[Federal Register Volume 72, Number 170 (Tuesday, September 4, 2007)]
[Rules and Regulations]
[Pages 50644-50645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17459]


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DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 585

[OTS-2007-0008]
RIN 1550-AC14


Prohibited Service at Savings and Loan Holding Companies 
Extension of Expiration Date of Temporary Exemption

AGENCY: Office of Thrift Supervision (OTS), Treasury.

ACTION: Final rule.

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SUMMARY: OTS is amending its rules implementing section 19(e) of the 
Federal Deposit Insurance Act (FDIA), which prohibits any person who 
has been convicted of any criminal offense involving dishonesty, breach 
of trust, or money laundering (or who has agreed to enter into a 
pretrial diversion or similar program in connection with a prosecution 
for such an offense) from holding certain positions with respect to a 
savings and loan holding company (SLHC). Specifically, OTS is extending 
the expiration date of a temporary exemption granted to persons who 
held positions with respect to a SLHC as of the date of the enactment 
of section 19(e). The revised expiration date for the temporary 
exemption is March 1, 2008.

DATES: Effective Date: The final rule is effective on September 4, 
2007.

FOR FURTHER INFORMATION CONTACT: Donna Deale, Director, Holding 
Companies and Affiliates, Supervision Policy, (202) 906-7488, or Karen 
Osterloh, Special Counsel, Regulations and Legislation, (202) 906-6639, 
Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION: On May 8, 2007, OTS published an interim 
final rule adding 12 CFR part 585. This new part implemented section 
19(e) of the FDIA, which prohibits any person who has been convicted of 
any criminal offense involving dishonesty, breach of trust, or money 
laundering (or who has agreed to enter into a pretrial diversion or 
similar program in connection with a prosecution for such an offense) 
from holding certain positions with a SLHC. Section 19(e) also 
authorizes the Director of OTS to provide exemptions from the 
prohibitions, by regulation or order, if the exemption is consistent 
with the purposes of the statute.
    The interim final rule described the actions that are prohibited 
under the statute and prescribed procedures for applying for an OTS 
order granting a case-by-case exemption from the prohibition. The rule 
also provided regulatory exemptions to the prohibitions, including a 
temporary exemption for persons who held positions with respect to a 
SLHC on October 13, 2006, the date of enactment of section 19(e). This 
temporary exemption expires on September 5, 2007, unless a case-by-case 
exemption is filed prior to that expiration date.
    OTS found that the temporary exemption was needed to ensure that 
the new prohibition did not needlessly disrupt SLHC operations by 
requiring the immediate termination of existing relationships. OTS 
designed this exemption to ensure that SLHCs would have sufficient time 
to determine which persons have convictions or pre-trial diversions 
involving the described criminal offenses, and to provide a meaningful 
opportunity for the SLHC or the prohibited person to demonstrate that 
the person's continued relationship with the SLHC is consistent with 
the purposes of the statute.
    Since the publication of the interim final rule, some SLHCs have 
contacted OTS to indicate that they have not had adequate time to 
review all of their existing relationships and file for appropriate 
permanent exemptions. To avoid needless disruptions of these SLHC 
operations, OTS is extending the expiration date of the temporary 
exemption to March 1, 2008. OTS has concluded that this extension of 
the exemption is consistent with the purposes of section 19(e) of the 
FDIA.\1\
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    \1\ OTS is continuing to review the public comments submitted on 
the interim final rule and plans to publish a final rule addressing 
these comments later this year.
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Regulatory Findings

Notice and Comment and Effective Date

    For the reasons set out in the interim final rule,\2\ OTS has 
concluded that: Notice and comment on this extension are unnecessary 
and contrary to the public interest under section 552(b)(B) of the 
Administrative Procedure Act; there is good cause for making the 
extension effective immediately under section 553(d) of the APA; and 
the delayed effective date requirements of section 302 of the Riegle 
Community Development and Regulatory Improvement Act of 1994 (CDRIA) do 
not apply.
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    \2\ 72 FR at 25953.
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Regulatory Flexibility Act

    For the reasons stated in the interim final rule,\3\ OTS has 
concluded that this extension does not require an initial regulatory 
flexibility analysis under the Regulatory Flexibility Act (RFA) (5 
U.S.C. 601 et seq.), and that this extension should not have a 
significant impact on a substantial number of small entities, as 
defined in the RFA.
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    \3\ 72 FR at 25953-25954.
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Paperwork Reduction Act

    OTS has determined that this extension does not involve a change to 
collections of information previously approved under the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.)

Unfunded Mandates Act of 1995

    For the reasons stated in the interim final rule,\4\ OTS has 
determined that this extension will not result in expenditures by 
state, local, and tribal governments, in the aggregate, or by the 
private sector, of more than $100 million in any one year.
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    \4\ 72 FR at 25954.
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Executive Order 12866

    OTS has determined that this extension is not a significant 
regulatory action under Executive Order 12866.

[[Page 50645]]

Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (12 U.S.C. 4809) requires 
the Agencies to use ``plain language'' in all final rules published 
after January 1, 2000. OTS believes that the final rule containing the 
extension is presented in a clear and straightforward manner.

List of Subjects in 12 CFR Part 585

    Administrative practice and procedure, Holding companies, reporting 
and recordkeeping requirements, savings associations.

Authority and Issuance

0
For the reasons in the preamble, OTS is amending part 585 of chapter V 
of title 12 of the Code of Federal Regulations as set forth below:

PART 585--PROHIBITED SERVICE AT SAVINGS AND LOAN HOLDING COMPANIES

0
1. The authority citation for 12 CFR part 585 continues to read as 
follows:

    Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, and 
1829(e).


0
2. Revise Sec.  585.100(b)(2) introductory text to read as follows:


Sec.  585.100  Who is exempt from the prohibition under this part?

* * * * *
    (b) Temporary exemption. * * *
* * * * *
    (2) This exemption expires on March 1, 2008, unless the savings and 
loan holding company or the person files an application seeking a case-
by-case exemption for the person under Sec.  585.110 by that date. If 
the savings and loan holding company or the person files such an 
application, the temporary exemption expires on:
* * * * *

    Dated: August 28, 2007.

    By the Office of Thrift Supervision.
John M. Reich,
Director.
 [FR Doc. E7-17459 Filed 8-31-07; 8:45 am]
BILLING CODE 6720-01-P