Federal Deposit Insurance Corporation December 2006 – Federal Register Recent Federal Regulation Documents

The OCC, the Board, and the FDIC (collectively, the ``agencies'') are publishing this joint final rule to reinsert a provision that was inadvertently deleted when the agencies revised their Community Reinvestment Act (CRA) regulations in August 2005. This change is technical only and does not make any substantive revisions. The agencies are also amending their CRA regulations to increase the asset-size threshold to be used to define ``small bank'' and ``intermediate small bank.'' The regulation is amended to state the increase in the threshold amount based on the annual percentage change in the Consumer Price Index.

In accordance with requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the FDIC hereby gives notice that it plans to submit to the Office of Management and Budget (OMB) a request for OMB review and approval of the information collection system described below.

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 proposing revisions to the existing risk-based capital framework that would enhance its risk sensitivity without unduly increasing regulatory burden. These changes would apply to banks, bank holding companies, and savings associations (banking organizations). A banking organization would be able to elect to adopt these proposed revisions or remain subject to the Agencies' existing risk-based capital rules, unless it uses the Advanced Capital Adequacy Framework proposed in the notice of proposed rulemaking published on September 25, 2006 (Basel II NPR). In this notice of proposed rulemaking (NPR or Basel IA), the Agencies are proposing to expand the number of risk weight categories, allow the use of external credit ratings to risk weight certain exposures, expand the range of recognized collateral and eligible guarantors, use loan-to-value ratios to risk weight most residential mortgages, increase the credit conversion factor for certain commitments with an original maturity of one year or less, assess a charge for early amortizations in securitizations of revolving exposures, and remove the 50 percent limit on the risk weight for certain derivative transactions. A banking organization would have to apply all the proposed changes if it chose to use these revisions. Finally, in Section III of this NPR, the Agencies seek further comment on possible alternatives for implementing the ``International Convergence of Capital Measurement and Capital Standards: A Revised Framework'' (Basel II) in the United States as proposed in the Basel II NPR.

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 (collectively, 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, approved the agencies' publication for public comment of proposed new regulatory reporting requirements for banks \1\ that qualify for and adopt the Advanced Capital Adequacy Framework to calculate their risk-based capital requirement or banks that are in the parallel run stage of qualifying to adopt this proposed framework. This notice extends the comment period on this document for consistency with the extension of the comment period for the notice of proposed rulemaking on the Advanced Capital Adequacy Framework, as published elsewhere in today's issue of the Federal Register.

In accordance with requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the FDIC hereby gives notice that it plans to submit to the Office of Management and Budget (OMB) a request for OMB review and approval of the information collection system described below.

The FDIC is seeking comment on whether and how the largest insured depository institutions should be required to modify their deposit account systems to speed depositor access to funds in the event of a failure. Today, insured institutions do not track the insured status of their depositors yet the FDIC must make deposit insurance coverage determinations in the event of failure. The current process might result in unacceptable delays if used for an FDIC-insured institution with a large volume of deposit accounts. Such delays would have an impact on depositors' ability to access their funds and are likely to result in a resolution (of the failed institution) significantly more costly to the Deposit Insurance Fund. As currently contemplated, the options discussed in the ANPR would apply only to the 152 insured depository institutions with more than 250,000 deposit accounts and more than $2 billion in domestic deposits, as well as seven additional institutions with total assets over $20 billion, less than 250,000 deposit accounts and at least $2 billion in domestic deposits. In December 2005 the FDIC issued a prior advance notice of proposed rulemaking on this subject (``2005 ANPR'').\1\ This ANPR is a follow-up to that issuance. The FDIC is seeking comment on all aspects of the ANPR.

This proposal would amend existing FDIC ethics regulations involving extensions of credit, ownership of stock, and definitions. This proposal would implement the Preserving Independence of Financial Institution Examinations Act of 2003, which amended sections 212 and 213 of title 18 of the United States Code. These sections continue generally to impose criminal penalties on examiners borrowing from banks they have examined, and financial institutions extending a loan to anyone who examines or has authority to examine that institution. The statutory amendment, however, decriminalizes extensions of credit to examiners for credit cards and for primary residential home loans from institutions that they examine or have authority to examine if these loans are made on the same terms and conditions as are available to other cardholders and borrowers and satisfy other criteria contained in the statute as amended. Additionally, the proposed regulation would clarify and make minor revisions to definitions and restrictions for FDIC employees' acquisition, ownership, or control of securities of FDIC-insured depository institutions and certain holding companies.