Removal of Transferred OTS Regulations Regarding Regulatory Reporting Requirements, Reports and Audits of State Savings Associations, 3247-3250 [2019-27577]
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Federal Register / Vol. 85, No. 13 / Tuesday, January 21, 2020 / Rules and Regulations
Reserve Act. For the purposes of
complying with § 215.5(d) of Federal
Reserve Board Regulation O, the
reference to ‘‘the amount specified for a
category of credit in paragraph (c) of this
section’’ shall be understood to refer to
the amount specified in paragraph (c)(2)
of this § 337.3.
(d) Definition. For purposes of this
section, FDIC-supervised institution
means an entity for which the FDIC is
the appropriate Federal banking agency
pursuant to section 3(q) of the FDI Act,
12 U.S.C. 1813(q).
■ 17. Revise § 337.11 to read as follows:
§ 337.11
Effect on other banking practices.
(a) Nothing in this part shall be
construed as restricting in any manner
the Corporation’s authority to deal with
any banking practice which is deemed
to be unsafe or unsound or otherwise
not in accordance with law, rule, or
regulation; or which violates any
condition imposed in writing by the
Corporation in connection with the
granting of any application or other
request by an FDIC-Supervised
institution, or any written agreement
entered into by such institution with the
Corporation. Compliance with the
provisions of this part shall not relieve
an FDIC-supervised institution from its
duty to conduct its operations in a safe
and sound manner nor prevent the
Corporation from taking whatever action
it deems necessary and desirable to deal
with specific acts or practices which,
although they do not violate the
provisions of this part, are considered
detrimental to the safety and sound
operation of the institution engaged
therein.
(b) Definition. FDIC-supervised
institution means an entity for which
the FDIC is the appropriate Federal
banking agency pursuant to section 3(q)
of the FDI Act, 12 U.S.C. 1813(q).
PART 353—SUSPICIOUS ACTIVITY
REPORTS
18. The authority citation for part 353
is revised to read as follows:
■
Authority: 12 U.S.C. 1818, 1819; 31 U.S.C.
5318.
§ 353.1
■
19. Revise § 353.1 to read as follows:
§ 353.1
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[Amended]
Purpose and scope.
The purpose of this part is to ensure
that an FDIC supervised institution files
a Suspicious Activity Report when it
detects a known or suspected criminal
violation of federal law or a suspicious
transaction related to a money
laundering activity or a violation of the
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Bank Secrecy Act. This part applies to
all FDIC supervised institutions.
20. Amend § 353.2 by adding
paragraph (c) to read as follows:
■
§ 353.2
Definitions.
3247
Dated at Washington, DC, on December 12,
2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019–27580 Filed 1–17–20; 8:45 am]
BILLING CODE 6714–01–P
*
*
*
*
*
(c) FDIC-supervised institution means
an entity for which the FDIC is the
appropriate Federal banking agency
pursuant to section 3(q) of the FDI Act,
12 U.S.C. 1813(q).
§ 353.3
21. Amend § 353.3 by:
a. Removing the term ‘‘A bank’’ and
adding in its place the term ‘‘An FDICsupervised institution’’ wherever it
appears;
■ b. Removing the term ‘‘a bank’’ and
adding in its place the term ‘‘an FDICsupervised institution’’ wherever it
appears;
■ c. Removing the term ‘‘an insured
state-licensed branch of a foreign bank’’
in paragraph (f) and adding in its place
the term ‘‘a foreign bank having an
insured branch’’;
■ d. Removing the term ‘‘Any bank’’ in
paragraph (g) and adding ‘‘An FDICsupervised institution’’ in its place;
■ e. Removing the term ‘‘any bank’’ in
paragraph (h) and adding ‘‘an FDICsupervised institution’’ in its place; and
■ f. Removing the term ‘‘the bank’’ and
adding in its place the term ‘‘the FDICsupervised institution’’ wherever it
appears.
■
PART 390—REGULATIONS
TRANSFERRED FROM THE OFFICE OF
THRIFT SUPERVISION
22. 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 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 S—[Removed and Reserved]
23. Remove and reserve subpart S,
consisting of §§ 390.330 through
390.368.
■
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
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12 CFR Part 390
RIN 3064–AF13
[Amended]
■
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FEDERAL DEPOSIT INSURANCE
CORPORATION
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Removal of Transferred OTS
Regulations Regarding Regulatory
Reporting Requirements, Reports and
Audits of State Savings Associations
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (‘‘FDIC’’) is
adopting a final rule rescinding and
removing from the Code of Federal
Regulations the regulations regarding
regulatory reporting standards.
DATES: The final rule is effective on
February 20, 2020.
FOR FURTHER INFORMATION CONTACT:
Christine M. Bouvier, Assistant Chief
Accountant, (202) 898–7289, CBouvier@
FDIC.gov, Division of Risk Management
Supervision; Karen J. Currie, Senior
Examination Specialist, (202) 898–3981,
Division of Risk Management
Supervision; David M. Miles, Counsel,
Legal Division, (202) 898–3651.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Policy Objectives
The policy objectives of the final rule
are twofold. The first is to simplify the
FDIC’s regulations by removing
unnecessary ones and thereby
improving ease of reference and public
understanding. The second is to
promote parity between State savings
associations and State nonmember
banks by having the regulatory reporting
requirements, regulatory reports and
audits of both classes of institutions
addressed in the same FDIC rules.
II. Background
Part 390, subpart R was included in
the regulations that were transferred
from the Office of Thrift Supervision
(‘‘OTS’’) to the FDIC on July 21, 2011,
in connection with the implementation
of title III of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
(‘‘Dodd-Frank Act’’).1 Beginning July 21,
2011, the transfer date established by
1 Public
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Law 111–203, 124 Stat. 1376 (2010).
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Federal Register / Vol. 85, No. 13 / Tuesday, January 21, 2020 / Rules and Regulations
section 311 of the Dodd-Frank Act,2 the
powers, duties, and functions formerly
performed by the OTS were divided
among the FDIC for State savings
associations, the Office of the
Comptroller of the Currency (‘‘OCC’’) for
Federal savings associations, and the
Board of Governors of the Federal
Reserve System (‘‘FRB’’) for 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 advisory materials that had been
issued, made, prescribed, or allowed to
become effective by the OTS. The
section provides that if such regulatory
issuances 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.
The Dodd-Frank Act directed the
FDIC and the OCC to consult with one
another and to publish a list of
continued OTS regulations to be
enforced by each respective agency that
would continue to remain in effect until
the appropriate Federal banking agency
modified or removed the regulations in
accordance with applicable law. The list
was published by the FDIC and OCC as
a Joint Notice in the Federal Register on
July 6, 2011,4 and shortly thereafter, the
FDIC published its transferred OTS
regulations as new FDIC regulations in
parts 390 and 391. When it republished
the transferred OTS regulations, the
FDIC noted that its staff would evaluate
the transferred OTS rules and might
later recommend incorporating the
transferred regulations into other FDIC
rules, amending them, or rescinding
them, as appropriate. Further, section
312(c)(1) of the Dodd-Frank Act 5
amended the definition of ‘‘appropriate
Federal banking agency’’ contained in
section 3(q) of the FDI Act,6 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’’
for State savings associations, as it does
today, it has the authority to issue,
modify, and rescind regulations
involving such associations, as well as
for State nonmember banks and StateU.S.C. 5411.
U.S.C. 5414(b).
4 76 FR 39246 (July 6, 2011).
5 12 U.S.C. 5412(c)(1).
6 12 U.S.C. 1813(q).
licensed insured branches of foreign
banks.
III. Proposed Rule
On October 2, 2019, the FDIC
published a notice of proposed
rulemaking (NPR) regarding the removal
of part 390, subpart R (former OTS part
562), which addressed regulatory
reporting requirements, regulatory
reports and audits of State savings
associations.7 The former OTS rule was
transferred to the FDIC with only
nominal changes. The NPR proposed
removing part 390, subpart R, because,
after careful review and consideration,
the FDIC believed it was largely
unnecessary, redundant or duplicative
given other FDIC regulations that
pertain to regulatory reporting
requirements (12 CFR part 304, 12 CFR
part 363 and its appendices A and B,
and 12 CFR part 364 and its appendix
A), regulatory reports (12 CFR part 304
and 12 CFR part 308), and audits of
insured depository institutions (12 CFR
part 363 and its appendices A and B and
12 CFR part 364 and its appendix A)
that already apply to State savings
associations.
IV. Comments
The FDIC issued the NPR on October
2, 2019, with a 30-day comment period.
On October 9, 2019, the FDIC issued a
supplemental notice of proposed
rulemaking (SNPR) which, among other
things, extended the deadline for
comments on the FDIC’s regulatory
flexibility analysis until November 8,
2019. The FDIC received no comments
on the NPR or the SNPR, and
consequently the final rule is adopted
without change.
V. Explanation of the Final Rule
As discussed in the NPR, 12 CFR part
390, subpart R, is being rescinded, in its
entirety, because it is largely
unnecessary, redundant or duplicative
given the existence of other applicable
FDIC regulations described in Part III
above.
VI. Expected Effects
As explained in Part III of this
Supplementary Information section,
certain OTS regulations transferred to
the FDIC by the Dodd-Frank Act relating
to regulatory reporting requirements,
regulatory reports, and audits of State
savings associations are redundant or
unnecessary in light of other applicable
FDIC regulations. This rule would
2 12
3 12
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7 See
84 FR 52387 (Oct. 2, 2019). The FDIC
published a SNPR in the Federal Register relating
to the FDIC’s regulatory flexibility analysis on
October 9, 2019. See 84 FR 54045 (Oct. 9, 2019).
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eliminate those transferred OTS
regulations.
As of June 30, 2019, the FDIC
supervises 3,424 insured depository
institutions, of which 38 (1.1 percent)
are State savings associations.8 The rule
primarily would affect regulations that
govern State savings associations.
As explained in the NPR, the rule
would remove §§ 390.320, 390.321, and
390.332 of part 390, subpart R, because
these sections are redundant of, or
otherwise unnecessary in light of,
applicable statutes and other FDIC
regulations regarding audits, reporting,
and safety and soundness. As a result,
rescinding and removing these
regulations will not have any
substantive effects on FDIC-supervised
institutions.
VII. Alternatives
The FDIC has considered alternatives
to the final 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 regulatory
reporting standards and audits of
insured depository institutions,
including 12 CFR part 304; 12 CFR part
308; 12 CFR part 363 and its appendices
A and B; 12 CFR part 364 and its
appendix A; and 12 CFR part 390,
subpart R. The FDIC considered the
status quo alternative of retaining the
current regulations but did not choose
to do so because the underlying
purposes of those regulations are
already accomplished through
substantively similar regulations
regarding regulatory reports, regulatory
reporting requirements, and audits.
Therefore, the FDIC is amending and
streamlining the FDIC’s regulations.
VIII. Regulatory Analysis and
Procedure
A. The Paperwork Reduction Act
In accordance with the requirements
of the Paperwork Reduction Act of 1995
(‘‘PRA’’),9 the FDIC may not conduct or
sponsor, and the respondent is not
8 Based on data from the June 30, 2019, Call
Report and FFIEC 002 Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign
Banks.
9 44 U.S.C. 3501–3521.
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Federal Register / Vol. 85, No. 13 / Tuesday, January 21, 2020 / Rules and Regulations
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
R. 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.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act
(‘‘RFA’’) requires that, in connection
with a final rule, an agency prepare and
make available for public comment a
final regulatory flexibility analysis that
describes the impact of the final rule on
small entities.10 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.11 12 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 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
10 5
U.S.C. 601, et seq.
SBA defines a small banking organization
as having $600 million or less in assets, where an
organization’s ‘‘assets are determined by averaging
the assets reported on its four quarterly financial
statements for the preceding year.’’ See 13 CFR
121.201 (as amended, by 84 FR 34261, effective
August 19, 2019). In its determination, ‘‘SBA counts
the receipts, employees, or other measure of size of
the concern whose size is at issue and all of its
domestic and foreign affiliates.’’ See 13 CFR
121.103. Following these regulations, the FDIC uses
a covered entity’s affiliated and acquired assets,
averaged over the preceding four quarters, to
determine whether the covered entity is ‘‘small’’ for
the purposes of the RFA.
12 The FDIC supplemented the RFA analysis in
the NPR with an updated regulatory flexibility
analysis to reflect changes to the Small Business
Administration’s monetary-based size standards
which were adjusted for inflation as of August 19,
2019. See 84 FR 54045 (Oct. 9, 2019).
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11 The
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for the purposes of RFA.13 The final 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.14
As explained in the NPR, the final
rule would remove §§ 390.320, 390.321,
and 390.332 of part 390, subpart R,
because these sections are redundant or
otherwise unnecessary in light of
applicable statutes and other FDIC
regulations. As a result, rescinding the
regulations would not have any
substantive effects on small FDICsupervised institutions.
Based on the information above, the
FDIC certifies that the final 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.15 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.16
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.17
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-LeachBliley Act 18 requires each Federal
banking agency to use plain language in
13 FDIC
Call Report, June 30, 2019.
14 Id.
15 5
U.S.C. 801 et seq.
U.S.C. 801(a)(3).
17 5 U.S.C. 804(2).
18 Public Law 106–102, section 722, 113 Stat.
1338, 1471 (1999).
3249
all of its 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.
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.19 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
agency will take to address issues that
were identified.20 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 R, this final rule
complements other actions 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
(‘‘RCDRIA’’),21 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, disclosure, 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
16 5
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19 Public
Law 104–208, 110 Stat. 3900 (1996).
FR 15900 (March 31, 2017).
21 12 U.S.C. 4802(a).
20 82
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Federal Register / Vol. 85, No. 13 / Tuesday, January 21, 2020 / Rules and Regulations
on which the regulations are published
in final form.22
Because the final rule does not
impose additional reporting, disclosure,
or other requirements on IDIs, section
302 of RCDRIA does not apply.
List of Subjects in 12 CFR Part 390
Regulatory reporting standards.
Authority and Issuance
For the reasons stated in the
preamble, the Federal Deposit Insurance
Corporation amends title 12 CFR part
390 as follows:
PART 390—REGULATIONS
TRANSFERRED FROM THE OFFICE OF
THRIFT SUPERVISION
1. Revise the authority citation for part
390 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 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 R—[Removed and Reserved]
2. Remove and reserve subpart R,
consisting of §§ 390.320 through
390.322.
■
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on December 12,
2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019–27577 Filed 1–17–20; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 390
RIN 3064–AF15
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Removal of Transferred OTS
Regulations Regarding Accounting
Requirements for State Savings
Associations
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to rescind and
remove rules regarding accounting
requirements for State savings
associations because these financial
statement and disclosure requirements
are substantially similar to, although
more detailed than, otherwise
applicable financial statement form and
content requirements and disclosure
requirements that a State savings
association must satisfy under Federal
banking or securities laws or
regulations. The final rule adopts,
without change, a notice of proposed
rulemaking (NPR) published in the
Federal Register on October 2, 2019,
which received no comments.
DATES: The final rule is effective on
February 20, 2020.
FOR FURTHER INFORMATION CONTACT:
Maureen Loviglio, Senior Staff
Accountant, Division of Risk
Management Supervision, (202) 898–
6777, MLoviglio@FDIC.gov; Suzanne
Dawley, Counsel, Legal Division,
sudawley@FDIC.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Policy Objectives
The policy objectives of the final rule
are twofold. The first is to simplify the
FDIC’s regulations by removing
unnecessary regulations, or realigning
existing regulations in order to improve
the public’s understanding and to
improve the ease of reference. The
second is to promote parity between
State savings associations and State
nonmember banks by making both
classes of institutions subject to the
same accounting requirements. Thus, as
further detailed in this section, the FDIC
is rescinding and removing from the
Code of Federal Regulations rules
entitled Accounting Requirements (part
390, subpart T) applicable to State
savings associations. Such requirements
prescribe definitions, public accountant
qualifications, and the form and content
of financial statements pertaining to
certain securities and their related
transaction documents. Transaction
documents may include proxy
statements and offering circulars in
connection with a conversion, any
offering of securities by a State savings
association, and filings by State savings
associations requiring financial
statements under the Securities
Exchange Act of 1934 (Exchange Act).1
The FDIC has determined that the
additional financial disclosure
requirements required by part 390,
subpart T, for State savings associations
are substantially similar to, although
more detailed than, otherwise
applicable financial statement form and
content requirements and disclosure
requirements that State nonmember
banks must satisfy under Federal
banking or securities laws or
regulations. Therefore, the FDIC is
rescinding and removing part 390,
subpart T, and will apply existing
disclosure requirements, and related
form and content of financial statements
requirements to State savings
associations.
II. Background
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (DoddFrank Act),2 signed into law on July 21,
2010, provided for a substantial
reorganization of the regulation of State
and Federal savings associations and
their holding companies.3 Beginning
July 21, 2011, the transfer date
established by section 311 of the DoddFrank Act,4 the powers, duties, and
functions formerly performed by the
Office of Thrift Supervision (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, as to savings and loan
holding companies. Section 316(b) of
the Dodd-Frank Act 5 provides the
manner of treatment for all orders,
resolutions, determinations, regulations,
and advisory materials issued, made,
prescribed, or allowed to become
effective by the OTS. Section 316(b) also
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,6 on June 14, 2011, the
FDIC’s Board of Directors 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, 2011.7
2 12
3 12
U.S.C. 5301 et seq.
U.S.C. 5411.
4 Id.
5 12
U.S.C. 5414(b).
U.S.C. 5414(c).
7 76 FR 39246 (July 6, 2011).
6 12
22 12
U.S.C. 4802.
VerDate Sep<11>2014
17:25 Jan 17, 2020
1 15
Jkt 250001
PO 00000
U.S.C. 78a et seq.
Frm 00022
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]]>Agencies
[Federal Register Volume 85, Number 13 (Tuesday, January 21, 2020)]
[Rules and Regulations]
[Pages 3247-3250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27577]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 390
RIN 3064-AF13
Removal of Transferred OTS Regulations Regarding Regulatory
Reporting Requirements, Reports and Audits of State Savings
Associations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
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SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is
adopting a final rule rescinding and removing from the Code of Federal
Regulations the regulations regarding regulatory reporting standards.
DATES: The final rule is effective on February 20, 2020.
FOR FURTHER INFORMATION CONTACT: Christine M. Bouvier, Assistant Chief
Accountant, (202) 898-7289, [email protected], Division of Risk
Management Supervision; Karen J. Currie, Senior Examination Specialist,
(202) 898-3981, Division of Risk Management Supervision; David M.
Miles, Counsel, Legal Division, (202) 898-3651.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The policy objectives of the final rule are twofold. The first is
to simplify the FDIC's regulations by removing unnecessary ones and
thereby improving ease of reference and public understanding. The
second is to promote parity between State savings associations and
State nonmember banks by having the regulatory reporting requirements,
regulatory reports and audits of both classes of institutions addressed
in the same FDIC rules.
II. Background
Part 390, subpart R was included in the regulations that were
transferred from the Office of Thrift Supervision (``OTS'') to the FDIC
on July 21, 2011, in connection with the implementation of title III of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-
Frank Act'').\1\ Beginning July 21, 2011, the transfer date established
by
[[Page 3248]]
section 311 of the Dodd-Frank Act,\2\ the powers, duties, and functions
formerly performed by the OTS were divided among the FDIC for State
savings associations, the Office of the Comptroller of the Currency
(``OCC'') for Federal savings associations, and the Board of Governors
of the Federal Reserve System (``FRB'') for 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 advisory materials that had been issued, made, prescribed, or
allowed to become effective by the OTS. The section provides that if
such regulatory issuances 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.
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\1\ Public Law 111-203, 124 Stat. 1376 (2010).
\2\ 12 U.S.C. 5411.
\3\ 12 U.S.C. 5414(b).
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The Dodd-Frank Act directed the FDIC and the OCC to consult with
one another and to publish a list of continued OTS regulations to be
enforced by each respective agency that would continue to remain in
effect until the appropriate Federal banking agency modified or removed
the regulations in accordance with applicable law. The list was
published by the FDIC and OCC as a Joint Notice in the Federal Register
on July 6, 2011,\4\ and shortly thereafter, the FDIC published its
transferred OTS regulations as new FDIC regulations in parts 390 and
391. When it republished the transferred OTS regulations, the FDIC
noted that its staff would evaluate the transferred OTS rules and might
later recommend incorporating the transferred regulations into other
FDIC rules, amending them, or rescinding them, as appropriate. Further,
section 312(c)(1) of the Dodd-Frank Act \5\ amended the definition of
``appropriate Federal banking agency'' contained in section 3(q) of the
FDI Act,\6\ 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'' for State savings associations, as it does today, it
has the authority to issue, modify, and rescind regulations involving
such associations, as well as for State nonmember banks and State-
licensed insured branches of foreign banks.
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\4\ 76 FR 39246 (July 6, 2011).
\5\ 12 U.S.C. 5412(c)(1).
\6\ 12 U.S.C. 1813(q).
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III. Proposed Rule
On October 2, 2019, the FDIC published a notice of proposed
rulemaking (NPR) regarding the removal of part 390, subpart R (former
OTS part 562), which addressed regulatory reporting requirements,
regulatory reports and audits of State savings associations.\7\ The
former OTS rule was transferred to the FDIC with only nominal changes.
The NPR proposed removing part 390, subpart R, because, after careful
review and consideration, the FDIC believed it was largely unnecessary,
redundant or duplicative given other FDIC regulations that pertain to
regulatory reporting requirements (12 CFR part 304, 12 CFR part 363 and
its appendices A and B, and 12 CFR part 364 and its appendix A),
regulatory reports (12 CFR part 304 and 12 CFR part 308), and audits of
insured depository institutions (12 CFR part 363 and its appendices A
and B and 12 CFR part 364 and its appendix A) that already apply to
State savings associations.
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\7\ See 84 FR 52387 (Oct. 2, 2019). The FDIC published a SNPR in
the Federal Register relating to the FDIC's regulatory flexibility
analysis on October 9, 2019. See 84 FR 54045 (Oct. 9, 2019).
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IV. Comments
The FDIC issued the NPR on October 2, 2019, with a 30-day comment
period. On October 9, 2019, the FDIC issued a supplemental notice of
proposed rulemaking (SNPR) which, among other things, extended the
deadline for comments on the FDIC's regulatory flexibility analysis
until November 8, 2019. The FDIC received no comments on the NPR or the
SNPR, and consequently the final rule is adopted without change.
V. Explanation of the Final Rule
As discussed in the NPR, 12 CFR part 390, subpart R, is being
rescinded, in its entirety, because it is largely unnecessary,
redundant or duplicative given the existence of other applicable FDIC
regulations described in Part III above.
VI. Expected Effects
As explained in Part III of this Supplementary Information section,
certain OTS regulations transferred to the FDIC by the Dodd-Frank Act
relating to regulatory reporting requirements, regulatory reports, and
audits of State savings associations are redundant or unnecessary in
light of other applicable FDIC regulations. This rule would eliminate
those transferred OTS regulations.
As of June 30, 2019, the FDIC supervises 3,424 insured depository
institutions, of which 38 (1.1 percent) are State savings
associations.\8\ The rule primarily would affect regulations that
govern State savings associations.
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\8\ Based on data from the June 30, 2019, Call Report and FFIEC
002 Report of Assets and Liabilities of U.S. Branches and Agencies
of Foreign Banks.
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As explained in the NPR, the rule would remove Sec. Sec. 390.320,
390.321, and 390.332 of part 390, subpart R, because these sections are
redundant of, or otherwise unnecessary in light of, applicable statutes
and other FDIC regulations regarding audits, reporting, and safety and
soundness. As a result, rescinding and removing these regulations will
not have any substantive effects on FDIC-supervised institutions.
VII. Alternatives
The FDIC has considered alternatives to the final 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 regulatory reporting standards and
audits of insured depository institutions, including 12 CFR part 304;
12 CFR part 308; 12 CFR part 363 and its appendices A and B; 12 CFR
part 364 and its appendix A; and 12 CFR part 390, subpart R. The FDIC
considered the status quo alternative of retaining the current
regulations but did not choose to do so because the underlying purposes
of those regulations are already accomplished through substantively
similar regulations regarding regulatory reports, regulatory reporting
requirements, and audits. Therefore, the FDIC is amending and
streamlining the FDIC's regulations.
VIII. Regulatory Analysis and Procedure
A. The Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (``PRA''),\9\ the FDIC may not conduct or sponsor, and the
respondent is not
[[Page 3249]]
required to respond to, an information collection unless it displays a
currently valid Office of Management and Budget (``OMB'') control
number.
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\9\ 44 U.S.C. 3501-3521.
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The final rule rescinds and removes from FDIC regulations part 390,
subpart R. 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.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA'') requires that, in
connection with a final rule, an agency prepare and make available for
public comment a final regulatory flexibility analysis that describes
the impact of the final rule on small entities.\10\ 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.11 12 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 rule would not have a significant
economic impact on a substantial number of small banking organizations.
Accordingly, a regulatory flexibility analysis is not required.
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\10\ 5 U.S.C. 601, et seq.
\11\ The SBA defines a small banking organization as having $600
million or less in assets, where an organization's ``assets are
determined by averaging the assets reported on its four quarterly
financial statements for the preceding year.'' See 13 CFR 121.201
(as amended, by 84 FR 34261, effective August 19, 2019). In its
determination, ``SBA counts the receipts, employees, or other
measure of size of the concern whose size is at issue and all of its
domestic and foreign affiliates.'' See 13 CFR 121.103. Following
these regulations, the FDIC uses a covered entity's affiliated and
acquired assets, averaged over the preceding four quarters, to
determine whether the covered entity is ``small'' for the purposes
of the RFA.
\12\ The FDIC supplemented the RFA analysis in the NPR with an
updated regulatory flexibility analysis to reflect changes to the
Small Business Administration's monetary-based size standards which
were adjusted for inflation as of August 19, 2019. See 84 FR 54045
(Oct. 9, 2019).
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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.\13\ The final 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.\14\
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\13\ FDIC Call Report, June 30, 2019.
\14\ Id.
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As explained in the NPR, the final rule would remove Sec. Sec.
390.320, 390.321, and 390.332 of part 390, subpart R, because these
sections are redundant or otherwise unnecessary in light of applicable
statutes and other FDIC regulations. As a result, rescinding the
regulations would not have any substantive effects on small FDIC-
supervised institutions.
Based on the information above, the FDIC certifies that the final
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.\15\ 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.\16\
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\15\ 5 U.S.C. 801 et seq.
\16\ 5 U.S.C. 801(a)(3).
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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.\17\
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\17\ 5 U.S.C. 804(2).
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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 \18\ requires each
Federal banking agency to use plain language in all of its 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.
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\18\ Public Law 106-102, section 722, 113 Stat. 1338, 1471
(1999).
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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.\19\ 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 agency will take to address issues that were identified.\20\ 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
R, this final rule complements other actions the FDIC has taken,
separately and with the other Federal banking agencies, to further the
EGRPRA mandate.
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\19\ Public Law 104-208, 110 Stat. 3900 (1996).
\20\ 82 FR 15900 (March 31, 2017).
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F. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (``RCDRIA''),\21\ 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, disclosure, 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
[[Page 3250]]
on which the regulations are published in final form.\22\
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\21\ 12 U.S.C. 4802(a).
\22\ 12 U.S.C. 4802.
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Because the final rule does not impose additional reporting,
disclosure, or other requirements on IDIs, section 302 of RCDRIA does
not apply.
List of Subjects in 12 CFR Part 390
Regulatory reporting standards.
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends title 12 CFR part 390 as follows:
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
1. Revise the authority citation for part 390 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 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 R--[Removed and Reserved]
0
2. Remove and reserve subpart R, consisting of Sec. Sec. 390.320
through 390.322.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on December 12, 2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019-27577 Filed 1-17-20; 8:45 am]
BILLING CODE 6714-01-P
