[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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  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.

-----------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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]
BILLING CODE 4810-33-P