[Federal Register Volume 69, Number 112 (Thursday, June 10, 2004)]
[Rules and Regulations]
[Pages 32435-32436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13314]



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  Federal Register / Vol. 69, No. 112 / Thursday, June 10, 2004 / Rules 
and Regulations  

[[Page 32435]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 32

[Docket No. 04-15]
RIN 1557-AC83


Lending Limits Pilot Program

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Interim rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
publishing this interim rule extending for three months, until 
September 11, 2004, an OCC lending limits pilot program (pilot program) 
that authorizes special lending limits for 1-4 family residential real 
estate loans and small business loans. Under the pilot program, which 
originated in 2001, eligible national banks with main offices located 
in states that prescribe a higher lending limit for residential real 
estate loans or small business loans than the current Federal limit may 
apply to take part in the program and use the higher limits. This 
interim rule allows the program to continue uninterrupted while the OCC 
reviews comments received on a proposal to extend the program for three 
years, until June 11, 2007.

EFFECTIVE DATE: June 10, 2004.

FOR FURTHER INFORMATION CONTACT: Tom O'Dea, National Bank Examiner, 
Credit Risk, (202) 874-5170); Stuart Feldstein, Assistant Director, 
Legislative and Regulatory Activities Division, (202) 874-5090, 
Mitchell Plave, Counsel, Legislative and Regulatory Activities 
Division, (202) 874-5090, or Jonathan Fink, Senior Attorney, Bank 
Activities and Structure, (202) 874-5300.

SUPPLEMENTARY INFORMATION:

Background

    Federal law permits a national bank to make loans to one borrower 
in an amount up to 15 percent of its unimpaired capital and surplus.\1\ 
A national bank may extend credit up to an additional 10 percent of 
unimpaired capital and surplus to the same borrower if the amount of 
the loan that exceeds the 15 percent limit is secured by ``readily 
marketable collateral.'' \2\ Together, the 15 percent and 10 percent 
provisions comprise the ``combined general limit.'' The statute and 
regulation also provide exemptions from the combined general limit for 
various types of loans and extensions of credit.
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    \1\ 12 U.S.C. 84; 12 CFR 32 (implementing section 84).
    \2\ 12 U.S.C 84(a)(2); 12 CFR 32.3(a).
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    Federal law at 12 U.S.C. 84 authorizes the OCC to establish lending 
limits ``for particular classes or categories of loans'' that are 
different from those expressly provided by the statute's terms.\3\ In 
2001, the OCC established a pilot program, using this authority, with 
special lending limits for residential real estate loans and small 
business loans.\4\ These special limits are separate from amounts that 
banks may lend to a single borrower under the existing combined general 
limit and the special limits authorized by other provisions of part 
32.\5\ The purpose of the program is to enable community banks to 
remain competitive in states that provide their state-chartered 
institutions with a higher lending limit for these types of loans 
while, at the same time, maintaining the safety and soundness of 
national banks.
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    \3\ 12 U.S.C. 84(d)(1).
    \4\ 66 FR 31114 (June 11, 2001); 12 CFR 32.7.
    \5\ See, e.g., 12 CFR 32.3(b).
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Temporary Extension of the Pilot Program

    On April 23, 2004, the OCC proposed to extend the pilot program for 
three years beyond its current expiration date of June 11, 2004.\6\ The 
comment period for the proposal closed on May 24, 2004. We received a 
number of comments that not only addressed the proposed program, but 
also recommended various modifications to it. In order to allow 
adequate time to evaluate these comments without causing unnecessary 
disruption in the operation of the program in its current form, we are 
issuing this interim rule. The interim rule extends the duration of the 
lending limits pilot program for three months, until September 11, 
2004. The OCC will issue a final rule addressing the continuation of 
the program before that date.
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    \6\ 69 FR 21978 (April 23, 2004).
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Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA) requires Federal agencies 
either to certify that a proposed rule would not, if adopted in final 
form, have a significant impact on a substantial number of small 
entities or to prepare an initial regulatory flexibility analysis 
(IRFA) of the proposal and publish the analysis for comment. See 5 
U.S.C. 603, 605. On the basis of the information currently available, 
the OCC certifies that this interim rule will not have a significant 
impact on a substantial number of small entities within the meaning of 
those terms as used in the RFA.

Executive Order 12866

    The OCC has determined that this interim rule is not a significant 
regulatory action under Executive Order 12866.

Unfunded Mandates Reform Act of 1995 Determinations

    Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1532 (Unfunded Mandates Act), requires that an 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 interim rule will not result in expenditures by 
state, local, and tribal governments, in the aggregate, 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 the regulatory alternatives considered.

Administrative Procedure Act

    The OCC finds that there is good cause to dispense with prior 
notice and

[[Page 32436]]

public comment on this interim rule and with the 30-day delay of 
effective date generally prescribed by the Administrative Procedure Act 
(APA). 5 U.S.C 553.
    Under section 553(b) of the APA, the OCC is not required to provide 
notice and an opportunity for public comment on a rule if we find, for 
good cause, that notice and comment are ``impracticable, unnecessary or 
contrary to the public interest.'' The OCC finds that notice and public 
comment on this interim rule are unnecessary because we have already 
given the public an opportunity to comment on whether to extend the 
lending limits pilot program, through the rule we proposed on April 23, 
2004. All commenters favored extending the program. This extension of 
the effective date of the pilot program merely provides additional time 
for the OCC to consider the comments and reach a decision on whether to 
extend, modify, or terminate the program. Further, the OCC finds that 
further notice and public comment are not in the public interest 
because a failure to extend the June 11, 2004 sunset date for the pilot 
program would cause unnecessary disruption in the operation of the 
program in its current form.
    Under section 553(d) of the APA, the OCC must generally provide a 
30-day delayed effective date for final rules. The OCC may dispense 
with the 30-day delayed effective date requirement ``for good cause 
found and published with the rule.'' Similarly, section 302 of the 
Riegle Community Development and Regulatory Improvement Act of 1994 
(CDRI), requires a banking agency to make a rule effective on the first 
day of the calendar quarter that begins on or after the date on which 
the regulations are published in final form, unless the agency finds 
good cause for an earlier effective date. 12 U.S.C. 4802(b)(1). The OCC 
finds that there is good cause to dispense with the two effective date 
requirements because a failure to extend the June 11, 2004 sunset date 
would cause unnecessary disruption in the operation of the program in 
its current form. In addition, the purpose of the APA and CDRI delayed 
effective date provisions is to afford affected persons a reasonable 
time to comply with rule changes. The interim rule makes no substantive 
changes to the existing lending limits pilot program.

Paperwork Reduction Act

    The Office of Management and Budget (OMB) has reviewed and approved 
the collection of information requirements contained in the pilot 
program under control number 1557-0221, in accordance with the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 12 CFR Part 32

    National banks, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons set forth in the preamble, part 32 of chapter I of 
title 12 of the Code of Federal Regulations is amended to read as 
follows:

PART 32--LENDING LIMITS

0
1. The authority citation for part 32 continues to read as follows:

    Authority: 12 U.S.C. 1 et seq., 84, and 93a.


0
2. In Sec.  32.7, paragraph (e) is revised to read as follows:


Sec.  32.7  Pilot program for residential real estate and small 
business loans.

* * * * *
    (e) Duration of pilot program. The pilot program will terminate on 
September 11, 2004, unless it is terminated sooner by the OCC.
* * * * *

    Dated: June 8, 2004.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 04-13314 Filed 6-9-04; 8:45 am]
BILLING CODE 4810-33-P