[Federal Register Volume 66, Number 89 (Tuesday, May 8, 2001)]
[Rules and Regulations]
[Pages 23153-23155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11573]


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DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 552

[No. 2001-34]
RIN 1550-AB46


Conversion From Stock Form Depository Institution to Federal 
Stock Association

AGENCY: Office of Thrift Supervision, Treasury.

ACTION: Direct final rule.

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SUMMARY: The Office of Thrift Supervision (OTS) is amending its 
regulation on conversions from stock from depository institutions to 
federal stock savings associations. This direct final rule clarifies 
that the resulting federal stock savings association in such 
transactions succeeds to all the rights, property, and obligations of 
the converting institution. This amendment merely codifies OTS's 
interpretation of its existing regulation.

DATES: The direct final rule is effective July 9, 2001, without further 
notice, unless OTS receives significant adverse comments by June 7, 
2001. If OTS receives such comments, it will publish a timely 
withdrawal informing the public that this rule will not take effect.

ADDRESSES: Mail: Send comments to Regulation Comments, Chief Counsel's 
Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, 
DC 20552, Attention Docket No. 2001-34.
    Delivery: Hand deliver comments to the Guard's Desk, East Lobby 
Entrance, 1700 G Street, NW., from 9:00 a.m. to 4:00 p.m. on business 
days, Attention Regulation Comments, Chief Counsel's Office, Docket No. 
2001-34.
    Facsimiles: Send facsimile transmissions to FAX Number (202) 906-
6518, Attention Docket No. 2001-34.
    E-Mail: Send e-mails to [email protected], Attention 
Docket No. 2001-34, and include your name and telephone number.
    Public Inspection: Comments and the related index will be posted on 
the OTS Internet Site at www.ots.treas.gov. In addition, you may 
inspect comments at the Public Reading Room, 1700 G St. NW., by 
appointment. To make an appointment for access, call (202) 906-5922, 
send an e-mail to public.info@ots.treas.gov">public.info@ots.treas.gov, or send a facsimile 
transmission to (202) 906-7755. (Prior notice identifying the materials 
you will be requesting will assist us in serving you.) Appointments 
will be scheduled on business days between 10:00 a.m. and 4:00 p.m. In 
most cases, appointments will be available the next business day 
following the date a request is received.

FOR FURTHER INFORMATION CONTACT: Aaron B. Kahn, (202) 906-6263, Special 
Counsel, or Kevin A. Corcoran, (202) 906-6962, Assistant Chief Counsel, 
Business Transactions Division, Chief Counsel's Office, Office of 
Thrift Supervision, 1700 G Street, NW., Washington DC 20552.

SUPPLEMENTARY INFORMATION:

Background

    OTS's regulations at 12 CFR 552.2-6 provides that, with OTS 
approval, any stock depository institution that is, or is eligible to 
become, a member of a Federal Home Loan Bank may convert to a federal 
stock savings association if the converting institution has deposits 
insured by the Federal Deposit Insurance Corporation (FDIC) at the time 
of conversion, and complies with all applicable statutes and 
regulations, including section 5(d) of the Federal Deposit Insurance 
Act.\1\ This regulation does not explicitly address the succession of 
the federal association resulting from such a conversion to the rights, 
obligations and property of the converting institution. However, as a 
matter of practice OTS treats federal stock associations that have 
resulted from direct conversions pursuant to 12 CFR 552.2-6 as the 
corporate successors of the converting institutions.
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    \1\ 12 U.S.C. 1815(d).
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    OTS regulations addressing similar transactions explicitly provide 
that the resulting federal association succeeds to the rights, 
obligations, and property of a converted or disappearing entity. This 
is true, for example, for conversions of mutual depository institutions 
to federal mutual savings associations \2\ and the merger or 
consolidation of stock institutions that result in a federal stock 
association.\3\
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    \2\ 12 CFR 543.14 (2000).
    \3\ See 12 CFR 552.13(l) (2000).
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    To clarify the legal consequences of direct conversions under 12 
CFR 552.2-6, OTS is amending that regulation to provide explicitly that 
a converted

[[Page 23154]]

federal stock association succeeds to all the rights, obligations and 
property of its corporate predecessor.
    This action will not change the existing treatment of federal stock 
associations that have converted from a stock depository institution. 
Rather, the amendment merely codifies the agency's existing 
interpretation of its regulation. The text of the amendment has been 
derived from a comparable provision pertaining to the merger and 
consolidation of federal stock associations that appears at 12 CFR 
552.13(l).

Rulemaking Procedures

    Direct final rulemaking is a technique for expediting the issuance 
of non-controversial rules. Under this procedure, an agency may publish 
a rule in the Federal Register with a statement that, unless a 
significant adverse comment is received within a specified time period, 
the rule will become effective as a final rule on a particular date. If 
a significant adverse comment is filed, however, the agency must 
withdraw the direct final rule and complete standard notice and comment 
procedures. This procedure permits an agency to issue final rules 
expeditiously, while at the same time offering the public the 
opportunity to challenge the agency's view that the rule is non-
controversial.
    The Administrative Conference of the United States adopted 
Recommendation 95-4 encouraging the use of direct final rulemaking,\4\ 
and recommending that agencies develop a direct final rulemaking 
process for issuing rules that are unlikely to result in significant 
adverse comments. OTS recently used the direct final rule procedure to 
remove a regulation on the transfer and repurchase of government 
securities. See 65 FR 16302 and 16350 (March 28, 2000) and 65 FR 30527 
(May 12, 2000).
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    \4\ 60 FR 43108 (Aug. 18, 1995).
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    OTS has concluded that this rule is non-controversial and should 
elicit no significant adverse comment. Accordingly, the agency has 
determined that it is appropriate to apply direct final rulemaking 
procedures. Therefore, consistent with the Administrative Conference's 
recommendations, OTS is applying the following procedures in this 
rulemaking:
    OTS is publishing this notice of direct final rule in the final 
rule section of the Federal Register and is including an opportunity 
for public comment on the substance of the change (i.e., a 30-day 
public comment period). OTS has also included a statement of basis and 
purpose for the rule and has discussed relevant substantive issues in 
the discussion above.
    The direct final rule will automatically become effective in 60 
days, unless OTS receives a significant adverse comment within the 30-
day comment period. If a timely, significant adverse comment is 
received, OTS will withdraw the direct final rule before the stated 
effective date. To be a significant adverse comment, the comment must 
explain why the rule would be inappropriate, including challenges to 
the rule's underlying premise or approach, or why the rule would be 
ineffective or unacceptable without a change.
    To ensure that the promulgation of a final rule will not be delayed 
if significant adverse comments are submitted, OTS has published a 
related notice of proposed rulemaking (NPRM) elsewhere in today's 
Federal Register. This related notice cross-references the direct final 
rule. The related notice indicates that if a timely, significant 
adverse comment on the matter is received, OTS will address all public 
comments in subsequent final rule based on the NPRM. If no significant 
adverse comments are timely received, OTS will take no further action 
on the NPRM.

Effective Date

    This direct final rule imposes no additional requirements on 
insured depository institutions. This rule is therefore exempt from the 
requirement found in section 302 of the Riegle Community Development 
and Regulatory Improvement Act of 1994 \5\ that regulations must not 
take effect before the first day of the quarter following publication.
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    \5\ Pub. L. No. 103-325, 12 U.S.C. 4802.
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Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act,\6\ 
the Director certifies that this direct final rule will not have a 
significant economic impact on a substantial number of small entities. 
The rule merely codifies an existing OTS interpretation.
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    \6\ Pub. L. No. 96-354, 5 U.S.C. 601.
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Executive Order 12866

    OTS has determined that this direct final rule is not a 
``significant regulatory action'' for purposes of Executive Order 
12866.

Unfunded Mandates Reform Act of 1995

    OTS has determined that the requirements of this direct final rule 
will not result in expenditures by State, local, and tribal governments 
or by the private sector of $100 million or more in any one year. 
Accordingly, a budgetary impact statement is not required under section 
202 of the Unfunded Mandates Reform Act of 1995.

Federalism

    Executive Order 13132 imposes certain requirements on an agency 
when formulating and implementing polices that have federalism 
implications or taking actions that preempt state law. OTS has 
determined that this direct final rule will not have substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government, and will not 
preempt State law.

List of Subjects in 12 CFR Part 552

    Reporting and recordkeeping requirements, Savings associations, 
Securities.

    Accordingly, the Office of Thrift Supervision hereby amends title 
12, chapter V of the Code of Federal Regulations as set forth below.

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

    1. The authority citation for Part 552 continues to read as 
follows:

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


    2. Section 552.2-6 is amended by designating the existing section 
as paragraph (a) and adding paragraph (b) to read as follows:


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

    (a) * * *
    (b) Any and all of the assets and other property (whether real, 
personal, mixed, tangible or intangible, including choses in action, 
rights, and credits) of the former stock form depository institution 
become assets and property of the Federal stock association when the 
conversion occurs. Similarly, any and all of the obligations and debts 
of or claims against the former stock form depository institution 
become obligations and debts of and claims against the Federal stock 
association when the conversion occurs. In effect, the Federal stock 
association is the same as the former stock form depository institution 
with respect to any and all assets, property, claims and debts of or

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claims against the former stock form depository institution.

    Dated: May 2, 2001.

    By the Office of Thrift Supervision.
Ellen Seidman,
Director.
[FR Doc. 01-11573 Filed 5-7-01; 8:45 am]
BILLING CODE 6720-01-P