[Federal Register Volume 63, Number 199 (Thursday, October 15, 1998)]
[Rules and Regulations]
[Pages 55486-55489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27671]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 30

[Docket No. 98-13]
RIN 1557-AB67


FEDERAL RESERVE SYSTEM

12 CFR Part 263

[Docket No. R-1018]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 364

RIN 3064-AC18

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 570

[Docket No. 98-106]
RIN 1550-AB27

Safety and Soundness Standards

AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of 
Governors of the Federal Reserve System; Federal Deposit Insurance 
Corporation; and Office of Thrift Supervision, Treasury.

ACTION: Interim rule with request for comment.

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SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board 
of Governors of the Federal Reserve System (Board), the Federal Deposit 
Insurance Corporation (FDIC), and the Office of Thrift Supervision 
(OTS) (collectively, the Agencies) are adopting this interim rule to 
update their rules of procedure pertaining to safety and soundness 
standards issued under section 39 of the Federal Deposit Insurance Act 
(FDI Act). This interim rule is intended only to incorporate 
appropriate references to the Interagency Guidelines Establishing Year 
2000 Standards for Safety and Soundness published elsewhere in this 
issue of the Federal Register.

DATES: This interim rule is effective October 15, 1998. Comments must 
be received by December 14, 1998.

ADDRESSES: Comments should be directed to:
    OCC: Office of the Comptroller of the Currency, Communications 
Division, 250 E Street, SW, Washington, DC 20219, Attention: Docket No. 
98-13. Comments will be available for public inspection and 
photocopying at the same location. In addition, comments may be sent by 
facsimile transmission to FAX number (202) 874-5274 or by Internet mail 
to [email protected].
    Board: Jennifer J. Johnson, Secretary, Board of Governors of the 
Federal Reserve System, Docket No. R-1018, 20th Street and Constitution 
Avenue, NW, Washington, DC 20551. Comments addressed to Ms. Johnson may 
also be delivered to the Board's mail room between 8:45 a.m. and 5:15 
p.m., and to the security control room outside of those hours. Both the 
mail room and control room are accessible from the courtyard entrance 
on 20th Street between Constitution Avenue and C Street, NW, 
Washington, DC. Comments may be inspected in room MP-500 between 9:00 
a.m. and 5:00 p.m., except as provided in Sec. 261.14 of the Board's 
Rules Regarding Availability of Information, 12 CFR 261.14.
    FDIC: Robert E. Feldman, Executive Secretary, Attention: Comments/
OES, Federal Deposit Insurance Corporation, 550 17th Street, NW, 
Washington, DC 20429. Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street), on business days between 7:00 a.m. and 5:00 p.m. (Fax number: 
(202) 898-3838; Internet address: [email protected]). Comments may be 
inspected and photocopied in the FDIC Public Information Center, Room 
100, 801 17th Street, NW, Washington, DC, between 9:00 a.m. and 4:30 
p.m. on business days.
    OTS: Manager, Dissemination Branch, Records Management and 
Information Policy, Office of Thrift Supervision, 1700 G Street, NW, 
Washington, DC 20552, Attention Docket No. 98-106. These submissions 
may be hand delivered to 1700 G Street, NW, Washington, DC, from 9:00 
a.m. to 5:00 p.m. on business days; sent by facsimile transmission to 
FAX number (202) 906-7755, or may be sent by e-mail to:

[[Page 55487]]

[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, Washington, DC, from 9:00 a.m. until 
4:00 p.m. on business days.

FOR FURTHER INFORMATION CONTACT:
    OCC: Ursula Pfeil, Attorney, Legislative and Regulatory Activities 
(202) 874-5090; or Brian McCormally, Assistant Director, Enforcement 
and Compliance (202) 874-4800.
    Board: Stephanie Martin, Senior Counsel, Legal Division (202) 452-
3198. For the hearing impaired only, Telecommunication Device for Deaf 
(TDD), Diane Jenkins (202) 452-3544, Board of Governors of the Federal 
Reserve System, 20th and C Streets, NW, Washington, DC 20551.
    FDIC: Sandy Comenetz, Year 2000 Project Manager, Legal Division 
(202) 898-3582; Richard Bogue, Counsel, Legal Division (202) 898-3726; 
or Nancy Chase Miller, Counsel, Legal Division (202) 898-6533.
    OTS: Dorothy Van Cleave, National Year 2000 Coordinator (202) 906-
7380; or Robert D. DeCuir, Senior Enforcement Attorney, Office of 
Enforcement, Office of Chief Counsel (202) 906-7152.

SUPPLEMENTARY INFORMATION:

Background and Discussion of Interim Rule

    In 1995, the Agencies jointly adopted Guidelines Establishing 
Standards for Safety and Soundness pursuant to section 39 of the FDI 
Act. At the same time, each of the Agencies adopted rules establishing 
procedures for requiring submission of a compliance plan and issuing an 
enforceable order for violation of safety and soundness standards 
pursuant to section 39. The general standards for safety and soundness 
are set forth in an appendix to each Agency's procedural rules. 60 FR 
35674 (July 10, 1995).
    Elsewhere in this issue of the Federal Register, the Agencies are 
publishing Interagency Guidelines Establishing Year 2000 Standards for 
Safety and Soundness (Year 2000 Guidelines) under section 39 of the FDI 
Act. 12 U.S.C. 1831p-1. The Year 2000 Guidelines published today will 
appear as a second appendix to the Agencies' respective procedural 
rules.
    This interim rule makes minor conforming amendments to the 
Agencies' procedural rules to incorporate appropriate references to the 
Agencies' Year 2000 Guidelines. This interim rule makes no substantive 
changes to the Agencies' rules of procedure.

Notice and Comment, Effective Date, and Request for Comment

    Section 553 of the Administrative Procedure Act (APA) permits an 
agency to issue rules without prior notice and comment if the Agency, 
for good cause, finds that notice and comment are impracticable, 
unnecessary, or contrary to the public interest and explains its 
finding when it publishes the rule. 5 U.S.C. 553(b)(B). This interim 
rule makes only conforming amendments to the Agencies' current rules of 
procedure to refer to the Year 2000 Guidelines. This interim rule makes 
no other changes to the Agencies' procedural rules, and it imposes no 
new substantive requirements on insured depository institutions. 
Therefore, each of the Agencies finds that prior notice and comment are 
unnecessary and, accordingly, are issuing this interim rule without 
prior notice and comment.
    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act (CDRIA) of 1994, Pub. L. 103-325, requires that new 
regulations and amendments to existing regulations prescribed by a 
Federal banking agency that impose reporting, disclosure, or other 
requirements on insured depository institutions shall take effect on 
the first day of the calendar quarter that begins on or after the date 
on which the regulation is published in final form. 12 U.S.C. 
4802(b)(1). Additionally, section 553(d) of the APA states that 
publication of a rule shall be made not less than 30 days before its 
effective date. 5 U.S.C. 553(d). Both the CDRIA and APA permit an 
agency to select an earlier effective date for good cause published 
with the regulation. As noted earlier, since this interim rule makes 
only conforming amendments to the Agencies' rules, each Agency finds 
good cause to dispense with the delayed effective date requirements.
    The Agencies invite comments on this interim rule during the 60-day 
period that runs concurrently with their request for comment on the 
Year 2000 Guidelines.

Regulatory Flexibility Act Analysis

    An initial regulatory flexibility analysis under the Regulatory 
Flexibility Act is required only when an agency must publish a general 
notice of proposed rulemaking. 5 U.S.C. 603. As noted previously, the 
Agencies have determined that it is not necessary to publish a notice 
of proposed rulemaking for this interim rule. Accordingly, an initial 
regulatory flexibility analysis is not required. In addition, since 
this interim rule imposes no new requirements on insured depository 
institutions and makes only conforming amendments to the Agencies' 
current rules of procedure, the Agencies find that this interim rule 
does not have a significant effect on a substantial number of small 
entities or create any additional burden on small entities.

Paperwork Reduction Act

    The Agencies have determined that this interim rule does not 
involve a collection of information pursuant to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

Executive Order 12866

    The OCC and OTS have determined that this interim rule is not a 
significant regulatory action under Executive Order 12866.

OCC and OTS: Unfunded Mandates Reform Act Analysis

    The Unfunded Mandates Reform Act of 1995 (UMA), Pub. L. 104-4, 
applies only when an agency is required to issue a general notice of 
proposed rulemaking or a final rule for which a general notice of 
proposed rulemaking was published. 2 U.S.C. 1532. As noted previously, 
the Agencies have determined, for good cause, that this interim rule 
should take immediate effect and, therefore, that a notice of proposed 
rulemaking is not required. Accordingly, the Agencies have concluded 
that the UMA does not require an unfunded mandates analysis of this 
interim rule.
    Moreover, the Agencies find that this interim rule will not result 
in expenditure by State, local, and tribal governments, or by the 
private sector, of more than $100 million in any one year. Accordingly, 
neither the OCC nor the OTS has prepared a budgetary impact statement 
or specifically addressed the regulatory alternatives considered.

List of Subjects

12 CFR Part 30

    Administrative practice and procedure, National banks, Reporting 
and recordkeeping requirements, Safety and soundness.

12 CFR Part 263

    Administrative practice and procedure, Claims, Crime, Equal access 
to justice, Federal Reserve System, Lawyers, Penalties.

12 CFR Part 364

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Reporting and recordkeeping requirements, Safety and 
soundness.

[[Page 55488]]

12 CFR Part 570

    Accounting, Administrative practice and procedures, Bank deposit 
insurance, Holding companies, Reporting and recordkeeping requirements, 
Savings associations, Safety and soundness.

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons set out in the joint preamble, the OCC is amending 
part 30 of chapter I of title 12 of the Code of Federal Regulations as 
follows:

PART 30--SAFETY AND SOUNDNESS STANDARDS

    1. The authority citation for part 30 continues to read as follows:

    Authority: 12 U.S.C. 93a, 1831p-1.

    2. In Sec. 30.2, the last sentence is revised to read as follows:


Sec. 30.2  Purpose.

    * *  * The Interagency Guidelines Establishing Standards for Safety 
and Soundness are set forth in appendix A to this part and the 
Interagency Guidelines Establishing Year 2000 Standards for Safety and 
Soundness are set forth in appendix B to this part.
    3. In Sec. 30.3, paragraph (a) is revised to read as follows:


Sec. 30.3  Determination and notification of failure to meet safety and 
soundness standard and request for compliance plan.

    (a) Determination. The OCC may, based upon an examination, 
inspection, or any other information that becomes available to the OCC, 
determine that a bank has failed to satisfy the safety and soundness 
standards contained in the Interagency Guidelines Establishing 
Standards for Safety and Soundness set forth in appendix A to this part 
or the Interagency Guidelines Establishing Year 2000 Standards for 
Safety and Soundness set forth in appendix B to this part.
* * * * *
    Dated: September 21, 1998.
Julie L. Williams,
Acting Comptroller of the Currency.

Federal Reserve System

12 CFR Chapter II

    For the reasons set out in the joint preamble, the Board is 
amending part 263 of chapter II of title 12 of the Code of Federal 
Regulations as follows:

PART 263--RULES OF PRACTICE FOR HEARINGS

    1. The authority citation for part 263 continues to read as 
follows:

    Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505, 1817(j), 
1818, 1828(c), 1831o, 1831p-1, 1847(b), 1847(d), 1884(b), 
1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15 U.S.C. 21, 78o-4, 78o-
5, 78u-2; and 28 U.S.C. 2461 note.

Subpart I--Submission and Review of Safety and Soundness Plans and 
Issuance of Orders to Correct Safety and Soundness Deficiencies

    2. In Sec. 263.302, paragraph (a) is revised to read as follows:


Sec. 263.302  Determination and notification of failure to meet safety 
and soundness standard and request for compliance plan.

    (a) Determination. The Board may, based upon an examination, 
inspection, or any other information that becomes available to the 
Board, determine that a bank has failed to satisfy the safety and 
soundness standards contained in the Interagency Guidelines 
Establishing Standards for Safety and Soundness set out in appendix D-1 
to part 208 of this chapter or the Interagency Guidelines Establishing 
Year 2000 Standards for Safety and Soundness set out in appendix D-2 to 
part 208 of this chapter.
* * * * *
    By Order of the Board of Governors of the Federal Reserve 
System, September 30, 1998.

Jennifer J. Johnson,

Secretary of the Board.

Federal Deposit Insurance Corporation

12 CFR Chapter III

    For the reasons set out in the joint preamble, the FDIC is amending 
part 364 of chapter III of title 12 of the Code of Federal Regulations 
as follows:

PART 364--STANDARDS FOR SAFETY AND SOUNDNESS

    1. The authority citation for part 364 continues to read as 
follows:

    Authority: 12 U.S.C. 1819 (Tenth), 1831p--1.

    2. Section 364.101 is revised to read as follows:


Sec. 364.101  Standards for safety and soundness.

    (a) General standards. The Interagency Guidelines Establishing 
Standards for Safety and Soundness prescribed pursuant to section 39 of 
the Federal Deposit Insurance Act (12 U.S.C. 1831p--1), as set forth as 
appendix A to this part, apply to all insured state nonmember banks and 
to state-licensed insured branches of foreign banks, that are subject 
to the provisions of section 39 of the Federal Deposit Insurance Act.
    (b) Year 2000 standards. The Interagency Guidelines Establishing 
Year 2000 Standards for Safety and Soundness prescribed pursuant to 
section 39 of the Federal Deposit Insurance Act (12 U.S.C. 1831p-1), as 
set forth as appendix B to this part, apply to all insured state 
nonmember banks and to state-licensed insured branches of foreign 
banks, that are subject to the provisions of section 39 of the Federal 
Deposit Insurance Act.

    By Order of the Board of Directors.

    Dated at Washington, DC, this 8th day of October, 1998.

Federal Deposit Insurance Corporation.
James D. LaPierre,
Deputy Executive Secretary.

Office of Thrift Supervision

12 CFR Chapter V

Authority and Issuance

    For the reasons set out in the joint preamble, the OTS is amending 
part 570 of chapter V of title 12 of the Code of Federal Regulations as 
follows:

PART 570--SUBMISSION AND REVIEW OF SAFETY AND SOUNDNESS COMPLIANCE 
PLANS AND ISSUANCE OF ORDERS TO CORRECT SAFETY AND SOUNDNESS 
DEFICIENCIES

    1. The authority citation for part 570 continues to read as 
follows:

    Authority: 12 U.S.C. 1831p-1.

    2. In Sec. 570.1, paragraph (a), the last sentence of paragraph 
(b), and paragraph (c) are revised to read as follows:


Sec. 570.1  Authority, purpose, scope and preservation of existing 
authority.

    (a) Authority. This part and the Guidelines in Appendices A and B 
to this part are issued by the OTS under section 39 (section 39) of the 
Federal Deposit Insurance Act (FDI Act) (12 U.S.C. 1831p-1) as added by 
section 132 of the Federal Deposit Insurance Corporation Improvement 
Act of 1991 (FDICIA) (Pub. L. 102-242, 105 Stat. 2236 (1991)), and as 
amended by section 956 of the Housing and Community Development Act of 
1992 (Pub. L. 102-550, 106 Stat. 3895 (1992)), and as amended by 
section 318 of the Community Development Banking Act of 1994 (Pub. L. 
103-325, 108 Stat. 2160 (1994)).
    (b) * * * Interagency Guidelines Establishing Standards for Safety 
and Soundness pursuant to section 39 of the FDI Act are set forth in 
Appendix A to

[[Page 55489]]

this part. The Interagency Guidelines Establishing Year 2000 Standards 
for Safety and Soundness are set forth in Appendix B to this part.
    (c) Scope. This part and the Interagency Guidelines at Appendices A 
and B to this part implement the provisions of section 39 of the FDI 
Act as they apply to savings associations.
* * * * *
    3. In Sec. 570.2, paragraph (a) is revised to read as follows:


Sec. 570.2  Determination and notification of failure to meet safety 
and soundness standards and request for compliance plan.

    (a) Determination. The OTS may, based upon an examination, 
inspection, or any other information that becomes available to the OTS, 
determine that a savings association has failed to satisfy the safety 
and soundness standards contained in the Interagency Guidelines 
Establishing Standards for Safety and Soundness as set forth in 
Appendix A to this part or the Interagency Guidelines Establishing Year 
2000 Standards for Safety and Soundness as set forth in Appendix B to 
this part.
* * * * *
    Dated: September 29, 1998.
Ellen Seidman,
Director.
[FR Doc. 98-27671 Filed 10-14-98; 8:45 am]
BILLING CODES: 4810-33-P, 6210-01-P, 6714-01-P, 6720-01-P