[Federal Register Volume 71, Number 77 (Friday, April 21, 2006)]
[Rules and Regulations]
[Pages 20524-20528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3721]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 303, 308, 312, 336, 347, 348, 357, 362, 363, 364, 366 
and 367

RIN 3064--AD04


Revisions To Reflect the Merger of the Bank Insurance Fund and 
the Savings Association Insurance Fund

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is amending its regulations to reflect the recent 
merger of the Bank Insurance Fund and the Savings Association Insurance 
Fund, forming the Deposit Insurance Fund. The merger of the two deposit 
insurance funds was required by the Federal Deposit Insurance Reform 
Act of 2005 and was effectuated by the FDIC as of March 31, 2006. All 
revisions to the FDIC's regulations made by the final rule are 
conforming changes necessitated by the funds merger.

DATES: Effective Date: The final rule is effective on April 21, 2006.

FOR FURTHER INFORMATION CONTACT: Joseph A. DiNuzzo, Counsel, (202) 898-
7349, Legal Division, Federal Deposit Insurance Corporation, 
Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 2102 of the Federal Deposit Insurance Reform Act of 2005 
(``Reform Act'') (Pub. L. 109-171, 120 Stat. 9) required that the FDIC 
merge the Bank Insurance Fund (``BIF'') and Savings Association 
Insurance Fund (``SAIF'') into the Deposit Insurance Fund (``DIF'') 
effective no later than July 1, 2006. The FDIC effectuated the funds 
merger as of March 31, 2006. As a result of the funds merger, the BIF 
and SAIF were abolished. Section 8 of the Federal Deposit Insurance 
Reform Conforming Amendments Act of 2005 (Pub. L. 109-173, 119 Stat. 
3601) (``Amendments Act'') made numerous technical and conforming 
amendments to the FDI Act relating to the merger of BIF and SAIF into 
the DIF.
    The final rule revises the FDIC's regulations to reflect the funds 
merger and the elimination of BIF and SAIF. The majority of revisions 
are comprised of replacing references to BIF and SAIF with DIF. Other 
changes eliminate provisions dealing with fund conversions and entrance 
and exit fees previously required when an institution converted from 
one fund to the other.
    Neither the recent legislation nor the funds merger will affect the 
authority of the Financing Corporation (``FICO'') to impose and 
collect, with approval of the FDIC, assessments for anticipated 
payments, issuance costs and custodial fees on obligations issued by 
the FICO.\1\
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    \1\ FICO is a mixed-ownership government corporation created in 
1987 to recapitalize the Federal Savings and Loan Insurance 
Corporation (``FSLIC'') by issuing bonds to purchase capital stock 
or capital certificates issued by the FSLIC. FICO issued 30-year 
non-callable bonds of approximately $8.2 billion that mature in 2017 
through 2019. Competitive Equality Banking Act, Public Law 100-86, 
Title III, amending section 21 of the Federal Home Loan Bank Act, 12 
U.S.C. 1441.
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II. The Final Rule

    The following is a section-by-section discussion of the final rule 
revisions to the FDIC's regulations.

Part 303--Filing Procedures

    The final rule: (1) Eliminates the defined term ``optional 
conversion (Oakar transaction)'' in section 303.61(d) because, with the 
elimination of BIF and SAIF and the formation of the DIF, fund 
conversions are now obsolete; (2) excludes ``deposit insurance fund 
conversions'' from the transactions listed in section 303.62

[[Page 20525]]

requiring prior FDIC approval; (3) replaces ``federal deposit insurance 
funds'' in section 303.162 with ``Deposit Insurance Fund'; (4) replaces 
``Bank Insurance Fund'' in section 303.187(a)(2)(vi) with ``Deposit 
Insurance Fund'; (5) replaces ``Bank Insurance Fund (BIF) or the 
Savings Association Insurance Fund (SAIF)'' with ``Deposit Insurance 
Fund'' in section 303.245(a); and (6) eliminates section 303.246, 
entitled ``Insurance Fund Conversions.''

Part 308--Rules of Practice and Procedure

    The final rule revises section 308.111(f) by replacing ``the Bank 
Insurance Fund or the Savings Association Insurance Fund'' with ``the 
Deposit Insurance Fund.''

Part 312--Assessment of Fees Upon Entrance to or Exit From the Bank 
Insurance Fund or the Savings Association Insurance Fund

    The final rule deletes this entire part because the funds merger 
has made fund conversions and the accompanying entrance and exit fees 
obsolete. Also, Section 8(a)(4) of the Amendments Act expressly 
provides that any funds held in the SAIF exit fee reserve account 
provided for in section 312.5(e) be deposited into the general fund of 
the DIF. This action was effectuated upon the merger of the funds.

Part 327--Assessments

    As a result of the Reform Act, the FDIC is in the process of 
revamping its risk-based assessment system. Technical changes to part 
327 involving the funds merger will be made as part of the FDIC's 
future rulemaking to implement the substantive overhaul of the 
assessment system. Section 2109 of the Reform Act specifies that, 
during the interim period between the time of the funds merger and the 
effective date of new assessment regulations, the existing assessment 
regulations shall apply to all DIF members, even though they may refer 
to BIF members or SAIF members.

Part 336--FDIC Employees

    The final rule revises section 336.3(f) by replacing ``Bank 
Insurance Fund, the Savings Association Insurance Fund'' with ``Deposit 
Insurance Fund, the former Bank Insurance Fund, the former Savings 
Association Insurance Fund.''

Part 347--International Banking

    The final rule revises section 347.202(u) by replacing ``Bank 
Insurance Fund'' with ``Deposit Insurance Fund.'' Sections 347.209(a) 
and 347.209(b)(3) are revised by replacing ``deposit insurance fund'' 
in each place it appears with ``Deposit Insurance Fund.'' Also, in 
section 347.212(b) ``affected deposit insurance fund'' is replaced by 
``Deposit Insurance Fund.''

Part 348--Management Official Interlocks

    The final rule revises a cross-reference citation in section 
348.6(d).

Part 357--Determination of Economically Depressed Regions

    The final rule revises section 357.1(a) by replacing ``Savings 
Association Insurance Fund members'' with ``insured savings 
associations.''

Part 362--Activities of Insured State Banks and Insured Savings 
Association

    Part 362 is revised: in section 362.1(d) by replacing ``deposit 
insurance funds'' with ``Deposit Insurance Fund''; in section 362.2(p) 
by replacing ``deposit insurance fund'' with ``Deposit Insurance Fund'' 
and replacing ``any insurance fund'' with ``the Deposit Insurance 
Fund''; in section 362.3(a)(2)(iii)(A)(2) by replacing ``appropriate 
deposit insurance fund'' with ``Deposit Insurance Fund'' in section 
362.3(b)(2)(i) by replacing ``affected deposit insurance fund'' and 
``deposit insurance funds'' with ``Deposit Insurance Fund''; in section 
362.3(b)(2)(iii)(A) and (B) by replacing references to ``deposit 
insurance funds'' with ``Deposit Insurance Fund''; in section 
362.4(b)(1) by replacing ``affected deposit insurance fund'' with 
``Deposit Insurance Fund''; in sections 362.4(b)(3), 362.4(b)(5), 
362.4(b)(6), 362.4(b)(7) and 362.9(c) by replacing ``deposit insurance 
funds'' with ``Deposit Insurance Fund''; and in sections 362.11 and 
362.12 by replacing all references to ``affected deposit insurance 
fund'' with ``Deposit Insurance Fund'' and by replacing all references 
to ``deposit insurance funds'' with ``Deposit Insurance Fund.''

Part 363--Annual Independent Audits and Reporting Requirements

    Part 363 is revised by replacing ``affected deposit insurance 
fund'' in section 363.1(b)(3) with ``Deposit Insurance Fund.''

Part 364--Standards for Safety and Soundness

    Part 364 (Appendix A I. vi) is revised by replacing ``deposit 
insurance funds'' with ``Deposit Insurance Fund.''

Part 366--Minimum Standards of Integrity and Fitness for an FDIC 
Contractor

    Section 366.3(d) and 366.5 are revised by replacing all references 
to ``a federal deposit insurance fund'' with ``the Deposit Insurance 
Fund (or any predecessor deposit insurance fund).''

Part 367--Suspension and Exclusion of Contractors and Termination of 
Contracts

    Section 367.2(s)(1) is revised by replacing ``Bank Insurance Fund 
(BIF), the Savings Association Insurance Fund (SAIF)'' with ``the 
former Bank Insurance Fund (BIF), the former Savings Association 
Insurance Fund (SAIF) or the Deposit Insurance Fund''. Section 
367.2(s)(3) is revised by replacing ``or the BIF, the SAIF'' with ``or 
the former BIF, the former SAIF, the Deposit Insurance Fund.'' Section 
367.6(d) is revised by replacing ``Federal deposit insurance funds'' 
with ``the Deposit Insurance Fund (or any predecessor deposit insurance 
fund).''

III. Waiver of APA Requirements

    The revisions to the FDIC's regulations made by the final rule are 
all technical, conforming and non-discretionary changes required by the 
Reform Act and the Amendments Act incident to the merger of BIF and 
SAIF and the formation of the DIF. Thus, the FDIC Board of Directors 
has determined that the public notice and participation that ordinarily 
would be required by the Administrative Procedure Act (5 U.S.C. 553) 
before a regulation may take effect are unnecessary and that good cause 
exists for an exception to the customary 30-day delayed effective date.

IV. Paperwork Reduction Act

    The final rule will not create or modify any collections of 
information pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.). Consequently, no information has been submitted to the Office of 
Management and Budget for review.

V. Regulatory Flexibility Act

    A regulatory flexibility analysis is required only when an agency 
must publish a notice of proposed rulemaking (5 U.S.C. 603, 604). 
Because the revisions to the FDIC's regulations are published in final 
form without a notice of proposed rulemaking, no regulatory flexibility 
analysis is required.

[[Page 20526]]

VI. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

VII. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the final 
rule is not a ``major rule'' within the meaning of the relevant 
sections of the Small Business Regulatory Enforcement Fairness Act of 
1996 (``SBREFA'') (5 U.S.C. 801 et seq.). As required by SBREFA, the 
FDIC will file the appropriate reports with Congress and the General 
Accounting Office so that the final rule may be reviewed.

List of Subjects

12 CFR Part 303

    Administrative practice procedure, Bank deposit insurance, Banks, 
banking, Reporting and recordkeeping requirements, Savings 
associations.

12 CFR Part 308

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Claims, Crime, Equal access to justice, Fraud, 
Investigations, Lawyers, Penalties.

12 CFR Part 312

    Bank deposit insurance, Savings associations.

12 CFR Part 336

    Conflict of interest.

12 CFR Part 347

    Authority delegations (Government agencies), Bank deposit 
insurance, Banks, banking, Credit, Foreign banking, Investments, 
Reporting and recordkeeping requirements, United States investments 
abroad.

12 CFR Part 348

    Antitrust, banks, banking, holding companies.

12 CFR Part 357

    Savings associations.

12 CFR Part 362

    Administrative practice and procedure, Authority delegations 
(Government Agencies), Bank deposit insurance, Banks, banking, 
Investments, Reporting and recordkeeping requirements.

12 CFR Part 363

    Accounting, Administrative practice and procedure, Banks, banking, 
Reporting and recordkeeping requirements.

12 CFR Part 364

    Administrative practice and procedure, Bank deposit insurance, 
Reporting and recordkeeping requirements.

12 CFR Part 366

    Conflict of interests, Government contracts, Reporting and 
recordkeeping requirements.

12 CFR Part 367

    Administrative practice and procedure, Conflict of interests, 
Government contracts.

0
For the reasons stated above, the Board of Directors of the Federal 
Deposit Insurance Corporation hereby amends chapter III of title 12 of 
the Code of Federal Regulations as follows:

PART 303--FILING PROCEDURES

0
1. The authority citation for part 303 continues to read as follows:


    Authority: 12 U.S.C. 378, 1813, 1815, 1817, 1818, 1819, (Seventh 
and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o, 1831p-1, 1831w, 
1835a, 1843(l), 3104, 3105, 3108, 3207; 15 U.S.C. 1601-1607.

Sec.  303.61  [Amended]

0
2. Section 303.61 paragraph (d) is removed and paragraph (e) is 
redesignated as (d).


Sec.  303.62  [Amended]

0
3. Section 303.62 paragraph (b)(3) is removed and paragraphs (b)(4), 
(b)(5) and (b)(6) are redesignated, respectively, as (b)(3), (b)(4) and 
(b)(5).


Sec.  303.162  [Amended]

0
4. Section 303.162 (b) is amended by removing ``federal deposit 
insurance funds'' and adding in its place ``Deposit Insurance Fund''.


Sec.  303.187  [Amended]

0
5. Section 303.187 (a)(2)(vi) is amended by removing ``Bank Insurance 
Fund'' and adding in its place ``Deposit Insurance Fund''.


Sec.  303.245  [Amended]

0
6. Section 303.245(a) is amended by removing ``Bank Insurance Fund 
(BIF) or the Savings Association Insurance Fund (SAIF)'' and adding in 
its place ``Deposit Insurance Fund''.


Sec.  303.246  [Removed]; Sec. Sec.  303.247, 303.248, 303.249, 
303.250, 303.251 and 303.252 [Redesignated]

0
7. Section 303.246 is removed and sections 303.247, 303.248, 303.249, 
303.250, 303.251 and 303.252 are redesignated, respectively, as 
sections 303.246, 303.247, 3030.248, 303.249, 303.250 and 303.251.

PART 308--RULES OF PRACTICE AND PROCEDURE

0
8. The authority citation continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1815(e), 1817, 1818, 1820, 1828, 1829, 1829b, 1831i, 1831m(g)(4), 
1831o, 1831p-1, 1832(c), 1884(b), 1972, 3102, 3108(a), 3349, 3909, 
4717; 15 U.S.C. 78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, and 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Sec. 3100(s), Pub. L. 104-134, 
110 Stat. 1321-358.


Sec.  308.111  [Amended]


0
9. Section 308.111(f) is amended by removing ``Bank Insurance Fund or 
the Savings Association Insurance Fund'' and adding in its place 
``Deposit Insurance Fund''.

PART 312--[REMOVED]

0
10. Under section 8 of the Federal Deposit Insurance Reform Conforming 
Amendments Act of 2005 (Pub. L. 109-173), amend 12 CFR chapter III by 
removing part 312.

PART 336--FDIC EMPLOYEES

0
11. The authority citation continues to read as follows:


    Authority: 5 U.S.C. 7301; 12 U.S.C. 1819(a).


0
12. Section 336.3(f) is revised to read as follows:


Sec.  336.3  Definitions.

* * * * *
    (f) Federal deposit insurance fund means the Deposit Insurance 
Fund, the former Bank Insurance Fund, the former Savings Association 
Insurance Fund, the Federal Savings and Loan Insurance Corporation 
(FSLIC) Resolution Trust, or the funds formerly maintained by the 
Resolution Trust Corporation (RTC), or their successors, for the 
benefit of insured depositors.
* * * * *

PART 347--INTERNATIONAL BANKING

0
13. The authority citation continues to read as follows:



[[Page 20527]]


    Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103, 
3104, 3105, 3108, 3109; Title IX, Pub. L. 98-181, 97 Stat. 1153.

Sec.  347.202  [Amended]

0
14. Section 347.202(u) is amended by removing ``Bank Insurance Fund'' 
and adding in its place ``Deposit Insurance Fund''.


Sec.  347.209  [Amended]

0
15. Section 347.209(a) and (b)(3) are amended by removing ``deposit 
insurance fund'' in each place it appears and adding in its place 
``Deposit Insurance Fund'.


Sec.  347.212  [Amended]

0
16. Section 347.212(b) is amended by removing ``affected deposit 
insurance fund'' and adding in its place ``Deposit Insurance Fund''.

PART 348--MANAGEMENT OFFICIAL INTERLOCKS

0
17. The authority citation continues to read as follows:


    Authority: 12 U.S.C. 3207, 12 U.S.C. 1823(k).

Sec.  348.6  [Amended]

0
18. Section 348.6(d) is amended by removing ``12 CFR 303.250'' and 
adding in its place ``12 CFR 303.249''.

PART 357--DETERMINATION OF ECONOMICALLY DEPRESSED REGIONS

0
19. The authority citation continues to read as follows:


    Authority: 12 U.S.C. 1819(k)(5).

Sec.  357.1  [Amended]

0
20. Section 357.1(a) is amended by removing ``Savings Association 
Insurance Fund members'' and adding in its place ``insured savings 
associations''.

PART 362--ACTIVITIES OF INSURED STATE BANKS AND INSURED SAVINGS 
ASSOCIATIONS

0
21. The authority citation continues to read as follows:


    Authority: 12 U.S.C. 1816, 1818, 1819(a)(Tenth), 1828(j), 
1828(m), 1828a, 1831e, 1831w, 1843(l).

Sec.  362.1  [Amended]

0
22. Section 362.1(d) is amended by removing ``deposit insurance funds'' 
and adding in its place ``Deposit Insurance Fund''.


Sec.  362.2  [Amended]

0
23. Section 362.2(p) is amended by removing ``deposit insurance fund'' 
and adding in its place ``Deposit Insurance Fund'' and removing ``any 
insurance fund'' and adding in its place ``the Deposit Insurance 
Fund''.


Sec.  362.3  [Amended]

0
24. Section 362.3 is amended as follows:
0
A. Paragraph (a)(2)(iii)(A)(2) is amended by removing ``appropriate 
deposit insurance fund'' and adding in its place ``Deposit Insurance 
Fund''.
0
B. Paragraph (b)(2)(i) is amended by removing ``affected deposit 
insurance fund'' and adding in its place ``Deposit Insurance Fund'' and 
by removing ``deposit insurance funds'' and adding in its place 
``Deposit Insurance Fund''.
0
C. Paragraphs (b)(2)(iii)(A) and (B) are amended by removing ``deposit 
insurance funds'' in both places it appears and adding in each place 
``Deposit Insurance Fund''.


Sec.  362.4  [Amended]

0
25. Section 362.4 is amended as follows:
0
A. Paragraph (b)(1) is amended by removing ``affected deposit insurance 
fund'' and adding in its place ``Deposit Insurance Fund'' and by 
removing ``deposit insurance funds'' and adding in its place ``Deposit 
Insurance Fund''.
0
B. Paragraphs (b)(3), (b)(5), (b)(6), and (b)(7) are amended by 
removing ``deposit insurance funds'' in each place it appears and 
adding in each such place ``Deposit Insurance Fund''.


Sec.  362.9  [Amended]

0
26. Section 362.9(c) is amended by removing ``deposit insurance funds'' 
and adding in its place ``Deposit Insurance Fund''.


Sec.  362.11  [Amended]

0
27-28. Section 362.11 is amended by removing ``affected deposit 
insurance fund'' each place it appears and adding in each such place 
``Deposit Insurance Fund'' and by removing ``deposit insurance funds'' 
each place it appears and adding in each such place ``Deposit Insurance 
Fund''.


Sec.  362.12  [Amended]

0
29. Section 362.12 is amended by removing ``affected deposit insurance 
fund'' each place it appears and adding in each such place ``Deposit 
Insurance Fund'' and by removing ``deposit insurance funds'' each place 
it appears and adding in each such place ``Deposit Insurance Fund''.

PART 363--ANNUAL INDEPENDENT AUDITS AND REPORTING REQUIREMENTS

0
30. The authority citation continues to read as follows:

    Authority: 12 U.S.C. 1831m.


Sec.  363.1  [Amended]

0
31. Section 363.1(b)(3) is amended by removing ``affected deposit 
insurance fund'' and adding in its place ``Deposit Insurance Fund''.

PART 364--STANDARDS FOR SAFETY AND SOUNDNESS

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

    Authority: 12 U.S.C. 1818 and 1819 (Tenth); 15 U.S.C. 1681b, 
1681s, and 1681w.

Appendix A to Part 364 [Amended]

0
33. Appendix A I. vi, is amended by removing ``deposit insurance 
funds'' and adding in its place ``Deposit Insurance Fund''.

PART 366--MINIMUM STANDARDS OF INTEGRITY AND FITNESS FOR AN FDIC 
CONTRACTOR

0
34. The authority citation continues to read as follows:


    Authority: Section 9 (Tenth) of the Federal Deposit Insurance 
Act (FDI Act), 12 U.S.C. 1819 (Tenth); sections 12(f)(3) and (4) of 
the FDI Act, 12 U.S.C. 1822(f)(3) and (4); and section 19 of Pub. L. 
103-204, 107 Stat. 2369.

Sec.  366.3  [Amended]

0
35. Section 366.3(d) is amended by removing ``a federal deposit 
insurance fund'' and adding in its place ``the Deposit Insurance Fund 
(or any predecessor deposit insurance fund)''.


Sec.  366.5  [Amended]

0
36. Section 366.5 introductory text is amended by removing ``a federal 
deposit insurance fund'' and adding in its place ``the Deposit 
Insurance Fund (or any predecessor deposit insurance fund)''.

PART 367--SUSPENSION AND EXCLUSION OF CONTRACTOR AND TERMINATION OF 
CONTRACTS

0
37. The authority citation continues to read as follows:


    Authority: 12 U.S.C. 1822(f)(4) and (5).

Sec.  367.2  [Amended]

0
38. Amend Sec.  367.2 as follows:
0
A. Paragraph (s)(1) is amended by removing ``Bank Insurance Fund (BIF), 
the Savings Association Insurance Fund (SAIF)'' and adding in its place 
``former

[[Page 20528]]

Bank Insurance Fund (BIF), the former Savings Association Insurance 
Fund (SAIF) or the Deposit Insurance Fund''.
0
B. Paragraph (s)(3) is amended by removing ``or the BIF, the SAIF'' and 
adding in its place ``or the former BIF, the former SAIF, the Deposit 
Insurance Fund''.


Sec.  367.6  [Amended]

0
39. Section 367.6(d) is amended by removing ``Federal deposit insurance 
funds'' and adding in its place ``Deposit Insurance Fund (or any 
predecessor deposit insurance fund)''.

    By order of the Board of Directors.

    Dated at Washington DC, this 4th day of April, 2006.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 06-3721 Filed 4-20-06; 8:45 am]
BILLING CODE 6714-01-P