[Federal Register Volume 62, Number 203 (Tuesday, October 21, 1997)]
[Rules and Regulations]
[Pages 54744-54746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27828]



[[Page 54743]]

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Part IV





Department of the Treasury





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Office of the Comptroller of the Currency



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12 CFR Part 8



Assessment of Fees; National Banks; District of Columbia Banks; Final 
and Proposed Rules

  Federal Register / Vol. 62, No. 203 / Tuesday, October 21, 1997 / 
Rules and Regulations  

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 8

[Docket No. 97-21]
RIN 1557-AB60


Assessment of Fees; National Banks; District of Columbia Banks

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The OCC is finalizing, with slight modifications, changes made 
by two previous interim rules with request for comments. The first 
interim rule removed the specific calculation of fees for examinations 
of fiduciary activities, special examinations and investigations, 
examinations of affiliates, and examinations and investigations of 
corporate activities (collectively, trust and other examinations and 
investigations). The second interim rule authorized the OCC to reduce 
assessments on national banks that are not the largest national bank in 
a bank holding company (referred to as non-lead banks). These changes 
have resulted in assessment revenue that more accurately reflects the 
expenses incurred by the OCC as it supervises banks according to the 
OCC's Supervision by Risk Program.

EFFECTIVE DATE: October 21, 1997.

FOR FURTHER INFORMATION CONTACT: Roy Madsen, Deputy Chief Financial 
Officer, Financial Review, Policy and Analysis, (202) 874-5130; or Mark 
Tenhundfeld, Assistant Director, Legislative and Regulatory Activities 
Division, (202) 874-5090, Office of the Comptroller of the Currency, 
Washington, D.C. 20219.

SUPPLEMENTARY INFORMATION:

Interim Rules and Comments Received 1
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    \1\ Elsewhere in this issue of the Federal Register the OCC is 
soliciting comments on, among other things, a proposed change to 
part 8 that would impose a 25 percent surcharge on national banks 
that receive a rating of 3, 4, or 5 under the Uniform Financial 
Institutions Rating System (the CAMELS rating) and on Federal 
branches and agencies of foreign banks that receive a rating of 3, 
4, or 5 under the ROCA rating system (which rates risk management, 
operational controls, compliance, and asset quality).
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1994 Interim Rule Regarding Fees for Trust and Other Examinations and 
Investigations

    The OCC issued an interim rule on November 18, 1994 (59 FR 59640) 
(1994 Interim Rule) that removed specific fees for trust and other 
examinations and investigations. That rule was adopted in response to 
changes to 12 U.S.C. 482 made by the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (FDICIA) which, among other things, 
removed the specific requirement for a fee adequate to recover expenses 
of examinations of fiduciary activities. In place of that requirement, 
FDICIA authorized the OCC to impose and collect assessments, fees, and 
other charges as necessary or appropriate to carry out its 
responsibilities, and gave the agency increased flexibility to set the 
assessments, fees, and charges to meet its expenses.
    The OCC exercised this flexibility by removing the specific formula 
for calculating fees that formerly appeared in 12 CFR 8.6. As noted in 
the preamble to the 1994 Interim Rule, the specific fee structure 
reflected an outdated view of fiduciary activities as special and 
separate from other bank operations. The OCC stated in revised Sec. 8.6 
that it would assess a fee for examining fiduciary activities and for 
conducting special examinations and investigations, and that it would 
publish a fee schedule for these examinations and investigations in the 
Notice of Comptroller of the Currency Fees described in Sec. 8.8. These 
changes were immediately effective, but the OCC also sought the views 
of interested parties.
    The OCC received two comments in response to this request for 
comments. Both commenters supported the interim rule, noting that the 
changes will result in substantial savings for national banks. One of 
the commenters requested that the OCC seek additional comments when and 
if the agency intends to increase fees for fiduciary examinations and 
investigations or intends to impose a separate trust assessment.
    In light of the comments received, the OCC is issuing this final 
rule that adopts the changes set out in the 1994 Interim Rule. In 
response to the commenter concerned about the possibility of future 
increases or separate assessments for trust examinations, the OCC notes 
that it will seek comment before it changes the manner in which it 
imposes fees for fiduciary examinations and investigations. While the 
specific amount of assessments may change from one assessment to the 
next as reflected in the Notice of Comptroller of the Currency Fees, 
the OCC will continue to calculate the assessment according to the 
method provided in part 8.

1996 Interim Rule Regarding Discounts for Non-Lead Banks

    On December 2, 1996, the OCC published another interim rule with 
request for comments (61 FR 64000) (1996 Interim Rule). The 1996 
Interim Rule amended part 8 by adding Sec. 8.2(a)(6), which provides 
that the OCC will reduce the assessments for non-lead banks by a 
percentage that is to be specified in the Notice of Comptroller of the 
Currency Fees. In that rule, the OCC defined a ``non-lead bank'' as a 
national bank that is not the lead bank in a bank holding company that 
owns more than one national bank, and defined ``lead bank'' as the 
largest national bank controlled by a bank holding company, based on a 
comparison of total assets held by each national bank as reported in 
each bank's Consolidated Report of Condition and Income filed for the 
quarter immediately preceding the payment of a semiannual assessment. 
The OCC defined ``bank holding company'' by adopting the definition of 
that term used in section 2 of the Bank Holding Company Act of 1956 
(BHC Act) (12 U.S.C. 1841(a)(1)).
    The 1996 Interim Rule also removed the provisions in part 8 
prohibiting the proration of assessments. Prior to adoption of that 
rule, part 8 provided that each bank and Federal branch or agency 
subject to the OCC's jurisdiction must pay the full amount of its 
assessment for the next six-month period, ``without proration for any 
reason.'' See former 12 CFR 8.2 (a)(5) and (b). This prohibition is 
inconsistent with a reduction in non-lead banks' assessments, because 
the reduction is effectively a proration of these banks' assessments. 
Accordingly, the OCC removed the prohibition against prorations.
    The OCC received two comments in response to the 1996 Interim Rule, 
both of which supported the changes. However, one commenter expressed 
its concern that the discount could unfairly benefit larger banks, 
which, in the commenter's view, tend to be structured in multi-bank 
holding companies more often than are smaller banks. The OCC notes that 
the discount applies equally to all banks, regardless of size, that are 
non-lead banks in a bank holding company, and, in fact, many community 
banks have benefitted from the Interim Rule.
    The other commenter, which owns several national banks that are 
credit card banks, suggested that the rule be further amended to cover 
institutions that are chartered and supervised by the OCC as national 
banks but that are excluded from the definition of ``bank'' under 
section 2(c)(2)(F) of the BHC Act (12 U.S.C. 1841(c)(2)(F)). This 
commenter noted that the 1996 Interim Rule, by adopting the definition 
of ``bank holding company'' used in the BHC Act, technically precludes 
non-

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lead banks from receiving an assessment reduction if the institutions 
are not ``banks'' under the BHC Act, because their holding companies 
then are not ``bank holding companies'' under the BHC Act. The 
commenter opined that the same economies of scale are realized when 
supervising non-lead credit card banks, and requested that the OCC 
clarify that the assessment reduction applies to all non-lead national 
banks, regardless of whether the parent is a ``bank holding company'' 
under the BHC Act. 2
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    \2\ The OCC received a similar request in connection with 
Federal branches and agencies of foreign banks, although the request 
was not submitted in a comment to the 1996 interim rule.
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    The OCC agrees with this commenter. The same economies realized 
when supervising non-lead banks owned by bank holding companies are 
available when supervising non-lead banks that would qualify for the 
reduction but for the fact that the parent is not a ``bank holding 
company'' under the BHC Act. This conclusion also applies to non-lead 
Federal branches and agencies of foreign banks, whose level of 
supervision, enforcement, and licensing are increasingly tied to the 
condition of the foreign bank. Consistent with this conclusion, the OCC 
has issued letters in which the OCC applied the assessment reduction to 
(a) non-lead banks owned by a company that is not a ``bank holding 
company'' under the BHC Act and (b) non-lead Federal branches and 
agencies of a foreign bank.
    In light of the comments received, the OCC is adopting in final 
form the changes contained in the 1996 Interim Rule, as amended to 
reflect the interpretations noted above. Consistent with these 
interpretations, the OCC is amending Sec. 8.2(a)(6)(ii) (A)-(C) so that 
``non-lead bank'' includes a national bank that is not the largest 
national bank controlled by a company (as opposed to a bank holding 
company) and is adopting a new Sec. 8.2(b)(4) to apply the assessment 
reduction to non-lead Federal branches and agencies of foreign banks. 
Finally, the OCC also has adopted a technical change to Sec. 8.2(b)(3) 
to use the term ``Call Report'' (in lieu of ``Report of Condition'') 
that is used elsewhere in part 8.

Immediately Effective Rule

    This final rule is effective upon publication in the Federal 
Register. The OCC has determined that the rule may be immediately 
effective pursuant to 5 U.S.C. 553(d) (1) and (3). By enabling the OCC 
to reduce assessments, the rulemaking will have the effect of granting 
a partial exemption from the assessment obligations that otherwise 
would apply to non-lead entities. Accordingly, the rule may be 
immediately effective under 5 U.S.C. 553(d)(1). There also is good 
cause to dispense with a delayed effective date under 5 U.S.C. 
553(d)(3), namely, that the rule needs to be effective in time to 
ensure that reductions will be reflected in the Notice of Comptroller 
of the Currency Fees that will be mailed in early December to all 
national banks and Federal branches and agencies. The OCC will continue 
to provide a semiannual Assessment Notice to each institution, and each 
national bank and Federal branch or agency will continue to have at 
least 30 days following receipt of a semiannual assessment notice in 
which to pay the assessment.

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA) 
(5 U.S.C. 605(b)), the regulatory flexibility analysis otherwise 
required under section 604 of the RFA (5 U.S.C. 604) 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 along with its rule.
    Pursuant to section 605(b) of the RFA, the OCC hereby certifies 
that this final rule will not have a significant economic impact on a 
substantial number of small entities. The final rule does not impose 
any new reporting or recordkeeping requirement. Moreover, to the extent 
that it has any impact on national banks, the impact will be to lower 
assessments for non-lead national banks and non-lead Federal branches 
and agencies of foreign banks and to eliminate a separate assessment 
for trust and other examinations and investigations. Accordingly, a 
regulatory flexibility analysis under section 604 of the RFA is not 
required.

Executive Order 12866

    The OCC has determined that this final rule is not a significant 
regulatory action under Executive Order 12866.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L. 
104-4 (2 U.S.C. 1532) (Unfunded Mandates Act), requires that an agency 
prepare a budgetary impact statement before promulgating any rule 
likely to result in a Federal mandate that may result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year. If a 
budgetary impact statement is required, section 205 of the Unfunded 
Mandates Act also requires an agency to identify and consider a 
reasonable number of regulatory alternatives before promulgating a 
rule. The OCC has determined that the final rule will not result in 
expenditures by State, local, and tribal governments, or by the private 
sector, of $100 million or more in any one year. Accordingly, the OCC 
has not prepared a budgetary impact statement or specifically addressed 
any regulatory alternatives. As discussed in the preamble, the final 
rule has the effect of reducing the assessments and fees paid by 
national banks.

List of Subjects in 12 CFR Part 8

    Assessments, Fees, National banks.

Authority and Issuance

    For the reasons set forth in the preamble, part 8 of chapter I of 
title 12 of the Code of Federal Regulations is amended as follows:

PART 8--ASSESSMENT OF FEES; NATIONAL BANKS; DISTRICT OF COLUMBIA 
BANKS

    1. The authority citation for part 8 is revised to read as follows:

    Authority: 12 U.S.C. 93a, 481, 482, 3102, and 3108; 15 U.S.C. 
78c and 78l; and 26 D.C. Code 102.

    2. The interim rule amending 12 CFR part 8 that was published at 59 
FR 59640 on November 18, 1994 is adopted as a final rule without 
change.
    3. Section 8.2 is amended by revising paragraphs (a)(6) and (b)(3) 
and adding paragraph (b)(4) to read as follows:


Sec. 8.2  Semiannual assessment.

    (a) * * *
    (6)(i) Notwithstanding any other provision of this part, the OCC 
may reduce the semiannual assessment for each non-lead bank by a 
percentage that it will specify in the Notice of Comptroller of the 
Currency Fees described in Sec. 8.8.
    (ii) For purposes of this paragraph (a)(6):
    (A) Lead bank means the largest national bank controlled by a 
company, based on a comparison of the total assets held by each 
national bank controlled by that company as reported in each bank's 
Call Report filed for the quarter immediately preceding the payment of 
a semiannual assessment.
    (B) Non-lead bank means a national bank that is not the lead bank 
controlled by a company that controls two or more national banks.
    (C) Control and company have the same meanings as these terms have 
in

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sections 2(a)(2) and 2(b), respectively, of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1841 (a)(2) and (b)).
    (b) * * *
    (3) Each semiannual assessment of each Federal branch or Federal 
agency is based upon the total assets shown in the Call Report most 
recently preceding the payment date. The assessment shall be computed 
in the manner and on the form provided by the OCC. Each Federal branch 
or Federal agency subject to the jurisdiction of the OCC on the date of 
the second and fourth Call Reports is subject to the full assessment 
for the next six month period.
    (4)(i) Notwithstanding any other provision of this part, the OCC 
may reduce the semiannual assessment for each non-lead Federal branch 
or agency by an amount that it will specify in the Notice of 
Comptroller of the Currency Fees described in Sec. 8.8.
    (ii) For purposes of this paragraph (b)(4):
    (A) Lead Federal branch or agency means the largest Federal branch 
or agency of a foreign bank, based on a comparison of the total assets 
held by each Federal branch or agency of that foreign bank as reported 
in each Federal branch's or agency's Call Report filed for the quarter 
immediately preceding the payment of a semiannual assessment.
    (B) Non-lead Federal branch or agency means a Federal branch or 
Federal agency that is not the lead Federal branch or agency of a 
foreign bank that controls two or more Federal branches or agencies.

    Dated: October 15, 1997.
Eugene A. Ludwig,
Comptroller of the Currency.
[FR Doc. 97-27828 Filed 10-20-97; 8:45 am]
BILLING CODE 4810-33-P