[Federal Register Volume 63, Number 59 (Friday, March 27, 1998)]
[Proposed Rules]
[Pages 14844-14848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7883]


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DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 563f and 574

[No. 98-28]
RIN 1550-AB10


Agency Disapproval of Directors and Senior Executive Officers of 
Savings Associations and Savings and Loan Holding Companies

AGENCY: Office of Thrift Supervision, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Office of Thrift Supervision (OTS) proposes to amend its 
regulations implementing section 32 of the Federal Deposit Insurance 
Act (FDIA). This statute requires certain savings associations and 
savings and loan holding companies to provide prior notice of the 
appointment or employment of directors and senior executive officers. 
The proposed changes eliminate unnecessary regulatory burden, implement 
changes enacted in the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 (EGRPRA), and more closely conform OTS 
regulations to those of the other banking agencies as required under 
section 303 of the Community Development and Regulatory Improvement Act 
of 1994 (CDRIA).

DATES: Comments must be received on or before May 26, 1998.

ADDRESSES: Send comments to Manager, Dissemination Branch, Records 
Management and Information Policy, Office of Thrift Supervision, 1700 G 
Street, NW., Washington, D.C. 20552, Attention Docket No. 98-28. These 
submissions may be hand-delivered to 1700 G Street, NW., from 9:00 a.m. 
to 5:00 p.m. on business days; sent by facsimile transmission to FAX 
number (202) 906-7755; or sent by e-mail: [email protected]. 
Those commenting by e-mail should include their name and telephone 
number. Comments will be available for inspection at 1700 G Street, 
NW., from 9:00 a.m. until 4:00 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Frances C. Augello, Senior Counsel, 
Business Transactions Division, Chief Counsel's Office (202) 906-6151; 
Scott Ciardi, Financial Analyst, Corporate Activities Division, (202) 
906-6960; or Mary Jo Johnson, Project Manager, Supervision Policy (202) 
906-5739, Office of Thrift Supervision, 1700 G Street, NW., Washington 
D.C. 20552.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 32 of FDIA 1 requires certain savings 
associations and savings and loan holding companies to notify the OTS 
at least 30 days before adding any individual to the board of directors 
or employing an individual as a senior executive officer. Section 2209 
of the EGRPRA 2 amended section 32 of the FDIA by changing 
the circumstances under which a notice must be filed. Section 2209 also 
provided that the OTS may have as long as 90 days to issue a notice of 
disapproval of the proposed addition of a director or employment of a 
senior executive officer.
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    \1\ 12 U.S.C. 1831i.
    \2\ Pub.L. 104-208, 110 Stat. 3009 (Sept. 30, 1996).
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    The OTS proposes to amend its regulations implementing section 32 
of FDIA to reflect the EGRPRA amendments and to eliminate unnecessary 
burden. In accordance with section 303 of the CDRIA,3 the 
OTS has coordinated with other federal banking agencies to streamline 
and clarify the regulations implementing section 32 of FDIA. The 
proposed OTS rule conforms generally to regulations that have been 
promulgated by the Office of the Comptroller of the Currency (OCC) and 
the Board of Governors of the Federal Reserve System (FRB), and 
proposed by the Federal Deposit Insurance Corporation 
(FDIC).4
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    \3\ Pub. L. 103-325, 108 Stat. 2215 (Sept. 23, 1994).
    \4\ (OCC) 61 FR 60341 (November 27, 1996); (FRB) 62 FR 9290 
(February 28, 1997); (FDIC) 61 FR 52809 (October 9, 1997).
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    The proposed rule is discussed in detail below. This proposal 
restates the provisions of the existing rule at Sec. 574.9 with the 
revisions noted in the discussion. In addition, the OTS has rewritten 
the rule using plain language drafting techniques promoted by the Vice 
President's National Performance Review Initiative and new guidance in 
the Federal Register Document Drafting Handbook (January 1997 edition). 
The primary goal of plain language drafting is to make regulations 
easier to understand. Plain language drafting emphasizes the use of 
informative headings (often written as a question), non-technical 
language (including the use of ``you'') and sentences in the active 
voice.
    The use of the plain language format has not altered the substance 
of the regulation. The OTS welcomes comments on the plain language 
format, and suggestions on how to improve it. The OTS is committed to 
converting more of its regulations to the plain language format to 
reduce regulatory burden.

II. Proposed Amendments

Proposed Section 574.10--What does this subpart do?

    Proposed Sec. 574.10 states that the new regulations implement 
section 32 of the FDIA.

Proposed Section 574.11--What definitions apply to this subpart?

    Proposed Sec. 574.11 sets forth the definitions that apply to the 
notice requirement under section 32. The proposed provision retains the 
substance of the existing definitions, except as noted below.
    The proposed regulation revises the definition of ``director'' to 
clarify the circumstances under which an advisory director would not be 
considered a director. Those circumstances would be if the individual 
(1) is not elected by the shareholders; (2) is not authorized to vote 
on any matters before the board, or any committee of the board; (3) 
provides

[[Page 14845]]

only general policy advice to the board or any committee of the board; 
and (4) has not been identified by the OTS in writing as an individual 
who performs the functions of a director, or who exercises a 
significant influence over, or participates in, major policymaking 
decisions of the board.
    The current definition of ``senior executive officer'' would also 
be clarified. The proposed rule states explicitly that the president of 
a savings association or savings and loan holding company is a senior 
executive officer.
    Finally, the existing definitions of ``complete notice'' and 
``complete notice date'' are eliminated as unnecessary.

Proposed Section 574.12--Who must give prior notice?

    Proposed Sec. 574.12(a) sets forth the circumstances under which 
notice is required, and implements certain changes made in EGRPRA.
    Prior to EGRPRA, section 32 of the FDIA required a savings 
association or savings and loan holding company to file prior notice 
where: (1) the savings association was chartered less than two years, 
(2) the savings association or savings and loan holding company had 
undergone a change of control within the preceding two years, or (3) 
the savings association or savings and loan holding company was not in 
compliance with minimum capital requirements or was otherwise in a 
troubled condition.
    Section 2209 of the EGRPRA eliminated the notice requirement for 
savings associations chartered for less than two years, and for savings 
associations and savings and loan holding companies that had undergone 
a change in control within the previous two years. Section 2209 also 
added a new provision requiring prior notice where an agency 
determines, in connection with its review of a capital restoration plan 
required under section 38 of the FDIA or otherwise, that prior notice 
is appropriate.
    The proposed regulation makes those changes and also makes minor 
clarifications to existing filing requirements. For example, the 
proposed regulation clarifies that filings are required when an 
existing senior executive officer changes responsibilities.
    Proposed Sec. 574.12(b) permits an individual seeking election to a 
board of directors to file a notice, if the individual has not been 
nominated by management. The current regulation includes a similar 
provision. See existing Sec. 574.9(d)(l)(ii).
    The current regulation includes a special rule for multi-tiered 
savings and loan holding companies. The special rule limits the 
circumstances under which filings are required with respect to changes 
in directors or senior executive officers of savings and loan holding 
companies. See existing Sec. 574.9(d)(5). The OTS originally 
promulgated this special rule to reduce the number of unnecessary 
filings by multi-tiered savings and loan holding companies within two 
years of a change of control. Because EGRPRA eliminated the filing 
requirement relating to changes of control, the proposed regulation 
eliminates the special rule for multi-tiered savings and loan holding 
companies.
    The proposed regulations require filings only from entities 
described in proposed Sec. 574.12. For example, a savings and loan 
holding company is required to file if it is in troubled condition. A 
savings association is required to file if it is undercapitalized or in 
troubled condition or if OTS requires, as part of prompt corrective 
action, the filing of a notice.

Proposed Section 574.13--What procedures govern the filing of my 
notice?

    The proposed regulation at Sec. 574.13 sets forth the procedures 
governing the filing of notices. This proposed section retains the 
existing requirement that the notice must be filed in accordance with 
the procedures in 12 CFR 516.1.

Proposed Section 574.14--What information must I include in my notice?

    The proposed regulation eliminates specific notice content 
requirements currently set forth at existing Sec. 574.9(d)(2)(i)-(iii). 
Instead, the proposed rule requires that the notice contain the 
information required under paragraph 6(A) of the Change in Bank Control 
Act,5 and information prescribed in appropriate interagency 
forms. Currently, these forms include the Interagency Notice of Change 
in Director or Senior Executive Officer,6 and the 
Interagency Biographical and Financial Report (Notice 
Forms).7
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    \5\ 12 U.S.C. 1817(j)(6)(A).
    \6\ OTS Form 1624.
    \7\ OTS Form 1623.
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    In addition, the proposed regulation retains the current 
requirement that a proposed director or senior executive officer 
provide legible fingerprints. Fingerprints may be omitted, if the 
individual previously submitted fingerprints as part of a notice filed 
with the OTS under section 32 of the FDIA within the previous three 
years.
    Finally, the proposed regulation requires the submission of such 
other information required by the OTS. The proposed regulation further 
states explicitly that the OTS may require or accept other information 
in lieu of the specific requirements of Sec. 574.14.
    The OTS proposes to eliminate the current regulatory provision 
requiring certain certifications. See existing Sec. 574.9(d)(l)(ii). 
The cited OTS Notice Forms already require similar certifications. 
Moreover, the signature requirement on the Notice Forms adequately 
ensures the accuracy of the information provided in the form. 
8
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    \8\ See also 12 CFR 563.180(b) which provides that no person 
filing or seeking approval of any application shall knowingly make 
any written or oral statement to the OTS that is false or misleading 
with respect to any material fact or omits to state any material 
fact concerning any matter within the jurisdiction of the OTS.
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Proposed Section 574.15--What procedures govern OTS review of my notice 
for completeness?

    Proposed Sec. 574.15 sets forth the procedures governing OTS review 
of the notice, and consolidates several provisions in the current 
regulations.9 The revised regulation provides that the OTS 
will review the notice to determine if it is complete. If the notice is 
complete, the OTS will notify the filer in writing of the date that the 
OTS received the complete notice. If the OTS determines that the notice 
is incomplete, the OTS will notify the filer in writing why it is 
incomplete, and will request the filer to submit additional information 
within a specified time period.
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    \9\ See 12 CFR 574.9(d)(1), (d)(3), and (d)(4).
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    If the OTS requests additional information, the filer must provide 
the information or request the OTS to suspend processing of the notice 
within the time period prescribed by the OTS. If the filer does not act 
within the specified period, the OTS may treat the notice as withdrawn 
or review the notice based on the provided information. In its review, 
the OTS may draw reasonable inferences from the filer's failure to 
provide the requested information.
    The proposed regulation eliminates the current provision permitting 
the OTS to suspend processing for up to 60 days upon the request of the 
filer. See existing Sec. 574.9(d)(4)(i). This provision is unnecessary 
in light of the EGRPRA amendments permitting OTS to extend the 30-day 
notice period for an additional 60 days. In any event, OTS may suspend 
processing at the filer's request for a specified period of time.

[[Page 14846]]

    In addition, the proposal streamlines the regulation by eliminating 
the current provision which permits the OTS to suspend processing for 
60 days if the OTS does not receive a report requested from another 
agency. See existing Sec. 574.9(d)(4)(ii). This provision is no longer 
necessary because the statute now permits the agency to extend the 
review period up to an additional 60 days and the OTS may always 
request the filer to suspend the time periods voluntarily.

Proposed Section 574.16--What standards and procedures will govern OTS 
review of the substance of my notice?

    Proposed Sec. 574.16 sets forth the review standard for notices 
submitted under section 32 of the FDIA. The proposed review standard is 
unchanged, except that it eliminates the reference to the best 
interests of the savings and loan holding company. This change conforms 
the rule more closely to section 32 of FDIA. See existing 
Sec. 574.9(d)(6).

Proposed Section 574.17--When may a proposed director or senior 
executive officer begin service?

    Proposed Sec. 574.17 sets forth the circumstances under which a 
proposed director or senior executive officer may begin service. The 
proposed regulation incorporates the current regulations at 
Secs. 574.9(b)(2), (d)(7) and (d)(9). Consistent with the EGRPRA 
amendments, the OTS may extend the 30-day review period for an 
additional period not to exceed 60 days. The OTS expects to continue to 
process most section 32 notices within 30 days. In special 
circumstances, such as where the administrative record is incomplete, 
however, extensions may be necessary.

Proposed Section 574.18--When will the OTS waive the prior notice 
requirement?

    Proposed Sec. 574.18(a) addresses waiver of the prior notice 
requirement. The current regulation permits the OTS to waive the notice 
if the OTS ``finds that waiver would be in the best interest of the 
savings association or the savings and loan holding company, would be 
in the public interest, or that other extraordinary circumstances 
justify waiving the prior notice requirement of this provision.'' See 
existing Sec. 574.9(d)(8).
    The proposed regulation revises the standard. The OTS may waive the 
prior notice requirement if it finds that delay in the individual's 
assumption of the position would threaten the safety or soundness of 
the savings association, or would not be in the public interest, or 
other extraordinary circumstances exist. The proposed regulation 
conforms more closely to section 32 of the FDIA, which states that the 
OTS may prescribe by regulation conditions under which prior notice may 
be waived in the event of extraordinary circumstances.
    The proposed regulation includes the current requirement that if a 
waiver is granted, the notice must be filed within the time period 
specified in the waiver.
    Proposed Sec. 574.18(b) waives the prior notice requirement with 
respect to certain individuals elected to the board of directors. An 
individual will qualify for this waiver if he or she was not nominated 
by management and provides the required notice within seven calendar 
days after being elected. This provision is based on existing 
Sec. 574.9(d)(8)(ii).
    Finally, the proposed regulation, in conformity with the statute, 
provides that a waiver shall not affect the authority of the OTS to 
disapprove a notice within 30 days after a waiver is granted. For the 
individual who is serving pursuant to proposed Sec. 574.18(b), the 30 
day period would commence with the individual's election. The OTS notes 
that the waiver section of the statute does not specifically provide 
for any extension of this 30 day period.10

III. Disposition of Existing Regulations

    The following chart gives an overview of the changes made to Part 
574.

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           Revised provision                  Former provision                         Comments                 
----------------------------------------------------------------------------------------------------------------
Sec.  574.10...........................  ..........................  Added.                                     
574.11.................................  574.9(a)..................  Modified.                                  
574.12.................................  Sec.  574.9(b), (c)(3) and  Significantly modified.                    
                                          (d)(1)(ii).                                                           
                                         574.9(c)(1) and (2).......  Deleted.                                   
Sec.  574.13...........................  Sec.  574.9(d)(1).........  Modified.                                  
Sec.  574.14...........................  Sec.  574.9(d)(1) and (2).  Modified and added.                        
Sec.  574.15...........................  Sec.  574.9(d)(3) and (4).  Significantly modified.                    
                                         Sec.  574.9(d)(5).........  Deleted.                                   
Sec.  574.16...........................  Sec.  574.9(d)(6).........  Modified.                                  
Sec.  574.17...........................  Sec.  574.9(b)(2), (d)(7)   Significantly modified.                    
                                          and (d)(9).                                                           
Sec.  574.18...........................  Sec.  574.9(d)(8).........  Modified.                                  
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IV. Executive Order 12866

    The Director of the OTS has determined that this proposed rule does 
not constitute a ``significant regulatory action'' for purposes of 
Executive Order 12866.

V. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, the 
OTS certifies that this proposed rule will not have a significant 
economic impact on a substantial number of small entities. The proposed 
rule does not impose any additional burdens or requirements upon small 
entities and reduces several paperwork and other burdens on all savings 
associations and savings and loan holding companies. 
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    \10\ Compare 12 U.S.C. 1831i(a).
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VI. Paperwork Reduction Act

    There are no new information collection requirements contained in 
this proposal. The information collection requirements contained in 
this proposal are the same as those required in the form Interagency 
Notice of Change in Director and Senior Executive Officer,11 
which has been previously submitted to and approved by the Office of 
Management and Budget for review in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(d)) under OMB Control No. 1550-
0047.
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    \11\ OTS Form 1624.
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VII. Unfunded Mandates Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L. 
104-4 (Unfunded Mandates Act), requires that an agency prepare a 
budgetary impact statement before promulgating a rule that includes a 
federal mandate that may result in expenditures 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

[[Page 14847]]

an agency to identify and consider a reasonable number of regulatory 
alternatives before promulgating a rule. The OTS has determined that 
the proposed rule will not result in expenditures by state, local, and 
tribal governments, or by the private sector, of $100 million or more. 
Accordingly, this rulemaking is not subject to section 202 of the 
Unfunded Mandates Act.

List of Subjects

12 CFR Part 563f

    Antitrust, Holding companies, Reporting and recordkeeping 
requirements, Savings associations.

12 CFR Part 574

    Administrative practice and procedure, Holding companies, Reporting 
and recordkeeping requirements, Savings associations, Securities.

    Accordingly, the Office of Thrift Supervision proposes to amend 
chapter V, title 12, Code of Federal Regulations, as set forth below.

PART 574--ACQUISITION OF CONTROL OF SAVINGS ASSOCIATIONS

    1. The authority citation for part 574 continues to read as 
follows:

    Authority: 12 U.S.C. 1467a, 1817, 1831i.

    2. Existing Secs. 574.1 through 574.8 are designated as subpart A, 
and the subpart heading is added to read as follows:

Subpart A--Acquisition of Control

* * * * *


Sec. 574.9  [Removed and Reserved]

    3. Section 574.9 is removed and reserved.
    4. Subpart B, consisting of Secs. 574.10 through 574.18, is added 
to read as follows:

Subpart B--Notice of Change of Director or Senior Executive Officer

Sec.
574.10  What does this subpart do?
574.11  What definitions apply to this subpart?
574.12  Who must give prior notice?
574.13  What procedures govern the filing of my notice?
574.14  What information must I include in my notice?
574.15  What procedures govern OTS review of my notice for 
completeness?
574.16  What standards and procedures will govern OTS review of the 
substance of my notice?
574.17  When may a proposed director or senior executive officer 
begin service?
574.18  When will the OTS waive the prior notice requirement?

Subpart B--Notice of Change of Director or Senior Executive Officer


Sec. 574.10  What does this subpart do?

    This subpart implements 12 U.S.C. 1831i, which requires certain 
savings associations and savings and loan holding companies to notify 
the OTS before appointing or employing directors and senior executive 
officers.


Sec. 574.11  What definitions apply to this subpart?

    The following definitions apply to this subpart:
    Director means an individual who serves on the board of directors 
of a savings association or savings and loan holding company. This term 
does not include an advisory director who:
    (1) Is not elected by the shareholders;
    (2) Is not authorized to vote on any matters before the board of 
directors or any committee of the board of directors;
    (3) Provides only general policy advice to the board of directors 
or any committee of the board of directors; and
    (4) Has not been identified by the OTS in writing as an individual 
who performs the functions of a director, or who exercises significant 
influence over, or participates in, major policymaking decisions of the 
board of directors.
    Senior executive officer means an individual who holds the title or 
performs the function of one or more of the following positions 
(without regard to title, salary, or compensation): president, chief 
executive officer, chief operating officer, chief financial officer, 
chief lending officer, or chief investment officer. Senior executive 
officer also includes any other person identified by the OTS in writing 
as an individual who exercises significant influence over, or 
participates in, major policymaking decisions, whether or not hired as 
an employee.
    Troubled condition means:
    (1) A savings association that has a composite rating of 4 or 5, as 
defined in Sec. 516.3(c) of this chapter;
    (2) A savings and loan holding company that has an unsatisfactory 
rating under the OTS's holding company rating system, or that is 
informed in writing by the OTS that it has an adverse effect on its 
subsidiary savings association;
    (3) A savings association or savings and loan holding company that 
is subject to a capital directive, a cease-and-desist order, a consent 
order, a formal written agreement, or a prompt corrective action 
directive relating to the safety and soundness or financial viability 
of the savings association, unless otherwise informed in writing by the 
OTS; or
    (4) A savings association or savings and loan holding company that 
is informed in writing by the OTS that it is in troubled condition 
based on information available to the OTS.


Sec. 574.12  Who must give prior notice?

    (a) Savings association or savings and loan holding company. Except 
as provided under Sec. 574.18, you must notify the OTS at least 30 days 
before adding or replacing any member of your board of directors, 
employing any person as a senior executive officer, or changing the 
responsibilities of any senior executive officer so that the person 
would assume a different senior executive position if:
    (1) You are a savings association and at least one of the following 
circumstances apply:
    (i) You do not comply with all minimum capital requirements under 
part 567 of this chapter;
    (ii) You are in troubled condition; or
    (iii) The OTS has notified you, in connection with its review of a 
capital restoration plan required under section 38 of the Federal 
Deposit Insurance Act or part 565 of this chapter or otherwise, that a 
notice is required under this subpart; or
    (2) You are a savings and loan holding company and you are in 
troubled condition.
    (b) Notice by individual. If you are an individual seeking election 
to the board of directors of a savings association or savings and loan 
holding company, and have not been nominated by management, you may 
provide the prior notice required under paragraph (a) of this section 
or you may follow the process under Sec. 574.18.


Sec. 574.13  What procedures govern the filing of my notice?

    The procedures found in Sec. 516.1 of this chapter govern the 
filing of your notice under Sec. 574.12.


Sec. 574.14  What information must I include in my notice?

    (a) Content requirements. Your notice must include:
    (1) The information required under 12 U.S.C. 1817(j)(6)(A), and the 
information prescribed in the Interagency Notice of Change in Director 
or Senior Executive Officer and the Interagency Biographical and 
Financial Report;
    (2) Legible fingerprints of the proposed director or senior 
executive officer. You are not required to file fingerprints if, within 
three years prior to the date of submission of the notice, the proposed 
director or senior executive officer provided legible

[[Page 14848]]

fingerprints as part of a notice filed with the OTS under 12 U.S.C. 
1831i; and
    (3) Such other information required by the OTS.
    (b) Modification of content requirements. The OTS may require or 
accept other information in place of the content requirements in 
paragraph (a) of this section.


Sec. 574.15  What procedures govern OTS review of my notice for 
completeness?

    The OTS will first review your notice to determine whether it is 
complete.
    (a) If your notice is complete, the OTS will notify you in writing 
of the date that the OTS received the complete notice.
    (b) If your notice is not complete, the OTS will notify you in 
writing what additional information you need to submit, why we need the 
information, and when you must submit it. You must, within the 
specified time period, provide additional information or request that 
the OTS suspend processing of the notice. If you fail to act within the 
specified time period, the OTS may treat the notice as withdrawn or may 
review the application based on the information provided.


Sec. 574.16  What standards and procedures will govern OTS review of 
the substance of my notice?

    The OTS will disapprove a notice if the OTS finds that the 
competence, experience, character, or integrity of the proposed 
director or senior executive officer indicates that it would not be in 
the best interests of the depositors of the savings association or of 
the public to permit the individual to be employed by, or associated 
with, the savings association or savings and loan holding company. If 
the OTS disapproves a notice, it will issue a written notice that 
explains why the OTS disapproved the notice. The OTS will send the 
notice to the savings association or savings and loan holding company 
and the individual.


Sec. 574.17  When may a proposed director or senior executive officer 
begin service?

    (a) A proposed director or senior executive officer may begin 
service 30 days after the date the OTS receives all required 
information, unless:
    (1) The OTS notifies you that it has disapproved the notice; or
    (2) The OTS extends the 30-day period for an additional period not 
to exceed 60 days. If the OTS extends the 30-day period, it will notify 
you in writing that the period has been extended, and will state the 
reason for the extension. The proposed director or senior executive 
officer may begin service upon expiration of the extended period, 
unless the OTS notifies you that it has disapproved the notice during 
the extended period.
    (b) Notwithstanding paragraph (a) of this section, a proposed 
director or senior executive officer may begin service after OTS 
notifies you, in writing, of its intention not to disapprove the 
notice.


Sec. 574.18  When will the OTS waive the prior notice requirement?

    (a) Waiver request. (1) An individual may serve as a director or 
senior executive officer before filing a notice under this subpart if 
OTS issues a written finding that:
    (i) Delay would threaten the safety or soundness of the savings 
association;
    (ii) Delay would not be in the public interest; or
    (iii) Other extraordinary circumstances exist that justify waiver 
of prior notice.
    (2) If the OTS grants a waiver, you must file a notice under this 
subpart within the time period specified by the OTS.
    (b) Automatic waiver. An individual may serve as a director before 
filing a notice under this subpart, if the individual was not nominated 
by management and the individual submits a notice under this subpart 
within seven days after election as a director.
    (c) Subsequent OTS action. The OTS may disapprove a notice within 
30 days after OTS issues a waiver under paragraph (a) of this section 
or within 30 days after the election of an individual who has filed a 
notice and is serving pursuant to an automatic waiver under paragraph 
(b) of this section.
    5. Existing Sec. 574.100 is designated as subpart C, and the 
subpart heading is added to read as follows:

Subpart C--Rebuttal of Control Agreement

* * * * *

PART 563f--MANAGEMENT OFFICIAL INTERLOCKS

    6. The authority citation for part 563f continues to read as 
follows:

    Authority: 12 U.S.C. 3201-3208.

    7. Section 563f.2 is amended by revising paragraph (l)(1)(iii) to 
read as follows:


Sec. 563f.2  Definitions.

* * * * *
    (l) Management official. (1) * * *
    (iii) A senior executive officer as that term is defined in 
Sec. 574.11 of this chapter;
* * * * *
    8. Section 563f.5 is amended by revising paragraphs (b)(2)(i) and 
(b)(2)(ii) to read as follows:


Sec. 563f.5  Regulatory Standards exemption.

* * * * *
    (b) * * *
    (2) * * *
    (i) That official is approved by the OTS to serve as a director or 
senior executive officer of that institution pursuant to Sec. 547.17 of 
this chapter; and
    (ii) The institution had operated for less than two years, was not 
in compliance with minimum capital requirements, or otherwise was in a 
``troubled condition'' as defined in Sec. 574.11 of this chapter at the 
time the service under that section was approved.
* * * * *
    9. Section 563f.6 is amended by revising paragraphs (b)(1) and 
(b)(2) to read as follows:


Sec. 563f.6  Management Consignment exemption.

* * * * *
    (b) * * *
    (1) A proposed management official is capable of strengthening the 
management of a depository institution described in paragraph (a)(3) of 
this section if that official is approved by the OTS to serve as a 
director or senior executive officer of that institution pursuant to 
Sec. 574.17 of this chapter and the institution had operated for less 
than two years at the time the service under Sec. 574.17 of this 
chapter was approved; and
    (2) A proposed management official is capable of strengthening the 
management of a depository institution described in paragraph (a)(4) of 
this section if that official is approved by the OTS to serve as a 
director or senior executive officer of that institution pursuant to 
Sec. 574.17 of this chapter and the institution was not in compliance 
with minimum capital requirements or otherwise was in a ``troubled 
condition'' as defined under Sec. 574.11 of this chapter at the time 
service under Sec. 574.11 of this chapter was approved.
* * * * *
    Dated: March 18, 1998.

    By the Office of Thrift Supervision.
Ellen Seidman,
Director.
[FR Doc. 98-7883 Filed 3-26-98; 8:45 am]
BILLING CODE 6720-01-P