[Federal Register Volume 66, Number 42 (Friday, March 2, 2001)]
[Rules and Regulations]
[Pages 12993-13010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-4996]



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  Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules 
and Regulations  

[[Page 12993]]



DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 516, 517, 543, 544, 545, 550, 552, 555, 559, 560, 562, 
563, 563b, 563f, 565, 567, 574, 575, 584

[No. 2001-11]
RIN 1550-AB14


Application Processing

AGENCY: Office of Thrift Supervision, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of Thrift Supervision (OTS) is revising its 
application processing guidelines and procedures. These changes update 
OTS rules to reflect existing practices; to provide more predictable 
procedures for applicants; and to provide greater flexibility to OTS 
and applicants in the processing of applications. OTS has also 
rewritten the rules in ``plain language'' to make them easier to 
understand.

EFFECTIVE DATE: April 1, 2001, except 12 CFR 516.290, which is 
effective July 1, 2001.

FOR FURTHER INFORMATION CONTACT: Lane Langford, Regulatory Analyst, 
Examination Policy, (202) 906-7027; Celeste Anderson, Program Analyst, 
Compliance Policy & Specialty Examinations, (202) 906-7990; Robyn 
Dennis, Manager, (202) 906-5751 and Josephine Battle, Program Analyst 
Trainee, (202) 906-6870, Supervision Policy Division; John P. 
Harootunian, Senior Counsel for Special Transactions, Business 
Transactions Division, (202) 906-6415, and Koko Ives, Counsel (Banking 
and Finance) Regulations and Legislation Division, Office of Chief 
Counsel, (202) 906-6661, Office of Thrift Supervision, 1700 G Street 
NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 2, 2000, OTS proposed to revise its OTS application 
processing guidelines and procedures at 12 CFR part 516.\1\ The 
proposed rule was intended to make the processing of applications more 
efficient, more expeditious, and easier to understand.\2\
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    \1\ See 65 FR 66118 (Nov. 2, 2000).
    \2\ In 1997, OTS added three new subparts to part 516. 62 FR 
64138 (Dec. 4, 1997). These new subparts were drafted using plain 
language drafting techniques. OTS has redrafted the remainder of 
part 516 consistent with section 722 of Gramm-Leach-Bliley Act (the 
G-L-B Act or Act), which requires OTS to use ``plain language'' in 
all proposed and final rules published after January 1, 2000.
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    Most of the proposed changes clarified existing procedures. The 
proposed rules, for example, presented current information in user-
friendly charts; explained how OTS computes time periods; and explained 
how an applicant may determine whether an application should be filed 
with the Regional Office and OTS headquarters. OTS also proposed to add 
a new provision codifying OTS's policy protecting confidential 
information.
    In addition, OTS proposed to remove some technical requirements 
from the existing regulations and to incorporate this information into 
individual application forms. OTS has revised its forms and 
application-processing handbook to reflect these changes. These forms 
and the handbook will be available on the effective date of today's 
final rule.
    OTS proposed only a few substantive changes to the existing rules. 
These included new provisions that address pre-filing procedures for 
certain complex applications, permit OTS to extend certain processing 
time frames, and allow OTS to deem certain long-pending applications to 
be withdrawn.
    The comment period on the proposed rule closed on January 2, 2001. 
OTS received five comments from two community organizations, one law 
firm representing financial institutions, one federal savings bank, and 
one trade association. Generally, the commenters supported the proposed 
rule, but objected to certain provisions. These issues are summarized 
in the following analysis.

II. Analysis of the Comments

A. Pre-Filing Procedures

    As noted above, the proposed rule included new pre-filing 
procedures. Proposed Sec. 516.15 would have required applicants to meet 
with OTS and submit a draft business plan before filing certain complex 
applications. These applications included:
     An application for permission to organize a de novo 
savings association.
     An application to convert an existing financial 
institution or credit union (other than a state-chartered savings 
association regulated by OTS or a state-chartered savings bank that is 
regulated by the FDIC) to a federal savings association.
     An application to acquire control of a savings association 
filed by an insurance company, an investment company, a securities 
firm, a commodities firms or a pension fund.
    Several commenters addressed these pre-filing procedures. One 
commenter agreed that pre-filing meetings could be useful in expediting 
application processing under certain conditions. The commenter, 
however, argued that a pre-filing meeting might not always be 
necessary. Instead, the commenter suggested that OTS should require 
pre-filing meetings on a case-by-case basis at the discretion of the 
Regional Offices or upon the request of the applicant.\3\ One commenter 
supported discussing, but not submitting, a business plan with OTS at 
the pre-filing stage.
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    \3\ This commenter noted that FDIC does not require a pre-filing 
meeting for any applications, and that OCC requires consultations 
only for certain types of applications. See 12 CFR 5.24(d)(2)(i) and 
12 CFR 303.161.
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    OTS has reconsidered whether it should require a pre-filing meeting 
and draft business plan for all applications that fall within the three 
categories described in the proposed rule. Based on the types of issues 
that are commonly presented by these applications, OTS has revised the 
final rule to impose different requirements for each category of 
applications.
    OTS believes that a pre-filing meeting and draft business plan are 
essential for an application for permission to organize a de novo 
federal savings association. These applications involve the creation of 
a new organization that has not previously operated as an insured 
depository institution. As a

[[Page 12994]]

result, these applications often involve operational, compliance and 
other issues that could benefit from the additional pre-filing review. 
For these reasons, OTS will require de novo applicants to meet with OTS 
and to file a draft business plan. This process will permit applicants 
to identify legal or policy issues before the application is filed and 
enable them to address these issues early in the process.
    Conversion applications filed by a commercial bank or credit union 
may involve significant changes to the way the institution conducts 
business. A credit union, for example, is not FDIC-insured, will 
probably have a different asset mix than a typical savings association, 
may not be familiar with savings associations' asset limitations, 
Qualified Thrift Lender (QTL) requirements and Community Reinvestment 
Act (CRA) requirements, will not have previously paid taxes, and will 
have focused on serving a particular group or community, rather than 
the general public. Similarly, commercial banks typically may not be 
familiar with QTL requirements, asset limitations applicable to savings 
associations, and other restrictions that apply to savings 
associations. For these reasons, OTS believes that it is appropriate to 
require credit unions and commercial banks to meet with the Regional 
Office before they may file a conversion application. On the other 
hand, these applications involve existing entities that have conducted 
banking operations, are generally familiar with safe and sound banking 
practices, and have previously been supervised by another banking 
regulator. Accordingly, OTS does not believe that a draft business plan 
must always be required for these applications. The final rule provides 
the Regional Office with discretion to determine whether a conversion 
applicant must submit a draft business plan or other relevant 
information before the pre-filing meeting.
    Change of control applications may or may not involve significant 
modifications to the way the institution conducts business, and may or 
may not raise other major issues.\4\ Accordingly, the final rule 
provides the Regional Office with discretion to determine whether a 
change of control applicant must meet with OTS before it files its 
application and whether an applicant must submit a draft business plan 
or other relevant information before this meeting. In exercising this 
discretion, the Regional Offices will review each proposal on a case-
by-case basis and will consider a number of factors. These factors will 
include the complexity of the legal and policy issues presented by the 
proposal and the level of assistance required by a particular 
applicant. For example, it may be beneficial for OTS to meet with an 
applicant the first time that it applies to control an association. 
However, it may not be necessary to hold a pre-filing meeting when that 
applicant seeks to acquire control of a second association with similar 
operating characteristics. Similarly, a pre-filing meeting and draft 
business plan may not be necessary, for example, where an application 
involves a simple reorganization of a holding company's corporate 
structure.
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    \4\ The proposed rule would have required a pre-filing meeting 
whenever an insurance company, an investment company, a securities 
firm, a commodities firm or a pension firm sought to acquire control 
of a savings association. Upon reconsideration, OTS has concluded 
that all acquisition applications, regardless of the nature of the 
acquiror, potentially may raise significant issues. Accordingly, the 
final rule requires all companies or individuals who intend to file 
a holding company application or a change in control notice to 
contact OTS and discuss whether OTS will require a pre-filing 
meeting.
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    The proposed rule would have permitted a Regional Office to 
require, or an applicant to request, a pre-filing meeting for any type 
of application if doing so would help resolve issues or expedite the 
process. The final rule continues to encourage all applicants to 
contact the Regional Office before filing an application. This process 
will allow the Regional Office and the applicant to determine whether a 
meeting and the submission of information will help expedite the 
application review process. Even where no pre-filing meeting is 
conducted or information submitted, these contacts will serve to 
expedite processing by providing an opportunity to discuss the 
application before it is filed.
    1. Contacting Regional Office. Final Sec. 516.15(b) requires 
applicants within the three categories to contact the Regional Office 
to ascertain how OTS will exercise its discretion regarding the pre-
filing meeting and the submission of other relevant information. This 
rule also addresses scheduling.
    The proposed rule indicated that the applicant must meet with OTS 
at least 30 days before it files an application. Several commenters 
asserted that the proposed 30-day time frame was too inflexible. These 
commenters noted that 30 days may be sufficient in some instances, but 
that a shorter or longer time period may be appropriate for other 
transactions.
    Rather than establish a fixed time period for the meeting, the 
final rule provides the Regional Office with discretion regarding 
scheduling. OTS anticipates that the Regional Office will consider such 
factors as the nature of the application, the parties' schedules, 
expected review time, and staff resources. OTS notes that it is up to 
the applicant to contact the Regional Office a reasonable period in 
advance of the filing. If the applicant fails to do so, the filing of 
the application may be delayed.\5\
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    \5\ The proposed rule required the applicant to submit the 
business plan seven calendar days before the pre-filing meeting. The 
final rule has been revised to permit the Regional Office to set an 
appropriate schedule for the submission of required information. See 
Sec. 516.15(b).
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    2. Contents of the business plan. Under proposed Sec. 516.20(a), 
the draft business plan, at a minimum, would have been required to: (1) 
Identify the projected operations and activities; (2) include financial 
projections for at least three years; (3) describe the risks associated 
with the transaction and the impact of the transaction on any existing 
activities; (4) identify all proposed directors and senior executive 
officers of the savings association and demonstrating that these 
individuals have the expertise to prudently manage the operations and 
activities described in the plan; and (5) demonstrate how applicable 
requirements regarding serving the credit and lending needs of the 
savings association's market areas will be met.
    Two commenters considered the business plan requirements too 
detailed. They argued that it is unrealistic to expect applicants to 
submit much of this information at the pre-filing stage. Specifically, 
the commenters noted that a description of the projected operations of 
the savings association, including financial projections for a minimum 
of three years, may not be available for some transactions at the pre-
filing stage. One of the two commenters would require financial 
projections and capital matters only when a complete application is 
filed. One commenter argued that the draft business plan should address 
only the proposed management and the board, the applicant's proposed 
operating strategy, and its compliance with relevant laws. Another 
commenter urged OTS to develop a description of the draft business plan 
that is more flexible. Such a business plan might include an overview 
of the general areas such as operations, risks, management, and service 
to community.
    OTS has not significantly revised the content requirements for the 
draft business plan in the final rule. For example, the final rule 
continues to require an applicant to provide financial projections for 
a minimum of three

[[Page 12995]]

years. These financial projections assist the Regional Office in 
determining how well the applicant has planned and analyzed its 
proposed operations and how well the applicant understands the 
underlying statutory and regulatory requirements. OTS notes that while 
the final rule lays out a common structure and sets out minimum 
standards for a draft business plan, it also provides considerable 
flexibility in applying those minimum standards. For example, while all 
draft business plans must clearly and completely describe projected 
operations and activities, the Regional Office may, depending on the 
circumstances, merely require an overview of operations, or may require 
more detailed discussions.
    OTS has made one minor adjustment to one of the proposed business 
plan requirements. Proposed Sec. 516.20(b)(3) would have required the 
applicant to identify all proposed directors and senior executive 
officers of the savings association and demonstrate that these 
individuals have the expertise to prudently manage the operations and 
activities described in the plan. OTS recognizes that an applicant may 
not have identified all of its directors and senior executive officers 
before submitting the proposed business plan. Accordingly, the final 
rule requires draft business plan to include this information for only 
a majority of the proposed directors and for key senior executive 
officers.
    One commenter mistakenly believed that OTS approval of the business 
plan at a pre-filing meeting is a precondition of an accepted 
application and opposed this concept. As stated in the preamble to the 
proposed rule, OTS will review in certain circumstances, but will not 
approve, the business plan at the pre-filing stage.
    3. Public attendance at pre-filing meeting. One commenter argued 
that the public should be permitted to witness the pre-filing meeting 
or that OTS should make transcripts of the meeting available to the 
public. If this public access is not possible, the commenter requested 
that OTS delete the pre-filing meeting requirement.
    OTS does not believe that it is appropriate to allow the public to 
attend or review discussions that take place at the pre-filing meeting. 
The purpose of the pre-filing meeting requirement is to permit OTS and 
the applicant to identify legal or policy issues before the application 
is filed, and to enable the applicant to address these issues early in 
the process. For this process to work effectively, the applicant must 
be free to discuss all aspects of the application with OTS staff, 
including protected business information and confidential information 
about potential securities filings.\6\ Although members of the public 
will not be able to attend a pre-filing meeting, they can comment on 
applications during the comment period and may request informal and 
formal meetings with the applicant and OTS. See 12 CFR part 516, 
subparts C and D.
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    \6\ This commenter expressed concern that the pre-filing meeting 
could lead to abuses. Specifically, the commenter was concerned that 
OTS and applicants would discuss ``how to resolve issues so that OTS 
can issue speedy approvals rather than how to submit an application 
that addresses the significant legal and policy issues.'' The pre-
filing meeting is intended to help applicants to submit the most 
complete application possible by identifying and addressing 
problematic legal and policy issues at the earliest possible date. 
While this may result in the speedier approval of some applications, 
the complete consideration and resolution of all legal and policy 
issues remains of paramount importance.
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B. Contents of Application

    Proposed part 516 did not impose substantive requirements regarding 
the content of applications. Some commenters urged OTS to codify 
application requirements relating to antitrust matters, CRA issues, 
management issues and fair lending matters in the final rule. 
Commenters argued that these requirements would help the general public 
to make informed comments. The commenters urged OTS to state that an 
inadequate CRA plan would result in an OTS determination that the 
application is materially deficient and ineligible for further review.
    OTS has not changed the final rule to codify requirements relating 
to these matters. Specific application requirements are contained in 
substantive regulations and in other guidance affecting particular 
notices and applications, appropriate forms, and instructions. 
Applicants may obtain guidance affecting particular notices and 
applications from any OTS Regional Office or, as of April 1, 2001, the 
OTS web site at www.ots.treas.gov. See Sec. 516.30. Although OTS will 
not codify specific requirements in part 516, the applicant still must 
comply with the applicable underlying substantive regulation and 
guidance. An inadequate discussion of required items could result in 
requests for additional information. In addition, OTS may deem an 
application containing an inadequate discussion of CRA factors or other 
required items to be materially deficient and not process it further. 
See Secs. 516.210(a)(3) and 516.220(a)(1)(iii).

C. Confidentiality

    Proposed Sec. 516.35 is new, but would restate current OTS policy 
protecting confidential information. Under this proposed section, OTS 
would make submissions under part 516 available to the public. An 
applicant, however, may request that OTS keep portions of the 
application confidential consistent with the standards of the Freedom 
of Information Act (5 U.S.C. 552 et seq.) (FOIA) and OTS regulations 
implementing FOIA.\7\ In the proposed rule, OTS would not grant 
confidential treatment for those portions of the application describing 
the applicant's CRA objectives.
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    \7\ 12 CFR part 505.
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    Several commenters agreed that CRA plans should not be 
confidential. One commenter observed that other parts of the 
application may address management issues or antitrust considerations 
that may relate to a CRA plan. The commenter urged OTS to make all 
parts of the application publicly available, ``unless the applicant can 
clearly establish any breach of privacy or competitive harm resulting 
from public availability.'' In contrast, another commenter asserted 
that it is imperative that certain portions of the applications remain 
confidential for competitive reasons and that OTS should respect an 
applicant's judgments regarding confidentiality.
    The FOIA requires OTS to disclose information to the public, unless 
the information falls within certain exempt categories. While the FOIA 
does not prohibit OTS from publicly disclosing any information, various 
other laws may do so. See Trade Secrets Act, 18 U.S.C. 1905; Privacy 
Act of 1974, 5 U.S.C. 552a. Even when these laws do not prohibit the 
disclosure of information, OTS believes that the policy considerations 
that support the protection of particular information, including the 
policy considerations that underlie the FOIA exemptions, weigh against 
OTS routinely disclosing matters that are exempt under FOIA.
    Under the final rules, an applicant may request confidential 
treatment for those portions of the application that the applicant 
believes would be exempt from disclosure if OTS were asked for the 
information under FOIA. 5 U.S.C. 552. The FOIA exemptions most likely 
to apply to portions of an application are Exemption (4) and Exemption 
(6). Exemption (4) may protect from disclosure ``privileged or 
confidential'' material consisting of ``trade secrets and commercial or 
financial information.'' 5 U.S.C. 552(b)(4). If the applicant requests 
confidential treatment of a portion of the application based on FOIA 
Exemption (4), the applicant must describe how it will suffer 
competitive

[[Page 12996]]

harm if the information were released. Exemption (6) protects against 
disclosure of information that if released ``would constitute a clearly 
unwarranted invasion of personal privacy.'' 5 U.S.C. 552(b)(6). If an 
applicant has requested confidential treatment for a portion of the 
application and OTS does not have sufficient information to determine 
whether confidential treatment is appropriate, OTS will ask the 
applicant for additional information before determining whether to 
disclose the information in response to a FOIA request.
    Under proposed Sec. 516.35(c), OTS would advise an applicant before 
disclosing to the public information for which the applicant has 
requested confidential treatment consistent with paragraph (b) of this 
section. One commenter urged OTS to adopt pre-disclosure notice 
requirements that are consistent with OCC rules governing confidential 
commercial information. See 12 CFR 4.16. Specifically, the commenter 
urged OTS to notify an applicant that it has 10 business days to object 
to a request for disclosure of confidential commercial information 
filed with OTS. The commenter would also require OTS to provide an 
applicant with notice of any decision to disclose confidential 
commercial information over the applicant's objection. OTS would 
provide this notice at least 10 business days before it intends to 
disclose the information.
    OTS complies with FOIA regulations issued by the Department of the 
Treasury (Treasury) at 31 CFR part 1, subpart A, and OTS supplemental 
FOIA regulations at 12 CFR part 505.\8\ The Treasury regulations 
provide substantively identical guidance for advance notice as those 
contained in OCC rules. Therefore, it is unnecessary to make the 
requested change.
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    \8\ Section 505.1(a) provides: ``This part is issued by the 
Office of Thrift Supervision (``OTS'') as a supplement to the 
Freedom of Information Act regulations of the Department of the 
Treasury, 31 CFR part 1, subpart A, which apply to the OTS as a 
component part of the Department of the Treasury.''
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    OTS has made a technical change to the text of 12 CFR 574.6(f)(4), 
which addresses the procedural requirements for disclosure of 
confidential information contained in an application for acquisition of 
control of a savings association. Under existing Sec. 574.6(f)(4), OTS 
must give the applicant five business days notice of its intent to 
disclose information for which confidential treatment has been 
requested. The technical change will conform Sec. 574.6(f)(4) to 
Sec. 516.35. OTS will comply with the advance notice required under the 
FOIA regulations.
    Under proposed Sec. 516.35(d), if OTS issues a public statement 
with its decision on the application, the agency may comment on 
confidential submissions in the application without notifying the 
applicant. OTS has decided to delete Sec. 516.35(d) as unnecessary. It 
is not OTS practice to comment on confidential submissions in the 
application in a public statement without first notifying the 
applicant.

D. Filing Amendments or Supplemental Information

    The final rule adds Sec. 516.47 to clarify how an applicant may 
amend or supplement an application. Under the final rule, an applicant 
must file the amendment or supplemental information at the appropriate 
OTS office(s) along with the number of copies required under 
Sec. 516.40. Any amendment or supplemental information must also be 
appropriately captioned and meet the exhibit requirements at 
Sec. 516.30(b).

E. Comment Procedures

    OTS proposed only minor revisions to the publication and comment 
procedures at existing subpart B and C. The proposed rule made two 
revisions to existing Sec. 516.130, which governs where commenters 
should file their comments on an application. Proposed Sec. 516.130 
would require commenters to file their comments with the appropriate 
OTS Regional Office and, where an application involves a significant 
issue of law or policy, with OTS headquarters. In addition, commenters 
would also be required to simultaneously provide a copy of the comment 
directly to the applicant.
    OTS has decided that it is too burdensome to require a commenter to 
determine whether an application involves a significant issue of law or 
policy in order to file its comments properly. Instead, the final rule 
merely requires a commenter to file its comment with the appropriate 
Regional Office. The Regional Office will forward a copy of the comment 
to OTS headquarters where appropriate.
    Several commenters urged OTS to delete the proposed requirement 
that commenters must send their comments directly to the applicant. 
These commenters noted that the other banking agencies do not require 
this submission.\9\ The commenters also asserted that this requirement 
may intimidate community groups.
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    \9\ See 12 CFR 5.10(OCC); 12 CFR 262.3(e)(FRB); and 12 CFR 
303.9(FDIC).
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    OTS disagrees. All comments are public information and, in the 
past, OTS has forwarded copies of comments to applicants to permit them 
to address the concerns raised. As a result, applicants know the 
substance of all comments and the identity of the commenters. Requiring 
commenters to provide comments directly to the applicant is therefore 
unlikely to intimidate community groups. OTS acknowledges that 
providing a copy to the applicant may impose costs on commenters. If 
providing a copy of a comment to an applicant imposes a significant 
burden on the commenter, OTS may on a case-by-case basis waive the 
requirement and forward the comment on the commenter's behalf.
    Under existing Sec. 516.140, commenters must file comments with OTS 
within 25 calendar days after the application is filed. OTS will 
consider a late-filed comment, if within the comment period, the 
commenter demonstrates good cause for the untimely comment, and OTS 
determines that the comment addresses a significant regulatory concern 
and will assist in the disposition of the application. OTS is changing 
Sec. 516.140 to permit OTS greater flexibility in accepting late-filed 
comments. The final rule will allow OTS to consider late-filed comments 
if the commenter demonstrates good cause within the comment period for 
the untimely comment or OTS concludes that the comment addresses a 
significant regulatory concern and will assist in the disposition of 
the application.

F. Meeting Procedures

    OTS did not propose changes to the formal and informal meeting 
procedures in Subpart D, but sought comment on how these meeting 
procedures are operating in practice.
    One commenter noted that the informal and formal meetings are 
valuable opportunities to make views known to OTS and applicants. 
Another commenter, however, suggested several changes to these 
procedures. This commenter noted that the existing rules do not address 
the timing of the informal or formal meetings. The commenter argued 
that time is of the essence for many corporate transactions. 
Accordingly, this commenter asserted that the regulation should require 
all parties to be available to meet within 10 days after the submission 
of a comment.
    OTS has decided not to impose these time frames in order to retain 
maximum flexibility in scheduling. It is, however, OTS's practice to 
schedule the meetings as soon as possible taking into account

[[Page 12997]]

the schedules of the parties and other factors.
    Under Sec. 516.170, OTS will conduct an informal meeting whenever a 
commenter requests such a meeting.\10\ One commenter argued that not 
all comments should result in an informal meeting. The commenter 
asserted that OTS should require that allegations have some merit 
before an informal meeting is arranged. The commenter also noted that 
under existing Sec. 516.190, arranging an informal meeting will suspend 
the application processing time frames. The commenter argued that OTS 
should only suspend the time frames if OTS determines that there are 
extraordinary circumstances. Compare Sec. 516.260 (OTS may suspend 
processing under Sec. 516.260 only for extraordinary circumstances such 
as pending legislation or material litigation).
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    \10\ OTS will not arrange an informal meeting, however, where a 
request is clearly frivolous or clearly lacking a factual basis. 
With respect to formal meetings, OTS will conduct a formal meeting 
when a request is filed under Sec. 516.170(e). A request under 
Sec. 516.170(e) must demonstrate that material issues or facts have 
not been adequately addressed by the informal meeting and that a 
formal meeting is necessary to develop a record sufficient to 
support a determination on those facts or issues.
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    OTS has not revised the informal meeting process. This process 
ensures that all allegations of harm to individuals and communities are 
fully explored and that OTS may issue an informed decision on the 
merits of an application. While the commenter feared that some 
individuals or community groups may request an informal meeting solely 
to suspend the application processing time periods, OTS knows of no 
situation where this has occurred. In addition, the rules permit OTS to 
suspend processing time frames only for a limited time,\11\ and allow 
OTS to select the type of meeting that is best suited to the issues 
raised. OTS may, for example, prescribe an informal meeting as simple 
as a telephone conference call. Under these circumstances, OTS does not 
believe that the delay caused by the suspension of processing will be 
significant.
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    \11\ Under Sec. 516.190, processing is suspended only until OTS 
determines that a record has been developed that sufficiently 
supports a determination on the merits. By contrast, OTS may suspend 
processing indefinitely when it finds extraordinary circumstances 
under Sec. 516.280.
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    If a meeting has been arranged, the application processing time 
periods will resume only when OTS determines that a record has been 
developed that sufficiently supports a determination on the issues 
raised by the commenters. See existing Sec. 516.190. One commenter 
argued that OTS should establish a deadline for the completion of the 
meeting process. The commenter argued that OTS should have a fixed time 
period following the conclusion of the meeting (e.g., two weeks) to 
create a record supporting the determinations regarding the issues 
raised by the commenters.
    OTS believes that a fixed time frame would limit its ability to 
develop a thorough record. In some instances, two weeks may be 
insufficient to develop a record. Accordingly, OTS will resume the time 
periods when the record is developed. It will not impose a rigid time 
period that will unnecessarily inhibit its flexibility.

G. OTS Review

    OTS processes applications under part 516 using two procedures--
expedited treatment and standard treatment. Like the current rule, the 
proposed rule would base the decision to process an application under 
expedited treatment, in part, on the association's condition, as 
reflected in the composite Uniform Financial Institutions Rating 
System, the CRA performance rating, and the most recent compliance 
rating. See proposed Sec. 516.5. The preamble noted that OTS also 
assesses an association's condition using other rating systems 
including the Uniform Rating System for Data Processing Operations and 
the Uniform Interagency Trust Rating System. OTS specifically requested 
comment on whether it should incorporate these ratings in its decision 
to process applications under expedited treatment.
    One commenter asserted that OTS should not revise the proposed rule 
to incorporate these other ratings because such a change would be 
inconsistent with the other banking agencies' procedures. The commenter 
argued that any proposed changes to the criteria for expedited 
treatment of an application should be based on interagency consensus.
    OTS has decided not to incorporate other ratings in its decision to 
process applications under expedited treatment. OTS monitors new 
developments for each thrift and updates the CAMELS rating, as needed, 
so that the rating is a current indicator of the institution's 
condition. As part of this monitoring, OTS examiners are authorized to 
make off-site changes to the management score (the M component) of the 
CAMELS rating to reflect the scores received under the other rating 
systems. As a result, the CAMELS rating used in Sec. 516.5 
determinations already reflect other ratings and considerations.

H. OTS Review Under Standard Treatment

    OTS received the following comments on OTS review under standard 
treatment: \12\
---------------------------------------------------------------------------

    \12\ OTS received no comments on OTS review under expedited 
treatment.
---------------------------------------------------------------------------

    1. Review for completeness. Under the proposed rule governing 
standard treatment, OTS will review each application for completeness 
within 30 calendar days after its filing date. If OTS determines that 
additional information is necessary to complete the application, OTS 
will notify the applicant of this fact and the applicant will have 30 
calendar days to respond. See proposed Secs. 516.210 and 516.220. 
Within 15 calendar days after the applicant files additional 
information, OTS will complete its review of the additional 
information.\13\ OTS may, however, extend this 15-day period by an 
additional 15 days, if OTS requires this additional time to review the 
response.
---------------------------------------------------------------------------

    \13\ Under Sec. 516.220(a)(2)(ii), OTS may deny an applicant's 
request for an extension of time to file additional information and 
may decide not to process the application further. If an applicant's 
request for more time is denied, but the applicant nonetheless files 
a timely response to all information requests, OTS will process the 
application under Sec. 516.220(a)(1).
---------------------------------------------------------------------------

    One commenter supported the proposed provision permitting OTS to 
extend its review period. Another commenter, however, argued that the 
rules should require OTS to explain why the extension is necessary. The 
final rule adds the requirement that OTS must briefly explain why the 
extension is necessary.
    2. Publishing a new public notice. Under proposed Sec. 516.250, OTS 
may require an applicant to publish a new public notice of the 
application if an applicant submits a revision to the application, the 
applicant submits new or additional information, or a major issue of 
law or change in circumstance arose after filing the application.
    One commenter argued that OTS should always grant a new comment 
period when it requires the applicant to submit additional information. 
OTS disagrees. The purpose of the new comment period is to ensure that 
the public has adequate notice and opportunity to comment on 
applications that change substantially after the initial comment 
period. Not all revisions, new information, changes in circumstances, 
or issues of law are of a sufficient magnitude to merit the delays, 
expense, and burden inherent in the republication of a notice. 
Accordingly, OTS has left this provision unchanged in order to retain 
its discretion in

[[Page 12998]]

determining when a new comment period is appropriate.
    3. Review criteria. The proposed rule did not describe the 
standards that OTS will apply when it reviews applications. The 
preamble indicated that approval or disapproval would be based on the 
standards in the underlying regulation for the particular application.
    The current rule, however, includes one standard governing the 
review of applications. See existing Sec. 516.3(b)(2). That provision 
requires OTS to deny applications that are subject to standard 
treatment unless the applicant affirmatively demonstrates how the 
application will clearly improve its financial or managerial condition 
or improve its compliance with CRA or other consumer-related statutes 
without affecting its financial or managerial resources. OTS proposed 
to delete this provision.
    Two commenters opposed this deletion, arguing that the change may 
lead regulators to discount or limit consideration of CRA factors. The 
final rule follows the proposed rule on this point. OTS continues to 
believe that the review standards in the applicable substantive 
statutes and regulations sufficiently address these matters. OTS will 
not limit or discount CRA or other consumer-related compliance 
requirements as a result of the deletion because an applicant is still 
subject to these underlying substantive statutes and regulations.

III. Miscellaneous Changes

    OTS has made miscellaneous technical changes to the text of several 
rules. For example, OTS has revised the chart at Sec. 516.40 to update 
the addresses of the OTS Regional Offices. The chart, however, does not 
reflect the new address of the West Region Office, which is expected to 
move later this year. OTS will update the address in its end of the 
year technical amendments. OTS has also made other minor editorial 
changes to Secs. 516.5, 516.15, 516.40, 516.45, 516.120, 516.220 and 
516.230.
    OTS has also made a technical change to 12 CFR 545.92(d)(2) to make 
the publication requirements for a branch office consistent with the 
publication requirements in subpart B of part 516. In 1997, OTS amended 
the application processing rules to consolidate the publication notice 
provisions in other OTS regulations in a single regulation under part 
516. At that time, OTS intended to include the branching regulation in 
the amendment but inadvertently omitted this change.

IV. Derivation Chart for Revised Part 516

----------------------------------------------------------------------------------------------------------------
         Revised provision                 Former provision                          Comments
----------------------------------------------------------------------------------------------------------------
Sec.  516.1(a).....................  ...........................  Added.
Sec.  516.1(b).....................  Sec.  516.2(a)(1)..........  Modified.
Sec.  516.1(c).....................  Sec.  516.2(a) (2).........  Modified.
Sec.  516.5(a).....................  ...........................  Added.
Sec.  516.5(b).....................  ...........................  Added.
Sec.  516.5(c).....................  Sec.  516.3(b)(1)(i).......  Modified.
Sec.  516.5(d).....................  Sec.  516.3(b)(1)(ii)......  Modified.
Sec.  516.5(e).....................  Sec.  516.3(B)(1)(iii).....  Modified.
Sec.  516.5(f).....................  Sec.  516.3(b)(1)(iv)......  Modified.
Sec.  516.5(g).....................  Sec.  516.3(b)(1)(v).......  Modified.
Sec.  516.5(h).....................  ...........................  Added.
Sec.  516.5(i).....................  ...........................  Added.
Sec.  516.10.......................  ...........................  Added.
Sec.  516.15.......................  ...........................  Added.
Sec.  516.20.......................  ...........................  Added.
Sec.  516.25(a)....................  Sec.  516.3(a)(2)..........  Modified.
Sec.  516.25(b)....................  Secs.  516.2(b)............  Modified and Added.
Sec.  516.30(a)....................  Sec.  516.1.(c)............  Modified and Added.
Sec.  516.30(b)....................  Sec.  516.1.(c)............  Modified.
Sec.  516.35.......................  ...........................  Added.
Sec.  516.40(a)(1).................  Sec.  516.1(c).............  Modified and Added.
Sec.  516.40(a)(2).................  Sec.  516.1(b).............  Modified.
Sec.  516.40(b)....................  Sec.  516.1(a)&(c).........  Modified.
Sec.  516.45(a)....................  ...........................  Added.
Sec.  516.45(b)....................  ...........................  Added.
Sec.  516.47.......................  ...........................  Added.
Sec.  516.55.......................  ...........................  Added.
Sec.  516.120......................  Sec.  516.120..............  Modified.
Sec.  516.130......................  Sec.  516.130..............  Modified.
Sec.  516.140......................  Sec.  516.140..............  Modified.
Sec.  516.150......................  Sec.  516.150..............  Modified.
Sec.  516.185......................  ...........................  Added.
Sec.  516.190......................  Sec.  516.190..............  Modified.
Sec.  516.200(a)...................  Sec.  516.3(a)(2)..........  Modified and Added.
Sec.  516.200(b)...................  Sec.  516.3(a)(3)..........  Modified.
Sec.  516.200(c)...................  ...........................  Added.
Sec.  516.200(d)...................  ...........................  Added.
Sec.  516.210(a)...................  Sec.  516.2(c)(1)..........  Modified and Added.
Sec.  516.210(b)...................  Sec.  516.2(c)(1)..........  Modified.
Sec.  516.220(a)...................  Sec.  516.2(c)(2)-(5)......  Modified and Added.
Sec.  516.220(b)...................  Sec.  516.2(e).............  Modified.
Sec.  516.220(c)...................  Sec.  516.2(c)(4)..........  Modified.
Sec.  516.230......................  ...........................  Added.
Sec.  516.240(a)...................  Sec.  516.2(c)(4)-(5)......  Modified.
Sec.  516.240(b)...................  Sec.  516.2(c)(5)..........  Modified and Added.
Sec.  516.250......................  ...........................  Added.
Sec.  516.260......................  Sec.  516.2(c)(7)..........  Modified and Added.
Sec.  516.270(a)...................  Sec.  516.2(d)(1)..........  Modified.

[[Page 12999]]

 
Sec.  561.270(b)...................  Sec.  516.2(d)(2)..........  Modified.
Sec.  516.270(c)(1)................  Sec.  516.2(e).............  Modified.
Sec.  516.270(c)(2)................  Sec.  516.2(f).............  Modified.
Sec.  516.280(a)...................  ...........................  Added.
Sec.  516.280(b)...................  Sec.  516.2(d)(1)..........  Modified.
Sec.  516.290......................  ...........................  Added.
----------------------------------------------------------------------------------------------------------------

V. Executive Order 12866

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

VI. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, OTS 
certifies that this final regulation will not have a significant 
economic impact on a substantial number of small entities. The final 
rule generally restates the existing rule in plain language and 
clarifies existing procedures. These changes should make it easier for 
all applicants to file applications and for OTS to review applications 
expeditiously. These changes should, therefore, assist all potential 
applicants, including small businesses. While the final rule would make 
several minor changes, only two of these changes would impose 
additional burden on certain applicants. Under the final rule, certain 
applicants may be subject to a possible pre-filing meeting requirement 
and may be required to provide a draft business plan or other relevant 
information before the meeting. OTS believes that the pre-filing 
meeting is generally consistent with existing procedures and imposes 
only a minimal burden. Moreover, most applicants should already have 
drafted business plans to provide to the agency.

VII. Paperwork Reduction Act of 1995

    The information collection requirements in this final rule have 
previously been approved by OMB under the substantive regulations or 
under the application forms; or involve technical changes that do not 
affect the overall burden of compliance. To the extent that this 
regulation imposes new burden, OTS has filed applications to update the 
information collection requirements in the underlying forms. These have 
been submitted under 1550-0005, 1550-00015, and 1550-0037.

VIII. 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 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. The final rule generally 
restates the existing application processing procedures in plain 
language and clarifies existing procedures. These changes should make 
it easier for all applicants to file applications and for OTS to review 
applications. While the final rule makes several minor changes, OTS has 
determined that the final rule will not result in expenditures by 
state, local, or tribal governments or by the private sector of $100 
million or more. Accordingly, this final rulemaking is not subject to 
section 202 of the Unfunded Mandates Act.

List of Subjects

12 CFR Part 516

    Administrative practice and procedure, Reporting and recordkeeping 
requirements, Savings associations.

12 CFR Part 517

    Government contracts, Individuals with disabilities, Minority 
businesses, Women.

12 CFR Part 543

    Reporting and recordkeeping requirements, Savings associations.

12 CFR Part 544

    Reporting and recordkeeping requirements, Savings associations.

12 CFR Part 545

    Accounting, Consumer protection, Credit, Electronic funds 
transfers, Investments, Reporting and recordkeeping requirements, 
Savings associations.

12 CFR Part 550

    Savings associations, Trusts and trustees.

12 CFR Part 552

    Reporting and recordkeeping requirements, Savings associations, 
Securities.

12 CFR Part 555

    Accounting, Consumer protection, Credit, Electronic funds 
transfers, Investments, Reporting and recordkeeping requirements, 
Savings associations.

12 CFR Part 559

    Reporting and recordkeeping requirements, Savings associations, 
Subsidiaries.

12 CFR Part 560

    Consumer protection, Investments, Manufactured homes, Mortgages, 
Reporting and recordkeeping requirements, Savings associations, 
Securities.

12 CFR Part 562

    Accounting, Reporting and recordkeeping requirements, Savings 
associations.

12 CFR Part 563

    Accounting, Advertising, Crime, Currency, Investments, Reporting 
and recordkeeping requirements, Savings associations, Securities, 
Surety bonds.

12 CFR Part 563b

    Reporting and recordkeeping requirements, Savings associations, 
Securities.

12 CFR Part 563f

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

12 CFR Part 565

    Administrative practice and procedure, Capital, Savings 
associations.

12 CFR Part 567

    Capital, Savings associations.

12 CFR Part 574

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

[[Page 13000]]

12 CFR Part 575

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

12 CFR Part 584

    Administrative practice and procedure, Holding companies, Reporting 
and recordkeeping requirements, Savings associations, Securities.
    Accordingly, the Office of Thrift Supervision amends title 12, 
chapter V, of the Code of Federal Regulations as set forth below:

PART 516--APPLICATION PROCESSING GUIDELINES AND PROCEDURES

    1. The authority citation for part 516 continues to read as 
follows:

    Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464, 2901 
et seq.


Secs. 516.1, 516.2, 516.3  [Removed]

    2. Subpart A of part 516 (Secs. 516.1, 516.2, 516.3) is removed.


Secs. 516.1, 516.5, 516.10  [Added]

Subpart A [Added]

    3. Sections 516.1, 516.5, and 516.10, and new subpart A, consisting 
of Secs. 516.15 through 516.45, are added to read as follows:

Sec.
516.1   What does this part do?
516.5   Do the same procedures apply to all applications under this 
part?
516.10   How does OTS compute time periods under this part?
Subpart A--Pre-Filing and Filing Procedures

Pre-Filing Procedures

516.15   Must I meet with OTS before I file my application?
516.20   What information must I include in my draft business plan?

Filing Procedures

516.25   What type of application must I file?
516.30   What information must I provide with my application?
516.35   May I keep portions of my application confidential?
516.40   Where do I file my application?
516.45   What is the filing date of my application?
516.47   How do I amend or supplement my application?


Sec. 516.1  What does this part do?

    (a) This part explains OTS procedures for processing applications, 
notices, or filings (applications). Except as provided in paragraph (b) 
of this section, subparts A and E of this part apply whenever an OTS 
regulation requires any person (you) to file an application with OTS. 
Subparts B, C, and D, however, only apply when an OTS regulation 
incorporates the procedures in the subpart or where otherwise required 
by OTS.
    (b) This part does not apply to any of the following:
    (1) An application related to a transaction under section 13(c) or 
(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1823(c) or (k).
    (2) A request for reconsideration, modification, or appeal of a 
final OTS action.
    (3) A request related to litigation, an enforcement proceeding, a 
supervisory directive or supervisory agreement. Such requests include a 
request seeking approval under, modification of, or termination of an 
order issued under part 508 or 509 of this chapter, a supervisory 
agreement, a supervisory directive, a consent merger agreement or a 
document negotiated in settlement of an enforcement matter or other 
litigation, unless an applicable OTS regulation specifically requires 
an application under this part.
    (4) An application filed under an OTS regulation that prescribes 
other application processing procedures and time frames for the 
approval of applications.
    (c) If an OTS regulation for a specific type of application 
prescribes some application processing procedures, or time frames, OTS 
will apply this part to the extent necessary to process the 
application. For example, if an OTS regulation for a specific type of 
application does not identify time periods for the processing of an 
application, the time periods in this part apply.


Sec. 516.5  Do the same procedures apply to all applications under this 
part?

    OTS processes applications under this part using two procedures, 
expedited treatment and standard treatment. To determine which 
treatment applies, you may use the following chart:

----------------------------------------------------------------------------------------------------------------
                        If * * *                           Then OTS will process your  application under * * *
----------------------------------------------------------------------------------------------------------------
(a) The applicable regulation does not specifically      Standard treatment.
 state that expedited treatment is available.
(b) You are not a savings association..................      Do.
(c) Your composite rating is 3, 4, or 5. The composite       Do.
 rating is the composite numeric rating that OTS or the
 other federal banking regulator assigned to you under
 the Uniform Financial Institutions Rating System \1\
 or under a comparable rating system. The composite
 rating refers to the rating assigned and provided to
 you, in writing, as a result of the most recent
 examination.
(d) Your Community Reinvestment Act (CRA) rating is          Do.
 Needs to Improve or Substantial Noncompliance. The CRA
 rating is the Community Reinvestment Act performance
 rating that OTS or the other federal banking regulator
 assigned and provided to you, in writing, as a result
 of the most recent compliance examination. See, for
 example, Sec.  563e.28 of this chapter.
(e) Your compliance rating is 3, 4, or 5. The                Do.
 compliance rating is the numeric rating that OTS or
 the other federal banking regulator assigned to you
 under OTS compliance rating system, or a comparable
 rating system used by the other federal banking
 regulator. The compliance rating refers to the rating
 assigned and provided to you, in writing, as a result
 of the most recent compliance examination.
(f) You fail any one of your capital requirements under      Do.
 part 567 of this chapter.
(g) OTS has notified you that you are an association in      Do.
 troubled condition.
(h) Neither OTS nor any other federal banking regulator      Do.
 has assigned you a composite rating, a CRA rating or a
 compliance rating.
(i) You do not meet any of the criteria listed in        Expedited treatment.
 paragraphs (a) through (h) of this section.
----------------------------------------------------------------------------------------------------------------
\1\ A savings association may obtain a copy of its composite rating from the appropriate Regional Office.


[[Page 13001]]

Sec. 516.10  How does OTS compute time periods under this part?

    In computing time periods under this part, OTS does not include the 
day of the act or event that commences the time period. When the last 
day of a time period is a Saturday, Sunday, or Federal holiday, the 
time period runs until the end of the next day that is not a Saturday, 
Sunday, or Federal holiday.

Subpart A--Pre-filing and Filing Procedures

Pre-Filing Procedures


Sec. 516.15  Must I meet with OTS before I file my application?

    (a) Chart. To determine whether you must attend a pre-filing 
meeting before you file an application, please consult the following 
chart:

------------------------------------------------------------------------
           If you file * * *                        Then * * *
------------------------------------------------------------------------
(1) An application for permission to     You must meet with OTS before
 organize a de novo federal savings       filing your application. You
 association.                             must submit a draft business
                                          plan before this meeting.
(2) An application to convert an         You must meet with OTS before
 existing insured depository              filing your application. OTS
 institution (other than a state-         may require you to submit a
 chartered savings association or a       draft business plan or other
 state-chartered savings bank) or a       relevant information before
 credit union to a federal savings        this meeting.
 association.
(3) An application to acquire control    OTS may require you to meet
 of a savings association.                with OTS before filing your
                                          application and may require
                                          you to submit a draft business
                                          plan or other relevant
                                          information before this
                                          meeting.
------------------------------------------------------------------------

    (b) Contacting the Regional Office. (1) You must contact the 
appropriate Regional Office a reasonable time before you file an 
application described in paragraph (a) of this section. Unless 
paragraph (a) already requires a pre-filing meeting or a draft business 
plan, the Regional Office will determine whether it will require a pre-
filing meeting, and whether you must submit a business plan or other 
relevant information before the meeting. The Regional Office will also 
establish a schedule for any meeting and the submission of any 
information.
    (2) All other applicants are encouraged to contact the appropriate 
Regional Office to determine whether a pre-filing meeting or the 
submission of a draft business plan or other relevant information would 
expedite the application review process.


Sec. 516.20  What information must I include in my draft business plan?

    If you must submit a draft business plan under Sec. 516.15, your 
plan must:
    (a) Clearly and completely describe the savings association's 
projected operations and activities;
    (b) Describe the risks associated with the transaction and the 
impact of this transaction on any existing activities and operations of 
the savings association, including financial projections for a minimum 
of three years;
    (c) Identify the majority of the proposed board of directors and 
the key senior executive officers (as defined in Sec. 563.555 of this 
chapter) of the savings association and demonstrate that these 
individuals have the expertise to prudently manage the activities and 
operations described in the savings association's draft business plan; 
and
    (d) Demonstrate how applicable requirements regarding serving the 
credit and lending needs in the market areas served by the savings 
association will be met.

Filing Procedures


Sec. 516.25  What type of application must I file?

    (a) Expedited treatment. If you are eligible for expedited 
treatment under Sec. 516.5, you may file your application in the form 
of a notice that includes all information required by the applicable 
substantive regulation. If OTS has designated a form for your notice, 
you must file that form. Your notice is an application for the purposes 
of all statutory and regulatory references to ``applications.''
    (b) Standard treatment. If you are subject to standard treatment 
under Sec. 516.5, you must file your application following all 
applicable substantive regulations and guidelines governing the filing 
of applications. If OTS has a designated form for your application, you 
must file that form.
    (c) Waiver requests.Z If you want OTS to waive a requirement that 
you provide certain information with the notice or application, you 
must include a written waiver request:
    (1) Describing the requirement to be waived and
    (2) Explaining why the information is not needed to enable OTS to 
evaluate your notice or application under applicable standards.


Sec. 516.30  What information must I provide with my application?

    (a) Required information. You may obtain information about required 
certifications, other regulations and guidelines affecting particular 
notices and applications, appropriate forms, and instructions from any 
OTS Regional Office. You may also obtain forms and instructions on 
OTS's web page at www.ots.treas.gov.
    (b) Captions and exhibits. You must caption the original 
application and required copies with the type of filing, and must 
include all exhibits and other pertinent documents with the original 
application and all required copies. You are not required to include 
original signatures on copies if you include a copy of the signed 
signature page or the copy otherwise indicates that the original was 
signed.


Sec. 516.35  May I keep portions of my application confidential?

    (a) Confidentiality. OTS makes submissions under this part 
available to the public, but may keep portions of your application 
confidential based on the rules in this section.
    (b) Confidentiality request. (1) You may request OTS to keep 
portions of your application confidential. You must submit your request 
in writing with your application and must explain in detail how your 
request is consistent with the standards under the Freedom of 
Information Act (5 U.S.C. 552) and part 505 of this chapter. For 
example, you should explain how you will be substantially harmed by 
pubic disclosure of the information. You must separately bind and mark 
the portions of the application you consider confidential and the 
portions you consider non-confidential.
    (2) OTS will not treat as confidential the portion of your 
application describing how you plan to meet your Community Reinvestment 
Act (CRA) objectives. OTS will make information in your CRA plan, 
including any information incorporated by reference

[[Page 13002]]

from other parts of your application, available to the public upon 
request.
    (c) OTS determination on confidentiality. OTS will determine 
whether information that you designate as confidential may be withheld 
from the public under the Freedom of Information Act (5 U.S.C. 552) and 
part 505 of this chapter. OTS will advise you before it makes 
information you designate as confidential available to the public.


Sec. 516.40  Where do I file my application?

    (a) Regional Office. (1) You must file the original application and 
the number of copies indicated on the applicable form with the 
applications filing division of the appropriate OTS Regional Office. 
You should address the filings to ``Attn: Applications Filing Room'' at 
the Regional address listed in paragraph (a)(2) of this section. If the 
form does not indicate the number of copies you must file or if OTS has 
not prescribed a form for your application, you must file the original 
application and two copies.
    (2) The address and the states served for each Regional Office are:

------------------------------------------------------------------------
          Region                Office address         States served
------------------------------------------------------------------------
Northeast.................  Office of Thrift       Connecticut,
                             Supervision, 10        Delaware, Maine,
                             Exchange Place, 18th   Massachusetts, New
                             Floor, Jersey City,    Hampshire, New
                             New Jersey 07303.      Jersey, New York,
                                                    Pennsylvania, Rhode
                                                    Island, Vermont,
                                                    West Virginia.
Southeast.................  Office of Thrift       Alabama, Florida,
                             Supervision, 1475      Georgia, Maryland,
                             Peachtree Street,      North Carolina,
                             N.E., Atlanta,         South Carolina,
                             Georgia 30309.         Virginia, District
                                                    of Columbia, Puerto
                                                    Rico, Virgin
                                                    Islands.
Central...................  Office of Thrift       Illinois, Indiana,
                             Supervision, One       Kentucky, Michigan,
                             South Wacker Drive,    Ohio, Tennessee,
                             Suite 2000, Chicago,   Wisconsin.
                             Illinois 60606.
Midwest...................  Office of Thrift       Arkansas, Colorado,
                             Supervision, 225 E.    Iowa, Kansas,
                             John Carpenter         Louisiana,
                             Freeway, Suite 500,    Minnesota, Missouri,
                             Irving, Texas 75062-   Mississippi, North
                             2731. Mail to: P.O.    Dakota, Nebraska,
                             Box 619027, Dallas/    New Mexico,
                             Ft. Worth, Texas       Oklahoma, South
                             75261-9027.            Dakota, Texas.
West......................  Office of Thrift       Alaska, Arizona,
                             Supervision, Pacific   California, Hawaii,
                             Telesis Tower, 1       Idaho, Montana,
                             Montgomery Street,     Nevada, Oregon,
                             San Francisco,         Utah, Washington,
                             California, 94104-     Wyoming, Guam,
                             4533. Mail to: P.O.    Northern Mariana
                             Box 7165, San          Islands.
                             Francisco,
                             California 94120-
                             7165.
------------------------------------------------------------------------

    (b) Additional filings with OTS Headquarters. (1) In addition to 
filing in the Regional Office, if your application involves a 
significant issue of law or policy or if an applicable regulation or 
form directs you to file with OTS Headquarters, you must also file 
copies of your application with the Applications Filing Room at OTS 
headquarters, 1700 G Street, NW., Washington, DC 20552. You must file 
the number of copies indicated on the applicable form. If the form does 
not indicate the number of copies you must file or if OTS has not 
prescribed a form for your application, you must file three copies.
    (2)(i) You may obtain a list of applications involving significant 
issues of law or policy at the OTS website at www.ots.treas.gov or by 
contacting a Regional Office.
    (ii) OTS reserves the right to identify significant issues of law 
or policy in a particular application. OTS will advise you, in writing, 
if it makes this determination.


Sec. 516.45  What is the filing date of my application?

    (a) Your application's filing date is the date that you complete 
all of the following requirements.
    (1) You attend a pre-filing meeting and submit a draft business 
plan or relevant information, if OTS requires you to do so under 
Sec. 516.15.
    (2) You file your application and all required copies with OTS, as 
described under Sec. 516.40.
    (i) If you are required to file with a Regional Office and with OTS 
Headquarters, you have not filed with OTS until you file with both 
offices.
    (ii) You have not filed with a Regional Office or OTS Headquarters 
until you file the application and the required number of copies with 
that office.
    (iii) If you file after the close of business established by a 
Regional Office or OTS Headquarters, you have filed with that office on 
the next business day.
    (3) You pay the applicable fee. You have not paid the fee until you 
submit the fee to the appropriate Regional Office, or OTS waives the 
fee. You may pay by check, money order, cashier's check or wire 
transfer payable to OTS.
    (b) OTS may notify you that it has adjusted your application filing 
date if you fail to meet any applicable publication requirements.
    (c) If, after you properly file your application with the Regional 
Office, OTS determines that a significant issue of law or policy exists 
under Sec. 516.40(b)(2)(ii), the filing date of your application is the 
day you filed with the Regional Office. The 30-day review period under 
Secs. 516.200 or 516.210 of this part will restart in its entirety when 
the Regional Office forwards the appropriate number of copies of your 
application to OTS Headquarters.


Sec. 516.47  How do I amend or supplement my application?

    To amend or supplement your application, you must file the 
amendment or supplemental information at the appropriate OTS office(s) 
along with the number of copies required under Sec. 516.40. Your 
amendment or supplemental information also must meet the caption and 
exhibit requirements at Sec. 516.30(b).

    4. Section 516.55 is added to read as follows:


Sec. 516.55  What information must I include in my public notice?

    Your public notice must include the following:
    (a) Your name and address.
    (b) The type of application.
    (c) The name of the depository institution(s) that is the subject 
matter of the application.
    (d) A statement indicating that the public may submit comments to 
the appropriate OTS office(s).
    (e) The address of the appropriate OTS offices where the public may 
submit comments.
    (f) The date that the comment period closes.
    (g) A statement indicating that the nonconfidential portions of the 
application are on file in the Regional Office, and are available for 
public inspection during regular business hours.
    (h) Any other information that OTS requires you to publish. You may 
find the format for various publication notices in the appendix to OTS 
application processing handbook.

[[Page 13003]]

Sec. 516.110  [Amended]

    5. Section 516.110 is amended by removing the phrase ``(you)''.

    6. Section 516.120 is revised to read as follows:


Sec. 516.120  What information should a comment include?

    (a) A comment should recite relevant facts, including any 
demographic, economic, or financial data, supporting the commenter's 
position. A comment opposing an application should also:
    (1) Address at least one of the reasons why OTS may deny the 
application under the relevant statute or regulation;
    (2) Recite any relevant facts and supporting data addressing these 
reasons; and;
    (3) Address how the approval of the application could harm the 
commenter or any community.
    (b) If a commenter wishes to request an informal meeting under 
Sec. 516.170, the commenter must file a request with the comment. The 
commenter should describe the nature of the issues or facts to be 
discussed and the reasons why written submissions are insufficient to 
adequately address these facts or issues.

    7. Section 516.130 is revised to read as follows:


Sec. 516.130  Where are comments filed?

    A commenter must file with the appropriate OTS Regional Office (See 
table at Sec. 516.40(a)(2)). The commenter must simultaneously send a 
copy of the comment to the applicant.

    8. Section 516.140 is revised to read as follows:


Sec. 516.140  How long is the comment period?

    (a) General. Except as provided in paragraph (b) of this section, a 
commenter must file a written comment with OTS within 25 calendar days 
after the application is filed with OTS.
    (b) Late-filed comments. OTS will consider a late-filed comment if:
    (1) Within the comment period, the commenter demonstrates to OTS 
good cause why the commenter could not submit a timely comment; or
    (2) OTS concludes that the comment addresses a significant 
regulatory concern and will assist in the disposition of the 
application.

    9. Section 516.150 is revised to read as follows:


Sec. 516.150  Will there be additional opportunities to discuss the 
application?

    OTS may provide the commenter with additional opportunities to 
discuss the application in informal or formal meetings under subpart D 
of this part.

    10. Section 516.185 is added to read as follows:


Sec. 516.185  Will OTS approve or disapprove an application at a 
meeting?

    OTS will not approve or deny an application at a formal or informal 
meeting under this subpart.

    11. Section 516.190 is revised to read as follows:


Sec. 516.190  Will a meeting affect application processing time frames?

    If OTS has arranged a meeting, it will suspend applicable 
application processing time frames, including the time frames for 
deeming an application complete and the applicable approval time frames 
specified in subpart E of this part. The time period will resume when 
OTS determines that a record has been developed that sufficiently 
supports a determination on the issues raised in the comments.

    12. Subpart E, consisting of Secs. 516.200 through 516.280, is 
added to read as follows:
Subpart E--OTS Review

Expedited Treatment

Sec.
516.200  If I file a notice under expedited treatment, when may I 
engage in the proposed activities?

Standard Treatment

516.210   What will OTS do after I file my application?
516.220   If OTS requests additional information to complete my 
application, how will it process my application?
516.230   Will OTS conduct an eligibility examination?
516.240   What may OTS require me to do after my application is 
deemed complete?
516.250   Will OTS require me to publish a new public notice?
516.260   May OTS suspend processing of my application?
516.270   How long is the OTS review period?
516.280   How will I know if my application has been approved?
516.290   What will happen if OTS does not approve or disapprove my 
application within two calendar years after the filing date?

Subpart E--OTS Review

Expedited Treatment


Sec. 516.200  If I file a notice under expedited treatment, when may I 
engage in the proposed activities?

    If you are eligible for expedited treatment and you have 
appropriately filed your notice with OTS, you may engage in the 
proposed activities upon the expiration of 30 days after the filing 
date of your notice, unless OTS takes one of the following actions 
before the expiration of that time period:
    (a) OTS notifies you in writing that you must file additional 
information supplementing your notice. If you are required to file 
additional information, you may engage in the proposed activities upon 
the expiration of 30 calendar days after the date you file the 
additional information, unless OTS takes one of the actions described 
in paragraphs (b) through (d) of this section before the expiration of 
that time period;
    (b) OTS notifies you in writing that your notice is subject to 
standard treatment under this subpart. OTS will subject your notice to 
standard treatment if it raises a supervisory concern, raises a 
significant issue of law or policy, or requires significant additional 
information;
    (c) OTS notifies you in writing that it is suspending the 
applicable time frames under Sec. 516.190; or
    (d) OTS notifies you that it disapproves your notice.

Standard Treatment


Sec. 516.210  What will OTS do after I file my application?

    (a) OTS action. Within 30 calendar days after the filing date of 
your application, OTS will take one of the following actions:

------------------------------------------------------------------------
              If OTS * * *                          Then * * *
------------------------------------------------------------------------
(1) Notifies you, in writing, that your  The applicable review period
 application is complete * * *.           will begin on the date that
                                          OTS deems your application
                                          complete.
(2) Notifies you, in writing, that you   You must submit the required
 must submit addition information to      additional information under
 complete your application * * *.         Sec.  516.220.
(3) Notifies you, in writing, that your  OTS will not process your
 application is materially deficient *    application.
 * *.
(4) Takes no action * * *..............  Your application is deemed
                                          complete. The applicable
                                          review period will begin on
                                          the day the 30-day time period
                                          expires.
------------------------------------------------------------------------


[[Page 13004]]

    (b) Waiver requests. If your application includes a request for 
waiver of an information requirement under Sec. 516.25(b), and OTS has 
not notified you that you must submit additional information under 
paragraph (a)(2) of this section, your request for waiver is granted.


Sec. 516.220  If OTS requests additional information to complete my 
application, how will it process my application?

    (a) You may use the following chart to determine the procedure that 
applies to your submission of additional information under 
Sec. 516.210(a)(1):

------------------------------------------------------------------------
 If, within 30 calendar days
   after the date of OTS's
   request for additional     Then, OTS may * * *.       And * * *.
      information * * *
------------------------------------------------------------------------
(1) You file a response to    (i) Notify you in     The applicable
 all information requests *    writing within 15     review period will
 * *.                          days after the        begin on the date
                               filing date of your   tha t OTS deems
                               response that your    your application
                               applicaiton is        complete.
                               complete * * *
                               applicable to all
                               response that your
                               application is
                               complete * * *.
                              (ii) Notify you in    You must respond to
                               writing within 15     the additional
                               calendar days after   information request
                               the filing date of    within the time
                               your response that    period required by
                               you must submit       OTS. OTS will
                               additional            review your
                               information           response under the
                               regarding matters     procedures
                               derived from or       described in this
                               prompted by           section.
                               information already
                               furnished or any
                               additional
                               information
                               information
                               necessary to
                               resolve the issues
                               presented in your
                               application * * *.
                              (iii) Notify you in   OTS will not process
                               writing within 15     your application.
                               calendar days after
                               the filing date of
                               your response that
                               your application is
                               materially
                               deficient * * *.
                              (iv) Take no action   Your application is
                               within 15 calendar    deemed complete.
                               days after the        The applicable
                               filing date of your   review period will
                               response * * *.       begin on the day
                                                     that the 15-day
                                                     time period
                                                     expires.
(2) You request an extension  (i) Grant an          You must fully
 of time to file additional    extension, in         respond within the
 information * * *.            writing, specifying   extended time
                               the number of days    period specified by
                               for the extension *   OTS. OTS will
                               * *.                  review your
                                                     response under the
                                                     procedures
                                                     described under
                                                     this section.
                              (ii) Notify you in    OTS will not process
                               writing that your     your application
                               extension request     further. You may
                               is disapproved * *    resubmit the
                               *.                    application for
                                                     processing as a new
                                                     filing under the
                                                     applicable
                                                     regulation.
(3) You fail to respond       (i) Notify you in     OTS will not process
 completely * * *.             writing that your     your to respond
                               application is        application
                               deemed withdrawn *    further. You may
                               * *.                  resubmit the
                                                     application for
                                                     processing as a new
                                                     filing under the
                                                     applicable
                                                     regulation.
                              (ii) Notify you, in   You must fully
                               writing, that your    respond within the
                               response is           extended time
                               incomplete and        period specified by
                               extend the response   OTS. OTS will
                               period, specifying    review your
                               the number of days    response under the
                               for the respond       procedures
                               extension * * *.      described under
                                                     this section.
------------------------------------------------------------------------

    (b) OTS may extend the 15-day period referenced in paragraph (a)(1) 
of this section by up to 15 calendar days, if OTS requires the 
additional time to review your response. OTS will notify you that it 
has extended the period before the end of the initial 15-day period and 
will briefly explain why the extension is necessary.
    (c) If your response filed under paragraph (a)(1) of this section 
includes a request for a waiver of an informational requirement, your 
request for a waiver is granted if OTS fails to act on it within 15 
calendar days after the filing of your response, unless OTS extends the 
review period under paragraph (b). If OTS extends the review period 
under paragraph (b), your request is granted if OTS fails to act on it 
by the end of the extended review period.


Sec. 516.230  Will OTS conduct an eligibility examination?

    (a) Eligibility examination. OTS may notify you at any time before 
it deems your application complete that it will conduct an eligibility 
examination. If OTS decides to conduct an eligibility examination, it 
will not deem your application complete until it concludes the 
examination.
    (b) Additional information. OTS may, as a result of the eligibility 
examination, notify you that you must submit additional information to 
complete your application. If so, you must respond to the additional 
information request within the time period required by OTS. OTS will 
review your response under the procedures described in Sec. 516.220.


Sec. 516.240  What may OTS require me to do after my application is 
deemed complete?

    After your application is deemed complete, but before the end of 
the applicable review period,
    (a) OTS may require you to provide additional information if the 
information is necessary to resolve or clarify the issues presented by 
your application.
    (b) OTS may determine that a major issue of law or a change in 
circumstances arose after you filed your application, and that the 
issue or changed circumstances will substantially effect your 
application. If OTS identifies such an issue or changed circumstances, 
it may:
    (1) Notify you, in writing, that your application is now incomplete 
and require you to submit additional information to complete the 
application

[[Page 13005]]

under the procedures described at Sec. 516.220; and
    (2) Require you to publish a new public notice of your application 
under Sec. 516.250.


Sec. 516.250  Will OTS require me to publish a new public notice?

    (a) If your application was subject to a publication requirement, 
OTS may require you to publish a new public notice of your application 
if:
    (1) You submitted a revision to the application, you submitted new 
or additional information, or a major issue of law or a change in 
circumstances arose after the filing of your application; and
    (2) OTS determines that additional comment on these matters is 
appropriate because of the significance of the new information or 
circumstances.
    (b) OTS will notify you in writing if you must publish a new public 
notice of your revised application.
    (c) If you are required to publish a new public notice of your 
revised application, you must notify OTS after you publish the new 
public notice.


Sec. 516.260  May OTS suspend processing of my application?

    (a) Suspension. OTS may, at any time, indefinitely suspend 
processing of your application if:
    (1) OTS, another governmental entity, or a self-regulatory trade or 
professional organization initiates an investigation, examination, or 
administrative proceeding that is relevant to OTS's evaluation of your 
application;
    (2) You request the suspension or there are other extraordinary 
circumstances that have a significant impact on the processing of your 
application.
    (b) Notice. OTS will promptly notify you, in writing, if it 
suspends your application.


Sec. 516.270  How long is the OTS review period?

    (a) General. The applicable OTS review period is 60 calendar days 
after the date that your application is deemed complete, unless an 
applicable OTS regulation specifies a different review period.
    (b) Multiple applications. If you submit more than one application 
in connection with a proposed action or if two or more applicants 
submit related applications, the applicable review period for all 
applications is the review period for the application with the longest 
review period, subject to statutory review periods.
    (c) Extensions. (1) OTS may extend the review period for up to 30 
calendar days beyond the period described in paragraph (a) or (b) of 
this section. OTS must notify you in writing of the extension and the 
duration of the extension. OTS must issue the written extension before 
the end of the review period.
    (2) OTS may also extend the review period as needed until it acts 
on the application, if the application presents a significant issue of 
law or policy that requires additional time to resolve. OTS must notify 
you in writing of the extension and the general reasons for the 
extension. OTS must issue the written extension before the end of the 
review period, including any extension of that period under paragraph 
(c)(1) of this section. This section applies to applications and 
notices filed under Sec. 575.3(b) and part 574 of this chapter.


Sec. 516.280  How will I know if my application has been approved?

    (a) OTS approval or denial. (1) OTS will approve or deny your 
application before the expiration of the applicable review period, 
including any extensions of the review period.
    (2) OTS will promptly notify you in writing of its decision to 
approve or deny your application.
    (b) No OTS action. If OTS fails to act under paragraph (a)(1) of 
this section, your application is approved.


Sec. 516.290  What will happen if OTS does not approve or disapprove my 
application within two calendar years after the filing date?

    (a) Withdrawal. If OTS has not approved or denied your pending 
application within two calendar years after the filing date under 
Sec. 516.45, OTS will notify you, in writing, that your application is 
deemed withdrawn unless OTS determines that you are actively pursuing a 
final OTS determination on your application. You are not actively 
pursuing a final OTS determination if you have failed to timely take an 
action required under this part, including filing required additional 
information, or OTS has suspended processing of your application under 
Sec. 516.260 based on circumstances that are, in whole or in part, 
within your control and you have failed to take reasonable steps to 
resolve these circumstances.
    (b) Effective date. This section is effective July 1, 2001.

PART 517--THE MINORITY, WOMEN, AND INDIVIDUALS WITH DISABILITIES 
OUTREACH PROGRAM: CONTRACTING FOR GOODS AND SERVICES

    13. The authority citation for part 517 continues to read as 
follows:

    Authority: 12 U.S.C. 1833(e); 42 U.S.C. 12101 et seq.


    14. Section 517.6 is amended by revising paragraph (b) to read as 
follows:


Sec. 517.6  Certification.

* * * * *
    (b) Self-certify ownership status by filing with the OTS Outreach 
Program Advocate a completed and signed ABELS Registration/
Certification Form, as prescribed by the U.S. Department of Commerce's 
Minority Business Development Agency and available from the Outreach 
Program Advocate at the headquarters address of the OTS listed in 
Sec. 516.40(b) of this chapter.
* * * * *

PART 543--INCORPORATION, ORGANIZATION, AND CONVERSION OF FEDERAL 
MUTUAL ASSOCIATIONS

    15. The authority citation for part 543 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901 et 
seq.


    16. Section 543.9 is amended by revising paragraph (a) to read as 
follows:


Sec. 543.9  Application for conversion to Federal mutual charter.

    (a)(1) Filing. Any depository institution that proposes to convert 
to a Federal mutual association as provided in Sec. 543.8 must, after 
approval by its board of directors, file an application on forms 
obtained from OTS. The applicant must submit any financial statements 
or other information OTS may require.
    (2) Procedures. An application for conversion filed under this 
section is subject to the procedures for organization of a federal 
mutual association at Sec. 543.2(d) through (f) of this chapter.
* * * * *

PART 544--CHARTER AND BYLAWS

    17. The authority citation for part 544 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901 et 
seq.


    18. Section 544.2 is amended by revising the last sentence of 
paragraph (c) to read as follows:

[[Page 13006]]

Sec. 544.2  Charter amendments.

* * * * *
    (c) * * * Such request for reissuance should be filed with the 
Corporate Secretary at the Washington Headquarters Office at the 
address listed at Sec. 516.40(b) of this chapter and contain signatures 
required under Sec. 544.1 of this part, together with such supporting 
documents as may be needed to demonstrate that the amendments were 
properly adopted.

    19. Section 544.5 is amended by revising paragraph (c)(1)(ii) to 
read as follows:


Sec. 544.5  Federal mutual savings association bylaws.

* * * * *
    (c) * * * (1) * * *
    (ii) Applications submitted under paragraph (c)(1)(i) of this 
section are subject to standard treatment processing procedures at part 
516, subparts A and E of this chapter.
* * * * *

PART 545--OPERATIONS

    20. The authority citation for part 545 continues to read as 
follows:

    Authority: 12 U.S.C. 1462a, 1463, 1464, 1828.

    21. Section 545.92 is amended by revising paragraphs (b) and 
(d)(2), and by removing the first sentence of paragraph (f) and adding 
two new sentences in its place, to read as follows:


Sec. 545.92  Branch offices.

* * * * *
    (b) Eligibility. Federal savings associations eligible for 
expedited treatment under Sec. 516.5 of this chapter may establish a 
branch office subject to the procedures in paragraph (f) of this 
section. A Federal savings association subject to standard treatment 
under Sec. 516.5 of this chapter must not establish a branch office 
without prior approval subject to the procedures in paragraph (e) of 
this section.
* * * * *
    (d) * * *
    (2) Submission of application or notice. A Federal savings 
association must comply with Sec. 556.5 of this chapter and must file 
its application or notice within the time frame in Sec. 516.60.
* * * * *
    (f) Approval of branch notice. A notice filed by a Federal savings 
association that qualifies for expedited treatment must be deemed to be 
approved 30 days after its filing with OTS, unless OTS takes one of the 
actions described at Sec. 516.200 of this chapter. OTS will apply the 
review standards set forth in paragraph (e)(1) of this section; or OTS 
determines to process the filing as an application under 
Sec. 516.200(b) of this chapter. * * *
* * * * *

PART 550--FIDUCIARY POWERS OF SAVINGS ASSOCIATIONS

    22. The authority citation for part 550 continues to read as 
follows:

    Authority: 12 U.S.C. 1462a, 1463, 1464.


    23. Section 550.80 is revised to read as follows:


Sec. 550.80  How do I obtain OTS approval?

    You must file an application under part 516, subparts A and E of 
this chapter.

    24. Section 550.260 is amended by revising the first sentence of 
paragraph (b)(2) to read as follows:


Sec. 550.260  How may I invest funds of a fiduciary account?

* * * * *
    (b) * * *
    (2) If you must file a document with the Comptroller of the 
Currency under 12 CFR 9.18, you must also file that document with the 
appropriate Regional Office at Sec. 516.40(a) of this chapter. * * *
* * * * *

    25. Section 550.530 is amended by revising the last sentence to 
read as follows:


Sec. 550.530  How do I surrender fiduciary powers?

    * * * You must file the resolution with the appropriate Regional 
Office at the address listed in Sec. 516.40(a) of this chapter.

PART 552--INCORPORATION, ORGANIZATION, AND CONVERSION OF FEDERAL 
STOCK ASSOCIATIONS

    26. The authority citation for part 552 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a.


    27. Section 552.2-6 is amended by adding the following sentence to 
the end of the section to read as follows:


Sec. 552.2-6  Conversion from stock form depository institution to 
Federal stock association.

    * * * An application for conversion filed under this section is 
subject to the procedures for organization of a federal stock 
organization at Sec. 552.2-1.

    28. Section 552.4 is amended by revising the last sentence of 
paragraph (d) to read as follows:


Sec. 552.4  Charter amendments.

* * * * *
    (d) * * * Such requests for reissuance should be filed with the 
Corporate Secretary at Washington Headquarters Office at the address 
listed in Sec. 516.40(b) of this chapter, and contain signatures 
required under Sec. 552.3 of this part, together with such supporting 
documents as needed to demonstrate that the amendments were properly 
adopted.

    29. Section 552.5 is amended by revising paragraph (b)(1)(ii) to 
read as follows:


Sec. 552.5  Bylaws.

* * * * *
    (b) * * * (1) * * *
    (ii) Applications submitted under paragraph (b)(1)(i) of this 
section are subject to standard treatment processing procedures at part 
516, subparts A and E of this chapter.
* * * * *

PART 555--ELECTRONIC OPERATIONS

    30. The authority citation for part 555 continues to read as 
follows:

    Authority: 12 U.S.C. 1462a, 1463, 1464.


    31. In section 555.310, the first sentence of the introductory text 
of paragraph (a) is revised to read as follows:


Sec. 555.310  How do I notify OTS?

    (a) Notice requirement. You must file a written notice with the 
appropriate Regional Office listed at Sec. 516.40(a) of this chapter at 
least 30 days before you establish a transactional website. * * *
* * * * *

PART 559--SUBORDINATE ORGANIZATIONS

    32. The authority citation for part 559 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1828.

Sec. 559.3  [Amended]

    33. Section 559.3 is amended by:
    a. Removing, in paragraph (e)(2)(i), the phrases ``Sec. 516.3(a) of 
this chapter'' and ``Sec. 516.1 of this chapter'', and by adding in 
lieu thereof the phrases Sec. 516.5 of this chapter'' and ``standard 
treatment processing procedures at part 516, subparts A and E of this 
chapter''; and
    b. Removing, in paragraph (e)(2)(ii), the phrases ``Sec. 516.3(b) 
of this chapter'' and ``Sec. 516.1 of this chapter'', and by adding in 
lieu thereof the phrases Sec. 516.5 of this chapter'' and, ``standard

[[Page 13007]]

treatment processing procedures at part 516, subparts A and E of this 
chapter'' respectively.

    34. Section 559.4 is amended by revising the third sentence of the 
introductory text to read as follows:


Sec. 559.4  What activities are preapproved for service corporations?

    * * * You should read these two sections together to determine 
whether you must file a notice with OTS under Sec. 559.11 of this part, 
or whether you must file an application subject to standard treatment 
processing procedures at part 516, subparts A and E of this chapter to 
request prior written OTS approval in order for your service 
corporation to engage in a particular activity. * * *
* * * * *

    35. Section 559.11 is amended by revising the first sentence and 
the last sentence to read as follows:


Sec. 559.11  What notices are required to establish or acquire a new 
subsidiary or engage in new activities through an existing subsidiary?

    When required by section 18(m) of the Federal Deposit Insurance 
Act, a savings association (``you'') must file a notice (``Notice'') 
under part 516, subpart A of this chapter at least 30 days before 
establishing or acquiring a subsidiary or engaging in new activities in 
a subsidiary. * * * If OTS notifies you within 30 days that the Notice 
presents supervisory concerns, or raises significant issues of law or 
policy, you must apply for and receive OTS's prior written approval 
under the standard treatment processing procedures at part 516, subpart 
A and E of this chapter before establishing or acquiring the subsidiary 
or engaging in new activities in the subsidiary.

    36. Section 559.13 is amended by revising paragraph (b) to read as 
follows:


Sec. 559.13  How may a savings association exercise its salvage power 
in connection with a service corporation or lower-tier entities?

* * * * *
    (b) If OTS notifies you within 30 days that the Notice presents 
supervisory concerns, or raises significant issues of law or policy, 
you must apply for and receive OTS's prior written approval under the 
standard treatment processing procedures at part 516, subparts A and E 
of this chapter before making a salvage investment.
* * * * *

PART 560--LENDING AND INVESTMENT

    37. The authority citation for part 560 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1701j-3, 
1828, 3803, 3806; 42 U.S.C. 4106.


    38. Section 560.32 is amended by revising the second sentence of 
paragraph (c) to read as follows:


Sec. 560.32  Pass-through investments.

* * * * *
    (c) * * * If within that 30-day period OTS notifies you that an 
investment presents supervisory, legal, or safety and soundness 
concerns, you must apply for and receive OTS prior written approval 
under the standard treatment processing procedures at part 516, 
subparts A and E of this chapter before making the investment. * * *
    39. Section 560.35 is amended by revising paragraph (d)(3) to read 
as follows:


Sec. 560.35  Adjustments to home loans.

* * * * *
    (d) * * *
    (3) A Federal savings association may use an index not satisfying 
the requirements of paragraph (d)(2) of this section 30 days after 
filing a notice unless, within that 30-day period, OTS has notified the 
association that the notice presents supervisory concerns or raises 
significant issues of law or policy. If OTS notifies the association of 
such concerns or issues, the Federal savings association may not use 
such an index unless it applies for and receives OTS's prior written 
approval under the standard treatment processing procedures at part 
516, subparts A and E of this chapter.

    40. Section 560.93 is amended by revising the second and third 
sentences of paragraph (d)(3)(iii) to read as follows:


Sec. 560.93  Lending limitations.

* * * * *
    (d) * * *
    (3) * * *
    (iii) * * * A savings association that meets the requirements of 
paragraphs (d)(3)(i), (ii), (iv) and (v) of this section and that meets 
the requirements for ``expedited treatment'' under Sec. 516.5 of this 
chapter may use the higher limit set forth under this paragraph (d)(3) 
if the savings association has filed a notice with OTS that it intends 
to use the higher limit at least 30 days prior to the proposed use. A 
savings association that meets the requirements of paragraphs 
(d)(3)(i), (ii), (iv), and (v) of this section and that meets the 
requirements for ``standard treatment'' under Sec. 516.5 of this 
chapter may use the higher limit set forth under this paragraph (d)(3) 
if the savings association has filed an application with OTS and OTS 
has approved the use the higher limit;
* * * * *

    41. Section 560.160 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 560.160  Asset classification.

    (a)(1) Each savings association must evaluate and classify its 
assets on a regular basis in a manner consistent with, or reconcilable 
to, the asset classification system used by OTS in its Thrift 
Activities Handbook (Available at the address of Washington 
Headquarters Office at Sec. 516.40(b) of this chapter).
* * * * *

PART 562--REGULATORY REPORTING STANDARDS

    42. The authority citation for part 562 continues to read as 
follows:

    Authority: 12 U.S.C. 1463.


    43. Section 562.4 is amended by revising paragraph (b)(1) to read 
as follows:


Sec. 562.4  Audit of savings associations and savings association 
holding companies.

* * * * *
    (b) * * *
    (1) If a savings association has received a composite rating of 3, 
4 or 5, as defined at Sec. 516.5(c) of this chapter; or
* * * * *

PART 563--OPERATIONS

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

    Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468, 
1817, 1820, 1828, 3806; 42 U.S.C. 4106.


    45. Section 563.22 is amended by revising paragraphs (b)(1)(ii), 
(b)(2), (d)(4), (f)(1), and (h)(2) to read as follows:


Sec. 563.22  Merger, consolidation, purchase or sale of assets, or 
assumption of liabilities.

* * * * *
    (b)(1) * * *
    (ii) In the case of a savings association that meets the conditions 
for expedited treatment under Sec. 516.5 of this chapter, convert, 
directly or indirectly, to a national or state bank.
    (2) A savings association that does not meet the conditions for 
expedited treatment under Sec. 516.5 of this chapter

[[Page 13008]]

may not, directly or indirectly, convert to a national or state bank 
without prior application to and approval of OTS, as provided in 
paragraph (h)(2)(ii) of this section.
* * * * *
    (d) * * *
    (4) Applications filed under section 5(d)(3) of the Federal Deposit 
Insurance Act (12 U.S.C. 1815(d)(3)) and paragraph (a) of this section 
must be processed in accordance with the time frames set forth in 
Secs. 516.220 through 516.290 of this chapter, provided that the period 
for review may be extended only if the Office determines that the 
applicant has failed to furnish all requested information or that the 
information submitted is substantially inaccurate, in which case the 
review period may be extended for up to 30 days.
* * * * *
    (f) * * *
    (1) The acquiring savings association does not meet the criteria 
for expedited treatment under Sec. 516.5 of this chapter;
* * * * *
    (h) * * *
    (2) Other transfer transactions--(i) Expedited treatment. A notice 
in conformity with Sec. 516.25(a) of this chapter may be submitted to 
OTS under Sec. 516.40 of this chapter for any transaction under 
paragraph (c) of this section, provided all constituent savings 
associations meet the conditions for expedited treatment under 
Sec. 516.5 of this chapter. Notices submitted under this paragraph must 
be deemed approved automatically by OTS 30 days after receipt, unless 
OTS advises the applicant in writing prior to the expiration of such 
period that the proposed transaction may not be consummated without 
OTS's approval of an application under paragraphs (h)(2)(ii) or 
(h)(2)(iii) of this section.
    (ii) Standard treatment. An application in conformity with 
Sec. 516.25(b) of this chapter and paragraph (d) of this section must 
be submitted to OTS under Sec. 516.40 by each savings association 
participating in a transaction under paragraph (b)(2) or (c) of this 
section, where any constituent savings association does not meet the 
conditions for expedited treatment under Sec. 516.5 of this chapter, 
except as provided in paragraph (h)(2)(iii) of this section. 
Applications under this paragraph must be processed in accordance with 
the procedures in part 516, subparts A and E of this chapter.
    (iii) Standard treatment for transactions under section 5(d)(3) of 
the Federal Deposit Insurance Act. An application in conformity with 
Sec. 516.25(b) of this chapter and paragraph (d) of this section must 
be submitted to OTS under Sec. 516.40 by each savings association which 
will survive any transaction under both section 5(d)(3) of the Federal 
Deposit Insurance Act (12 U.S.C. 1815(d)(3)) and paragraph (c) of this 
section, where any constituent savings association does not meet the 
conditions for expedited treatment under Sec. 516.5 of this chapter. 
Applications under this paragraph must be processed in accordance with 
the procedures in part 516, subparts A and E of this chapter, provided 
that the period for review may be extended only if OTS determines that 
the applicant has failed to furnish all requested information or that 
the information submitted is substantially inaccurate, in which case 
the review period may be extended for up to 30 days.

    46 Section 563.41 is amended by revising paragraph (e)(2)(ii)(A) to 
read as follows:


Sec. 563.41  Loans and other transactions with affiliates and 
subsidiaries.

* * * * *
    (e) * * *
    (2) * * *
    (ii) * * *
    (A) Has a composite rating of 4 or 5, as defined in Sec. 516.5(c) 
of this chapter;
* * * * *

    47. Section 563.81 is amended by revising the first sentence in 
paragraphs (a)(1), (a)(2), and (c) to read as follows:


Sec. 563.81  Issuance of subordinated debt securities and mandatorily 
redeemable preferred stock.

    (a) General--(1) Savings associations receiving standard treatment. 
No savings association subject to standard treatment of its 
applications under Sec. 516.5 of this chapter may issue subordinated 
debt securities or mandatorily redeemable preferred stock includable in 
regulatory capital pursuant to this section or amend the terms of such 
securities unless it has obtained the written approval of OTS. * * *
    (2) Savings associations receiving expedited treatment. No savings 
association eligible for expedited treatment under Sec. 516.5 of this 
chapter may issue subordinated debt securities or mandatorily 
redeemable preferred stock pursuant to this section for inclusion in 
regulatory capital or amend the terms of such securities unless it 
provides notice to OTS, and such notice contains a statement of the 
association's intent to include such securities in regulatory capital. 
* * *
* * * * *
    (c) Form of application or notice; supporting information. 
Applications subject to standard treatment or notices eligible for 
expedited treatment under Sec. 516.5 of this chapter must be in the 
form prescribed by OTS. * * *
* * * * *

    48. Section 563.143 is amended by revising the heading and the 
first sentence of paragraph (a)(1) to read as follows:


Sec. 563.143  Must I file with OTS?

* * * * *
    (a) * * *
    (1) You are not eligible for expedited treatment under Sec. 516.5 
of this chapter. * * *
* * * * *

    49. Section 563.171 is amended by revising paragraph (b)(4) to read 
as follows:


Sec. 563.171  Frequency of safety and soundness examination.

* * * * *
    (b) * * *
    (4) At its most recent examination, OTS determined that the savings 
association was in outstanding or good condition, that is, it received 
a composite rating of 1 or 2, as composite rating defined in 
Sec. 516.5(c) of this chapter;
* * * * *

    50. Section 563.180 is amended by revising paragraph (d)(11) to 
read as follows:


Sec. 563.180  Suspicious Activity Reports and other reports and 
statements.

* * * * *
    (d) * * *
    (11) Obtaining SARs. A savings association or service corporation 
may obtain SARs and the instructions from the appropriate OTS Regional 
Office listed in Sec. 516.40(a) of this chapter.
* * * * *

    51. Section 563.183 is amended by revising paragraph (c)(1) to read 
as follows:


Sec. 563.183  Reports of change in chief executive officer or director; 
other reports; form and filing of such reports.

* * * * *
    (c) Form and filing of reports. (1) Unless otherwise specified by 
OTS, a report required by Sec. 563.181 of this part or this 
Sec. 563.183 must comply with Sec. 516.30 and must be submitted to the 
appropriate Regional Office listed in Sec. 516.40(a) of this chapter.
* * * * *

    52. Section 563.555 is amended by revising paragraph (1) of the 
definition of ``troubled condition'' to read as follows:

[[Page 13009]]

Sec. 563.555  What definitions apply to this subpart?

* * * * *
    Troubled condition means:
    (1) A savings association that has a composite rating of 4 or 5, as 
composite rating is defined in Sec. 516.5(c) of this chapter.
* * * * *

    53. Section 563.565 is revised to read as follows:


Sec. 563.565  What procedures govern the filing of my notice?

    The procedures found in part 516, subpart A of this chapter govern 
the filing of your notice under Sec. 563.560.

PART 563b--CONVERSIONS FROM MUTUAL TO STOCK FORM

    54. The authority citation for part 563b continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901; 15 
U.S.C. 78c, 78l, 78m, 78n, 78w.


Sec. 563b.27  [Amended]

    55. Section 563b.27 is amended in paragraph (e), footnote 1, by 
removing the phrase ``Sec. 516.1(a) of this chapter'', and by adding in 
lieu thereof ``Sec. 516.40(b) of this chapter''.

PART 563f--MANAGEMENT OFFICIAL INTERLOCKS

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

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


    57. Section 563f.6 is amended by revising the last sentence of 
paragraph (a) to read as follows:


Sec. 563f.6  General exemption.

    (a) * * * A depository organization may apply to OTS for an 
exemption under part 516, subpart E, of this chapter.
* * * * *

PART 565--PROMPT CORRECTIVE ACTION

    58. The authority citation for part 565 continues to read as 
follows:

    Authority: 12 U.S.C. 1831o.


Sec. 565.4  [Amended]

    59. Section 565.4 is amended as follows:
    a. Section 565.4(b)(2)(iii)(B) is amended by removing the phrase 
``as defined in Sec. 516.3(c)'' and adding in lieu thereof ``as 
composite rating is defined in Sec. 516.5(c)'';
    b. Section 565.4(b)(3)(iii)(B) is amended by removing the phrase 
``as defined in Sec. 516.3(c)'' and adding in lieu thereof ``as 
composite rating is defined in Sec. 516.5(c)''; and
    c. Section 565.4(c)(2), footnote 1, is amended by removing the 
phrase Sec. 516.1 of this chapter'', and by adding in lieu thereof 
``Sec. 516.40 of this chapter''.

PART 567--CAPITAL

    60. The authority citation for part 567 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1828 (note).


    61. Section 567.3 is amended by revising the third sentence in 
paragraph (d)(2)(i) introductory text, to read as follows:


Sec. 567.3  Individual minimum capital requirements.

* * * * *
    (d) * * *
    (2) * * * (i) * * * Such response must be filed in accordance with 
Secs. 516.30 and 516.40 of this chapter. * * *
* * * * *

    62. Section 567.4 is amended by revising the fifth sentence of 
paragraph (a)(3)(i) to read as follows:


Sec. 567.4  Capital directives.

    (a) * * *
    (3) * * * (i) * * * Such responses must be filed in accordance with 
Secs. 516.30 and 516.40 of this chapter. * * *
* * * * *

    63. Section 567.7 is amended by revising paragraph (f) to read as 
follows:


Sec. 567.7  Interest-rate risk component.

* * * * *
    (f) OTS will provide, upon request, manuals describing the OTS 
Model and guidance at the address set forth in Sec. 516.40(b) of this 
chapter.

PART 574--ACQUISITION OF CONTROL OF SAVINGS ASSOCIATIONS

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

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


    65. Section 574.4 is amended by revising the second sentence of 
paragraph (f)(2) to read as follows:


Sec. 574.4  Control.

* * * * *
    (f) * * *
    (2) * * * Certifications provided for in this paragraph must be 
filed with OTS in accordance with Secs. 516.30 and 516.40 of this 
chapter.
    (ii)(B) is amended by removing the phrase ``as defined in 
Sec. 516.3(c)'' and adding in lieu thereof ``as composite rating is 
defined in Sec. 516.5(c)'';
    b. Section 565.4(b)(3)(iii)(B) is amended by removing the phrase 
``as defined in Sec. 516.3(c)'' and adding in lieu thereof ``as 
composite rating is defined in Sec. 516.5(c)''; and
    c. Section 565.4(c)(2), footnote 1, is amended by removing the 
phrase Sec. 516.1 of this chapter'', and by adding in lieu thereof 
``Sec. 516.40 of this chapter''.

PART 567--CAPITAL

    60. The authority citation for part 567 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1828 (note).


    61. Section 567.3 is amended by revising the third sentence in 
paragraph (d)(2)(i) introductory text, to read as follows:


Sec. 567.3  Individual minimum capital requirements.

* * * * *
    (d) * * *
    (2) * * * (i) * * * Such response must be filed in accordance with 
Secs. 516.30 and 516.40 of this chapter. * * *
* * * * *

    62. Section 567.4 is amended by revising the fifth sentence of 
paragraph (a)(3)(i) to read as follows:


Sec. 567.4  Capital directives.

    (a) * * *
    (3) * * * (i) * * * Such responses must

    66. Section 574.6 is amended by revising the second sentence of 
paragraph (f)(4) to read as follows:


Sec. 574.6  Procedural requirements.

* * * * *
    (f) * * *
    (4) * * * If the Office receives a request for the information 
under the Freedom of Information Act, OTS will advise the filing party 
before it discloses material for which confidential treatment has been 
requested.
* * * * *

PART 575--MUTUAL HOLDING COMPANIES

    67. The authority citation for part 575 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1828, 2901.


    68. Section 575.3 is amended by revising paragraph (b)(2) 
introductory text to read as follows:

[[Page 13010]]

Sec. 575.3  Mutual holding company reorganizations.

* * * * *
    (b) * * *
    (2) Sixty days have passed since OTS received the Reorganization 
Notice and deemed it complete under Sec. 516.210 or Sec. 516.220 of 
this chapter, and OTS has not:
* * * * *

    69. Section 575.13 is amended by revising the third sentence of 
paragraph (a)(1), paragraph (b), the first sentence of paragraph 
(c)(2), and the first and last sentences of paragraph (e), to read as 
follows:


Sec. 575.13  Procedural requirements.

    (a) * * * (1) * * * Proxies and proxy statements must be filed in 
accordance with Sec. 563b.5(e) of this chapter and must be addressed to 
the Business Transactions Division, Chief Counsel's Office, Office of 
Thrift Supervision, at the address set forth in Sec. 516.40(b) of this 
chapter. * * *
* * * * *
    (b) Applications under this part. Except as provided in paragraph 
(c) of this section, any application, notice or certification required 
to be filed with OTS under this part must be filed in accordance with 
part 516, subpart A of this chapter.
    (c) * * *
    (2) Filing instructions. Any Reorganization Notice submitted under 
Sec. 575.3(b) of this part must be filed in accordance with part 516, 
subpart A of this chapter. * * *
* * * * *
    (e) Time-frames. All Reorganization Notices and applications filed 
pursuant to this part must be processed in accordance with standard 
treatment processing procedures at part 516, subparts A and E. * * * 
The review by OTS of proxy solicitation materials, including forms of 
proxy and proxy statements, and of any other materials used in 
connection with the issuance of stock under Sec. 575.7 of this part 
must not be subject to the applications processing time-frames set 
forth in Secs. 516.210 through 516.290 of this chapter.
* * * * *

PART 584--REGULATED ACTIVITIES

    70. The authority citation for part 584 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1468.


    71. Section 584.2-2 is amended by revising the last sentence of 
paragraph (b) to read as follows:


Sec. 584.2-2  Permissible bank holding company activities of savings 
and loan holding companies.

* * * * *
    (b) * * * OTS must act upon such application under the guidelines 
in part 516, subpart E of this chapter.
* * * * *

    Dated: February 23, 2001.

    By the Office of Thrift Supervision.
Ellen Seidman,
Director.
[FR Doc. 01-4996 Filed 3-1-01; 8:45 am]
BILLING CODE 6720-01-P