[Federal Register Volume 67, Number 20 (Wednesday, January 30, 2002)]
[Rules and Regulations]
[Pages 4325-4326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2171]



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 Rules and Regulations
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  Federal Register / Vol. 67, No. 20 / Wednesday, January 30, 2002 / 
Rules and Regulations  

[[Page 4325]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 28

[Docket No. 02-02]
RIN 1557-AC05


International Banking Activities: Capital Equivalency Deposits

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.

ACTION: Interim rule with request for comments.

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SUMMARY: The Comptroller of the Currency is amending its regulation 
regarding the capital equivalency deposits (CED) that foreign banks 
with Federal branches or agencies must establish and maintain pursuant 
to section 4(g) of the International Banking Act of 1978. This interim 
rule revises certain requirements regarding CED deposit arrangements to 
increase flexibility for and reduce burden on certain Federal branches 
and agencies, based on a supervisory assessment of the risks presented 
by the particular institution. The OCC is issuing this rule on an 
interim basis effective January 30, 2002.

DATES: Effective Date: This rule is effective on January 30, 2002.
    Comment Date: Comments must be received by April 1, 2002.

ADDRESSES: Please direct comments to: Public Information Room, Office 
of the Comptroller of the Currency, 250 E Street, SW., Mailstop 1-5, 
Washington, DC, 20219, Attention: Docket No. 02-02. Comments are 
available for inspection and photocopying at that address. In addition, 
comments may be sent by facsimile transmission to number 202-874-4448, 
or by electronic mail to [email protected]. Due to recent, 
temporary disruptions in the OCC's mail service, commenters are 
encouraged to use e-mail delivery if possible.

FOR FURTHER INFORMATION CONTACT: Martha Clarke, Counsel, Legislative 
and Regulatory Activities Division, 202-874-5090; or Carlos Hernandez, 
International Advisor, International Banking and Finance Division, 202-
874-4730.

SUPPLEMENTARY INFORMATION: This interim rule revises certain 
requirements regarding CED deposit arrangements to increase flexibility 
and reduce burden by permitting the OCC to impose deposit requirements 
based on the same supervision by risk approach that it uses in its 
supervision of national banks. The interim rule revises 12 CFR 28.15(d) 
to clarify that the OCC may vary the terms of CED Agreements 
(Agreement) based on the circumstances and supervisory risks present at 
a particular branch or agency. For example, an Agreement may permit a 
foreign bank to withdraw assets from its CED account, reducing the net 
value of the assets held in the account without OCC approval, as long 
as the withdrawal does not reduce the value below the minimum CED level 
required for that institution. Moreover, it may not be necessary in all 
cases for a foreign bank to pledge its CED assets to the OCC or for the 
depository bank to be a signatory to the Agreement unless required by 
the OCC. The OCC will make these determinations on a case by case 
basis, consistent with its supervisory assessment of the risks 
presented by the particular institution.

Comment Solicitation

    The OCC requests comment on all aspects of this interim rule.
    The OCC also requests comment on whether the interim rule is 
written clearly and is easy to understand. On June 1, 1998, the 
President issued a memorandum directing each agency in the Executive 
branch to write its rules in plain language. This directive applies to 
all new proposed and final rulemaking documents issued on or after 
January 1, 1999. In addition, Public Law 106-102 requires each Federal 
agency to use plain language in all proposed and final rules published 
after January 1, 2000. The OCC invites comments on how to make this 
rule clearer. For example, you may wish to discuss:
    (1) Whether we have organized the material to suit your needs;
    (2) Whether the requirements of the rule are clear; or
    (3) Whether there is something else we could do to make the rule 
easier to understand.

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the OCC certifies that this proposal will not have a 
significant economic impact on a substantial number of small entities. 
The principal effect of the rule is to remove several requirements with 
respect to deposit arrangements for the CED and reduce burden on 
qualifying foreign banks with Federal branches and agencies.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
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 OCC has determined that 
the interim rule will not result in expenditures by State, local, or 
tribal governments or by the private sector of $100 million or more. 
Accordingly, the OCC has not prepared a budgetary impact statement or 
specifically addressed the regulatory alternatives considered.

Executive Order 12866

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

Effective Date

    The rule is effective immediately on an interim basis. Pursuant to 
5 U.S.C. 553, agencies may issue a rule without public notice and 
comment when the agency, for good cause, finds that such notice and 
public comment are impracticable, unnecessary, or contrary

[[Page 4326]]

to the public interest. Section 553 also permits agencies to issue a 
rule without delaying its effectiveness if the agency finds good cause 
for the immediate effective date.
    The OCC finds good cause to issue this rule without notice and 
public comment and without a delayed effective date. The change will 
enable the OCC to make determinations on a case by case basis, 
consistent with its supervisory assessment of the risks presented by a 
particular institution, as to whether a foreign bank should continue to 
be required to pledge its CED assets to the OCC or to obtain the OCC's 
approval to reduce the aggregate value of the CED assets by withdrawal. 
These requirements are costly and burdensome, and where they are not 
required for safety and soundness reasons, it is in the public interest 
to make this interim rule effective immediately so that qualifying 
foreign banks that do not pose safety or soundness issues may take 
advantage immediately of the cost savings and burden reduction benefits 
of the change. The OCC is seeking public comment on all aspects of this 
interim rule and will consider those comments when promulgating the 
final rule. The OCC will publish in the Federal Register a response to 
any significant adverse comments received, along with modifications to 
the rule, if any.
    Subject to certain exceptions, 12 U.S.C. 4802(b)(1) provides that 
new regulations and amendments to regulations prescribed by a federal 
banking agency that impose additional reporting, disclosure, or other 
new requirements on an insured depository institution must take effect 
on the first day of a calendar quarter that begins on or after the date 
on which the regulations are published in final form. The interim rule 
imposes no additional reporting, disclosure, or other new requirements 
on insured depository institutions. Instead it removes restrictions for 
qualifying foreign banks with Federal branches and agencies. For this 
reason, section 4802(b)(1) does not apply to this rulemaking.

Paperwork Reduction Act

    The OCC may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
The information collection requirements contained in 12 CFR Part 28 
have been approved under OMB control number 1557-0102.
    The information collection requirements contained in this rule are 
contained in section 28.15(d). Under this section as amended, capital 
equivalency deposits may not be reduced in value below the minimum 
required for that branch or agency without prior OCC approval, and 
Federal branches and agencies are required to maintain records.
    Estimated number of respondents: 35.
    Estimated number of responses: 35.
    Estimated burden hours per response: 1 hour.
    Estimated number of recordkeepers: 35.
    Estimated number of recordkeeping burden hours:
    Estimated total burden hours:
    The OCC has a continuing interest in the public's opinion regarding 
collections of information. Members of the public may submit comments 
regarding any aspects of the collections of information to Jessie 
Dunaway, OCC Clearance Officer, 250 E Street, SW., Mailstop 8-4, 
Washington, DC 20219. Due to the temporary delay in mail delivery, you 
may prefer to send your comments by electronic mail to: 
[email protected].
    The OCC invites comments on:
    (1) Whether the collections of information are necessary for the 
proper performance of the agency's functions, including whether the 
information has practical utility:
    (2) The accuracy of the estimate of the burden;
    (3) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (4) Ways to minimize the burden of the information collection on 
respondents, including the use of automated collection techniques or 
other forms of information technology;
    (5) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchases of services to provide information.

List of Subjects in 12 CFR Part 28

    Foreign banking, National banks, Reporting and recordkeeping 
requirements.

Authority and Issuance

    For the reasons set forth in the preamble, the OCC amends part 28 
of chapter I of title 12 of the Code of Federal Regulations as follows:

PART 28--INTERNATIONAL BANKING ACTIVITIES

    1. The authority citation for part 28 is amended to read as 
follows:

    Authority: 12 U.S.C. 1 et seq., 24(Seventh), 93a, 161, 602, 
1818, 3101 et seq., and 3901 et seq.


    2. In Sec. 28.15, paragraphs (d)(1) and (d)(2) are revised to read 
as follows:


Sec. 28.15  Capital equivalency deposits.

* * * * *
    (d) * * * *
    (1) May not be reduced in value below the minimum required for that 
branch or agency without the prior approval of the OCC;
    (2) Must be maintained pursuant to an agreement prescribed by the 
OCC that shall be a written agreement entered into with the OCC for 
purposes of section 8 of the Federal Deposit Insurance Act, 12 U.S.C. 
1818; and
* * * * *

    Dated: January 18, 2002.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 02-2171 Filed 1-29-02; 8:45 am]
BILLING CODE 4810-33-P