Rescission of Statements of Policy, 70413-70415 [2019-27225]
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Federal Register / Vol. 84, No. 246 / Monday, December 23, 2019 / Rules and Regulations
‘‘transactions secured by a dwelling,’’
consistent with § 1026.2(a)(17)(v), an affiliate
regularly extended covered transactions if it
extended more than five covered transactions
in a calendar year. Also consistent with
§ 1026.2(a)(17)(v), because a covered
transaction may be a high-cost mortgage
subject to § 1026.32, an affiliate regularly
extends covered transactions if, in any 12month period, it extends more than one
covered transaction that is subject to the
requirements of § 1026.32 or one or more
such transactions through a mortgage broker.
Thus, if a creditor’s affiliate regularly
extended first-lien covered transactions
during the preceding calendar year, the
creditor’s assets as of the end of the
preceding calendar year, for purposes of the
asset limit, take into account the assets of
that affiliate. If the creditor, together with its
affiliates that regularly extended first-lien
covered transactions, exceeded the asset limit
in the preceding calendar year—to be eligible
to operate as a small creditor for transactions
with applications received before April 1 of
the current calendar year—the assets of the
creditor’s affiliates that regularly extended
covered transactions in the year before the
preceding calendar year are included in
calculating the creditor’s assets.
C. If multiple creditors share ownership of
a company that regularly extended first-lien
covered transactions, the assets of the
company count toward the asset limit for a
co-owner creditor if the company is an
‘‘affiliate,’’ as defined in § 1026.32(b)(5), of
the co-owner creditor. Assuming the
company is not an affiliate of the co-owner
creditor by virtue of any other aspect of the
definition (such as by the company and coowner creditor being under common control),
the company’s assets are included toward the
asset limit of the co-owner creditor only if
the company is controlled by the co-owner
creditor, ‘‘as set forth in the Bank Holding
Company Act.’’ If the co-owner creditor and
the company are affiliates (by virtue of any
aspect of the definition), the co-owner
creditor counts all of the company’s assets
toward the asset limit, regardless of the coowner creditor’s ownership share. Further,
because the co-owner and the company are
mutual affiliates the company also would
count all of the co-owner’s assets towards its
own asset limit. See comment 35(b)(2)(iii)–
1.ii.C for discussion of the definition of
‘‘affiliate.’’
D. A creditor satisfies the criterion in
§ 1026.35(b)(2)(iii)(C) for purposes of any
higher-priced mortgage loan consummated
during 2016, for example, if the creditor
(together with its affiliates that regularly
extended first-lien covered transactions) had
total assets of less than the applicable asset
threshold on December 31, 2015. A creditor
that (together with its affiliates that regularly
extended first-lien covered transactions) did
not meet the applicable asset threshold on
December 31, 2015 satisfies this criterion for
a higher-priced mortgage loan consummated
during 2016 if the application for the loan
was received before April 1, 2016 and the
creditor (together with its affiliates that
regularly extended first-lien covered
transactions) had total assets of less than the
applicable asset threshold on December 31,
2014.
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E. Under § 1026.35(b)(2)(iii)(C), the
$2,000,000,000 asset threshold adjusts
automatically each year based on the year-toyear change in the average of the Consumer
Price Index for Urban Wage Earners and
Clerical Workers, not seasonally adjusted, for
each 12-month period ending in November,
with rounding to the nearest million dollars.
The Bureau will publish notice of the asset
threshold each year by amending this
comment. For calendar year 2020, the asset
threshold is $2,202,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2019 has
total assets of less than $2,202,000,000 on
December 31, 2019, satisfies this criterion for
purposes of any loan consummated in 2020
and for purposes of any loan consummated
in 2021 for which the application was
received before April 1, 2021. For historical
purposes:
1. For calendar year 2013, the asset
threshold was $2,000,000,000. Creditors that
had total assets of less than $2,000,000,000
on December 31, 2012, satisfied this criterion
for purposes of the exemption during 2013.
2. For calendar year 2014, the asset
threshold was $2,028,000,000. Creditors that
had total assets of less than $2,028,000,000
on December 31, 2013, satisfied this criterion
for purposes of the exemption during 2014.
3. For calendar year 2015, the asset
threshold was $2,060,000,000. Creditors that
had total assets of less than $2,060,000,000
on December 31, 2014, satisfied this criterion
for purposes of any loan consummated in
2015 and, if the creditor’s assets together
with the assets of its affiliates that regularly
extended first-lien covered transactions
during calendar year 2014 were less than that
amount, for purposes of any loan
consummated in 2016 for which the
application was received before April 1,
2016.
4. For calendar year 2016, the asset
threshold was $2,052,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2015 had
total assets of less than $2,052,000,000 on
December 31, 2015, satisfied this criterion for
purposes of any loan consummated in 2016
and for purposes of any loan consummated
in 2017 for which the application was
received before April 1, 2017.
5. For calendar year 2017, the asset
threshold was $2,069,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2016 had
total assets of less than $2,069,000,000 on
December 31, 2016, satisfied this criterion for
purposes of any loan consummated in 2017
and for purposes of any loan consummated
in 2018 for which the application was
received before April 1, 2018.
6. For calendar year 2018, the asset
threshold was $2,112,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2017 had
total assets of less than $2,112,000,000 on
December 31, 2017, satisfied this criterion for
purposes of any loan consummated in 2018
and for purposes of any loan consummated
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70413
in 2019 for which the application was
received before April 1, 2019.
7. For calendar year 2019, the asset
threshold was $2,167,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2018 had
total assets of less than $2,167,000,000 on
December 31, 2018, satisfied this criterion for
purposes of any loan consummated in 2019
and for purposes of any loan consummated
in 2020 for which the application was
received before April 1, 2020.
iv. The creditor and its affiliates do not
maintain an escrow account for any mortgage
transaction being serviced by the creditor or
its affiliate at the time the transaction is
consummated, except as provided in
§ 1026.35(b)(2)(iii)(D)(1) and (2). Thus, the
exemption applies, provided the other
conditions of § 1026.35(b)(2)(iii) are satisfied,
even if the creditor previously maintained
escrow accounts for mortgage loans, provided
it no longer maintains any such accounts
except as provided in
§ 1026.35(b)(2)(iii)(D)(1) and (2). Once a
creditor or its affiliate begins escrowing for
loans currently serviced other than those
addressed in § 1026.35(b)(2)(iii)(D)(1) and (2),
however, the creditor and its affiliate become
ineligible for the exemption in
§ 1026.35(b)(2)(iii) on higher-priced mortgage
loans they make while such escrowing
continues. Thus, as long as a creditor (or its
affiliate) services and maintains escrow
accounts for any mortgage loans, other than
as provided in § 1026.35(b)(2)(iii)(D)(1) and
(2), the creditor will not be eligible for the
exemption for any higher-priced mortgage
loan it may make. For purposes of
§ 1026.35(b)(2)(iii), a creditor or its affiliate
‘‘maintains’’ an escrow account only if it
services a mortgage loan for which an escrow
account has been established at least through
the due date of the second periodic payment
under the terms of the legal obligation.
*
*
*
*
*
Dated: December 17, 2019.
Thomas Pahl,
Policy Associate Director, Bureau of
Consumer Financial Protection.
[FR Doc. 2019–27523 Filed 12–19–19; 8:45 am]
BILLING CODE 4810–AM–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Chapter III
RIN 3064–ZA11
Rescission of Statements of Policy
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Rescission of Statements of
Policy.
AGENCY:
In an ongoing effort to
streamline issuances by the FDIC to the
public and to ensure that such issuances
are timely, relevant, and effective, the
FDIC initiated a comprehensive review
SUMMARY:
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lotter on DSKBCFDHB2PROD with RULES
70414
Federal Register / Vol. 84, No. 246 / Monday, December 23, 2019 / Rules and Regulations
of its Statements of Policy to identify
those that were outdated. Additionally,
the FDIC, in the 2017 report required by
the Economic Growth and Regulatory
Paperwork Reduction Act, committed to
reviewing published guidance to
identify any guidance that should be
revised or rescinded because it is out-ofdate or otherwise no longer relevant. In
furtherance of these initiatives, the FDIC
Board of Directors approved a proposal
to rescind four FDIC Statements of
Policy, which was published in the
Federal Register on September 30, 2019,
with a 30-day comment period. The
FDIC did not receive any comments on
the proposed rescission of these
Statements of Policy and is rescinding
them effective December 31, 2019.
DATES: Effective December 31, 2019.
FOR FURTHER INFORMATION CONTACT:
Applicability of the Glass-Steagall Act
to the Securities Activities of
Subsidiaries of Insured Nonmember
Banks:
William R. Baxter, Senior Policy
Analyst, (202) 898–8514, wbaxter@
fdic.gov; Michael B. Phillips, Counsel,
(202) 898–3581 mphillips@fdic.gov.
Treatment of Collateralized Letters of
Credit After Appointment of the FDIC as
Conservator or Receiver and Treatment
of Collateralized Put Obligations After
Appointment of the FDIC as Conservator
or Receiver:
Thomas P. Bolt, Senior Counsel, (703)
562–2046, tbolt@fdic.gov; Philip
Mangano, Deputy Director, (571) 858–
8279, pmangano@fdic.gov; Scott A.
Greenup, Associate Director, (571) 858–
8207, sgreenup@fdic.gov; George H.
Williamson, Manager, (571) 858–8199,
gwilliamson@fdic.gov.
Contracting With Firms That Have
Unresolved Audit Issues With FDIC:
Thomas D. Harris, Deputy Director,
(703) 562–2203, tharris@fdic.gov; Robert
J. Brown, Supervisory Counsel, (703)
562–6068, robertjbrown@fdic.gov.
SUPPLEMENTARY INFORMATION: After a
comprehensive review of FDIC
Statements of Policy and following
publication of notice 1 and a 30-day
comment period which ended on
October 30, 2019, during which no
comments were received, the FDIC is
rescinding the following four
Statements of Policy effective December
31, 2019:
Applicability of the Glass-Steagall Act
to Securities Activities of Subsidiaries of
Insured Nonmember Banks;
Treatment of Collateralized Letters of
Credit After Appointment of the FDIC as
Conservator or Receiver;
1 84
FR 51467 (Sept. 30, 2019).
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16:18 Dec 20, 2019
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Treatment of Collateralized Put
Obligations After Appointment of the
FDIC as Conservator or Receiver; and
Contracting with Firms that have
Unresolved Audit Issues with the FDIC.
Although these Statements of Policy
were not subject to public comment
prior to their adoption, the FDIC Board,
on a discretionary basis, elected to
provide a period for public comment on
the proposed rescission of these Policy
Statements. The FDIC did not receive
any comments regarding the proposed
rescissions and therefore is rescinding
the Statements of Policy effective
December 31, 2019.
Rescission of Statements of Policy
(a) Statement of Policy on Applicability
of the Glass-Steagall Act to Securities
Activities of Subsidiaries of Insured
Nonmember Banks
This 1982 Statement of Policy
addresses the applicability of sections
20 and 32 of the Banking Act of 1933
(Glass Steagall Act) to the securities
activities of subsidiaries of insured
nonmember banks.2 The Statement of
Policy states the opinion of the FDIC
Board that the Glass Steagall Act does
not prohibit an insured nonmember
bank from establishing an affiliate
relationship with, or organizing or
acquiring, a subsidiary corporation that
engages in the business of issuing,
underwriting, selling, or distributing
stocks, bonds, or other securities. The
1982 Statement of Policy was
superseded in its entirety by the
enactment of the Gramm-Leach-Bliley
Act (GLBA).3 GLBA allowed
commercial banks, investment banks,
securities firms, and insurance
companies to consolidate and operate as
financial conglomerates. Therefore, the
information and guidance contained in
the 1982 Statement of Policy is out-ofdate. For this reason, the FDIC is
rescinding the 1982 Statement of Policy
effective December 31, 2019.
(b) Statement of Policy on Treatment of
Collateralized Letters of Credit After
Appointment of the FDIC as Conservator
or Receiver
This Statement of Policy was adopted
by the FDIC on May 19, 1995, in order
to clarify how the FDIC as conservator
or receiver of a failed insured depository
institution (IDI) would treat certain
capital markets financing transactions
using collateralized letters of credit
(CLOCs) issued by IDIs prior to August
9, 1989, the date on which the Financial
Institutions Reform, Recovery, and
Enforcement Act of 1989 4 (FIRREA) was
signed into law.5 The Statement of
Policy applies only to CLOCs (i) utilized
in capital markets financing transactions
originally issued by IDIs prior to August
9, 1989, and any subsequent renewal,
replacement or extension of such
CLOCs; and (ii) where the security
interest in collateral pledged by the IDI
was both perfected and legally
enforceable under applicable law. The
Statement of Policy does not apply to
trade letters of credit or letters of credit
issued for any other purpose.
The Statement of Policy provides that
after its appointment as conservator or
receiver of a failed IDI, the FDIC may
either (i) continue any CLOCs as
enforceable under the terms of the
contract during the pendency of the
conservatorship or receivership, or (ii)
call, redeem or prepay any CLOC by its
statutory power to repudiate or
disaffirm contracts entered into by the
IDI.
Based on market research, the FDIC
has concluded, to the best of its
knowledge, that it is unlikely that any
public or privately issued transactions
of the type covered by the Statement of
Policy remain outstanding at this time.
Therefore, the FDIC is rescinding the
Statement of Policy effective December
31, 2019.
(c) Statement of Policy on Treatment of
Collateralized Put Obligations After
Appointment of the FDIC as Conservator
or Receiver
This Statement of Policy was adopted
by the FDIC on July 9, 1991, in order to
explain how the FDIC as conservator or
receiver of a failed IDI would treat
certain capital markets financing
transactions using collateralized put
obligations—also referred to as
‘‘collateralized put options’’ (CPOs)—
issued by IDIs prior to August 9, 1989,
the date on which FIRREA was signed
into law.6 The Statement of Policy
applies only to CPOs (i) issued by IDIs
in connection with capital markets
financing transactions, including the
formation of publicly offered unit
investment trusts and other sales of an
IDI’s portfolio securities, prior to August
9, 1989, and any subsequent renewal,
replacement or extension of such CPOs;
and (ii) collateralized by property
owned and pledged by the IDI, and in
which the security interest granted is
both perfected and legally enforceable.
4 Public
2 47
FR 38984. (https://www.govinfo.gov/content/
pkg/FR-1982-09-03/pdf/FR-1982-09-03.pdf).
3 Public Law 106–102, 113 Stat. 1338, section 101
(1999).
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Law 101–73, 103 Stat. 103 (1989).
FR 27976. (https://www.govinfo.gov/content/
pkg/FR-1995-05-26/pdf/95-12992.pdf).
6 56 FR 36152. (https://cdn.loc.gov/service/ll/
fedreg/fr056/fr056147/fr056147.pdf).
5 60
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Federal Register / Vol. 84, No. 246 / Monday, December 23, 2019 / Rules and Regulations
The Statement of Policy explains that
the FDIC as conservator or receiver has
the right to call, redeem or prepay any
CPOs by repudiation or disaffirmance of
the applicable written contract entered
into by the IDI, either directly by cash
payment in exchange for release of
collateral or by liquidation of the
collateral by a trustee or other secured
party.
Based on market research, the FDIC
has concluded, to the best of its
knowledge, that it is unlikely that any
public or privately issued transactions
of this type remain outstanding at this
time. Therefore, the FDIC is rescinding
the Statement of Policy effective
December 31, 2019.
lotter on DSKBCFDHB2PROD with RULES
(d) Statement of Policy on Contracting
With Firms That Have Unresolved Audit
Issues With FDIC
The Statement of Policy on
Contracting with Firms That Have
Unresolved Audit Issues With FDIC
(1997 Statement of Policy) was not
approved by the FDIC Board but it is
being consolidated in this notice for
convenience and completeness.
The 1997 Statement of Policy was
adopted to address situations in which
the FDIC seeks to contract with firms
with which there are unresolved audit
issues.7 The 1997 Statement of Policy
established certain rights and
procedures for the handling of
contracting parties that have unresolved
audit issues, as determined by various
FDIC auditing agents. After review of
the relevant Statement of Policy, the
FDIC concluded that the document may
give rise to de facto exclusions from
future FDIC contracting opportunities in
a manner that is inconsistent with
procedural protections specified in 12
CFR 367.
In determining whether to revise or
rescind the Statement of Policy, the
FDIC considered a variety of factors,
including whether or not the Policy
provided the FDIC and its various audit
agents with essential or additional
protections regarding the repayment of
challenged amounts. The FDIC
determined that existing remedies are
sufficient to allow the FDIC and its
agents to pursue such challenged
amounts without the need for those
measures specified in the Statement of
Policy. Therefore, the FDIC is rescinding
this Statement of Policy effective
December 31, 2019.
(Authority: 12 U.S.C. 1811 et seq.)
Dated at Washington, DC, on December 12,
2019.
Federal Deposit Insurance Corporation.
7 62 FR 13382. (https://www.govinfo.gov/content/
pkg/FR-1997-03-20/pdf/97-6995.pdf).
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By order of the Board of Directors.
Annmarie H. Boyd,
Assistant Executive Secretary.
BILLING CODE 6714–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2019–0813; Product
Identifier 2019–SW–006–AD; Amendment
39–19787; AD 2019–22–08]
RIN 2120–AA64
Airworthiness Directives; Leonardo
S.p.A. Helicopters
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule; request for
comments.
AGENCY:
The FAA is adopting a new
airworthiness directive (AD) for
Leonardo S.p.A. Model AW169 and
AW189 helicopters. This AD requires
inspecting certain part-numbered and
serial-numbered tail rotor (T/R)
actuators, reporting information, and
depending on the inspection outcome,
marking a part, performing an
additional inspection, and removing the
T/R actuator from service. This AD also
prohibits the installation of affected T/
R actuators. This AD is prompted by
reports of incorrect installations of the
T/R actuator back-end input lever. The
actions of this AD are intended to
address an unsafe condition on these
products.
SUMMARY:
This AD becomes effective
January 7, 2020.
The Director of the Federal Register
approved the incorporation by reference
of a certain document listed in this AD
as of January 7, 2020.
The FAA must receive comments on
this AD by February 21, 2020.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Docket: Go to
https://www.regulations.gov. Follow the
online instructions for sending your
comments electronically.
• Fax: 202–493–2251.
• Mail: Send comments to the U.S.
Department of Transportation, Docket
Operations, M–30, West Building
Ground Floor, Room W12–140, 1200
New Jersey Avenue SE, Washington, DC
20590–0001.
• Hand Delivery: Deliver to the
‘‘Mail’’ address between 9 a.m. and 5
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p.m., Monday through Friday, except
Federal holidays.
Examining the AD Docket
[FR Doc. 2019–27225 Filed 12–20–19; 8:45 am]
DATES:
70415
You may examine the AD docket on
the internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2019–
0813; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this AD, the
European Aviation Safety Agency
(EASA) AD, any service information
that is incorporated by reference, the
economic evaluation, any comments
received, and other information. The
street address for Docket Operations is
listed above. Comments will be
available in the AD docket shortly after
receipt.
For Leonardo Helicopters service
information identified in this final rule,
contact Leonardo S.p.A. Helicopters,
Emanuele Bufano, Head of
Airworthiness, Viale G.Agusta 520,
21017 C.Costa di Samarate (Va) Italy;
telephone +39–0331–225074; fax +39–
0331–229046; or at https://
www.leonardocompany.com/en/home.
For UTC Aerospace Systems service
information identified in this final rule,
contact Collins Aerospace (previously
UTC Aerospace Systems); telephone 1–
877–808–7575; fax 1–860–660–0372;
email tech.solutions@hs.utc.com; or at
https://utcaerospacesystems.com/
aftermarket-services/technical-support/.
You may view the referenced service
information at the FAA, Office of the
Regional Counsel, Southwest Region,
10101 Hillwood Pkwy, Room 6N–321,
Fort Worth, TX 76177. It is also
available on the internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2019–
0813.
FOR FURTHER INFORMATION CONTACT:
David Hatfield, Aviation Safety
Engineer, Safety Management Section,
Rotorcraft Standards Branch, FAA,
10101 Hillwood Pkwy., Fort Worth, TX
76177; telephone (817) 222–5110; email
david.hatfield@faa.gov.
SUPPLEMENTARY INFORMATION:
Comments Invited
This AD is a final rule that involves
requirements affecting flight safety, and
the FAA did not provide you with
notice and an opportunity to provide
your comments prior to it becoming
effective. However, the FAA invites you
to participate in this rulemaking by
submitting written comments, data, or
views. The FAA also invites comments
relating to the economic, environmental,
energy, or federalism impacts that
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]]>Agencies
[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Rules and Regulations]
[Pages 70413-70415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27225]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Chapter III
RIN 3064-ZA11
Rescission of Statements of Policy
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Rescission of Statements of Policy.
-----------------------------------------------------------------------
SUMMARY: In an ongoing effort to streamline issuances by the FDIC to
the public and to ensure that such issuances are timely, relevant, and
effective, the FDIC initiated a comprehensive review
[[Page 70414]]
of its Statements of Policy to identify those that were outdated.
Additionally, the FDIC, in the 2017 report required by the Economic
Growth and Regulatory Paperwork Reduction Act, committed to reviewing
published guidance to identify any guidance that should be revised or
rescinded because it is out-of-date or otherwise no longer relevant. In
furtherance of these initiatives, the FDIC Board of Directors approved
a proposal to rescind four FDIC Statements of Policy, which was
published in the Federal Register on September 30, 2019, with a 30-day
comment period. The FDIC did not receive any comments on the proposed
rescission of these Statements of Policy and is rescinding them
effective December 31, 2019.
DATES: Effective December 31, 2019.
FOR FURTHER INFORMATION CONTACT:
Applicability of the Glass-Steagall Act to the Securities
Activities of Subsidiaries of Insured Nonmember Banks:
William R. Baxter, Senior Policy Analyst, (202) 898-8514,
[email protected]; Michael B. Phillips, Counsel, (202) 898-3581
[email protected].
Treatment of Collateralized Letters of Credit After Appointment of
the FDIC as Conservator or Receiver and Treatment of Collateralized Put
Obligations After Appointment of the FDIC as Conservator or Receiver:
Thomas P. Bolt, Senior Counsel, (703) 562-2046, [email protected];
Philip Mangano, Deputy Director, (571) 858-8279, [email protected];
Scott A. Greenup, Associate Director, (571) 858-8207,
[email protected]; George H. Williamson, Manager, (571) 858-8199,
[email protected].
Contracting With Firms That Have Unresolved Audit Issues With FDIC:
Thomas D. Harris, Deputy Director, (703) 562-2203,
[email protected]; Robert J. Brown, Supervisory Counsel, (703) 562-6068,
[email protected].
SUPPLEMENTARY INFORMATION: After a comprehensive review of FDIC
Statements of Policy and following publication of notice \1\ and a 30-
day comment period which ended on October 30, 2019, during which no
comments were received, the FDIC is rescinding the following four
Statements of Policy effective December 31, 2019:
---------------------------------------------------------------------------
\1\ 84 FR 51467 (Sept. 30, 2019).
---------------------------------------------------------------------------
Applicability of the Glass-Steagall Act to Securities Activities of
Subsidiaries of Insured Nonmember Banks;
Treatment of Collateralized Letters of Credit After Appointment of
the FDIC as Conservator or Receiver;
Treatment of Collateralized Put Obligations After Appointment of
the FDIC as Conservator or Receiver; and
Contracting with Firms that have Unresolved Audit Issues with the
FDIC.
Although these Statements of Policy were not subject to public
comment prior to their adoption, the FDIC Board, on a discretionary
basis, elected to provide a period for public comment on the proposed
rescission of these Policy Statements. The FDIC did not receive any
comments regarding the proposed rescissions and therefore is rescinding
the Statements of Policy effective December 31, 2019.
Rescission of Statements of Policy
(a) Statement of Policy on Applicability of the Glass-Steagall Act to
Securities Activities of Subsidiaries of Insured Nonmember Banks
This 1982 Statement of Policy addresses the applicability of
sections 20 and 32 of the Banking Act of 1933 (Glass Steagall Act) to
the securities activities of subsidiaries of insured nonmember
banks.\2\ The Statement of Policy states the opinion of the FDIC Board
that the Glass Steagall Act does not prohibit an insured nonmember bank
from establishing an affiliate relationship with, or organizing or
acquiring, a subsidiary corporation that engages in the business of
issuing, underwriting, selling, or distributing stocks, bonds, or other
securities. The 1982 Statement of Policy was superseded in its entirety
by the enactment of the Gramm-Leach-Bliley Act (GLBA).\3\ GLBA allowed
commercial banks, investment banks, securities firms, and insurance
companies to consolidate and operate as financial conglomerates.
Therefore, the information and guidance contained in the 1982 Statement
of Policy is out-of-date. For this reason, the FDIC is rescinding the
1982 Statement of Policy effective December 31, 2019.
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\2\ 47 FR 38984. (https://www.govinfo.gov/content/pkg/FR-1982-09-03/pdf/FR-1982-09-03.pdf).
\3\ Public Law 106-102, 113 Stat. 1338, section 101 (1999).
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(b) Statement of Policy on Treatment of Collateralized Letters of
Credit After Appointment of the FDIC as Conservator or Receiver
This Statement of Policy was adopted by the FDIC on May 19, 1995,
in order to clarify how the FDIC as conservator or receiver of a failed
insured depository institution (IDI) would treat certain capital
markets financing transactions using collateralized letters of credit
(CLOCs) issued by IDIs prior to August 9, 1989, the date on which the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
\4\ (FIRREA) was signed into law.\5\ The Statement of Policy applies
only to CLOCs (i) utilized in capital markets financing transactions
originally issued by IDIs prior to August 9, 1989, and any subsequent
renewal, replacement or extension of such CLOCs; and (ii) where the
security interest in collateral pledged by the IDI was both perfected
and legally enforceable under applicable law. The Statement of Policy
does not apply to trade letters of credit or letters of credit issued
for any other purpose.
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\4\ Public Law 101-73, 103 Stat. 103 (1989).
\5\ 60 FR 27976. (https://www.govinfo.gov/content/pkg/FR-1995-05-26/pdf/95-12992.pdf).
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The Statement of Policy provides that after its appointment as
conservator or receiver of a failed IDI, the FDIC may either (i)
continue any CLOCs as enforceable under the terms of the contract
during the pendency of the conservatorship or receivership, or (ii)
call, redeem or prepay any CLOC by its statutory power to repudiate or
disaffirm contracts entered into by the IDI.
Based on market research, the FDIC has concluded, to the best of
its knowledge, that it is unlikely that any public or privately issued
transactions of the type covered by the Statement of Policy remain
outstanding at this time. Therefore, the FDIC is rescinding the
Statement of Policy effective December 31, 2019.
(c) Statement of Policy on Treatment of Collateralized Put Obligations
After Appointment of the FDIC as Conservator or Receiver
This Statement of Policy was adopted by the FDIC on July 9, 1991,
in order to explain how the FDIC as conservator or receiver of a failed
IDI would treat certain capital markets financing transactions using
collateralized put obligations--also referred to as ``collateralized
put options'' (CPOs)--issued by IDIs prior to August 9, 1989, the date
on which FIRREA was signed into law.\6\ The Statement of Policy applies
only to CPOs (i) issued by IDIs in connection with capital markets
financing transactions, including the formation of publicly offered
unit investment trusts and other sales of an IDI's portfolio
securities, prior to August 9, 1989, and any subsequent renewal,
replacement or extension of such CPOs; and (ii) collateralized by
property owned and pledged by the IDI, and in which the security
interest granted is both perfected and legally enforceable.
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\6\ 56 FR 36152. (https://cdn.loc.gov/service/ll/fedreg/fr056/fr056147/fr056147.pdf).
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[[Page 70415]]
The Statement of Policy explains that the FDIC as conservator or
receiver has the right to call, redeem or prepay any CPOs by
repudiation or disaffirmance of the applicable written contract entered
into by the IDI, either directly by cash payment in exchange for
release of collateral or by liquidation of the collateral by a trustee
or other secured party.
Based on market research, the FDIC has concluded, to the best of
its knowledge, that it is unlikely that any public or privately issued
transactions of this type remain outstanding at this time. Therefore,
the FDIC is rescinding the Statement of Policy effective December 31,
2019.
(d) Statement of Policy on Contracting With Firms That Have Unresolved
Audit Issues With FDIC
The Statement of Policy on Contracting with Firms That Have
Unresolved Audit Issues With FDIC (1997 Statement of Policy) was not
approved by the FDIC Board but it is being consolidated in this notice
for convenience and completeness.
The 1997 Statement of Policy was adopted to address situations in
which the FDIC seeks to contract with firms with which there are
unresolved audit issues.\7\ The 1997 Statement of Policy established
certain rights and procedures for the handling of contracting parties
that have unresolved audit issues, as determined by various FDIC
auditing agents. After review of the relevant Statement of Policy, the
FDIC concluded that the document may give rise to de facto exclusions
from future FDIC contracting opportunities in a manner that is
inconsistent with procedural protections specified in 12 CFR 367.
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\7\ 62 FR 13382. (https://www.govinfo.gov/content/pkg/FR-1997-03-20/pdf/97-6995.pdf).
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In determining whether to revise or rescind the Statement of
Policy, the FDIC considered a variety of factors, including whether or
not the Policy provided the FDIC and its various audit agents with
essential or additional protections regarding the repayment of
challenged amounts. The FDIC determined that existing remedies are
sufficient to allow the FDIC and its agents to pursue such challenged
amounts without the need for those measures specified in the Statement
of Policy. Therefore, the FDIC is rescinding this Statement of Policy
effective December 31, 2019.
(Authority: 12 U.S.C. 1811 et seq.)
Dated at Washington, DC, on December 12, 2019.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019-27225 Filed 12-20-19; 8:45 am]
BILLING CODE 6714-01-P
