[Federal Register Volume 63, Number 217 (Tuesday, November 10, 1998)]
[Rules and Regulations]
[Pages 62927-62930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30044]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 4

[Docket No. 98-18]
RIN 1557-AB65


Organization and Functions, Availability and Release of 
Information, Contracting Outreach Program

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


[[Page 62928]]


ACTION: Interim rule with request for comments.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
amending its disclosure regulation. Among other things, the amendment 
clarifies that Suspicious Activity Reports are non-public documents and 
that the OCC may make non-public OCC information available to a 
supervised entity and to other persons, as in the sole discretion of 
the Comptroller may be necessary or appropriate, without a request for 
records or testimony.

DATES: This interim rule is effective on November 10, 1998. Comments 
must be received by January 11, 1999.

ADDRESSES: Comments should be directed to: Office of the Comptroller of 
the Currency, Communications Division, 250 E Street, SW, Washington, DC 
20219, Attention: Docket No. 98-18. 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 electronic mail to [email protected].

FOR FURTHER INFORMATION CONTACT: Ursula Pfeil, Attorney, Legislative 
and Regulatory Activities (202) 874-5090; or Stuart Feldstein, 
Assistant Director, Legislative and Regulatory Activities (202) 874-
5090.

SUPPLEMENTARY INFORMATION:

Background and Discussion of Interim Rule

    The OCC is amending subpart C of 12 CFR Part 4 which governs the 
release of non-public OCC information. Part 4 currently requires a 
person seeking non-public OCC information to submit a request in 
writing to the OCC. The current rule does not include a procedure for 
the release of non-public OCC information to supervised entities and 
other persons without a specific request for the information.
    The OCC has authority to prescribe rules governing the release of 
agency records and information under its grant of statutory authority 
to promulgate substantive regulations to carry out the responsibilities 
of the office, 12 U.S.C. 93a, as well as under statutes that 
contemplate the sharing of information with other agencies and persons. 
See, e.g., 12 U.S.C. 481; 12 U.S.C. 1867; 12 U.S.C. 1820(d)(6).
    In some circumstances, the safety and soundness or financial 
stability of national banks may be affected unless the OCC discloses 
non-public information to supervised entities or certain other persons 
without a request. For example, if the OCC obtains information that a 
check fraud ring has targeted multiple banks in a particular area, it 
may be necessary for the OCC to disclose confidential supervisory 
information obtained from one of the targeted banks to other banks that 
may also be targets of the same scheme. Similarly, the OCC's ability to 
help national banks attain Year 2000 readiness depends, in part, on the 
OCC's ability to share information concerning third parties with 
supervised entities and other persons.1
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    \1\ For example, ``other persons'' may include self-regulatory 
organizations or state banks with whom the OCC seeks to share 
information.
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    This interim rule amends part 4 to include a new section on the 
dissemination of non-public OCC information without a request. This new 
section authorizes the OCC to make non-public OCC information available 
to a supervised entity and to other persons, as in the sole discretion 
of the Comptroller may be necessary or appropriate, without a request 
for records or testimony.2 This interim rule defines the 
term ``supervised entity'' to include a national bank, a subsidiary of 
a national bank, or a federal branch or agency of a foreign bank 
licensed by the OCC. The OCC may continue to impose conditions and 
limitations on the disclosure of information through the entry of a 
protective order or a written agreement of confidentiality, as provided 
for under the current rule.
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    \2\ This approach is consistent with the long-standing 
disclosure regulation of the Federal Reserve Board (FRB). See 12 CFR 
261.20. The FRB disclosure regulation similarly authorizes the FRB 
to share confidential supervisory information with supervised 
financial institutions and, from time to time, to make other 
discretionary disclosures that the FRB determines necessary.
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    Current Sec. 4.32 defines non-public OCC information as 
information, confidential or otherwise, that the OCC is not required to 
release under the Freedom of Information Act (FOIA) (5 U.S.C. 552) or 
that the OCC has not yet published or made available under 12 U.S.C. 
1818(u), the statute requiring publication of certain enforcement 
orders. FOIA specifically exempts from disclosure several categories of 
information including records contained in, or related to, examination 
and operating or condition reports concerning financial institutions. 
This interim rule adds a new provision to the part 4 definition of non-
public OCC information to include a Suspicious Activity Report (SAR) 
filed by the OCC or a supervised entity under 12 CFR 21.11. This new 
provision clarifies that SARs, which are sensitive and confidential 
documents, are subject to the procedures for the release of non-public 
OCC information under part 4.
    This interim rule also clarifies that non-public OCC information 
remains the property of the OCC even after it is disclosed, and that it 
may not be disclosed to others except as authorized by the OCC. In 
addition, no current or former OCC employee or agent may disclose or 
permit the disclosure of any non-public OCC information to anyone other 
than an employee or agent of the OCC who is entitled to the information 
for the performance of OCC duties. Current or former OCC employees or 
agents subpoenaed or otherwise requested to provide OCC information 
must notify the OCC immediately under procedures set forth in 
Sec. 4.37(a)(2).

Effective Date

    Section 553 of the Administrative Procedure Act permits an agency 
to issue a rule without prior notice and comment when the agency for 
good cause finds that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest. 5 
U.S.C. 553(b)(B); 5 U.S.C. 553(d). Likewise, section 302 of the Riegle 
Community Development and Regulatory Improvement Act of 1994 (CDRI), 
Pub. L. 103-325, authorizes a banking agency to issue a rule without 
notice and comment to be effective before the first day of the calender 
quarter that begins on or after the date on which the regulations are 
published in final form if the agency finds good cause for an earlier 
effective date. 12 U.S.C. 4802(b)(1).
    The OCC finds good cause for issuing this interim rule without 
prior notice and comment and for the rule to take effect upon 
publication in the Federal Register. Among other things, making this 
interim rule effective immediately will allow the OCC to disclose non-
public OCC information to supervised entities and other persons in 
certain enforcement contexts requiring immediate action where a request 
for the information may not be forthcoming or may be delayed. The OCC's 
ability to help national banks attain Year 2000 readiness in the short 
time remaining also depends, in part, on the OCC's ability to provide 
information rapidly concerning third parties to supervised entities and 
other persons without a request. The OCC's ability to carry out its 
mission to ensure national banks' safety and soundness, in certain 
circumstances, may be impaired unless it can make disclosures, as 
authorized by this interim rule, promptly after acquiring the 
information in question. For these reasons, the OCC concludes that 
prior notice and comment

[[Page 62929]]

procedures and a delayed effective date are impracticable and would be 
contrary to the public interest. 5 U.S.C. 553(b)(B).

Request for Comment

    The OCC is interested in the views of the public regarding this 
interim rule and therefore welcomes comments on any and all aspects of 
this interim rule.

Regulatory Flexibility Act

    An initial regulatory flexibility analysis under the Regulatory 
Flexibility Act is only required whenever an agency is required to 
publish a general notice of proposed rulemaking. 5 U.S.C. 603. As noted 
previously, the OCC has determined that it is not necessary to publish 
a notice of proposed rulemaking for this rule. Accordingly, an initial 
regulatory flexibility analysis is not required. Nonetheless, since 
this interim rule imposes no new requirements on any national bank, the 
OCC finds that this interim rule does not have a secondary or 
incidental effect on a substantial number of small entities or create 
any additional burden on small entities.

OCC Executive Order 12866 Statement

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

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, Public Law 104-4 
(Unfunded Mandates Act), applies only when an agency is required to 
promulgate 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 that it is not 
necessary to publish a notice of proposed rulemaking for these 
Guidelines. Accordingly, an unfunded mandates act analysis is not 
required. Nonetheless, since this interim rule prescribed no mandate of 
any kind, the OCC finds 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, the OCC 
has not prepared a budgetary impact statement or specifically addressed 
the regulatory alternatives considered.

List of Subjects in 12 CFR Part 4

    Freedom of information, National banks, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons set out in the preamble, part 4 of chapter I of 
title 12 of the Code of Federal Regulations is amended as set forth 
below:

PART 4--ORGANIZATIONS AND FUNCTIONS, AVAILABILITY AND RELEASE OF 
INFORMATION, CONTRACTING OUTREACH PROGRAM

    1. The authority citation for part 4 is revised to read as follows:

    Authority: 12 U.S.C. 93a. Subpart A also issued under 5 U.S.C. 
552; Subpart B also issued under 5 U.S.C. 552; E.O. 12600 (3 CFR 
1987 Comp., p. 235). Subpart C also issued under 5 U.S.C. 301, 552; 
12 U.S.C. 161, 481, 482, 484(a), 1442, 1817(a)(3), 1818(u) and (v), 
1820(d)(6), 1821(c), 1821(o), 1821(t), 1831m, 1831p-1, 1831o, 1867, 
1951 et seq., 2601 et seq., 2801 et seq., 2901 et seq., 3101 et 
seq., 3401 et seq.; 15 U.S.C. 77uu(b), 78q(c)(3); 18 U.S.C. 641, 
1905, 1906; 29 U.S.C. 1204; 31 U.S.C. 9701; 42 U.S.C. 3601; 44 
U.S.C. 3506, 3510. Subpart D also issued under 12 U.S.C. 1833e.

Subpart C--Release of Non-Public OCC Information

    2. Section 4.31 is amended by revising paragraphs (a)(1) and (b)(1) 
to read as follows:


Sec. 4.31  Purpose and scope.

    (a) Purpose. * * *
    (1) Afford an orderly mechanism for the OCC to process 
expeditiously requests for non-public OCC information; to address the 
release of non-public OCC information without a request; and, when 
appropriate, for the OCC to assert evidentiary privileges in 
litigation;
* * * * *
    (b) Scope. (1) This subpart applies to requests for, and 
dissemination of, non-public OCC information, including requests for 
records or testimony arising out of civil lawsuits and administrative 
proceedings to which the OCC is not a party and the release of non-
public OCC information without a specific request. Lawsuits and 
administrative proceedings to which the OCC is not a party include 
proceedings in which a Federal agency is a party in opposition to the 
private requester.
* * * * *
    3. Section 4.32 is amended by redesignating paragraph (e) as 
paragraph (f); by removing the word ``and'' from paragraph (b)(1)(v); 
and by adding new paragraphs (b)(1)(vii) and (e) to read as follows:


Sec. 4.32  Definitions.

* * * * *
    (b) * * *
    (1) * * *
    (vii) A Suspicious Activity Report filed by the OCC or a supervised 
entity under 12 CFR 21.11; and
* * * * *
    (e) Supervised entity includes a national bank, a subsidiary of a 
national bank, a Federal branch or agency of a foreign bank licensed by 
the OCC as defined under 12 CFR 28.11(h) and (i), or any other entity 
supervised by the OCC.
* * * * *
    4. Sections 4.36 through 4.39 are redesignated as Secs. 4.37 
through 4.40, respectively.
    5. A new Sec. 4.36 is added to read as follows:


Sec. 4.36  Disclosure of non-public OCC information.

    (a) Discretionary disclosure of non-public OCC information. The OCC 
may make non-public OCC information available to a supervised entity 
and to other persons, as in the sole discretion of the Comptroller may 
be necessary or appropriate, without a request for records or 
testimony.
    (b) Conditions and limitations. The OCC may impose any conditions 
or limitations on disclosures under this section, including the 
restrictions on dissemination contained in Sec. 4.38, that it 
determines are necessary to effect the purposes of this section.
    (c) Unauthorized disclosures prohibited. All non-public OCC 
information remains the property of the OCC. No supervised entity, 
government agency, person, or other party to whom the information is 
made available, or any officer, director, employee, or agent thereof, 
may disclose non-public OCC information without the prior written 
permission of the OCC, except in published statistical material that 
does not disclose, either directly or when used in conjunction with 
other publicly available information, the affairs of any individual, 
corporation, or other entity. Except as authorized by the OCC, no 
person obtaining access to non-public OCC information under this 
section may make a copy of the information and no person may remove 
non-public OCC information from the premises of the institution, 
agency, or other party in authorized possession of the information.
    6. Paragraph (a) of newly designated Sec. 4.37 is revised to read 
as follows:


Sec. 4.37  Persons and entities with access to OCC information; 
prohibition on dissemination.

    (a) Current and former OCC employees or agents--(1) Generally.

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Except as authorized by this subpart or otherwise by the OCC, no 
current or former OCC employee or agent in any manner, may disclose or 
permit the disclosure of any non-public OCC information to anyone other 
than an employee or agent of the Comptroller for use in the performance 
of OCC duties.
    (2) Duty of person served. Any current or former OCC employee or 
agent subpoenaed or otherwise requested to provide information covered 
by this subpart must immediately notify the OCC as provided in this 
paragraph. The OCC may intervene, attempt to have the compulsory 
process withdrawn, and register appropriate objections when a current 
or former OCC employee or agent receives a subpoena and the subpoena 
requires the current or former employee or agent to appear or produce 
OCC information. If necessary, the current or former employee or agent 
must appear as required and respectfully decline to produce the 
information sought, citing this subpart as authority and United States 
ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). The current or former OCC 
employee or agent must immediately notify the OCC if subpoenaed or 
otherwise asked for non-public OCC information:
    (i) In a civil action, by notifying the Director of the OCC's 
Litigation Division at the Washington, DC office; or
    (ii) In a criminal action, by notifying the appropriate district 
counsel for current and former district employees or agents; or the 
Director of the OCC's Enforcement and Compliance Division at the 
Washington, DC office, for current and former Washington employees or 
agents.
* * * * *

    Dated: October 28, 1998.
Julie L. Williams,
Acting Comptroller of the Currency.
[FR Doc. 98-30044 Filed 11-9-98; 8:45 am]
BILLING CODE 4870-33-P