Federal Deposit Insurance Corporation October 2005 – Federal Register Recent Federal Regulation Documents

The Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), and Office of Thrift Supervision (OTS) (collectively, ``the Agencies'') are considering various revisions to the existing risk-based capital framework that would enhance its risk sensitivity. These changes would apply to banks, bank holding companies, and savings associations (``banking organizations''). The Agencies are soliciting comment on possible modifications to their risk-based capital standards that would facilitate the development of fuller and more comprehensive proposals applicable to a range of activities and exposures. This ANPR discusses various modifications that would increase the number of risk-weight categories, permit greater use of external ratings as an indicator of credit risk for externally-rated exposures, expand the types of guarantees and collateral that may be recognized, and modify the risk weights associated with residential mortgages. This ANPR also discusses approaches that would change the credit conversion factor for certain types of commitments, assign a risk-based capital charge to certain securitizations with early-amortization provisions, and assign a higher risk weight to loans that are 90 days or more past due or in nonaccrual status and to certain commercial real estate exposures. The Agencies are also considering modifying the risk weights on certain other retail and commercial exposures.

The FDIC is proposing to revise its Statement of Policy on the National Historic Preservation Act of 1966 (NHPA). The revised Statement of Policy reflects the FDIC's experience and practices in applying the current NHPA Statement of Policy and statutory changes to the NHPA and its implementing regulations. The revised Statement of Policy is relevant to applications for deposit insurance for de novo institutions, applications for the establishment of domestic branches, and applications for the relocation of domestic branches or main offices.

The FDIC is proposing to revise its regulation addressing the certification to the FDIC of the assumption of deposits and the notification to depositors of a change in insured status. The proposed revision would clarify that a certification is required only when all of an insured institution's deposit liabilities have been assumed and that no certification is required for partial deposit assumptions. The proposal would require the institution whose deposits are transferred, or its legal successor, to provide the notification rather than the institution assuming the deposits. Finally, the proposal would also clarify the circumstances in which the FDIC would issue orders reflecting that an institution's insured status has been terminated under section 8(q) of the Federal Deposit Insurance Act. Generally, no orders would be issued when an insured institution transfers all of its deposits and its authority to engage in banking is contemporaneously cancelled, nor when the FDIC has been appointed receiver for an insured institution in default.

The FDIC received a petition for rulemaking to preempt certain state laws with the stated purpose of establishing parity between national banks and state-chartered banks in interstate activities and operations. The petition also requested rulemaking to implement the interest rate authority contained in the Federal Deposit Insurance Act. Generally, the requested rules would provide that the home state law of a state bank applies to the interstate activities of the bank and its operating subsidiaries to the same extent that the National Bank Act applies to the interstate activities of a national bank and its operating subsidiaries. They would also implement the federal statutory provisions addressing interest charged by FDIC-insured state banks and insured U.S. branches of foreign banks. The FDIC is requesting comments on a proposed rule to amend the FDIC's regulations in response to the rulemaking petition. Issuance of the proposed rules would serve as the FDIC's response to the rulemaking petition.