[Federal Register Volume 66, Number 22 (Thursday, February 1, 2001)]
[Rules and Regulations]
[Pages 8505-8507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2735]

Rules and Regulations
                                                Federal Register

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Federal Register / Vol. 66, No. 22 / Thursday, February 1, 2001 / 
Rules and Regulations

[[Page 8505]]


5 CFR Part 3101

RINs 1550-AB43, 3209-AA15

Supplemental Standards of Ethical Conduct for Employees of the 
Department of the Treasury

AGENCY: Department of the Treasury.

ACTION: Final rule; amendment.


SUMMARY: The Department of the Treasury (Department), with the 
concurrence of the Office of Government Ethics (OGE), amends the 
Supplemental Standards of Ethical Conduct for Employees of the 
Department of the Treasury (Treasury Ethics Regulations) to revise the 
circumstances under which certain Office of Thrift Supervision (OTS) 
employees may obtain credit cards from OTS-regulated savings 
associations or their subsidiaries, notwithstanding the general 
prohibition against ``covered employees'' obtaining loans or extensions 
of credit from these entities. The amendment also eliminates 
unnecessary provisions concerning retail store credit cards and 
mortgage assumptions.

EFFECTIVE DATE: February 1, 2001.

FOR FURTHER INFORMATION CONTACT: Henry H. Booth, Senior Ethics Counsel, 
Office of the Assistant General Counsel (General Law and Ethics), 
Department of the Treasury, Room 1410, Washington, DC 20220, (202) 622-
0450; or Caroline Morris, Ethics Counsel, OTS General Law Division, 
1700 G Street, NW, Washington, DC 20552, (202) 906-6431.


I. Background

    The Treasury Ethics Regulations were issued in 1995 to minimize 
potential conflicts of interest and supplement OGE's Standards of 
Ethical Conduct for Employees of the Executive Branch (5 CFR part 2635) 
(Standards). See 60 FR 22251 (May 5, 1995), as codified at 5 CFR part 
3101. The OTS-pertinent part of the Treasury Ethics Regulations, 
Additional rules for OTS employees, at 5 CFR 3101.109 prohibits 
``covered OTS employees'' from seeking or obtaining any loan or other 
extension of credit from a savings association. The requirement 
prevents employees from taking actions that may violate conflict of 
interest laws or that may constitute violations of 18 U.S.C. 213 
concerning credit extended to examiners. Exceptions to the general 
prohibition permit covered OTS employees to obtain a credit card from a 
savings association under certain circumstances. See 5 CFR 
    Under the current regulation, most covered OTS employees are 
permitted to hold and use savings association credit cards if they 
recuse themselves from any work involving savings associations from 
which they hold credit cards. This general exception, however, is not 
available to covered OTS employees assigned to regional offices who 
wish to obtain a credit card from a savings association headquartered 
in their region. Under current Treasury Ethics Regulations, no regional 
covered employees may obtain credit cards from a savings association 
headquartered in their region. See 5 CFR 3101.109(c)(3)(i)(A).
    The Department has been prohibiting regional covered OTS employees 
from holding credit cards issued by a saving association headquartered 
in their region to strengthen public confidence in the integrity of OTS 
programs and to facilitate the assignment of work without constraints 
arising from employees' credit card recusals. When adopted, this 
restriction did not impose a significant burden on regional covered 
employees seeking credit cards. Since then, industry consolidation and 
conversions to the savings association charter have reduced the credit 
card options available to those employees. Further, the current rules 
have created problems in terms of staffing certain matters because of 
widespread holding of particular cards by covered employees. Subsequent 
to the issuance of the Treasury Ethics Regulation, the OTS examined the 
extent to which credit cards present conflicts of interest and 
concluded that in most instances, neither obtaining nor holding a 
credit card creates a conflict of interest or presents a likelihood for 
a loss of impartiality by an OTS employee. For these reasons, the 
existing credit card exception is being revised so that the general 
prohibition more closely conforms to the scope of 18 U.S.C. 213, the 
statutory prohibition barring only examiners from accepting credit from 
savings associations that they examine. This amended rule changes the 
Treasury Ethics Regulations' prohibition against OTS covered employees 
obtaining credit and the exceptions to the prohibition in the following 

A. Application to OTS Employees Who Are Not Examiners

    To assure that the regional and Washington offices have maximum 
flexibility to assign projects to covered employees who are not 
examiners, this amendment eliminates the requirement for employees who 
are not examiners (attorneys, economists, analysts, etc.) to be recused 
from work concerning savings associations that have issued them credit 
cards. These employees may obtain a credit card from a savings 
association as long as the credit card is obtained and held on terms 
and conditions no more favorable than those offered to the general 
public.\1\ Both the existing regulation and the regulation as amended 
concern the extension of credit by OTS-regulated savings associations 
and their subsidiaries. The exceptions in the existing regulation allow 
examiners and other covered employees to obtain credit cards from 
regulated savings associations under certain circumstances. These 
exceptions applied to subsidiaries of regulated savings associations 
only by implication. The amended regulation specifically extends the 
exceptions for examiners and other covered employees to subsidiaries of 
OTS-regulated savings associations from which credit cards may be 
obtained. See new Sec. 3101.109(c)(3)(i) and (ii).

    \1\ OTS will continue to require all covered employees to 
disclose their savings association credit cards on annual financial 
disclosure reports, and to require employees to continue to attest 
that their credit cards were obtained and are being held on non-
preferential terms, i.e., on terms and conditions (including 
collection policies) no more favorable than those offered to the 
general public.

B. Application to Examiners

    OTS is the primary federal regulator of savings associations. OTS 

[[Page 8506]]

assigned to the agency's five regions conduct examinations, make 
recommendations and prepare reports for savings associations 
headquartered in these respective geographical jurisdictions. The 
current rule prohibits examiners from holding credit cards issued by 
savings associations headquartered in their region. This rule continues 
that provision. In addition, OTS assigns examiners with certain skills 
to examine institutions outside their region. Consistent with the 
statutory language, the rule has been revised to reflect current 
practice of prohibiting examiners from obtaining or holding credit from 
savings associations headquartered outside their region if they are 
actually assigned to examine the savings associations. The final rule 
prohibits an examiner from obtaining a credit card from any savings 
associations or their subsidiaries that are headquartered in his or her 
region; or if not headquartered in the examiner's region, that he or 
she is assigned to examine. The rule retains the requirement that an 
examiner must obtain and hold credit cards on terms and conditions no 
more favorable than those offered to the general public.
    The rule also requires an examiner to submit a written 
disqualification from examining a savings association issuing a credit 
card to the examiner, but not from participating in other regulatory 
and supervisory matters affecting the savings association, such as 
applications, investigations, or records review. 18 U.S.C. 212 and 213 
do not bar such participation, and permitting this participation by 
examiners broadens OTS staffing options for various activities.
    Because this rule more clearly connects the credit card restriction 
to the examiners' actual or likely work assignments, it will provide 
OTS examiners greater access to credit cards without restricting the 
flexibility of supervisors in making work assignments and without 
increasing the potential for conflicts of interest. Therefore, the rule 
is consistent with the fundamental purpose of Treasury Ethics 
Regulations restrictions on savings association credit card use by 
covered OTS employees.

C. Related Changes

    The existing regulations permit covered employees to use exceptions 
to the prohibition only under limited circumstances, including when the 
employee (1) obtains a credit card sponsored by a retail firm 
(Sec. 3101.109(c)(3)(ii)); or (2) obtains the credit through the 
assumption of a savings association mortgage on the employee's 
residence in accordance with the mortgage's original terms 
(Sec. 3101.109(c)(3)(iii)). The amended rule eliminates the reference 
to retail store sponsored credit cards, because a retail store credit 
card issued by a saving association will be treated no differently than 
any other savings association issued card. The amended rule's reference 
to mortgage assumptions also is being deleted as unnecessary.
    The current rule's prohibition on obtaining credit from a savings 
association in Sec. 3101.109(c)(1) applies to ``any loan or extension 
of credit, including credit obtained through the use of a credit 
card.'' The amended rule shortens and simplifies that provision by 
removing the reference to a credit card. It is clear from the content 
of the rest of paragraph (c) that credit includes the use of a credit 

II. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(a)(2), (b), and (d), the Department has 
found that good cause exists for waiving the regular notice of proposed 
rulemaking, opportunity for public comment, and 30-day delayed 
effective date for this final rule amendment. This action is being 
taken because it is in the public interest that this rule, which 
concerns matters of agency management, personnel, organization, 
practice and procedure, and which relieves certain restrictions placed 
on OTS employees, become effective on the date of publication.

Regulatory Flexibility Act Analysis

    Pursuant to section 605(b) of the Regulatory Flexibility Act, the 
Department certifies that this rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
Accordingly, no regulatory flexibility analysis is required. The rule 
would not increase the regulatory burden on savings associations. The 
economic impact of this rule on savings associations, regardless of 
size, is expected to be minuscule at most.

Executive Order 12866 Determination

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

Unfunded Mandates Reform Act of 1995 Determinations

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act) \2\ requires that an agency prepare a budgetary impact 
statement before promulgating a rule that includes a Federal mandate 
that may result in 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. As discussed in the preamble, this rule limits the 
restrictions on OTS employees borrowing from savings associations. The 
Department therefore has determined that the rule will not result in 
expenditures by State, local, or tribal governments or by the private 
sector of $100 million or more. Accordingly, the Department has not 
prepared a budgetary impact statement or specifically addressed the 
regulatory alternatives considered.

    \2\ Pub. L. 104-4, 109 Stat. 48 (1995) (codified at 2 U.S.C. 
Chs. 17A, 25).

List of Subjects in 5 CFR Part 3101

    Conflict of interests, Ethics, Extensions of credit, Government 
employees, OTS employees.

    Dated: January 16, 2001.
Neal S. Wolin,
General Counsel, Department of the Treasury.

    Approved: January 19, 2001.
Amy L. Comstock,
Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Department, with the 
concurrence of OGE, amends 5 CFR part 3101 as follows:


    1. The authority citation for part 3101 is revised to read as 

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 18 U.S.C. 212, 213; 26 U.S.C. 7214(b); E.O. 
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.203(a), 2635.403(a), 2635.803, 2635.807(a)(2)(ii).

    2. In Sec. 3101.109, paragraphs (c)(1) and (c)(3) are revised to 
read as follows:

Sec. 3101.109  Additional rules for Office of Thrift Supervision 

* * * * *
    (c) Prohibited borrowing--(1) Prohibition on employee borrowing. 
Except as provided in this section, no

[[Page 8507]]

covered OTS employee shall seek or obtain any loan or extension of 
credit from any OTS-regulated savings association or from an officer, 
director, employee, or subsidiary of any such association.
* * * * *
    (3) Exceptions--(i) Covered employees other than examiners. Except 
for examiners, a covered OTS employee, or the spouse or minor child of 
a covered OTS employee, may obtain a credit card from an OTS-regulated 
savings association or its subsidiary if the credit card is issued and 
held on terms and conditions no more favorable than those offered the 
general public.
    (ii) Examiners. An examiner, or the spouse or minor child of an 
examiner, may obtain or hold a credit card issued by an OTS-regulated 
savings association or its subsidiary, if:
    (A) The savings association is not headquartered in the examiner's 
    (B) The examiner is not assigned to examine the savings 
    (C) The terms and conditions are no more favorable than those 
offered to the general public; and
    (D) The examiner submits a written disqualification from examining 
that savings association. The examiner nonetheless may participate in 
other supervisory or regulatory matters involving the savings 
* * * * *

[FR Doc. 01-2735 Filed 1-31-01; 8:45 am]