Removal of Transferred OTS Regulations Regarding Deposits, 65276-65280 [2019-25697]

Download as PDF 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]


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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.

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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\
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    \1\ 12 U.S.C. 5301 et seq.
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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\
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    \4\ 12 U.S.C. 5414(c).
    \5\ 76 FR 39246 (July 6, 2011).
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    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.
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    \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).
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    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\
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    \10\ 76 FR 47652 (Aug. 5, 2011).
    \11\ See 76 FR 47653.
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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\
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    \12\ See 76 FR 47659.
    \13\ 62 FR 55759 (Oct. 22, 1997).
    \14\ 62 FR 15627 (Apr. 2, 1997).
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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).
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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.
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    \16\ 12 U.S.C. 1817(a)(9).
    \17\ 81 FR 87735 (Dec. 5, 2016).
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C. Treasury Department Bank Secrecy Act Regulations 18
---------------------------------------------------------------------------

    \18\ 31 CFR 1020.
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    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).
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D. Activities Implicating Safety and Soundness; Part 364 20
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    \20\ 12 CFR part 364, Appendix A II.
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    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\
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    \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