Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans, 20387-20394 [2020-07712]

Download as PDF 20387 Rules and Regulations Federal Register Vol. 85, No. 71 Monday, April 13, 2020 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 3 [Docket No. OCC–2020–0018] RIN 1557–AE90 FEDERAL RESERVE SYSTEM 12 CFR Part 217 [Regulations Q; Docket No. R–1712] RIN 7100–AF86 FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 324 RIN 3064–AF49 Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC). ACTION: Interim final rule; request for comment. AGENCY: To provide liquidity to small business lenders and the broader credit markets, to help stabilize the financial system, and to provide economic relief to small businesses nationwide, the Board of Governors of the Federal Reserve System (Board) authorized each of the Federal Reserve Banks to participate in the Paycheck Protection Program Lending Facility (PPPL Facility), pursuant to section 13(3) of the Federal Reserve Act. Under the PPPL Facility, each of the Federal Reserve Banks will extend non-recourse loans to eligible financial institutions to fund loans guaranteed by the Small Business Administration under the khammond on DSKJM1Z7X2PROD with RULES SUMMARY: VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). To facilitate use of this Federal Reserve facility, the Office of the Comptroller of the Currency, the Board, and the Federal Deposit Insurance Corporation (together, the agencies) are adopting this interim final rule to allow banking organizations to neutralize the regulatory capital effects of participating in the facility. This treatment is similar to the treatment extended previously by the agencies in connection with the Federal Reserve’s Money Market Mutual Fund Liquidity Facility. In addition, as mandated by section 1102 of the CARES Act, loans originated under the Small Business Administration’s Paycheck Protection Program will receive a zero percent risk weight under the agencies’ regulatory capital rule. DATES: Effective date: The interim final rule is effective April 13, 2020. Comment date: Comments on the interim final rule must be received no later than May 13, 2020. ADDRESSES: OCC: Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title ‘‘Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans’’ to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods: • Federal eRulemaking Portal— Regulations.gov Classic or Regulations.gov Beta: Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0018’’ in the Search Box and click ‘‘Search.’’ Click on ‘‘Comment Now’’ to submit public comments. For help with submitting effective comments please click on ‘‘View Commenter’s Checklist.’’ Click on the ‘‘Help’’ tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Regulations.gov Beta: Go to https:// beta.regulations.gov/ or click ‘‘Visit New Regulations.gov Site’’ from the Regulations.gov Classic homepage. Enter ‘‘Docket ID OCC–2020–0018’’ in the Search Box and click ‘‘Search.’’ Public comments can be submitted via PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 the ‘‘Comment’’ box below the displayed document information or by clicking on the document title and then clicking the ‘‘Comment’’ box on the topleft side of the screen. For help with submitting effective comments please click on ‘‘Commenter’s Checklist.’’ For assistance with the Regulations.gov Beta site, please call (877) 378–5457 (toll free) or (703) 454–9859 Monday–Friday, 9 a.m.–5 p.m. ET or email regulations@ erulemakinghelpdesk.com. • Email: regs.comments@ occ.treas.gov. • Mail: Chief Counsel’s Office, Attention: Comment Processing, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E–218, Washington, DC 20219. • Hand Delivery/Courier: 400 7th Street SW, Suite 3E–218, Washington, DC 20219. • Fax: (571) 465–4326. Instructions: You must include ‘‘OCC’’ as the agency name and ‘‘Docket ID OCC–2020–0018’’ in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information provided such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this rulemaking action by any of the following methods: • Viewing Comments Electronically— Regulations.gov Classic or Regulations.gov Beta: Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0018’’ in the Search box and click ‘‘Search.’’ Click on ‘‘Open Docket Folder’’ on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on ‘‘View all documents and comments in this docket’’ and then using the filtering tools on the left side of the screen. Click on the ‘‘Help’’ tab on the Regulations.gov home page to get information on using Regulations.gov. E:\FR\FM\13APR1.SGM 13APR1 khammond on DSKJM1Z7X2PROD with RULES 20388 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations The docket may be viewed after the close of the comment period in the same manner as during the comment period. Regulations.gov Beta: Go to https:// beta.regulations.gov/ or click ‘‘Visit New Regulations.gov Site’’ from the Regulations.gov Classic homepage. Enter ‘‘Docket ID OCC–2020–0018’’ in the Search Box and click ‘‘Search.’’ Click on the ‘‘Comments’’ tab. Comments can be viewed and filtered by clicking on the ‘‘Sort By’’ drop-down on the right side of the screen or the ‘‘Refine Results’’ options on the left side of the screen. Supporting materials can be viewed by clicking on the ‘‘Documents’’ tab and filtered by clicking on the ‘‘Sort By’’ drop-down on the right side of the screen or the ‘‘Refine Results’’ options on the left side of the screen.’’ For assistance with the Regulations.gov Beta site, please call (877) 378–5457 (toll free) or (703) 454– 9859 Monday–Friday, 9 a.m.–5 p.m. ET or email regulations@ erulemakinghelpdesk.com. The docket may be viewed after the close of the comment period in the same manner as during the comment period. Board: You may submit comments, identified by Docket No. R–1712; RIN 7100–AF86, by any of the following methods: • Agency Website: http:// www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm. • Email: regs.comments@ federalreserve.gov. Include docket and RIN numbers in the subject line of the message. • Fax: (202) 452–3819 or (202) 452– 3102. • Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. All public comments will be made available on the Board’s website at http://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove personally identifiable information at the commenter’s request. Accordingly, comments will not be edited to remove any identifying or contact information. For security reasons, the Board requires that visitors make an appointment to inspect comments. You may do so by calling (202) 452–3684. FDIC: You may submit comments, identified by RIN 3064–AF49, by any of the following methods: • Agency Website: https:// www.fdic.gov/regulations/laws/federal. VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 Follow instructions for submitting comments on the Agency website. • Email: Comments@FDIC.gov. Include ‘‘RIN 3064–AF49’’ on the subject line of the message. • Mail: Robert E. Feldman, Executive Secretary, Attention: Comments/RIN 3064–AF49, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. FOR FURTHER INFORMATION CONTACT: OCC: Margot Schwadron, Director, or Andrew Tschirhart, Risk Expert, Capital and Regulatory Policy, (202) 649–6370; or Carl Kaminski, Special Counsel, or Christopher Rafferty, Counsel, Chief Counsel’s Office, (202) 649–5490, for persons who are deaf or hearing impaired, TTY, (202) 649–5597, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. Board: Anna Lee Hewko, Associate Director, (202) 530–6360, Constance Horsley, Deputy Associate Director, (202) 452–5239, Elizabeth MacDonald, Manager, (202) 457–6316, Cecily Boggs, Senior Financial Institution Policy Analyst II, (202) 530–6209, or Eusebius Luk, Senior Financial Institution Policy Analyst I, (202) 452–2874, Division of Supervision and Regulation; Benjamin McDonough, Assistant General Counsel, (202) 452–2036, Asad Kudiya, Senior Counsel, (202) 475–6358, or David Alexander, Senior Counsel, (202) 452– 2877, Legal Division, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. Users of Telecommunication Device for Deaf (TDD) only, call (202) 263–4869. FDIC: Bobby R. Bean, Associate Director, bbean@fdic.gov; Benedetto Bosco, Chief, Capital Policy Section, bbosco@fdic.gov; Noah Cuttler, Senior Policy Analyst, ncuttler@fdic.gov; regulatorycapital@fdic.gov; Capital Markets Branch, Division of Risk Management Supervision, (202) 898– 6888; or Michael Phillips, Counsel, mphillips@fdic.gov; Catherine Wood, Counsel, cawood@fdic.gov; Supervision and Legislation Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), (800) 925–4618. SUPPLEMENTARY INFORMATION: Table of Contents I. Background II. The Interim Final Rule III. Administrative Law Matters A. Administrative Procedure Act B. Congressional Review Act C. Paperwork Reduction Act D. Regulatory Flexibility Act PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E. Riegle Community Development and Regulatory Improvement Act of 1994 F. Use of Plain Language G. Unfunded Mandates Act I. Background The spread of the coronavirus disease 2019 (COVID–19) has slowed economic activity in many countries, including the United States. Financial conditions have tightened markedly, and the cost of credit has risen for most borrowers. Small businesses are acutely impacted by the COVID–19 pandemic. As millions of Americans have been ordered to stay home, severely reducing their ability to engage in normal commerce, revenue streams for many small businesses have collapsed. This has resulted in severe liquidity constraints at small businesses and has forced many small businesses to close temporarily or furlough employees. Continued access to financing will be crucial for small businesses to weather economic disruptions caused by COVID–19 and, ultimately, to help restore economic activity. As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and in recognition of the exigent circumstances faced by small businesses, Congress created the Paycheck Protection Program (PPP). PPP covered loans are fully guaranteed as to principal and accrued interest by the Small Business Administration (SBA), the amount of each being determined at the time the guarantee is exercised. As a general matter, SBA guarantees are backed by the full faith and credit of the U.S. Government. PPP covered loans also afford borrowers forgiveness up to the principal amount of the PPP covered loan, if the proceeds of the PPP covered loan are used for certain expenses. The SBA reimburses PPP lenders for any amount of a PPP covered loan that is forgiven. PPP lenders are not held liable for any representations made by PPP borrowers in connection with a borrower’s request for PPP covered loan forgiveness. Under the PPP, eligible borrowers generally include businesses with fewer than 500 employees or that are otherwise considered by the SBA to be small, including individuals operating sole proprietorships or acting as independent contractors, certain franchisees, nonprofit corporations, veterans organizations, and Tribal businesses.1 The loan amount under the PPP would be limited to the lesser of $10 million and 250 percent of a 1 For more information on the Paycheck Protection Program, see https://www.sba.gov/ funding-programs/loans/coronavirus-relief-options/ paycheck-protection-program-ppp. E:\FR\FM\13APR1.SGM 13APR1 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations borrower’s average monthly payroll costs.2 In order to provide liquidity to small business lenders and the broader credit markets, and to help stabilize the financial system, on April 7, 2020, the Board, with approval of the Secretary of the Treasury, authorized each of the Federal Reserve Banks to extend credit under the Paycheck Protection Program Lending Facility (PPPL Facility), pursuant to section 13(3) of the Federal Reserve Act.3 Under the PPPL Facility, each of the Federal Reserve Banks will extend non-recourse loans to institutions that are eligible to make PPP covered loans, including depository institutions subject to the agencies’ capital rules.4 Under the PPPL Facility, only PPP covered loans that are guaranteed by the SBA under the Paycheck Protection Program with respect to both principal and interest and that are originated by an eligible institution may be pledged as collateral to the Federal Reserve Banks (eligible collateral). To facilitate the use of this Federal Reserve facility, the agencies are adopting the interim final rule, which allows banking organizations to neutralize the regulatory capital effects of loans pledged to the PPPL Facility. This relief, which applies to both riskbased and leverage capital ratios, including the community bank leverage ratio, is consistent with the treatment that the agencies previously provided to banking organizations to facilitate use of the Federal Reserve’s Money Market Mutual Fund Liquidity Facility.5 III. The Interim Final Rule A. Regulatory Capital Treatment of PPPL Facility Exposures The agencies’ capital rules require banking organizations to comply with risk-based and leverage capital requirements, which are expressed as a ratio of regulatory capital to assets and certain other exposures. Risk-based capital requirements are based on riskweighted assets, whereas leverage capital requirements are based on a measure of average total consolidated assets or total leverage exposure. Participation in the PPPL Facility will affect the balance sheet of an eligible banking organization because, as a khammond on DSKJM1Z7X2PROD with RULES 2 Id. 3 12 U.S.C. 343(3). 12 part 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 324 (FDIC). 5 See Regulatory Capital Rule: Money Market Mutual Fund Liquidity Facility, 80 FR 16232 (March 23, 2020). This treatment also is consistent with relief provided in connection with the AssetBacked Commercial Paper Money Market Mutual Fund Facility in 2008, 73 FR 55706 (Sept. 26, 2008). 4 See VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 function of participating in the PPPL Facility, the banking organization must originate and hold PPP covered loans (that is, assets that are eligible collateral pledged to the Federal Reserve Banks) on its balance sheet.6 As a result, an eligible banking organization that participates in the PPPL Facility could potentially be subject to increased regulatory capital requirements. The agencies believe that the regulatory capital requirements for PPP covered loans pledged by a banking organization to a Federal Reserve Bank as part of the PPPL Facility do not reflect the substantial protections from risk provided to the banking organization by the facility. Because of the non-recourse nature of the Federal Reserve’s extension of credit to the banking organization, the banking organization is not exposed to credit or market risk from the pledged PPP covered loans. Therefore, the agencies believe that it would be appropriate to exclude the effects of these pledged PPP covered loans from the banking organization’s regulatory capital.7 Specifically, the interim final rule would permit banking organizations to exclude exposures pledged as collateral to the PPPL Facility from a banking organization’s total leverage exposure, average total consolidated assets, advanced approaches-total riskweighted assets, and standardized total risk-weighted assets, as applicable.8 Question 1: The agencies invite comment on the advantages and disadvantages of neutralizing the effects of participating in the PPPL Facility on regulatory capital requirements. How does the approach in the interim final rule support the objectives of the facility? What other steps could be taken to support the objectives of the facility? What safety and soundness concerns should the agencies consider in connection with the approach in the interim final rule? B. Regulatory Capital Treatment of PPP Covered Loans The agencies’ regulatory capital rule requires a banking organization to apply 6 Under the Small Business Administration’s interim final rule, a lender may request that the Small Business Administration purchase the expected forgiveness amount of a PPP covered loan or pool of PPP covered loans at the end of week seven of the covered period. See Interim Final Rule ‘‘Business Loan Program Temporary Changes; Paycheck Protection Program,’’ https:// www.sba.gov/sites/default/files/2020-04/PPPIFRN%20FINAL_0.pdf. 7 This includes covered PPP loans originated beginning on April 3, 2020, and pledged to the Federal Reserve Banks in connection with this facility. 8 This treatment would extend to the community bank leverage ratio. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 20389 a zero percent risk weight to the portion of exposures that is guaranteed by a U.S. Government agency for purposes of the banking organization’s risk-based capital requirements.9 Section 1102 of the CARES Act requires banking organizations to apply a zero percent risk weight to PPP covered loans. Accordingly, and consistent with Section 1102 of the CARES Act, the agencies are amending sections 32 and 131 of the capital rule to clarify that PPP covered loans originated by a banking organization under the Paycheck Protection Program will receive a zero percent risk weight. The agencies seek comment on all aspects of the interim final rule. IV. Administrative Law Matters A. Administrative Procedure Act The agencies are issuing the interim final rule without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).10 Pursuant to section 553(b)(B) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an ‘‘agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.’’ 11 The agencies believe that the public interest is best served by implementing the interim final rule immediately upon publication in the Federal Register. As discussed above, the spread of COVID– 19 has slowed economic activity in many countries, including the United States. Financial conditions have tightened markedly, and the cost of credit has risen for most borrowers. Small businesses are acutely impacted by the COVID–19 pandemic. As millions of Americans have been ordered to stay home, severely reducing their ability to engage in normal commerce, revenue streams for many small businesses have collapsed. This has resulted in severe liquidity constraints at small businesses and has forced many small businesses to close temporarily or furlough employees. Continued access to financing will be crucial for small businesses to weather economic disruptions caused by COVID–19 and, ultimately, to help restore economic activity. 9 See 12 CFR 3.32(a)(1) (OCC); 12 CFR 217.32(a)(1) (Board); 12 CFR 324.32(a)(1) (FDIC). 10 5 U.S.C. 553. 11 5 U.S.C. 553(b)(B). E:\FR\FM\13APR1.SGM 13APR1 20390 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations In order to provide liquidity to small business lenders and the broader credit markets, and to stabilize the financial system, the Board, with approval of the Secretary of the Treasury, authorized each of the Federal Reserve Banks to extend credit under the PPPL Facility, and the interim final rule will facilitate this Federal Reserve lending program. For these reasons, the agencies find that there is good cause consistent with the public interest to issue the rule without advance notice and comment.12 The APA also requires a 30-day delayed effective date, except for (1) substantive rules that grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.13 Because the rules relieve a restriction, the interim final rule is exempt from the APA’s delayed effective date requirement.14 While the agencies believe that there is good cause to issue the interim final rule without advance notice and comment and with an immediate effective date, the agencies are interested in the views of the public and requests comment on all aspects of the interim final rule. khammond on DSKJM1Z7X2PROD with RULES B. Congressional Review Act For purposes of Congressional Review Act (CRA), the Office of Management and Budget (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 CRA generally provides that the rule may not take effect until at least 60 days following its publication.16 The CRA 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 (1) an annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (3) 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 For the same reasons set forth above, the agencies are adopting the interim final rule without the delayed effective 12 5 U.S.C. 553(b)(B). U.S.C. 553(d). 14 5 U.S.C. 553(d)(1). 15 5 U.S.C. 801 et seq. 16 5 U.S.C. 801(a)(3). 17 5 U.S.C. 804(2). 13 5 VerDate Sep<11>2014 17:15 Apr 10, 2020 date generally prescribed under the CRA. The delayed effective date required by the CRA does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.18 In light of current market uncertainty, the agencies believe that delaying the effective date of the rule would be contrary to the public interest. As required by the CRA, the agencies will submit the interim final rule and other appropriate reports to Congress and the Government Accountability Office for review. C. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid OMB control number.19 The interim final rule affects the agencies’ current information collections for the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051) and the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101). The OMB control numbers for the Call Reports of the agencies are: OCC OMB No. 1557–0081; Board OMB No. 7100–0036; and FDIC OMB No. 3064– 0052. The OMB control numbers for FFIEC 101 of the agencies are: OCC OMB No. 1557–0239; Board OMB No. 7100–0319; and FDIC OMB No. 3064– 0159. The Board has reviewed the interim final rule pursuant to authority delegated by the OMB. Although there is a substantive change to the actual calculation of total leverage exposure, average total consolidated assets, standardized total risk-weighted assets, and advanced approaches total risk-weighted assets, as applicable, for purposes of the Call Reports, the change should be minimal and result in a zero net change in hourly burden under the agencies’ information collections. Submissions will, however, be made by the agencies to OMB. The changes to the instructions of the Call Reports and FFIEC 101 will be addressed in a separate Federal Register notice. The Board has temporarily revised the instructions to the Financial Statements for Holding Companies (FR Y–9 reports; OMB No. 7100–0128) to reflect the 18 5 19 4 Jkt 250001 PO 00000 U.S.C. 808. U.S.C. 3501–3521. Frm 00004 Fmt 4700 Sfmt 4700 changes made in this interim final rule. On June 15, 1984, OMB delegated to the Board authority under the PRA to temporarily approve a revision to a collection of information without providing opportunity for public comment if the Board determines that a change in an existing collection must be instituted quickly and that public participation in the approval process would defeat the purpose of the collection or substantially interfere with the Board’s ability to perform its statutory obligation. The Board’s delegated authority requires that the Board, after temporarily approving a collection, solicit public comment on a proposal to extend the temporary collection for a period not to exceed three years. Therefore, the Board is inviting comment to extend the FR Y–9 reports for three years, with revision. The Board invites public comment on the FR Y–9 reports, which are being reviewed under authority delegated by the OMB under the PRA. Comments are invited on the following: a. Whether the collection of information in the interim final rule is necessary for the proper performance of the Board’s functions, including whether the information has practical utility; b. The accuracy of the Board’s estimate of the burden of the information collection in the interim final rule, including the validity of the methodology and assumptions used; c. Ways to enhance the quality, utility, and clarity of the information to be collected; d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information. Comments must be submitted on or before May 13, 2020. At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the interim final rule. Adopted Revision, With Extension for Three Years, of the Following Information Collection: Report title: Financial Statements for Holding Companies. Agency form number: FR Y–9C; FR Y– 9LP; FR Y–9SP; FR Y–9ES; FR Y–9CS. OMB control number: 7100–0128. Effective date: June 30, 2020. Frequency: Quarterly, semiannually, and annually. E:\FR\FM\13APR1.SGM 13APR1 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations Affected public: Businesses or other for-profit. Respondents: Bank holding companies (BHCs), savings and loan holding companies (SLHCs),20 securities holding companies (SHCs), and U.S. intermediate holding companies (IHCs) (collectively, holding companies (HCs)). Estimated number of respondents: FR Y–9C (non-advanced approaches (AA) community bank leverage ratio (CBLR) HCs) with less than $5 billion in total assets—71, FR Y–9C (non-AA CBLR HCs) with $5 billion or more in total assets—35, FR Y–9C (non-AA non-CBLR HCs) with less than $5 billion in total assets—84, FR Y–9C (non-AA non-CBLR HCs) with $5 billion or more in total assets—154, FR Y–9C (AA HCs)—19, FR Y–9LP—434, FR Y–9SP—3,960, FR Y– 9ES—83, FR Y–9CS—236. Estimated average hours per response: Reporting FR Y–9C (non-AA CBLR HCs) with less than $5 billion in total assets— 29.14, FR Y–9C (non-AA CBLR HCs) with $5 billion or more in total assets— 35.11, FR Y–9C (non-AA non-CBLR HCs) with less than $5 billion in total assets—40.98, FR Y–9C (non-AA nonCBLR HCs) with $5 billion or more in total assets—46.95, FR Y–9C (AA HCs)—48.59, FR Y–9LP—5.27, FR Y– 9SP—5.40, FR Y–9ES—0.50, FR Y– 9CS—0.50. Recordkeeping FR Y–9C—1, FR Y–9LP—1, FR Y– 9SP—0.50, FR Y–9ES—0.50, FR Y– 9CS—0.50. Estimated annual burden hours: Reporting FR Y–9C (non-AA CBLR HCs) with less than $5 billion in total assets— 8,276, FR Y–9C (non-AA CBLR HCs) with $5 billion or more in total assets— 4,915, FR Y–9C (non-AA non-CBLR HCs) with less than $5 billion in total assets—13,769, FR Y–9C (non-AA nonCBLR HCs) with $5 billion or more in total assets—28,921, FR Y–9C (AA HCs)—3,693, FR Y–9LP—9,149, FR Y– 9SP—42,768, FR Y–9ES—42, FR Y– 9CS—472. khammond on DSKJM1Z7X2PROD with RULES Recordkeeping FR Y–9C—1,452, FR Y–9LP—1,736, FR Y–9SP—3,960, FR Y–9ES—42, FR Y–9CS—472. 20 An SLHC must file one or more of the FR Y– 9 family of reports unless it is: (1) A grandfathered unitary SLHC with primarily commercial assets and thrifts that make up less than 5 percent of its consolidated assets; or (2) a SLHC that primarily holds insurance-related assets and does not otherwise submit financial reports with the SEC pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 General description of report: The FR Y–9 reports continue to be the primary source of financial data on holding companies that examiners rely on in the intervals between on-site inspections. Financial data from these reporting forms are used to detect emerging financial problems, to review performance and conduct preinspection analysis, to monitor and evaluate capital adequacy, to evaluate HC mergers and acquisitions, and to analyze a holding company’s overall financial condition to ensure the safety and soundness of its operations. The FR Y–9C, FR Y–9LP, and FR Y–9SP serve as standardized financial statements for the consolidated HC. The Board requires HCs to provide standardized financial statements to fulfill the Board’s statutory obligation to supervise these organizations. The FR Y–9ES is a financial statement for HCs that are Employee Stock Ownership Plans. The Board uses the FR Y–9CS (a free-form supplement) to collect additional information deemed to be critical and needed in an expedited manner. HCs file the FR Y–9C on a quarterly basis, the FR Y–9LP quarterly, the FR Y–9SP semiannually, the FR Y–9ES annually, and the FR Y–9CS on a schedule that is determined when this supplement is used. Legal authorization and confidentiality: The Board has the authority to impose the reporting and recordkeeping requirements associated with the FR Y–9 family of reports on BHCs pursuant to section 5 of the Bank Holding Company Act of 1956 (BHC Act) (12 U.S.C. 1844); on SLHCs pursuant to section 10(b)(2) and (3) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(2) and (3)), as amended by sections 369(8) and 604(h)(2) of the Dodd-Frank Wall Street and Consumer Protection Act (Dodd-Frank Act); on U.S. IHCs pursuant to section 5 of the BHC Act (12 U.S.C 1844), as well as pursuant to sections 102(a)(1) and 165 of the Dodd-Frank Act (12 U.S.C. 511(a)(1) and 5365); and on SHCs pursuant to section 618 of the DoddFrank Act (12 U.S.C. 1850a(c)(1)(A)). The obligation to submit the FR Y–9 reports, and the recordkeeping requirements set forth in the respective instructions to each report, are mandatory. With respect to the FR Y–9C report, Schedule HI’s memoranda data item 7(g) ‘‘FDIC deposit insurance assessments,’’ Schedule HC–P’s data item 7(a) ‘‘Representation and warranty reserves for 1–4 family residential mortgage loans sold to U.S. government agencies and government sponsored agencies,’’ and Schedule HC–P’s data item 7(b) PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 20391 ‘‘Representation and warranty reserves for 1–4 family residential mortgage loans sold to other parties’’ are considered confidential commercial and financial information. Such treatment is appropriate under exemption 4 of the Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(4)) because these data items reflect commercial and financial information that is both customarily and actually treated as private by the submitter, and which the Board has previously assured submitters will be treated as confidential. It also appears that disclosing these data items may reveal confidential examination and supervisory information, and in such instances, this information would also be withheld pursuant to exemption 8 of the FOIA (5 U.S.C. 552(b)(8)), which protects information related to the supervision or examination of a regulated financial institution. In addition, for both the FR Y–9C report and the FR Y–9SP report, Schedule HC’s memorandum item 2.b., the name and email address of the external auditing firm’s engagement partner, is considered confidential commercial information and protected by exemption 4 of the FOIA (5 U.S.C. 552(b)(4)) if the identity of the engagement partner is treated as private information by HCs. The Board has assured respondents that this information will be treated as confidential since the collection of this data item was proposed in 2004. Aside from the data items described above, the remaining data items on the FR Y–9C report and the FR Y–9SP report are generally not accorded confidential treatment. The data items collected on FR Y–9LP, FR Y–9ES, and FR Y–9CS reports, are also generally not accorded confidential treatment. As provided in the Board’s Rules Regarding Availability of Information (12 CFR part 261), however, a respondent may request confidential treatment for any data items the respondent believes should be withheld pursuant to a FOIA exemption. The Board will review any such request to determine if confidential treatment is appropriate, and will inform the respondent if the request for confidential treatment has been denied. To the extent the instructions to the FR Y–9C, FR Y–9LP, FR Y–9SP, and FR Y–9ES reports each respectively direct the financial institution to retain the workpapers and related materials used in preparation of each report, such material would only be obtained by the Board as part of the examination or supervision of the financial institution. Accordingly, such information is considered confidential pursuant to exemption 8 of the FOIA (5 U.S.C. E:\FR\FM\13APR1.SGM 13APR1 20392 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations 552(b)(8)). In addition, the workpapers and related materials may also be protected by exemption 4 of the FOIA, to the extent such financial information is treated as confidential by the respondent (5 U.S.C. 552(b)(4)). Current actions: The Board has temporarily revised the instructions for the FR Y–9C to reflect the exclusion of PPP loans pledged to the PPPL Facility from the institution’s total leverage exposure, average total consolidated assets, advanced approaches total riskweighted assets, and standardized total risk-weighted assets, as applicable.21 Specifically, the Board has temporarily revised the FR Y–9C instructions to permit HCs to assign a zero percent risk weight to covered loans pledged to the PPPL Facility for purposes of determining the risk-weighted assets and leverage ratio. HCs would report these covered loans pledged to the PPPL Facility in Schedule HC–R, Part II, item 5.d., ‘‘Loans and leases held for investment: All other exposures’’ as appropriate, in both Column A (Totals) and Column C (0% risk-weight category).22 The average of such assets purchased would be reported in Schedule HC–R, part I, item 29, ‘‘LESS: Other deductions from (additions to) assets for leverage ratio purposes,’’ and thus excluded from Schedule HC–R, item 30, ‘‘Total assets for the leverage ratio.’’ The Board has determined that the revisions to the FR Y–9C must be instituted quickly and that public participation in the approval process would defeat the purpose of the collection of information, as delaying the revisions would result in the collection of inaccurate information and would interfere with the Board’s ability to perform its statutory duties. The Board also proposes to extend the FR Y–9 reports for three years, with the revisions discussed above. khammond on DSKJM1Z7X2PROD with RULES D. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) 23 requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities.24 The RFA applies only to rules for which an agency publishes a general notice of 21 This treatment also would apply to those banking organizations that have elected to opt into the CBLR framework. 22 Reporting in Schedule HC–R, Part II, only applies to non CBLR holding companies. 23 5 U.S.C. 601 et seq. 24 Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with total assets of $600 million or less and trust companies with total assets of $41.5 million or less. See 13 CFR 121.201. VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, consistent with section 553(b)(B) of the APA, the agencies have determined for good cause that general notice and opportunity for public comment is unnecessary, and therefore the agencies are not issuing a notice of proposed rulemaking. Accordingly, the agencies have concluded that the RFA’s requirements relating to initial and final regulatory flexibility analysis do not apply. Nevertheless, the agencies seek comment on whether, and the extent to which, the interim final rule would affect a significant number of small entities. E. Riegle Community Development and Regulatory Improvement Act of 1994 Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),25 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 the principle 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, with certain exceptions, including for good cause.26 For the reasons described above, the agencies find good cause exists under section 302 of RCDRIA to publish the interim final rule with an immediate effective date. As such, the interim final rule will be effective immediately. Nevertheless, the agencies seek comment on RCDRIA. F. Use of Plain Language Section 722 of the Gramm-LeachBliley Act 27 requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The agencies have sought to present the interim final rule in a simple and 25 12 U.S.C. 4802(a). U.S.C. 4802. 27 12 U.S.C. 4809. 26 12 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 straightforward manner. The agencies invite comments on whether there are additional steps it could take to make the rule easier to understand. For example: • Have we organized the material to suit your needs? If not, how could this material be better organized? • Are the requirements in the regulation clearly stated? If not, how could the regulation be more clearly stated? • Does the regulation contain language or jargon that is not clear? If so, which language requires clarification? • Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand? What else could we do to make the regulation easier to understand? G. Unfunded Mandates Act As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. However, the UMRA does not apply to final rules for which a general notice of proposed rulemaking was not published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found good cause to dispense with notice and comment for the interim final rule, the OCC has not prepared an economic analysis of the rule under the UMRA. List of Subjects 12 CFR Part 3 Administrative practice and procedure, Capital, Federal savings associations, National banks, Risk. 12 CFR Part 217 Administrative practice and procedure, Banks, Banking, Capital, Federal Reserve System, Holding companies, Reporting and recordkeeping requirements, Risk, Securities. 12 CFR Part 324 Administrative practice and procedure, Banks, banking, Reporting and recordkeeping requirements, Savings associations, State non-member banks. E:\FR\FM\13APR1.SGM 13APR1 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Chapter I Authority and Issuance For the reasons stated in the preamble, the Office of the Comptroller of the Currency amends part 3 of chapter I of title 12, Code of Federal Regulations as follows: PART 3—CAPITAL ADEQUACY STANDARDS 1. The authority citation for part 3 is revised to read as follows: ■ Authority: 12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and Pub. L. 116–136, 134 Stat. 281. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM ■ 2. Amend § 3.2 in the definition of ‘‘Corporate exposure’’ by revising paragraphs (12) and (13) and adding paragraph (14) to read as follows: Authority and Issuance § 3.2 For the reasons stated in the preamble, the Board of Governors of the Federal Reserve System amends 12 CFR chapter II as follows: Definitions. * * * * * Corporate exposure * * * (12) A policy loan; (13) A separate account; or (14) A Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). * * * * * ■ 3. Amend § 3.32 by adding paragraph (a)(1)(iii) to read as follows: § 3.32 General risk weights. (a) * * * (1) * * * (iii) A national bank or Federal savings association must assign a zero percent risk weight to a Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). * * * * * ■ 4. Amend § 3.131 by adding paragraph (e)(3)(viii) to read as follows: § 3.131 Mechanics for calculating total wholesale and retail risk-weighted assets. * khammond on DSKJM1Z7X2PROD with RULES savings association may exclude exposures pledged as collateral for a non-recourse loan that is provided as part of the Paycheck Protection Program Lending Facility, announced by the Federal Reserve Board on April 7, 2020, from total leverage exposure, average total consolidated assets, advanced approaches total risk-weighted assets, and standardized total risk-weighted assets, as applicable. For the purpose of this section, a national bank’s or Federal savings association’s liability under the facility must be reduced by the principal amount of the loans pledged as collateral for funds advanced under the facility. * * * * (e) * * * (3) * * * (viii) The risk-weighted asset amount for a Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) equals zero. * * * * * ■ 5. Add § 3.305 to read as follows: § 3.305 Exposures related to the Paycheck Protection Program Lending Facility. Notwithstanding any other section of this part, a national bank or Federal VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 12 CFR Chapter II PART 217—CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q) 6. The authority citation for part 217 is revised to read as follows: ■ Authority: 12 U.S.C. 248(a), 321–338a, 481–486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p–1, 1831w, 1835, 1844(b), 1851, 3904, 3906–3909, 4808, 5365, 5368, 5371 and 5371 note; Pub. L. 116–136, 134 Stat. 281. 7. Amend § 217.2 in the definition of ‘‘Corporate exposure’’ by revising paragraphs (12) and (13) and adding paragraph (14) to read as follows: ■ § 217.2 Definitions. * * * * * Corporate exposure * * * (12) A policy loan; (13) A separate account; or (14) A Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). * * * * * ■ 8. Amend § 217.32 by adding paragraph (a)(1)(iii) to read as follows: § 217.32 General risk weights. (a) * * * (1) * * * (iii) A Board-regulated institution must assign a zero percent risk weight to a Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). * * * * * PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 20393 9. Amend § 217.131 by adding paragraph (e)(3)(viii) to read as follows: ■ § 217.131 Mechanics for calculating total wholesale and retail risk-weighted assets. * * * * * (e) * * * (3) * * * (viii) The risk-weighted asset amount for a Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) equals zero. * * * * * ■ 10. Add § 217.305 to read as follows: § 217.305 Exposures related to the Paycheck Protection Program Lending Facility. Notwithstanding any other section of this part, a Board-regulated institution may exclude exposures pledged as collateral for a non-recourse loan that is provided as part of the Paycheck Protection Program Lending Facility, announced by the Board on April 7, 2020, from total leverage exposure, average total consolidated assets, advanced approaches total riskweighted assets, and standardized total risk-weighted assets, as applicable. For the purpose of this section, a Boardregulated institution’s liability under the facility must be reduced by the principal amount of the loans pledged as collateral for funds advanced under the facility. FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Chapter III Authority and Issuance For the reasons set forth in the joint preamble, chapter III of title 12 of the Code of Federal Regulations is amended as follows: PART 324—CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS 11. The authority citation for part 324 is revised to read as follows: ■ Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102–233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102–242, 105 Stat. 2236, 2355, as amended by Pub. L. 103–325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102–242, 105 Stat. 2236, 2386, as amended by Pub. L. 102–550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111–203, 124 Stat. 1376, 1887 (15 U.S.C. 78o–7 note); Pub. L. 115–174; Pub. L. 116–136, 134 Stat. 281. 12. Amend § 324.2 in the definition of ‘‘Corporate exposure’’ by revising paragraphs (12) and (13) and adding paragraph (14) to read as follows: ■ E:\FR\FM\13APR1.SGM 13APR1 20394 § 324.2 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations Definitions. * * * * * Corporate exposure * * * (12) A policy loan; (13) A separate account; or (14) A Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). * * * * * ■ 13. Section 324.32 is amended by adding paragraph (a)(1)(iii) to read as follows: § 324.32 [FR Doc. 2020–07712 Filed 4–10–20; 8:45 am] BILLING CODE 4810–33–P 6210–01–P 6714–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 General risk weights. (a) * * * (1) * * * (iii) An FDIC-supervised institution must assign a zero percent risk weight to a Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). * * * * * ■ 14. Amend § 324.131 by revising paragraph (e)(3)(viii) to read as follows: [Docket No. FAA–2019–0728; Product Identifier 2019–NM–071–AD; Amendment 39–19892; AD 2020–07–13] RIN 2120–AA64 Airworthiness Directives; Bombardier, Inc., Airplanes § 324.131 Mechanics for calculating total wholesale and retail risk-weighted assets. Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. * SUMMARY: * * * * (e) * * * (3) * * * (viii) The risk-weighted asset amount for a Paycheck Protection Program covered loan as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) equals zero. * * * * * ■ 15. Add § 324.304 to read as follows: § 324.304 Exposures related to the Paycheck Protection Program Lending Facility. Notwithstanding any other section of this part, an FDIC-supervised institution may exclude exposures pledged as collateral for a non-recourse loan that is provided as part of the Paycheck Protection Program Lending Facility, announced by the Federal Reserve on April 7, 2020, from total leverage exposure, average total consolidated assets, advanced approaches total riskweighted assets, and standardized total risk-weighted assets, as applicable. For the purpose of this section, an FDICsupervised institution’s liability under the facility must be reduced by the principal amount of the loans pledged as collateral for funds advanced under the facility. khammond on DSKJM1Z7X2PROD with RULES By order of the Board of Directors. Dated at Washington, DC, on or about April 7, 2020. Robert E. Feldman, Executive Secretary. Brian P. Brooks, First Deputy Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System. Ann Misback, Secretary of the Board. Federal Deposit Insurance Corporation. VerDate Sep<11>2014 17:15 Apr 10, 2020 Jkt 250001 AGENCY: The FAA is adopting a new airworthiness directive (AD) for certain Bombardier, Inc., Model BD–100–1A10 airplanes. This AD was prompted by a report that during ALTS CAP or (V) ALTS CAP mode, the flight guidance/ autopilot does not account for engine failure while capturing an altitude. This AD requires revising the existing airplane flight manual (AFM) to provide the flightcrew with new warnings for ‘‘Autoflight’’ and ‘‘Engine Failure in Climb During ALTS CAP.’’ The FAA is issuing this AD to address the unsafe condition on these products. DATES: This AD is effective May 18, 2020. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of May 18, 2020. ADDRESSES: For service information identified in this final rule, contact Bombardier, Inc., 200 Coˆte-Vertu Road West, Dorval, Que´bec H4S 2A3, Canada; North America toll-free phone: 1–866– 538–1247 or direct-dial phone: 1–514– 855–2999; email: ac.yul@ aero.bombardier.com; internet: http:// www.bombardier.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206–231–3195. It is also available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA–2019–0728. PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 Examining the AD Docket You may examine the AD docket on the internet at https:// www.regulations.gov by searching for and locating Docket No. FAA–2019– 0728; 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 final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations is U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, Washington, DC 20590. FOR FURTHER INFORMATION CONTACT: Steven Dzierzynski, Aerospace Engineer, Avionics and Electrical Systems Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: 516–228–7367; fax: 516– 794–5531; email: 9-avs-nyaco-cos@ faa.gov. SUPPLEMENTARY INFORMATION: Discussion Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF–2019–12, dated April 3, 2019 (‘‘Canadian AD CF–2019–12’’) (also referred to as the Mandatory Continuing Airworthiness Information, or ‘‘the MCAI’’), to correct an unsafe condition for certain Bombardier, Inc., Model BD– 100–1A10 airplanes. You may examine the MCAI in the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA–2019–0728. The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc., Model BD–100–1A10 airplanes. The NPRM published in the Federal Register on November 6, 2019 (84 FR 59739). The NPRM was prompted by a report that during ALTS CAP or (V) ALTS CAP mode, the flight guidance/autopilot does not account for engine failure while capturing an altitude. The NPRM proposed to require revising the existing AFM to provide the flightcrew with new warnings for ‘‘Autoflight’’ and ‘‘Engine Failure in Climb During ALTS CAP.’’ The FAA is issuing this AD to address the occurrence of an engine failure during or before a climb while in ALTS CAP or (V) ALTS CAP mode, as it could cause the airspeed to drop significantly below the safe operating speed and may require flightcrew intervention to maintain a safe operating speed. See the E:\FR\FM\13APR1.SGM 13APR1

Agencies

[Federal Register Volume 85, Number 71 (Monday, April 13, 2020)]
[Rules and Regulations]
[Pages 20387-20394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07712]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules 
and Regulations

[[Page 20387]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 3

[Docket No. OCC-2020-0018]
RIN 1557-AE90

FEDERAL RESERVE SYSTEM

12 CFR Part 217

[Regulations Q; Docket No. R-1712]
RIN 7100-AF86

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 324

RIN 3064-AF49


Regulatory Capital Rule: Paycheck Protection Program Lending 
Facility and Paycheck Protection Program Loans

AGENCY: Office of the Comptroller of the Currency (OCC), Board of 
Governors of the Federal Reserve System (Board), and Federal Deposit 
Insurance Corporation (FDIC).

ACTION: Interim final rule; request for comment.

-----------------------------------------------------------------------

SUMMARY: To provide liquidity to small business lenders and the broader 
credit markets, to help stabilize the financial system, and to provide 
economic relief to small businesses nationwide, the Board of Governors 
of the Federal Reserve System (Board) authorized each of the Federal 
Reserve Banks to participate in the Paycheck Protection Program Lending 
Facility (PPPL Facility), pursuant to section 13(3) of the Federal 
Reserve Act. Under the PPPL Facility, each of the Federal Reserve Banks 
will extend non-recourse loans to eligible financial institutions to 
fund loans guaranteed by the Small Business Administration under the 
Paycheck Protection Program established by the Coronavirus Aid, Relief, 
and Economic Security Act (CARES Act). To facilitate use of this 
Federal Reserve facility, the Office of the Comptroller of the 
Currency, the Board, and the Federal Deposit Insurance Corporation 
(together, the agencies) are adopting this interim final rule to allow 
banking organizations to neutralize the regulatory capital effects of 
participating in the facility. This treatment is similar to the 
treatment extended previously by the agencies in connection with the 
Federal Reserve's Money Market Mutual Fund Liquidity Facility. In 
addition, as mandated by section 1102 of the CARES Act, loans 
originated under the Small Business Administration's Paycheck 
Protection Program will receive a zero percent risk weight under the 
agencies' regulatory capital rule.

DATES: 
    Effective date: The interim final rule is effective April 13, 2020.
    Comment date: Comments on the interim final rule must be received 
no later than May 13, 2020.

ADDRESSES: 
    OCC: Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal or email, if possible. Please use the title 
``Regulatory Capital Rule: Paycheck Protection Program Lending Facility 
and Paycheck Protection Program Loans'' to facilitate the organization 
and distribution of the comments. You may submit comments by any of the 
following methods:
     Federal eRulemaking Portal--Regulations.gov Classic or 
Regulations.gov Beta: Regulations.gov Classic: Go to https://www.regulations.gov/. Enter ``Docket ID OCC-2020-0018'' in the Search 
Box and click ``Search.'' Click on ``Comment Now'' to submit public 
comments. For help with submitting effective comments please click on 
``View Commenter's Checklist.'' Click on the ``Help'' tab on the 
Regulations.gov home page to get information on using Regulations.gov, 
including instructions for submitting public comments.
    Regulations.gov Beta: Go to https://beta.regulations.gov/ or click 
``Visit New Regulations.gov Site'' from the Regulations.gov Classic 
homepage. Enter ``Docket ID OCC-2020-0018'' in the Search Box and click 
``Search.'' Public comments can be submitted via the ``Comment'' box 
below the displayed document information or by clicking on the document 
title and then clicking the ``Comment'' box on the top-left side of the 
screen. For help with submitting effective comments please click on 
``Commenter's Checklist.'' For assistance with the Regulations.gov Beta 
site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
Friday, 9 a.m.-5 p.m. ET or email [email protected].
     Email: [email protected].
     Mail: Chief Counsel's Office, Attention: Comment 
Processing, Office of the Comptroller of the Currency, 400 7th Street 
SW, Suite 3E-218, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2020-0018'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website without change, including any business or 
personal information provided such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this rulemaking action by any of the following methods:
     Viewing Comments Electronically--Regulations.gov Classic 
or Regulations.gov Beta: Regulations.gov Classic: Go to https://www.regulations.gov/. Enter ``Docket ID OCC-2020-0018'' in the Search 
box and click ``Search.'' Click on ``Open Docket Folder'' on the right 
side of the screen. Comments and supporting materials can be viewed and 
filtered by clicking on ``View all documents and comments in this 
docket'' and then using the filtering tools on the left side of the 
screen. Click on the ``Help'' tab on the Regulations.gov home page to 
get information on using Regulations.gov.

[[Page 20388]]

The docket may be viewed after the close of the comment period in the 
same manner as during the comment period.
    Regulations.gov Beta: Go to https://beta.regulations.gov/ or click 
``Visit New Regulations.gov Site'' from the Regulations.gov Classic 
homepage. Enter ``Docket ID OCC-2020-0018'' in the Search Box and click 
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and 
filtered by clicking on the ``Sort By'' drop-down on the right side of 
the screen or the ``Refine Results'' options on the left side of the 
screen. Supporting materials can be viewed by clicking on the 
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down 
on the right side of the screen or the ``Refine Results'' options on 
the left side of the screen.'' For assistance with the Regulations.gov 
Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 
Monday-Friday, 9 a.m.-5 p.m. ET or email 
[email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.
    Board: You may submit comments, identified by Docket No. R-1712; 
RIN 7100-AF86, by any of the following methods:
     Agency Website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include docket 
and RIN numbers in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments will be made available on the Board's website 
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any identifying or 
contact information. For security reasons, the Board requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 452-3684.
    FDIC: You may submit comments, identified by RIN 3064-AF49, by any 
of the following methods:
     Agency Website: https://www.fdic.gov/regulations/laws/federal. Follow instructions for submitting comments on the Agency 
website.
     Email: [email protected]. Include ``RIN 3064-AF49'' on the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/RIN 3064-AF49, Federal Deposit Insurance Corporation, 550 17th 
Street NW, Washington, DC 20429.

FOR FURTHER INFORMATION CONTACT: 
    OCC: Margot Schwadron, Director, or Andrew Tschirhart, Risk Expert, 
Capital and Regulatory Policy, (202) 649-6370; or Carl Kaminski, 
Special Counsel, or Christopher Rafferty, Counsel, Chief Counsel's 
Office, (202) 649-5490, for persons who are deaf or hearing impaired, 
TTY, (202) 649-5597, Office of the Comptroller of the Currency, 400 7th 
Street SW, Washington, DC 20219.
    Board: Anna Lee Hewko, Associate Director, (202) 530-6360, 
Constance Horsley, Deputy Associate Director, (202) 452-5239, Elizabeth 
MacDonald, Manager, (202) 457-6316, Cecily Boggs, Senior Financial 
Institution Policy Analyst II, (202) 530-6209, or Eusebius Luk, Senior 
Financial Institution Policy Analyst I, (202) 452-2874, Division of 
Supervision and Regulation; Benjamin McDonough, Assistant General 
Counsel, (202) 452-2036, Asad Kudiya, Senior Counsel, (202) 475-6358, 
or David Alexander, Senior Counsel, (202) 452-2877, Legal Division, 
Board of Governors of the Federal Reserve System, 20th Street and 
Constitution Avenue NW, Washington, DC 20551. Users of 
Telecommunication Device for Deaf (TDD) only, call (202) 263-4869.
    FDIC: Bobby R. Bean, Associate Director, [email protected]; Benedetto 
Bosco, Chief, Capital Policy Section, [email protected]; Noah Cuttler, 
Senior Policy Analyst, [email protected]; [email protected]; 
Capital Markets Branch, Division of Risk Management Supervision, (202) 
898-6888; or Michael Phillips, Counsel, [email protected]; Catherine 
Wood, Counsel, [email protected]; Supervision and Legislation Branch, 
Legal Division, Federal Deposit Insurance Corporation, 550 17th Street 
NW, Washington, DC 20429. For the hearing impaired only, 
Telecommunication Device for the Deaf (TDD), (800) 925-4618.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. The Interim Final Rule
III. Administrative Law Matters
    A. Administrative Procedure Act
    B. Congressional Review Act
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Riegle Community Development and Regulatory Improvement Act 
of 1994
    F. Use of Plain Language
    G. Unfunded Mandates Act

I. Background

    The spread of the coronavirus disease 2019 (COVID-19) has slowed 
economic activity in many countries, including the United States. 
Financial conditions have tightened markedly, and the cost of credit 
has risen for most borrowers. Small businesses are acutely impacted by 
the COVID-19 pandemic. As millions of Americans have been ordered to 
stay home, severely reducing their ability to engage in normal 
commerce, revenue streams for many small businesses have collapsed. 
This has resulted in severe liquidity constraints at small businesses 
and has forced many small businesses to close temporarily or furlough 
employees. Continued access to financing will be crucial for small 
businesses to weather economic disruptions caused by COVID-19 and, 
ultimately, to help restore economic activity.
    As part of the Coronavirus Aid, Relief, and Economic Security Act 
(CARES Act) and in recognition of the exigent circumstances faced by 
small businesses, Congress created the Paycheck Protection Program 
(PPP). PPP covered loans are fully guaranteed as to principal and 
accrued interest by the Small Business Administration (SBA), the amount 
of each being determined at the time the guarantee is exercised. As a 
general matter, SBA guarantees are backed by the full faith and credit 
of the U.S. Government. PPP covered loans also afford borrowers 
forgiveness up to the principal amount of the PPP covered loan, if the 
proceeds of the PPP covered loan are used for certain expenses. The SBA 
reimburses PPP lenders for any amount of a PPP covered loan that is 
forgiven. PPP lenders are not held liable for any representations made 
by PPP borrowers in connection with a borrower's request for PPP 
covered loan forgiveness.
    Under the PPP, eligible borrowers generally include businesses with 
fewer than 500 employees or that are otherwise considered by the SBA to 
be small, including individuals operating sole proprietorships or 
acting as independent contractors, certain franchisees, nonprofit 
corporations, veterans organizations, and Tribal businesses.\1\ The 
loan amount under the PPP would be limited to the lesser of $10 million 
and 250 percent of a

[[Page 20389]]

borrower's average monthly payroll costs.\2\
---------------------------------------------------------------------------

    \1\ For more information on the Paycheck Protection Program, see 
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
    \2\ Id.
---------------------------------------------------------------------------

    In order to provide liquidity to small business lenders and the 
broader credit markets, and to help stabilize the financial system, on 
April 7, 2020, the Board, with approval of the Secretary of the 
Treasury, authorized each of the Federal Reserve Banks to extend credit 
under the Paycheck Protection Program Lending Facility (PPPL Facility), 
pursuant to section 13(3) of the Federal Reserve Act.\3\ Under the PPPL 
Facility, each of the Federal Reserve Banks will extend non-recourse 
loans to institutions that are eligible to make PPP covered loans, 
including depository institutions subject to the agencies' capital 
rules.\4\ Under the PPPL Facility, only PPP covered loans that are 
guaranteed by the SBA under the Paycheck Protection Program with 
respect to both principal and interest and that are originated by an 
eligible institution may be pledged as collateral to the Federal 
Reserve Banks (eligible collateral).
---------------------------------------------------------------------------

    \3\ 12 U.S.C. 343(3).
    \4\ See 12 part 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 
324 (FDIC).
---------------------------------------------------------------------------

    To facilitate the use of this Federal Reserve facility, the 
agencies are adopting the interim final rule, which allows banking 
organizations to neutralize the regulatory capital effects of loans 
pledged to the PPPL Facility. This relief, which applies to both risk-
based and leverage capital ratios, including the community bank 
leverage ratio, is consistent with the treatment that the agencies 
previously provided to banking organizations to facilitate use of the 
Federal Reserve's Money Market Mutual Fund Liquidity Facility.\5\
---------------------------------------------------------------------------

    \5\ See Regulatory Capital Rule: Money Market Mutual Fund 
Liquidity Facility, 80 FR 16232 (March 23, 2020). This treatment 
also is consistent with relief provided in connection with the 
Asset-Backed Commercial Paper Money Market Mutual Fund Facility in 
2008, 73 FR 55706 (Sept. 26, 2008).
---------------------------------------------------------------------------

III. The Interim Final Rule

A. Regulatory Capital Treatment of PPPL Facility Exposures

    The agencies' capital rules require banking organizations to comply 
with risk-based and leverage capital requirements, which are expressed 
as a ratio of regulatory capital to assets and certain other exposures. 
Risk-based capital requirements are based on risk-weighted assets, 
whereas leverage capital requirements are based on a measure of average 
total consolidated assets or total leverage exposure. Participation in 
the PPPL Facility will affect the balance sheet of an eligible banking 
organization because, as a function of participating in the PPPL 
Facility, the banking organization must originate and hold PPP covered 
loans (that is, assets that are eligible collateral pledged to the 
Federal Reserve Banks) on its balance sheet.\6\ As a result, an 
eligible banking organization that participates in the PPPL Facility 
could potentially be subject to increased regulatory capital 
requirements.
---------------------------------------------------------------------------

    \6\ Under the Small Business Administration's interim final 
rule, a lender may request that the Small Business Administration 
purchase the expected forgiveness amount of a PPP covered loan or 
pool of PPP covered loans at the end of week seven of the covered 
period. See Interim Final Rule ``Business Loan Program Temporary 
Changes; Paycheck Protection Program,'' https://www.sba.gov/sites/default/files/2020-04/PPP-IFRN%20FINAL_0.pdf.
---------------------------------------------------------------------------

    The agencies believe that the regulatory capital requirements for 
PPP covered loans pledged by a banking organization to a Federal 
Reserve Bank as part of the PPPL Facility do not reflect the 
substantial protections from risk provided to the banking organization 
by the facility. Because of the non-recourse nature of the Federal 
Reserve's extension of credit to the banking organization, the banking 
organization is not exposed to credit or market risk from the pledged 
PPP covered loans. Therefore, the agencies believe that it would be 
appropriate to exclude the effects of these pledged PPP covered loans 
from the banking organization's regulatory capital.\7\
---------------------------------------------------------------------------

    \7\ This includes covered PPP loans originated beginning on 
April 3, 2020, and pledged to the Federal Reserve Banks in 
connection with this facility.
---------------------------------------------------------------------------

    Specifically, the interim final rule would permit banking 
organizations to exclude exposures pledged as collateral to the PPPL 
Facility from a banking organization's total leverage exposure, average 
total consolidated assets, advanced approaches-total risk-weighted 
assets, and standardized total risk-weighted assets, as applicable.\8\
---------------------------------------------------------------------------

    \8\ This treatment would extend to the community bank leverage 
ratio.
---------------------------------------------------------------------------

    Question 1: The agencies invite comment on the advantages and 
disadvantages of neutralizing the effects of participating in the PPPL 
Facility on regulatory capital requirements. How does the approach in 
the interim final rule support the objectives of the facility? What 
other steps could be taken to support the objectives of the facility? 
What safety and soundness concerns should the agencies consider in 
connection with the approach in the interim final rule?

B. Regulatory Capital Treatment of PPP Covered Loans

    The agencies' regulatory capital rule requires a banking 
organization to apply a zero percent risk weight to the portion of 
exposures that is guaranteed by a U.S. Government agency for purposes 
of the banking organization's risk-based capital requirements.\9\ 
Section 1102 of the CARES Act requires banking organizations to apply a 
zero percent risk weight to PPP covered loans. Accordingly, and 
consistent with Section 1102 of the CARES Act, the agencies are 
amending sections 32 and 131 of the capital rule to clarify that PPP 
covered loans originated by a banking organization under the Paycheck 
Protection Program will receive a zero percent risk weight.
---------------------------------------------------------------------------

    \9\ See 12 CFR 3.32(a)(1) (OCC); 12 CFR 217.32(a)(1) (Board); 12 
CFR 324.32(a)(1) (FDIC).
---------------------------------------------------------------------------

    The agencies seek comment on all aspects of the interim final rule.

IV. Administrative Law Matters

A. Administrative Procedure Act

    The agencies are issuing the interim final rule without prior 
notice and the opportunity for public comment and the delayed effective 
date ordinarily prescribed by the Administrative Procedure Act 
(APA).\10\ Pursuant to section 553(b)(B) of the APA, general notice and 
the opportunity for public comment are not required with respect to a 
rulemaking when an ``agency for good cause finds (and incorporates the 
finding and a brief statement of reasons therefor in the rules issued) 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' \11\
---------------------------------------------------------------------------

    \10\ 5 U.S.C. 553.
    \11\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------

    The agencies believe that the public interest is best served by 
implementing the interim final rule immediately upon publication in the 
Federal Register. As discussed above, the spread of COVID-19 has slowed 
economic activity in many countries, including the United States. 
Financial conditions have tightened markedly, and the cost of credit 
has risen for most borrowers. Small businesses are acutely impacted by 
the COVID-19 pandemic. As millions of Americans have been ordered to 
stay home, severely reducing their ability to engage in normal 
commerce, revenue streams for many small businesses have collapsed. 
This has resulted in severe liquidity constraints at small businesses 
and has forced many small businesses to close temporarily or furlough 
employees. Continued access to financing will be crucial for small 
businesses to weather economic disruptions caused by COVID-19 and, 
ultimately, to help restore economic activity.

[[Page 20390]]

    In order to provide liquidity to small business lenders and the 
broader credit markets, and to stabilize the financial system, the 
Board, with approval of the Secretary of the Treasury, authorized each 
of the Federal Reserve Banks to extend credit under the PPPL Facility, 
and the interim final rule will facilitate this Federal Reserve lending 
program. For these reasons, the agencies find that there is good cause 
consistent with the public interest to issue the rule without advance 
notice and comment.\12\
---------------------------------------------------------------------------

    \12\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------

    The APA also requires a 30-day delayed effective date, except for 
(1) substantive rules that grant or recognize an exemption or relieve a 
restriction; (2) interpretative rules and statements of policy; or (3) 
as otherwise provided by the agency for good cause.\13\ Because the 
rules relieve a restriction, the interim final rule is exempt from the 
APA's delayed effective date requirement.\14\
---------------------------------------------------------------------------

    \13\ 5 U.S.C. 553(d).
    \14\ 5 U.S.C. 553(d)(1).
---------------------------------------------------------------------------

    While the agencies believe that there is good cause to issue the 
interim final rule without advance notice and comment and with an 
immediate effective date, the agencies are interested in the views of 
the public and requests comment on all aspects of the interim final 
rule.

B. Congressional Review Act

    For purposes of Congressional Review Act (CRA), the Office of 
Management and Budget (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 CRA generally provides that the rule may not 
take effect until at least 60 days following its publication.\16\
---------------------------------------------------------------------------

    \15\ 5 U.S.C. 801 et seq.
    \16\ 5 U.S.C. 801(a)(3).
---------------------------------------------------------------------------

    The CRA 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 (1) an annual effect on the 
economy of $100,000,000 or more; (2) a major increase in costs or 
prices for consumers, individual industries, Federal, State, or local 
government agencies or geographic regions, or (3) 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\
---------------------------------------------------------------------------

    \17\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

    For the same reasons set forth above, the agencies are adopting the 
interim final rule without the delayed effective date generally 
prescribed under the CRA. The delayed effective date required by the 
CRA does not apply to any rule for which an agency for good cause finds 
(and incorporates the finding and a brief statement of reasons therefor 
in the rule issued) that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.\18\ In 
light of current market uncertainty, the agencies believe that delaying 
the effective date of the rule would be contrary to the public 
interest.
---------------------------------------------------------------------------

    \18\ 5 U.S.C. 808.
---------------------------------------------------------------------------

    As required by the CRA, the agencies will submit the interim final 
rule and other appropriate reports to Congress and the Government 
Accountability Office for review.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) states that no agency may 
conduct or sponsor, nor is the respondent required to respond to, an 
information collection unless it displays a currently valid OMB control 
number.\19\ The interim final rule affects the agencies' current 
information collections for the Consolidated Reports of Condition and 
Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051) and the 
Regulatory Capital Reporting for Institutions Subject to the Advanced 
Capital Adequacy Framework (FFIEC 101). The OMB control numbers for the 
Call Reports of the agencies are: OCC OMB No. 1557-0081; Board OMB No. 
7100-0036; and FDIC OMB No. 3064-0052. The OMB control numbers for 
FFIEC 101 of the agencies are: OCC OMB No. 1557-0239; Board OMB No. 
7100-0319; and FDIC OMB No. 3064-0159. The Board has reviewed the 
interim final rule pursuant to authority delegated by the OMB.
---------------------------------------------------------------------------

    \19\ 4 U.S.C. 3501-3521.
---------------------------------------------------------------------------

    Although there is a substantive change to the actual calculation of 
total leverage exposure, average total consolidated assets, 
standardized total risk-weighted assets, and advanced approaches total 
risk-weighted assets, as applicable, for purposes of the Call Reports, 
the change should be minimal and result in a zero net change in hourly 
burden under the agencies' information collections. Submissions will, 
however, be made by the agencies to OMB. The changes to the 
instructions of the Call Reports and FFIEC 101 will be addressed in a 
separate Federal Register notice.
    The Board has temporarily revised the instructions to the Financial 
Statements for Holding Companies (FR Y-9 reports; OMB No. 7100-0128) to 
reflect the changes made in this interim final rule. On June 15, 1984, 
OMB delegated to the Board authority under the PRA to temporarily 
approve a revision to a collection of information without providing 
opportunity for public comment if the Board determines that a change in 
an existing collection must be instituted quickly and that public 
participation in the approval process would defeat the purpose of the 
collection or substantially interfere with the Board's ability to 
perform its statutory obligation.
    The Board's delegated authority requires that the Board, after 
temporarily approving a collection, solicit public comment on a 
proposal to extend the temporary collection for a period not to exceed 
three years. Therefore, the Board is inviting comment to extend the FR 
Y-9 reports for three years, with revision. The Board invites public 
comment on the FR Y-9 reports, which are being reviewed under authority 
delegated by the OMB under the PRA. Comments are invited on the 
following:
    a. Whether the collection of information in the interim final rule 
is necessary for the proper performance of the Board's functions, 
including whether the information has practical utility;
    b. The accuracy of the Board's estimate of the burden of the 
information collection in the interim final rule, including the 
validity of the methodology and assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    d. Ways to minimize the burden of information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    e. Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments must be submitted on or before May 13, 2020. At the end of 
the comment period, the comments and recommendations received will be 
analyzed to determine the extent to which the Board should modify the 
interim final rule.
    Adopted Revision, With Extension for Three Years, of the Following 
Information Collection:
    Report title: Financial Statements for Holding Companies.
    Agency form number: FR Y-9C; FR Y-9LP; FR Y-9SP; FR Y-9ES; FR Y-
9CS.
    OMB control number: 7100-0128.
    Effective date: June 30, 2020.
    Frequency: Quarterly, semiannually, and annually.

[[Page 20391]]

    Affected public: Businesses or other for-profit.
    Respondents: Bank holding companies (BHCs), savings and loan 
holding companies (SLHCs),\20\ securities holding companies (SHCs), and 
U.S. intermediate holding companies (IHCs) (collectively, holding 
companies (HCs)).
---------------------------------------------------------------------------

    \20\ An SLHC must file one or more of the FR Y-9 family of 
reports unless it is: (1) A grandfathered unitary SLHC with 
primarily commercial assets and thrifts that make up less than 5 
percent of its consolidated assets; or (2) a SLHC that primarily 
holds insurance-related assets and does not otherwise submit 
financial reports with the SEC pursuant to section 13 or 15(d) of 
the Securities Exchange Act of 1934.
---------------------------------------------------------------------------

    Estimated number of respondents: FR Y-9C (non-advanced approaches 
(AA) community bank leverage ratio (CBLR) HCs) with less than $5 
billion in total assets--71, FR Y-9C (non-AA CBLR HCs) with $5 billion 
or more in total assets--35, FR Y-9C (non-AA non-CBLR HCs) with less 
than $5 billion in total assets--84, FR Y-9C (non-AA non-CBLR HCs) with 
$5 billion or more in total assets--154, FR Y-9C (AA HCs)--19, FR Y-
9LP--434, FR Y-9SP--3,960, FR Y-9ES--83, FR Y-9CS--236.
    Estimated average hours per response:
Reporting
    FR Y-9C (non-AA CBLR HCs) with less than $5 billion in total 
assets--29.14, FR Y-9C (non-AA CBLR HCs) with $5 billion or more in 
total assets--35.11, FR Y-9C (non-AA non-CBLR HCs) with less than $5 
billion in total assets--40.98, FR Y-9C (non-AA non-CBLR HCs) with $5 
billion or more in total assets--46.95, FR Y-9C (AA HCs)--48.59, FR Y-
9LP--5.27, FR Y-9SP--5.40, FR Y-9ES--0.50, FR Y-9CS--0.50.
Recordkeeping
    FR Y-9C--1, FR Y-9LP--1, FR Y-9SP--0.50, FR Y-9ES--0.50, FR Y-9CS--
0.50.
    Estimated annual burden hours:
Reporting
    FR Y-9C (non-AA CBLR HCs) with less than $5 billion in total 
assets--8,276, FR Y-9C (non-AA CBLR HCs) with $5 billion or more in 
total assets--4,915, FR Y-9C (non-AA non-CBLR HCs) with less than $5 
billion in total assets--13,769, FR Y-9C (non-AA non-CBLR HCs) with $5 
billion or more in total assets--28,921, FR Y-9C (AA HCs)--3,693, FR Y-
9LP--9,149, FR Y-9SP--42,768, FR Y-9ES--42, FR Y-9CS--472.
Recordkeeping
    FR Y-9C--1,452, FR Y-9LP--1,736, FR Y-9SP--3,960, FR Y-9ES--42, FR 
Y-9CS--472.
    General description of report: The FR Y-9 reports continue to be 
the primary source of financial data on holding companies that 
examiners rely on in the intervals between on-site inspections. 
Financial data from these reporting forms are used to detect emerging 
financial problems, to review performance and conduct pre-inspection 
analysis, to monitor and evaluate capital adequacy, to evaluate HC 
mergers and acquisitions, and to analyze a holding company's overall 
financial condition to ensure the safety and soundness of its 
operations. The FR Y-9C, FR Y-9LP, and FR Y-9SP serve as standardized 
financial statements for the consolidated HC. The Board requires HCs to 
provide standardized financial statements to fulfill the Board's 
statutory obligation to supervise these organizations. The FR Y-9ES is 
a financial statement for HCs that are Employee Stock Ownership Plans. 
The Board uses the FR Y-9CS (a free-form supplement) to collect 
additional information deemed to be critical and needed in an expedited 
manner. HCs file the FR Y-9C on a quarterly basis, the FR Y-9LP 
quarterly, the FR Y-9SP semiannually, the FR Y-9ES annually, and the FR 
Y-9CS on a schedule that is determined when this supplement is used.
    Legal authorization and confidentiality: The Board has the 
authority to impose the reporting and recordkeeping requirements 
associated with the FR Y-9 family of reports on BHCs pursuant to 
section 5 of the Bank Holding Company Act of 1956 (BHC Act) (12 U.S.C. 
1844); on SLHCs pursuant to section 10(b)(2) and (3) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(b)(2) and (3)), as amended by 
sections 369(8) and 604(h)(2) of the Dodd-Frank Wall Street and 
Consumer Protection Act (Dodd-Frank Act); on U.S. IHCs pursuant to 
section 5 of the BHC Act (12 U.S.C 1844), as well as pursuant to 
sections 102(a)(1) and 165 of the Dodd-Frank Act (12 U.S.C. 511(a)(1) 
and 5365); and on SHCs pursuant to section 618 of the Dodd-Frank Act 
(12 U.S.C. 1850a(c)(1)(A)). The obligation to submit the FR Y-9 
reports, and the recordkeeping requirements set forth in the respective 
instructions to each report, are mandatory.
    With respect to the FR Y-9C report, Schedule HI's memoranda data 
item 7(g) ``FDIC deposit insurance assessments,'' Schedule HC-P's data 
item 7(a) ``Representation and warranty reserves for 1-4 family 
residential mortgage loans sold to U.S. government agencies and 
government sponsored agencies,'' and Schedule HC-P's data item 7(b) 
``Representation and warranty reserves for 1-4 family residential 
mortgage loans sold to other parties'' are considered confidential 
commercial and financial information. Such treatment is appropriate 
under exemption 4 of the Freedom of Information Act (FOIA) (5 U.S.C. 
552(b)(4)) because these data items reflect commercial and financial 
information that is both customarily and actually treated as private by 
the submitter, and which the Board has previously assured submitters 
will be treated as confidential. It also appears that disclosing these 
data items may reveal confidential examination and supervisory 
information, and in such instances, this information would also be 
withheld pursuant to exemption 8 of the FOIA (5 U.S.C. 552(b)(8)), 
which protects information related to the supervision or examination of 
a regulated financial institution.
    In addition, for both the FR Y-9C report and the FR Y-9SP report, 
Schedule HC's memorandum item 2.b., the name and email address of the 
external auditing firm's engagement partner, is considered confidential 
commercial information and protected by exemption 4 of the FOIA (5 
U.S.C. 552(b)(4)) if the identity of the engagement partner is treated 
as private information by HCs. The Board has assured respondents that 
this information will be treated as confidential since the collection 
of this data item was proposed in 2004.
    Aside from the data items described above, the remaining data items 
on the FR Y-9C report and the FR Y-9SP report are generally not 
accorded confidential treatment. The data items collected on FR Y-9LP, 
FR Y-9ES, and FR Y-9CS reports, are also generally not accorded 
confidential treatment. As provided in the Board's Rules Regarding 
Availability of Information (12 CFR part 261), however, a respondent 
may request confidential treatment for any data items the respondent 
believes should be withheld pursuant to a FOIA exemption. The Board 
will review any such request to determine if confidential treatment is 
appropriate, and will inform the respondent if the request for 
confidential treatment has been denied.
    To the extent the instructions to the FR Y-9C, FR Y-9LP, FR Y-9SP, 
and FR Y-9ES reports each respectively direct the financial institution 
to retain the workpapers and related materials used in preparation of 
each report, such material would only be obtained by the Board as part 
of the examination or supervision of the financial institution. 
Accordingly, such information is considered confidential pursuant to 
exemption 8 of the FOIA (5 U.S.C.

[[Page 20392]]

552(b)(8)). In addition, the workpapers and related materials may also 
be protected by exemption 4 of the FOIA, to the extent such financial 
information is treated as confidential by the respondent (5 U.S.C. 
552(b)(4)).
    Current actions: The Board has temporarily revised the instructions 
for the FR Y-9C to reflect the exclusion of PPP loans pledged to the 
PPPL Facility from the institution's total leverage exposure, average 
total consolidated assets, advanced approaches total risk-weighted 
assets, and standardized total risk-weighted assets, as applicable.\21\ 
Specifically, the Board has temporarily revised the FR Y-9C 
instructions to permit HCs to assign a zero percent risk weight to 
covered loans pledged to the PPPL Facility for purposes of determining 
the risk-weighted assets and leverage ratio. HCs would report these 
covered loans pledged to the PPPL Facility in Schedule HC-R, Part II, 
item 5.d., ``Loans and leases held for investment: All other 
exposures'' as appropriate, in both Column A (Totals) and Column C (0% 
risk-weight category).\22\ The average of such assets purchased would 
be reported in Schedule HC-R, part I, item 29, ``LESS: Other deductions 
from (additions to) assets for leverage ratio purposes,'' and thus 
excluded from Schedule HC-R, item 30, ``Total assets for the leverage 
ratio.''
---------------------------------------------------------------------------

    \21\ This treatment also would apply to those banking 
organizations that have elected to opt into the CBLR framework.
    \22\ Reporting in Schedule HC-R, Part II, only applies to non 
CBLR holding companies.
---------------------------------------------------------------------------

    The Board has determined that the revisions to the FR Y-9C must be 
instituted quickly and that public participation in the approval 
process would defeat the purpose of the collection of information, as 
delaying the revisions would result in the collection of inaccurate 
information and would interfere with the Board's ability to perform its 
statutory duties.
    The Board also proposes to extend the FR Y-9 reports for three 
years, with the revisions discussed above.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \23\ requires an agency to 
consider whether the rules it proposes will have a significant economic 
impact on a substantial number of small entities.\24\ The RFA applies 
only to rules for which an agency publishes a general notice of 
proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed 
previously, consistent with section 553(b)(B) of the APA, the agencies 
have determined for good cause that general notice and opportunity for 
public comment is unnecessary, and therefore the agencies are not 
issuing a notice of proposed rulemaking. Accordingly, the agencies have 
concluded that the RFA's requirements relating to initial and final 
regulatory flexibility analysis do not apply.
---------------------------------------------------------------------------

    \23\ 5 U.S.C. 601 et seq.
    \24\ Under regulations issued by the Small Business 
Administration, a small entity includes a depository institution, 
bank holding company, or savings and loan holding company with total 
assets of $600 million or less and trust companies with total assets 
of $41.5 million or less. See 13 CFR 121.201.
---------------------------------------------------------------------------

    Nevertheless, the agencies seek comment on whether, and the extent 
to which, the interim final rule would affect a significant number of 
small entities.

E. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\25\ 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 the principle 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, with certain exceptions, including for good cause.\26\ 
For the reasons described above, the agencies find good cause exists 
under section 302 of RCDRIA to publish the interim final rule with an 
immediate effective date.
---------------------------------------------------------------------------

    \25\ 12 U.S.C. 4802(a).
    \26\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

    As such, the interim final rule will be effective immediately. 
Nevertheless, the agencies seek comment on RCDRIA.

F. Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \27\ requires the Federal 
banking agencies to use plain language in all proposed and final rules 
published after January 1, 2000. The agencies have sought to present 
the interim final rule in a simple and straightforward manner. The 
agencies invite comments on whether there are additional steps it could 
take to make the rule easier to understand. For example:
---------------------------------------------------------------------------

    \27\ 12 U.S.C. 4809.
---------------------------------------------------------------------------

     Have we organized the material to suit your needs? If not, 
how could this material be better organized?
     Are the requirements in the regulation clearly stated? If 
not, how could the regulation be more clearly stated?
     Does the regulation contain language or jargon that is not 
clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes to the format would make the regulation 
easier to understand? What else could we do to make the regulation 
easier to understand?

G. Unfunded Mandates Act

    As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 
U.S.C. 1531 et seq., requires the preparation of a budgetary impact 
statement before promulgating a rule that includes a Federal mandate 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. However, the UMRA does not apply to 
final rules for which a general notice of proposed rulemaking was not 
published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found 
good cause to dispense with notice and comment for the interim final 
rule, the OCC has not prepared an economic analysis of the rule under 
the UMRA.

List of Subjects

12 CFR Part 3

    Administrative practice and procedure, Capital, Federal savings 
associations, National banks, Risk.

12 CFR Part 217

    Administrative practice and procedure, Banks, Banking, Capital, 
Federal Reserve System, Holding companies, Reporting and recordkeeping 
requirements, Risk, Securities.

12 CFR Part 324

    Administrative practice and procedure, Banks, banking, Reporting 
and recordkeeping requirements, Savings associations, State non-member 
banks.

[[Page 20393]]

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons stated in the preamble, the Office of the 
Comptroller of the Currency amends part 3 of chapter I of title 12, 
Code of Federal Regulations as follows:

PART 3--CAPITAL ADEQUACY STANDARDS

0
1. The authority citation for part 3 is revised to read as follows:

    Authority:  12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and 
Pub. L. 116-136, 134 Stat. 281.

0
2. Amend Sec.  3.2 in the definition of ``Corporate exposure'' by 
revising paragraphs (12) and (13) and adding paragraph (14) to read as 
follows:


Sec.  3.2  Definitions.

* * * * *
    Corporate exposure * * *
    (12) A policy loan;
    (13) A separate account; or
    (14) A Paycheck Protection Program covered loan as defined in 
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
* * * * *

0
3. Amend Sec.  3.32 by adding paragraph (a)(1)(iii) to read as follows:


Sec.  3.32   General risk weights.

    (a) * * *
    (1) * * *
    (iii) A national bank or Federal savings association must assign a 
zero percent risk weight to a Paycheck Protection Program covered loan 
as defined in section 7(a)(36) of the Small Business Act (15 U.S.C. 
636(a)(36)).
* * * * *

0
4. Amend Sec.  3.131 by adding paragraph (e)(3)(viii) to read as 
follows:


Sec.  3.131   Mechanics for calculating total wholesale and retail 
risk-weighted assets.

* * * * *
    (e) * * *
    (3) * * *
    (viii) The risk-weighted asset amount for a Paycheck Protection 
Program covered loan as defined in section 7(a)(36) of the Small 
Business Act (15 U.S.C. 636(a)(36)) equals zero.
* * * * *

0
5. Add Sec.  3.305 to read as follows:


Sec.  3.305   Exposures related to the Paycheck Protection Program 
Lending Facility.

    Notwithstanding any other section of this part, a national bank or 
Federal savings association may exclude exposures pledged as collateral 
for a non-recourse loan that is provided as part of the Paycheck 
Protection Program Lending Facility, announced by the Federal Reserve 
Board on April 7, 2020, from total leverage exposure, average total 
consolidated assets, advanced approaches total risk-weighted assets, 
and standardized total risk-weighted assets, as applicable. For the 
purpose of this section, a national bank's or Federal savings 
association's liability under the facility must be reduced by the 
principal amount of the loans pledged as collateral for funds advanced 
under the facility.

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

12 CFR Chapter II

Authority and Issuance

    For the reasons stated in the preamble, the Board of Governors of 
the Federal Reserve System amends 12 CFR chapter II as follows:

PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND 
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)

0
6. The authority citation for part 217 is revised to read as follows:

    Authority:  12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 
1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904, 
3906-3909, 4808, 5365, 5368, 5371 and 5371 note; Pub. L. 116-136, 
134 Stat. 281.

0
7. Amend Sec.  217.2 in the definition of ``Corporate exposure'' by 
revising paragraphs (12) and (13) and adding paragraph (14) to read as 
follows:


Sec.  217.2  Definitions.

* * * * *
    Corporate exposure * * *
    (12) A policy loan;
    (13) A separate account; or
    (14) A Paycheck Protection Program covered loan as defined in 
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
* * * * *

0
8. Amend Sec.  217.32 by adding paragraph (a)(1)(iii) to read as 
follows:


Sec.  217.32   General risk weights.

    (a) * * *
    (1) * * *
    (iii) A Board-regulated institution must assign a zero percent risk 
weight to a Paycheck Protection Program covered loan as defined in 
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
* * * * *

0
9. Amend Sec.  217.131 by adding paragraph (e)(3)(viii) to read as 
follows:


Sec.  217.131   Mechanics for calculating total wholesale and retail 
risk-weighted assets.

* * * * *
    (e) * * *
    (3) * * *
    (viii) The risk-weighted asset amount for a Paycheck Protection 
Program covered loan as defined in section 7(a)(36) of the Small 
Business Act (15 U.S.C. 636(a)(36)) equals zero.
* * * * *

0
10. Add Sec.  217.305 to read as follows:


Sec.  217.305   Exposures related to the Paycheck Protection Program 
Lending Facility.

    Notwithstanding any other section of this part, a Board-regulated 
institution may exclude exposures pledged as collateral for a non-
recourse loan that is provided as part of the Paycheck Protection 
Program Lending Facility, announced by the Board on April 7, 2020, from 
total leverage exposure, average total consolidated assets, advanced 
approaches total risk-weighted assets, and standardized total risk-
weighted assets, as applicable. For the purpose of this section, a 
Board-regulated institution's liability under the facility must be 
reduced by the principal amount of the loans pledged as collateral for 
funds advanced under the facility.

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Chapter III

Authority and Issuance

    For the reasons set forth in the joint preamble, chapter III of 
title 12 of the Code of Federal Regulations is amended as follows:

PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS

0
11. The authority citation for part 324 is revised to read as follows:

    Authority:  12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 
105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 
2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, 
as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 
note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note); 
Pub. L. 115-174; Pub. L. 116-136, 134 Stat. 281.

0
12. Amend Sec.  324.2 in the definition of ``Corporate exposure'' by 
revising paragraphs (12) and (13) and adding paragraph (14) to read as 
follows:

[[Page 20394]]

Sec.  324.2  Definitions.

* * * * *
    Corporate exposure * * *
    (12) A policy loan;
    (13) A separate account; or
    (14) A Paycheck Protection Program covered loan as defined in 
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
* * * * *

0
13. Section 324.32 is amended by adding paragraph (a)(1)(iii) to read 
as follows:


Sec.  324.32   General risk weights.

    (a) * * *
    (1) * * *
    (iii) An FDIC-supervised institution must assign a zero percent 
risk weight to a Paycheck Protection Program covered loan as defined in 
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
* * * * *

0
14. Amend Sec.  324.131 by revising paragraph (e)(3)(viii) to read as 
follows:


Sec.  324.131   Mechanics for calculating total wholesale and retail 
risk-weighted assets.

* * * * *
    (e) * * *
    (3) * * *
    (viii) The risk-weighted asset amount for a Paycheck Protection 
Program covered loan as defined in section 7(a)(36) of the Small 
Business Act (15 U.S.C. 636(a)(36)) equals zero.
* * * * *

0
15. Add Sec.  324.304 to read as follows:


Sec.  324.304   Exposures related to the Paycheck Protection Program 
Lending Facility.

    Notwithstanding any other section of this part, an FDIC-supervised 
institution may exclude exposures pledged as collateral for a non-
recourse loan that is provided as part of the Paycheck Protection 
Program Lending Facility, announced by the Federal Reserve on April 7, 
2020, from total leverage exposure, average total consolidated assets, 
advanced approaches total risk-weighted assets, and standardized total 
risk-weighted assets, as applicable. For the purpose of this section, 
an FDIC-supervised institution's liability under the facility must be 
reduced by the principal amount of the loans pledged as collateral for 
funds advanced under the facility.

Brian P. Brooks,
First Deputy Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve 
System.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on or about April 7, 2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020-07712 Filed 4-10-20; 8:45 am]
 BILLING CODE 4810-33-P 6210-01-P 6714-01-P