Director, Shareholder, and Member Meetings, 31943-31949 [2020-11525]

Agencies

• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 85, Number 103 (Thursday, May 28, 2020)]
[Rules and Regulations]
[Pages 31943-31949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11525]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 5 and 7

[Docket No. OCC-2020-0020]
RIN 1557-AE94


Director, Shareholder, and Member Meetings

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC).

ACTION: Interim final rule and request for comment.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
amending its regulations on activities and operations of national banks 
and corporate activities of Federal savings associations to provide 
that these institutions may permit telephonic and electronic 
participation at all board of directors, shareholder, and as 
applicable, member, meetings. This Interim Final Rule (IFR) will update 
the OCC's regulations to conform with modern technologies and enable 
national banks and Federal savings associations to hold these meetings 
without violating social distancing restrictions imposed in response to 
the coronavirus disease 2019 (COVID-19) emergency.

DATES: The effective date of this interim final rule is May 28, 2020. 
Comments on the interim final rule must be received no later than July 
13, 2020.

ADDRESSES: 
    OCC: Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal or email, if possible. Please use the title 
``Director, Shareholder, and Member Meetings'' 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-2020-0020'' 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-2020-0020'' 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-2020-0020'' 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-2020-0020'' 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-2020-0020'' in the Search Box and click 
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and 
filtered by clicking on the ``Sort By'' drop-down on the right side of 
the screen or the ``Refine Results'' options on the left side of the 
screen. Supporting materials can be viewed by clicking on the 
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down 
on the right side of the screen or the ``Refine Results'' options on 
the left side of the screen.'' For assistance with the Regulations.gov 
Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 
Monday-Friday, 9 a.m.-5 p.m. ET or email 
[email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.

FOR FURTHER INFORMATION CONTACT: Frances C. Augello, Special Counsel, 
or

[[Page 31944]]

Heidi M. Thomas, Special Counsel, Chief Counsel's Office, (202) 649-
5490, or Donald W. Dwyer, Thrift Licensing Lead Expert, (202) 649-6260, 
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.

SUPPLEMENTARY INFORMATION: 

I. Background

    The OCC recognizes the recent disruptions and significant 
challenges faced by national banks and Federal savings associations as 
a result of the coronavirus disease 2019 (COVID-19) emergency. Health 
and safety advisories declared in response to the COVID-19 emergency, 
including those relating to social distancing, are impeding the ability 
of national banks and Federal savings associations to hold in-person 
meetings, such as board of director, shareholder, and member meetings. 
However, neither the National Bank Act or the Home Owners' Loan Act, as 
applicable, nor OCC regulations require that director, shareholder, or 
member meetings take place in person.\1\ Furthermore, remote 
communication tools such as telephone or internet-based conferencing 
are available to institutions so that they may comply with internal and 
regulatory meeting requirements within the parameters of the social 
distancing guidelines. The OCC is issuing this IFR to clarify that 
national banks and Federal savings associations may use remote 
communication tools to conduct these meetings. Specifically, this IFR 
allows national banks and Federal savings associations to permit remote 
participation by shareholders, directors, and as applicable, members at 
shareholder, board of directors, and member meetings. Under this 
authority, institutions could hold in-person meetings with some 
participants attending remotely or hold these meetings exclusively by 
means of remote communication.
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    \1\ Although the National Bank Act does not specifically address 
the manner in which a national bank's board of directors must 
conduct its meetings, it does authorize national banks ``[t]o 
prescribe by its board of directors, bylaws not inconsistent with 
law, regulating the manner . . . its general business [is to be] 
conducted.'' 12 U.S.C. 24 (Sixth). In a 1999 interpretive letter, 
the OCC stated that ``[t]his authority to prescribe bylaws to 
conduct a national bank's general business is sufficiently broad to 
permit a national bank to adopt procedures governing the practice of 
conducting board meetings, including the ability to conduct regular 
board meetings by telephone or video conferencing.'' OCC 
Interpretive Letter No. 860 (Apr. 5, 1999).
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    The amendments made by this IFR will enable national banks and 
Federal savings associations to conduct necessary meetings remotely 
during the COVID-19 emergency as well as during any other future 
emergency when in-person meetings may not be feasible. Because these 
amendments will be permanent and will not expire after the COVID-19 
emergency has ended, they also will provide national banks and Federal 
savings associations, on an ongoing basis, with more flexibility in 
planning and holding director, shareholder, and, as applicable, member 
meetings; could permit greater director, shareholder, and member 
participation at these meetings for those participants not able to 
attend in person; and may reduce the burden and costs of in-person 
meetings for national banks and Federal savings associations, as well 
as meeting participants. The OCC expects that national banks and 
Federal savings associations allowing remote participation will provide 
fair treatment and transparency for shareholders or members 
participating telephonically or electronically.

II. Description of the Interim Final Rule

Federal Savings Associations (Sec. Sec.  5.21, 5.22) \2\
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    \2\ On March 5, the OCC issued a proposal to amend 12 CFR part 5 
to update and clarify its policies and procedures for corporate 
activities and transactions involving national banks and Federal 
savings associations, eliminate unnecessary requirements consistent 
with safety and soundness, and make other technical and conforming 
changes. 85 FR 18728 (Apr. 2, 2020). This proposed rule includes 
amendments to Sec. Sec.  5.21 and 5.22. The OCC will reconcile these 
proposed changes with the amendments made by this IFR when issuing 
the part 5 final rule.
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    Member and Shareholder Meetings. Twelve CFR 5.21 governs the 
procedures and requirements for charters and bylaws of Federal mutual 
savings associations. Paragraph (j)(2)(i) of Sec.  5.21 requires the 
association's bylaws to indicate that the association will provide for 
and conduct an annual meeting of its members for the election of 
directors and any other business of the association. Paragraph 
(j)(2)(i) also provides that the annual meeting must be held at any 
convenient place the board of directors may designate, and at a date 
and time within 150 days after the end of the association's fiscal 
year.\3\ Paragraph (j)(2)(ii) of Sec.  5.21 requires the bylaws to 
include procedures for calling and conducting special meetings of 
Federal mutual savings association members.
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    \3\ On May 12, 2020, the OCC issued guidance to institutions 
considering changes to the date, time or location of their annual 
meetings as a result of the COVID-19 emergency. See OCC Bulletin 
2020-51.
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    Section 5.22 governs the procedures and requirements for Federal 
stock savings association charters and bylaws and generally parallels 
Sec.  5.21. Paragraph (k)(1) of Sec.  5.22 provides that all annual and 
special meetings of shareholders must be held at any convenient place 
the board of directors may designate.
    To clarify that both a Federal mutual savings association and a 
Federal stock savings association may use remote communication tools to 
conduct these meetings, the OCC is amending Sec. Sec.  5.21(j)(2)(i) 
and (j)(2)(ii) and 5.22(k)(1) to permit an association's bylaws to 
provide for telephonic or electronic participation of members and 
shareholders, as applicable, at both annual and special meetings. This 
amendment also provides that members or shareholders participating 
telephonically or electronically in an annual or special meeting will 
be deemed present in person for purposes of the quorum requirement in 
Sec. Sec.  5.21(j)(2)(v) or 5.22(k)(5), as applicable.\4\ As noted 
below, OCC regulations and model bylaw provisions governing annual and 
special meetings of the board of directors of Federal mutual savings 
associations and special meetings of the board of directors of Federal 
stock savings associations currently permit ``telephonic and electronic 
participation.'' The OCC is using the phrase ``telephonic and 
electronic participation'' in its amendments to the shareholder meeting 
provisions and maintaining the use of this phrase in its board of 
director provisions to provide consistent terminology for Federal 
savings associations and to avoid the cost and burden of any bylaw 
changes that could result from modifying this terminology in this IFR. 
The OCC requests comment on whether this terminology is appropriate in 
light of current technology or whether the OCC should use a different 
phrase in describing remote participation at shareholder and board of 
directors meetings.
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    \4\ Section 5.21(j)(2)(v) provides that any number of members 
present and voting, represented in person or by proxy, at a regular 
or special meeting of the members constitutes a quorum. Section 
5.22(k)(5) provides that a majority of the outstanding shares of the 
association entitled to vote, represented in person or by proxy, 
constitutes a quorum at a meeting of shareholders.
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    This IFR also requires Federal savings associations to have 
procedures in place for telephonic and electronic participation at 
member or shareholder meetings and provides associations with a choice 
of procedures to follow. The procedures available to Federal mutual 
savings associations and those available to Federal stock savings 
associations differ only with respect to the State law procedures they 
may choose. As explained below, this difference is

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based on the State corporate governance procedures available to each 
type of entity under current OCC regulations.
    With respect to Federal mutual savings associations, the IFR amends 
Sec.  5.21(j)(2)(i) (annual meetings of members) and Sec.  
5.21(j)(2)(ii) (special meetings of members) to require the association 
to follow the procedures for telephonic or electronic participation of: 
(1) The State corporate governance procedures it is permitted to elect 
pursuant to Sec.  5.21(j)(3)(iii), if those State corporate governance 
procedures include telephonic or electronic participation procedures; 
(2) the Delaware General Corporation Law \5\ (with ``member'' 
substituting for ``stockholder''); or (3) the Model Business 
Corporation Act \6\ (with ``member'' substituting for ``shareholder''), 
provided that such procedures are not inconsistent with applicable 
Federal statutes and regulations and safety and soundness. With certain 
exceptions, Sec.  5.21(j)(3)(iii) provides that a Federal mutual 
savings association may elect to follow the corporate governance 
procedures of the laws of the State where the home office of the 
institution is located. Therefore, pursuant to this IFR, a Federal 
mutual savings association has the choice of following either the 
procedures for remote participation of the laws of its home State if 
these procedures exist, the procedures for remote participation under 
Delaware General Corporation Law, or the procedures for remote 
participation under the Model Business Corporation Act. To inform 
members of its choice of procedures, the IFR requires the association 
to indicate the use of these procedures in its bylaws.
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    \5\ Delaware law provides that stockholders and proxyholders not 
physically present at a stockholders meeting may, by means of remote 
communication, participate in the meeting and be deemed present in 
person and vote at the meeting provided that: (1) The corporation 
implements reasonable measures to verify that each person deemed 
present and permitted to vote remotely is a stockholder or 
proxyholder, (2) the corporation implements reasonable measures to 
provide such stockholders and proxyholders a reasonable opportunity 
to participate in the meeting and to vote on matters submitted to 
the stockholders, including an opportunity to read or hear the 
proceedings of the meeting substantially concurrently with such 
proceedings, and (3) if any stockholder or proxyholder votes or 
takes other action at the meeting by means of remote communication, 
a record of such vote or other action is maintained by the 
corporation. 8 Del. C. Sec.  211.
    \6\ The Model Business Corporation Act provides that 
shareholders participating in a shareholders' meeting by means of 
remote communication shall be deemed present and may vote at such 
meeting if the corporation has implemented reasonable measures to: 
(1) Verify that each person participating remotely as a shareholder 
is a shareholder; and (2) provide such shareholders a reasonable 
opportunity to participate in the meeting and to vote on matters 
submitted to the shareholders, including an opportunity to 
communicate, and to read or hear the proceedings of the meeting, 
substantially concurrently with such proceedings. Section 7.09, The 
Model Business Corporation Act (as amended 2019).
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    With respect to Federal stock savings associations, Sec.  
5.22(k)(1) as amended by this IFR requires the association to elect to 
follow, pursuant to Sec.  5.22(j)(2)(iii), corporate governance 
procedures for shareholder meetings that include procedures for 
telephonic or electronic participation. With certain exceptions, Sec.  
5.22(j)(2)(iii) provides that a Federal stock association may elect to 
follow the corporate governance procedures of: (1) The laws of the 
State where the home office of the association is located; (2) the laws 
of the State where the association's holding company, if any, is 
incorporated or chartered; (3) the Delaware General Corporation Law; or 
(4) the Model Business Corporation Act, provided that such procedures 
are not inconsistent with applicable Federal statutes and regulations 
and safety and soundness. This amendment, therefore, permits a Federal 
stock savings association to choose from any of the sources listed in 
Sec.  5.22(j)(2)(iii) for its telephonic and electronic participation 
procedures. As with the amendments for Federal mutual savings 
associations, this IFR requires a Federal stock savings association to 
indicate in its bylaws which procedures it will use to inform its 
shareholders of these procedures.
    As a result of these amendments, this IFR will ensure that if a 
Federal savings association's bylaws provide for telephonic or 
electronic participation at member or shareholder meetings, the Federal 
savings association must have procedures in place for this remote 
participation even if it has not elected to follow any particular 
corporate governance law pursuant to Sec. Sec.  5.21(j)(3)(iii) or 
5.22(j)(2)(iii), or if the corporate governance law it has elected to 
follow does not contain procedures for remote participation at 
meetings.
    As indicated above, the IFR requires a Federal savings association 
to amend its bylaws if it wishes to utilize remote means of 
communication for its meetings. Current Sec. Sec.  5.21(j)(3) and 
5.22(j)(2) provide that, in general, a Federal savings association must 
submit an amendment to its bylaws to the OCC 30 days prior to adoption 
by its board of directors and that the amendment is effective 30 days 
after filing with the OCC. However, pursuant to Sec. Sec.  
5.21(j)(3)(i)(B) and 5.22(j)(2)(i)(B), if an association adopts a bylaw 
amendment that includes the language of the OCC's model or optional 
bylaws without change and files the bylaw with the OCC within 30 days 
after adoption, the bylaw is effective upon adoption. To permit Federal 
savings associations to utilize the remote communication provisions 
included in this IFR as quickly as possible during the COVID-19 
emergency, the OCC is issuing concurrent with this IFR optional model 
bylaw provisions for telephonic and electronic participation at 
shareholder and member meetings.\7\
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    \7\ Model bylaw provisions for mutual savings associations are 
available at https://www.occ.gov/static/licensing/model-mutual-fsa-bylaws.pdf. Model bylaw provisions for stock savings associations 
are available at https://www.occ.gov/static/licensing/model-stock-fsa-bylaws.pdf.
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    The OCC also is considering updating the member and shareholder 
meeting notice requirements contained in Sec. Sec.  5.21 and 5.22. 
Section 5.21(j)(2)(iii) requires a Federal mutual savings association 
to publish a notice of the annual or special meeting in a newspaper of 
general circulation in the city or county in which the principal place 
of business of the association is located or to mail the notice postage 
prepaid to each of its members of record. This provision also requires 
the Federal mutual savings association to post notice of the meeting in 
a conspicuous place in each of its offices during the 14 days 
immediately preceding the date on which the meeting convenes. The OCC 
requests comment on whether it should amend this provision to permit a 
Federal mutual savings association to deliver the meeting notice to a 
member electronically if the member receives electronic communications. 
In addition, the OCC requests comment on whether it should amend this 
provision to permit the Federal mutual savings association to post the 
notice of the meeting on its website instead of in its offices. Section 
5.22(k)(2) requires a Federal savings association to deliver a written 
notice of a shareholder meeting either personally or by mail to each 
shareholder of record entitled to vote at the meeting. If mailed, the 
notice is deemed delivered when deposited in the mail, addressed to the 
shareholder at the address appearing on the stock transfer books or 
records of the association as of the record date, with postage thereon 
prepaid. As with Sec.  5.21(j)(2)(iii), the OCC requests comment on 
whether it should amend Sec.  5.22(k)(2) to permit the Federal stock 
savings association to deliver the meeting notice to the shareholder 
electronically if the shareholder receives electronic communications 
and that this electronic notice be deemed delivered when sent to the 
shareholder's electronic address appearing on the books or records of 
the association as of the record date. The OCC believes that

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these amendments to the notice provisions would update the OCC's rules 
to reflect modern communication methods and complement the amendments 
made by this IFR. The OCC also believes that these amendments would 
benefit members and shareholders by providing them with notice by means 
consistent with other communications they receive from the association 
and allow a Federal savings association to announce a member or 
shareholder meeting through less costly or burdensome methods.
    Board of Directors Meetings. Current Sec.  5.21(j)(2)(ix) provides 
that the board of directors of a Federal mutual savings association may 
permit telephonic or electronic participation at its meetings. Current 
Sec.  5.22(l)(8) permits the bylaws of a Federal stock savings 
association to provide for electronic participation at special meetings 
of the board of directors. The OCC's model bylaws for Federal mutual 
and stock savings associations also permit telephonic or similar 
communication at meetings of the board of directors.\8\ However, 
current Sec.  5.22(l)(3), which provides requirements for regular 
meetings of the board of directors of a Federal stock savings 
association, is silent with respect to electronic participation. To 
make these provisions consistent with each other, as well as with the 
model bylaws, the OCC is amending Sec.  5.22(l)(3) to provide that the 
bylaws of a Federal stock savings association may provide for 
telephonic or electronic participation of board members at regular 
meetings. The OCC also is making technical changes to Sec.  5.22(l)(8) 
by revising it to include telephonic in addition to electronic 
participation so that it is consistent with the other provisions of 
this IFR and to specify that this telephonic and electronic 
participation provision applies to special meetings of the board.
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    \8\ See ``Articles of Association, Charter, and Bylaw 
Amendments,'' Comptroller's Licensing Manual, (June 2017).
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National Banks (Sec.  7.2003)

    As with the amendments to Sec. Sec.  5.21 and 5.22, the OCC is 
permitting national banks to provide for telephonic or electronic 
participation at shareholder and board of directors meetings. To 
accomplish this, the OCC is combining current 12 CFR 7.2001, which 
provides procedures for notifying shareholders of shareholder meetings, 
into current Sec.  7.2003, which provides the rule for annual 
shareholder meetings that fall on a holiday; adding new telephonic and 
electronic participation language to 12 CFR 7.2003 as new paragraphs 
(c) and (d); and retitling Sec.  7.2003 as ``Shareholder meetings; 
Board of directors meetings.'' The OCC is not making any substantive 
changes to current Sec.  7.2001, which becomes Sec.  7.2003(a), or 
current Sec.  7.2003, which becomes Sec.  7.2003(b). Combining 
Sec. Sec.  7.2001 and 7.2003 puts all amendments related to shareholder 
meetings are held in one section.
    New paragraph (c) to Sec.  7.2003 permits a national bank to 
provide for telephonic or electronic participation at shareholder 
meetings. Further, new paragraph (c) requires a national bank to have 
procedures for telephonic or electronic participation in shareholder 
meetings. As with Federal savings associations, a national bank may 
choose these procedures from several sources: (1) The corporate 
governance procedures it has elected to follow pursuant to Sec.  
7.2000(b),\9\ if those elected procedures include telephonic or 
electronic participation procedures; (2) the Delaware General 
Corporation Law; or (3) the Model Business Corporation Act. However, 
these procedures must not be inconsistent with applicable Federal 
statutes and regulations and safety and soundness. To inform 
shareholders of its choice of procedures, the IFR requires the national 
bank to indicate the use of these procedures in its bylaws. In general, 
Federal law does not require a national bank to file its bylaws and any 
amendments with, or to seek approval of its bylaws from, the OCC.\10\
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    \9\ Section 7.2000(b) provides that to the extent not 
inconsistent with applicable Federal banking statutes or regulations 
or bank safety and soundness, a national bank may elect to follow 
the corporate governance procedures of the law of the State in which 
the main office of the bank is located, the law of the State in 
which the holding company of the bank is incorporated, Delaware 
General Corporation Law, or the Model Business Corporation Act. 
Further, Sec.  7.2000 requires that a national bank designate in its 
bylaws the body of law selected for its corporate governance 
procedures.
    \10\ See Articles of Association, Charter, and Bylaw Amendments 
booklet of the Comptroller's Licensing Manual at page 4 (June 2017). 
Should it come to the OCC's attention, however, that a national 
bank's bylaws are inconsistent with a law or regulation or the 
national bank's articles of association, or the bylaws promote 
unsafe or unsound operation of the national bank, the OCC will 
consider appropriate supervisory action to address any concerns. Id.
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    As with the amendments to Sec. Sec.  5.21(j)(2)(i) and (j)(2)(ii) 
and 5.22(k)(1) for Federal savings associations, this provision will 
ensure that a national bank has procedures in place for remote 
participation at shareholder meetings even if the corporate governance 
law it has elected to follow does not contain procedures for remote 
participation at shareholder meetings or if it has not elected to 
follow any particular corporate governance law pursuant to Sec.  
7.2000(b).
    New paragraph (d) of Sec.  7.2003 provides that a national bank may 
provide for telephonic or electronic participation at a meeting of its 
board of directors. This provision codifies OCC Interpretive Letter No. 
860 \11\ and makes the national bank rule consistent with rules for 
Federal savings associations.
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    \11\ See footnote 1.
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III. Request for Comment

    The OCC seeks comment on all aspects of the IFR in addition to 
those specific requests noted in the SUPPLEMENTARY INFORMATION. In 
addition, please comment on the following:
     Should the OCC limit the ability of national banks and 
Federal savings associations to hold shareholder or member meetings 
exclusively by means of remote communication to emergency situations or 
when extenuating circumstances exist? If so, in what extenuating 
circumstances should national banks and Federal savings associations 
have authority to hold meetings exclusively by means of remote 
communication?
     Would holding shareholder or member meetings exclusively 
by means of remote communication limit participation by some 
shareholders or members, and if so, how?
     Should the OCC require national banks and Federal savings 
associations to provide in-person options for each shareholder or 
member meeting or require national banks or Federal savings 
associations to adopt procedures that permit shareholder participation 
at virtual meetings? If so, why?
     Should the OCC adopt regulatory procedures governing 
telephonic and electronic participation at shareholder meetings instead 
of requiring national banks and Federal savings associations to follow 
State corporate law, Delaware General Corporation Law, or Model 
Business Corporation Act procedures? If so, what specific procedures 
should the OCC adopt?
     Should the OCC provide risk management standards to 
mitigate any security risks arising from telephonic or electronic 
meetings? If so, what specific standards should the OCC adopt?

IV. Administrative Law Matters

A. Administrative Procedure Act

    The OCC is issuing the IFR without prior notice and the opportunity 
for public comment and the delayed effective date ordinarily prescribed 
by the Administrative Procedure Act

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(APA).\12\ 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.'' \13\
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    \12\ 5 U.S.C. 553.
    \13\ 5 U.S.C. 553(b)(3)(A).
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    The OCC believes that the public interest is best served by 
implementing the IFR immediately upon publication in the Federal 
Register. National banks and Federal savings associations are acutely 
impacted by the COVID-19 emergency. Health and safety advisories in 
response to the COVID-19 emergency, including those relating to social 
distancing, are impeding the ability of national banks and Federal 
savings associations to hold in-person meetings, such as board of 
director, shareholder, and member meetings. The IFR amends the OCC's 
rules to permit telephonic and electronic participation at these 
meetings, thereby allowing national banks and Federal savings 
associations to conduct all necessary board of director, shareholder, 
and member meetings during the COVID-19 emergency. For these reasons, 
the OCC finds that there is good cause consistent with the public 
interest to issue the rule without advance notice and comment.\14\
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    \14\ 5 U.S.C. 553(b)(B); 553(d)(3).
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    The APA also requires a 30-day delayed effective date, except for: 
(1) Substantive rules which 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.\15\ As 
described above, the OCC believes it has good cause to issue this rule 
without a delayed effective date. Therefore, the IFR is exempt from the 
APA's delayed effective date requirement.\16\
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    \15\ 5 U.S.C. 553(d).
    \16\ 5 U.S.C. 553(d)(1).
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    While the OCC believes that there is good cause to issue the rule 
without advance notice and comment and with an immediate effective 
date, the OCC is interested in the views of the public and requests 
comment on all aspects of the IFR.

B. Congressional Review Act

    For purposes of the Congressional Review Act, the Office of 
Management and Budget (OMB) makes a determination as to whether a final 
rule constitutes a ``major rule.'' \17\ If a rule is deemed a ``major 
rule'' by the OMB, the Congressional Review Act generally provides that 
the rule may not take effect until at least 60 days following its 
publication.\18\
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    \17\ 5 U.S.C. 801 et seq.
    \18\ 5 U.S.C. 801(a)(3).
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    The Congressional Review Act defines a ``major rule'' as any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs of the OMB finds has resulted in or is likely to result in: (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.\19\
---------------------------------------------------------------------------

    \19\ 5 U.S.C. 804(2).
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    The delayed effective date required by the Congressional Review Act 
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.\20\ For 
the same reasons set forth above, the OCC is adopting the IFR without 
the delayed effective date generally prescribed under the Congressional 
Review Act. In light of the COVID-19 emergency, the OCC believes that 
delaying the effective date of the rule would be contrary to the public 
interest.
---------------------------------------------------------------------------

    \20\ 5 U.S.C. 808.
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    As required by the Congressional Review Act, the OCC will submit 
the IFR and other appropriate reports to Congress and the Government 
Accountability Office for review.

C. Paperwork Reduction Act

    Certain provisions of the proposed rulemaking contain ``collection 
of information'' requirements within the meaning of the Paperwork 
Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with 
the requirements of the PRA, the OCC may not conduct or sponsor, and a 
respondent is not required to respond to, an information collection 
unless it displays a currently valid Office of Management and Budget 
(OMB) control number.
    The OCC reviewed the IFR and determined that it revises certain 
information collection requirements previously cleared by OMB under OMB 
Control No. 1557-0014. The OCC has submitted the revised information 
collection to OMB for review under section 3507(d) of the PRA (44 
U.S.C. 3507(d)) and section 1320.11 of the OMB's implementing 
regulations (5 CFR 1320).
Current Actions
    The information collection requirements are as follows:
     National banks and FSAs must have procedures in place for 
holding remote meetings.
     FSAs will need to amend their bylaws if they wish to 
utilize remote means of communication for its meetings.
     Depending on which state or law the FSA elects to follow 
for procedures for remote means of communication, the FSA may have to 
amend its bylaws and file with the OCC.
     National banks must indicate the use of telephonic or 
electronic participation at shareholder meetings in their bylaws.
     The OCC is considering allowing alternative/electronic 
means of notifying members/shareholders of meetings.
    The OCC estimates that there will be no change in burden as a 
result of these changes.
    Title of Information Collection: Licensing Manual.
    Frequency: Event generated.
    Affected Public: Businesses or other for-profit.
    Estimated number of respondents: 1,174
    Total estimated annual burden for the collection: 12,534 hours.
    Comments are invited on:
    a. Whether the collections of information are necessary for the 
proper performance of the agencies' functions, including whether the 
information has practical utility;
    b. The accuracy or the estimate of the burden of the information 
collections, 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 the information collections 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.
    All comments will become a matter of public record. Comments on 
aspects of this notice that may affect reporting, recordkeeping, or 
disclosure

[[Page 31948]]

requirements and burden estimates should be sent to the addresses 
listed in the ADDRESSES section of this document. A copy of the 
comments may also be submitted to the OMB desk officer by mail to U.S. 
Office of Management and Budget, 725 17th Street NW, #10235, 
Washington, DC 20503; facsimile to (202) 395-6974; or email to 
[email protected], Attention, Federal Banking Agency Desk 
Officer.

D. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\21\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with the principle of safety and soundness 
and the public interest, any administrative burdens that such 
regulations would place on depository institutions, including small 
depository institutions, and customers of depository institutions, as 
well as the benefits of such regulations. In addition, section 302(b) 
of RCDRIA requires new regulations and amendments to regulations that 
impose additional reporting, disclosures, or other new requirements on 
IDIs generally to take effect on the first day of a calendar quarter 
that begins on or after the date on which the regulations are published 
in final form, with certain exceptions, including for good cause.\22\ 
For the reasons described above, the OCC finds good cause exists under 
section 302 of RCDRIA to publish this IFR with an immediate effective 
date.
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    \21\ 12 U.S.C. 4802(a).
    \22\ 12 U.S.C. 4802.
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    As such, the IFR will be effective immediately. Nevertheless, the 
OCC seeks comment on RCDRIA.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \23\ requires an agency to 
consider whether the rules it proposes will have a significant economic 
impact on a substantial number of small entities.\24\ The RFA applies 
only to rules for which an agency publishes a general notice of 
proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed 
previously, consistent with section 553(b)(B) of the APA, the OCC has 
determined for good cause that general notice and opportunity for 
public comment is unnecessary, and therefore the OCC is not issuing a 
notice of proposed rulemaking. Accordingly, the OCC has concluded that 
the RFA's requirements relating to initial and final regulatory 
flexibility analysis do not apply.
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    \23\ 5 U.S.C. 601 et seq.
    \24\ Under regulations issued by the Small Business 
Administration, a small entity includes a depository institution, 
bank holding company, or savings and loan holding company with total 
assets of $600 million or less and trust companies with total assets 
of $41.5 million or less. See 13 CFR 121.201.
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    Nevertheless, the OCC seeks comment on whether, and the extent to 
which, the IFR would affect a significant number of small entities.

F. Unfunded Mandates

    As a general matter, the Unfunded Mandates Act of 1995 (UMRA) \25\ 
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.\26\ Therefore, 
because the OCC has found good cause to dispense with notice and 
comment for this IFR, the OCC has not prepared an economic analysis of 
the rule under the UMRA.
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    \25\ 2 U.S.C. 1531 et seq.
    \26\ See 2 U.S.C. 1532(a).
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List of Subjects

12 CFR Part 5

    Administrative practice and procedure, Federal savings 
associations, National banks, Reporting and recordkeeping requirements, 
Securities.

12 CFR Part 7

    Computer technology, Credit, Derivatives, Federal savings 
associations, Insurance, Investments, Metals, National banks, Reporting 
and recordkeeping requirements, Securities, Security bonds.

    For the reasons set out in the preamble, the OCC amends 12 CFR part 
5 and part 7 as follows:

PART 5--RULES, POLICIES, AND PROCIDURES FOR CORPORATE ACTIVITIES

0
1. The authority citation for part 5 continues to read as follows:

    Authority:  12 U.S.C. 1 et seq., 24a, 93a, 215a-2, 215a-3, 481, 
1462a, 1463, 1464, 2901 et seq., 3907, and 5412(b)(2)(B).


0
2. Amend 5.21 by:
0
a. Adding two sentences at the end of paragraph (j)(2)(i)(A);
0
b. Adding a new paragraph (j)(2)(i)(C); and
0
c. Adding two sentences after the second sentence of paragraph 
(j)(2)(ii).
    The additions read as follows:


Sec.  5.21   Federal mutual savings association charter and bylaws.

* * * * *
    (j) * * *
    (2) * * *
    (i) * * *
    (A) * * * The association's bylaws may provide for telephonic or 
electronic participation of members at an annual meeting. Members 
participating in an annual meeting telephonically or electronically 
will be deemed present in person for purposes of the quorum requirement 
in paragraph (j)(2)(v) of this section.
* * * * *
    (C) If the association's bylaws provide for telephonic or 
electronic participation in member meetings, the association must 
follow the procedures for telephonic or electronic participation of the 
State corporate governance procedures it is permitted to elect pursuant 
to paragraph (j)(3)(iii) of this section, if those State corporate 
governance procedures include telephonic or electronic participation 
procedures; the Delaware General Corporation Law, Del. Code Ann. Tit. 8 
(1991, as amended 1994, and as amended thereafter) (with ``member'' 
substituting for ``stockholder''); or the Model Business Corporation 
Act (with ``member'' substituting for ``shareholder''), provided, 
however, that such procedures are not inconsistent with applicable 
Federal statutes and regulations and safety and soundness. The 
association must indicate the use of these procedures in its bylaws.
    (ii) * * * The association's bylaws may provide for telephonic or 
electronic participation of members at a special meeting pursuant to 
the procedures specified in paragraph (j)(2)(i)(C) of this section. 
Members participating in a special meeting telephonically or 
electronically will be deemed present in person for purposes of the 
quorum requirement in paragraph (j)(2)(v) of this section. * * *
* * * * *

0
3. Amend Sec.  5.22 by:
0
a. Revising paragraph (k)(1);
0
b. Adding a sentence at the end of paragraph (l)(3); and
0
c. Revising the last sentence of paragraph (l)(8).
    The revisions and additions read as follows:


Sec.  5.22   Federal Stock savings association charter and bylaws.

* * * * *

[[Page 31949]]

    (k) Shareholders of Federal stock savings associations--(1) 
Shareholder meetings. (i) In general. A meeting of the shareholders of 
the association for the election of directors and for the transaction 
of any other business of the association shall be held annually within 
150 days after the end of the association's fiscal year. Unless 
otherwise provided in the association's charter, special meetings of 
the shareholders may be called by the board of directors or on the 
request of the holders of 10 percent or more of the shares entitled to 
vote at the meeting, or by such other persons as may be specified in 
the bylaws of the association.
    (ii) Location of shareholder meetings. (A) In general. All annual 
and special meetings of shareholders of the association shall be held 
at any convenient place the board of directors may designate. The 
association's bylaws may provide for the telephonic or electronic 
participation of shareholders in these meetings. Shareholders 
participating in an annual or special meeting telephonically or 
electronically will be deemed present in person for purposes of the 
quorum requirement in paragraph (k)(5) of this section.
    (B) Procedures for telephonic or electronic participation. If the 
association's bylaws provide for telephonic or electronic participation 
in shareholder meetings, the association must elect to follow corporate 
governance procedures for these meetings pursuant to paragraph 
(j)(2)(iii) of this section that include procedures for telephonic or 
electronic participation in shareholder meetings. The association must 
indicate the use of these elected procedures in its bylaws.
    (l) * * *
    (3) * * * The bylaws may provide for telephonic or electronic 
participation at these meetings.
* * * * *
    (8) * * * The bylaws may provide for telephonic or electronic 
participation at a special meeting.
* * * * *

PART 7--ACTIVITIES AND OPERATIONS

0
4. The authority citation for part 7 continues to read as follows:

    Authority:  12 U.S.C. 1 et seq., 25b, 29, 71, 71a, 92, 92a, 93, 
93a, 95(b)(1), 371, 371d, 481, 484, 1463, 1464, 1465, 1818, 1828(m), 
3102(b), and 5412(b)(2)(B).


Sec.  7.1001   [Reserved]

0
6. Remove and reserve Sec.  7.1001.

0
7. Revise Sec.  7.2003 to read as follows:


Sec.  7.2003   Shareholder meetings; Board of directors meetings.

    (a) Notice of shareholders' meetings. A national bank must mail 
shareholders notice of the time, place, and purpose of all 
shareholders' meetings at least 10 days prior to the meeting by first 
class mail, unless the OCC determines that an emergency circumstance 
exists. Where a national bank is a wholly-owned subsidiary, the sole 
shareholder is permitted to waive notice of the shareholder's meeting. 
The articles of association, bylaws, or law applicable to a national 
bank may require a longer period of notice.
    (b) Annual meeting for election of directors. When the day fixed 
for the regular annual meeting of the shareholders falls on a legal 
holiday in the State in which the bank is located, the shareholders' 
meeting must be held, and the directors elected, on the next following 
banking day.
    (c) Virtual participation at shareholder meetings--(1) In general. 
A national bank may provide for telephonic or electronic participation 
at shareholder meetings.
    (2) Procedures. A national bank must follow the procedures for 
telephonic or electronic participation in a shareholder meeting of the 
corporate governance procedures it has elected to follow pursuant to 
Sec.  7.2000(b), if those elected procedures include telephonic or 
electronic participation procedures; the Delaware General Corporation 
Law, Del. Code Ann. Tit. 8 (1991, as amended 1994, and as amended 
thereafter); or the Model Business Corporation Act, provided, however, 
that such procedures are not inconsistent with applicable Federal 
statutes and regulations and safety and soundness. The national bank 
must indicate the use of these procedures in its bylaws.
    (d) Virtual participation at board of directors meetings. A 
national bank may provide for telephonic or electronic participation at 
a meeting of its board of directors.

Brian P. Brooks,
First Deputy Comptroller, Comptroller of the Currency.
[FR Doc. 2020-11525 Filed 5-27-20; 8:45 am]
BILLING CODE 4810-33-P