[Federal Register Volume 85, Number 13 (Tuesday, January 21, 2020)]
[Rules and Regulations]
[Pages 3247-3250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27577]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 390
RIN 3064-AF13
Removal of Transferred OTS Regulations Regarding Regulatory
Reporting Requirements, Reports and Audits of State Savings
Associations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
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SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is
adopting a final rule rescinding and removing from the Code of Federal
Regulations the regulations regarding regulatory reporting standards.
DATES: The final rule is effective on February 20, 2020.
FOR FURTHER INFORMATION CONTACT: Christine M. Bouvier, Assistant Chief
Accountant, (202) 898-7289, [email protected], Division of Risk
Management Supervision; Karen J. Currie, Senior Examination Specialist,
(202) 898-3981, Division of Risk Management Supervision; David M.
Miles, Counsel, Legal Division, (202) 898-3651.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The policy objectives of the final rule are twofold. The first is
to simplify the FDIC's regulations by removing unnecessary ones and
thereby improving ease of reference and public understanding. The
second is to promote parity between State savings associations and
State nonmember banks by having the regulatory reporting requirements,
regulatory reports and audits of both classes of institutions addressed
in the same FDIC rules.
II. Background
Part 390, subpart R was included in the regulations that were
transferred from the Office of Thrift Supervision (``OTS'') to the FDIC
on July 21, 2011, in connection with the implementation of title III of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-
Frank Act'').\1\ Beginning July 21, 2011, the transfer date established
by
[[Page 3248]]
section 311 of the Dodd-Frank Act,\2\ the powers, duties, and functions
formerly performed by the OTS were divided among the FDIC for State
savings associations, the Office of the Comptroller of the Currency
(``OCC'') for Federal savings associations, and the Board of Governors
of the Federal Reserve System (``FRB'') for savings and loan holding
companies. Section 316(b) of the Dodd-Frank Act \3\ provides the manner
of treatment for all orders, resolutions, determinations, regulations,
and advisory materials that had been issued, made, prescribed, or
allowed to become effective by the OTS. The section provides that if
such regulatory issuances were in effect on the day before the transfer
date, they continue in effect and are enforceable by or against the
appropriate successor agency until they are modified, terminated, set
aside, or superseded in accordance with applicable law by such
successor agency, by any court of competent jurisdiction, or by
operation of law.
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\1\ Public Law 111-203, 124 Stat. 1376 (2010).
\2\ 12 U.S.C. 5411.
\3\ 12 U.S.C. 5414(b).
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The Dodd-Frank Act directed the FDIC and the OCC to consult with
one another and to publish a list of continued OTS regulations to be
enforced by each respective agency that would continue to remain in
effect until the appropriate Federal banking agency modified or removed
the regulations in accordance with applicable law. The list was
published by the FDIC and OCC as a Joint Notice in the Federal Register
on July 6, 2011,\4\ and shortly thereafter, the FDIC published its
transferred OTS regulations as new FDIC regulations in parts 390 and
391. When it republished the transferred OTS regulations, the FDIC
noted that its staff would evaluate the transferred OTS rules and might
later recommend incorporating the transferred regulations into other
FDIC rules, amending them, or rescinding them, as appropriate. Further,
section 312(c)(1) of the Dodd-Frank Act \5\ amended the definition of
``appropriate Federal banking agency'' contained in section 3(q) of the
FDI Act,\6\ to add State savings associations to the list of entities
for which the FDIC is designated as the ``appropriate Federal banking
agency.'' As a result, when the FDIC acts as the ``appropriate Federal
banking agency'' for State savings associations, as it does today, it
has the authority to issue, modify, and rescind regulations involving
such associations, as well as for State nonmember banks and State-
licensed insured branches of foreign banks.
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\4\ 76 FR 39246 (July 6, 2011).
\5\ 12 U.S.C. 5412(c)(1).
\6\ 12 U.S.C. 1813(q).
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III. Proposed Rule
On October 2, 2019, the FDIC published a notice of proposed
rulemaking (NPR) regarding the removal of part 390, subpart R (former
OTS part 562), which addressed regulatory reporting requirements,
regulatory reports and audits of State savings associations.\7\ The
former OTS rule was transferred to the FDIC with only nominal changes.
The NPR proposed removing part 390, subpart R, because, after careful
review and consideration, the FDIC believed it was largely unnecessary,
redundant or duplicative given other FDIC regulations that pertain to
regulatory reporting requirements (12 CFR part 304, 12 CFR part 363 and
its appendices A and B, and 12 CFR part 364 and its appendix A),
regulatory reports (12 CFR part 304 and 12 CFR part 308), and audits of
insured depository institutions (12 CFR part 363 and its appendices A
and B and 12 CFR part 364 and its appendix A) that already apply to
State savings associations.
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\7\ See 84 FR 52387 (Oct. 2, 2019). The FDIC published a SNPR in
the Federal Register relating to the FDIC's regulatory flexibility
analysis on October 9, 2019. See 84 FR 54045 (Oct. 9, 2019).
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IV. Comments
The FDIC issued the NPR on October 2, 2019, with a 30-day comment
period. On October 9, 2019, the FDIC issued a supplemental notice of
proposed rulemaking (SNPR) which, among other things, extended the
deadline for comments on the FDIC's regulatory flexibility analysis
until November 8, 2019. The FDIC received no comments on the NPR or the
SNPR, and consequently the final rule is adopted without change.
V. Explanation of the Final Rule
As discussed in the NPR, 12 CFR part 390, subpart R, is being
rescinded, in its entirety, because it is largely unnecessary,
redundant or duplicative given the existence of other applicable FDIC
regulations described in Part III above.
VI. Expected Effects
As explained in Part III of this Supplementary Information section,
certain OTS regulations transferred to the FDIC by the Dodd-Frank Act
relating to regulatory reporting requirements, regulatory reports, and
audits of State savings associations are redundant or unnecessary in
light of other applicable FDIC regulations. This rule would eliminate
those transferred OTS regulations.
As of June 30, 2019, the FDIC supervises 3,424 insured depository
institutions, of which 38 (1.1 percent) are State savings
associations.\8\ The rule primarily would affect regulations that
govern State savings associations.
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\8\ Based on data from the June 30, 2019, Call Report and FFIEC
002 Report of Assets and Liabilities of U.S. Branches and Agencies
of Foreign Banks.
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As explained in the NPR, the rule would remove Sec. Sec. 390.320,
390.321, and 390.332 of part 390, subpart R, because these sections are
redundant of, or otherwise unnecessary in light of, applicable statutes
and other FDIC regulations regarding audits, reporting, and safety and
soundness. As a result, rescinding and removing these regulations will
not have any substantive effects on FDIC-supervised institutions.
VII. Alternatives
The FDIC has considered alternatives to the final rule but believes
that the amendments represent the most appropriate option for covered
institutions. As discussed previously, the Dodd-Frank Act transferred
certain powers, duties, and functions formerly performed by the OTS to
the FDIC. The FDIC's Board reissued and redesignated certain
transferred regulations from the OTS, but noted that it would evaluate
them and might later incorporate them into other FDIC regulations,
amend them, or rescind them, as appropriate. The FDIC has evaluated the
existing regulations relating to regulatory reporting standards and
audits of insured depository institutions, including 12 CFR part 304;
12 CFR part 308; 12 CFR part 363 and its appendices A and B; 12 CFR
part 364 and its appendix A; and 12 CFR part 390, subpart R. The FDIC
considered the status quo alternative of retaining the current
regulations but did not choose to do so because the underlying purposes
of those regulations are already accomplished through substantively
similar regulations regarding regulatory reports, regulatory reporting
requirements, and audits. Therefore, the FDIC is amending and
streamlining the FDIC's regulations.
VIII. Regulatory Analysis and Procedure
A. The Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (``PRA''),\9\ the FDIC may not conduct or sponsor, and the
respondent is not
[[Page 3249]]
required to respond to, an information collection unless it displays a
currently valid Office of Management and Budget (``OMB'') control
number.
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\9\ 44 U.S.C. 3501-3521.
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The final rule rescinds and removes from FDIC regulations part 390,
subpart R. The final rule will not create any new or revise any
existing collections of information under the PRA. Therefore, no
information collection request will be submitted to the OMB for review.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA'') requires that, in
connection with a final rule, an agency prepare and make available for
public comment a final regulatory flexibility analysis that describes
the impact of the final rule on small entities.\10\ However, a
regulatory flexibility analysis is not required if the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities, and publishes its certification
and a short explanatory statement in the Federal Register together with
the rule. The Small Business Administration (``SBA'') has defined
``small entities'' to include banking organizations with total assets
of less than or equal to $600 million.11 12 Generally, the
FDIC considers a significant effect to be a quantified effect in excess
of 5 percent of total annual salaries and benefits per institution, or
2.5 percent of total noninterest expenses. The FDIC believes that
effects in excess of these thresholds typically represent significant
effects for FDIC-supervised institutions. For the reasons provided
below, the FDIC certifies that the rule would not have a significant
economic impact on a substantial number of small banking organizations.
Accordingly, a regulatory flexibility analysis is not required.
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\10\ 5 U.S.C. 601, et seq.
\11\ The SBA defines a small banking organization as having $600
million or less in assets, where an organization's ``assets are
determined by averaging the assets reported on its four quarterly
financial statements for the preceding year.'' See 13 CFR 121.201
(as amended, by 84 FR 34261, effective August 19, 2019). In its
determination, ``SBA counts the receipts, employees, or other
measure of size of the concern whose size is at issue and all of its
domestic and foreign affiliates.'' See 13 CFR 121.103. Following
these regulations, the FDIC uses a covered entity's affiliated and
acquired assets, averaged over the preceding four quarters, to
determine whether the covered entity is ``small'' for the purposes
of the RFA.
\12\ The FDIC supplemented the RFA analysis in the NPR with an
updated regulatory flexibility analysis to reflect changes to the
Small Business Administration's monetary-based size standards which
were adjusted for inflation as of August 19, 2019. See 84 FR 54045
(Oct. 9, 2019).
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As of June 30, 2019, the FDIC supervised 3,424 insured depository
institutions, of which 2,665 are considered small banking organizations
for the purposes of RFA.\13\ The final rule primarily affects
regulations that govern State savings associations. There are 36 State
savings associations considered to be small banking organizations for
the purposes of the RFA.\14\
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\13\ FDIC Call Report, June 30, 2019.
\14\ Id.
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As explained in the NPR, the final rule would remove Sec. Sec.
390.320, 390.321, and 390.332 of part 390, subpart R, because these
sections are redundant or otherwise unnecessary in light of applicable
statutes and other FDIC regulations. As a result, rescinding the
regulations would not have any substantive effects on small FDIC-
supervised institutions.
Based on the information above, the FDIC certifies that the final
rule would not have a significant economic impact on a substantial
number of small entities.
C. The Congressional Review Act
For purposes of Congressional Review Act, the OMB makes a
determination as to whether a final rule constitutes a ``major''
rule.\15\ If a rule is deemed a major rule by the OMB, the
Congressional Review Act generally provides that the rule may not take
effect until at least 60 days following its publication.\16\
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\15\ 5 U.S.C. 801 et seq.
\16\ 5 U.S.C. 801(a)(3).
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The Congressional Review Act defines a ``major rule'' as any rule
that the Administrator of the Office of Information and Regulatory
Affairs of the OMB finds has resulted in or is likely to result in--(A)
an annual effect on the economy of $100,000,000 or more; (B) a major
increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies or geographic regions, or
(C) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.\17\
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\17\ 5 U.S.C. 804(2).
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The OMB has determined that the final rule is not a major rule for
purposes of the Congressional Review Act and the FDIC will submit the
final rule and other appropriate reports to Congress and the Government
Accountability Office for review.
D. Plain Language
Section 722 of the Gramm-Leach-Bliley Act \18\ requires each
Federal banking agency to use plain language in all of its proposed and
final rules published after January 1, 2000. The FDIC has sought to
present the final rule in a simple and straightforward manner and did
not receive any comments on the use of plain language.
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\18\ Public Law 106-102, section 722, 113 Stat. 1338, 1471
(1999).
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E. The Economic Growth and Regulatory Paperwork Reduction Act
Under section 2222 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all
of its regulations, at least once every 10 years, in order to identify
any outdated or otherwise unnecessary regulations imposed on insured
institutions.\19\ The FDIC, along with the other Federal banking
agencies, submitted a Joint Report to Congress on March 21, 2017
(``EGRPRA Report''), discussing how the review was conducted, what has
been done to date to address regulatory burden, and further measures
the agency will take to address issues that were identified.\20\ As
noted in the EGRPRA Report, the FDIC is continuing to streamline and
clarify its regulations through the OTS rule integration process. By
removing outdated or unnecessary regulations, such as part 390, subpart
R, this final rule complements other actions the FDIC has taken,
separately and with the other Federal banking agencies, to further the
EGRPRA mandate.
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\19\ Public Law 104-208, 110 Stat. 3900 (1996).
\20\ 82 FR 15900 (March 31, 2017).
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F. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (``RCDRIA''),\21\ in determining the
effective date and administrative compliance requirements for new
regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions (``IDIs''), each
Federal banking agency must consider, consistent with principles of
safety and soundness and the public interest, any administrative
burdens that such regulations would place on depository institutions,
including small depository institutions, and customers of depository
institutions, as well as the benefits of such regulations. In addition,
section 302(b) of RCDRIA requires new regulations and amendments to
regulations that impose additional reporting, disclosure, or other new
requirements on IDIs generally to take effect on the first day of a
calendar quarter that begins on or after the date
[[Page 3250]]
on which the regulations are published in final form.\22\
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\21\ 12 U.S.C. 4802(a).
\22\ 12 U.S.C. 4802.
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Because the final rule does not impose additional reporting,
disclosure, or other requirements on IDIs, section 302 of RCDRIA does
not apply.
List of Subjects in 12 CFR Part 390
Regulatory reporting standards.
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends title 12 CFR part 390 as follows:
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
1. Revise the authority citation for part 390 to read as follows:
Authority: 12 U.S.C. 1819.
Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901 et
seq.
Subpart G also issued under 12 U.S.C. 2810 et seq., 2901 et
seq.; 15 U.S.C. 1691; 42 U.S.C. 1981, 1982, 3601-3619.
Subpart O also issued under 12 U.S.C. 1828.
Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w.
Subpart Y also issued under 12 U.S.C. 1831o.
Subpart R--[Removed and Reserved]
0
2. Remove and reserve subpart R, consisting of Sec. Sec. 390.320
through 390.322.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on December 12, 2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019-27577 Filed 1-17-20; 8:45 am]
BILLING CODE 6714-01-P