[Federal Register Volume 66, Number 222 (Friday, November 16, 2001)]
[Rules and Regulations]
[Pages 57645-57648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28692]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 66, No. 222 / Friday, November 16, 2001 /
Rules and Regulations
[[Page 57645]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 8
[Docket No. 01-23]
RIN 1557-ACOO
Assessment of Fees
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of the Comptroller of the Currency (OCC) is
amending 12 CFR 8.2(a), which sets forth the formula for the semiannual
assessment the OCC charges each national bank. The amendment revises
the formula to establish a minimum base amount for the semiannual
assessment for the first assessment bracket ($0-$2 million) of the
assessment schedule. This change will enable the OCC to modestly adjust
its assessments to better align with its costs of supervision.
EFFECTIVE DATE: December 31, 2001.
FOR FURTHER INFORMATION CONTACT: Michele Meyer, Counsel, Legislative
and Regulatory Activities Division, (202) 874-5090; or David Nebhut,
Director, Policy Analysis, (202) 874-5220.
SUPPLEMENTARY INFORMATION:
I. Background
The OCC charters, regulates, and supervises approximately 2,200
national banks and 58 Federal branches and agencies of foreign banks in
the United States, accounting for approximately 55 percent of the
nation's banking assets. Our mission is to ensure a safe, sound, and
competitive national banking system that supports the citizens,
communities, and economy of the United States.
The OCC funds the activities it undertakes to carry out this
mission through assessments on institutions regulated by the OCC. The
National Bank Act authorizes the OCC to collect assessments, fees, or
other charges as necessary or appropriate to carry out the
responsibilities of the Office. 12 U.S.C. 482 (Supp. 2000). The statute
requires that our charges be set to meet the Comptroller's expenses in
carrying out authorized activities. Id. Pursuant to part 8 of its
regulations, the OCC currently assesses national banks and Federal
branches and agencies according to the following formula, set forth in
the table at Sec. 8.2(a):
------------------------------------------------------------------------
If the bank's total assets The semiannual assessment is:
(consolidated domestic and -------------------------------------------
foreign subsidiaries) are: This amount-- Plus Of excess
----------------------------------------------------------- over--
Over-- But not over-- Base amount Marginal -------------
-------------- --------------- rates
--------------- --------------- Column E
Column A Column B Column C Column D
------------------------------------------------------------------------
Million Million Million
$0 $2 $0 Y1 $0
2 20 X1 Y2 2
20 100 X2 Y3 20
100 200 X3 Y4 100
200 1,000 X4 Y5 200
1,000 2,000 X5 Y6 1,000
2,000 6,000 X6 Y7 2,000
6,000 20,000 X7 Y8 6,000
20,000 40,000 X8 Y9 20,000
40,000 ............. X9 Y10 40,000
------------------------------------------------------------------------
Under this formula, the OCC assesses a national bank according to
the amount of assets the bank reports on its Consolidated Report of
Condition (Including Domestic and Foreign Subsidiaries) (``Call
Report'') filed for the quarter preceding the semiannual assessment
period. A bank calculates the book-asset component of its assessment by
first identifying which of 10 asset categories it fits within. If the
bank fits within the smallest category (i.e., $0 to $2 million), it
multiplies all of its assets by a marginal rate that is provided each
year by the OCC in the Notice of the Comptroller of the Currency Fees
(Notice of Fees). Under this system, a national bank with $2 million in
assets currently pays approximately $3,211 ($2 million multiplied by
the 0.0016057180 marginal rate currently in effect) semiannually for
the cost of its supervision by the OCC.
If the bank fits within any of the other nine asset categories, the
bank pays a base amount provided in the Notice of Fees for that
category (which equals the assessment on the largest bank in the next
smallest asset category), plus an amount determined by multiplying a
marginal rate (also provided in the Notice of Fees) by the amount of
its assets that exceed the low end-point of its category. Thus, for
example, a bank with $10 million in assets would fall into the second
asset category ($2 million to $20 million) and would pay an assessment
equal to $3,211, which is the current base amount for its category,
plus $1605, which is the product of the current marginal rate for that
category (0.0002007170), multiplied by $8 million (the amount of its
assets that
[[Page 57646]]
exceeds the $2 million low-end point for its category).\1\
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\1\ This illustrative calculation assumes that there are no
circumstances that, under part 8, would require adjustments to the
assessment to reflect, for instance, a bank's status as a non-lead
bank or a composite supervisory rating of 3, 4, or 5 under the
Uniform Financial Institutions Rating System or ROCA rating (which
rates risk management, operational contols, compliance, and asset
quality), as apprpriate. See 12 CFR 8.2(a)(6) and (7).
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II. Description of the Proposal
On September 25, 2001, the OCC published a notice of proposed
rulemaking in the Federal Register (66 FR 48983) to amend this
assessment formula. The OCC proposed revising the table at Sec. 8.2(a)
to establish a minimum base amount for the semiannual assessment for
the first assessment bracket of the assessment schedule. To accomplish
this, the proposal deleted the figure of $0 as the base amount in
Column C for the first asset bracket and replaced it with a variable
(X1). The proposal also deleted the variable Y1 in Column D and
replaced it with 0. The proposed revised table at Sec. 8.2(a) looked as
follows:
------------------------------------------------------------------------
If the bank's total assets The semiannual assessment is:
(consolidated domestic and -------------------------------------------
foreign subsidiaries) are: This amount-- Plus Of excess
----------------------------------------------------------- over--
Over-- But not over-- Base amount Marginal -------------
-------------- --------------- rates
--------------- --------------- Column E
Column A Column B Column C Column D
------------------------------------------------------------------------
Million Million Million
$0 $2 X1 0
2 20 X2 Y1 $2
20 100 X3 Y2 20
100 200 X4 Y3 100
200 1,000 X5 Y4 200
1,000 2,000 X6 Y5 1,000
2,000 6,000 X7 Y6 2,000
6,000 20,000 X8 Y7 6,000
20,000 40,000 X9 Y8 20,000
40,000 ............. X10 Y9 40,000
------------------------------------------------------------------------
This proposed assessment formula requires national banks to pay an
assessment equal to the base amount (X1) for assets subject to the
first asset bracket. For each semiannual assessment period, the base
amount (X1) would be established by the Notice of Fees.
The OCC received nine comments on the proposal, all of which
expressed concern about the impact of the increase on small banks. For
the reasons discussed below, we are adopting the rule as proposed.
III. Discussion of Final Rule and Comments Received
The OCC is revising the table at Sec. 8.2(a) as proposed to
establish a minimum base amount for the semiannual assessment for the
first asset category of the assessment schedule. As explained in the
proposal, the dollar amount of the anticipated increased semiannual
assessment will be the same for every national bank with at least $2
million in balance sheet assets.
The commenters were concerned that the effect of the proposed
increase would be proportionately greater for the smallest national
banks than for larger banks. These commenters believe that the increase
is unfair and amounts to an undue burden on small banks, particularly
those operating in areas that are experiencing economic decline.
Several commenters suggested mitigating the effect of the increase by
phasing it in over two or three years. Others suggested increasing
assessments based on a flat percentage of assets or adopting a
progressive dollar increase for each asset category so that the
percentage increase for the smaller institutions is not as high as with
a flat dollar increase.
We have considered carefully how changes to our assessment schedule
would allocate the costs of OCC operations among national banks of
different sizes and concluded that adoption of the proposed increase is
warranted for the following reasons. First, the principal purpose of
the proposal was to align the semiannual assessment for all national
banks more closely with the increasing costs of the OCC's supervision.
The final rule accomplishes that objective by modestly increasing the
amount of the assessment for the asset category that is applicable to
all national banks.
Second, the final rule enables the OCC to strike an appropriate
balance between assessing each national bank for its fair share of the
OCC's expenses and moderating the impact of the increase on small
national banks. We continue to anticipate, as we said in the preamble
to the proposed rule, that the December 1, 2001, Notice of Fees will
set a semiannual base amount for the smallest asset category in the
range of $5,000 and that the marginal rate for that asset category will
be 0. Applying a base amount of $5,000 and a marginal rate of 0 to
national banks in the smallest asset category results in a minimum
semiannual assessment charge for these banks of $5,000, or an increase
of $1,789 for a bank with balance sheet assets of $2 million. The
assessment for banks in each of the larger categories (X2-X10) would
increase by the same dollar amount, because the base amount for any
category is the maximum that a bank in the immediately preceding asset
category would pay.
This approach enables the OCC to allocate its costs of supervision
more equitably among national banks, and particularly to narrow the gap
between the OCC's overall costs to supervise, examine and regulate
smaller banks, and what these institutions pay in assessments. Although
the amount of the increase will represent a proportionately greater
amount of a smaller bank's total assessment than will be the case for a
larger bank that pays a larger total assessment, the greater
proportionate increase will affect the category of banks where the
greatest disparity currently exists between the assessments those banks
pay and the OCC's overall costs attributable to them.
Even so, the relatively modest size, in dollars, of the anticipated
base amount results in a relatively modest increase, in dollars, even
for the smallest banks. Because the OCC has decided on this approach to
mitigate the effects of the increase on the smallest banks, we have
[[Page 57647]]
declined to adopt a multi-year phase-in period, which could have
resulted in an assessment increase that, ultimately, would need to be
greater than we anticipate under the approach we have adopted, in order
to reflect increases in costs of the OCC attributable to each
institution.
IV. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5
U.S.C. 605(b) (RFA), the regulatory flexibility analysis otherwise
required under section 604 of the RFA is not required if the agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities and publishes its certification
and a short, explanatory statement in the Federal Register along with
its rule.
Pursuant to section 605(b) of the RFA, the OCC hereby certifies
that this final rule will not have a significant economic impact on a
substantial number of small entities. The OCC has reviewed the impact
this final rule will have on small national banks. For purposes of this
final rule, the OCC defines ``small national banks'' to be those banks
with less than $100 million in total assets. Based on that review, the
OCC certifies that the final rule will not have a significant economic
impact on a substantial number of small entities. The basis for this
conclusion is that the minimum semiannual assessment for these banks
will increase by only approximately $1,789. The OCC does not believe
this to be a significant economic impact. Accordingly, a Regulatory
Flexibility Act analysis is not required.
V. Executive Order 12866
The OCC has determined that this final rule is not a significant
regulatory action under Executive Order 12866.
VI. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532 (Unfunded Mandates Act), requires that the agency prepare a
budgetary impact statement before promulgating any rule likely to
result in a Federal mandate that may result in the 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 the agency to identify and consider a reasonable number
of regulatory alternatives before promulgating the rule. The OCC has
determined that this 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, the OCC has not prepared
a budgetary impact statement or specifically addressed any regulatory
alternatives. As noted above, for a national bank with at least $2
million in total assets, the final rule will increase the bank's
semiannual assessments by $1,789.
VII. Effective Date
Any new regulation that imposes ``additional reporting, disclosure,
or other requirements on insured depository institutions shall take
effect on the first day of a calendar quarter which begins on or after
the date on which the regulations are published in final form,'' unless
certain exceptions apply. Riegle Community Development and Regulatory
Improvement Act of 1994, Pub. L. 103-325, Sec. 302(b) (September 23,
1994). This rulemaking imposes no such additional reporting,
disclosure, or other requirements. Accordingly, the requirement to
delay the effective date until the first day of the next calendar
quarter does not apply, and the rule will become effective December 31.
List of Subjects in 12 CFR Part 8
National banks, Reporting and recordkeeping requirements.
Authority and Issuance
For the reasons set forth in the preamble, the OCC amends part 8 of
chapter I of title 12 of the Code of Federal Regulations as follows:
PART 8--ASSESSMENT OF FEES
1. The authority citation for part 8 continues to read as follows:
Authority: 12 U.S.C. 93a, 481, 482, 1867, 3102, and 3108; 15
U.S.C. 78c and 781; and 26 D.C. Code 102.
2. In Sec. 8.2, paragraph (a) is revised to read as follows:
Sec. 8.2 Semiannual assessment.
(a) Each national bank and each District of Columbia bank shall pay
to the Comptroller of the Currency a semiannual assessment fee, due by
January 31 and July 31 of each year, for the six-month period beginning
30 days before each payment date. The amount of the semiannual
assessment paid by each bank is computed as follows:
------------------------------------------------------------------------
If the bank's total assets The semiannual assessment is:
(consolidated domestic and -------------------------------------------
foreign subsidiaries) are: This amount-- Plus Of excess
----------------------------------------------------------- over--
Over-- But not over-- Base amount Marginal -------------
-------------- --------------- rates
--------------- --------------- Column E
Column A Column B Column C Column D
------------------------------------------------------------------------
Million Million Million
$0 $2 X1 0
2 20 X2 Y1 $2
20 100 X3 Y2 20
100 200 X4 Y3 100
200 1,000 X5 Y4 200
1,000 2,000 X6 Y5 1,000
2,000 6,000 X7 Y6 2,000
16,000 20,000 X8 Y7 6,000
20,000 40,000 X9 Y8 20,000
140,000 ............. X10 Y9 40,000
------------------------------------------------------------------------
[[Page 57648]]
* * * * *
Dated: November 9, 2001.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 01-28692 Filed 11-15-01; 8:45 am]
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