Liquidity Coverage Ratio Rule: Treatment of Certain Emergency Facilities, 26835-26842 [2020-09716]
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26835
Rules and Regulations
Federal Register
Vol. 85, No. 88
Wednesday, May 6, 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 50
[Docket No. OCC–2020–0019]
RIN 1557–AE92
FEDERAL RESERVE SYSTEM
12 CFR Part 249
[Regulations WW; Docket No. R–1717]
RIN 7100–AF90
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 329
RIN 3064–AF51
Liquidity Coverage Ratio Rule:
Treatment of Certain Emergency
Facilities
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 the
money market sector, small business
lenders, and the broader credit markets
in order to stabilize the financial
system, the Board of Governors of the
Federal Reserve System (Board)
authorized the establishment of the
Money Market Mutual Fund Liquidity
Facility (MMLF) and the Paycheck
Protection Program Liquidity Facility
(PPPLF), pursuant to section 13(3) of the
Federal Reserve Act. To facilitate use of
these Federal Reserve facilities, and to
ensure that the effects of their use are
consistent and predictable under the
Liquidity Coverage Ratio (LCR) rule, the
Office of the Comptroller of the
Currency, the Board, and the Federal
SUMMARY:
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Deposit Insurance Corporation (together,
the agencies) are adopting this interim
final rule to require banking
organizations to neutralize the effect
under the LCR rule of participating in
the MMLF and the PPPLF.
DATES: The interim final rule is effective
May 6, 2020. Comments on the interim
final rule must be received no later than
June 5, 2020.
ADDRESSES:
OCC: Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal or email, if possible.
Please use the title ‘‘Liquidity Coverage
Ratio Rule: Treatment of Emergency
FRB Secured Lending Facilities’’ 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–2020–0019’’ 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
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Enter ‘‘Docket ID OCC–2020–0019’’ in
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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.
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• 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–2020–0019’’ 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
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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–2020–0019’’ 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
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this docket’’ and then using the filtering
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on the ‘‘Help’’ tab on the
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information on using Regulations.gov.
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–2020–0019’’ in
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Click on the ‘‘Comments’’ tab.
Comments can be viewed and filtered
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Federal Register / Vol. 85, No. 88 / Wednesday, May 6, 2020 / Rules and Regulations
‘‘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–1717; RIN
7100–AF90, 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–AF51, 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: Comments@FDIC.gov.
Include ‘‘RIN 3064–AF51’’ on the
subject line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/RIN
3064–AF51, Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
• Hand Delivered/Courier: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
NW, building (located on F Street) on
business days between 7:00 a.m. and
5:00 p.m.
FOR FURTHER INFORMATION CONTACT:
OCC: James Weinberger, Technical
Expert, Treasury & Market Risk Policy,
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16:33 May 05, 2020
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(202) 649–6360; or Henry Barkhausen,
Counsel, or Daniel Perez, Senior
Attorney, 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, Kathryn Ballintine,
Manager, (202) 452–2555, Kevin Littler,
Lead Financial Institution Policy
Analyst, (202) 475–6677, Cecily Boggs,
Senior Financial Institution Policy
Analyst II, (202) 530–6209, Michael
Ofori-Kuragu, Senior Financial
Institution Policy Analyst II, (202) 475–
6623, or Christopher Powell, Senior
Financial Institution Policy Analyst II,
(202) 452–3442, Division of Supervision
and Regulation; Benjamin McDonough,
Assistant General Counsel, (202) 452–
2036, Steve Bowne, Senior Counsel,
(202) 452–3900, Jason Shafer, Senior
Counsel, (202) 728–5811, Laura Bain,
Counsel, (202) 736–5546, or Jeffery
Zhang, Attorney, (202) 736–1968, 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; Irina Leonova,
Acting Chief, Capital Markets Strategies
Section, ileonova@FDIC.gov; Eric
Schatten, Senior Policy Analyst,
eschatten@fdic.gov; Andrew
Carayiannis, Senior Policy Analyst,
acarayiannis@fdic.gov; capitalmarkets@
fdic.gov; Capital Markets Branch,
Division of Risk Management
Supervision, (202) 898–6888; or
Suzanne Dawley, Counsel, sudawley@
fdic.gov; Gregory Feder, Counsel,
gfeder@fdic.gov; Andrew B. Williams II,
Counsel, andwilliams@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
E. Riegle Community Development and
Regulatory Improvement Act of 1994
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F. Use of Plain Language
G. OCC Unfunded Mandates Reform Act of
1995 Determination
I. Background
The containment measures adopted in
response to the public health concerns
have slowed economic activity in many
countries, including the United States.
Financial conditions have tightened
markedly, sudden disruptions in
financial markets have put increasing
liquidity pressure on money market
mutual funds, and the cost of credit has
risen for most borrowers. Given these
liquidity pressures, money market
mutual funds have been faced with
redemption requests from clients with
immediate cash needs and may need to
sell a significant number of assets to
meet such requests, which could further
increase market pressures. Small
businesses also are facing severe
liquidity constraints, as millions of
Americans have been ordered to stay
home, severely reducing their ability to
engage in normal commerce, and
revenue streams for many small
businesses have collapsed. This 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 the
containment measures adopted in
response to the public health concerns
and, ultimately, to help restore
economic activity.
In order to prevent the disruption in
the money markets from destabilizing
the financial system, the Board of
Governors of the Federal Reserve
System (Board), with the approval of the
Secretary of the Treasury, authorized
the Federal Reserve Bank of Boston to
establish the Money Market Mutual
Fund Liquidity Facility (MMLF),
pursuant to section 13(3) of the Federal
Reserve Act.1 Under the MMLF, the
Federal Reserve Bank of Boston extends
non-recourse loans to eligible borrowers
to purchase assets from money market
mutual funds (MMFs). Assets purchased
from MMFs are posted as collateral to
the Federal Reserve Bank of Boston
(MMLF collateral). Eligible borrowers
under the MMLF include certain
banking organizations subject to the
Liquidity Coverage Ratio (LCR) rule
(covered companies) issued by the
Office of the Comptroller of the
Currency (OCC), the Board, and the
Federal Deposit Insurance Corporation
(FDIC) (together, the agencies).2 MMLF
collateral generally comprises securities
1 12
U.S.C. 343(3).
applicability of the LCR rule is described in
§ __.1 of the rule. See 12 CFR 50.1 (OCC); 12 CFR
249.1 (Board); and 12 CFR 329.1 (FDIC).
2 The
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and other assets with the same maturity
date as the MMLF non-recourse loan.
In order to provide liquidity to small
business lenders and the broader credit
markets, and to help stabilize the
financial system, the Board, with the
approval of the Secretary of the
Treasury, authorized each of the Federal
Reserve Banks to extend credit under
the Paycheck Protection Program
Liquidity Facility (PPPLF), pursuant to
section 13(3) of the Federal Reserve
Act.3 Under the PPPLF, each of the
Federal Reserve Banks extends nonrecourse loans to institutions that are
eligible to make Paycheck Protection
Program (PPP) covered loans,4 including
depository institutions subject to the
agencies’ LCR rule. Under the PPPLF,
only PPP covered loans that are
guaranteed by the SBA under the PPP
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
(PPPLF collateral). The maturity date of
the extension of credit under the PPPLF
equals the maturity date of the PPP
loans pledged to secure the extension of
credit.5
To facilitate the use of the MMLF and
PPPLF, the agencies are adopting this
interim final rule, which requires
covered companies to neutralize the
LCR effects of the advances made by
each facility and the exposures securing
such facility advances.
3 12
U.S.C. 343(3).
created the PPP as part of the
Coronavirus Aid, Relief, and Economic Security Act
(CARES Act) and in recognition of the exigent
circumstances faced by small businesses. PPP
covered loans are fully guaranteed as to principal
and accrued interest by the Small Business
Administration (SBA) and also afford borrower
forgiveness up to the principal amount of the PPP
covered loan, if the proceeds of the PPP covered
loan are used for certain expenses. Under the PPP,
eligible borrowers generally include businesses
with fewer than 500 employees or that are
otherwise considered to be small by the SBA. 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. For more
information on the Paycheck Protection Program,
see https://www.sba.gov/funding-programs/loans/
coronavirus-relief-options/paycheck-protectionprogram-ppp.
5 The maturity date of the PPPLF’s loan will be
accelerated if the underlying PPP loan goes into
default and the eligible borrower sells the PPP Loan
to the Small Business Administration (SBA) to
realize the SBA guarantee. The maturity date of the
PPPLF’s loan also will be accelerated to the extent
of any PPP loan forgiveness reimbursement
received by the eligible borrower from the SBA.
4 Congress
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II. The Interim Final Rule
A. LCR Treatment of MMLF and PPPLF
Funding
The agencies’ LCR rule requires
covered companies to calculate and
maintain an amount of high-quality
liquid assets (HQLA) sufficient to cover
their total net cash outflows over a 30day stress period. A covered company’s
LCR is the ratio of its HQLA amount
(LCR numerator) divided by its total net
cash outflows (LCR denominator). The
total net cash outflow amount is
calculated as the difference between
outflow and inflow amounts, which are
determined by applying a standardized
set of outflow and inflow rates to the
cash flows of various assets and
liabilities, together with off-balance
sheet items, as specified in §§ __.32 and
__.33 of the LCR rule.6
Absent the interim final rule, under
the LCR rule, covered companies would
be required to recognize outflows for
MMLF and PPPLF loans with a
remaining maturity of 30 days or less
and inflows for certain assets securing
the MMLF and PPPLF loans. As a result,
a covered company’s participation in
the MMLF or PPPLF could affect its
total net cash outflows, which could
potentially result in an inconsistent,
unpredictable, and more volatile
calculation of LCR requirements across
covered companies.
Under the LCR rule, secured loans
from a Federal Reserve facility with a
remaining maturity of 30 calendar days
or less are categorized as secured
funding transactions with a sovereign
entity and assigned an outflow rate that
varies based on the collateral securing
the loan.7 In addition, the LCR rule
assigns inflow rates to collateral
generally based on the asset and
counterparty type.8 As a result of the
applicable inflow and outflow rates in
the LCR rule, MMLF and PPPLF
transactions could receive a non-neutral
liquidity risk treatment. Moreover, after
these loans are extended and upon their
maturity, the associated inflows and
outflows could unnecessarily contribute
to volatility in LCRs.
6 Section __.30 of the LCR rule also requires a
covered company, as applicable, to include in its
total net cash outflow amount a maturity mismatch
add-on, which is calculated as the difference (if
greater than zero) between the covered company’s
largest net cumulative maturity outflow amount for
any of the 30 calendar days following the
calculation date and the net day 30 cumulative
maturity outflow amount. See 12 CFR 50.30 (OCC);
12 CFR 249.30 (Board); and 12 CFR 329.30 (FDIC).
7 See 12 CFR 50.32(j)(1)(i)–(iii) (OCC); 12 CFR
249.32(j)(1)(i)–(iii) (Board); and 12 CFR
329.32(j)(1)(i)–(iii) (FDIC).
8 See 12 CFR 50.33 (OCC); 12 CFR 249.33 (Board);
and 12 CFR 329.33 (FDIC).
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26837
Under the terms of the MMLF and
PPPLF, covered companies use the
value of cash received from posted or
pledged assets to repay the MMLF or
PPPLF loan, respectively, and in no case
is the maturity of the collateral shorter
than the maturity of the advance. In
addition, because the advance from the
Federal Reserve Bank is non-recourse,
the banking organization is not exposed
to credit or market risk from the
collateral securing the MMLF or PPPLF
loan that could otherwise affect the
banking organization’s ability to settle
the loan. For these reasons, the agencies
believe that it is appropriate to provide
predictable and consistent treatment for
participation in the MMLF and PPPLF
by neutralizing the effects of
participation in the MMLF and the
PPPLF on covered companies’ LCRs.
Absent this interim final rule, the
agencies believe that the treatment of
covered companies’ transactions with
the MMLF and PPPLF under the LCR
rule would not be consistent across
transactions or facilities and would not
accurately reflect the liquidity risk
associated with funding exposures
through these facilities.
Specifically, the interim final rule
adds a new definition to § __.3 and a
new § __.34 to the LCR rule. In § __.3,
the new definition ‘‘Covered Federal
Reserve Facility Funding’’ means a nonrecourse loan that is extended as part of
the Money Market Mutual Fund
Liquidity Facility or Paycheck
Protection Program Liquidity Facility
authorized by the Board of Governors of
the Federal Reserve System pursuant to
section 13(3) of the Federal Reserve Act.
The new § __.34 requires Covered
Federal Reserve Facility Funding and
the assets securing such funding to be
excluded from the calculation of a
covered company’s total net cash
outflow amount as calculated under
§ __.30 of the LCR rule, notwithstanding
any other section of the LCR rule.
Except as described below, this new
section excludes advances made by a
Federal Reserve Bank under the MMLF
or the PPPLF from being assigned an
outflow rate under § __.32 of the LCR
rule, and any collateral securing such an
advance from being assigned an inflow
rate under § __.33 of the LCR rule. While
this treatment would neutralize the
effect of the use of the facilities on a
covered company’s LCR for the duration
of the facility, banking organizations
should be mindful of the need, where
applicable, to replace maturing Covered
Federal Reserve Facility Funding with
appropriate alternative sources in
instances where exposures mature later
than such funding.
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This new § __.34 does not apply to the
extent the covered company secures
Covered Federal Reserve Facility
Funding with securities, debt
obligations, or other instruments issued
by the covered company or its
consolidated entity. When a covered
company owns an instrument that it or
its consolidated entity issued, the
covered company will not record a
payment upon the instrument’s
maturity. The covered company would
not receive a payment from outside the
consolidated covered company upon
maturity or settlement of the collateral
that would be available to repay the
borrowing (Covered Federal Reserve
Facility Funding), and, as a result, this
arrangement presents liquidity risk due
to the asymmetric cash flows of the
covered company because the covered
company would not have an inflow to
offset its cash outflows.9 It would,
therefore, be inappropriate to neutralize
the impact of such a funding transaction
under the LCR rule. The agencies seek
comment on this provision and all
aspects of the interim final rule.
Question 1: The agencies invite
comment on the advantages and
disadvantages of neutralizing the effects
of participating in the MMLF and PPPLF
in the LCR rule.
Question 2: How well does the
approach in the interim final rule
support the objectives of the facilities?
Question 3: What are the advantages
and disadvantages of extending this
treatment to any other facilities created
pursuant to section 13(3) of the Federal
Reserve Act in which covered company
exposures are pledged as collateral for
non-recourse, maturity-matched
advances?
Question 4: What are the advantages
and disadvantages of excluding from
this treatment Covered Federal Reserve
Facility Funding that is secured by
instruments issued by a covered
company or any of its consolidated
entities?
III. 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
9 The covered company would not record a
payment to itself in the amount owed for the
instrument issued by the covered company or its
consolidated entity; this would be eliminated in the
process of consolidating the covered company’s
financial statements.
10 5 U.S.C. 553.
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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 containment
measures adopted in response to the
public health concerns have slowed
economic activity in many countries,
including the United States. In
particular, these containment measures
have acutely affected small businesses,
MMFs, and financial markets generally.
Significantly tighter financial
conditions and the increased cost of
credit for most borrowers have severely
affected small businesses. 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 the containment
measures adopted in response to the
public health concerns and, ultimately,
to help restore economic activity.
Additionally, sudden disruptions in
financial markets have put increasing
liquidity pressure on MMFs. Given
these pressures, MMFs have been faced
with increased redemption requests
from clients with immediate cash needs.
The MMFs may need to sell a significant
number of assets to meet these
redemption requests, which could
further increase market pressures.
In order to provide liquidity to
banking organizations that lend to small
business and the broader credit markets,
and to prevent the disruption in the
money markets from destabilizing 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 PPPLF and the Federal Reserve Bank
of Boston to establish the MMLF. This
interim final rule will provide certainty
to covered companies regarding the
liquidity treatment of inflows and
outflows related to these Federal
Reserve lending programs. In the
absence of this interim final rule,
11 5
PO 00000
U.S.C. 553(b)(B).
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Fmt 4700
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banking organizations may be restricted
in their ability to use the MMLF and
PPPLF due to potential effects on their
LCRs. The urgent funding pressures
facing small businesses and MMFs
justify the adoption of this interim final
rule as quickly as possible. For these
reasons, the agencies find that there is
good cause consistent with the public
interest to issue the interim final 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 For the
good cause described above, 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
request 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
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
date generally prescribed under the
CRA. The delayed effective date
12 5
U.S.C. 553(b)(B).
U.S.C. 553(d).
14 5 U.S.C. 553(d)(1).
15 5 U.S.C. 801 et seq.
16 5 U.S.C. 801(a)(3).
17 5 U.S.C. 804(2).
13 5
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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 This interim final rule does
not introduce any new information
collections or revise any existing
information collections pursuant to the
PRA for the OCC or the FDIC. Therefore,
no submissions will be made by the
OCC or the FDIC to OMB for review.
The interim final rule does, however,
affect the Board’s current information
collection for the Complex Institution
Liquidity Monitoring Report (FR 2052a;
OMB No. 7100–0361). The Board has
reviewed the interim final rule pursuant
to authority delegated by OMB.
The Board has temporarily revised the
reporting form and instructions for the
FR 2052a to reflect the changes made in
this interim final rule. On June 15, 1984,
OMB delegated to the Board authority
under the PRA to approve a temporary
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 on a proposal to extend the FR
2052a for three years, with such
revisions. The Board invites public
comment on the FR 2052a, which is
18 5
19 4
U.S.C. 808.
U.S.C. 3501–3521.
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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 proposed
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 July 6, 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
information collection.
Approval Under OMB Delegated
Authority of the Temporary Revision of,
and Proposal To Extend for Three Years,
With Revision, the Following
Information Collection
Report title: Complex Institution
Liquidity Monitoring Report.
Agency form number: FR 2052a.
OMB control number: 7100–0361.
Effective date: May 6, 2020.
Frequency: Monthly, and each
business day (daily).
Affected public: Businesses or other
for-profit.
Respondents: U.S. bank holding
companies (BHCs), U.S. savings and
loan holding companies (SLHCs), and
foreign banking organizations (FBOs)
with U.S. assets.
Estimated number of respondents:
Monthly, 26; daily, 16.
Estimated average hours per response:
Monthly, 120; daily, 220.
Estimated annual burden hours:
917,440.
General description of report: The
Board uses the FR 2052a to monitor the
overall liquidity profile of supervised
institutions. These data provide detailed
information on the liquidity risks within
different business lines (e.g., financing
of securities positions, prime brokerage
activities). In particular, these data serve
as part of the Board’s supervisory
surveillance program in its liquidity risk
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26839
management area and provide timely
information on firm-specific liquidity
risks during periods of stress. Analyses
of systemic and idiosyncratic liquidity
risk issues are then used to inform the
Board’s supervisory processes,
including the preparation of analytical
reports that detail funding
vulnerabilities.
Legal authorization and
confidentiality: The FR 2052a is
authorized pursuant to section 5 of the
Bank Holding Company Act (12 U.S.C.
1844), section 8 of the International
Banking Act (12 U.S.C. 3106), section
165 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
(Dodd-Frank Act) (12 U.S.C. 5365), and
section 10 of the Home Owners’ Loan
Act (12 U.S.C. 1467(a)) and is
mandatory. Section 5(c) of the Bank
Holding Company Act authorizes the
Board to require BHCs to submit reports
to the Board regarding their financial
condition. Section 8(a) of the
International Banking Act subjects FBOs
to the provisions of the Bank Holding
Company Act. Section 165 of the DoddFrank Act requires the Board to
establish prudential standards for
certain BHCs and FBOs, which include
liquidity requirements. Section 10(g) of
the Home Owners’ Loan Act authorizes
the Board to collect reports from SLHCs.
Financial institution information
required by the FR 2052a is collected as
part of the Board’s supervisory process.
Therefore, such information is entitled
to confidential treatment under
Exemption 8 of the Freedom of
Information Act (FOIA) (5 U.S.C.
552(b)(8)). In addition, the institution
information provided by each
respondent would not be otherwise
available to the public and its disclosure
could cause substantial competitive
harm. Accordingly, it is entitled to
confidential treatment under the
authority of exemption 4 of the FOIA (5
U.S.C. 552(b)(4)), which protects from
disclosure trade secrets and commercial
or financial information.
Current actions: The Board has
temporarily revised the reporting form
and instructions of the FR 2052a to
incorporate the interim final rule.
Specifically, the Board has added: (1)
The sub-product value of ‘‘Covered
Federal Reserve Facility Funding’’ to the
product O.S.6: Exceptional Central Bank
Operations and a corresponding
instruction to exclude balances reported
under this sub-product from the preexisting sub-product of ‘‘Federal
Reserve Bank’’; (2) a sentence to the
‘‘General Guidance’’ paragraphs under
the I.U: Inflows-Unsecured and I.S:
Inflows-Secured headings: ‘‘Exclude
assets that secure Covered Federal
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Reserve Facility Funding’’; (3) a
sentence to the definition of product
I.O.6: Interest and Dividends
Receivable: ‘‘Exclude interest and
dividends receivable on assets securing
Covered Federal Reserve Facility
Funding’’; (4) a sentence to the
definition of product O.O.19: Interest
and Dividends Payable: ‘‘Exclude
interest payable on Covered Federal
Reserve Facility Funding’’; and (5) a
collateral class of ‘‘L–12’’ representing
loans guaranteed by U.S. Government
agencies.
The Board has determined that these
temporary revisions to the FR 2052a
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 interfere with the
Board’s ability to perform its statutory
duties and would cause public harm if
firms were unable to take full advantage
of the emergency relief provided by the
MMLF in response to significant
financial industry disruptions from the
containment measures adopted in
response to the public health concerns.
In addition, the Board proposes to
extend the FR 2052a for three years with
the revisions discussed above.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 20 requires an agency to consider
whether the rules it proposes will have
a significant economic impact on a
substantial number of small entities.21
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.
Nevertheless, the agencies seek
comment on whether, and the extent to
which, the interim final rule would
have a significant economic impact on
a substantial number of small entities.
20 5
U.S.C. 601 et seq.
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.
21 Under
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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),22 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 the 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.23 For the
reasons described above, the agencies
find good cause exists under section 302
of the 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 the RCDRIA.
F. Use of Plain Language
Section 722 of the Gramm-LeachBliley Act 24 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:
• 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,
22 12
U.S.C. 4802(a).
23 12 U.S.C. 4802.
24 12 U.S.C. 4809.
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Fmt 4700
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. OCC Unfunded Mandates Reform Act
of 1995 Determination
As a general matter, the Unfunded
Mandates Reform 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.25 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 50
Administrative practice and
procedure, Banks, Banking, Reporting
and recordkeeping requirements,
Savings associations.
12 CFR Part 249
Administrative practice and
procedure, Banks, Banking, Holding
companies, Reporting and
recordkeeping requirements.
12 CFR Part 329
Administrative practice and
procedure, Banks, Banking, Reporting
and recordkeeping requirements.
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 50 of
chapter I of title 12, Code of Federal
Regulations as follows:
PART 50—LIQUIDITY RISK
MEASUREMENT STANDARDS
1. The authority citation for part 50
continues to read as follows:
■
Authority: 12 U.S.C. 1 et seq., 93a, 481,
1818, 1828, and 1462 et seq.
25 See
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2 U.S.C. 1532(a).
06MYR1
Federal Register / Vol. 85, No. 88 / Wednesday, May 6, 2020 / Rules and Regulations
■ 2. Amend § 50.3 by adding the
definition of Covered Federal Reserve
Facility Funding, in alphabetical order,
to read as follows:
§ 50.3
Definitions.
*
*
*
*
*
Covered Federal Reserve Facility
Funding means a non-recourse loan that
is extended as part of the Money Market
Mutual Fund Liquidity Facility or
Paycheck Protection Program Liquidity
Facility authorized by the Board of
Governors of the Federal Reserve
System pursuant to section 13(3) of the
Federal Reserve Act.1
*
*
*
*
*
■
3. Add § 50.34 to read as follows:
§ 50.34 Cash flows related to Covered
Federal Reserve Facility Funding.
(a) Treatment of Covered Federal
Reserve Facility Funding.
Notwithstanding any other section of
this part and except as provided in
paragraph (b) of this section, outflow
amounts and inflow amounts related to
Covered Federal Reserve Facility
Funding and the assets securing
Covered Federal Reserve Facility
Funding are excluded from the
calculation of a national bank’s or
Federal savings association’s total net
cash outflow amount calculated under
§ 50.30.
(b) Exception. To the extent the
Covered Federal Reserve Facility
Funding is secured by securities, debt
obligations, or other instruments issued
by the national bank or Federal savings
association or one of its consolidated
subsidiaries, the Covered Federal
Reserve Facility Funding is not subject
to paragraph (a) of this section and this
outflow amount must be included in the
national bank’s or Federal savings
association’s total net cash outflow
amount calculated under § 50.30.
PART 249—LIQUIDITY RISK
MEASUREMENT STANDARDS
(REGULATION WW)
4. The authority citation for part 249
continues to read as follows:
■
Authority: 12 U.S.C. 248(a), 321–338a,
481–486, 1467a(g)(1), 1818, 1828, 1831p–1,
1831o–1, 1844(b), 5365, 5366, 5368; 12
U.S.C. 3101 et seq.
5. Amend § 249.3 by redesignating
footnotes 1 and 2 as footnotes 2 and 3
and adding the definition of Covered
Federal Reserve Facility Funding, in
alphabetical order, to read as follows:
■
§ 249.3
Definitions.
*
*
*
*
*
Covered Federal Reserve Facility
Funding means a non-recourse loan that
is extended as part of the Money Market
Mutual Fund Liquidity Facility or
Paycheck Protection Program Liquidity
Facility authorized by the Board
pursuant to section 13(3) of the Federal
Reserve Act.1
*
*
*
*
*
■ 6. Add § 249.34 to read as follows:
§ 249.34 Cash flows related to Covered
Federal Reserve Facility Funding.
12 CFR Chapter II
(a) Treatment of Covered Federal
Reserve Facility Funding.
Notwithstanding any other section of
this part and except as provided in
paragraph (b) of this section, outflow
amounts and inflow amounts related to
Covered Federal Reserve Facility
Funding and the assets securing
Covered Federal Reserve Facility
Funding are excluded from the
calculation of a Board-regulated
institution’s total net cash outflow
amount calculated under § 249.30.
(b) Exception. To the extent the
Covered Federal Reserve Facility
Funding is secured by securities, debt
obligations, or other instruments issued
by the Board-regulated institution or
one of its consolidated subsidiaries, the
Covered Federal Reserve Facility
Funding is not subject to paragraph (a)
of this section and this outflow amount
must be included in the Board-regulated
institution’s total net cash outflow
amount calculated under § 249.30.
Authority and Issuance
Federal Deposit Insurance Corporation
For the reasons stated in the
the Board
of Governors of the Federal Reserve
System amends 12 CFR chapter II as
follows:
12 CFR Chapter III
Board of Governors of the Federal
Reserve System
SUPPLEMENTARY INFORMATION,
1 The Money Market Mutual Fund Liquidity
Facility was authorized on March 18, 2020, and the
Paycheck Protection Program Liquidity Facility was
authorized on April 6, 2020.
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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:
1 The Money Market Mutual Fund Liquidity
Facility was authorized on March 18, 2020, and the
Paycheck Protection Program Liquidity Facility was
authorized on April 6, 2020.
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26841
PART 329—LIQUIDITY RISK
MEASUREMENT STANDARDS
7. The authority citation for part 329
continues to read as follows:
■
Authority: 12 U.S.C. 1815, 1816, 1818,
1819, 1828, 1831p–1, 5412.
8. Amend § 329.3 by redesignating
footnotes 1 and 2 as footnotes 2 and 3
and adding the definition of Covered
Federal Reserve Facility Funding, in
alphabetical order, to read as follows:
■
§ 329.3
Definitions.
*
*
*
*
*
Covered Federal Reserve Facility
Funding means a non-recourse loan that
is extended as part of the Money Market
Mutual Fund Liquidity Facility or
Paycheck Protection Program Liquidity
Facility authorized by the Board of
Governors of the Federal Reserve
System pursuant to section 13(3) of the
Federal Reserve Act.1
*
*
*
*
*
■ 9. Add § 329.34 to read as follows:
§ 329.34 Cash flows related to Covered
Federal Reserve Facility Funding.
(a) Treatment of Covered Federal
Reserve Facility Funding.
Notwithstanding any other section of
this part and except as provided in
paragraph (b) of this section, outflow
amounts and inflow amounts related to
Covered Federal Reserve Facility
Funding and the assets securing
Covered Federal Reserve Facility
Funding are excluded from the
calculation of a FDIC-supervised
institution’s total net cash outflow
amount calculated under § 329.30.
(b) Exception. To the extent the
Covered Federal Reserve Facility
Funding is secured by securities, debt
obligations, or other instruments issued
by the FDIC-supervised institution or
one of its consolidated subsidiaries, the
Covered Federal Reserve Facility
Funding is not subject to paragraph (a)
of this section and this outflow amount
must be included in the FDICsupervised institution’s total net cash
outflow amount calculated under
§ 329.30.
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.
1 The Money Market Mutual Fund Liquidity
Facility was authorized on March 18, 2020, and the
Paycheck Protection Program Liquidity Facility was
authorized on April 6, 2020.
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Federal Register / Vol. 85, No. 88 / Wednesday, May 6, 2020 / Rules and Regulations
Dated at Washington, DC, on or about April
30, 2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020–09716 Filed 5–5–20; 8:45 am]
BILLING CODE 6210–01–P 4810–33–P; 6714–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2020–0092; Product
Identifier 2020–NM–001–AD; Amendment
39–19905; AD 2020–08–13]
RIN 2120–AA64
Airworthiness Directives; Bombardier,
Inc. Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
The FAA is adopting a new
airworthiness directive (AD) for certain
Bombardier, Inc., Model CL–600–2B19
(Regional Jet Series 100 & 440)
airplanes, Model CL–600–2C10
(Regional Jet Series 700, 701 & 702)
airplanes, Model CL–600–2D15
(Regional Jet Series 705) airplanes, and
Model CL–600–2D24 (Regional Jet
Series 900) airplanes; and all
Bombardier, Inc., Model CL–600–2C11
(Regional Jet Series 550) airplanes. This
AD was prompted by reports of
fractured rudder primary feel unit
shafts; a subsequent investigation
determined that the fractures in the
shafts are consistent with fatigue
damage. This AD requires replacement
of the rudder primary feel unit shaft.
The FAA is issuing this AD to address
the unsafe condition on these products.
DATES: This AD is effective June 10,
2020.
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of June 10, 2020.
ADDRESSES: For service information
identified in this final rule, contact
Bombardier, Inc., 400 Coˆte-Vertu Road
West, Dorval, Que´bec H4S 1Y9, Canada;
Widebody Customer Response Center
North America toll-free telephone 1–
866–538–1247 or direct-dial telephone
1–514–855–2999; fax 514–855–7401;
email ac.yul@aero.bombardier.com;
internet https://www.bombardier.com.
You may view this service information
at the FAA, Airworthiness Products
Section, Operational Safety Branch,
SUMMARY:
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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–2020–0092.
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–2020–
0092; 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,
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:
Andrea Jimenez, Aerospace Engineer,
Airframe and Mechanical Systems
Section, FAA, New York ACO Branch,
1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; telephone 516–
228–7330; fax 516–794–5531; email 9avs-nyaco-cos@faa.gov.
SUPPLEMENTARY INFORMATION:
Discussion
Transport Canada Civil Aviation
(TCCA), which is the aviation authority
for Canada, has issued Canadian AD
CF–2019–42, dated November 8, 2019
(also referred to as the Mandatory
Continuing Airworthiness Information,
or ‘‘the MCAI’’), to correct an unsafe
condition for certain Bombardier, Inc.,
Model CL–600–2B19 (Regional Jet
Series 100 & 440) airplanes, Model CL–
600–2C10 (Regional Jet Series 700, 701
& 702) airplanes, Model CL–600–2D15
(Regional Jet Series 705) airplanes, and
Model CL–600–2D24 (Regional Jet
Series 900) airplanes; and all
Bombardier, Inc., Model CL–600–2C11
(Regional Jet Series 550) 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–2020–
0092.
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
CL–600–2B19 (Regional Jet Series 100 &
440) airplanes, Model CL–600–2C10
(Regional Jet Series 700, 701 & 702)
airplanes, Model CL–600–2D15
(Regional Jet Series 705) airplanes, and
Model CL–600–2D24 (Regional Jet
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Fmt 4700
Sfmt 4700
Series 900) airplanes; and all
Bombardier, Inc., Model CL–600–2C11
(Regional Jet Series 550) airplanes. The
NPRM published in the Federal
Register on February 18, 2020 (85 FR
8768). The NPRM was prompted by
reports of fractured rudder primary feel
unit shafts; a subsequent investigation
determined that the fractures in the
shafts are consistent with fatigue
damage. The NPRM proposed to require
replacement of the rudder primary feel
unit shaft. The FAA is issuing this AD
to address fractures of the rudder
primary feel unit shaft, which could
result in a loss of feel in the yaw axis
and thereby impact the controllability of
the airplane. See the MCAI for
additional background information.
Comments
The FAA gave the public the
opportunity to participate in developing
this final rule. The FAA has considered
the comments received. The Air Line
Pilots Association, International (ALPA)
and Jacob Yepiz stated support for the
NPRM.
Conclusion
The FAA reviewed the relevant data,
considered the comments received, and
determined that air safety and the
public interest require adopting this
final rule as proposed, except for minor
editorial changes. The FAA has
determined that these minor changes:
• Are consistent with the intent that
was proposed in the NPRM for
addressing the unsafe condition; and
• Do not add any additional burden
upon the public than was already
proposed in the NPRM.
Related Service Information Under 1
CFR Part 51
Bombardier has issued Service
Bulletin 601R–27–166, dated April 5,
2019; and Service Bulletin 670BA–27–
075, dated April 5, 2019. This service
information describes procedures for
replacing the rudder primary feel unit
shaft that has part number 600–90251–
1 with a new shaft. These documents
are distinct since they apply to different
airplane models. This service
information is reasonably available
because the interested parties have
access to it through their normal course
of business or by the means identified
in the ADDRESSES section.
Costs of Compliance
The FAA estimates that this AD
affects 1,002 airplanes of U.S. registry.
The FAA estimates the following costs
to comply with this AD:
E:\FR\FM\06MYR1.SGM
06MYR1
]]>Agencies
[Federal Register Volume 85, Number 88 (Wednesday, May 6, 2020)]
[Rules and Regulations]
[Pages 26835-26842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09716]
========================================================================
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. 88 / Wednesday, May 6, 2020 / Rules
and Regulations
[[Page 26835]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 50
[Docket No. OCC-2020-0019]
RIN 1557-AE92
FEDERAL RESERVE SYSTEM
12 CFR Part 249
[Regulations WW; Docket No. R-1717]
RIN 7100-AF90
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 329
RIN 3064-AF51
Liquidity Coverage Ratio Rule: Treatment of Certain Emergency
Facilities
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 the money market sector, small
business lenders, and the broader credit markets in order to stabilize
the financial system, the Board of Governors of the Federal Reserve
System (Board) authorized the establishment of the Money Market Mutual
Fund Liquidity Facility (MMLF) and the Paycheck Protection Program
Liquidity Facility (PPPLF), pursuant to section 13(3) of the Federal
Reserve Act. To facilitate use of these Federal Reserve facilities, and
to ensure that the effects of their use are consistent and predictable
under the Liquidity Coverage Ratio (LCR) rule, 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 require banking organizations to neutralize the
effect under the LCR rule of participating in the MMLF and the PPPLF.
DATES: The interim final rule is effective May 6, 2020. Comments on the
interim final rule must be received no later than June 5, 2020.
ADDRESSES:
OCC: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal or email, if possible. Please use the title
``Liquidity Coverage Ratio Rule: Treatment of Emergency FRB Secured
Lending Facilities'' 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-2020-0019'' 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-2020-0019'' 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-2020-0019'' 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-2020-0019'' 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. 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-2020-0019'' 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
[[Page 26836]]
``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-1717;
RIN 7100-AF90, 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-AF51, 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-AF51'' on the
subject line of the message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments/RIN 3064-AF51, Federal Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
Hand Delivered/Courier: Comments may be hand-delivered to
the guard station at the rear of the 550 17th Street NW, building
(located on F Street) on business days between 7:00 a.m. and 5:00 p.m.
FOR FURTHER INFORMATION CONTACT:
OCC: James Weinberger, Technical Expert, Treasury & Market Risk
Policy, (202) 649-6360; or Henry Barkhausen, Counsel, or Daniel Perez,
Senior Attorney, 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, Kathryn
Ballintine, Manager, (202) 452-2555, Kevin Littler, Lead Financial
Institution Policy Analyst, (202) 475-6677, Cecily Boggs, Senior
Financial Institution Policy Analyst II, (202) 530-6209, Michael Ofori-
Kuragu, Senior Financial Institution Policy Analyst II, (202) 475-6623,
or Christopher Powell, Senior Financial Institution Policy Analyst II,
(202) 452-3442, Division of Supervision and Regulation; Benjamin
McDonough, Assistant General Counsel, (202) 452-2036, Steve Bowne,
Senior Counsel, (202) 452-3900, Jason Shafer, Senior Counsel, (202)
728-5811, Laura Bain, Counsel, (202) 736-5546, or Jeffery Zhang,
Attorney, (202) 736-1968, 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]; Irina
Leonova, Acting Chief, Capital Markets Strategies Section,
[email protected]; Eric Schatten, Senior Policy Analyst,
[email protected]; Andrew Carayiannis, Senior Policy Analyst,
[email protected]; [email protected]; Capital Markets Branch,
Division of Risk Management Supervision, (202) 898-6888; or Suzanne
Dawley, Counsel, [email protected]; Gregory Feder, Counsel,
[email protected]; Andrew B. Williams II, 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. OCC Unfunded Mandates Reform Act of 1995 Determination
I. Background
The containment measures adopted in response to the public health
concerns have slowed economic activity in many countries, including the
United States. Financial conditions have tightened markedly, sudden
disruptions in financial markets have put increasing liquidity pressure
on money market mutual funds, and the cost of credit has risen for most
borrowers. Given these liquidity pressures, money market mutual funds
have been faced with redemption requests from clients with immediate
cash needs and may need to sell a significant number of assets to meet
such requests, which could further increase market pressures. Small
businesses also are facing severe liquidity constraints, as millions of
Americans have been ordered to stay home, severely reducing their
ability to engage in normal commerce, and revenue streams for many
small businesses have collapsed. This 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 the containment measures adopted in response to
the public health concerns and, ultimately, to help restore economic
activity.
In order to prevent the disruption in the money markets from
destabilizing the financial system, the Board of Governors of the
Federal Reserve System (Board), with the approval of the Secretary of
the Treasury, authorized the Federal Reserve Bank of Boston to
establish the Money Market Mutual Fund Liquidity Facility (MMLF),
pursuant to section 13(3) of the Federal Reserve Act.\1\ Under the
MMLF, the Federal Reserve Bank of Boston extends non-recourse loans to
eligible borrowers to purchase assets from money market mutual funds
(MMFs). Assets purchased from MMFs are posted as collateral to the
Federal Reserve Bank of Boston (MMLF collateral). Eligible borrowers
under the MMLF include certain banking organizations subject to the
Liquidity Coverage Ratio (LCR) rule (covered companies) issued by the
Office of the Comptroller of the Currency (OCC), the Board, and the
Federal Deposit Insurance Corporation (FDIC) (together, the
agencies).\2\ MMLF collateral generally comprises securities
[[Page 26837]]
and other assets with the same maturity date as the MMLF non-recourse
loan.
---------------------------------------------------------------------------
\1\ 12 U.S.C. 343(3).
\2\ The applicability of the LCR rule is described in Sec. __.1
of the rule. See 12 CFR 50.1 (OCC); 12 CFR 249.1 (Board); and 12 CFR
329.1 (FDIC).
---------------------------------------------------------------------------
In order to provide liquidity to small business lenders and the
broader credit markets, and to help stabilize the financial system, the
Board, with the approval of the Secretary of the Treasury, authorized
each of the Federal Reserve Banks to extend credit under the Paycheck
Protection Program Liquidity Facility (PPPLF), pursuant to section
13(3) of the Federal Reserve Act.\3\ Under the PPPLF, each of the
Federal Reserve Banks extends non-recourse loans to institutions that
are eligible to make Paycheck Protection Program (PPP) covered
loans,\4\ including depository institutions subject to the agencies'
LCR rule. Under the PPPLF, only PPP covered loans that are guaranteed
by the SBA under the PPP 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 (PPPLF collateral). The
maturity date of the extension of credit under the PPPLF equals the
maturity date of the PPP loans pledged to secure the extension of
credit.\5\
---------------------------------------------------------------------------
\3\ 12 U.S.C. 343(3).
\4\ Congress created the PPP as part of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act) and in recognition of
the exigent circumstances faced by small businesses. PPP covered
loans are fully guaranteed as to principal and accrued interest by
the Small Business Administration (SBA) and also afford borrower
forgiveness up to the principal amount of the PPP covered loan, if
the proceeds of the PPP covered loan are used for certain expenses.
Under the PPP, eligible borrowers generally include businesses with
fewer than 500 employees or that are otherwise considered to be
small by the SBA. 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. For more
information on the Paycheck Protection Program, see https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
\5\ The maturity date of the PPPLF's loan will be accelerated if
the underlying PPP loan goes into default and the eligible borrower
sells the PPP Loan to the Small Business Administration (SBA) to
realize the SBA guarantee. The maturity date of the PPPLF's loan
also will be accelerated to the extent of any PPP loan forgiveness
reimbursement received by the eligible borrower from the SBA.
---------------------------------------------------------------------------
To facilitate the use of the MMLF and PPPLF, the agencies are
adopting this interim final rule, which requires covered companies to
neutralize the LCR effects of the advances made by each facility and
the exposures securing such facility advances.
II. The Interim Final Rule
A. LCR Treatment of MMLF and PPPLF Funding
The agencies' LCR rule requires covered companies to calculate and
maintain an amount of high-quality liquid assets (HQLA) sufficient to
cover their total net cash outflows over a 30-day stress period. A
covered company's LCR is the ratio of its HQLA amount (LCR numerator)
divided by its total net cash outflows (LCR denominator). The total net
cash outflow amount is calculated as the difference between outflow and
inflow amounts, which are determined by applying a standardized set of
outflow and inflow rates to the cash flows of various assets and
liabilities, together with off-balance sheet items, as specified in
Sec. Sec. __.32 and __.33 of the LCR rule.\6\
---------------------------------------------------------------------------
\6\ Section __.30 of the LCR rule also requires a covered
company, as applicable, to include in its total net cash outflow
amount a maturity mismatch add-on, which is calculated as the
difference (if greater than zero) between the covered company's
largest net cumulative maturity outflow amount for any of the 30
calendar days following the calculation date and the net day 30
cumulative maturity outflow amount. See 12 CFR 50.30 (OCC); 12 CFR
249.30 (Board); and 12 CFR 329.30 (FDIC).
---------------------------------------------------------------------------
Absent the interim final rule, under the LCR rule, covered
companies would be required to recognize outflows for MMLF and PPPLF
loans with a remaining maturity of 30 days or less and inflows for
certain assets securing the MMLF and PPPLF loans. As a result, a
covered company's participation in the MMLF or PPPLF could affect its
total net cash outflows, which could potentially result in an
inconsistent, unpredictable, and more volatile calculation of LCR
requirements across covered companies.
Under the LCR rule, secured loans from a Federal Reserve facility
with a remaining maturity of 30 calendar days or less are categorized
as secured funding transactions with a sovereign entity and assigned an
outflow rate that varies based on the collateral securing the loan.\7\
In addition, the LCR rule assigns inflow rates to collateral generally
based on the asset and counterparty type.\8\ As a result of the
applicable inflow and outflow rates in the LCR rule, MMLF and PPPLF
transactions could receive a non-neutral liquidity risk treatment.
Moreover, after these loans are extended and upon their maturity, the
associated inflows and outflows could unnecessarily contribute to
volatility in LCRs.
---------------------------------------------------------------------------
\7\ See 12 CFR 50.32(j)(1)(i)-(iii) (OCC); 12 CFR
249.32(j)(1)(i)-(iii) (Board); and 12 CFR 329.32(j)(1)(i)-(iii)
(FDIC).
\8\ See 12 CFR 50.33 (OCC); 12 CFR 249.33 (Board); and 12 CFR
329.33 (FDIC).
---------------------------------------------------------------------------
Under the terms of the MMLF and PPPLF, covered companies use the
value of cash received from posted or pledged assets to repay the MMLF
or PPPLF loan, respectively, and in no case is the maturity of the
collateral shorter than the maturity of the advance. In addition,
because the advance from the Federal Reserve Bank is non-recourse, the
banking organization is not exposed to credit or market risk from the
collateral securing the MMLF or PPPLF loan that could otherwise affect
the banking organization's ability to settle the loan. For these
reasons, the agencies believe that it is appropriate to provide
predictable and consistent treatment for participation in the MMLF and
PPPLF by neutralizing the effects of participation in the MMLF and the
PPPLF on covered companies' LCRs. Absent this interim final rule, the
agencies believe that the treatment of covered companies' transactions
with the MMLF and PPPLF under the LCR rule would not be consistent
across transactions or facilities and would not accurately reflect the
liquidity risk associated with funding exposures through these
facilities.
Specifically, the interim final rule adds a new definition to Sec.
__.3 and a new Sec. __.34 to the LCR rule. In Sec. __.3, the new
definition ``Covered Federal Reserve Facility Funding'' means a non-
recourse loan that is extended as part of the Money Market Mutual Fund
Liquidity Facility or Paycheck Protection Program Liquidity Facility
authorized by the Board of Governors of the Federal Reserve System
pursuant to section 13(3) of the Federal Reserve Act. The new Sec.
__.34 requires Covered Federal Reserve Facility Funding and the assets
securing such funding to be excluded from the calculation of a covered
company's total net cash outflow amount as calculated under Sec. __.30
of the LCR rule, notwithstanding any other section of the LCR rule.
Except as described below, this new section excludes advances made by a
Federal Reserve Bank under the MMLF or the PPPLF from being assigned an
outflow rate under Sec. __.32 of the LCR rule, and any collateral
securing such an advance from being assigned an inflow rate under Sec.
__.33 of the LCR rule. While this treatment would neutralize the effect
of the use of the facilities on a covered company's LCR for the
duration of the facility, banking organizations should be mindful of
the need, where applicable, to replace maturing Covered Federal Reserve
Facility Funding with appropriate alternative sources in instances
where exposures mature later than such funding.
[[Page 26838]]
This new Sec. __.34 does not apply to the extent the covered
company secures Covered Federal Reserve Facility Funding with
securities, debt obligations, or other instruments issued by the
covered company or its consolidated entity. When a covered company owns
an instrument that it or its consolidated entity issued, the covered
company will not record a payment upon the instrument's maturity. The
covered company would not receive a payment from outside the
consolidated covered company upon maturity or settlement of the
collateral that would be available to repay the borrowing (Covered
Federal Reserve Facility Funding), and, as a result, this arrangement
presents liquidity risk due to the asymmetric cash flows of the covered
company because the covered company would not have an inflow to offset
its cash outflows.\9\ It would, therefore, be inappropriate to
neutralize the impact of such a funding transaction under the LCR rule.
The agencies seek comment on this provision and all aspects of the
interim final rule.
---------------------------------------------------------------------------
\9\ The covered company would not record a payment to itself in
the amount owed for the instrument issued by the covered company or
its consolidated entity; this would be eliminated in the process of
consolidating the covered company's financial statements.
---------------------------------------------------------------------------
Question 1: The agencies invite comment on the advantages and
disadvantages of neutralizing the effects of participating in the MMLF
and PPPLF in the LCR rule.
Question 2: How well does the approach in the interim final rule
support the objectives of the facilities?
Question 3: What are the advantages and disadvantages of extending
this treatment to any other facilities created pursuant to section
13(3) of the Federal Reserve Act in which covered company exposures are
pledged as collateral for non-recourse, maturity-matched advances?
Question 4: What are the advantages and disadvantages of excluding
from this treatment Covered Federal Reserve Facility Funding that is
secured by instruments issued by a covered company or any of its
consolidated entities?
III. 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 containment measures adopted
in response to the public health concerns have slowed economic activity
in many countries, including the United States. In particular, these
containment measures have acutely affected small businesses, MMFs, and
financial markets generally.
Significantly tighter financial conditions and the increased cost
of credit for most borrowers have severely affected small businesses.
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 the containment measures adopted in response to
the public health concerns and, ultimately, to help restore economic
activity.
Additionally, sudden disruptions in financial markets have put
increasing liquidity pressure on MMFs. Given these pressures, MMFs have
been faced with increased redemption requests from clients with
immediate cash needs. The MMFs may need to sell a significant number of
assets to meet these redemption requests, which could further increase
market pressures.
In order to provide liquidity to banking organizations that lend to
small business and the broader credit markets, and to prevent the
disruption in the money markets from destabilizing 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
PPPLF and the Federal Reserve Bank of Boston to establish the MMLF.
This interim final rule will provide certainty to covered companies
regarding the liquidity treatment of inflows and outflows related to
these Federal Reserve lending programs. In the absence of this interim
final rule, banking organizations may be restricted in their ability to
use the MMLF and PPPLF due to potential effects on their LCRs. The
urgent funding pressures facing small businesses and MMFs justify the
adoption of this interim final rule as quickly as possible. For these
reasons, the agencies find that there is good cause consistent with the
public interest to issue the interim final 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\ For the good
cause described above, 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 request 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
[[Page 26839]]
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\ This interim final rule does not introduce any new
information collections or revise any existing information collections
pursuant to the PRA for the OCC or the FDIC. Therefore, no submissions
will be made by the OCC or the FDIC to OMB for review. The interim
final rule does, however, affect the Board's current information
collection for the Complex Institution Liquidity Monitoring Report (FR
2052a; OMB No. 7100-0361). The Board has reviewed the interim final
rule pursuant to authority delegated by OMB.
---------------------------------------------------------------------------
\19\ 4 U.S.C. 3501-3521.
---------------------------------------------------------------------------
The Board has temporarily revised the reporting form and
instructions for the FR 2052a to reflect the changes made in this
interim final rule. On June 15, 1984, OMB delegated to the Board
authority under the PRA to approve a temporary 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 on a proposal to
extend the FR 2052a for three years, with such revisions. The Board
invites public comment on the FR 2052a, which is 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
proposed 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 July 6, 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
information collection.
Approval Under OMB Delegated Authority of the Temporary Revision of,
and Proposal To Extend for Three Years, With Revision, the Following
Information Collection
Report title: Complex Institution Liquidity Monitoring Report.
Agency form number: FR 2052a.
OMB control number: 7100-0361.
Effective date: May 6, 2020.
Frequency: Monthly, and each business day (daily).
Affected public: Businesses or other for-profit.
Respondents: U.S. bank holding companies (BHCs), U.S. savings and
loan holding companies (SLHCs), and foreign banking organizations
(FBOs) with U.S. assets.
Estimated number of respondents: Monthly, 26; daily, 16.
Estimated average hours per response: Monthly, 120; daily, 220.
Estimated annual burden hours: 917,440.
General description of report: The Board uses the FR 2052a to
monitor the overall liquidity profile of supervised institutions. These
data provide detailed information on the liquidity risks within
different business lines (e.g., financing of securities positions,
prime brokerage activities). In particular, these data serve as part of
the Board's supervisory surveillance program in its liquidity risk
management area and provide timely information on firm-specific
liquidity risks during periods of stress. Analyses of systemic and
idiosyncratic liquidity risk issues are then used to inform the Board's
supervisory processes, including the preparation of analytical reports
that detail funding vulnerabilities.
Legal authorization and confidentiality: The FR 2052a is authorized
pursuant to section 5 of the Bank Holding Company Act (12 U.S.C. 1844),
section 8 of the International Banking Act (12 U.S.C. 3106), section
165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) (12 U.S.C. 5365), and section 10 of the Home Owners'
Loan Act (12 U.S.C. 1467(a)) and is mandatory. Section 5(c) of the Bank
Holding Company Act authorizes the Board to require BHCs to submit
reports to the Board regarding their financial condition. Section 8(a)
of the International Banking Act subjects FBOs to the provisions of the
Bank Holding Company Act. Section 165 of the Dodd-Frank Act requires
the Board to establish prudential standards for certain BHCs and FBOs,
which include liquidity requirements. Section 10(g) of the Home Owners'
Loan Act authorizes the Board to collect reports from SLHCs.
Financial institution information required by the FR 2052a is
collected as part of the Board's supervisory process. Therefore, such
information is entitled to confidential treatment under Exemption 8 of
the Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In
addition, the institution information provided by each respondent would
not be otherwise available to the public and its disclosure could cause
substantial competitive harm. Accordingly, it is entitled to
confidential treatment under the authority of exemption 4 of the FOIA
(5 U.S.C. 552(b)(4)), which protects from disclosure trade secrets and
commercial or financial information.
Current actions: The Board has temporarily revised the reporting
form and instructions of the FR 2052a to incorporate the interim final
rule. Specifically, the Board has added: (1) The sub-product value of
``Covered Federal Reserve Facility Funding'' to the product O.S.6:
Exceptional Central Bank Operations and a corresponding instruction to
exclude balances reported under this sub-product from the pre-existing
sub-product of ``Federal Reserve Bank''; (2) a sentence to the
``General Guidance'' paragraphs under the I.U: Inflows-Unsecured and
I.S: Inflows-Secured headings: ``Exclude assets that secure Covered
Federal
[[Page 26840]]
Reserve Facility Funding''; (3) a sentence to the definition of product
I.O.6: Interest and Dividends Receivable: ``Exclude interest and
dividends receivable on assets securing Covered Federal Reserve
Facility Funding''; (4) a sentence to the definition of product O.O.19:
Interest and Dividends Payable: ``Exclude interest payable on Covered
Federal Reserve Facility Funding''; and (5) a collateral class of ``L-
12'' representing loans guaranteed by U.S. Government agencies.
The Board has determined that these temporary revisions to the FR
2052a 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 interfere with the Board's
ability to perform its statutory duties and would cause public harm if
firms were unable to take full advantage of the emergency relief
provided by the MMLF in response to significant financial industry
disruptions from the containment measures adopted in response to the
public health concerns.
In addition, the Board proposes to extend the FR 2052a for three
years with the revisions discussed above.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \20\ requires an agency to
consider whether the rules it proposes will have a significant economic
impact on a substantial number of small entities.\21\ 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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\20\ 5 U.S.C. 601 et seq.
\21\ 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 have a significant economic
impact on a substantial 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),\22\ 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 the 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.\23\ For the reasons described above, the
agencies find good cause exists under section 302 of the RCDRIA to
publish the interim final rule with an immediate effective date.
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\22\ 12 U.S.C. 4802(a).
\23\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
As such, the interim final rule will be effective immediately.
Nevertheless, the agencies seek comment on the RCDRIA.
F. Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act \24\ 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:
---------------------------------------------------------------------------
\24\ 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. OCC Unfunded Mandates Reform Act of 1995 Determination
As a general matter, the Unfunded Mandates Reform 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.\25\ 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.
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\25\ See 2 U.S.C. 1532(a).
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List of Subjects
12 CFR Part 50
Administrative practice and procedure, Banks, Banking, Reporting
and recordkeeping requirements, Savings associations.
12 CFR Part 249
Administrative practice and procedure, Banks, Banking, Holding
companies, Reporting and recordkeeping requirements.
12 CFR Part 329
Administrative practice and procedure, Banks, Banking, Reporting
and recordkeeping requirements.
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 50 of chapter I of title 12,
Code of Federal Regulations as follows:
PART 50--LIQUIDITY RISK MEASUREMENT STANDARDS
0
1. The authority citation for part 50 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 93a, 481, 1818, 1828, and 1462
et seq.
[[Page 26841]]
0
2. Amend Sec. 50.3 by adding the definition of Covered Federal Reserve
Facility Funding, in alphabetical order, to read as follows:
Sec. 50.3 Definitions.
* * * * *
Covered Federal Reserve Facility Funding means a non-recourse loan
that is extended as part of the Money Market Mutual Fund Liquidity
Facility or Paycheck Protection Program Liquidity Facility authorized
by the Board of Governors of the Federal Reserve System pursuant to
section 13(3) of the Federal Reserve Act.\1\
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\1\ The Money Market Mutual Fund Liquidity Facility was
authorized on March 18, 2020, and the Paycheck Protection Program
Liquidity Facility was authorized on April 6, 2020.
---------------------------------------------------------------------------
* * * * *
0
3. Add Sec. 50.34 to read as follows:
Sec. 50.34 Cash flows related to Covered Federal Reserve Facility
Funding.
(a) Treatment of Covered Federal Reserve Facility Funding.
Notwithstanding any other section of this part and except as provided
in paragraph (b) of this section, outflow amounts and inflow amounts
related to Covered Federal Reserve Facility Funding and the assets
securing Covered Federal Reserve Facility Funding are excluded from the
calculation of a national bank's or Federal savings association's total
net cash outflow amount calculated under Sec. 50.30.
(b) Exception. To the extent the Covered Federal Reserve Facility
Funding is secured by securities, debt obligations, or other
instruments issued by the national bank or Federal savings association
or one of its consolidated subsidiaries, the Covered Federal Reserve
Facility Funding is not subject to paragraph (a) of this section and
this outflow amount must be included in the national bank's or Federal
savings association's total net cash outflow amount calculated under
Sec. 50.30.
Board of Governors of the Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons stated in the Supplementary Information, the Board
of Governors of the Federal Reserve System amends 12 CFR chapter II as
follows:
PART 249--LIQUIDITY RISK MEASUREMENT STANDARDS (REGULATION WW)
0
4. The authority citation for part 249 continues to read as follows:
Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1467a(g)(1),
1818, 1828, 1831p-1, 1831o-1, 1844(b), 5365, 5366, 5368; 12 U.S.C.
3101 et seq.
0
5. Amend Sec. 249.3 by redesignating footnotes 1 and 2 as footnotes 2
and 3 and adding the definition of Covered Federal Reserve Facility
Funding, in alphabetical order, to read as follows:
Sec. 249.3 Definitions.
* * * * *
Covered Federal Reserve Facility Funding means a non-recourse loan
that is extended as part of the Money Market Mutual Fund Liquidity
Facility or Paycheck Protection Program Liquidity Facility authorized
by the Board pursuant to section 13(3) of the Federal Reserve Act.\1\
---------------------------------------------------------------------------
\1\ The Money Market Mutual Fund Liquidity Facility was
authorized on March 18, 2020, and the Paycheck Protection Program
Liquidity Facility was authorized on April 6, 2020.
---------------------------------------------------------------------------
* * * * *
0
6. Add Sec. 249.34 to read as follows:
Sec. 249.34 Cash flows related to Covered Federal Reserve Facility
Funding.
(a) Treatment of Covered Federal Reserve Facility Funding.
Notwithstanding any other section of this part and except as provided
in paragraph (b) of this section, outflow amounts and inflow amounts
related to Covered Federal Reserve Facility Funding and the assets
securing Covered Federal Reserve Facility Funding are excluded from the
calculation of a Board-regulated institution's total net cash outflow
amount calculated under Sec. 249.30.
(b) Exception. To the extent the Covered Federal Reserve Facility
Funding is secured by securities, debt obligations, or other
instruments issued by the Board-regulated institution or one of its
consolidated subsidiaries, the Covered Federal Reserve Facility Funding
is not subject to paragraph (a) of this section and this outflow amount
must be included in the Board-regulated institution's total net cash
outflow amount calculated under Sec. 249.30.
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 329--LIQUIDITY RISK MEASUREMENT STANDARDS
0
7. The authority citation for part 329 continues to read as follows:
Authority: 12 U.S.C. 1815, 1816, 1818, 1819, 1828, 1831p-1,
5412.
0
8. Amend Sec. 329.3 by redesignating footnotes 1 and 2 as footnotes 2
and 3 and adding the definition of Covered Federal Reserve Facility
Funding, in alphabetical order, to read as follows:
Sec. 329.3 Definitions.
* * * * *
Covered Federal Reserve Facility Funding means a non-recourse loan
that is extended as part of the Money Market Mutual Fund Liquidity
Facility or Paycheck Protection Program Liquidity Facility authorized
by the Board of Governors of the Federal Reserve System pursuant to
section 13(3) of the Federal Reserve Act.\1\
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\1\ The Money Market Mutual Fund Liquidity Facility was
authorized on March 18, 2020, and the Paycheck Protection Program
Liquidity Facility was authorized on April 6, 2020.
---------------------------------------------------------------------------
* * * * *
0
9. Add Sec. 329.34 to read as follows:
Sec. 329.34 Cash flows related to Covered Federal Reserve Facility
Funding.
(a) Treatment of Covered Federal Reserve Facility Funding.
Notwithstanding any other section of this part and except as provided
in paragraph (b) of this section, outflow amounts and inflow amounts
related to Covered Federal Reserve Facility Funding and the assets
securing Covered Federal Reserve Facility Funding are excluded from the
calculation of a FDIC-supervised institution's total net cash outflow
amount calculated under Sec. 329.30.
(b) Exception. To the extent the Covered Federal Reserve Facility
Funding is secured by securities, debt obligations, or other
instruments issued by the FDIC-supervised institution or one of its
consolidated subsidiaries, the Covered Federal Reserve Facility Funding
is not subject to paragraph (a) of this section and this outflow amount
must be included in the FDIC-supervised institution's total net cash
outflow amount calculated under Sec. 329.30.
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.
[[Page 26842]]
Dated at Washington, DC, on or about April 30, 2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020-09716 Filed 5-5-20; 8:45 am]
BILLING CODE 6210-01-P 4810-33-P; 6714-01-P
