Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans, 20387-20394 [2020-07712]
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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
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SUMMARY:
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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
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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.
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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: https://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://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
https://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.
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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
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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.
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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
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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
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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.
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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).
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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.
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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).
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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
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U.S.C. 808.
U.S.C. 3501–3521.
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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.
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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.
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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.
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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)
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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.
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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.
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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.
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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.
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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.
*
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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
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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)).
*
*
*
*
*
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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:
■
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§ 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.
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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.
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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: https://
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: https://www.federalreserve.gov. Follow the
instructions for submitting comments at https://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 https://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)).
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\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.
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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.''
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\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.
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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.
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\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.
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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.
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\25\ 12 U.S.C. 4802(a).
\26\ 12 U.S.C. 4802.
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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:
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\27\ 12 U.S.C. 4809.
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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
