Regulatory Capital Rule: Changes to Applicability Thresholds for Regulatory Capital and Liquidity Requirements; Correction, 74257-74259 [2020-24900]
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74257
Rules and Regulations
Federal Register
Vol. 85, No. 225
Friday, November 20, 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 Part 324
RIN 3064–AF66
Regulatory Capital Rule: Changes to
Applicability Thresholds for
Regulatory Capital and Liquidity
Requirements; Correction
Federal Deposit Insurance
Corporation.
ACTION: Correcting amendment.
AGENCY:
The Federal Deposit
Insurance Corporation (FDIC) published
an interagency final rule in the Federal
Register on November 1, 2019, that
revises the criteria for determining the
applicability of regulatory capital and
liquidity requirements for large U.S.
banking organizations and the U.S.
intermediate holding companies of
certain foreign banking organizations.
This final rule aligns the applicability of
the enhanced supplementary leverage
ratio for purposes of the prompt
corrective action provisions in the
FDIC’s capital rule to its intended scope.
DATES: Effective Date: November 20,
2020.
SUMMARY:
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FOR FURTHER INFORMATION CONTACT:
Michael Phillips, Counsel, mphillips@
fdic.gov, (202) 898–3581; Catherine
Wood, Counsel, cawood@fdic.gov, (202)
898–3788; Francis Kuo, Counsel, fkuo@
fdic.gov, (202) 898–6654; Supervision
and Legislation Branch, Legal Division,
Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC
20429. For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (800) 925–4618.
SUPPLEMENTARY INFORMATION: The
Federal Deposit Insurance Corporation,
along with the Office of the Comptroller
of the Currency and the Board of
Governors of the Federal Reserve
System (collectively, the agencies)
published a final rule in the Federal
Register on November 1, 2019, that
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16:07 Nov 19, 2020
Jkt 253001
revises the criteria for determining the
applicability of regulatory capital and
liquidity requirements for large U.S.
banking organizations and the U.S.
intermediate holding companies of
certain foreign banking organizations
(tailoring rule).1 Under the tailoring
rule, the supplementary leverage ratio of
3 percent applies to certain banking
organizations and their subsidiaries,
while global systemically important
banking organizations (GSIBs) and their
subsidiaries are subject to the enhanced
supplementary leverage ratio. Under the
agencies’ prompt corrective action
(PCA) provisions of the capital rule,
depository institution subsidiaries of
GSIBs must maintain a supplementary
leverage ratio of 6 percent or greater for
purposes of the ‘‘well capitalized’’ PCA
category.2
In promulgating the tailoring rule, the
agencies stated in the preamble that the
enhanced supplementary leverage ratio
is a Category I capital standard, which
is applicable only to U.S. GSIBs and
their depository institution subsidiaries.
Specifically, the preamble to the
tailoring final rule provides that the
final rule maintains the capital
requirements applicable to U.S. GSIBs
and their depository institution
subsidiaries. These requirements
generally reflect agreements reached by
the BCBS. U.S. GSIBs and their
depository institution subsidiaries must
calculate risk-based capital ratios using
both the advanced approaches and the
standardized approach and are subject
to the U.S. leverage ratio. As stated in
the preamble, such banking
organizations are also subject to the
requirement to recognize elements of
AOCI in regulatory capital; the
requirement to expand the capital
conservation buffer by the amount of the
countercyclical capital buffer, if
applicable; and enhanced
supplementary leverage ratio
standards.3 In addition, U.S. GSIBs are
subject to the GSIB surcharge.
Application of these Category I capital
requirements will continue to
strengthen the capital positions of U.S.
1 Regulatory Capital Rule: Changes to
Applicability Thresholds for Regulatory Capital and
Liquidity Requirements, 84 FR 59230 (Nov. 1,
2020).
2 See 12 CFR part 324, subpart H.
3 84 FR 59230, 59277.
PO 00000
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Fmt 4700
Sfmt 4700
GSIBs and reduce risks to financial
stability.
In promulgating the tailoring rule, the
agencies, however, inadvertently
omitted amending the PCA provisions
of the capital rule to reflect the tailoring
rule, including the well capitalized PCA
category. This PCA provision currently
states that beginning on January 1, 2018
and thereafter, an FDIC-supervised
institution that is a subsidiary of a
covered BHC will be deemed to be well
capitalized if the FDIC-supervised
institution satisfies 12 CFR
324.403(b)(1)(i)(A) through (E) and has a
supplementary leverage ratio of 6.0
percent or greater. For purposes of 12
CFR 324.403(b)(1)(ii), a covered BHC
means a U.S. top-tier bank holding
company with more than $700 billion in
total assets as reported on the
company’s most recent Consolidated
Financial Statement for Bank Holding
Companies (Form FR Y–9C) or more
than $10 trillion in assets under custody
as reported on the company’s most
recent Banking Organization Systemic
Risk Report (Form FR Y–15).4
This final rule aligns the applicability
of the enhanced supplementary leverage
ratio to its intended scope covering only
global systemically important banking
organizations and their subsidiaries as
described in the preamble to the
tailoring rule. Specifically, this final
rule revises § 324.403(b)(1)(ii) by
removing the definition of covered BHC
and provides that an FDIC-supervised
institution that is a subsidiary of a
global systemically important bank
holding company as defined in 12 CFR
217.402 will be considered wellcapitalized for purposes of the PCA
provisions of the capital rule if it
satisfies certain capital requirements
and has a supplementary leverage ratio
of 6.0 percent or greater.
A. Administrative Procedure Act
The FDIC is issuing this final rule
without prior notice, the opportunity for
public comment, and the 30-day
delayed effective date ordinarily
prescribed by the Administrative
Procedure Act (APA).5 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
4 12
55
CFR 324.403(b)(1)(ii).
U.S.C. 553.
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74258
Federal Register / Vol. 85, No. 225 / Friday, November 20, 2020 / Rules and Regulations
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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.’’ 6
The FDIC finds that the public
interest is best served by implementing
this final rule as of the date of Federal
Register publication. This final rule’s
technical correction will correct the
applicability of the enhanced
supplementary leverage ratio to remove
any potential confusion about the
regulatory capital requirements
applicable to the largest insured
depository institutions so that such
institutions can focus their attention on
the continued intermediation of credit.
For purposes of the well capitalized
PCA category, this final rule aligns the
applicability of the enhanced
supplementary leverage ratio to its
intended scope covering only global
systemically important banking
organizations and their subsidiaries as
described in the preamble to the
tailoring rule. The FDIC finds that there
is good cause consistent with the public
interest to issue this final rule without
notice and comment.
Additionally, the APA requires a 30day 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.7
Because the final rule relieves a
restriction, the final rule is also exempt
from the APA’s delayed effective date
requirement.8 Additionally, the FDIC
finds good cause to publish the final
rule correction with an immediate
effective date for the same reasons set
forth above under the discussion of
section 553(b)(B) of the APA.
B. Congressional Review Act
For purposes of Congressional Review
Act, the Office of Management and
Budget (OMB) makes a determination as
to whether a final rule constitutes a
‘‘major’’ rule.9 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.10
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
65
U.S.C. 553(b)(B).
U.S.C. 553(d).
8 5 U.S.C. 553(d)(1).
9 5 U.S.C. 801 et seq.
10 5 U.S.C. 801(a)(3).
75
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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 foreignbased enterprises in domestic and
export markets.11
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.12
For the same reasons set forth above,
the FDIC adopts this final rule without
the delayed effective date generally
prescribed under the Congressional
Review Act. Given the importance of
aligning the PCA provisions of the
capital rule to the tailoring rule, the
FDIC believes that delaying the effective
date of this final rule would be contrary
to the public interest. As required by the
Congressional Review Act, the FDIC
will submit the final rule and other
appropriate reports to Congress and the
Government Accountability Office for
review.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521) (PRA) states that
no agency may conduct or sponsor, nor
is the respondent required to respond
to, an information collection unless it
displays a currently valid OMB control
number. This final rule correction does
not contain any information collection
requirements therefore the FDIC will
make no submissions to OMB in
connection with this final rule.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 13 requires an agency to consider
whether the rules it proposes will have
a significant economic impact on a
substantial number of small entities.14
The RFA applies only to rules for which
an agency publishes a general notice of
proposed rulemaking pursuant to 5
11 5
U.S.C. 804(2).
U.S.C. 808.
13 5 U.S.C. 601 et seq.
14 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.
12 5
PO 00000
Frm 00002
Fmt 4700
Sfmt 4700
U.S.C. 553(b). As discussed previously,
consistent with section 553(b)(B) of the
APA, the FDIC has determined general
notice and opportunity for public
comment is impracticable and contrary
to the public’s interest, and therefore
good cause exists to not issue a notice
of proposed rulemaking. Accordingly,
the FDIC has concluded that the RFA’s
requirements relating to initial and final
regulatory flexibility analysis do not
apply to this final rule.
E. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act
(RCDRIA),15 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.16
As stated above, this final rule’s
technical correction will correct the
applicability of the enhanced
supplementary leverage ratio to remove
any potential confusion about the
regulatory capital requirements
applicable to the largest insured
depository institutions so that such
institutions can focus their attention on
the continued intermediation of credit.
In addition, for purposes of the well
capitalized PCA category, this final rule
aligns the applicability of the enhanced
supplementary leverage ratio to its
intended scope covering only global
systemically important banking
organizations and their subsidiaries as
described in the preamble to the
tailoring rule. As such, this final rule
does not impose any additional
reporting, disclosures, or other new
requirements on IDIs. Therefore, the
FDIC finds that the requirements of
15 12
16 12
E:\FR\FM\20NOR1.SGM
U.S.C. 4802(a).
U.S.C. 4802.
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Federal Register / Vol. 85, No. 225 / Friday, November 20, 2020 / Rules and Regulations
RCDRIA do not apply and this final rule
will be published with an immediate
effective date.
F. Plain Language
Section 722 of the Gramm-LeachBliley Act 17 requires the Federal
banking agencies to use ‘‘plain
language’’ in all proposed and final
rules published after January 1, 2000. In
light of this requirement, the FDIC has
sought to present the final rule in a
simple and straightforward manner.
of this paragraph (b)(1)(ii), global
systemically important bank holding
company has the same meaning as in 12
CFR 217.402.
*
*
*
*
*
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on November 4,
2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020–24900 Filed 11–19–20; 8:45 am]
BILLING CODE 6714–01–P
List of Subjects in 12 CFR Part 324
Administrative practice and
procedure, Banks, Banking, Capital,
Capital adequacy, Reporting and
recordkeeping requirements, Risk,
Savings associations.
DEPARTMENT OF TRANSPORTATION
12 CFR Chapter III
[Docket No. FAA–2020–0803; Airspace
Docket No. 20–AGL–30]
Federal Aviation Administration
14 CFR Part 71
Authority and Issuance
For the reasons set forth in the
preamble, the FDIC corrects chapter III
of title 12 of the Code of Federal
Regulations by making the following
correcting amendment:
PART 324—CAPITAL ADEQUACY OF
FDIC-SUPERVISED INSTITUTIONS
Authority: 12 U.S.C. 1815(a), 1815(b),
1816, 1818(a), 1818(b), 1818(c), 1818(t),
1819(Tenth), 1828(c), 1828(d), 1828(i),
1828(n), 1828(o), 1831o, 1835, 3907, 3909,
4808; 5371; 5412; Pub. L. 102–233, 105 Stat.
1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.
L. 102–242, 105 Stat. 2236, 2355, as amended
by Pub. L. 103–325, 108 Stat. 2160, 2233 (12
U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.
2236, 2386, as amended by Pub. L. 102–550,
106 Stat. 3672, 4089 (12 U.S.C. 1828 note);
Pub. L. 111–203, 124 Stat. 1376, 1887 (15
U.S.C. 78o–7 note), Pub. L. 115–174; section
4014, Pub. L. 116–136, 134 Stat. 281 (15
U.S.C. 9052).
2. Section 324.403 is amended by
revising paragraph (b)(1)(ii) to read as
follows:
■
§ 324.403 Capital measures and capital
category definitions.
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*
*
*
*
*
(b) * * *
(1) * * *
(ii) An FDIC-supervised institution
that is a subsidiary of a global
systemically important bank holding
company will be deemed to be well
capitalized if the FDIC-supervised
institution satisfies paragraphs
(b)(1)(i)(A) through (E) of this section
and has a supplementary leverage ratio
of 6.0 percent or greater. For purposes
17 Pub. L. 106–102, sec. 722, 113 Stat. 1338, 1471
(1999), 12 U.S.C. 4809.
16:07 Nov 19, 2020
Jkt 253001
Amendment of Class E Airspace;
Charlevoix, MI
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
This action amends the Class
E airspace extending upward from 700
feet above the surface at Charlevoix
Municipal Airport, Charlevoix, MI. This
action is the result of an airspace review
caused by the decommissioning of the
Charlevoix non-directional beacon
(NDB). The geographic coordinates of
the airport are also being updated to
coincide with the FAA’s aeronautical
database.
DATES: Effective 0901 UTC, February 25,
2021. The Director of the Federal
Register approves this incorporation by
reference action under Title 1 Code of
Federal Regulations part 51, subject to
the annual revision of FAA Order
7400.11 and publication of conforming
amendments.
ADDRESSES: FAA Order 7400.11E,
Airspace Designations and Reporting
Points, and subsequent amendments can
be viewed online at https://
www.faa.gov/air_traffic/publications/.
For further information, you can contact
the Airspace Policy Group, Federal
Aviation Administration, 800
Independence Avenue SW, Washington,
DC 20591; telephone: (202) 267–8783.
The Order is also available for
inspection at the National Archives and
Records Administration (NARA). For
information on the availability of FAA
Order 7400.11E at NARA, email
fedreg.legal@nara.gov or go to https://
www.archives.gov/federal-register/cfr/
ibr-locations.html.
SUMMARY:
1. The authority citation for part 324
continues to read as follows:
■
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74259
FOR FURTHER INFORMATION CONTACT:
Jeffrey Claypool, Federal Aviation
Administration, Operations Support
Group, Central Service Center, 10101
Hillwood Parkway, Fort Worth, TX
76177; telephone (817) 222–5711.
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the United States Code.
Subtitle I, Section 106 describes the
authority of the FAA Administrator.
Subtitle VII, Aviation Programs,
describes in more detail the scope of the
agency’s authority. This rulemaking is
promulgated under the authority
described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it amends the
Class E airspace extending upward from
700 feet above the surface at Charlevoix
Municipal Airport, Charlevoix, MI, to
support instrument flight rule
operations at this airport.
History
The FAA published a notice of
proposed rulemaking in the Federal
Register (85 FR 55395; September 8,
2020) for Docket No. FAA–2020–0803 to
amend the Class E airspace extending
upward from 700 feet above the surface
at Charlevoix Municipal Airport,
Charlevoix, MI. Interested parties were
invited to participate in this rulemaking
effort by submitting written comments
on the proposal to the FAA. One
comment was received; however, the
comment did not pertain to the
proposed action so no response is
provided.
Class E airspace designations are
published in paragraph 6005 of FAA
Order 7400.11E, dated July 21, 2020,
and effective September 15, 2020, which
is incorporated by reference in 14 CFR
71.1. The Class E airspace designations
listed in this document will be
published subsequently in the Order.
Availability and Summary of
Documents for Incorporation by
Reference
This document amends FAA Order
7400.11E, Airspace Designations and
Reporting Points, dated July 21, 2020,
and effective September 15, 2020. FAA
Order 7400.11E is publicly available as
listed in the ADDRESSES section of this
document. FAA Order 7400.11E lists
Class A, B, C, D, and E airspace areas,
E:\FR\FM\20NOR1.SGM
20NOR1
]]>Agencies
[Federal Register Volume 85, Number 225 (Friday, November 20, 2020)]
[Rules and Regulations]
[Pages 74257-74259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24900]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 85, No. 225 / Friday, November 20, 2020 /
Rules and Regulations
[[Page 74257]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 324
RIN 3064-AF66
Regulatory Capital Rule: Changes to Applicability Thresholds for
Regulatory Capital and Liquidity Requirements; Correction
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Correcting amendment.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) published an
interagency final rule in the Federal Register on November 1, 2019,
that revises the criteria for determining the applicability of
regulatory capital and liquidity requirements for large U.S. banking
organizations and the U.S. intermediate holding companies of certain
foreign banking organizations. This final rule aligns the applicability
of the enhanced supplementary leverage ratio for purposes of the prompt
corrective action provisions in the FDIC's capital rule to its intended
scope.
DATES: Effective Date: November 20, 2020.
FOR FURTHER INFORMATION CONTACT: Michael Phillips, Counsel,
[email protected], (202) 898-3581; Catherine Wood, Counsel,
[email protected], (202) 898-3788; Francis Kuo, Counsel, [email protected],
(202) 898-6654; Supervision and Legislation Branch, Legal Division,
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington,
DC 20429. For the hearing impaired only, Telecommunication Device for
the Deaf (TDD), (800) 925-4618.
SUPPLEMENTARY INFORMATION: The Federal Deposit Insurance Corporation,
along with the Office of the Comptroller of the Currency and the Board
of Governors of the Federal Reserve System (collectively, the agencies)
published a final rule in the Federal Register on November 1, 2019,
that revises the criteria for determining the applicability of
regulatory capital and liquidity requirements for large U.S. banking
organizations and the U.S. intermediate holding companies of certain
foreign banking organizations (tailoring rule).\1\ Under the tailoring
rule, the supplementary leverage ratio of 3 percent applies to certain
banking organizations and their subsidiaries, while global systemically
important banking organizations (GSIBs) and their subsidiaries are
subject to the enhanced supplementary leverage ratio. Under the
agencies' prompt corrective action (PCA) provisions of the capital
rule, depository institution subsidiaries of GSIBs must maintain a
supplementary leverage ratio of 6 percent or greater for purposes of
the ``well capitalized'' PCA category.\2\
---------------------------------------------------------------------------
\1\ Regulatory Capital Rule: Changes to Applicability Thresholds
for Regulatory Capital and Liquidity Requirements, 84 FR 59230 (Nov.
1, 2020).
\2\ See 12 CFR part 324, subpart H.
---------------------------------------------------------------------------
In promulgating the tailoring rule, the agencies stated in the
preamble that the enhanced supplementary leverage ratio is a Category I
capital standard, which is applicable only to U.S. GSIBs and their
depository institution subsidiaries. Specifically, the preamble to the
tailoring final rule provides that the final rule maintains the capital
requirements applicable to U.S. GSIBs and their depository institution
subsidiaries. These requirements generally reflect agreements reached
by the BCBS. U.S. GSIBs and their depository institution subsidiaries
must calculate risk-based capital ratios using both the advanced
approaches and the standardized approach and are subject to the U.S.
leverage ratio. As stated in the preamble, such banking organizations
are also subject to the requirement to recognize elements of AOCI in
regulatory capital; the requirement to expand the capital conservation
buffer by the amount of the countercyclical capital buffer, if
applicable; and enhanced supplementary leverage ratio standards.\3\ In
addition, U.S. GSIBs are subject to the GSIB surcharge. Application of
these Category I capital requirements will continue to strengthen the
capital positions of U.S. GSIBs and reduce risks to financial
stability.
---------------------------------------------------------------------------
\3\ 84 FR 59230, 59277.
---------------------------------------------------------------------------
In promulgating the tailoring rule, the agencies, however,
inadvertently omitted amending the PCA provisions of the capital rule
to reflect the tailoring rule, including the well capitalized PCA
category. This PCA provision currently states that beginning on January
1, 2018 and thereafter, an FDIC-supervised institution that is a
subsidiary of a covered BHC will be deemed to be well capitalized if
the FDIC-supervised institution satisfies 12 CFR 324.403(b)(1)(i)(A)
through (E) and has a supplementary leverage ratio of 6.0 percent or
greater. For purposes of 12 CFR 324.403(b)(1)(ii), a covered BHC means
a U.S. top-tier bank holding company with more than $700 billion in
total assets as reported on the company's most recent Consolidated
Financial Statement for Bank Holding Companies (Form FR Y-9C) or more
than $10 trillion in assets under custody as reported on the company's
most recent Banking Organization Systemic Risk Report (Form FR Y-
15).\4\
---------------------------------------------------------------------------
\4\ 12 CFR 324.403(b)(1)(ii).
---------------------------------------------------------------------------
This final rule aligns the applicability of the enhanced
supplementary leverage ratio to its intended scope covering only global
systemically important banking organizations and their subsidiaries as
described in the preamble to the tailoring rule. Specifically, this
final rule revises Sec. 324.403(b)(1)(ii) by removing the definition
of covered BHC and provides that an FDIC-supervised institution that is
a subsidiary of a global systemically important bank holding company as
defined in 12 CFR 217.402 will be considered well-capitalized for
purposes of the PCA provisions of the capital rule if it satisfies
certain capital requirements and has a supplementary leverage ratio of
6.0 percent or greater.
A. Administrative Procedure Act
The FDIC is issuing this final rule without prior notice, the
opportunity for public comment, and the 30-day delayed effective date
ordinarily prescribed by the Administrative Procedure Act (APA).\5\
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
[[Page 74258]]
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.'' \6\
---------------------------------------------------------------------------
\5\ 5 U.S.C. 553.
\6\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------
The FDIC finds that the public interest is best served by
implementing this final rule as of the date of Federal Register
publication. This final rule's technical correction will correct the
applicability of the enhanced supplementary leverage ratio to remove
any potential confusion about the regulatory capital requirements
applicable to the largest insured depository institutions so that such
institutions can focus their attention on the continued intermediation
of credit. For purposes of the well capitalized PCA category, this
final rule aligns the applicability of the enhanced supplementary
leverage ratio to its intended scope covering only global systemically
important banking organizations and their subsidiaries as described in
the preamble to the tailoring rule. The FDIC finds that there is good
cause consistent with the public interest to issue this final rule
without notice and comment.
Additionally, the APA 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.\7\
Because the final rule relieves a restriction, the final rule is also
exempt from the APA's delayed effective date requirement.\8\
Additionally, the FDIC finds good cause to publish the final rule
correction with an immediate effective date for the same reasons set
forth above under the discussion of section 553(b)(B) of the APA.
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\7\ 5 U.S.C. 553(d).
\8\ 5 U.S.C. 553(d)(1).
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B. Congressional Review Act
For purposes of Congressional Review Act, the Office of Management
and Budget (OMB) makes a determination as to whether a final rule
constitutes a ``major'' rule.\9\ 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.\10\
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\9\ 5 U.S.C. 801 et seq.
\10\ 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 (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-based enterprises in domestic and
export markets.\11\
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\11\ 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.\12\
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\12\ 5 U.S.C. 808.
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For the same reasons set forth above, the FDIC adopts this final
rule without the delayed effective date generally prescribed under the
Congressional Review Act. Given the importance of aligning the PCA
provisions of the capital rule to the tailoring rule, the FDIC believes
that delaying the effective date of this final rule would be contrary
to the public interest. As required by the Congressional Review Act,
the FDIC will submit the final rule and other appropriate reports to
Congress and the Government Accountability Office for review.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA)
states that no agency may conduct or sponsor, nor is the respondent
required to respond to, an information collection unless it displays a
currently valid OMB control number. This final rule correction does not
contain any information collection requirements therefore the FDIC will
make no submissions to OMB in connection with this final rule.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \13\ requires an agency to
consider whether the rules it proposes will have a significant economic
impact on a substantial number of small entities.\14\ 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 FDIC has
determined general notice and opportunity for public comment is
impracticable and contrary to the public's interest, and therefore good
cause exists to not issue a notice of proposed rulemaking. Accordingly,
the FDIC has concluded that the RFA's requirements relating to initial
and final regulatory flexibility analysis do not apply to this final
rule.
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\13\ 5 U.S.C. 601 et seq.
\14\ 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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E. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (RCDRIA),\15\ 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.\16\
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\15\ 12 U.S.C. 4802(a).
\16\ 12 U.S.C. 4802.
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As stated above, this final rule's technical correction will
correct the applicability of the enhanced supplementary leverage ratio
to remove any potential confusion about the regulatory capital
requirements applicable to the largest insured depository institutions
so that such institutions can focus their attention on the continued
intermediation of credit. In addition, for purposes of the well
capitalized PCA category, this final rule aligns the applicability of
the enhanced supplementary leverage ratio to its intended scope
covering only global systemically important banking organizations and
their subsidiaries as described in the preamble to the tailoring rule.
As such, this final rule does not impose any additional reporting,
disclosures, or other new requirements on IDIs. Therefore, the FDIC
finds that the requirements of
[[Page 74259]]
RCDRIA do not apply and this final rule will be published with an
immediate effective date.
F. Plain Language
Section 722 of the Gramm-Leach-Bliley Act \17\ requires the Federal
banking agencies to use ``plain language'' in all proposed and final
rules published after January 1, 2000. In light of this requirement,
the FDIC has sought to present the final rule in a simple and
straightforward manner.
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\17\ Pub. L. 106-102, sec. 722, 113 Stat. 1338, 1471 (1999), 12
U.S.C. 4809.
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List of Subjects in 12 CFR Part 324
Administrative practice and procedure, Banks, Banking, Capital,
Capital adequacy, Reporting and recordkeeping requirements, Risk,
Savings associations.
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the preamble, the FDIC corrects
chapter III of title 12 of the Code of Federal Regulations by making
the following correcting amendment:
PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
0
1. The authority citation for part 324 continues to read as follows:
Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b),
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n),
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233,
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242,
105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160,
2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386,
as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828
note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note),
Pub. L. 115-174; section 4014, Pub. L. 116-136, 134 Stat. 281 (15
U.S.C. 9052).
0
2. Section 324.403 is amended by revising paragraph (b)(1)(ii) to read
as follows:
Sec. 324.403 Capital measures and capital category definitions.
* * * * *
(b) * * *
(1) * * *
(ii) An FDIC-supervised institution that is a subsidiary of a
global systemically important bank holding company will be deemed to be
well capitalized if the FDIC-supervised institution satisfies
paragraphs (b)(1)(i)(A) through (E) of this section and has a
supplementary leverage ratio of 6.0 percent or greater. For purposes of
this paragraph (b)(1)(ii), global systemically important bank holding
company has the same meaning as in 12 CFR 217.402.
* * * * *
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on November 4, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020-24900 Filed 11-19-20; 8:45 am]
BILLING CODE 6714-01-P
