[Federal Register Volume 64, Number 104 (Tuesday, June 1, 1999)]
[Rules and Regulations]
[Pages 29214-29217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13725]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 4

[Docket No. 99-07]
RIN 1557-AB65


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

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

ACTION: Final rule.

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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 the OCC may make non-public OCC information available to 
a supervised entity and to other persons, as the Comptroller, in his 
sole discretion, may

[[Page 29215]]

deem necessary or appropriate, without a request for records or 
testimony.

DATES: The final rule is effective on June 1, 1999

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, Office of the Comptroller of the Currency, 250 E Street, SW, 
Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

Background

    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).
    On November 10, 1998, the OCC requested comment on an interim rule 
amending part 4. 63 FR 62927. The OCC made three independent changes to 
part 4 in the interim rule. First, the interim rule added a new section 
that clarifies the OCC's existing authority to make non-public OCC 
information available to a supervised entity and to other persons, that 
in the sole discretion of the Comptroller may be necessary or 
appropriate, without a specific request by a third party. The term 
``supervised entity'' is defined in the interim rule 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.
    Second, the OCC amended the definition of non-public OCC 
information. Section 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. Section 4.32 provides an illustrative list of the types of 
information that qualify as non-public OCC information, including OCC 
records contained in, or related to, examination and operating or 
condition reports concerning national banks and their subsidiaries and 
affiliates. The interim rule amended the 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. While the OCC has always 
taken the position that SARs are non-public information, the OCC 
proposed this change to enhance the ability of banks and the OCC to 
protect SARs from being disclosed when SARs are sought by private 
litigants.
    Third, the OCC emphasized in the interim rule that non-public OCC 
information remains the property of the OCC even after it is disclosed 
and may not be disclosed to others except as authorized by the OCC. The 
interim rule clarified that current and former OCC employees and agents 
are prohibited from disclosing or permitting the disclosure of any non-
public OCC information to anyone other than an employee or agent of the 
OCC who needs the information for the performance of OCC duties. 
Current and former OCC employees and agents who are subpoenaed or 
otherwise requested to provide OCC information must notify the OCC 
immediately under procedures set forth in Sec. 4.37(a)(2).
    Finally, the OCC made conforming changes to the purpose and scope 
provisions at Sec. 4.31 of Subpart C to reflect the substantive changes 
to the other sections amended.

Description of Comments Received

    The OCC received two comments on the interim rule: one from a 
national bank and another from a bank trade association. The bank trade 
association supported the interim rule as published. The bank objected 
to the rule on several grounds. After careful consideration of the 
comments received, the OCC is adopting the interim rule with some 
clarifying changes.

The Disclosure of Non-Public OCC Information Without a Request

    One commenter raised concerns that the new section authorizing 
disclosure of confidential information (Sec. 4.36) violates provisions 
of the Right to Financial Privacy Act (RFPA) (12 U.S.C. 3401-22) and 
the Community Reinvestment Act (CRA) (12 U.S.C. 2906).
    Section 4.36 does not authorize the OCC to disclose information in 
a manner that would violate the requirements of other federal laws, 
including the RFPA or CRA. Rather, this section is intended solely to 
clarify that the OCC has the discretionary authority to make 
disclosures, in the exercise of its supervisory responsibilities, that 
are not prohibited by other applicable statutes without waiting for a 
specific request. This amendment does not reflect a change in the OCC's 
long-standing policy and practice to respect the confidentiality of 
supervisory information. Thus, the OCC will continue to release non-
public OCC information without a request only in rare cases after 
consideration of all circumstances. The exercise of discretion to 
disclose information under this new section will be limited to a few 
senior OCC officials, in line with an appropriate delegation of 
authority.
    To address the commenter's concern, however, the OCC is adding a 
new paragraph to Sec. 4.36 on the OCC's policy regarding the release of 
non-public OCC information. This paragraph restates the OCC policy that 
non-public OCC information is confidential and privileged and that the 
OCC, accordingly, will not normally disclose this information to third 
parties.
    This approach also ensures greater consistency with the Federal 
Reserve Board's (FRB) regulation regarding discretionary disclosures. 
The FRB disclosure regulation authorizes the FRB to share confidential 
supervisory information with supervised financial institutions and, 
from time to time, to authorize other disclosures of confidential 
information as necessary. 12 CFR 261.20. The FRB regulation also states 
that it is the FRB's policy that confidential supervisory information 
is confidential and privileged and that the FRB, accordingly, will not 
normally disclose this information to the public. 12 CFR 261.22(a). In 
addition, 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 
old rule.
    As noted in the interim rule, 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, 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. In this case, 
``other persons'' may include self-regulatory organizations or state 
banks with whom the OCC seeks to share information.

[[Page 29216]]

Definition of Non-Public OCC Information (SARs)

    The interim rule also amended the definition of non-public OCC 
information in Sec. 4.32 to to include a SAR filed by the OCC, a 
national bank, or a Federal branch or agency of a foreign bank licensed 
or chartered by the OCC under 12 CFR 21.11. One commenter, viewing this 
change in the context of the amendment previously described, raised 
concerns that this change could chill the cooperation between banks and 
the OCC and may subject banks to greater liability should the OCC begin 
to publicly disclose SARs. This is not the case. The OCC added SARs to 
the list of non-public OCC information to protect the confidentiality 
of SARs further, particularly in litigation, not to make them more 
easily disclosable. The amendment clarifies that SARs, which are 
sensitive and confidential documents, are not subject to disclosure 
requests under FOIA and are subject to the procedures for the release 
of non-public OCC information under part 4. The OCC is committed to 
protecting the confidentiality of SARs, and the amendment does not 
alter this long-standing policy. Accordingly, the OCC adopts this 
provision without modification.

Effective Date

    Section 553 of the Administrative Procedure Act permits an agency, 
for good cause, to issue a rule to be effective in less than 30 days 
from its publication date. 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 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 making this final rule effective upon 
publication in the Federal Register. Like the interim rule, this final 
rule allows 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 final 
rule, promptly after acquiring the information in question. For these 
reasons, the OCC concludes that a delayed effective date is 
impracticable and would be contrary to the public interest. 5 U.S.C. 
553(d).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rule for 
which an agency is not required to publish a notice of proposed 
rulemaking. 5 U.S.C. 603. In issuing the interim rule, the OCC 
concluded, for good cause, that it is not required to publish a notice 
of proposed rulemaking. Accordingly, it issued the interim rule without 
prior notice and comment to be effective immediately. Since the RFA 
does not apply to a rule for which an agency is not required to publish 
a notice of proposed rulemaking, the OCC also concludes that the RFA 
does not require an initial regulatory flexibility analysis of this 
final rule. Nonetheless, since this final rule imposes no new 
requirements on any national bank, the OCC finds that this final rule 
does not have a significant economic impact 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 this final rule is not a significant 
regulatory action under Executive Order 12866.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act (UMA) of 1995, Public Law 104-4, 
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. The OCC did not 
publish a general notice of proposed rulemaking when it, for good 
cause, issued the interim rule with an immediate effective date. 
Accordingly, the UMA does not require an unfunded mandates act analysis 
of this final rule.
    Nonetheless, since this final rule prescribes no mandate of any 
kind, the OCC finds that the final 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 follows:

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

    Accordingly, the interim rule amending 12 CFR part 4 which was 
published at 63 FR 62927 on November 10, 1998, is adopted as a final 
rule with the following changes:


Sec. 4.31  [Amended]

    1. In Sec. 4.31(b)(3) the term ``Sec. 4.36(c)'' is removed and the 
term ``Sec. 4.37(c)'' is added in its place.
    2. Section 4.32 is amended by revising paragraph (b)(1)(vii) to 
read as follows:


Sec. 4.32  Definitions.

* * * * *
    (b) * * *
    (1) * * *
    (vii) A Suspicious Activity Report filed by the OCC, a national 
bank, or a Federal branch or agency of a foreign bank licensed or 
chartered by the OCC under 12 CFR 21.11; and
* * * * *


Sec. 4.34  [Amended]

    3. In Sec. 4.34, in paragraph (a), the term ``Sec. 4.38(d)'' is 
removed and the term ``Sec. 4.39(d)'' is added in its place and the 
term ``Sec. 4.36'' is removed and the term ``Sec. 4.37'' is added in 
its place, in paragraph (c) introductory text the term ``Sec. 4.36(c)'' 
is removed and the term ``Sec. 4.37(c)'' is added in its place, and in 
paragraphs (c)(1) and (c)(2) the term ``Washington, DC office'' is 
removed and the term ``Washington office'' is added in its place.
    4. In Sec. 4.36, paragraph (a) is revised, paragraphs (b) and (c) 
are redesignated as paragraphs (c) and (d), respectively, a new 
paragraph (b) is added, and the heading of paragraph (c) is revised 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, that in the sole discretion of the Comptroller 
may be necessary or

[[Page 29217]]

appropriate, without a request for records or testimony.
    (b) OCC policy. It is the OCC's policy regarding non-public OCC 
information that such information is confidential and privileged. 
Accordingly, the OCC will not normally disclose this information to 
third parties.
    (c) Conditions and limitations. * * *
* * * * *
    5. In Sec. 4.37, paragraph (a)(1) is revised and in paragraphs 
(a)(2)(i) and (ii) the term ``Washington, DC office'' is removed and 
the term ``Washington office'' is added in its place, to read as 
follows:


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

    (a) * * *
    (1) Generally. Except as authorized by this subpart or otherwise by 
the OCC, no current or former OCC employee or agent may, in any manner, 
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.
* * * * *

Appendix A to Subpart C--[Amended]

    6. In Appendix A to Subpart C, section II, paragraph 7, the term 
``12 CFR 4.38(b)'' is removed and the term ``12 CFR 4.39(c)'' is added 
in its place.

    Dated: May 20, 1999.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 99-13725 Filed 5-28-99; 8:45 am]
BILLING CODE 4810-33-P