Unsafe and Unsound Banking Practices: Brokered Deposits, 1065-1066 [2021-28540]
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Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Rules and Regulations
VI. Severity of Violations
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(b) * * *
(1) * * * A Severity Level I violation
would be subject to a base civil penalty
of up to 100% of the maximum base
civil penalty of $106,790.
(2) * * * A Severity Level II violation
would be subject to a base civil penalty
up to 50% of the maximum base civil
penalty ($53,395).
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IX. Enforcement Actions
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1. Notice of Violation
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(e) * * *
(1) DOE may assess civil penalties of
up to $106,790 per violation per day on
contractors (and their subcontractors
and suppliers) that are indemnified by
the Price-Anderson Act, 42 U.S.C.
2210(d). See 10 CFR 851.5(a).
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Authority: 42 U.S.C. 7101 et seq.; 50
U.S.C. 2401 et seq.; 42 U.S.C. 2168; 28 U.S.C.
2461 note.
27. Section 1017.29 is amended by
revising paragraph (c) to read as follows:
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§ 1017.29
Civil penalty.
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(c) Amount of penalty. The Director
may propose imposition of a civil
penalty for violation of a requirement of
a regulation under paragraph (a) of this
section or a compliance order issued
under paragraph (b) of this section, not
to exceed $296,132 for each violation.
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PART 1050—FOREIGN GIFTS AND
DECORATIONS
28. The authority citation for part
1050 continues to read as follows:
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Authority: The Constitution of the United
States, Article I, Section 9; 5 U.S.C. 7342; 22
U.S.C. 2694; 42 U.S.C. 7254 and 7262; 28
U.S.C. 2461 note.
PART 1013—PROGRAM FRAUD CIVIL
REMEDIES AND PROCEDURES
29. Section 1050.303 is amended by
revising the last sentence in paragraph
(d) to read as follows:
24. The authority citation for part
1013 continues to reads as follows:
§ 1050.303
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Authority: 31 U.S.C. 3801–3812; 28 U.S.C.
2461 note.
25. Section 1013.3 is amended by
revising paragraphs (a)(1)(iv) and
(b)(1)(ii) to read as follows:
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§ 1013.3 Basis for civil penalties and
assessments.
khammond on DSKJM1Z7X2PROD with RULES
26. The authority citation for part
1017 continues to read as follows:
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15:53 Jan 07, 2022
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(d) * * * The court in which such
action is brought may assess a civil
penalty against such employee in any
amount not to exceed the retail value of
the gift improperly solicited or received
plus $22,450.
[FR Doc. 2021–28446 Filed 1–7–22; 8:45 am]
(a) * * *
(1) * * *
(iv) Is for payment for the provision
of property or services which the person
has not provided as claimed, shall be
subject, in addition to any other remedy
that may be prescribed by law, to a civil
penalty of not more than $12,537 for
each such claim.
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(b) * * *
(1) * * *
(ii) Contains or is accompanied by an
express certification or affirmation of
the truthfulness and accuracy of the
contents of the statement, shall be
subject, in addition to any other remedy
that may be prescribed by law, to a civil
penalty of not more than $12,537 for
each such statement.
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PART 1017—IDENTIFICATION AND
PROTECTION OF UNCLASSIFIED
CONTROLLED NUCLEAR
INFORMATION
Enforcement.
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BILLING CODE 6450–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 337
RIN 3064–ZA30
Unsafe and Unsound Banking
Practices: Brokered Deposits
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notification of additional
designated business relationship that
meets the primary purpose exception.
AGENCY:
The FDIC is identifying an
additional business relationship, or
‘‘designated exception,’’ that meets the
‘‘primary purpose’’ exception to the
deposit broker definition. The business
relationship relates to specific, nondiscretionary custodial services offered
by third parties to depositors or
depositors’ agents. Entities that meet the
criteria detailed below will be permitted
to rely upon the primary purpose
SUMMARY:
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
1065
exception without submitting a notice
or application.
DATES:
Effective date: January 10, 2022.
Applicability date: December 29,
2021.
FOR FURTHER INFORMATION CONTACT:
Division of Risk Management
Supervision: Rae-Ann Miller, Associate
Director, (202) 898–3898, rmiller@
fdic.gov. Legal Division: Vivek V. Khare,
Counsel, (202) 898–6847, vkhare@
fdic.gov.
SUPPLEMENTARY INFORMATION:
I. Background
On December 15, 2020, the FDIC
adopted a final rule on brokered
deposits and the interest rate
restrictions that apply to less than well
capitalized insured depository
institutions (‘‘IDIs’’).1 For brokered
deposits, the final rule established a
new framework for analyzing certain
parts of the ‘‘deposit broker’’ definition,
including a new interpretation for the
‘‘primary purpose’’ exception and the
business relationships that meet the
exception. The final rule took effect on
April 1, 2021. Full compliance with the
rule was extended to January 1, 2022.
II. Primary Purpose Exception
Section 29 of the FDI Act provides
that the primary purpose exception
applies to an ‘‘agent or nominee whose
primary purpose is not the placement of
funds with depository institutions.’’ 2 In
the final rule, the FDIC provided that
the primary purpose exception will
apply when the primary purpose of the
agent or nominee’s business
relationship with its customers is not
the placement of funds with depository
institutions.3 In addition, the FDIC
identified a number of business
relationships (or ‘‘designated
exceptions’’) that meet the ‘‘primary
purpose’’ exception. The final rule also
provided that, as part of the enumerated
list of designated exceptions, the FDIC
would make publicly available any
additional business arrangements not
described in the rulemaking that the
FDIC later determines meet the primary
purpose exception (without requiring an
application).4
III. Additional Designated Exception
As described below, the FDIC has
identified the following additional
business arrangement that meets the
primary purpose exception and intends
1 86
FR 6742 (Jan. 22, 2021); 12 CFR 337.6.
U.S.C. 1831f.
3 86 FR 6742, 6749 (Jan. 22, 2021).
4 Id. at 6755; 12 CFR 337.6(a)(5)(v)(I)(1)(xiv).
2 12
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10JAR1
1066
Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Rules and Regulations
to make conforming changes to the Call
Report instructions in coordination with
the Federal Financial Institutions
Examination Council.5
khammond on DSKJM1Z7X2PROD with RULES
The agent or nominee is ‘‘engaged in the
business of placing’’ customer funds at IDIs,
in a custodial capacity, based upon
instructions received from a depositor or
depositor’s agent specific to each IDI and
deposit account, and the agent or nominee
neither plays any role in determining at
which IDI(s) to place any customers’ funds,
nor negotiates or set rates, terms, fees, or
conditions, for the deposit account.
Over the past several months, in
response to questions received, the FDIC
has been considering the role that
certain custodial agents play in various
deposit placement arrangements.
Specifically, in some deposit placement
arrangements, a depositor, or a
depositor’s agent, uses a custodial agent
in placing depositor or customer funds
at IDIs. Based on the ‘‘deposit broker’’
definition, these agents likely meet the
‘‘engaged in the business of placing’’
part of the definition because they
receive third party funds and place
those funds at more than one IDI.6
The FDIC recognizes, however, that in
certain arrangements, the agent or
nominee, in a custodial capacity, places
deposits but has no discretion over
where the deposits are placed and acts
solely upon instructions given by the
depositor or the depositor’s agent
specific to each deposit account.
Moreover, in these arrangements, when
the agent or nominee, acting in a
custodial capacity, places deposits
based upon instructions received from a
depositor or depositor’s agent, it does so
without playing any role in determining
at which banks the depositor’s funds are
to be placed nor does the agent negotiate
or set rates, terms, fees, or conditions for
the deposit account.
As such, in these specific
arrangements, it is the FDIC’s view that
the agent or nominee’s primary purpose
in placing deposits at IDIs is to provide
non-discretionary custodial services on
behalf of the depositor or depositor’s
agent. Therefore, such entities will be
deemed to meet the primary purpose
exception. Accordingly, through this
Notice, the FDIC is identifying this
specific business relationship as a
designated business relationship that
meets the primary purpose exception.
Entities that meet the criteria described
in this Notice will be permitted to rely
5 The additional designated exception will be
posted to the FDIC’s Banker Resource Center
(Brokered Deposits web page), available at: https://
www.fdic.gov/resources/bankers/brokered-deposits/
, will be updated to reflect this additional
designated business exception.
6 12 CFR 337.6(a)(5)(i)(A).
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15:53 Jan 07, 2022
Jkt 256001
upon the exception without the
submission of an application or notice.
As noted above, a custodial agent that
plays any role in determining at which
IDI(s) to place any customers’ funds will
not be eligible for the designated
exception. As an example, a custodial
agent that plays any role in creating,
operating, or using an algorithm that is
used to determine or recommend at
which IDI(s) any customer funds are
placed would be viewed as playing a
role in determining at which banks the
depositor’s funds are to be placed and
thus not eligible for the designated
exception.
Involvement of Additional Third Party
Deposit Brokers
The FDIC notes that a depositor or
depositor’s agent that meets the deposit
broker definition and uses the services
of a custodial agent that meets this
designated exception to place deposits
would result in such deposits being
classified as brokered deposits. The
involvement of the non-discretionary
custodial agent does not change the
classification of deposits placed by, or
through the facilitation of, an entity that
otherwise meets the deposit broker
definition.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on December 29,
2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021–28540 Filed 1–7–22; 8:45 am]
BILLING CODE 6714–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 25
[Docket No. FAA–2014–1075; Special
Conditions No. 25–599A–SC]
Special Conditions: Dassault Aviation
Model Falcon 6X Airplane;
Hydrophobic Windshield Coatings in
Lieu of Windshield Wipers
Federal Aviation
Administration (FAA), DOT.
ACTION: Final special conditions,
amendment.
AGENCY:
These amended special
conditions are issued for the Dassault
Model Falcon 6X airplane. This airplane
will have a novel or unusual design
feature when compared to the state of
technology envisioned in the
airworthiness standards for transportcategory airplanes. This design feature
is hydrophobic windshield coatings in
SUMMARY:
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
lieu of windshield wipers. The
applicable airworthiness regulations do
not contain adequate or appropriate
safety standards for this design feature.
These special conditions contain the
additional safety standards that the
Administrator considers necessary to
establish a level of safety equivalent to
that established by the existing
airworthiness standards.
DATES: This action is effective on
Dassault on January 10, 2022.
FOR FURTHER INFORMATION CONTACT: Paul
Pellicano, AIR–625, Performance and
Environment Section, Technical
Innovation Policy Branch, Policy and
Innovation Division, Federal Aviation
Administration, 1701 Columbia Avenue,
College Park, GA 30337; telephone and
fax 404–474–5558, email
Paul.Pellicano@faa.gov.
SUPPLEMENTARY INFORMATION:
Background
On July 1, 2012, Dassault Aviation
applied for a type certificate for their
new Model Falcon 5X airplane. Special
conditions were issued for that design
on September 15, 2015 (80 FR 55226).
However, Dassault has decided not to
release an airplane under the model
designation Falcon 5X, instead choosing
to change that model designation to
Falcon 6X.
In February of 2018, due to engine
supplier issues, Dassault extended the
type certificate application date for their
Model Falcon 5X airplane under new
Model Falcon 6X. This amendment to
the original special conditions reflects
the model-name change. This airplane is
a twin-engine business jet with seating
for 19 passengers and a maximum
takeoff weight of 77,460 pounds. The
Dassault Model Falcon 6X airplane
design remains unchanged from the
Model Falcon 5X in all material respects
other than different engines.
Type Certification Basis
Under the provisions of Title 14, Code
of Federal Regulations (14 CFR) 21.17,
Dassault Aviation must show that the
Model Falcon 6X airplane meets the
applicable provisions of part 25, as
amended by Amendments 25–1 through
25–146.
If the Administrator finds that the
applicable airworthiness regulations
(i.e., 14 CFR part 25) do not contain
adequate or appropriate safety standards
for the Dassault Model Falcon 6X
airplane because of a novel or unusual
design feature, special conditions are
prescribed under the provisions of
§ 21.16.
Special conditions are initially
applicable to the model for which they
E:\FR\FM\10JAR1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 6 (Monday, January 10, 2022)]
[Rules and Regulations]
[Pages 1065-1066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28540]
=======================================================================
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 337
RIN 3064-ZA30
Unsafe and Unsound Banking Practices: Brokered Deposits
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Notification of additional designated business relationship
that meets the primary purpose exception.
-----------------------------------------------------------------------
SUMMARY: The FDIC is identifying an additional business relationship,
or ``designated exception,'' that meets the ``primary purpose''
exception to the deposit broker definition. The business relationship
relates to specific, non-discretionary custodial services offered by
third parties to depositors or depositors' agents. Entities that meet
the criteria detailed below will be permitted to rely upon the primary
purpose exception without submitting a notice or application.
DATES:
Effective date: January 10, 2022.
Applicability date: December 29, 2021.
FOR FURTHER INFORMATION CONTACT: Division of Risk Management
Supervision: Rae-Ann Miller, Associate Director, (202) 898-3898,
[email protected]. Legal Division: Vivek V. Khare, Counsel, (202) 898-
6847, [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
On December 15, 2020, the FDIC adopted a final rule on brokered
deposits and the interest rate restrictions that apply to less than
well capitalized insured depository institutions (``IDIs'').\1\ For
brokered deposits, the final rule established a new framework for
analyzing certain parts of the ``deposit broker'' definition, including
a new interpretation for the ``primary purpose'' exception and the
business relationships that meet the exception. The final rule took
effect on April 1, 2021. Full compliance with the rule was extended to
January 1, 2022.
---------------------------------------------------------------------------
\1\ 86 FR 6742 (Jan. 22, 2021); 12 CFR 337.6.
---------------------------------------------------------------------------
II. Primary Purpose Exception
Section 29 of the FDI Act provides that the primary purpose
exception applies to an ``agent or nominee whose primary purpose is not
the placement of funds with depository institutions.'' \2\ In the final
rule, the FDIC provided that the primary purpose exception will apply
when the primary purpose of the agent or nominee's business
relationship with its customers is not the placement of funds with
depository institutions.\3\ In addition, the FDIC identified a number
of business relationships (or ``designated exceptions'') that meet the
``primary purpose'' exception. The final rule also provided that, as
part of the enumerated list of designated exceptions, the FDIC would
make publicly available any additional business arrangements not
described in the rulemaking that the FDIC later determines meet the
primary purpose exception (without requiring an application).\4\
---------------------------------------------------------------------------
\2\ 12 U.S.C. 1831f.
\3\ 86 FR 6742, 6749 (Jan. 22, 2021).
\4\ Id. at 6755; 12 CFR 337.6(a)(5)(v)(I)(1)(xiv).
---------------------------------------------------------------------------
III. Additional Designated Exception
As described below, the FDIC has identified the following
additional business arrangement that meets the primary purpose
exception and intends
[[Page 1066]]
to make conforming changes to the Call Report instructions in
coordination with the Federal Financial Institutions Examination
Council.\5\
---------------------------------------------------------------------------
\5\ The additional designated exception will be posted to the
FDIC's Banker Resource Center (Brokered Deposits web page),
available at: https://www.fdic.gov/resources/bankers/brokered-deposits/, will be updated to reflect this additional designated
business exception.
The agent or nominee is ``engaged in the business of placing''
customer funds at IDIs, in a custodial capacity, based upon
instructions received from a depositor or depositor's agent specific
to each IDI and deposit account, and the agent or nominee neither
plays any role in determining at which IDI(s) to place any
customers' funds, nor negotiates or set rates, terms, fees, or
---------------------------------------------------------------------------
conditions, for the deposit account.
Over the past several months, in response to questions received,
the FDIC has been considering the role that certain custodial agents
play in various deposit placement arrangements. Specifically, in some
deposit placement arrangements, a depositor, or a depositor's agent,
uses a custodial agent in placing depositor or customer funds at IDIs.
Based on the ``deposit broker'' definition, these agents likely meet
the ``engaged in the business of placing'' part of the definition
because they receive third party funds and place those funds at more
than one IDI.\6\
---------------------------------------------------------------------------
\6\ 12 CFR 337.6(a)(5)(i)(A).
---------------------------------------------------------------------------
The FDIC recognizes, however, that in certain arrangements, the
agent or nominee, in a custodial capacity, places deposits but has no
discretion over where the deposits are placed and acts solely upon
instructions given by the depositor or the depositor's agent specific
to each deposit account. Moreover, in these arrangements, when the
agent or nominee, acting in a custodial capacity, places deposits based
upon instructions received from a depositor or depositor's agent, it
does so without playing any role in determining at which banks the
depositor's funds are to be placed nor does the agent negotiate or set
rates, terms, fees, or conditions for the deposit account.
As such, in these specific arrangements, it is the FDIC's view that
the agent or nominee's primary purpose in placing deposits at IDIs is
to provide non-discretionary custodial services on behalf of the
depositor or depositor's agent. Therefore, such entities will be deemed
to meet the primary purpose exception. Accordingly, through this
Notice, the FDIC is identifying this specific business relationship as
a designated business relationship that meets the primary purpose
exception. Entities that meet the criteria described in this Notice
will be permitted to rely upon the exception without the submission of
an application or notice.
As noted above, a custodial agent that plays any role in
determining at which IDI(s) to place any customers' funds will not be
eligible for the designated exception. As an example, a custodial agent
that plays any role in creating, operating, or using an algorithm that
is used to determine or recommend at which IDI(s) any customer funds
are placed would be viewed as playing a role in determining at which
banks the depositor's funds are to be placed and thus not eligible for
the designated exception.
Involvement of Additional Third Party Deposit Brokers
The FDIC notes that a depositor or depositor's agent that meets the
deposit broker definition and uses the services of a custodial agent
that meets this designated exception to place deposits would result in
such deposits being classified as brokered deposits. The involvement of
the non-discretionary custodial agent does not change the
classification of deposits placed by, or through the facilitation of,
an entity that otherwise meets the deposit broker definition.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on December 29, 2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021-28540 Filed 1-7-22; 8:45 am]
BILLING CODE 6714-01-P
