Title IV Conservators and Receivers, 15081-15083 [2021-05860]
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Federal Register / Vol. 86, No. 53 / Monday, March 22, 2021 / Rules and Regulations
(3) * * *
(ii) Any preferred stock instrument
issued under the U.S. Department of the
Treasury’s Emergency Capital
Investment Program pursuant to section
104A of the Community Development
Banking and Financial Institutions Act
of 1994, added by the Consolidated
Appropriations Act, 2021.16
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*
(d) * * *
(4) * * *
(ii) Any debt instrument issued under
the U.S. Department of the Treasury’s
Emergency Capital Investment Program
pursuant to section 104A of the
Community Development Banking and
Financial Institutions Act of 1994,
added by the Consolidated
Appropriations Act, 2021.21
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Federal Deposit Insurance Corporation
Blake J. Paulson,
Acting Comptroller of the Currency.
12 CFR Chapter III
Authority and Issuance
For the reasons stated in the
preamble, the Federal Deposit Insurance
Corporation amends chapter III of Title
12 of the Code of Federal Regulations as
follows:
PART 324—CAPITAL ADEQUACY OF
FDIC–SUPERVISED INSTITUTIONS
7. The authority citation for part 324
continues to read as follows:
■
8. Amend § 324.20 by:
a. Redesignating footnotes 17 through
21 as footnotes 18 through 22;
■ b. Redesignating paragraph (c)(3) as
paragraph (c)(3)(i);
■ c. Adding paragraph (c)(3)(ii);
■ d. Redesignating paragraph (d)(4) as
paragraph (d)(4)(i); and
■ e. Adding paragraph (d)(4)(ii).
The additions and revisions read as
follows:
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■
■
§ 324.20 Capital components and eligibility
criteria for regulatory capital instruments.
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16 Public
21 Public
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Law 116–260.
Law 116–260.
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By order of the Board of Governors of the
Federal Reserve System.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about
March 5, 2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021–05443 Filed 3–19–21; 8:45 am]
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 § 201, Pub. L. 116–136, 134 Stat. 281
(15 U.S.C. 9052).
*
(c) * * *
(3) * * *
(ii) Any preferred stock instruments
issued under the U.S. Department of the
Treasury’s Emergency Capital
Investment Program pursuant to section
104A of the Community Development
Banking and Financial Institutions Act
of 1994, added by the Consolidated
Appropriations Act, 2021.17
*
*
*
*
*
(d) * * *
(4) * * *
(ii) Any debt instruments issued
under the U.S. Department of the
Treasury’s Emergency Capital
Investment Program pursuant to section
104A of the Community Development
Banking and Financial Institutions Act
of 1994, added by the Consolidated
Appropriations Act, 2021.23
*
*
*
*
*
BILLING CODE 4810–33–P; 6714–01–P; 6210–01–P
FARM CREDIT ADMINISTRATION
12 CFR Part 627
RIN 3052–AD46
Title IV Conservators and Receivers
Farm Credit Administration.
Direct final rule.
AGENCY:
ACTION:
The Farm Credit
Administration (FCA, we, or our) issues
this direct final rule to repeal certain
regulations in part 627 that have been
superseded by section 5412 of the
Agricultural Improvement Act of 2018
(2018 Farm Bill), which strengthens,
clarifies, and updates the authorities of
the Farm Credit System Insurance
Corporation (FSCIC or Insurance
Corporation) to act as a conservator or
receiver of a Farm Credit System (FCS
or System) institution.
DATES: If no significant adverse
comment is received on or before April
21, 2021, this regulation shall become
SUMMARY:
17 Public
23 Public
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Law 116–260.
Law 116–260.
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15081
effective no earlier than the expiration
of 30 days after publication in the
Federal Register during which either or
both Houses of Congress are in session.
Pursuant to 12 U.S.C. 2252(c)(1), FCA
will publish notification of the effective
date in the Federal Register.
ADDRESSES: For accuracy and efficiency
reasons, please submit comments by
email or through FCA’s website. We do
not accept comments submitted by
facsimiles (fax), as faxes are difficult for
us to process and achieve compliance
with section 508 of the Rehabilitation
Act of 1973. Please do not submit your
comment multiple times via different
methods. You may submit comments by
any of the following methods:
• Email: Send us an email at regcomm@fca.gov.
• FCA Website: https://www.fca.gov.
Click inside the ‘‘I want to. . .’’ field
near the top of the page; select
‘‘comment on a pending regulation’’
from the dropdown menu; and click
‘‘Go.’’ This takes you to an electronic
public comment form.
• Mail: Kevin J. Kramp, Director,
Office of Regulatory Policy, Farm Credit
Administration, 1501 Farm Credit Drive,
McLean, VA 22102–5090.
You may review copies of comments
we receive on our website at https://
www.fca.gov. Once you are on the
website, click inside the ‘‘I want to
. . .’’ field near the top of the page;
select ‘‘find comments on a pending
regulation’’ from the dropdown menu;
and click ‘‘Go.’’ This will take you to the
Comment Letters page where you can
select the regulation for which you
would like to read the public comments.
We will show your comments as
submitted, including any supporting
data provided, but for technical reasons
we may omit items such as logos and
special characters. Identifying
information that you provide, such as
phone numbers and addresses, will be
publicly available. However, we will
attempt to remove email addresses to
help reduce internet spam. You may
also review comments at our office in
McLean, Virginia. Please call us at (703)
883–4056 or email us at reg-comm@
fca.gov to make an appointment.
FOR FURTHER INFORMATION CONTACT:
Technical information: Ryan Leist,
LeistR@fca.gov, Senior Accountant, or
Jeremy R. Edelstein, EdelsteinJ@fca.gov,
Associate Director, Finance and Capital
Markets Team, Office of Regulatory
Policy, Farm Credit Administration,
McLean, VA 22102–5090, (703) 883–
4414, TTY (703) 883–4056 or
ORPMailbox@fca.gov; or
Legal information: Richard Katz,
KatzR@fca.gov, Senior Counsel, Office
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Federal Register / Vol. 86, No. 53 / Monday, March 22, 2021 / Rules and Regulations
of General Counsel, Farm Credit
Administration, McLean, VA 22102–
5090, (703) 883–4020, TTY (703) 883–
4056.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Objective
II. Background
III. Repeal of Regulations Superseded by
Statutory Amendments
IV. Direct Final Rule
V. Regulatory Flexibility Act Analysis and
Major Rule Conclusion
I. Objective
The objective of this direct final rule
is to repeal regulatory provisions in part
627 that have been superseded by
section 5412 of the 2018 Farm Bill.
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II. Background
On December 20, 2018, President
Trump signed the 2018 Farm Bill into
law.1 Section 5142 of the 2018 Farm Bill
added a new section 5.61C to the Farm
Credit Act of 1971, as amended (Act).2
This new statutory provision
strengthens, clarifies, and updates the
powers and duties of FCSIC after FCA
has appointed it as the conservator or
receiver of a FCS institution.3
Additionally, section 5.61C of the Act
enhances FCSIC’s authority to handle
claims by various parties against a
System institution in conservatorship or
receivership. FCSIC’s new statutory
conservatorship and receivership
authorities are comparable to those of
the Federal Deposit Insurance
Corporation, National Credit Union
Administration, and Federal Housing
Finance Agency.4
FCA is revising its regulations in part
627 so they are consistent with section
5412 of the 2018 Farm Bill. FCA is
issuing this direct final rule that repeals
several regulations in part 627 that are
now inconsistent with provisions in
section 5.61C of the Act pertaining to
FCSIC’s authority to administer
conservatorships and receiverships of
FCS institutions. FCA may address the
following issues in subsequent
rulemakings: (1) Voluntary liquidation
of System institutions under section
1 Public Law 115–334, 132 Stat. 4490, (Dec. 20,
2018).
2 Section 5.61C of the Act is codified at 12 U.S.C.
2277a–10c. The Act is available at www.fca.gov
under ‘‘Laws and regulations,’’ and ‘‘Statutes.’’
3 Section 4.12(b) of the Act requires FCA to
appoint FCSIC as the conservator or receiver of an
FCS bank, association, service corporation, or the
Federal Farm Credit Banks Funding Corporation.
Section 8.41(c)(1)(A) allows, but does not require,
FCA to appoint FCSIC as the conservator or receiver
of the Federal Agricultural Mortgage Corporation
(Farmer Mac).
4 See Conf. Report No. 115–1072, 115th Cong.,
2nd Sess., (Dec. 10, 2018) p. 648.
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4.12(a) of the Act; (2) FCA appointment
of conservators and receivers pursuant
to section 4.12(b) of the Act; and (3)
chartering and dissolving bridge banks
in accordance with section 5.61C(h) of
the Act.
III. Repeal of Regulations Superseded
by Statutory Amendments
FCA is rescinding, in their entirety,
nine (9) regulations in subpart B and
one regulation in subpart C of part 627
pertaining to the receivership or
conservatorship of System institutions.
New section 5.61C of the Act has
strengthened, clarified, and updated
FCSIC’s conservatorship and
receivership authorities, thereby
superseding and rendering these ten
(10) regulations obsolete. More
specifically, this direct rule rescinds:
• 12 CFR 627.2725 Powers and
duties of the receiver—sets forth the
powers and duties of the receiver of a
System institution.
• 12 CFR 627.2726 Treatment by the
conservator or receiver of financial
assets transferred in connection with a
securitization or participation—defines
beneficial interests, financial assets,
participation, securitization, and special
purpose entity. It describes the
treatment of financial assets transferred
in connection with a securitization or
participation in a conservator or
receiver.
• 12 CFR 627.2730 Preservation of
equity—provides that no capital stock,
participation certificates, equity
reserves, or other allocated equities of
an institution in receivership will be
issued, allocated, retired, sold,
distributed, transferred, assigned, or
applied against any indebtedness of the
owners of such equities. This regulation
confirms that borrower stock must be
retired in accordance with section 4.9A
of the Act.
• 12 CFR 627.2740 Creditors’
claims—describes the requirements to
provide notice to creditors, the
allowance and disallowance of claims,
and the procedures for handling certain
claims.
• 12 CFR 627.2745 Priority of
claims—associations—describes the
priority of claims for the distribution of
the assets of an association in
liquidation.
• 12 CFR 627.2750 Priority of
claims-banks—describes the priority of
claims for the distribution of the assets
of a bank in liquidation.
• 12 CFR 627.2752 Priority of
claims—other Farm Credit
institutions—describes the priority of
claims for the distribution of the assets
of a System institution other than an
association or bank.
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• 12 CFR 627.2755 Payment of
claims—describes the payment of
claims and if there are insufficient funds
to pay any class of claims in full,
distribution for that class of claims will
be handled on a pro rata basis.
• 12 CFR 627.2760 Inventory, audit,
and reports—describes inventory, audit,
and reporting requirements for the
receiver upon possession, annually, and
upon final liquidation.
• 12 CFR 627.2780 Powers and
duties of conservators—describes the
powers and duties of the conservator to
conduct its operations for the benefit of
the creditors and stockholders of the
institution.
As noted earlier, section 5412 of the
2018 Farm Bill, which added section
5.61C to the Act, enhanced, clarified,
and updated FCSIC’s powers to conduct
conservatorships and receiverships of
System institutions. More specifically,
various provisions in section 5.61C(b)(2)
of the Act include authorization for
FCSIC to: (1) Operate any System
institution in conservatorship or
receivership, (2) function as the
institution’s board of directors, officers,
members, and stockholders, (3) use
proceeds collected from the
performance of contracts and sale of
assets to pay valid claims, and (4)
receive, determine, and settle claims,
and set the priority of claims in
accordance with the statute.
Furthermore, sections 5.61C(b)(1), (b)(4),
and (b)(10)(C) of the Act expressly
authorize FCSIC to prescribe regulations
regarding the conduct of
conservatorships and receiverships, and
the allowance, disallowance, and
resolution of claims in receivership.
Section 5.61C(b)(15)(B) of the Act
states that FCSIC shall make an annual
accounting or report about each
conservatorship or receivership
available to the FCA Board. Providing
an annual accounting or report to FCA
is currently required by § 627.2760,
which is among the regulations that we
are rescinding. Pursuant to the Act, FCA
is able to obtain necessary annual
accounting or reports from FCSIC.
This direct final rule is not rescinding
subpart A, §§ 627.2720, 627.2735, or
627.2765 in subpart B, or §§ 627.2770,
627.2775, 627.2785, or 627.2790 in
subpart C of part 627 because these
regulations implement section 4.12(b) of
the Act which authorizes FCA to
appoint FCSIC as the receiver or
conservator of System institutions.
Similarly, we are not repealing subpart
D of part 627 which governs our
authority to supervise and regulate the
voluntary liquidation of a System
institution without a receiver. FCA may
revise or update these regulations in a
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subsequent rulemaking. We may also
engage in a rulemaking that implements
section 5.61C(h) of the Act, which
governs the chartering, termination, and
dissolution of System bridge banks that
enable FCSIC to handle the resolution of
one or more distressed FCS institutions.
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IV. Direct Final Rule
For the reasons discussed above, we
are rescinding the above-referenced
sections of part 627 subparts B
(Receivers and Receiverships) and C
(Conservators and Conservatorships) by
direct final rulemaking. The
Administrative Conference of the
United States recommends direct final
rulemakings for Federal agencies to
enact noncontroversial regulations on
an expedited basis, without the usual
notice and comment period.5 This
process enables us to reduce the time
and resources we need to develop,
review, and publish a final rule while
still affording the public an adequate
opportunity to comment or object to the
rule.
In a direct final rulemaking, we notify
the public that the rule will become
effective on a specified date unless we
receive a significant adverse comment
during the comment period. A
significant adverse comment is one
where the commenter explains why the
rule would be inappropriate (including
challenges to its underlying premise or
approach), ineffective, or unacceptable
without a change. In general, a
significant adverse comment would
raise an issue serious enough to warrant
a substantive response from the FCA in
a notice-and-comment proceeding.
We believe that a direct final
rulemaking is the appropriate method
for rescinding above-referenced sections
in subparts B and C of part 627 that are
superseded by the 2018 Farm Bill. We
do not anticipate there will be
significant adverse comments because
this direct final rule implements recent
statutory amendments governing
FCSIC’s numerous powers and duties as
the conservator or receiver of System
institutions. If, however, we receive a
significant adverse comment during the
comment period, we will publish in the
Federal Register a notice of withdrawal
of the relevant provisions of this rule
that will also indicate how the agency
plans to proceed. If we receive no
significant adverse comments, we will
publish notice of the effective date of
the rule following the required
5 Recommendation 95–4, referencing the
Administrative Procedure Act ‘‘good cause’’
exemption at 5 U.S.C. 553(b)(B), adopted June 15,
1995.
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congressional waiting period under
section 5.17(c)(1) of the Act.
V. Regulatory Flexibility Act Analysis
and Major Rule Conclusion
Pursuant to section 605(b) of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.), FCA hereby certifies that the
direct final rule would not have a
significant economic impact on a
substantial number of small entities.
Each of the banks in the Farm Credit
System, considered together with its
affiliated associations, has assets and
annual income in excess of the amounts
that would qualify them as small
entities. Therefore, Farm Credit System
institutions are not ‘‘small entities’’ as
defined in the Regulatory Flexibility
Act.
Under the provisions of the
Congressional Review Act (5 U.S.C. 801
et seq.), the Office of Management and
Budget’s Office of Information and
Regulatory Affairs has determined that
this direct final rule is not a ‘‘major
rule,’’ as the term is defined at 5 U.S.C.
804(2).
List of Subjects in 12 CFR Part 627
Agriculture, Banks, Banking, Claims,
Rural areas.
For the reasons stated in the
preamble, part 627 of chapter VI, title 12
of the Code of Federal Regulations are
amended as follows:
PART 627— TITLE IV
CONSERVATORS, RECEIVERS, AND
VOLUNTARY LIQUIDATIONS
1. The authority citation for part 627
continues to read as follows:
■
Authority: Secs. 4.2, 5.9, 5.10, 5.17, 5.51,
5.58, 5.61 of the Farm Credit Act (12 U.S.C.
2183, 2243, 2244, 2252, 2277a, 2277a–7,
2277a–10).
§§ 627.2725, 627.2726, 627.2730, 627.2740,
627.2745, 627.2750, 627.2752, 627.2755,
627.2760, and 627.2780 [Removed and
Reserved]
2. Sections 627.2725, 627.2726,
627.2730, 627.2740, 627.2745, 627.2750,
627.2752, 627.2755, 627.2760, and
627.2780 are removed and reserved.
■
Dated: March 17, 2021.
Dale Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2021–05860 Filed 3–19–21; 8:45 am]
BILLING CODE 6705–01–P
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15083
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 120 and 121
[Docket Number SBA–2021–0013]
RIN 3245–AH77
Business Loan Program Temporary
Changes; Paycheck Protection
Program as Amended by American
Rescue Plan Act
U.S. Small Business
Administration.
ACTION: Interim final rule.
AGENCY:
This interim final rule
implements changes related to loans
made under the Paycheck Protection
Program (PPP), which was originally
established under the Coronavirus Aid,
Relief, and Economic Security Act
(CARES Act) to provide economic relief
to small businesses nationwide
adversely impacted by the Coronavirus
Disease 2019 (COVID–19). On December
27, 2020, the Economic Aid to Hard-Hit
Small Businesses, Nonprofits, and
Venues Act (Economic Aid Act) was
enacted, extending the authority to
make PPP loans through March 31,
2021, revising certain PPP requirements,
and permitting second draw PPP loans.
On January 14, 2021, SBA published an
interim final rule that incorporated the
Economic Aid Act amendments to the
PPP and consolidated the interim final
rules (and important guidance) that had
been issued governing borrower
eligibility, lender eligibility, and PPP
application and origination
requirements for PPP loans. On March
11, 2021, the American Rescue Plan Act
of 2021 (American Rescue Plan Act) was
enacted expanding eligibility for first
and second draw PPP loans, revising the
exclusions from payroll costs for
purposes of loan forgiveness, and
providing that a PPP borrower that
receives a PPP loan after December 27,
2020 can be approved for a Shuttered
Venue Operator Grant under certain
conditions. This interim final rule
revises the PPP rules to incorporate the
American Rescue Plan Act’s
amendments to the PPP. Additionally,
this interim final rule clarifies the
eligibility for first draw PPP loans for
applicants that are assigned a North
American Industry Classification
System (NAICS) code beginning with 72
and have more than one physical
location and clarifies certain payroll
cost exclusions included in the
Economic Aid Act.
DATES:
Effective date: The provisions of this
interim final rule are effective March 18,
2021.
SUMMARY:
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]]>Agencies
[Federal Register Volume 86, Number 53 (Monday, March 22, 2021)]
[Rules and Regulations]
[Pages 15081-15083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05860]
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FARM CREDIT ADMINISTRATION
12 CFR Part 627
RIN 3052-AD46
Title IV Conservators and Receivers
AGENCY: Farm Credit Administration.
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: The Farm Credit Administration (FCA, we, or our) issues this
direct final rule to repeal certain regulations in part 627 that have
been superseded by section 5412 of the Agricultural Improvement Act of
2018 (2018 Farm Bill), which strengthens, clarifies, and updates the
authorities of the Farm Credit System Insurance Corporation (FSCIC or
Insurance Corporation) to act as a conservator or receiver of a Farm
Credit System (FCS or System) institution.
DATES: If no significant adverse comment is received on or before April
21, 2021, this regulation shall become effective no earlier than the
expiration of 30 days after publication in the Federal Register during
which either or both Houses of Congress are in session. Pursuant to 12
U.S.C. 2252(c)(1), FCA will publish notification of the effective date
in the Federal Register.
ADDRESSES: For accuracy and efficiency reasons, please submit comments
by email or through FCA's website. We do not accept comments submitted
by facsimiles (fax), as faxes are difficult for us to process and
achieve compliance with section 508 of the Rehabilitation Act of 1973.
Please do not submit your comment multiple times via different methods.
You may submit comments by any of the following methods:
Email: Send us an email at [email protected].
FCA Website: https://www.fca.gov. Click inside the ``I want
to. . .'' field near the top of the page; select ``comment on a pending
regulation'' from the dropdown menu; and click ``Go.'' This takes you
to an electronic public comment form.
Mail: Kevin J. Kramp, Director, Office of Regulatory
Policy, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA
22102-5090.
You may review copies of comments we receive on our website at
https://www.fca.gov. Once you are on the website, click inside the ``I
want to . . .'' field near the top of the page; select ``find comments
on a pending regulation'' from the dropdown menu; and click ``Go.''
This will take you to the Comment Letters page where you can select the
regulation for which you would like to read the public comments.
We will show your comments as submitted, including any supporting
data provided, but for technical reasons we may omit items such as
logos and special characters. Identifying information that you provide,
such as phone numbers and addresses, will be publicly available.
However, we will attempt to remove email addresses to help reduce
internet spam. You may also review comments at our office in McLean,
Virginia. Please call us at (703) 883-4056 or email us at [email protected] to make an appointment.
FOR FURTHER INFORMATION CONTACT:
Technical information: Ryan Leist, [email protected], Senior
Accountant, or Jeremy R. Edelstein, [email protected], Associate
Director, Finance and Capital Markets Team, Office of Regulatory
Policy, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-
4414, TTY (703) 883-4056 or [email protected]; or
Legal information: Richard Katz, [email protected], Senior Counsel,
Office
[[Page 15082]]
of General Counsel, Farm Credit Administration, McLean, VA 22102-5090,
(703) 883-4020, TTY (703) 883-4056.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Objective
II. Background
III. Repeal of Regulations Superseded by Statutory Amendments
IV. Direct Final Rule
V. Regulatory Flexibility Act Analysis and Major Rule Conclusion
I. Objective
The objective of this direct final rule is to repeal regulatory
provisions in part 627 that have been superseded by section 5412 of the
2018 Farm Bill.
II. Background
On December 20, 2018, President Trump signed the 2018 Farm Bill
into law.\1\ Section 5142 of the 2018 Farm Bill added a new section
5.61C to the Farm Credit Act of 1971, as amended (Act).\2\ This new
statutory provision strengthens, clarifies, and updates the powers and
duties of FCSIC after FCA has appointed it as the conservator or
receiver of a FCS institution.\3\ Additionally, section 5.61C of the
Act enhances FCSIC's authority to handle claims by various parties
against a System institution in conservatorship or receivership.
FCSIC's new statutory conservatorship and receivership authorities are
comparable to those of the Federal Deposit Insurance Corporation,
National Credit Union Administration, and Federal Housing Finance
Agency.\4\
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\1\ Public Law 115-334, 132 Stat. 4490, (Dec. 20, 2018).
\2\ Section 5.61C of the Act is codified at 12 U.S.C. 2277a-10c.
The Act is available at www.fca.gov under ``Laws and regulations,''
and ``Statutes.''
\3\ Section 4.12(b) of the Act requires FCA to appoint FCSIC as
the conservator or receiver of an FCS bank, association, service
corporation, or the Federal Farm Credit Banks Funding Corporation.
Section 8.41(c)(1)(A) allows, but does not require, FCA to appoint
FCSIC as the conservator or receiver of the Federal Agricultural
Mortgage Corporation (Farmer Mac).
\4\ See Conf. Report No. 115-1072, 115th Cong., 2nd Sess., (Dec.
10, 2018) p. 648.
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FCA is revising its regulations in part 627 so they are consistent
with section 5412 of the 2018 Farm Bill. FCA is issuing this direct
final rule that repeals several regulations in part 627 that are now
inconsistent with provisions in section 5.61C of the Act pertaining to
FCSIC's authority to administer conservatorships and receiverships of
FCS institutions. FCA may address the following issues in subsequent
rulemakings: (1) Voluntary liquidation of System institutions under
section 4.12(a) of the Act; (2) FCA appointment of conservators and
receivers pursuant to section 4.12(b) of the Act; and (3) chartering
and dissolving bridge banks in accordance with section 5.61C(h) of the
Act.
III. Repeal of Regulations Superseded by Statutory Amendments
FCA is rescinding, in their entirety, nine (9) regulations in
subpart B and one regulation in subpart C of part 627 pertaining to the
receivership or conservatorship of System institutions. New section
5.61C of the Act has strengthened, clarified, and updated FCSIC's
conservatorship and receivership authorities, thereby superseding and
rendering these ten (10) regulations obsolete. More specifically, this
direct rule rescinds:
12 CFR 627.2725 Powers and duties of the receiver--sets
forth the powers and duties of the receiver of a System institution.
12 CFR 627.2726 Treatment by the conservator or receiver
of financial assets transferred in connection with a securitization or
participation--defines beneficial interests, financial assets,
participation, securitization, and special purpose entity. It describes
the treatment of financial assets transferred in connection with a
securitization or participation in a conservator or receiver.
12 CFR 627.2730 Preservation of equity--provides that no
capital stock, participation certificates, equity reserves, or other
allocated equities of an institution in receivership will be issued,
allocated, retired, sold, distributed, transferred, assigned, or
applied against any indebtedness of the owners of such equities. This
regulation confirms that borrower stock must be retired in accordance
with section 4.9A of the Act.
12 CFR 627.2740 Creditors' claims--describes the
requirements to provide notice to creditors, the allowance and
disallowance of claims, and the procedures for handling certain claims.
12 CFR 627.2745 Priority of claims--associations--
describes the priority of claims for the distribution of the assets of
an association in liquidation.
12 CFR 627.2750 Priority of claims-banks--describes the
priority of claims for the distribution of the assets of a bank in
liquidation.
12 CFR 627.2752 Priority of claims--other Farm Credit
institutions--describes the priority of claims for the distribution of
the assets of a System institution other than an association or bank.
12 CFR 627.2755 Payment of claims--describes the payment
of claims and if there are insufficient funds to pay any class of
claims in full, distribution for that class of claims will be handled
on a pro rata basis.
12 CFR 627.2760 Inventory, audit, and reports--describes
inventory, audit, and reporting requirements for the receiver upon
possession, annually, and upon final liquidation.
12 CFR 627.2780 Powers and duties of conservators--
describes the powers and duties of the conservator to conduct its
operations for the benefit of the creditors and stockholders of the
institution.
As noted earlier, section 5412 of the 2018 Farm Bill, which added
section 5.61C to the Act, enhanced, clarified, and updated FCSIC's
powers to conduct conservatorships and receiverships of System
institutions. More specifically, various provisions in section
5.61C(b)(2) of the Act include authorization for FCSIC to: (1) Operate
any System institution in conservatorship or receivership, (2) function
as the institution's board of directors, officers, members, and
stockholders, (3) use proceeds collected from the performance of
contracts and sale of assets to pay valid claims, and (4) receive,
determine, and settle claims, and set the priority of claims in
accordance with the statute. Furthermore, sections 5.61C(b)(1), (b)(4),
and (b)(10)(C) of the Act expressly authorize FCSIC to prescribe
regulations regarding the conduct of conservatorships and
receiverships, and the allowance, disallowance, and resolution of
claims in receivership.
Section 5.61C(b)(15)(B) of the Act states that FCSIC shall make an
annual accounting or report about each conservatorship or receivership
available to the FCA Board. Providing an annual accounting or report to
FCA is currently required by Sec. 627.2760, which is among the
regulations that we are rescinding. Pursuant to the Act, FCA is able to
obtain necessary annual accounting or reports from FCSIC.
This direct final rule is not rescinding subpart A, Sec. Sec.
627.2720, 627.2735, or 627.2765 in subpart B, or Sec. Sec. 627.2770,
627.2775, 627.2785, or 627.2790 in subpart C of part 627 because these
regulations implement section 4.12(b) of the Act which authorizes FCA
to appoint FCSIC as the receiver or conservator of System institutions.
Similarly, we are not repealing subpart D of part 627 which governs our
authority to supervise and regulate the voluntary liquidation of a
System institution without a receiver. FCA may revise or update these
regulations in a
[[Page 15083]]
subsequent rulemaking. We may also engage in a rulemaking that
implements section 5.61C(h) of the Act, which governs the chartering,
termination, and dissolution of System bridge banks that enable FCSIC
to handle the resolution of one or more distressed FCS institutions.
IV. Direct Final Rule
For the reasons discussed above, we are rescinding the above-
referenced sections of part 627 subparts B (Receivers and
Receiverships) and C (Conservators and Conservatorships) by direct
final rulemaking. The Administrative Conference of the United States
recommends direct final rulemakings for Federal agencies to enact
noncontroversial regulations on an expedited basis, without the usual
notice and comment period.\5\ This process enables us to reduce the
time and resources we need to develop, review, and publish a final rule
while still affording the public an adequate opportunity to comment or
object to the rule.
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\5\ Recommendation 95-4, referencing the Administrative
Procedure Act ``good cause'' exemption at 5 U.S.C. 553(b)(B),
adopted June 15, 1995.
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In a direct final rulemaking, we notify the public that the rule
will become effective on a specified date unless we receive a
significant adverse comment during the comment period. A significant
adverse comment is one where the commenter explains why the rule would
be inappropriate (including challenges to its underlying premise or
approach), ineffective, or unacceptable without a change. In general, a
significant adverse comment would raise an issue serious enough to
warrant a substantive response from the FCA in a notice-and-comment
proceeding.
We believe that a direct final rulemaking is the appropriate method
for rescinding above-referenced sections in subparts B and C of part
627 that are superseded by the 2018 Farm Bill. We do not anticipate
there will be significant adverse comments because this direct final
rule implements recent statutory amendments governing FCSIC's numerous
powers and duties as the conservator or receiver of System
institutions. If, however, we receive a significant adverse comment
during the comment period, we will publish in the Federal Register a
notice of withdrawal of the relevant provisions of this rule that will
also indicate how the agency plans to proceed. If we receive no
significant adverse comments, we will publish notice of the effective
date of the rule following the required congressional waiting period
under section 5.17(c)(1) of the Act.
V. Regulatory Flexibility Act Analysis and Major Rule Conclusion
Pursuant to section 605(b) of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), FCA hereby certifies that the direct final rule
would not have a significant economic impact on a substantial number of
small entities. Each of the banks in the Farm Credit System, considered
together with its affiliated associations, has assets and annual income
in excess of the amounts that would qualify them as small entities.
Therefore, Farm Credit System institutions are not ``small entities''
as defined in the Regulatory Flexibility Act.
Under the provisions of the Congressional Review Act (5 U.S.C. 801
et seq.), the Office of Management and Budget's Office of Information
and Regulatory Affairs has determined that this direct final rule is
not a ``major rule,'' as the term is defined at 5 U.S.C. 804(2).
List of Subjects in 12 CFR Part 627
Agriculture, Banks, Banking, Claims, Rural areas.
For the reasons stated in the preamble, part 627 of chapter VI,
title 12 of the Code of Federal Regulations are amended as follows:
PART 627-- TITLE IV CONSERVATORS, RECEIVERS, AND VOLUNTARY
LIQUIDATIONS
0
1. The authority citation for part 627 continues to read as follows:
Authority: Secs. 4.2, 5.9, 5.10, 5.17, 5.51, 5.58, 5.61 of the
Farm Credit Act (12 U.S.C. 2183, 2243, 2244, 2252, 2277a, 2277a-7,
2277a-10).
Sec. Sec. 627.2725, 627.2726, 627.2730, 627.2740, 627.2745, 627.2750,
627.2752, 627.2755, 627.2760, and 627.2780 [Removed and Reserved]
0
2. Sections 627.2725, 627.2726, 627.2730, 627.2740, 627.2745, 627.2750,
627.2752, 627.2755, 627.2760, and 627.2780 are removed and reserved.
Dated: March 17, 2021.
Dale Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2021-05860 Filed 3-19-21; 8:45 am]
BILLING CODE 6705-01-P
