[Federal Register Volume 67, Number 137 (Wednesday, July 17, 2002)]
[Rules and Regulations]
[Pages 46840-46842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17918]


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DEPARTMENT OF THE TREASURY

5 CFR Part 3101

RIN 3209-AA15


Supplemental Standards for Ethical Conduct for Employees of the 
Department of Treasury

AGENCY: Department of the Treasury (Department).

ACTION: Final rule; amendment.

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SUMMARY: The Department of the Treasury, with the concurrence of the 
Office of Government Ethics, is issuing this final rule to amend the 
Supplemental Standards of Ethical Conduct for Employees of the 
Department of the Treasury (Supplemental Regulations) that govern the 
use of national bank credit cards by employees of the Office of the 
Comptroller of the Currency (OCC). This final rule amends the 
Supplemental Regulations to follow more closely the statutory 
restrictions on the use of national bank credit cards by OCC employees 
and to increase OCC supervisors' flexibility in making work 
assignments.

EFFECTIVE DATE: July 17, 2002.

FOR FURTHER INFORMATION CONTACT: Virginia R. Canter, Senior Counsel 
(Ethics), Office of the Assistant General Counsel (General Law and 
Ethics), Department of the Treasury, (202) 622-0450, 1500 Pennsylvania 
Avenue, NW., Washington, DC 20220; Barrett Aldemeyer, OCC Ethics 
Counsel, (202) 874-4460, or MaryAnn Orr Nash, Counsel, OCC Legislative 
and Regulatory Activities Division, (202) 874-5090, 250 E St., SW. , 
Washington, DC 20219.

SUPPLEMENTARY INFORMATION: The Supplemental Standards of Ethical 
Conduct for Employees of the Department of Treasury, at 5 CFR 3101.108, 
set forth rules that apply to employees of the Office of the 
Comptroller of the Currency (OCC). This final rule amends 
Sec. 3101.108(b), which prohibits OCC employees from borrowing, 
including borrowing through the use of a credit card, from a national 
bank except under very limited circumstances.
    Under 18 U.S.C. 213, a bank examiner is prohibited from accepting 
loans from a bank that he or she examines; 18 U.S.C. 212 
correspondingly prohibits a bank from making a loan to someone who 
examines or has authority to examine the bank.\1\ Current Supplemental 
Regulations implementing section 213 and expanding upon it generally 
prohibit examiners and the other ``covered'' OCC employees from seeking 
or obtaining any loan or other extension of credit from a national 
bank, including through the use of a credit card. 5 CFR 3101.108(b).
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    \1\ Under the OCC Ethics Policy, Rules, Policies and Procedures 
for Employees (October 1999) (OCC Ethics Policy) the term 
``examiner'' does not include supervisory personnel who are not 
assigned to the examination of banks. The OCC Ethics Policy will be 
revised to reflect the changes made by this final rule and to 
clarify that, under 18 U.S.C. 212, ``authority to examine'' also 
does not include OCC supervisory personnel. A summary of the OCC 
Ethics Policy is available on the OCC's website at http://www.occ.treas.gov/ethics.htm.
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    The existing Supplemental Regulations do contain an exception to 
this prohibition. A covered OCC employee \2\ generally is permitted to 
obtain a credit card from a national bank if: (1) The credit card is 
obtained on terms and conditions no more favorable than those offered 
to the general public; (2) the employee is not assigned to examine the 
bank offering the credit card at the time the credit card is obtained; 
and (3) the employee recuses himself or herself from examining or 
otherwise participating in the supervision of the bank. Two issues 
concerning the scope of the exception have arisen since the issuance of 
the current rules in 1995. See 60 FR 22249-22255.
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    \2\ ``Covered'' OCC employees include bank examiners and all 
other employees designated by the Comptroller under OCC ethics 
policies. See 5 CFR 3101.108(b)(3). Under these policies, ``covered 
employee'' means any employee, except an administrative employee, 
who is required to file financial disclosure reports.
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    The first issue under the current credit card rules is that 
employees' credit card-related recusals have limited the flexibility of 
OCC supervisors to make assignments. The exception to the general 
prohibition on obtaining credit generally permits covered OCC employees 
to hold and use national bank credit cards if they recuse themselves 
from any work involving those banks. See 5 CFR 3101.108(b)(4), as 
adopted in 1995. In instances where covered OCC employees holding 
national bank credit cards are involved in OCC licensing, policy and 
legal staff matters directly involving the bank issuer, the OCC has 
found that there is little likelihood of a conflict of interest or a 
loss of impartiality and that the breadth of the restriction 
unnecessarily hinders the administration of the OCC's programs. 
Therefore, this final rule refines the application of the credit card 
rules to covered OCC employees and more closely follows the statutory 
prohibition.
    The second issue is that the current credit card rules have 
significantly limited the credit card options available to employees 
who work in district offices and on large bank supervision teams. Under 
the Supplemental Regulations and the OCC ethics policies (which set 
forth the procedures that implement the OCC's portion of the 
Supplemental Regulations), covered district employees may not obtain 
credit cards from banks headquartered in their district. In addition, 
large bank team (formerly known as the ``Multinational Division'') 
employees \3\ may not have credit cards from banks supervised by their 
large bank team or from banks in the district where they are located. 
See 5 CFR 3101.108(b)(4)(i), as adopted in 1995; see also OCC Ethics 
Policy at 14.
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    \3\ Because they were adopted prior to the recent changes to 
OCC's management structure, the Supplemental Regulations refer to 
large bank team employees as employees of the ``Multinational 
Division.'' This final rule includes a technical correction to make 
appropriate changes to terminology.
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    The Department originally adopted the Supplemental Regulations' 
credit card restrictions on covered OCC district and large bank team 
employees, in part, to permit the supervisors of those employees to 
make work assignments free from the constraints that would have 
otherwise arisen from employees' credit card recusals. At the time they 
were adopted by the Department, these restrictions did not present a 
serious obstacle to covered district and large bank team employees 
obtaining credit cards. Since the issuance of the Supplemental 
Regulations, industry consolidation and

[[Page 46841]]

conversions to the national bank charter have reduced sharply the 
credit card options available to those employees.
    The Department has found that the imposition of such broad 
restrictions on obtaining credit cards on covered district and large 
bank team employees is not necessary for the administration of the 
OCC's supervisory activities. In situations where these covered 
employees are unlikely to examine a bank, the Department believes that 
the process of obtaining and holding a national bank credit card does 
not inherently present a conflict of interest or a likelihood of a loss 
of impartiality.
    There are several changes made by these final rule amendments to 
address these concerns. The final rule changes the general statement of 
the prohibition on borrowing at 5 CFR 3101.108(b)(1) to omit the 
reference to credit cards as unnecessary and redundant. The import of 
the original provision would not be altered by this change.
    The final rule also changes the Supplemental Regulations to 
eliminate the requirement for non-examiners (attorneys, economists, 
Senior Advisors, etc.) to be recused from matters involving banks from 
which they hold credit cards. The final rule, at 
Sec. 3101.108(b)(4)(i), therefore, provides a general exception 
permitting non-examiners to seek or obtain credit cards from national 
banks on terms and conditions no more favorable than those offered to 
the general public. The final rule further changes the Supplemental 
Regulations to limit credit card recusals to examiners and to require 
examiners holding national bank credit cards to be recused only from 
bank examinations involving the issuing credit card banks, and not 
limit their participation in other matters, such as licensing or 
supervisory policy decisions affecting the bank. The exception in 
Sec. 3101.108(b)(4)(ii) of the final rule, permitting examiners and 
their spouses and minor children to hold credit cards from banks the 
examiner is not assigned to examine, applies only to examiners and 
their spouses and minor children, and not any other covered OCC 
employees. The exception is available with respect to a credit card 
from a bank an examiner is not assigned to examine provided the credit 
card is obtained on terms and conditions no more favorable than those 
offered to the general public and the examiner maintains a written 
recusal from examinations of the bank.
    An examiner is ``assigned to examine'' a bank if the examiner works 
either: (A) in a district, and the bank is one that he or she examines 
or that is assigned to his or her Assistant Deputy Comptroller (ADC) or 
rating official; or (B) in Large Bank Supervision, and the bank is one 
to which the examiner is assigned or otherwise actually examines. The 
term ``Large Bank Supervision'' in the final rule replaces the term 
``Multinational Division'' which is used in the current regulations. 
This is a technical change to reflect recent changes to the OCC's 
management structure.
    The changes to the Supplemental Regulations narrow the current 
prohibition on district and large bank team employees by prohibiting 
only examiners in districts and large banks from holding credit cards 
issued by banks they are assigned to examine. Because this final rule 
more clearly connects the credit card restriction to the examiners' 
actual or likely work assignments, it will provide covered OCC district 
and large bank team examiners greater access to credit cards without 
unduly restricting supervisors' flexibility in making assignments or 
increasing the potential for conflicts of interest.
    The final rule eliminates the retail store exception in 5 CFR 
3101.108(b)(4)(ii) as heretofore codified to create a uniform OCC 
credit card policy. With the adoption of this final rule, the need for 
this exception should diminish because a retail store credit card would 
be treated as any other national bank credit card--generally 
permissible for examiners who recuse themselves unless the card is 
issued by a national bank assigned to the examiners' ADC or by a bank 
they examine. The final rule also eliminates the exception for mortgage 
assumptions as codified until now in 5 CFR 3101.108(b)(4)(iii) because 
this exception arises infrequently and will be better handled by the 
OCC ethics staff by way of recusal or waiver pursuant to 5 CFR 
3101.108(g).

Matters of Regulatory Procedure

Administrative Procedure Act

    Under 5 U.S.C. 553(a)(2), rules relating to agency management or 
personnel are exempt from the proposed rulemaking requirements of the 
Administrative Procedure Act (APA). As set forth in the description of 
the final rule, this rule affects only the OCC and its personnel. Even 
if this rulemaking were subject to APA proposed rulemaking procedures, 
the Department finds good cause, pursuant to 5 U.S.C. 553 (b) and (d), 
to waive the requirements for notice and comment and 30-day delayed 
effective date because the rule affects only the OCC and its employees 
(and their immediate families) and operates to relieve a restriction 
that has resulted in administrative and personnel inefficiencies.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required for this rule, 
the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
do not apply. However, this final rule will not have a significant 
economic impact on a substantial number of small entities in accord 
with the spirit and purposes of the Regulatory Flexibility Act. This 
rule affects the administrative operations of the OCC and it affects 
OCC employees. Any effect on national banks is merely incidental and 
creates no cost or burden for a bank.

Executive Order 12866

    This final rule does not constitute a ``significant regulatory 
action'' for the purposes of Executive Order 12866.

List of Subjects in 5 CFR Part 3101

    Conflict of interests, Extensions of credit, Government employees, 
OCC employees.
    For the reasons set forth in the preamble, the Department of the 
Treasury, with the concurrence of the Office of Government Ethics, 
amends 5 CFR part 3101 as follows:

PART 3101--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF THE TREASURY

    1. The authority citation for part 3101 continues to read as 
follows:

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 18 U.S.C. 212, 213; 26 U.S.C. 7214 (b); 
E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by 
E.O. 12731, 55 FR 42547; 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.203(a), 2635.403(a), 2635.803, 2635.807(a) (2) (ii).

    2. In Sec. 3101.108, paragraphs (b)(1) and (b)(4) are revised to 
read as follows:


Sec. 3101.108  Additional rules for Office of the Comptroller of the 
Currency employees.

* * * * *
    (b) Prohibited borrowing--(1) Prohibition on employee borrowing. 
Except as provided in this section, no covered OCC employee shall seek 
or obtain credit from any national bank or from an officer, director, 
employee, or subsidiary of any national bank.
* * * * *
    (4) Exceptions--(i) Non-examiners. A covered OCC employee, other 
than an examiner, or the spouse or minor child of such a covered OCC 
employee, may seek or obtain a credit card from a national bank if the 
credit card is sought

[[Page 46842]]

or obtained on terms and conditions no more favorable than those 
offered to the general public.
    (ii) Examiners. (A) An examiner, or the spouse or minor child of an 
examiner to whom the prohibition in paragraph (b)(1) of this section 
applies, may seek or obtain a credit card from a national bank the 
examiner is not assigned to examine so long as the credit card is 
obtained on terms and conditions no more favorable than those offered 
to the general public and the examiner submits to the Chief Counsel or 
designee a written disqualification from the examination of that bank. 
Such a recusal would not prevent an examiner from participating in 
other bank supervision matters outside the scope of an examination, 
such as licensing or supervisory policy decisions.
    (B) For purposes of this section, examiners are assigned to examine 
a bank if they work:
    (1) In a district, and the bank is one they examine or that is 
assigned to their Assistant Deputy Comptroller or rating official; or
    (2) In Large Bank Supervision or Washington, D.C. Headquarters, and 
the bank is one to which they are regularly or otherwise assigned.
* * * * *

    Dated: June 27, 2002.
David D. Aufhauser,
General Counsel, Department of the Treasury.
    Approved: July 9, 2002.
Amy L. Comstock,
Director, Office of Government Ethics.
[FR Doc. 02-17918 Filed 7-16-02; 8:45 am]
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