Branch Application Procedures, 72551-72555 [2020-23529]

Download as PDF 72551 Rules and Regulations Federal Register Vol. 85, No. 220 Friday, November 13, 2020 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Parts 303 and 347 RIN 3064–AF54 Branch Application Procedures Federal Deposit Insurance Corporation (FDIC). ACTION: Final rule. AGENCY: The FDIC is adopting a final rule to amend its application requirements for the establishment and relocation of branches and offices so that such applications no longer require statements regarding the compliance of such proposals with the National Historic Preservation Act of 1966 (NHPA) and the National Environmental Policy Act of 1969 (NEPA). The final rule amends the FDIC’s regulations to remove NHPA and NEPA requirements embedded in its branch application procedures, and rescinds FDIC statements of policy regarding the NHPA and the NEPA, consistent with branch application procedures for national banks and insured state member banks supervised by the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System. DATES: The final rule is effective on December 14, 2020. FOR FURTHER INFORMATION CONTACT: Navid Choudhury, Counsel, Policy Unit, Legal Division, (202) 898–6526, nchoudhury@fdic.gov; Patricia A. Colohan, Associate Director, Risk Management Examination Branch; (202) 898–7283, pcolohan@fdic.gov. SUPPLEMENTARY INFORMATION: SUMMARY: jbell on DSKJLSW7X2PROD with RULES Background The NHPA and the NEPA were enacted by Congress as discrete but related laws to limit the impact of Federal Government initiatives on historic properties and the environment, respectively. These statutes apply to a VerDate Sep<11>2014 16:03 Nov 12, 2020 Jkt 253001 limited universe of Federal Government actions. The NHPA and the NEPA seek to incorporate historic preservation and environmental considerations into the Federal Government’s work and also to enhance and support state and local laws that address historic preservation and environmental policy. Historically, the FDIC has interpreted the NHPA and NEPA as having limited application to deposit insurance and branch applications. Under Section 106 of the NHPA, Federal agencies are required to take into account the effects of their ‘‘undertakings’’ on historic properties.1 Likewise, section 102(2)(C) of the NEPA requires that Federal agencies include, in every recommendation or report on major Federal actions significantly affecting the quality of the human environment, a detailed statement that addresses the environmental impact of the proposal.2 The FDIC has historically interpreted the scope of the NHPA and the NEPA as limited to the potential impact on historic properties and the environment with respect to a limited universe of applications, specifically, for deposit insurance for de novo institutions and applications by state non-member banks to establish a domestic branch and to relocate a domestic branch or main office (Covered Applications). The FDIC has implemented the NHPA and the NEPA with respect to Covered Applications by regulations and via three statements of policy. The FDIC’s regulations generally require applicants to provide statements regarding their compliance with NEPA and NHPA in connection with main office relocation applications by state nonmember banks,3 domestic and foreign branch establishment and relocation applications by state nonmember banks,4 and insured branch relocation applications by foreign banks.5 The three statements of policy are: the 1 54 U.S.C. 306108. U.S.C. 4332(C). 3 12 CFR 303.40 and 303.42(b)(4) and (5). 4 12 CFR 303.40, 303.42(b)(4) and (5), and 303.182. See also section 402 (54 U.S.C. 307101) of the NHPA that requires Federal undertakings outside of the United States take into account adverse effects on sites inscribed on the World Heritage List or on the foreign nation’s equivalent of the National Register for the purpose of avoiding or mitigating adverse effects. Congress added this provision to the NHPA in 1980 to govern Federal undertakings outside the United States. 5 12 CFR 303.184. 2 42 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Statement of Policy Regarding the National Historic Preservation Act of 1966; 6 the Statement of Policy Regarding the National Environmental Policy Act of 1969; 7 and the Statement of Policy on Applications for Deposit Insurance.8 Review of Regulations and Guidance As part of the FDIC’s comprehensive review of its statements of policy and related matters in an effort to streamline FDIC regulations and other supervisory materials issued to the public, FDIC staff reviewed the requirements for branch applications. Additionally, the FDIC committed to review all published guidance in order to identify any guidance that should be revised or rescinded because such issuance is outof-date or otherwise no longer relevant as part of its 2017 decennial report to Congress required by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA).9 Courts generally determine whether the NHPA and the NEPA apply to a particular Federal agency action by applying similar principles to both statutes, because the NHPA and NEPA are parallel but discrete statutes. Section 106 of the NHPA applies only to a Federal ‘‘undertaking,’’ which, for the type of work the FDIC does, means an activity ‘‘requiring a federal permit, license or approval.’’ 10 Section 102(2)(C) of the NEPA applies only to a ‘‘major Federal action,’’ which includes actions with environmental effects that may be major and which are potentially subject to Federal control and responsibility. As noted in the preamble 6 71 FR 42399 (July 26, 2006). FR 63475 (Nov. 13, 1998). 8 63 FR 44756 (Nov. 20, 1998); amended 67 FR 79278 (Dec. 27, 2002). The FDIC expects to update this Statement of Policy at a later date, however, applications for deposit insurance would also be impacted similarly based on this final rule in that statements regarding the NHPA and the NEPA would not be required for deposit insurance applications. 9 12 U.S.C. 3311. In accordance with the EGRPRA, the FDIC regularly reviews its regulations to identify outdated or otherwise unnecessary regulatory requirements. 10 Undertaking is a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including: (1) Those carried out by or on behalf of the Federal agency; (2) those carried out with Federal financial assistance; (3) those requiring a Federal permit, license or approval; and (4) those subject to state or local regulation administered pursuant to a delegation or approval by a Federal agency. 54 U.S.C. 300320. 7 63 E:\FR\FM\13NOR1.SGM 13NOR1 jbell on DSKJLSW7X2PROD with RULES 72552 Federal Register / Vol. 85, No. 220 / Friday, November 13, 2020 / Rules and Regulations to the July notice of proposed rulemaking, in reviewing the case law on what constitutes an ‘‘undertaking’’ under NHPA or a ‘‘major Federal action’’ under the NEPA, the FDIC does not believe that approval of a Covered Application constitutes a Federal undertaking under section 106 or section 402 of the NHPA or a major Federal action under section 102(2)(C) of the NEPA as discussed below. Section 18(d) of the Federal Deposit Insurance Act requires the FDIC’s consent in connection with: An insured state nonmember bank’s establishment of a domestic or foreign branch, an insured state nonmember bank’s relocation of its main office or a domestic branch, and a foreign bank’s relocation of an insured branch.11 Section 3(o) defines a domestic branch as any branch bank, branch office, branch agency, additional office, or any branch place of business located in any State of the United States or in any Territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, or the Virgin Islands at which deposits are received or checks paid or money lent.12 These functions (receiving deposits, paying checks, and lending money) characterize a ‘‘domestic branch’’ and are generally referred to as the ‘‘core banking functions.’’ Section 3(o) likewise defines a ‘‘foreign branch’’ as any office or place of business located outside the United States at which ‘‘banking operations are conducted,’’ 13 and an insured branch of a foreign bank is defined as a branch of a foreign bank at which insured deposits are received.14 Section 18(d) therefore generally prohibits a state nonmember bank from engaging in specified activities at a location other than an FDIC-approved main office, domestic branch, or foreign branch, and prohibits a foreign bank from receiving insured deposits at a location other than an approved insured branch. Section 18(d) does not confer upon the FDIC the statutory authority to oversee the construction or acquisition of bank premises, but it governs the circumstances under which the FDIC may authorize a state nonmember bank or an insured branch of a foreign bank to engage in specified banking functions from bank premises. The FDIC’s approval of an application under section 18(d), as well as its consideration of NHPA and NEPA in connection with deposit insurance applications, only 11 12 12 12 U.S.C. 1828(d)(1) & (2). U.S.C. 1813(o). 13 Id. 14 12 authorizes certain banking activities to occur at a particular geographic location. Therefore, the FDIC’s approval of a Covered Application does not authorize any building construction or demolition—or any other activity that could affect historic properties or the environment. Currently, the FDIC is the only Federal banking agency that requires consideration of the NHPA and NEPA in connection with branch applications. The regulatory requirements under the Federal Reserve Board and the OCC do not incorporate review of the NHPA and the NEPA with respect to branch applications.15 After carefully reviewing the FDIC’s procedures for Covered Applications, the FDIC has concluded that consideration of the NHPA and NEPA is not required by law and is an unnecessary regulatory requirement for insured State nonmember banks. Proposed Rule; Rescission of Policy Statements On July 10, 2020, the FDIC published a notice of proposed rulemaking (NPR) to amend its application requirements for the establishment and relocation of branches and offices and deposit insurance for de novo institutions so that such applications would no longer require statements regarding the compliance of such proposal with the NHPA and NEPA.16 The NPR proposed amending the FDIC regulations to remove NHPA and NEPA requirements embedded in the branch application procedures, and to rescind the statements of policy regarding the NHPA and NEPA, because consideration of these statutes during the processing of these applications is an unnecessary regulatory requirement and would make the FDIC’s procedures consistent with the branch application procedures for national banks and insured State member banks supervised by the OCC and Federal Reserve System. Comments The FDIC issued the NPR on July 10, 2020, with a 30-day comment period. The FDIC received one comment on the NPR. The commenter supported the proposal by noting that rescinding the filing requirement would make the application process more efficient, align with timing requirements, and remove a time-consuming and onerous requirement. Consequently, the final rule is adopted without change. 15 84 U.S.C. 1813(s); see also 12 U.S.C. 3101(b)(6). VerDate Sep<11>2014 16:03 Nov 12, 2020 Jkt 253001 16 85 PO 00000 FR 51711 (Sept. 30, 2019). FR 41442 (July 10, 2020). Frm 00002 Fmt 4700 Sfmt 4700 Explanation of the Final Rule The final rule amends parts 303 and 347 to remove references to compliance statements regarding the NHPA and NEPA, as well as to rescind the Statement of Policy Regarding the National Historic Preservation Act of 1966 and the Statement of Policy Regarding the National Environmental Policy Act of 1969. The amendments to 12 CFR parts 303 and 347, together with the rescission of the two Statements of Policy regarding the NHPA and the NEPA, eliminate requirements that are unnecessary for insured state nonmember banks and insured branches of foreign banks, as well as improve the efficiency of the Covered Application review process. Additionally, these actions place the FDIC in alignment with the other Federal banking agencies and remove a competitive disadvantage insured state nonmember banks and insured branches of foreign banks now face relative to insured state member banks and national banks. Furthermore, insured state nonmember banks and insured branches of foreign banks remain subject to any applicable state and local historic preservation and environmental laws. Expected Effects According to the most recent data, the FDIC supervises 3,309 depository institutions. The final rule specifically affects 2,980 state nonmember depository institutions supervised by the FDIC and 9 insured branches of foreign banks.17 FDIC supervised State savings banks and associations are not subject to the NHPA/NEPA requirements because 12 CFR part 303 only applies to insured state nonmember banks. As previously discussed, the final rule would (1) remove ‘‘NEPA’’ and ‘‘NHPA’’ as defined terms in 12 CFR 303.2(w) and (x); (2) amend the branch application filing procedures for state nonmember banks set forth in 12 CFR 303.42 by deleting the requirements related to the NHPA and the NEPA set forth in paragraphs (b)(4) and (5); (3) amend the foreign branch application notice procedures for state nonmember banks set forth in 12 CFR 303.182 by removing the requirements to provide a statement in accordance with NHPA set forth in paragraphs (a) and (b)(2)(i), and by removing NHPA compliance as a basis for withholding general consent to establish or relocate a foreign branch under 12 CFR 347.119(b); (4) amend the filing procedures for moving an insured branch of a foreign bank set forth in 12 17 FDIC E:\FR\FM\13NOR1.SGM Call Report data, March 31, 2020. 13NOR1 jbell on DSKJLSW7X2PROD with RULES Federal Register / Vol. 85, No. 220 / Friday, November 13, 2020 / Rules and Regulations CFR 303.184 by deleting the requirements related to the NHPA and the NEPA set forth in paragraphs (a)(2)(iii) and (iv) and (d)(1)(iv); and (5) rescind the Statement of Policy Regarding the National Historic Preservation Act of 1966; and (6) rescind the Statement of Policy on National Environmental Policy Act Procedures Relating to Filings Made with the FDIC. In so doing, the final rule would amend the required contents for applications for establishment of a branch and applications for relocation of a branch or main office. Between 2015 and 2018, the FDIC received 549 applications from 400 unique insured State nonmember banks per year to establish a branch, 177 applications from 152 unique insured State nonmember banks per year to relocate a branch or main office, and 1 application from insured branches of foreign banks per year to relocate a branch or main office, on average.18 For purposes of this analysis, the FDIC is estimating that the number of unique respondents affected by the final rule would be consistent with this recent experience. Therefore, the FDIC estimates that the final rule would affect 400 insured State nonmember banks applying to establish a domestic branch, 152 insured State nonmember institutions applying to relocate a branch or main office, and 1 insured branch of a foreign bank applying to relocate a branch or main office, per year, on average. The final rule would likely reduce the costs associated with filing branch applications for affected entities by making the process more efficient. Although the final rule is expected to reduce costs associated with Covered Applications for applicants dealing with historic properties or environmental issues, the FDIC does not believe the final rule will reduce the average hours per response for Covered Applications. Additionally, as previously discussed, the FDIC is currently the only Federal banking agency that requires consideration of the NHPA and NEPA in connection with branch applications. Therefore, the final rule is expected to remove a competitive disadvantage that insured state nonmember banks and insured branches of foreign banks now face relative to state member banks and national banks. The FDIC believes that the associated reductions in costs and application information content as a result of the final rule are unlikely to generate significant effects on the U.S. economy. The estimated cost reductions are likely to be small because the number of 18 FDIC Application Data. VerDate Sep<11>2014 16:03 Nov 12, 2020 Jkt 253001 entities affected is also estimated to be small. Further, as previously discussed, while covered applications of insured state nonmember banks and insured branches of foreign banks would no longer be subject to NHPA or NEPA review under federal law, they would remain subject to any applicable state and local historic preservation and environmental laws. Accordingly, outcomes for individual properties that are the subject of covered applications may differ in some states from what they would have been in the absence of the rule. As previously discussed, after reviewing the case law on what constitutes an ‘‘undertaking’’ under NHPA or a ‘‘major Federal action’’ under the NEPA, the FDIC does not believe that approval of a Covered Application constitutes a federal undertaking under section 106 of the NHPA or a major federal action under section 102(2)(C) of the NEPA. Therefore, concurrent with the amendment of 12 CFR parts 303 and 347, the FDIC is planning on rescinding the Statements of Policy entitled Statement of Policy Regarding the National Historic Preservation Act of 1966, and Statement of Policy on National Environmental Policy Act Procedures Relating to Filings Made with the FDIC. The FDIC believes that the concurrent action to rescind these Statements of Policy will help simplify the application process by removing unnecessary information for applicants, thereby making the process more efficient. Alternatives Considered The FDIC considered alternatives to the final rule but believes that the amendments represent the most appropriate option for affected entities. As discussed previously, after carefully reviewing the FDIC’s procedures for Covered Applications, the FDIC has concluded that consideration of the NHPA and the NEPA is not required by law and is an unnecessary regulatory requirement of the branch application review process. The FDIC considered the alternative of retaining the current regulations, but did not choose to do so. As discussed elsewhere in this preamble, the FDIC believes the regulations are unnecessary, require entities to incur unnecessary costs associated with submitting branch applications, and perpetuate a competitive disadvantage for insured state nonmember banks and insured branches of foreign banks relative to insured state member banks and national banks. Additionally, the FDIC considered retaining the Statements of PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 72553 Policy entitled, Statement of Policy Regarding the National Historic Preservation Act of 1966 and Statement of Policy on National Environmental Policy Act Procedures Relating to Filings Made with the FDIC, but did not choose to do so. Upon reevaluation of the applicability of what constitutes an ‘‘undertaking’’ under NHPA or a ‘‘major Federal action’’ under the NEPA, and deletion of requirements related to the NHPA and the NEPA in 12 CFR parts 303 and 347, these Statements of Policy would be unnecessary. Therefore, the FDIC is amending 12 CFR parts 303 and 347 by deleting the requirements related to the NHPA and the NEPA and concurrently rescinding the related Statements of Policy. Regulatory Analysis A. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) requires that, in connection with a notice of final rulemaking, an agency prepare and make available for public comment a final regulatory flexibility analysis that describes the impact of the final rule on small entities.19 However, a final regulatory flexibility analysis is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities, and publishes its certification, including a statement providing a factual basis for the certification, in the Federal Register, together with the rule. The Small Business Administration (SBA) has defined ‘‘small entities’’ to include banking organizations with total assets of less than or equal to $600 million.20 Generally, the FDIC considers a significant effect to be a quantified effect in excess of 5 percent of total annual salaries and benefits, or 2.5 percent of total noninterest expenses. The FDIC believes that effects in excess of these thresholds typically represent significant effects for FDIC-supervised institutions. For the reasons provided below, the FDIC certifies that the final rule will not have a significant economic impact on a substantial 19 5 U.S.C. 601, et seq. SBA defines a small banking organization as having $600 million or less in assets, where ‘‘a financial institution’s assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year.’’ See 13 CFR 121.201 (as amended by 84 FR 34261, effective August 19, 2019). ‘‘SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates.’’ See 13 CFR 121.103. Following these regulations, the FDIC uses a covered entity’s affiliated and acquired assets, averaged over the preceding four quarters, to determine whether the FDIC-supervised institution is ‘‘small’’ for the purposes of RFA. 20 The E:\FR\FM\13NOR1.SGM 13NOR1 jbell on DSKJLSW7X2PROD with RULES 72554 Federal Register / Vol. 85, No. 220 / Friday, November 13, 2020 / Rules and Regulations number of small banking organizations. Accordingly, a regulatory flexibility analysis is not required. According to the most recent data, the FDIC supervises 3,309 insured depository institutions, of which 2,548 are considered small banking organizations for the purposes of RFA.21 As previously discussed, the final rule would (1) remove ‘‘NEPA’’ and ‘‘NHPA’’ as defined terms in 12 CFR 303.2(w) and (x); (2) amend the branch application filing procedures for state nonmember banks set forth in 12 CFR 303.42 by deleting the requirements related to the NHPA and the NEPA set forth in paragraphs (b)(4) and (5); (3) amend the foreign branch application notice procedures for state nonmember banks set forth in 12 CFR 303.182 by removing the requirements to provide a statement in accordance with NHPA set forth in paragraphs (a) and (b)(2)(i), and by removing NHPA compliance as a basis for withholding general consent to establish or relocate a foreign branch under 12 CFR 347.119(b); (4) amend the filing procedures for moving an insured branch of a foreign bank set forth in 12 CFR 303.184 by deleting the requirements related to the NHPA and the NEPA set forth in paragraphs (a)(2)(iii) and (iv) and (d)(1)(iv); (5) rescind the Statement of Policy Regarding the National Historic Preservation Act of 1966; and (6) rescind the Statement of Policy on National Environmental Policy Act Procedures Relating to Filings Made with the FDIC. In so doing, the final rule amends the required contents for applications for establishment of a branch and applications for relocation of a branch or main office. The final rule could affect the 2,352 small state nonmember depository institutions supervised by the FDIC. No insured branches of foreign banks are considered small banking organizations for the purposes of RFA.22 Between 2015 and 2018, the FDIC received applications from 195 unique small insured State nonmember banks per year to establish a branch and applications from 68 unique small insured State nonmember banks per year to relocate a branch or main office, on average.23 For purposes of this analysis, the FDIC is estimating that the number of unique respondents affected by the final rule will be consistent with this recent experience. Therefore, the FDIC estimates that the final rule will 21 FDIC Call Report data for the period ending March 31, 2020. 22 FFIEC Reports of Condition and Income (Call Report), for the period ending March 31, 2020. 23 FDIC Application Data. VerDate Sep<11>2014 16:03 Nov 12, 2020 Jkt 253001 affect approximately 195 small insured State nonmember banks applying to establish a domestic branch and approximately 68 small insured State nonmember institutions applying to relocate a branch or main office, per year. In total, these 263 affected entities represent no more than an estimated 10.3 percent of small FDIC-supervised institutions. The final rule is likely to reduce the costs associated with filing Covered Applications for small entities, making the process more efficient. Although the final rule is expected to reduce costs associated with Covered Applications for small applicants dealing with historic properties or environmental issues, the FDIC does not believe the final rule will reduce the average hours per response for Covered Applications. Additionally, as previously discussed, the FDIC is currently the only Federal banking agency that requires consideration of the NHPA and NEPA in connection with branch applications. Therefore, the final rule is expected to remove a competitive disadvantage that small insured state nonmember banks and insured branches of foreign banks currently face relative to state member banks and national banks. Based on the information above, and pursuant to section 605(b) of the RFA, the FDIC certifies that the final rule will not have a significant economic impact on a substantial number of small entities. B. Paperwork Reduction Act In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA),24 the FDIC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currentlyvalid Office of Management and Budget (OMB) control number. The final rule affects the FDIC’s current information collection titled ‘‘Application for a Bank to Establish a Branch or Move its Main Office’’ (OMB Control No. 3064–0070). In particular, the final rule removes the requirements related to NHPA and NEPA therefore reducing the PRA burden. However, the amount of hourly burden previously indicated in connection with the PRA information collection does not distinguish between the time to comply with the NHPA and NEPA and the other non-NHPA/NEPA notification requirements. For this reason, the FDIC is assuming that any allotted time dedicated to NHPA and NEPA is minimal and will result in a zero net change in the current estimated average hourly burden for the 24 44 PO 00000 U.S.C. 3501–3521. Frm 00004 Fmt 4700 Sfmt 4700 information collection. Therefore, no submission will be made to OMB for review. C. Riegle Community Development and Regulatory Improvement Act of 1994 Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),25 in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), each Federal banking agency must consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, 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.26 Because the final rule does not impose any reporting, disclosure, or other new requirements on insured depository institutions, the requirements of RCDRIA do not apply. D. Congressional Review Act For purposes of Congressional Review Act (CRA), the OMB makes a determination as to whether a final rule constitutes a ‘‘major’’ rule.27 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.28 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—(A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign25 12 U.S.C. 4802(a). at 4802(b). 27 5 U.S.C. 801 et seq. 28 5 U.S.C. 801(a)(3). 26 Id. E:\FR\FM\13NOR1.SGM 13NOR1 Federal Register / Vol. 85, No. 220 / Friday, November 13, 2020 / Rules and Regulations based enterprises in domestic and export markets.29 The OMB has determined that the final rule is not a major rule for purposes of the CRA and the FDIC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review. § 303.42 E. Plain Language § 303.182 Establishing, moving or closing a foreign branch of an insured state nonmember bank. Section 722 of the Gramm-LeachBliley Act 30 requires each Federal banking agency to use plain language in all of its proposed and final rules published after January 1, 2000. The FDIC has sought to present the final rule in a simple and straightforward manner and did not receive any comments on the use of plain language in connection with the proposed rule. List of Subjects 12 CFR Part 303 Administrative practice and procedure, Bank deposit insurance, Banks, banking, Reporting and recordkeeping requirements, Savings associations. 12 CFR Part 347 Authority delegations (Government agencies), Bank deposit insurance, Banks, banking, Credit, Foreign banking, Investments, Reporting and recordkeeping requirements, U.S. Investments abroad. FEDERAL DEPOSIT INSURANCE CORPORATION [Amended] 3. In § 303.42, remove paragraphs (b)(4) and (5) and redesignate paragraphs (b)(6) through (8) as paragraphs (b)(4) through (6), respectively. ■ 4. Amend § 303.182 by revising paragraphs (a) and (b)(2)(i) to read as follows: ■ (a) Notice procedures for general consent. Notice in the form of a letter from an eligible depository institution establishing or relocating a foreign branch pursuant to § 347.117(a) of this chapter must be provided to the appropriate FDIC office no later than 30 days after taking such action. The notice must include the location of the foreign branch, including a street address. The FDIC will provide written acknowledgment of receipt of the notice. (b) * * * (2) * * * (i) The exact location of the proposed foreign branch, including the street address. * * * * * ■ 5. Amend § 303.184 by: ■ a. Removing paragraphs (a)(2)(iii) and (iv); ■ b. Redesignating paragraphs (a)(2)(v) and (vi) as paragraphs (a)(iii) and (iv), respectively; and ■ c. Revising paragraph (d)(1)(iv). The revision reads as follows: 12 CFR Chapter III § 303.184 Moving an insured branch of a foreign bank. Authority and Issuance * * * * * (d) * * * (1) * * * (iv) Compliance with the CRA and any applicable related regulations, including 12 CFR part 345, has been considered and favorably resolved; * * * * * For the reasons set forth in the preamble, the FDIC amends 12 CFR parts 303 and 347 as follows: PART 303—FILING PROCEDURES 1. The authority citation for part 303 continues to read as follows: ■ Authority: 12 U.S.C. 378, 478, 1463, 1467a, 1813, 1815, 1817, 1818, 1819 (Seventh and Tenth), 1820, 1823, 1828, 1831i, 1831e, 1831o, 1831p–1, 1831w, 1831z, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5412; 15 U.S.C. 1601–1607. § 303.2 [Amended] 2. In § 303.2, remove paragraphs (w) and (x) and redesignate paragraphs (y) through (gg) as paragraphs (w) through (ee), respectively. jbell on DSKJLSW7X2PROD with RULES ■ 29 5 U.S.C. 804(2). Law 106–102, section 722, 113 Stat. 1338, 1471 (1999). 30 Public VerDate Sep<11>2014 16:03 Nov 12, 2020 Jkt 253001 PART 347—INTERNATIONAL BANKING 6. The authority citation for part 347 continues to read as follows: ■ Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103, 3104, 3105, 3108, 3109; Pub. L. 111–203, section 939A, 124 Stat. 1376, 1887 (July 21, 2010) (codified 15 U.S.C. 78o–7 note). § 347.119 [Amended] 7. Amend § 347.119 by removing paragraph (b) and redesignating paragraphs (c) and (d) as paragraphs (b) and (c), respectively. ■ Federal Deposit Insurance Corporation. PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 72555 By order of the Board of Directors. Dated at Washington, DC, on October 20, 2020. James P. Sheesley, Assistant Executive Secretary. [FR Doc. 2020–23529 Filed 11–12–20; 8:45 am] BILLING CODE 6714–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2020–0779; Product Identifier 2020–NM–092–AD; Amendment 39–21311; AD 2020–22–15] RIN 2120–AA64 Airworthiness Directives; the Boeing Company Airplanes Federal Aviation Administration (FAA), DOT. ACTION: Final rule. AGENCY: The FAA is adopting a new airworthiness directive (AD) for all The Boeing Company Model DC–10–10 and DC–10–10F airplanes, Model DC–10–15 airplanes, Model DC–10–30 and DC–10– 30F (KC–10A and KDC–10) airplanes, Model DC–10–40 and DC–10–40F airplanes, Model MD–10–10F and MD– 10–30F airplanes, and Model MD–11 and MD–11F airplanes. This AD was prompted by reports of cracked floor beams and floor beam supports in the area of the overwing exit doors located at certain stations (STA). This AD requires an inspection of the overwing floor beams for any repair, repetitive inspections of the overwing floor beams and floor beam supports at certain STA on the left and right sides for any crack, and applicable on-condition actions. The FAA is issuing this AD to address the unsafe condition on these products. DATES: This AD is effective December 18, 2020. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of December 18, 2020. ADDRESSES: For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110–SK57, Seal Beach, CA 90740–5600; telephone 562–797–1717; internet https://www.myboeingfleet.com. You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206–231–3195. SUMMARY: E:\FR\FM\13NOR1.SGM 13NOR1

Agencies

[Federal Register Volume 85, Number 220 (Friday, November 13, 2020)]
[Rules and Regulations]
[Pages 72551-72555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23529]



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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. 

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Federal Register / Vol. 85, No. 220 / Friday, November 13, 2020 / 
Rules and Regulations

[[Page 72551]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 303 and 347

RIN 3064-AF54


Branch Application Procedures

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is adopting a final rule to amend its application 
requirements for the establishment and relocation of branches and 
offices so that such applications no longer require statements 
regarding the compliance of such proposals with the National Historic 
Preservation Act of 1966 (NHPA) and the National Environmental Policy 
Act of 1969 (NEPA). The final rule amends the FDIC's regulations to 
remove NHPA and NEPA requirements embedded in its branch application 
procedures, and rescinds FDIC statements of policy regarding the NHPA 
and the NEPA, consistent with branch application procedures for 
national banks and insured state member banks supervised by the Office 
of the Comptroller of the Currency (OCC) and the Board of Governors of 
the Federal Reserve System.

DATES: The final rule is effective on December 14, 2020.

FOR FURTHER INFORMATION CONTACT: Navid Choudhury, Counsel, Policy Unit, 
Legal Division, (202) 898-6526, [email protected]; Patricia A. 
Colohan, Associate Director, Risk Management Examination Branch; (202) 
898-7283, [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    The NHPA and the NEPA were enacted by Congress as discrete but 
related laws to limit the impact of Federal Government initiatives on 
historic properties and the environment, respectively. These statutes 
apply to a limited universe of Federal Government actions. The NHPA and 
the NEPA seek to incorporate historic preservation and environmental 
considerations into the Federal Government's work and also to enhance 
and support state and local laws that address historic preservation and 
environmental policy. Historically, the FDIC has interpreted the NHPA 
and NEPA as having limited application to deposit insurance and branch 
applications.
    Under Section 106 of the NHPA, Federal agencies are required to 
take into account the effects of their ``undertakings'' on historic 
properties.\1\ Likewise, section 102(2)(C) of the NEPA requires that 
Federal agencies include, in every recommendation or report on major 
Federal actions significantly affecting the quality of the human 
environment, a detailed statement that addresses the environmental 
impact of the proposal.\2\ The FDIC has historically interpreted the 
scope of the NHPA and the NEPA as limited to the potential impact on 
historic properties and the environment with respect to a limited 
universe of applications, specifically, for deposit insurance for de 
novo institutions and applications by state non-member banks to 
establish a domestic branch and to relocate a domestic branch or main 
office (Covered Applications).
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    \1\ 54 U.S.C. 306108.
    \2\ 42 U.S.C. 4332(C).
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    The FDIC has implemented the NHPA and the NEPA with respect to 
Covered Applications by regulations and via three statements of policy. 
The FDIC's regulations generally require applicants to provide 
statements regarding their compliance with NEPA and NHPA in connection 
with main office relocation applications by state nonmember banks,\3\ 
domestic and foreign branch establishment and relocation applications 
by state nonmember banks,\4\ and insured branch relocation applications 
by foreign banks.\5\ The three statements of policy are: the Statement 
of Policy Regarding the National Historic Preservation Act of 1966; \6\ 
the Statement of Policy Regarding the National Environmental Policy Act 
of 1969; \7\ and the Statement of Policy on Applications for Deposit 
Insurance.\8\
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    \3\ 12 CFR 303.40 and 303.42(b)(4) and (5).
    \4\ 12 CFR 303.40, 303.42(b)(4) and (5), and 303.182. See also 
section 402 (54 U.S.C. 307101) of the NHPA that requires Federal 
undertakings outside of the United States take into account adverse 
effects on sites inscribed on the World Heritage List or on the 
foreign nation's equivalent of the National Register for the purpose 
of avoiding or mitigating adverse effects. Congress added this 
provision to the NHPA in 1980 to govern Federal undertakings outside 
the United States.
    \5\ 12 CFR 303.184.
    \6\ 71 FR 42399 (July 26, 2006).
    \7\ 63 FR 63475 (Nov. 13, 1998).
    \8\ 63 FR 44756 (Nov. 20, 1998); amended 67 FR 79278 (Dec. 27, 
2002). The FDIC expects to update this Statement of Policy at a 
later date, however, applications for deposit insurance would also 
be impacted similarly based on this final rule in that statements 
regarding the NHPA and the NEPA would not be required for deposit 
insurance applications.
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Review of Regulations and Guidance

    As part of the FDIC's comprehensive review of its statements of 
policy and related matters in an effort to streamline FDIC regulations 
and other supervisory materials issued to the public, FDIC staff 
reviewed the requirements for branch applications. Additionally, the 
FDIC committed to review all published guidance in order to identify 
any guidance that should be revised or rescinded because such issuance 
is out-of-date or otherwise no longer relevant as part of its 2017 
decennial report to Congress required by the Economic Growth and 
Regulatory Paperwork Reduction Act (EGRPRA).\9\
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    \9\ 12 U.S.C. 3311. In accordance with the EGRPRA, the FDIC 
regularly reviews its regulations to identify outdated or otherwise 
unnecessary regulatory requirements.
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    Courts generally determine whether the NHPA and the NEPA apply to a 
particular Federal agency action by applying similar principles to both 
statutes, because the NHPA and NEPA are parallel but discrete statutes. 
Section 106 of the NHPA applies only to a Federal ``undertaking,'' 
which, for the type of work the FDIC does, means an activity 
``requiring a federal permit, license or approval.'' \10\ Section 
102(2)(C) of the NEPA applies only to a ``major Federal action,'' which 
includes actions with environmental effects that may be major and which 
are potentially subject to Federal control and responsibility. As noted 
in the preamble

[[Page 72552]]

to the July notice of proposed rulemaking, in reviewing the case law on 
what constitutes an ``undertaking'' under NHPA or a ``major Federal 
action'' under the NEPA, the FDIC does not believe that approval of a 
Covered Application constitutes a Federal undertaking under section 106 
or section 402 of the NHPA or a major Federal action under section 
102(2)(C) of the NEPA as discussed below.
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    \10\ Undertaking is a project, activity, or program funded in 
whole or in part under the direct or indirect jurisdiction of a 
Federal agency, including: (1) Those carried out by or on behalf of 
the Federal agency; (2) those carried out with Federal financial 
assistance; (3) those requiring a Federal permit, license or 
approval; and (4) those subject to state or local regulation 
administered pursuant to a delegation or approval by a Federal 
agency. 54 U.S.C. 300320.
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    Section 18(d) of the Federal Deposit Insurance Act requires the 
FDIC's consent in connection with: An insured state nonmember bank's 
establishment of a domestic or foreign branch, an insured state 
nonmember bank's relocation of its main office or a domestic branch, 
and a foreign bank's relocation of an insured branch.\11\ Section 3(o) 
defines a domestic branch as any branch bank, branch office, branch 
agency, additional office, or any branch place of business located in 
any State of the United States or in any Territory of the United 
States, Puerto Rico, Guam, American Samoa, the Trust Territory of the 
Pacific Islands, or the Virgin Islands at which deposits are received 
or checks paid or money lent.\12\ These functions (receiving deposits, 
paying checks, and lending money) characterize a ``domestic branch'' 
and are generally referred to as the ``core banking functions.'' 
Section 3(o) likewise defines a ``foreign branch'' as any office or 
place of business located outside the United States at which ``banking 
operations are conducted,'' \13\ and an insured branch of a foreign 
bank is defined as a branch of a foreign bank at which insured deposits 
are received.\14\ Section 18(d) therefore generally prohibits a state 
nonmember bank from engaging in specified activities at a location 
other than an FDIC-approved main office, domestic branch, or foreign 
branch, and prohibits a foreign bank from receiving insured deposits at 
a location other than an approved insured branch. Section 18(d) does 
not confer upon the FDIC the statutory authority to oversee the 
construction or acquisition of bank premises, but it governs the 
circumstances under which the FDIC may authorize a state nonmember bank 
or an insured branch of a foreign bank to engage in specified banking 
functions from bank premises. The FDIC's approval of an application 
under section 18(d), as well as its consideration of NHPA and NEPA in 
connection with deposit insurance applications, only authorizes certain 
banking activities to occur at a particular geographic location. 
Therefore, the FDIC's approval of a Covered Application does not 
authorize any building construction or demolition--or any other 
activity that could affect historic properties or the environment.
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    \11\ 12 U.S.C. 1828(d)(1) & (2).
    \12\ 12 U.S.C. 1813(o).
    \13\ Id.
    \14\ 12 U.S.C. 1813(s); see also 12 U.S.C. 3101(b)(6).
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    Currently, the FDIC is the only Federal banking agency that 
requires consideration of the NHPA and NEPA in connection with branch 
applications. The regulatory requirements under the Federal Reserve 
Board and the OCC do not incorporate review of the NHPA and the NEPA 
with respect to branch applications.\15\ After carefully reviewing the 
FDIC's procedures for Covered Applications, the FDIC has concluded that 
consideration of the NHPA and NEPA is not required by law and is an 
unnecessary regulatory requirement for insured State nonmember banks.
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    \15\ 84 FR 51711 (Sept. 30, 2019).
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Proposed Rule; Rescission of Policy Statements

    On July 10, 2020, the FDIC published a notice of proposed 
rulemaking (NPR) to amend its application requirements for the 
establishment and relocation of branches and offices and deposit 
insurance for de novo institutions so that such applications would no 
longer require statements regarding the compliance of such proposal 
with the NHPA and NEPA.\16\ The NPR proposed amending the FDIC 
regulations to remove NHPA and NEPA requirements embedded in the branch 
application procedures, and to rescind the statements of policy 
regarding the NHPA and NEPA, because consideration of these statutes 
during the processing of these applications is an unnecessary 
regulatory requirement and would make the FDIC's procedures consistent 
with the branch application procedures for national banks and insured 
State member banks supervised by the OCC and Federal Reserve System.
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    \16\ 85 FR 41442 (July 10, 2020).
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Comments

    The FDIC issued the NPR on July 10, 2020, with a 30-day comment 
period. The FDIC received one comment on the NPR. The commenter 
supported the proposal by noting that rescinding the filing requirement 
would make the application process more efficient, align with timing 
requirements, and remove a time-consuming and onerous requirement. 
Consequently, the final rule is adopted without change.

Explanation of the Final Rule

    The final rule amends parts 303 and 347 to remove references to 
compliance statements regarding the NHPA and NEPA, as well as to 
rescind the Statement of Policy Regarding the National Historic 
Preservation Act of 1966 and the Statement of Policy Regarding the 
National Environmental Policy Act of 1969. The amendments to 12 CFR 
parts 303 and 347, together with the rescission of the two Statements 
of Policy regarding the NHPA and the NEPA, eliminate requirements that 
are unnecessary for insured state nonmember banks and insured branches 
of foreign banks, as well as improve the efficiency of the Covered 
Application review process. Additionally, these actions place the FDIC 
in alignment with the other Federal banking agencies and remove a 
competitive disadvantage insured state nonmember banks and insured 
branches of foreign banks now face relative to insured state member 
banks and national banks. Furthermore, insured state nonmember banks 
and insured branches of foreign banks remain subject to any applicable 
state and local historic preservation and environmental laws.

Expected Effects

    According to the most recent data, the FDIC supervises 3,309 
depository institutions. The final rule specifically affects 2,980 
state nonmember depository institutions supervised by the FDIC and 9 
insured branches of foreign banks.\17\ FDIC supervised State savings 
banks and associations are not subject to the NHPA/NEPA requirements 
because 12 CFR part 303 only applies to insured state nonmember banks. 
As previously discussed, the final rule would (1) remove ``NEPA'' and 
``NHPA'' as defined terms in 12 CFR 303.2(w) and (x); (2) amend the 
branch application filing procedures for state nonmember banks set 
forth in 12 CFR 303.42 by deleting the requirements related to the NHPA 
and the NEPA set forth in paragraphs (b)(4) and (5); (3) amend the 
foreign branch application notice procedures for state nonmember banks 
set forth in 12 CFR 303.182 by removing the requirements to provide a 
statement in accordance with NHPA set forth in paragraphs (a) and 
(b)(2)(i), and by removing NHPA compliance as a basis for withholding 
general consent to establish or relocate a foreign branch under 12 CFR 
347.119(b); (4) amend the filing procedures for moving an insured 
branch of a foreign bank set forth in 12

[[Page 72553]]

CFR 303.184 by deleting the requirements related to the NHPA and the 
NEPA set forth in paragraphs (a)(2)(iii) and (iv) and (d)(1)(iv); and 
(5) rescind the Statement of Policy Regarding the National Historic 
Preservation Act of 1966; and (6) rescind the Statement of Policy on 
National Environmental Policy Act Procedures Relating to Filings Made 
with the FDIC. In so doing, the final rule would amend the required 
contents for applications for establishment of a branch and 
applications for relocation of a branch or main office. Between 2015 
and 2018, the FDIC received 549 applications from 400 unique insured 
State nonmember banks per year to establish a branch, 177 applications 
from 152 unique insured State nonmember banks per year to relocate a 
branch or main office, and 1 application from insured branches of 
foreign banks per year to relocate a branch or main office, on 
average.\18\ For purposes of this analysis, the FDIC is estimating that 
the number of unique respondents affected by the final rule would be 
consistent with this recent experience. Therefore, the FDIC estimates 
that the final rule would affect 400 insured State nonmember banks 
applying to establish a domestic branch, 152 insured State nonmember 
institutions applying to relocate a branch or main office, and 1 
insured branch of a foreign bank applying to relocate a branch or main 
office, per year, on average.
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    \17\ FDIC Call Report data, March 31, 2020.
    \18\ FDIC Application Data.
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    The final rule would likely reduce the costs associated with filing 
branch applications for affected entities by making the process more 
efficient. Although the final rule is expected to reduce costs 
associated with Covered Applications for applicants dealing with 
historic properties or environmental issues, the FDIC does not believe 
the final rule will reduce the average hours per response for Covered 
Applications. Additionally, as previously discussed, the FDIC is 
currently the only Federal banking agency that requires consideration 
of the NHPA and NEPA in connection with branch applications. Therefore, 
the final rule is expected to remove a competitive disadvantage that 
insured state nonmember banks and insured branches of foreign banks now 
face relative to state member banks and national banks.
    The FDIC believes that the associated reductions in costs and 
application information content as a result of the final rule are 
unlikely to generate significant effects on the U.S. economy. The 
estimated cost reductions are likely to be small because the number of 
entities affected is also estimated to be small. Further, as previously 
discussed, while covered applications of insured state nonmember banks 
and insured branches of foreign banks would no longer be subject to 
NHPA or NEPA review under federal law, they would remain subject to any 
applicable state and local historic preservation and environmental 
laws. Accordingly, outcomes for individual properties that are the 
subject of covered applications may differ in some states from what 
they would have been in the absence of the rule.
    As previously discussed, after reviewing the case law on what 
constitutes an ``undertaking'' under NHPA or a ``major Federal action'' 
under the NEPA, the FDIC does not believe that approval of a Covered 
Application constitutes a federal undertaking under section 106 of the 
NHPA or a major federal action under section 102(2)(C) of the NEPA. 
Therefore, concurrent with the amendment of 12 CFR parts 303 and 347, 
the FDIC is planning on rescinding the Statements of Policy entitled 
Statement of Policy Regarding the National Historic Preservation Act of 
1966, and Statement of Policy on National Environmental Policy Act 
Procedures Relating to Filings Made with the FDIC. The FDIC believes 
that the concurrent action to rescind these Statements of Policy will 
help simplify the application process by removing unnecessary 
information for applicants, thereby making the process more efficient.

Alternatives Considered

    The FDIC considered alternatives to the final rule but believes 
that the amendments represent the most appropriate option for affected 
entities. As discussed previously, after carefully reviewing the FDIC's 
procedures for Covered Applications, the FDIC has concluded that 
consideration of the NHPA and the NEPA is not required by law and is an 
unnecessary regulatory requirement of the branch application review 
process. The FDIC considered the alternative of retaining the current 
regulations, but did not choose to do so. As discussed elsewhere in 
this preamble, the FDIC believes the regulations are unnecessary, 
require entities to incur unnecessary costs associated with submitting 
branch applications, and perpetuate a competitive disadvantage for 
insured state nonmember banks and insured branches of foreign banks 
relative to insured state member banks and national banks. 
Additionally, the FDIC considered retaining the Statements of Policy 
entitled, Statement of Policy Regarding the National Historic 
Preservation Act of 1966 and Statement of Policy on National 
Environmental Policy Act Procedures Relating to Filings Made with the 
FDIC, but did not choose to do so. Upon reevaluation of the 
applicability of what constitutes an ``undertaking'' under NHPA or a 
``major Federal action'' under the NEPA, and deletion of requirements 
related to the NHPA and the NEPA in 12 CFR parts 303 and 347, these 
Statements of Policy would be unnecessary. Therefore, the FDIC is 
amending 12 CFR parts 303 and 347 by deleting the requirements related 
to the NHPA and the NEPA and concurrently rescinding the related 
Statements of Policy.

Regulatory Analysis

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires that, in connection 
with a notice of final rulemaking, an agency prepare and make available 
for public comment a final regulatory flexibility analysis that 
describes the impact of the final rule on small entities.\19\ However, 
a final regulatory flexibility analysis is not required if the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities, and publishes its 
certification, including a statement providing a factual basis for the 
certification, in the Federal Register, together with the rule. The 
Small Business Administration (SBA) has defined ``small entities'' to 
include banking organizations with total assets of less than or equal 
to $600 million.\20\ Generally, the FDIC considers a significant effect 
to be a quantified effect in excess of 5 percent of total annual 
salaries and benefits, or 2.5 percent of total noninterest expenses. 
The FDIC believes that effects in excess of these thresholds typically 
represent significant effects for FDIC-supervised institutions. For the 
reasons provided below, the FDIC certifies that the final rule will not 
have a significant economic impact on a substantial

[[Page 72554]]

number of small banking organizations. Accordingly, a regulatory 
flexibility analysis is not required.
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    \19\ 5 U.S.C. 601, et seq.
    \20\ The SBA defines a small banking organization as having $600 
million or less in assets, where ``a financial institution's assets 
are determined by averaging the assets reported on its four 
quarterly financial statements for the preceding year.'' See 13 CFR 
121.201 (as amended by 84 FR 34261, effective August 19, 2019). 
``SBA counts the receipts, employees, or other measure of size of 
the concern whose size is at issue and all of its domestic and 
foreign affiliates.'' See 13 CFR 121.103. Following these 
regulations, the FDIC uses a covered entity's affiliated and 
acquired assets, averaged over the preceding four quarters, to 
determine whether the FDIC-supervised institution is ``small'' for 
the purposes of RFA.
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    According to the most recent data, the FDIC supervises 3,309 
insured depository institutions, of which 2,548 are considered small 
banking organizations for the purposes of RFA.\21\ As previously 
discussed, the final rule would (1) remove ``NEPA'' and ``NHPA'' as 
defined terms in 12 CFR 303.2(w) and (x); (2) amend the branch 
application filing procedures for state nonmember banks set forth in 12 
CFR 303.42 by deleting the requirements related to the NHPA and the 
NEPA set forth in paragraphs (b)(4) and (5); (3) amend the foreign 
branch application notice procedures for state nonmember banks set 
forth in 12 CFR 303.182 by removing the requirements to provide a 
statement in accordance with NHPA set forth in paragraphs (a) and 
(b)(2)(i), and by removing NHPA compliance as a basis for withholding 
general consent to establish or relocate a foreign branch under 12 CFR 
347.119(b); (4) amend the filing procedures for moving an insured 
branch of a foreign bank set forth in 12 CFR 303.184 by deleting the 
requirements related to the NHPA and the NEPA set forth in paragraphs 
(a)(2)(iii) and (iv) and (d)(1)(iv); (5) rescind the Statement of 
Policy Regarding the National Historic Preservation Act of 1966; and 
(6) rescind the Statement of Policy on National Environmental Policy 
Act Procedures Relating to Filings Made with the FDIC. In so doing, the 
final rule amends the required contents for applications for 
establishment of a branch and applications for relocation of a branch 
or main office. The final rule could affect the 2,352 small state 
nonmember depository institutions supervised by the FDIC. No insured 
branches of foreign banks are considered small banking organizations 
for the purposes of RFA.\22\
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    \21\ FDIC Call Report data for the period ending March 31, 2020.
    \22\ FFIEC Reports of Condition and Income (Call Report), for 
the period ending March 31, 2020.
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    Between 2015 and 2018, the FDIC received applications from 195 
unique small insured State nonmember banks per year to establish a 
branch and applications from 68 unique small insured State nonmember 
banks per year to relocate a branch or main office, on average.\23\ For 
purposes of this analysis, the FDIC is estimating that the number of 
unique respondents affected by the final rule will be consistent with 
this recent experience. Therefore, the FDIC estimates that the final 
rule will affect approximately 195 small insured State nonmember banks 
applying to establish a domestic branch and approximately 68 small 
insured State nonmember institutions applying to relocate a branch or 
main office, per year. In total, these 263 affected entities represent 
no more than an estimated 10.3 percent of small FDIC-supervised 
institutions.
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    \23\ FDIC Application Data.
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    The final rule is likely to reduce the costs associated with filing 
Covered Applications for small entities, making the process more 
efficient. Although the final rule is expected to reduce costs 
associated with Covered Applications for small applicants dealing with 
historic properties or environmental issues, the FDIC does not believe 
the final rule will reduce the average hours per response for Covered 
Applications. Additionally, as previously discussed, the FDIC is 
currently the only Federal banking agency that requires consideration 
of the NHPA and NEPA in connection with branch applications. Therefore, 
the final rule is expected to remove a competitive disadvantage that 
small insured state nonmember banks and insured branches of foreign 
banks currently face relative to state member banks and national banks.
    Based on the information above, and pursuant to section 605(b) of 
the RFA, the FDIC certifies that the final rule will not have a 
significant economic impact on a substantial number of small entities.

B. Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA),\24\ the FDIC 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 final rule affects the FDIC's current 
information collection titled ``Application for a Bank to Establish a 
Branch or Move its Main Office'' (OMB Control No. 3064-0070). In 
particular, the final rule removes the requirements related to NHPA and 
NEPA therefore reducing the PRA burden. However, the amount of hourly 
burden previously indicated in connection with the PRA information 
collection does not distinguish between the time to comply with the 
NHPA and NEPA and the other non-NHPA/NEPA notification requirements. 
For this reason, the FDIC is assuming that any allotted time dedicated 
to NHPA and NEPA is minimal and will result in a zero net change in the 
current estimated average hourly burden for the information collection. 
Therefore, no submission will be made to OMB for review.
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    \24\ 44 U.S.C. 3501-3521.
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C. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\25\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with principles of safety and soundness and 
the public interest, any administrative burdens that such regulations 
would place on depository institutions, including small depository 
institutions, and customers of depository institutions, as well as the 
benefits of such regulations. In addition, section 302(b) of RCDRIA 
requires new regulations and amendments to regulations that impose 
additional reporting, 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.\26\ Because the final rule does not impose any reporting, 
disclosure, or other new requirements on insured depository 
institutions, the requirements of RCDRIA do not apply.
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    \25\ 12 U.S.C. 4802(a).
    \26\ Id. at 4802(b).
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D. Congressional Review Act

    For purposes of Congressional Review Act (CRA), the OMB makes a 
determination as to whether a final rule constitutes a ``major'' 
rule.\27\ 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.\28\
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    \27\ 5 U.S.C. 801 et seq.
    \28\ 5 U.S.C. 801(a)(3).
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    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--(A) an annual effect on the 
economy of $100,000,000 or more; (B) a major increase in costs or 
prices for consumers, individual industries, Federal, State, or local 
government agencies or geographic regions, or (C) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-

[[Page 72555]]

based enterprises in domestic and export markets.\29\
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    \29\ 5 U.S.C. 804(2).
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    The OMB has determined that the final rule is not a major rule for 
purposes of the CRA and the FDIC will submit the final rule and other 
appropriate reports to Congress and the Government Accountability 
Office for review.

E. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \30\ requires each 
Federal banking agency to use plain language in all of its proposed and 
final rules published after January 1, 2000. The FDIC has sought to 
present the final rule in a simple and straightforward manner and did 
not receive any comments on the use of plain language in connection 
with the proposed rule.
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    \30\ Public Law 106-102, section 722, 113 Stat. 1338, 1471 
(1999).
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List of Subjects

12 CFR Part 303

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Reporting and recordkeeping requirements, Savings 
associations.

12 CFR Part 347

    Authority delegations (Government agencies), Bank deposit 
insurance, Banks, banking, Credit, Foreign banking, Investments, 
Reporting and recordkeeping requirements, U.S. Investments abroad.

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Chapter III

Authority and Issuance

    For the reasons set forth in the preamble, the FDIC amends 12 CFR 
parts 303 and 347 as follows:

PART 303--FILING PROCEDURES

0
1. The authority citation for part 303 continues to read as follows:

    Authority:  12 U.S.C. 378, 478, 1463, 1467a, 1813, 1815, 1817, 
1818, 1819 (Seventh and Tenth), 1820, 1823, 1828, 1831i, 1831e, 
1831o, 1831p-1, 1831w, 1831z, 1835a, 1843(l), 3104, 3105, 3108, 
3207, 5412; 15 U.S.C. 1601-1607.


Sec.  303.2  [Amended]

0
2. In Sec.  303.2, remove paragraphs (w) and (x) and redesignate 
paragraphs (y) through (gg) as paragraphs (w) through (ee), 
respectively.


Sec.  303.42  [Amended]

0
3. In Sec.  303.42, remove paragraphs (b)(4) and (5) and redesignate 
paragraphs (b)(6) through (8) as paragraphs (b)(4) through (6), 
respectively.

0
4. Amend Sec.  303.182 by revising paragraphs (a) and (b)(2)(i) to read 
as follows:


Sec.  303.182  Establishing, moving or closing a foreign branch of an 
insured state nonmember bank.

    (a) Notice procedures for general consent. Notice in the form of a 
letter from an eligible depository institution establishing or 
relocating a foreign branch pursuant to Sec.  347.117(a) of this 
chapter must be provided to the appropriate FDIC office no later than 
30 days after taking such action. The notice must include the location 
of the foreign branch, including a street address. The FDIC will 
provide written acknowledgment of receipt of the notice.
    (b) * * *
    (2) * * *
    (i) The exact location of the proposed foreign branch, including 
the street address.
* * * * *

0
5. Amend Sec.  303.184 by:
0
a. Removing paragraphs (a)(2)(iii) and (iv);
0
b. Redesignating paragraphs (a)(2)(v) and (vi) as paragraphs (a)(iii) 
and (iv), respectively; and
0
c. Revising paragraph (d)(1)(iv).
    The revision reads as follows:


Sec.  303.184  Moving an insured branch of a foreign bank.

* * * * *
    (d) * * *
    (1) * * *
    (iv) Compliance with the CRA and any applicable related 
regulations, including 12 CFR part 345, has been considered and 
favorably resolved;
* * * * *

PART 347--INTERNATIONAL BANKING

0
6. The authority citation for part 347 continues to read as follows:

    Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103, 
3104, 3105, 3108, 3109; Pub. L. 111-203, section 939A, 124 Stat. 
1376, 1887 (July 21, 2010) (codified 15 U.S.C. 78o-7 note).


Sec.  347.119  [Amended]

0
7. Amend Sec.  347.119 by removing paragraph (b) and redesignating 
paragraphs (c) and (d) as paragraphs (b) and (c), respectively.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on October 20, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020-23529 Filed 11-12-20; 8:45 am]
BILLING CODE 6714-01-P