OTS regulations as new FDIC regulations, it specifically
noted that its staff would evaluate the transferred OTS rules and might
later recommend incorporating the transferred OTS regulations into
other FDIC regulations, amending them, or rescinding them, as
appropriate.\11\
---------------------------------------------------------------------------
\10\ 76 FR 47652 (Aug. 5, 2011).
\11\ See 76 FR 47653.
---------------------------------------------------------------------------
B. Transferred OTS Regulations (Transferred to the FDIC's Part 390,
Subpart M)
One of the regulations transferred to the FDIC from the OTS was
former 12 CFR 557.20, concerning the maintenance of deposit records by
State savings associations.\12\ That provision was transferred to the
FDIC and now comprises part 390, subpart M. The OTS had issued Sec.
557.20 as part of a
[[Page 65277]]
streamlining of its regulations in 1997.\13\ At that time, the OTS
regulations included several specific deposit recordkeeping
requirements, and the OTS sought to replace those with one provision.
In the associated NPR, the OTS explained that ``[a]s part of its
reinvention effort, OTS is endeavoring to eliminate regulations that
are outdated or micromanage thrift operations. For example, OTS
proposes to replace several specific deposit-related recordkeeping
requirements with a general recordkeeping regulation that is tied more
closely to safety and soundness.'' \14\
---------------------------------------------------------------------------
\12\ See 76 FR 47659.
\13\ 62 FR 55759 (Oct. 22, 1997).
\14\ 62 FR 15627 (Apr. 2, 1997).
---------------------------------------------------------------------------
III. Proposed Rule
Removal of Part 390, Subpart M--Deposits
On August 26, 2019, the FDIC published an NPR regarding the removal
of part 390, subpart M (former OTS regulation 12 CFR 557.20), which
addressed deposits at State savings associations.\15\ The former OTS
rule was transferred to the FDIC with only nominal changes. The NPR
proposed removing part 390, subpart M from the Code of Federal
Regulations, because, after careful review and consideration, the FDIC
believes it is unnecessary, redundant, and duplicative of existing
statutes and regulations currently applicable to State savings
associations.
---------------------------------------------------------------------------
\15\ 84 FR 44558 (Aug. 26, 2019).
---------------------------------------------------------------------------
IV. Comparison of Other Applicable Statutes and Regulations With the
Transferred OTS Regulations To Be Rescinded
The following is a description of existing statutes and regulations
that provide for complete and accurate recordkeeping of deposits and
account transactions at State savings associations, obviating the need
for a new regulation or amendment of existing regulations upon
rescission of part 390, subpart M. Accordingly, the FDIC proposed that
Sec. Sec. 390.230 and 390.231, part 390, subpart M, be rescinded as
unnecessary, redundant of, or otherwise duplicative of the provisions
of law delineated in 12 U.S.C. 1817(a)(9); 31 CFR 1020.410(c)(2); 12
CFR part 364, Appendix A II; 12 CFR 330.1(e); and 12 CFR 1005, each
discussed individually below.
A. Former OTS Safety and Soundness--Part 390, Subpart M, Sections
390.230 and 390.231
1. Sec. 390.230--What does this subpart do?
Section 390.230 simply states that subpart M ``applies to the
deposit activities of State savings associations.'' There is no
substantively similar provision in the FDIC's regulations, nor is one
necessary. Accordingly, the FDIC proposed that section 390.230 be
rescinded.
2. Sec. 390.231--What records should I maintain on deposit activities?
Former OTS Sec. 557.20, as modified by the FDIC in transferred
Sec. 390.231, provided general information on what records should be
maintained by State savings associations on their deposit activities.
Existing statutes and regulations that are applicable to State savings
associations (discussed in greater detail below) already require the
maintenance of accurate records of deposits and transactions by State
savings associations.
B. Data Collection at Insured Depository Institutions
Section 7(a)(9) of the FDI Act \16\ provides that ``the Corporation
shall take such action as may be necessary to ensure that--(A) each
insured depository institution maintains; and (B) the Corporation
receives on a regular basis from such institution, information on the
total amount of all insured deposits, preferred deposits, and uninsured
deposits at the institution.'' In issuing regulations under that
statutory provision, the FDIC has stated that it ``has a right and a
duty'' under Sec. 7(a)(9) to require the maintenance of accurate
deposit account records and that ``requiring covered institutions to
maintain complete and accurate records regarding the ownership and
insurability of deposits . . . will facilitate the FDIC's prompt
payment of deposit insurance and enhance the ability to implement the
least costly resolution of these institutions.'' \17\ Due to the
requirements for accurate recordkeeping pursuant to its existing
statutory authority, the FDIC takes the position that no new regulation
will be needed upon the rescission of part 390, subpart M.
---------------------------------------------------------------------------
\16\ 12 U.S.C. 1817(a)(9).
\17\ 81 FR 87735 (Dec. 5, 2016).
---------------------------------------------------------------------------
C. Treasury Department Bank Secrecy Act Regulations 18
---------------------------------------------------------------------------
\18\ 31 CFR 1020.
---------------------------------------------------------------------------
Section 1020.410(c)(2) of title 31, Code of Federal Regulations,
requires banks (defined to include savings associations \19\) to
maintain certain records, including ``[e]ach statement, ledger card or
other record on each deposit or share account, showing each transaction
in, or with respect to, that account.'' This rule specifically requires
that such records be maintained at State savings associations, rather
than the merely suggestive language included in part 390, subpart M.
---------------------------------------------------------------------------
\19\ 31 CFR 1010.100(d)(3).
---------------------------------------------------------------------------
D. Activities Implicating Safety and Soundness; Part 364 20
---------------------------------------------------------------------------
\20\ 12 CFR part 364, Appendix A II.
---------------------------------------------------------------------------
In 1995, the FDIC published 12 CFR 364 as a final rule with an
appendix that implements section 39(a) of the FDI Act \21\ regarding
standards for safety and soundness (Appendix A).\22\ The OCC, the FRB,
and the OTS also issued their versions of Appendix A.\23\ The FDIC's
Appendix A II (Operational and Managerial Standards) provides that an
institution should have internal controls and information systems that
are appropriate to the size of the institution and the nature, scope,
and risk of its activities and that provide for, among other things:
``timely and accurate financial, operational and regulatory reports.''
An Appendix B (regarding information security) was also published to
implement Sec. 39 of the FDI Act.\24\ Section 364.101 of part 364
provides that Appendix A and Appendix B apply to all insured State
nonmember banks, State-licensed insured branches of foreign banks, and
State savings associations. FDIC-supervised institutions are required
to file quarterly Reports of Condition.\25\ In
[[Page 65278]]
addition, the accounting principles applicable to reports or statements
that insured depository institutions file with the Federal banking
agencies are required to be uniform and consistent with generally
accepted accounting principles.\26\
---------------------------------------------------------------------------
\21\ 12 U.S.C. 1831p-1. Sec. 132 of the Federal Deposit
Insurance Corporation Improvement Act of 1991, Public Law 102-242,
105 Stat. 2236 (codified at 12 U.S.C. 1831p-1) added Sec. 39 to the
FDI Act. Section 39 was later amended by Sec. 956 of the Housing
and Community Development Act of 1992, Public Law 102-550, 106 Stat.
3672, and Sec. 318 of the Riegle Community Development and
Regulatory Improvement Act of 1994, Public Law 103-325, 108 Stat.
2160.
\22\ 60 FR 35674 (July 10, 1995).
\23\ See 12 CFR part 30, Appendix A, 60 FR 35678; 12 CFR part
208, Appendix D-1, 60 FR 35682; (former) 12 CFR part 570, Appendix
A, 60 FR 35687, respectively (July 10, 1995).
\24\ Appendix B was added in accordance with section 501 of the
Gramm-Leach-Bliley Financial Modernization Act of 1999, Public Law
106-102, 113 Stat. 1338, codified at 15 U.S.C. 6801, which statute
required the agencies to establish appropriate information security
standards in order to protect nonpublic personal information.
\25\ 12 U.S.C. 1817(a)(3)-(6); 12 U.S.C. 1464(v).
\26\ 12 U.S.C. 1831n.
---------------------------------------------------------------------------
Taken together, part 364 and appendix A constitute the FDIC's long-
standing expectations for all prudently managed insured depository
institutions, but leave specific methods of achieving these objectives
to each institution. These regulations provide a framework for sound
corporate governance and the supervision of operations designed to
prompt an institution to identify emerging problems and correct
deficiencies before capital becomes impaired. Pursuant to Sec. 39(e)
of the FDI Act,\27\ an FDIC-supervised institution's failure to meet
the standards may cause the FDIC to require the institution to submit a
safety and soundness compliance plan, and if the institution does not
comply with its plan, the FDIC will issue an order to correct safety
and soundness deficiencies.\28\ Hence, in order to accurately report
their financial condition, including deposit liabilities, and to meet
applicable safety and soundness criteria, insured depository
institutions, including State savings associations, must keep accurate
and up-to-date records of account transactions and balances.
---------------------------------------------------------------------------
\27\ 12 U.S.C. 1831p-1(e).
\28\ See 12 U.S.C. 1831p-1(e); 12 CFR 308.300, et seq.
---------------------------------------------------------------------------
E. FDIC's Deposit Insurance Coverage Criteria 29
---------------------------------------------------------------------------
\29\ 12 CFR 330.
---------------------------------------------------------------------------
Part 330 of the FDIC's regulations governs the criteria for deposit
insurance coverage at insured depository institutions, including
insured State savings associations. Section 330.3(h) of part 330 states
that deposit insurance coverage is ``a function of the deposit account
records of the insured depository institution . . . which, in the
interest of uniform national rules for deposit insurance coverage, are
controlling for purposes of determining deposit insurance coverage.''
Further, Sec. 330.1(e) defines the term ``deposit account records'' to
include documents such as ``account ledgers . . . and other books and
records of the insured depository institution . . . which relate to the
insured depository institution's deposit taking function.'' This
existing regulation on criteria for deposit insurance also requires
State savings associations to maintain records of their deposit
transactions, eliminating the need for part 390, subpart M.
F. Bureau of Consumer Financial Protection--Regulation E
Regulation E,\30\ issued by the Bureau of Consumer Financial
Protection, relates to electronic fund transfers at financial
institutions, including any savings association.\31\ It states that
``[f]or an account to or from which electronic fund transfers can be
made, a financial institution shall send a periodic statement for each
monthly cycle in which an electronic fund transfer has occurred; and
shall send a periodic statement at least quarterly if no transfer has
occurred.'' \32\ Thus, in order to comply with existing Regulation E, a
State savings association must be capable of generating periodic
statements for each of its deposit accounts, whether or not electronic
transfers are made from that account, again serving the intended
purpose of part 390, subpart M.
---------------------------------------------------------------------------
\30\ 12 CFR part 1005.
\31\ 12 CFR 1005.2(i).
\32\ 12 CFR 1005.9(b).
---------------------------------------------------------------------------
Accordingly, as explained in the analysis above, the FDIC proposed
removing Sec. Sec. 390.230 and 390.231, subpart M because these
sections are unnecessary, redundant of, or otherwise duplicative of the
safety and soundness and other standards described above.
V. Comments
The FDIC issued the NPR with a 30-day comment period, which closed
on September 25, 2019. The FDIC received no comments on its Proposed
Rule, and consequently the final rule is adopted as proposed.
VI. Explanation of the Final Rule
As discussed in the NPR, the requirements for State savings
associations in part 390, subpart M, are duplicative of the regulations
and statutes described in Section IV above. To that effect, the Final
Rule removes and rescinds 12 CFR part 390, subpart M, in its entirety.
VII. Expected Effects
As explained in detail in Section III of this Supplemental
Information section, certain OTS regulations transferred to the FDIC by
the Dodd-Frank Act relating to records of deposit transactions and
activities are either unnecessary or effectively duplicate existing
regulations. This rule would eliminate one of those transferred OTS
regulations.
As of June 30th, 2019, the FDIC supervises 3,424 insured depository
institutions, of which 38 (1.1%) are State savings associations.\33\
The rule primarily would affect regulations that govern State savings
associations.
---------------------------------------------------------------------------
\33\ Based on data from the June 30, 2019, Consolidated Reports
of Condition and Income (Call Report) and Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign Banks.
---------------------------------------------------------------------------
As explained previously, the rule would remove sections Sec. Sec.
390.230 and 390.231, subpart M, because these sections are unnecessary,
redundant of, or otherwise duplicative of other statutes and
regulations, including those relating to safety and soundness. Because
these regulations are redundant, rescinding them will not have any
substantive effects on FDIC-supervised institutions.
VIII. Alternatives
The FDIC has considered alternatives to the rule but believes that
the amendments represent the most appropriate option for covered
institutions. As discussed previously, the Dodd-Frank Act transferred
certain powers, duties, and functions formerly performed by the OTS to
the FDIC. The FDIC's Board reissued and redesignated certain
transferred regulations from the OTS, but noted that it would evaluate
them and might later incorporate them into other FDIC regulations,
amend them, or rescind them, as appropriate. The FDIC has evaluated the
existing regulations relating to the maintenance of deposit account
records. The FDIC considered the status quo alternative of retaining
the current regulations, but did not choose to do so. The FDIC believes
it would be procedurally complex for FDIC-supervised institutions to
continue to refer to these separate sets of regulations, and is
therefore amending and streamlining them in accordance with this final
rulemaking.
IX. Regulatory Analysis and Procedure
A. The Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (PRA),\34\ 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.
---------------------------------------------------------------------------
\34\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------
The final rule rescinds and removes from FDIC regulations part 390,
subpart M. The final rule will not create any new or revise any
existing collections of information under the PRA. Therefore, no
information collection request will be submitted to the OMB for review.
[[Page 65279]]
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) 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 rule on small entities.\35\ 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.
The Small Business Administration (SBA) has defined ``small entities''
to include banking organizations with total assets of less than or
equal to $600 million.36 37 Generally, the FDIC considers a
significant effect to be a quantified effect in excess of 5 percent of
total annual salaries and benefits per institution, or 2.5 percent of
total noninterest expenses. The FDIC believes that effects in excess of
these thresholds typically represent significant effects for FDIC-
supervised institutions. For the reasons provided below, the FDIC
certifies that the final rule would not have a significant economic
impact on a substantial number of small banking organizations.
Accordingly, a regulatory flexibility analysis is not required.
---------------------------------------------------------------------------
\35\ 5 U.S.C. 601 et seq.
\36\ The SBA defines a small banking organization as having $600
million or less in assets, where ``a financial institution'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 by 84 FR 34261, effective August 19, 2019).
``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 FDIC-supervised institution is ``small'' for
the purposes of RFA.
\37\ The FDIC supplemented the original notice of proposed
rulemaking with updated supporting information for the RFA section
that reflected changes to the SBA's monetary-based size standards
which were adjusted for inflation as of August 19, 2019. See 84 FR
52834 (Oct. 3, 2019).
---------------------------------------------------------------------------
As of June 30, 2019, the FDIC supervised 3,424 insured depository
institutions, of which 2,665 are considered small banking organizations
for the purposes of RFA. The proposed rule primarily affects
regulations that govern State savings associations. There are 36 State
savings associations considered to be small banking organizations for
the purposes of the RFA.\38\
---------------------------------------------------------------------------
\38\ Based on data from the June 30, 2019, Call Report and
Report of Assets and Liabilities of U.S. Branches and Agencies of
Foreign Banks.
---------------------------------------------------------------------------
As explained previously, the rule would remove Sec. Sec. 390.230
and 390.231, part 390, subpart M, because these sections are
unnecessary, redundant of, or otherwise duplicative of other statutes
and regulations, including safety and soundness standards. Therefore,
rescinding subpart M would not have any substantive effects on small
FDIC-supervised institutions.
Based on the information above, the FDIC certifies that the rule
would not have a significant economic impact on a substantial number of
small entities.
C. The Congressional Review Act
For purposes of Congressional Review Act, the OMB makes a
determination as to whether a final rule constitutes a ``major''
rule.\39\ If a rule is deemed a major rule by the OMB, the
Congressional Review Act generally provides that the rule may not take
effect until at least 60 days following its publication.\40\
---------------------------------------------------------------------------
\39\ 5 U.S.C. 801 et seq.
\40\ 5 U.S.C. 801(a)(3).
---------------------------------------------------------------------------
The Congressional Review Act defines a ``major rule'' as any rule
that the Administrator of the Office of Information and Regulatory
Affairs of the OMB finds has resulted in or is likely to result in--(A)
an annual effect on the economy of $100,000,000 or more; (B) a major
increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies or geographic regions, or
(C) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.\41\
---------------------------------------------------------------------------
\41\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------
The OMB has determined that the final rule is not a major rule for
purposes of the Congressional Review Act and 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-Leach-Bliley Act \42\ requires the Federal
banking agencies to use plain language in all proposed and final rules
published after January 1, 2000. The FDIC has sought to present the
final rule in a simple and straightforward manner and did not receive
any comments on the use of plain language.
---------------------------------------------------------------------------
\42\ Public Law 106-102, 113 Stat. 1338, 1471 (1999).
---------------------------------------------------------------------------
E. The Economic Growth and Regulatory Paperwork Reduction Act
Under section 2222 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (EGRPRA), the FDIC is required to review all of
its regulations, at least once every 10 years, in order to identify any
outdated or otherwise unnecessary regulations imposed on insured
institutions.\43\ 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
the FDIC will take to address issues that were identified.\44\ 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 part 390, subpart M, this
final rule complements other actions that the FDIC has taken,
separately and with the other Federal banking agencies, to further the
EGRPRA mandate.
---------------------------------------------------------------------------
\43\ Public Law 104-208, 110 Stat. 3009 (1996).
\44\ 82 FR 15900 (March 31, 2017).
---------------------------------------------------------------------------
F. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (RCDRIA),\45\ in determining the
effective date and administrative compliance requirements for new
regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions (IDIs), 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, disclosures, or other new requirements on
IDIs 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.\46\
---------------------------------------------------------------------------
\45\ 12 U.S.C. 4802(a).
\46\ Id.
---------------------------------------------------------------------------
Because the final rule does not impose additional reporting,
disclosure, or other new requirements on IDIs, section 302 of the
RCDRIA does not apply.
List of Subjects in 12 CFR Part 390
Deposits.
[[Page 65280]]
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends 12 CFR 390 as follows:
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
1. The authority citation for part 390 is revised to read as follows:
Authority: 12 U.S.C. 1819.
Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901 et
seq.
Subpart G also issued under 12 U.S.C. 2810 et seq., 2901 et
seq.; 15 U.S.C. 1691; 42 U.S.C. 1981, 1982, 3601-3619.
Subpart O also issued under 12 U.S.C. 1828.
Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
Subpart R also issued under 12 U.S.C. 1463; 1464; 1831m; 1831n;
1831p-1.
Subpart S also issued under 12 U.S.C. 1462; 1462a; 1463; 1464;
1468a; 1817; 1820; 1828; 1831e; 1831o; 1831p-1; 1881-1884; 3207;
3339; 15 U.S.C. 78b; 78l; 78m; 78n; 78p; 78q; 78w; 31 U.S.C. 5318;
42 U.S.C. 4106.
Subpart T also issued under 12 U.S.C. 1462a; 1463; 1464; 15
U.S.C. 78c; 78l; 78m; 78n; 78w.
Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w.
Subpart Y also issued under 12 U.S.C. 1831o.
Subpart M--[Removed and Reserved]
0
2. Remove and reserve subpart M, consisting of Sec. Sec. 390.230 and
390.231.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on November 19, 2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019-25697 Filed 11-26-19; 8:45 am]
BILLING CODE 6714-01-P
