Federal Deposit Insurance Corporation February 2007 – Federal Register Recent Federal Regulation Documents

The FDIC is seeking comment on proposed guidelines it will use for determining how adjustments of up to 0.50 basis points would be made to the quarterly assessment rates of insured institutions defined as large Risk Category I institutions, and insured foreign branches in Risk Category I, according to the Final Assessments Rule (the final rule).\1\ These guidelines are intended to further clarify the analytical processes, and the controls applied to these processes, in making assessment rate adjustment determinations.

In accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, the FDIC, and the OTS (the ``agencies'') may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The Federal Financial Institutions Examination Council (FFIEC), of which the agencies are members, has approved the agencies' publication for public comment of a proposal to revise the reporting of risk-based capital information in the Consolidated Reports of Condition and Income (Call Report) for banks and the Thrift Financial Report (TFR) for savings associations, which are currently approved collections of information for the agencies. These proposed reporting revisions are based on the agencies' joint notice of proposed rulemaking (NPR) on proposed revisions to their existing risk-based capital framework, an approach known as Basel IA (71 FR 77445, December 26, 2006), the comment period for which ends on March 26, 2007. At the end of the comment periods for the Basel IA NPR and this reporting proposal, the agencies will review all comments and recommendations they receive on both proposals, which may result in modifications of the proposed Basel IA risk-based capital rules and these related proposed reporting revisions. Before any proposed Basel IA reporting revisions are implemented, the agencies will submit them to OMB for review and approval.

The FDIC is publishing for comment proposed rules that would impose certain conditions and requirements on each deposit insurance application approval and non-objection to a change in control notice that would result in an insured industrial loan company or industrial bank (collectively ``industrial bank'' or ``ILC'') \1\ becoming, after the effective date of any final rules, a subsidiary \2\ of a company that is engaged solely in financial activities and that is not subject to consolidated bank supervision by the Federal Reserve Board or the Office of Thrift Supervision (``Federal Consolidated Bank Supervision''). The proposed rules would also require that before any industrial bank may become a subsidiary of a company that is engaged solely in financial activities and that is not subject to Federal Consolidated Bank Supervision (a ``Non-FCBS Financial Company''), such company and the industrial bank must enter into one or more written agreements with the FDIC. Simultaneously with the proposed rules, the FDIC is publishing a Notice to extend for one year its moratorium for applications for deposit insurance and change in control notices for industrial banks that will become subsidiaries of companies engaged in non-financial activities (``commercial companies'').\3\ By this action, however, the FDIC is not expressing any conclusion about the propriety of ownership or control of industrial banks by commercial companies. The FDIC has determined that it is appropriate to provide additional time for review of such ownership and the related issues by the FDIC and by Congress.