[Federal Register Volume 76, Number 140 (Thursday, July 21, 2011)]
[Rules and Regulations]
[Pages 43549-43569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-18231]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 4, 5, 7, 8, 28, and 34

[Docket ID OCC-2011-0018]
RIN 1557-AD41


Office of Thrift Supervision Integration; Dodd-Frank Act 
Implementation

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
adopting amendments to its regulations governing organization and 
functions, availability and release of information, post-employment 
restrictions for senior examiners, and assessment of fees to 
incorporate the transfer of certain functions of the Office of Thrift 
Supervision (OTS) to the OCC pursuant to Title III of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act. The OCC also is 
amending its rules pertaining to preemption and visitorial powers to 
implement various sections of the Act; change in control of credit card 
banks and trust banks to implement section 603 of the Act; and deposit-
taking by uninsured Federal branches to implement section 335 of the 
Act.

DATES: July 21, 2011, except for the amendments to 12 CFR 4.73 in 
amendatory instruction 21, 12 CFR 4.74 in amendatory instruction 23, 12 
CFR 4.75 in amendatory instruction 25, 12 CFR 4.76 in amendatory 
instruction 27, which are effective July 21, 2012; the amendment to 12 
CFR 5.50 in amendatory instruction 31, which is effective July 21, 
2013; and the amendment to 12 CFR 8.6 in amendatory instruction 43, 
which is effective December 31, 2011.

FOR FURTHER INFORMATION CONTACT: Andra Shuster, Senior Counsel, Heidi 
Thomas, Special Counsel, Michele Meyer (preemption), Assistant 
Director, or Stuart Feldstein, Director, Legislative and Regulatory 
Activities Division, (202) 874-5090; Mitchell Plave (assessments), 
Special Assistant to the Deputy Chief Counsels, Office of the Chief 
Counsel, 202-874-5200; Timothy Ward, Deputy Comptroller for Thrift 
Supervision, (202) 874-4468; or Frank Vance, Manager, Disclosure 
Services and Administrative Operations, Communications Division, (202) 
874-5378, Office of the Comptroller of the Currency, 250 E Street, SW., 
Washington, DC 20219.

SUPPLEMENTARY INFORMATION: 

I. Background

    On May 26, 2011, the OCC published in the Federal Register a notice 
of proposed rulemaking (NPRM or proposal) to implement Title III, and 
certain other provisions, of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, Public Law 111-203, 124 Stat. 1376 (2010) 
(Dodd-Frank Act or Act). Title III of the Act transfers the powers, 
authorities, rights and duties of the OTS to other banking agencies, 
including the OCC, on the ``transfer

[[Page 43550]]

date.'' The transfer date is one year after the date of enactment of 
the Dodd-Frank Act, July 21, 2011. The Dodd-Frank Act also abolishes 
the OTS ninety days after the transfer date.
    Specifically, the Dodd-Frank Act transfers to the OCC all functions 
of the OTS and the Director of the OTS relating to Federal savings 
associations. As a result, the OCC will assume responsibility for the 
ongoing examination, supervision, and regulation of Federal savings 
associations.\1\ The Act also transfers to the OCC rulemaking authority 
of the OTS relating to all savings associations, both state and 
Federal.\2\ The legislation continues in effect all OTS orders, 
resolutions, determinations, agreements, regulations, interpretive 
rules, other interpretations, guidelines, procedures and other advisory 
materials in effect the day before the transfer date, and allows the 
OCC to enforce these issuances with respect to Federal savings 
associations, unless the OCC modifies, terminates, or sets aside such 
guidance or until superseded by the OCC, a court, or operation of 
law.\3\ Title III also transfers OTS employees to either the OCC or 
FDIC, allocated as necessary to perform or support the OTS functions 
transferred to the OCC and FDIC, respectively.
---------------------------------------------------------------------------

    \1\ Dodd-Frank Act, section 312(b)(2)(B)(i)(I), 124 Stat. at 
1522 (to be codified at 12 U.S.C. 5412). Title III also transfers 
all functions of the OTS relating to state savings associations to 
the Federal Deposit Insurance Corporation (FDIC) and all functions 
relating to the supervision of any savings and loan holding company 
and nondepository institution subsidiaries of such holding 
companies, as well as rulemaking authority for savings and loan 
holding companies, to the Board of Governors of the Federal Reserve 
System (FRB). Dodd-Frank Act, section 312(b)(1) and (2)(A), 124 
Stat. at 1521 (to be codified at 12 U.S.C. 5412) (savings and loan 
holding companies) and (2)(C), 124 Stat. at 1522 (to be codified at 
12 U.S.C. 5412) (state savings associations).
    \2\ Id. at section 312(b)(2)(B)(i)(II), 124 Stat. at 1522 (to be 
codified at 12 U.S.C. 5412).
    \3\ Id. at section 316(b), 124 Stat. at 1525 (to be codified at 
12 U.S.C. 5414).
---------------------------------------------------------------------------

II. OCC Regulatory Actions To Integrate OTS Functions

    As described in the preamble for the proposed rule, the OCC is 
undertaking a multi-phased review of its regulations, as well as those 
of the OTS, to determine what changes are needed to facilitate the 
transfer of supervisory jurisdiction for Federal saving associations to 
the OCC. This final rule, described in detail below, is part of the 
first phase of this review and includes provisions revising OCC rules 
that will be central to internal agency functions and operations 
immediately upon the transfer date, such as providing for the OCC's 
assessment of Federal savings associations and adapting the OCC's rules 
governing the availability and release of information to cover 
information pertaining to the supervision of those institutions. This 
final rule also amends OCC regulations necessary to implement certain 
revisions to the banking laws that either took effect on the enactment 
of the Dodd-Frank Act or are effective as of the transfer date.
    As part of this first phase of our review of OTS and OCC 
regulations, the OCC also will issue an interim final rule with a 
request for comments, effective on publication, that republishes those 
OTS regulations the OCC has the authority to promulgate and will 
enforce as of the transfer date, with nomenclature and other technical 
changes.\4\ These republished regulations will supersede the OTS 
regulations in Chapter V for purposes of OCC supervision and regulation 
of Federal savings associations, and for certain rules for purposes of 
the FDIC's supervision of state savings associations. OTS regulations 
that will be unnecessary following the transfer of OTS functions to the 
OCC, or that are superseded as of the transfer date by provisions of 
the Dodd-Frank Act, will be repealed at a later date.
---------------------------------------------------------------------------

    \4\ Pursuant to section 316(c)(2) of the Dodd-Frank Act, 124 
Stat. at 1525 (to be codified at 12 U.S.C. 5415), the OCC and the 
FDIC published in the Federal Register on July 6, 2011 a joint 
notice that identified those OTS regulations that each agency will 
enforce as of the transfer date. 76 FR 39246.
---------------------------------------------------------------------------

    In future phases of our regulatory review, the OCC will consider 
more comprehensive substantive amendments, as necessary, to these 
regulations. For example, we may propose to repeal or combine 
provisions in cases where OCC and former OTS rules are substantively 
identical or substantially overlap. In addition, we may propose to 
repeal or modify OCC or former OTS rules where differences in 
regulatory approach are not required by statute or warranted by 
features unique to either charter. We expect to publish these 
amendments in one or more notices of proposed rulemaking, the first of 
which we expect to issue later in 2011. This substantive review also 
will provide an opportunity for the OCC to ask for comments suggesting 
revisions to the rules for both national banks and Federal savings 
associations that would remove provisions that are ``outmoded, 
ineffective, insufficient, or excessively burdensome,'' consistent with 
the goals outlined in an executive order recently issued by the 
President.\5\
---------------------------------------------------------------------------

    \5\ Executive Order 13563, ``Improving Regulation and Regulatory 
Review,'' 76 FR 3821 (Jan. 21, 2011).
---------------------------------------------------------------------------

III. Description of the Proposal and Comments Received

    The NPRM contained amendments to OCC rules at 12 CFR part 4 
pertaining to its organization and functions, the availability of 
information under the Freedom of Information Act (FOIA), the release of 
non-public OCC information, and restrictions on the post-employment 
activities of senior examiners; and at 12 CFR part 8, pertaining to 
assessments. This NPRM also proposed to amend 12 CFR parts 5 and 28, 
pertaining to change in control of credit card banks and trust banks 
and deposit-taking by uninsured Federal branches, respectively, and 12 
CFR parts 5, 7 and 34, pertaining to preemption and visitorial powers, 
pursuant to the Dodd-Frank Act. The public comment period closed on 
June 27, 2011, and the OCC received a total of 45, including comments 
from consumer advocacy groups, government agencies, representatives of 
Congress, associations of state officials, industry trade groups, 
Federal and state banks and thrifts, and law firms. Set forth below is 
a detailed description of these comments and the resulting final rule.

IV. Section-by-Section Description of Final Rule

A. Part 4

    The NPRM contained a number of amendments to part 4 to incorporate 
the supervision of Federal savings associations within the OCC. We 
received no substantive comments on the proposed amendments to part 4 
and therefore adopt them as proposed, with one technical correction to 
Sec.  4.14 to include cites to OCC rules applicable to savings 
associations.
1. Organization and Functions (Part 4, Subpart A)
    Subpart A describes the organization and functions of the OCC and 
provides the OCC's principal addresses. The final rule amends subpart A 
to reflect the organizational and functional changes resulting from the 
transfer of the powers and duties of the OTS to the OCC on the transfer 
date. Other changes conform this subpart to additional provisions in 
the Dodd-Frank Act, including the Comptroller's membership on the 
Financial Stability Oversight Council.
2. Freedom of Information Act (Part 4, Subpart B)
    Subpart B contains the OCC's rules for making requests for agency 
records and documents under the FOIA. The final rule amends subpart B 
to apply these rules to FOIA requests relating to Federal savings 
associations received by the OCC as of the transfer date, ensures

[[Page 43551]]

that records of the OTS are subject to the OCC's FOIA regulations, and 
makes various technical changes to part 4 to correct technical errors 
and to update appropriate references to OCC units charged with handling 
FOIA requests. The final rule also provides that the OTS's former rules 
will continue to govern requests received by the OTS prior to the 
transfer date.
3. Non-Public Information (Part 4, Subpart C)
    Subpart C contains OCC rules and procedures for requesting access 
to various types of nonpublic information and the OCC's process for 
reviewing and responding to such requests. It also clarifies the 
persons and entities with which the OCC can share non-public 
information. The final rule amends subpart C to cover OTS nonpublic 
information transferred to the OCC and, going forward, OCC nonpublic 
information related to Federal savings associations. The final rule 
also provides that nonpublic information in the possession of former 
employees or officials of the OTS will remain subject to 
confidentiality safeguards and procedures for requesting access to such 
information. As with FOIA requests, the final rule provides that the 
OTS's former rules will continue to govern requests for nonpublic 
information received by the OTS prior to the transfer date.
4. One-Year Restrictions on Post-Employment Activities of Senior 
Examiners (Part 4, Subpart E)
    Subpart E sets forth the employment restrictions placed on senior 
examiners for one year after these individuals leave the employment of 
the OCC. During this period, a former senior examiner of a national 
bank is prohibited from accepting compensation from the bank or from an 
entity that controls the bank. The OTS adopted nearly identical rules. 
The final rule amends subpart E to include senior examiners of savings 
associations.

B. Dodd-Frank Act Amendments Affecting Approval of Change in Control 
Notices and Acceptance of Deposits by Federal Branches (Parts 5 and 28)

    This final rule contains amendments to 12 CFR part 5 to implement 
section 603 of the Dodd-Frank Act. Section 603 provides for a three-
year moratorium (with certain exceptions) on the approval of a change 
in control of credit card banks, industrial banks and trust banks, if 
the change in control would result in a commercial firm controlling 
(directly or indirectly) such a bank. The moratorium took effect on the 
date of enactment of the Act, i.e., July 21, 2010. The proposal amended 
12 CFR 5.50(f) to conform OCC regulations to this section of the Act. 
We received no comments on this amendment and adopt it as proposed.
    Section 6 of the International Banking Act, 12 U.S.C. 3104(b), 
provides that uninsured Federal branches of foreign banks may not 
accept deposits in an amount of less than the standard maximum deposit 
insurance amount (SMDIA). The SMDIA is defined in 12 U.S.C. 
1821(a)(1)(E) to mean $100,000, subject to certain adjustments provided 
for in the statute. Section 335 of the Dodd-Frank Act, which takes 
effect on the transfer date, amends 12 U.S.C. 1821(a)(1)(E) to change 
the amount from $100,000 to $250,000. Section 28.16(b) of the OCC's 
regulations states that an uninsured Federal branch may accept initial 
deposits of less than $100,000 only from certain persons. In order to 
conform this section of the OCC's regulations to the statutory changes 
and to prevent the need to continually amend this section for changes 
in the SMDIA, the proposal amended 12 CFR 28.16(b) to refer to 12 
U.S.C. 1821(a)(1)(E), rather than the obsolete reference to $100,000. 
We received no comments on this amendment and adopt it as proposed.

C. Preemption and Visitorial Powers (Parts 5, 7, and 34)

1. Dodd-Frank Act Provisions Affecting Preemption and Visitorial Powers
    The Dodd-Frank Act contains provisions, effective as of the 
transfer date (July 21, 2011), that affect the scope of preemption for 
operating subsidiaries, Federal savings associations, and national 
banks.\6\ The Act also sets forth procedural requirements for future 
preemption determinations \7\ and codifies the Supreme Court's 
visitorial powers decision in Cuomo v. Clearing House Association, 
L.L.C.\8\
---------------------------------------------------------------------------

    \6\ Dodd-Frank Act, sections 1044-1046, 124 Stat. at 2014-2017 
(to be codified at 12 U.S.C. 25b, 1465). Section 1044, which amends 
chapter one of title LXII of the Revised Statutes by inserting a new 
section 5136C (to be codified at 12 U.S.C. 25b), contains the 
principal national bank preemption provisions.
    \7\ Id. at section 1044(a), 124 Stat. at 2015-2016 (to be 
codified at 12 U.S.C. 25b).
    \8\ 129 S. Ct. 2710 (June 29, 2009).
---------------------------------------------------------------------------

    The Act precludes preemption of state law for national bank 
subsidiaries, agents and affiliates.\9\ The Act also changes the 
preemption standards applicable to Federal savings associations to 
conform to those applicable to national banks. The Act specifically 
provides that, as of the transfer date, determinations by a court or by 
the OCC under the Home Owners' Loan Act (HOLA) with respect to Federal 
savings associations must be made in accordance with the laws and legal 
standards applicable to national banks regarding the application of 
state law.\10\
---------------------------------------------------------------------------

    \9\ Dodd-Frank Act, sections 1044(a), 1045, 124 Stat. at 1376, 
2016, 2017 (to be codified at 12 U.S.C. 25b).
    \10\ Id. at section 1046, 124 Stat. at 2017 (to be codified at 
12 U.S.C. 1465).
---------------------------------------------------------------------------

    The Act further provides that ``state consumer financial laws'' 
\11\ may be preempted only if: (1) Application of such a law would have 
a ``discriminatory effect'' on national banks compared with state-
chartered banks in that state; (2) ``in accordance with the legal 
standard for preemption in the decision of the Supreme Court in'' 
Barnett Bank of Marion County, N.A. v. Nelson,\12\ the state consumer 
financial law ``prevents or significantly interferes with the exercise 
by the national bank of its powers'' (Barnett standard); or (3) the 
state consumer financial law is preempted by a provision of Federal law 
other than Title LXII of the Revised Statutes.\13\
---------------------------------------------------------------------------

    \11\ The Dodd-Frank Act defines the term ``state consumer 
financial law'' to mean a state law that (1) does not directly or 
indirectly discriminate against national banks and that (2) directly 
and specifically (3) regulates the manner, content, or terms and 
conditions of (4) any financial transaction or related account (5) 
with respect to a consumer. Id. at section 1044(a), 124 Stat. at 
2014-2015 (to be codified at 12 U.S.C. 25b). The Dodd-Frank Act does 
not address the application of state law that is not a ``state 
consumer financial law'' to national banks.
    \12\ 517 U.S. 25 (1996).
    \13\ Dodd-Frank Act, section 1044(a), 124 Stat. at 2015 (to be 
codified at 12 U.S.C. 25b).
---------------------------------------------------------------------------

    The Dodd-Frank Act imposes new procedures and consultation 
requirements with respect to how the OCC may reach certain future 
preemption determinations and clarifies the criteria for judicial 
review of these determinations. Specifically, the Act requires that the 
OCC make preemption determinations with regard to state consumer 
financial laws under the Barnett standard by regulation or order on a 
``case-by-case basis'' in accordance with applicable law.\14\ The Act 
defines ``case-by-case basis'' as a determination by the Comptroller as 
to the impact of a ``particular'' state consumer financial law on ``any 
national bank that is subject to that law'' or the law of any other 
state with substantively equivalent terms.\15\ When making a 
determination under this provision that a state consumer financial law 
has substantively equivalent terms as the law the OCC is preempting, 
the OCC

[[Page 43552]]

must first consult with and take into account the views of the Consumer 
Financial Protection Bureau (CFPB).\16\
---------------------------------------------------------------------------

    \14\ Id.
    \15\ Id.
    \16\ Id.
---------------------------------------------------------------------------

    The Dodd-Frank Act also requires there to be substantial evidence, 
made on the record of the proceeding, to support an OCC order or 
regulation that declares inapplicable a state consumer financial law 
under the Barnett standard.\17\ Finally, the Act requires the OCC to 
conduct a periodic review, subject to notice and comment, every five 
years after issuing a preemption determination relating to a state 
consumer financial law and to publish a list of such preemption 
determinations every quarter.\18\
---------------------------------------------------------------------------

    \17\ Id. at section 1044(a), 124 Stat. at 2016 (to be codified 
at 12 U.S.C. 25b).
    \18\ Id.
---------------------------------------------------------------------------

    Other features of the Dodd-Frank Act address the authority of state 
attorneys general to enforce applicable Federal and state laws. The 
National Bank Act, at 12 U.S.C. 484, vests in the OCC exclusive 
visitorial powers with respect to national banks, subject to certain 
express exceptions.\19\ On June 29, 2009, the Supreme Court issued its 
opinion in Cuomo. The Court held that when a state attorney general 
files a lawsuit to enforce a state law against a national bank, 
``[s]uch a lawsuit is not an exercise of `visitorial powers' and thus 
the Comptroller erred by extending the definition of `visitorial 
powers' to include `prosecuting enforcement actions' in state courts.'' 
\20\ Conversely, the decision recognized the ``regime of exclusive 
administrative oversight by the Comptroller'' \21\ applicable to 
national banks. Accordingly, under Cuomo, a state attorney general may 
bring an action against a national bank in a court of appropriate 
jurisdiction to enforce non-preempted state laws, but is restricted in 
conducting non-judicial investigations or oversight of a national 
bank.\22\
---------------------------------------------------------------------------

    \19\ Section 484 provides that ``[n]o national bank shall be 
subject to any visitorial powers except as authorized by Federal 
law, vested in the courts of justice or such as shall be, or have 
been exercised or directed by Congress or by either House thereof or 
by any committee of Congress or of either House duly authorized.''
    \20\ 129 S. Ct. at 2721.
    \21\ Id. at 2718.
    \22\ The Court stated that:
    The request for information [by the Attorney General] in the 
present case was stated to be ``in lieu of'' other action; implicit 
was the threat that if the request was not voluntarily honored, that 
other action would be taken. All parties have assumed, and we agree, 
that if the threatened action would have been unlawful the request-
cum-threat could be enjoined. Here the threatened action was not the 
bringing of a civil suit, or the obtaining of a judicial search 
warrant based on probable cause, but rather the Attorney General's 
issuance of subpoena on his own authority under New York Executive 
Law, which permits such subpoenas in connection with his 
investigation of ``repeated fraudulent or illegal acts * * * in the 
carrying on, conducting or transaction of business.'' See N.Y. Exec. 
Law Ann. Sec.  63(12) (West 2002). That is not the exercise of the 
power of law enforcement ``vested in the courts of justice'' which 
12 U.S.C. 484(a) exempts from the ban on exercise of supervisory 
power.
    Accordingly, the injunction below is affirmed as applied to the 
threatened issuance of executive subpoenas by the Attorney General 
for the State of New York, but vacated insofar as it prohibits the 
Attorney General from bringing judicial enforcement actions.
    Cuomo, 129 S. Ct. at 2721-2722 (emphasis added).
---------------------------------------------------------------------------

    The Dodd-Frank Act codifies the Supreme Court's decision in Cuomo 
regarding enforcement of state law against national banks by providing 
that no provision ``of this title'' \23\ or other limits restricting 
the visitorial powers to which a national bank is subject shall be 
construed to limit or restrict the authority of any state attorney 
general to ``bring an action against a national bank in a court of 
appropriate jurisdiction to enforce an applicable law and to seek 
relief as authorized by such law.'' \24\
---------------------------------------------------------------------------

    \23\ Dodd-Frank Act, section 1047(a), 124 Stat. at 2018 (to be 
codified at 12 U.S.C. 25b) (referring to Title LXII of the Revised 
Statutes).
    \24\ Id.
---------------------------------------------------------------------------

    In addition, the Act provides that these visitorial powers 
provisions shall apply to Federal savings associations and their 
subsidiaries to the same extent and in the same manner as if they were 
national banks or national bank subsidiaries.\25\
---------------------------------------------------------------------------

    \25\ Id. at section 1047(b), 124 Stat. at 2018 (to be codified 
at 12 U.S.C. 1465).
---------------------------------------------------------------------------

2. Description of the Proposal
    The proposal amended provisions of the OCC's regulations relating 
to preemption (12 CFR 7.4007, 7.4008, 7.4009, and 34.4) (2004 
preemption rules), operating subsidiaries (12 CFR 5.34 and 7.4006), and 
visitorial powers (12 CFR 7.4000) to implement the provisions of the 
Dodd-Frank Act that affect the scope of national bank and Federal 
thrift preemption and codify Cuomo.
    First, we proposed rescission of 12 CFR 7.4006, which is the OCC's 
regulation concerning the application of state laws to national bank 
operating subsidiaries. The proposal also made conforming revisions to 
the OCC's operating subsidiary rules at 12 CFR 5.34(a) and paragraph 
(e)(3) to refer to new 12 U.S.C. 25b, which includes the codification 
of the Dodd-Frank Act preclusion of operating subsidiary 
preemption.\26\
---------------------------------------------------------------------------

    \26\ Id. at section 1045, 124 Stat. at 2017 (to be codified at 
12 U.S.C. 25b) provides that Title LXII of the Revised Statutes and 
section 24 of the Federal Reserve Act (12 U.S.C. 371) do not 
preempt, annul, or affect the applicability of state law to any 
subsidiary, affiliate, or agent of a national bank (other than a 
subsidiary, affiliate, or agent that is chartered as a national 
bank).
---------------------------------------------------------------------------

    To implement the Act's changes to the preemption standards under 
the HOLA to conform to those applicable to national banks, we proposed 
adding new Sec. Sec.  7.4010(a) and 34.6 to our regulations. The new 
sections provide that state laws apply to Federal savings associations 
and their subsidiaries to the same extent and in the same manner as 
those laws apply to national banks and their subsidiaries, 
respectively. The proposal also added Sec.  7.4010(b) to similarly 
subject Federal savings associations and their subsidiaries to the same 
visitorial powers provisions in the Dodd-Frank Act that apply to 
national banks and their subsidiaries.
    In addition, the proposal made conforming changes to the 2004 
preemption rules at 12 CFR 7.4007 (concerning deposit-taking), 7.4008 
(non-real estate lending), and 34.4 (real estate lending) to reflect 
the Act's provisions concerning preemption of state consumer financial 
laws. Those rules had provided that ``state laws that obstruct, impair, 
or condition a national bank's ability to fully exercise its Federally 
authorized * * * powers are not applicable to national banks.'' The 
proposal noted that, while the phrase ``obstruct, impair or condition'' 
had been drawn from and was intended to be consistent with the 
standards cited by the Supreme Court in Barnett, the terminology had 
resulted in misunderstanding and confusion. Accordingly, the proposal 
removed that phrase from these preemption rules. The proposal further 
clarified that a state law is not preempted to the extent that result 
is consistent with the Barnett decision. The proposal also deleted 
Sec.  7.4009, which had provided only that ``state laws that obstruct, 
impair, or condition a national bank's ability to fully exercise its 
powers to conduct activities under Federal law do not apply to national 
banks'' without identifying any types of state laws that would be 
preempted.
    Finally, the proposal made several changes to the OCC's visitorial 
powers regulation, 12 CFR 7.4000, to conform the regulations to the 
Supreme Court's decision in the Cuomo case as adopted by the Dodd-Frank 
Act. First, it added a reference to 12 U.S.C. 484 in the general rule, 
set forth Sec.  7.4000(a)(1), that only the OCC may exercise visitorial 
powers with respect to national banks subject to certain exceptions. 
Second, to incorporate the Cuomo Court's recognition that nonjudicial 
investigations of national banks

[[Page 43553]]

generally constitute an exercise of visitorial powers, the proposal 
revised the definition of ``visitorial powers'' in Sec.  
7.4000(a)(2)(iv) to clarify that those powers include ``investigating 
or enforcing compliance with any applicable Federal or state laws 
concerning those activities.'' Third, the proposal added a new 
paragraph (b) to provide that ``[i]n accordance with the decision of 
the Supreme Court in Cuomo v. Clearing House Assn., L.L.C., 129 S. Ct. 
2710 (2009), an action against a national bank in a court of 
appropriate jurisdiction brought by a state attorney general (or other 
chief law enforcement officer) to enforce a non-preempted state law 
against a national bank and to seek relief as authorized thereunder is 
not an exercise of visitorial powers under 12 U.S.C. 484.''
3. Comments on the Proposal
    Commenters who disagreed with the preemption provisions of the 
proposal generally relied on several principal arguments:
    [cir] First, that the Barnett standard preemption provision is a 
new statutory ``prevent or significantly interfere'' standard that the 
proposal impermissibly seeks to broaden. These commenters referred to 
portions of the language of the statute and legislative history in 
support of their assertion that the Dodd-Frank Act adopts a new 
preemption standard, narrower than the Barnett decision's ``conflict'' 
preemption analysis.
    [cir] Second, that the ``obstruct, impair, or condition'' language 
introduced in the 2004 preemption rules, which the OCC proposed to 
delete, is inconsistent with Barnett and with the ``prevent or 
significantly interfere'' preemption standard. Many of these commenters 
asserted that the preemption rules adopted by the OCC in 2004 were 
impliedly repealed by the Dodd-Frank Act. Therefore, these commenters 
disagree with the OCC's conclusion that any portions of the 2004 
preemption rules and precedents based on those rules remain applicable.
    [cir] Third, by retaining, rather than repealing, rules that 
preempt categories of state laws, that the proposal would circumvent 
the Dodd-Frank Act procedural and consultation requirements. These 
commenters asserted that the preemption of categories and/or terms of 
state laws is equivalent to ``occupation of the field,'' rather than 
conflict, preemption. These commenters also believe that the Dodd-Frank 
Act procedural requirements apply to, and therefore (retroactively) 
invalidate, certain precedents, including the 2004 preemption rules, 
adopted prior to the Dodd-Frank Act.
    In addition, some of these commenters objected to preemption of 
state and local laws on grounds that preemption is bad public policy 
and asserted that preemption had resulted in predatory lending to 
vulnerable consumers and the financial and subprime mortgage lending 
crises. A few commenters also asserted that the Dodd-Frank Act limits 
the OCC's preemption authority to state consumer financial laws only.
    Some of these commenters further asserted that the proposed 
visitorial powers amendments:
    [cir] Could be construed as prohibiting all types of investigative 
activities by state officials, including collecting complaints from 
consumers or researching public records.
    [cir] Do not reflect the authority of state attorneys general to 
enforce compliance with certain Federal laws and regulations to be 
issued by the CFPB.\27\
---------------------------------------------------------------------------

    \27\ Id. at section 1042(a)(2)(B), 124 Stat. at 2013 (to be 
codified at 12 U.S.C. 5552) (pertaining to the ability of state 
attorneys general to enforce certain new regulations promulgated by 
the CFPB).
---------------------------------------------------------------------------

    [cir] Incorrectly narrow the definition of visitorial powers to the 
investigation and enforcement of ``non-preempted,'' rather than 
``applicable'' law.
    Commenters who supported the preemption and visitorial powers 
portions of the proposal expressed agreement with the analysis of the 
Dodd-Frank Act preemption provisions and legislative history set out in 
the preamble to the proposal. In the view of these commenters, the 
Barnett standard preemption provision adopts the conflict preemption 
standard that is the fundamental legal standard of the Barnett 
decision. Some commenters agreed that the ``obstruct, impair, or 
condition'' phrasing used in the 2004 preemption rules was a 
distillation of this conflict preemption standard. These commenters 
agreed with the position stated in the preamble to the proposal that 
eliminating this language does not impact the continued applicability 
of precedents based on those rules.
    In addition, supporting commenters argued that a contrary position 
would also have negative consequences for national banks because it 
would eliminate legal certainty concerning which laws apply to their 
operations. These commenters asserted that consumer loans and deposit 
products are subject to comprehensive regulation, and preemption has 
served to provide clarity and certainty as to which regulatory 
requirements and standards apply to national banks. These commenters 
opined that preemption of multiple, differing, and sometimes 
conflicting, state and local laws and regulations is crucial to the 
ability of banks and thrifts to conduct multi-state operations in a 
safe and sound manner to the benefit of consumers, small businesses, 
and the United States economy as a whole. They voiced concern that the 
imposition of an overlay of potentially 50 state and an indeterminate 
number of local government rules on top of myriad Federal requirements 
would have a costly consequence that could materially affect banks and 
their ability to serve consumers efficiently and effectively across the 
nation and could deter future product innovation and modernized, more 
effective consumer disclosures.\28\ These commenters cited studies 
showing that compliance with a multiplicity of state laws can increase 
costs for consumers and loan losses for banks and decrease credit 
availability. Some commenters also noted that uniform national laws, 
and the court and regulatory determinations pursuant to them, have been 
used in the past as a device to open markets, redress local 
protectionist measures, reduce the price of credit, increase the 
availability of credit, and increase the efficiency of banks.
---------------------------------------------------------------------------

    \28\ One commenter noted that a bank operating across state 
lines could find itself subject to the law of the state where it 
provides the product or service, the law of the state where its 
branch is located, or the law of the state where the customer is 
located. The bank could also be subject to laws at the county, 
municipal, or other level in any or all of these states. The laws of 
these locations could be different, and failure to comply with each 
state and local law could subject the bank to fines, penalties, and 
litigation, and as result cause it to discontinue activities in 
certain states to the potential detriment of its customers.
---------------------------------------------------------------------------

    Bank and thrift commenters described the scope of their operations 
and provided examples of the burdens the application of state and local 
laws and regulations would impose. According to these institutions, the 
burdens of having to comply with multiple state and local laws would 
impair their efficiency in offering core banking products, such as 
checking accounts, credit cards, mortgage loans, and deposit products. 
Some commenters also voiced concern that their ability to prudently 
underwrite loans, offer borrowers needed flexibility, and provide 
effective consumer disclosures would be compromised by application of 
various state laws.
    Finally, commenters also disputed the contention that preemption 
encouraged lenders to engage in predatory lending practices that 
contributed to the subprime mortgage crisis. Some

[[Page 43554]]

commenters also suggested that the final rule include additional 
provisions to: clarify that the OCC's regulations concerning non-
interest fees and charges (12 CFR 7.4002), adjustable rate mortgages 
(12 CFR 34.21) and debt cancellation contracts (12 CFR 37.1) remain in 
effect; revise, rather than eliminate, 12 CFR 7.4009 to conform with 
Sec. Sec.  7.4007, 7.4008, and 34.4; clarify that the abrogation of 12 
CFR 7.4006 will not be given retroactive effect,\29\ confirm that the 
2004 preemption rules will also apply to Federal savings associations, 
to the same extent that those rules apply to national banks; and 
confirm that all prior OTS preemption actions that are consistent with 
the holding in Barnett, including those based on the HOLA, also 
continue to be effective.
---------------------------------------------------------------------------

    \29\ One commenter also requested clarification that the Dodd-
Frank elimination of agent preemption does not apply to employees of 
national banks and Federal thrifts. Employees of national banks and 
Federal thrifts acting within the scope of their employment are not 
acting as agents of these institutions. Therefore, the elimination 
of preemption for agents has no affect on these employees.
---------------------------------------------------------------------------

4. Discussion
    The OCC has carefully considered all of the points raised by all of 
the commenters. As described in detail in the next section and for the 
reasons next discussed, the OCC is issuing a final rule that is 
substantially the same as the proposal with additional instructive 
commentary and certain modifications to the visitorial powers 
provisions to address specific concerns that commenters raised and a 
clarifying change to Sec. Sec.  7.4010(a) and 34.6 regarding the 
applicability of state law to Federal savings associations.
a. The Role of Preemption in the U.S. Banking System
    As noted above, in addition to comments on specific aspects of the 
proposed rule, some commenters urged general disfavor of the concept of 
Federal preemption as applied to the powers of national banks, and some 
also contended that preemption in the context of national banks 
contributed to predatory lending practices, which, in turn contributed 
to the recent financial crisis. Both of these concerns are important to 
address as threshold matters.
    When Congress established the fundamental structure of the U.S. 
banking system in 1863, it created national banks and a national 
banking system to operate in parallel with the existing state banking 
system--a ``dual banking system.'' Congress did not abolish state 
banking, but it did include explicit protections in the new framework 
so that national banks would be governed by Federal standards 
administered by a new Federal agency--the Office of the Comptroller of 
the Currency--and not by state authority.
    Perhaps not surprisingly, the independence of national banks from 
state authority over their banking business has produced tensions and 
disputes over the years. Yet, a long series of Supreme Court decisions 
beginning in the earliest years of the national banking system have 
confirmed the fundamental principle of Federal preemption as applied to 
national banks: that the Federally-granted banking powers of national 
banks are governed by national standards set at the Federal level, 
subject to supervision and oversight by the OCC. These characteristics 
are fundamental to the duality of the ``dual banking system.'' Thus 
established, the twin pillars of the national and state banking systems 
have been fundamental to the structure--and success--of the U.S. 
banking system for nearly 150 years. The Supreme Court's Barnett 
decision was a particularly thorough treatment of this background, 
applying a conflict preemption standard consistent with over a century 
of Supreme Court precedent as the yardstick for determining when state 
law applied to a national bank.
    With this design, the state and national banking systems have grown 
up around each other in this ``dual banking system.'' Encompassing both 
large institutions that market products and services regionally, 
nationally and globally, and smaller institutions that focus their 
business on their immediate communities, this dual system is diverse, 
with complex linkages and interdependencies. In this context, and over 
time, a benefit has been that the ``national'' part of the dual banking 
system, the part that has allowed large and small banks to operate 
under uniform national rules across state lines, has helped to foster 
the growth of national products and services and multi-state markets. 
And the system also has supported the contributions of the state 
systems, allowing states to serve as a ``laboratory'' for new 
approaches applicable to their state-supervised institutions.
    Throughout our history, uniform national standards have proved to 
be a powerful engine for prosperity and growth. National standards for 
national banks have been very much a part of this history, benefiting 
individuals, business and the national economy. In the 21st Century, 
the Internet and the advent of technological innovations in the 
creation and delivery of financial products and services has 
accentuated the geographic seamlessness of financial services markets, 
highlighting the importance of uniform standards that attach based on 
the product or service being provided, applying wherever and however 
the product or service is provided. However, the premise that 
Federally-chartered institutions would be subject to standards set at 
the Federal, rather than state-by-state level, does not and should 
never mean that those institutions are subject to lax standards. 
National banks are subject to extensive regulation at the Federal 
level--which is being considerably enhanced by many provisions of the 
Dodd-Frank Act--and to regular, and in some cases, continuous 
examination of their operations.
    Because of the degree of regulation and supervision to which 
national banks are subject, national banks--and other Federally-
regulated depository institutions--had limited involvement in subprime 
lending and the worst subprime loans were originated by nonbank lenders 
and brokers \30\ where national bank preemption was not applicable. 
National bank preemption did not and does not prevent regulation of 
nonbank mortgage lenders and brokers, and going forward, the CFPB's 
authority in this area will bring a new level of Federal standards, 
oversight and enforcement over this ``shadow banking system.'' Concerns 
that have been expressed that Federal consumer protection rules were 
not sufficiently

[[Page 43555]]

robust should be addressed by the CFPB's authority and mandate to write 
strong Federal consumer protection standards, and its research-based 
and consumer-tested rulemaking processes envisioned under the Dodd-
Frank Act.
---------------------------------------------------------------------------

    \30\ See Testimony of Comptroller of the Currency John C. Dugan 
to the Financial Crisis Inquiry Commission, App. B (April 8, 2010); 
Department of the Treasury, Financial Regulatory Reform, A New 
Foundation: Rebuilding Financial Supervision and Regulation (Jun. 
17, 2009), at 69-70 (``worst abuses were made by firms not covered 
by the CRA,'' which applies only to insured depository 
institutions); Mason, Joseph R., Kulick, Robert B. and Singer, Hal 
J., The Economic Impact of Eliminating Preemption of State Consumer 
Protection Laws, 12 U. PA. J. Bus. L. 781 at 782 (2010) (the 
``overwhelming majority of subprime mortgage loans were originated 
by companies that were not subject to preemption * * *''); Committee 
on Financial Services, H.R. Rep. No 111-94, Mortgage Reform and 
Anti-Predatory Lending Act (May 4, 2009) (``Subprime lenders 
included banks, bank affiliates, and non-bank mortgage companies. 
According to Mortgage Bankers Association (MBA), more than half of 
subprime mortgages were made by mortgage brokers and lenders with no 
Federal supervision; a quarter were made by finance companies that 
are affiliates of bank holding companies and indirectly regulated by 
the Federal Reserve Board; and the rest were made by institutions 
directly regulated by Federal financial regulators such as banks, 
thrifts, and credit unions.''); Barney Frank, Chairman of the House 
Financial Services Committee, Lessons of the Subprime Crisis, Boston 
Globe, September 14, 2007, at 11A (``Reasonable regulation of 
mortgages by the bank and credit union regulators allowed the market 
to function in an efficient and constructive way, while mortgages 
made and sold in the unregulated sector led to the crisis.'').
---------------------------------------------------------------------------

b. The Barnett Standard Preemption Provision
    With respect to the specifics of the proposal, the OCC concludes 
that the Dodd-Frank Act does not create a new, stand-alone ``prevents 
or significantly interferes'' preemption standard, but rather, 
incorporates the conflict preemption legal standard and the reasoning 
that supports it in the Supreme Court's Barnett decision. This result 
follows from the language of the statute; is supported by language of 
other, integrally-related portions of the Dodd-Frank Act preemption 
provisions; was so described by its sponsors at the time of enactment 
as intending that result; is consistent with the interpretation Federal 
courts have accorded virtually identical preemption language in the 
Gramm-Leach-Bliley Act of 1999 (GLBA); and subsequently has been 
explained as embodying the intent of the sponsors of the language.
    As described in the preamble to the proposal, the language of the 
Barnett standard preemption provision differs substantially from 
earlier versions of the legislation. Its sponsors have explained that 
this change was intended to provide consistency and legal certainty by 
preserving the preemption principles of the Supreme Court's Barnett 
decision, while specifying a process for preemption determinations, and 
integrating that process with other reforms implemented by the Dodd-
Frank Act, prospectively. For example, when asked by Senator Carper to 
confirm that Section 1044 retained the Barnett standard for determining 
preemption of state consumer financial law passed by the Senate, 
Chairman Dodd confirmed that was so.\31\
---------------------------------------------------------------------------

    \31\ As passed by the Senate on May 20, 2010, the legislation 
incorporated the ``Carper Amendment,'' which provided that a state 
consumer financial law could be ``preempted in accordance with the 
legal standards of the decision of the Supreme Court of the United 
States in Barnett Bank v. Nelson (517 U.S. 25 (1996)).'' 156 Cong. 
Rec. S3866 (daily ed. May 18, 2010). The final version of Section 
1044 enacted by Congress reflects the revision to the Carper 
Amendment made by the Conference Committee. When discussing that 
revision, Senator Carper and Senator Dodd had the following 
exchange:
    Senator Carper: Mr. President, I am very pleased to see that the 
conference committee * * * retained my amendment regarding the 
preemption standard for State consumer financial laws with only 
minor modifications. I very much appreciate the effort of Chairman 
Dodd in fighting to retain the amendment in conference.
    Senator Dodd: I thank the Senator. As the Senator knows, his 
amendment received strong bipartisan support on the Senate floor and 
passed by a vote of 80 to 18. It was therefore a Senate priority to 
retain his provision in our negotiations with the House of 
Representatives.
    Senator Carper: One change made by the conference committee was 
to restate the preemption standard in a slightly different way, but 
my reading of the language indicates that the conference report 
still maintains the Barnett standard for determining when a State 
law is preempted.
    Senator Dodd: The Senator is correct. That is why the conference 
report specifically cites the Barnett Bank of Marion County, N.A. v. 
Nelson, Florida Insurance Commissioner, 517 U.S. 25 (1996) case. 
There should be no doubt the legislation codifies the preemption 
standard stated by the U.S. Supreme Court in that case.
    Senator Carper: I again thank the Senator. This will provide 
certainty to everyone--those who offer consumers financial products 
and to consumer[s] themselves.
    156 Cong. Rec. S5902 (daily ed. July 15, 2010) (colloquy between 
Senator Carper and Chairman Dodd).
    See also 156 Cong. Rec. S5889 (daily ed. July 15, 2010) 
(statement by Senator Tim Johnson). And see letter from Senator 
Thomas R. Carper and Senator Mark Warner to Acting Comptroller John 
Walsh (April 4, 2011); OCC Interpretive Letter 1132 (letter from 
Acting Comptroller Walsh to Senators Warner and Carper) (May 12, 
2011) (responding to Senators Carper and Warner and providing 
further detail on the OCC's analysis of the Dodd-Frank Act 
preemption provisions), available at http://www.occ.gov/static/interpretations-and-precedents/may11/int1132.pdf; Letter from 
Senator Thomas R. Carper and Senator Mark Warner to Treasury 
Secretary Timothy Geithner (July 8, 2011).
---------------------------------------------------------------------------

    Some commenters assert, however, that the Barnett standard 
provision and the colloquy between Senators Carper and Dodd point to an 
intention to adopt a new ``prevent or significantly interfere'' 
preemption test for state consumer financial law. However, this 
assertion fails to take account of both the context and entirety of the 
colloquy and is not sustained by the language of the statute, or by the 
Barnett decision itself. Section 1044 of the Dodd-Frank Act provides in 
pertinent part that a state consumer financial law as applied to a 
national bank will be preempted only if, ``in accordance with the legal 
standard for preemption in the decision of the Supreme Court of the 
United States in [Barnett], the State consumer financial law prevents 
or significantly interferes with the exercise by the national bank of 
its powers * * * '' \32\ The ``legal standard for preemption'' employed 
in the Court's decision is conflict preemption, applied in the context 
of powers granted national banks under Federal law.\33\ ``Prevent or 
significantly interfere'' is not ``the legal standard for preemption in 
the decision''; it is part of the Court's discussion of its reasoning; 
an observation made describing other Supreme Court precedent that is 
cited in the Court's decision.\34\
---------------------------------------------------------------------------

    \32\ Dodd-Frank Act, section 1044(a), 124 Stat. at 2015 (to be 
codified at 12 U.S.C. 25b).
    \33\ The Barnett decision describes in detail the analysis under 
the Barnett conflict preemption standard. 517 U.S. at 32-35.
    \34\ 517 U.S. at 33-34.
---------------------------------------------------------------------------

    Therefore, in order to apply the Barnett standard preemption 
provision in section 1044, the first step is that the preemption 
analysis must be ``in accordance with the legal standard for preemption 
in the decision of the Supreme Court'' in Barnett. Thus, the analysis 
should be a conflict preemption legal standard, and the analysis should 
be in accordance with the Court's reasoning applying that standard in 
the Barnett decision. The ``prevent or significantly interfere'' phrase 
that follows then provides a touchstone to that conflict preemption 
standard and analysis.\35\ The phrase cannot be a new, stand-alone 
standard, divorced from the reasoning of the decision without ignoring 
the language that precedes it, which directs that the legal standard be 
the standard for preemption ``in the decision'' of the Court. That 
standard is conflict preemption, as supported by the reasoning of the 
decision, which includes, but is not bounded by, the ``prevent or 
significantly interfere'' formulation. If Congress had intended a 
different preemption analysis than the conflict preemption analysis in 
Barnett, it would have been rejecting not just Barnett, but also, as 
described above, well over a century of judicial precedent upon which 
the decision was founded. We decline to infer that result from 
legislative language that begins by stating that preemption would be 
determined ``in accordance with the legal standard for preemption in 
the decision of the Supreme Court'' in Barnett.
---------------------------------------------------------------------------

    \35\ We note that a recent decision by the U.S. Court of Appeals 
for the 11th Circuit reached the same result. Baptista v. JPMorgan 
Chase Bank, N.A., 640 F.3d 1194, 1197 (11th Cir. May 11, 2011) 
(``Thus it is clear that under the Dodd-Frank Act, the proper 
preemption test asks whether there is a significant conflict between 
the state and federal statutes--that is, the test for conflict 
preemption.'').
---------------------------------------------------------------------------

    This result is supported by other portions of the Dodd-Frank Act 
and relevant precedent.\36\ Specifically, in the same section 1044, the 
related requirement that the OCC must have ``substantial evidence'' on 
the record to support adoption of preemption rules or orders refers to 
``the legal standard of the decision of the Supreme Court in'' the 
Barnett decision, not to any single phrase used in that decision.\37\ 
It would

[[Page 43556]]

not make sense for this ``substantial evidence'' requirement to require 
compliance with a different preemption standard than the standard 
intended by the Barnett standard preemption provision.
---------------------------------------------------------------------------

    \36\ See, e.g., Dodd-Frank Act, section 1046(a), 124 Stat. at 
2017 (to be codified at 12 U.S.C. 1465).
    \37\ See id. at section 1044(a), 124 Stat. at 2016 (to be 
codified at 12 U.S.C. 25b) (providing that regulations and orders 
promulgated under Barnett standard preemption do not affect the 
application of a state consumer financial law to a national bank 
unless substantial evidence made on the record of the proceeding 
supports the specific finding of preemption ``in accordance with the 
legal standard of the decision of the Supreme Court of the United 
States in Barnett Bank of Marion County, N.A. v. Nelson, Florida, 
Florida Insurance Commissioner, et al., 517 U.S. 25 (1996).'').
---------------------------------------------------------------------------

    Other textual support is found in the Dodd-Frank Act section 
providing that Federal savings associations are to be subject to the 
same preemption standards applicable to national banks. Subsection (a) 
of section 1046 states that preemption determinations for Federal 
savings associations under the Home Owners' Loan Act ``shall be made in 
accordance with the laws and legal standards applicable to national 
banks regarding preemption of state law.'' The heading of subsection 
(b), which immediately follows, is ``Principles of Conflict Preemption 
Applicable,'' which can only refer to the national bank preemption 
standards to which Federal savings associations are made subject by 
subsection (a).
    The Barnett standard preemption provision also uses language 
virtually identical to that used in section 104(d)(2)(A) of the 
GLBA.\38\ The leading case applying that standard similarly treated the 
phrase ``prevents or significantly interferes'' as a reference to the 
whole of the Court's Barnett preemption analysis and referred to the 
GLBA statutory language as ``the traditional Barnett Bank standards.'' 
\39\
---------------------------------------------------------------------------

    \38\ See 15 U.S.C. 6701(d)(2)(A).
    \39\ Association of Banks in Insurance Inc. v. Duryee, 270 F.3d 
397, at 405, 408 (6th Cir. 2001).
---------------------------------------------------------------------------

    Accordingly, because we conclude that the Dodd-Frank Act preserves 
the Barnett conflict preemption standard, precedents consistent with 
that analysis--which may include regulations adopted consistent with 
such a conflict preemption justification--are also preserved.\40\ 
Further, as of July 21, 2011, those rules and precedents will apply to 
Federal savings associations to the same extent that they apply to 
national banks.
---------------------------------------------------------------------------

    \40\ One commenter asserted that the Dodd-Frank Act expressly 
preserves only the OCC's rules concerning the law applicable to 
interest rates charged by national banks, and those applicable to 
prior contracts. This does not mean, however, that the 2004 
preemption rules and precedents in other areas have become invalid. 
It is well settled that ``repeals by implication are not favored and 
will not be found unless an intent to repeal is `clear and 
manifest.' '' Rodriguez v. U.S., 480 U.S. 522, 524 (1987) (internal 
citations omitted). Rather, regulatory provisions and other 
precedents that are consistent with standards in the Dodd-Frank Act 
are preserved.
---------------------------------------------------------------------------

c. Deletion of ``Obstruct, Impair, or Condition'' Preemption 
Formulation and Retention of the 2004 Preemption Rules
    Some commenters asserted that the ``obstruct, impair, or 
condition'' phrasing in the 2004 preemption rules was not only 
inconsistent with Barnett but also inconsistent with the new, narrower 
``prevents or significantly interferes'' standard that they assert is 
imposed by the Dodd-Frank Act. As discussed above, we conclude that the 
Dodd-Frank Act Barnett standard is the conflict preemption standard 
employed in the Court's decision, not a new test. The question remains, 
however, of the relationship between that standard and the ``obstruct, 
impair or condition'' formulation. As we noted in the preamble to the 
proposal, the words ``obstruct, impair or condition'' as used in the 
2004 preemption rules were intended to reflect the precedents cited in 
Barnett, not to create a new preemption standard. Nevertheless, we 
acknowledge that the phrase created confusion and misunderstanding well 
before enactment of the Dodd-Frank Act. We also recognize that 
inclusion of the ``prevents or significantly interferes'' conflict 
preemption formulation in the Barnett standard preemption provision may 
have been intended to change the OCC's approach by shifting the basis 
of preemption back to the decision itself, rather than placing reliance 
on the OCC's effort to distill the Barnett principles in this 
manner.\41\
---------------------------------------------------------------------------

    \41\ As we noted in note 31, the colloquy between Senators 
Carper and Dodd clearly demonstrates that Congress did not intend to 
change the Barnett standard. But the final language in section 1044 
could be read as a rejection of the ``obstruct, impair, or 
condition'' formulation used in the 2004 preemption rules.
---------------------------------------------------------------------------

    For these reasons, the OCC is deleting the phrase in the final 
rule.\42\ Eliminating this language from our regulations will remove 
any ambiguity that the conflict preemption principles of the Supreme 
Court's Barnett decision are the governing standard for national bank 
preemption. In response to concerns raised by commenters about Dodd-
Frank Act legislative intent, misunderstanding and potential 
misapplication of the ``obstructs, impairs or conditions'' formulation, 
and the relevant legislative history, the OCC also has reconsidered its 
position concerning precedent that relied on that standard. To the 
extent that an existing preemption precedent is exclusively reliant on 
the phrase ``obstructs, impairs, or conditions'' as the basis for a 
preemption determination, we believe that validity of the precedent 
would need to be reexamined to ascertain whether the determination is 
consistent with the Barnett conflict preemption analysis as discussed 
above.\43\
---------------------------------------------------------------------------

    \42\ We decline commenters' request that we also delete this 
language from the OCC's bank operations rule at 12 CFR 7.4009 rather 
than eliminating the rule in its entirety. We have not had occasion 
to apply this rule to particular types of state laws and therefore 
its removal should not create uncertainty about the validity of 
prior precedent. The application of state consumer financial laws to 
national bank operations continues to be subject to a Barnett 
conflict preemption analysis.
    \43\ Under some circumstances, however, the preemptive effect of 
the former regulation could be preserved under Section 1043 of the 
Dodd-Frank Act. See Dodd-Frank Act, section 1043, 124 Stat. at 2014 
(to be codified at 12 U.S.C. 5553). The OCC has not identified any 
OCC-issued preemption precedent that rested only on the ``obstruct, 
impair, or condition'' formulation.
---------------------------------------------------------------------------

    Some commenters also asserted that the preemption rules promulgated 
by the OCC in 2004 are not consistent with the Dodd-Frank Act, or with 
Barnett, because they identify categories and/or terms of state laws 
that are preempted; some of these commenters equated listing of 
categories of preempted state laws with field preemption. However, 
these rules are not based on a field preemption standard.\44\ They were 
based on the OCC's conclusion that the listed types and terms of state 
laws would be preempted by application of the conflict preemption 
standard of the Barnett decision.
---------------------------------------------------------------------------

    \44\ See McCormick v. Wells Fargo Bank, No. 3:08-0944, 2009 WL 
151588, at *2 (S.D. W.Va. Jan 22, 2009).
---------------------------------------------------------------------------

    The essence of the Barnett conflict preemption analysis is an 
evaluation of the extent and nature of an impediment posed by state law 
to the exercise of a power granted national banks under Federal 
law.\45\ The ``conflict'' that is analyzed in conflict preemption is 
the nature and scope of that impediment. Where the same type of 
impediment exists under multiple states' laws, a single conclusion of 
preemption can apply to multiple laws that contain the same type of 
impediment--that generate the same type of conflict with a Federally-
granted power. Accordingly, a conflict preemption analysis can be state 
law-specific, or it can apply to provisions or terms in more than one 
law that present the same type of conflict.\46\ But in all cases,\47\ 
there must

[[Page 43557]]

be a conflict that triggers preemption under the standard articulated 
in the Barnett decision.\48\ As detailed below, the Dodd-Frank Act's 
case-by-case procedural requirement applicable to future determinations 
regarding preemption of state consumer financial laws allows 
categorical determinations where multiple state laws are identified. 
The Act defines ``case-by-case basis'' as a determination by the 
Comptroller as to the impact of a ``particular'' state consumer 
financial law on ``any national bank that is subject to that law'' or 
the law of any other state with substantively equivalent terms.
---------------------------------------------------------------------------

    \45\ As noted by the Court in Barnett, these Federal powers 
granted national banks may be ``both enumerated and incidental.'' 
517 U.S. at 32.
    \46\ See Dodd-Frank Act, section 1044(a), 124 Stat. at 2015 (to 
be codified at 12 U.S.C. 25b).
    \47\ The Barnett standard preemption provision of Dodd-Frank 
applies to questions concerning the applicability of state consumer 
financial laws to national banks; the principles of preemption 
articulated in the Barnett decision apply to questions concerning 
the application of all types of state laws to national banks. 
Contrary to a few commenters' assertions, nothing in Dodd-Frank 
affects the OCC's authority to address preemption questions 
concerning laws other than ``state consumer financial laws.''
    \48\ This is in contrast to the OTS's preemption rules, which 
assert an ``occupation of the field'' preemption standard for 
Federal savings associations. See, e.g., 12 CFR 557.11(b), 560.2(a).
---------------------------------------------------------------------------

    The types and terms of laws that are set out in the 2004 preemption 
rules were based on the OCC's experience with the potential impact of 
such laws on national bank powers and operations.\49\ We have re-
reviewed those rules in connection with this rulemaking to confirm that 
the specific types of laws cited in the rules are consistent with the 
standard for conflict preemption in the Supreme Court's Barnett 
decision.\50\ For example, in the lending arena, based upon our 
assessment as the primary Federal supervisor of national banks, state 
laws that would affect the ability of national banks to underwrite and 
mitigate credit risk, manage credit risk exposures, and manage loan-
related assets, such as laws concerning the protection of collateral 
value, credit enhancements, risk mitigation, loan-to-value standards, 
loan amortization and repayment requirements, circumstances when a loan 
may be called due and payable, escrow standards, use of credit reports 
to assess creditworthiness of borrowers, and origination, managing, and 
purchasing and selling extensions of credit or interests therein, would 
meaningfully interfere with fundamental and substantial elements of the 
business of national banks and with their responsibilities to manage 
that business and those risks.
---------------------------------------------------------------------------

    \49\ Id. at Sec. Sec.  7.4007, 7.4008, 34.4; see 69 FR 1904, 
1911 (Jan. 13, 2004) (final preemption rules); see also 68 FR 46119, 
46128 (Aug. 5, 2003) (proposed preemption rules).
    \50\ We also have added a clarification in the final rule to 
specifically state that the OCC will use the Barnett standard for 
determining that state laws are applicable to national banks. This 
clarification does not effect any substantive change, but simply 
modifies the reference to state laws that are not preempted because 
they have only an insignificant effect upon national bank powers 
according to the Barnett conflict standard, notwithstanding the type 
of state law involved.
---------------------------------------------------------------------------

    Similarly, disclosure laws that impose requirements that predicate 
the exercise of national banks' deposit-taking or lending powers on 
compliance with state-dictated disclosure requirements clearly present 
a significant interference, within the meaning of Barnett, with the 
exercise of those national bank powers. This type of law falls squarely 
within the precedent recognized in the Supreme Court's Barnett 
decision, notably the Franklin Nat'l Bank decision specifically 
discussed and relied upon in Barnett.\51\
---------------------------------------------------------------------------

    \51\ Barnett, 517 U.S. at 33; Franklin Nat'l Bank of Franklin 
Square v. New York, 347 U.S. 373 (1954). See also American Bankers 
Ass'n v. Lockyer, 239 F. Supp. 2d 1000, 1014-1018 (E.D. Cal. 2002) 
(the monetary and non-monetary costs of a mandatory disclosure 
scheme constituted a significant interference with national banks' 
powers under the National Bank Act); Rose v. Chase Bank, N.A., 513 
F.3d 1032 (9th Cir. 2008) (a state may not by statute attach civil 
liability to the offer of convenience checks that do not carry 
state-mandated disclosures.) Lockyer and Rose cited and relied on 
the preemption standard in Barnett.
---------------------------------------------------------------------------

    And state laws that would alter standards of a national bank's 
depository business--setting standards for permissible types and terms 
of accounts and for funds availability, similarly would significantly 
interfere with management of a core banking business. Moreover, the 
imposition of state-based standards on national banks' depository 
activities implicates aspects of a bank's overall risk management and 
funding strategies, including liquidity, interest rate risk exposure, 
funding management, and fraud prevention. State and local law 
directives or instructions affecting these areas are significant, 
within the meaning of Barnett, since they affect whether and how the 
bank may offer a core banking product and manage some of its most basic 
funding functions in operating a banking business.
    Several commenters identified particular types of laws in the 
foregoing categories and explained how they impaired or otherwise 
burdened their operations. Those commenters also emphasized that to the 
extent that multiple states' requirements may be asserted, the 
significance of the interference is magnified. Based upon the OCC's 
supervisory experience, these concerns are valid.
d. Dodd-Frank Act Procedural and Consultation Requirements
    Some commenters asserted that maintaining any of the preemption 
rules contravenes the new Dodd-Frank Act preemption procedures. These 
commenters contend that OCC can preempt only on a ``case-by-case 
basis'' if a ``particular'' state law, or an equivalent one, prevents 
or significantly interferes with the exercise of bank powers, after 
consultation with the CFPB. However, these provisions clearly apply to 
determinations made under the Barnett standard provisions of the Dodd-
Frank Act that are not effective until July 21, 2011. Actions and 
regulations in effect prior to the effective date are not subject to 
the case-by-case requirement, but, as discussed above, the continued 
validity of those precedents applicable to state consumer financial 
laws is subject to the standards of section 1044(b)(1). Future 
preemption determinations would be subject to the new Dodd-Frank Act 
procedural provisions. Where Congress wanted to make wholesale changes 
to existing preemption standards, it clearly did so, as it did by 
eliminating field preemption for Federal thrifts and preemption for 
operating subsidiaries, and those standards operate prospectively.\52\
---------------------------------------------------------------------------

    \52\ See Dodd-Frank Act, sections 1046(a), 1044(a), 124 Stat. at 
2017, 2015 (to be codified at 12 U.S.C. 1465, 25b). Earlier versions 
of the legislation would have had a retroactive impact by creating 
various new standards for preemption under the National Bank Act, 
invalidating an extensive body of national bank judicial, 
interpretive and regulatory preemption precedent. See H.R. 4173, 
111th Cong. Sec.  4404 (as passed by the House of Representatives on 
Dec. 11, 2009). The final version of the Dodd-Frank Act legislation 
enacted by Congress did not adopt this approach. See, e.g., Landgraf 
v. USI Film Products, 511 U.S. 244, 272-73 (1994) (recognizing 
presumption against retroactive legislation).
---------------------------------------------------------------------------

e. Visitorial Powers Amendments
    As explained above, some commenters voiced concern about the 
proposed revision to the definition of visitorial powers at Sec.  
7.4000(a)(2)(iv) to include ``[i]nvestigating or enforcing compliance 
with any applicable Federal or state laws concerning those 
activities.'' This addition, consistent with the concept of visitation, 
was intended to include direct investigations of national banks such as 
through requests for documents or testimony directed to the bank to 
ascertain the bank's compliance with law through mechanisms not 
otherwise authorized under the rule. It would not include collecting 
information from other sources or from the bank through actions that do 
not constitute visitations or as authorized under Federal law. In 
response to commenters and to better reflect the Cuomo decision, we 
have revised the final rule to clarify this point.
    Commenters also opined that the proposed definition does not 
reflect the authority of state attorneys general to

[[Page 43558]]

enforce certain Federal laws and certain regulations to be issued by 
the CFPB. We believe this authority is addressed in current Sec.  
7.4000(a)(3), which provides that the OCC has exclusive visitorial 
powers ``[u]nless otherwise provided by Federal law,'' and in Sec.  
7.4000(b)(1).
    Finally, some commenters asserted that the phrase ``non-preempted 
state law'' used in the proposal could be interpreted more narrowly 
than the ``applicable law'' phrasing used in the Dodd-Frank Act. We 
intended the authority addressed in current Sec.  7.4000(a)(3) in 
combination with the phrase ``non-preempted state law'' to have the 
result sought by these commenters, but we understand the commenters' 
concern regarding the clarity of this result. Accordingly, we have 
changed the language of the final rule to simply use the term 
``applicable law.'' We note, however, that this is an exception from a 
prohibition of certain visitorial actions by an attorney general (or 
other chief state law enforcement officer), not an authorization. In 
the case of both non-preempted state law and Federal law, the law in 
question still must provide authority for the attorney general to 
enforce and seek relief as authorized under that applicable law.
5. Description of the Final Rule
    For the reasons set forth in this preamble, the final rule amends 
provisions of the OCC's regulations relating to preemption (12 CFR 
7.4007, 7.4008, 7.4009, and 34.4), operating subsidiaries (12 CFR 5.34 
and 7.4006), and visitorial powers (12 CFR 7.4000) as follows:
     The final rule adds Sec. Sec.  7.4010(a) and 34.6 to 
provide that Federal savings associations and their subsidiaries are 
subject to the same laws and legal standards, including OCC 
regulations, as are applicable to national banks and their subsidiaries 
regarding the preemption of state law. The final rule also adds Sec.  
7.4010(b) to subject Federal savings associations and their 
subsidiaries to the same visitorial powers provisions in the Dodd-Frank 
Act that apply to national banks and their subsidiaries.
     The final rule makes conforming changes to Sec. Sec.  
7.4007, 7.4008, and 34.4. It revises paragraphs (b) in Sec.  7.4007, 
(d) in Sec.  7.4008, and (a) in Sec.  34.4 by removing ``state laws 
that obstruct, impair, or condition a national bank's ability to fully 
exercise its Federally authorized * * * powers are not applicable to 
national banks.'' The final rule further clarifies that a state law is 
not preempted to the extent consistent with the Barnett decision.
     The final rule deletes Sec.  7.4009.
     The final rule deletes Sec.  7.4006, which governs 
applicability of state laws to national bank operating subsidiaries. 
The final rule also makes conforming revisions to 12 CFR 5.34(a) and 
paragraph (e)(3) by expressly referencing the new section 12 U.S.C. 25b 
adopted by the Dodd-Frank Act.
     The final rule makes a number of changes to Sec.  7.4000 
to conform the regulations to the Supreme Court's decision in the Cuomo 
case as adopted by the Dodd-Frank Act. First, it adds a reference to 12 
U.S.C. 484 in Sec.  7.4000(a)(1). Second, it revises paragraph 
(a)(2)(iv) to read ``[e]nforcing compliance with any applicable Federal 
or state laws concerning those activities, including through 
investigations that seek to ascertain compliance through production of 
non-public information by the bank, except as otherwise provided in 
paragraphs (a), (b) and (c).'' Third, it adds a new paragraph (b), 
which specifically provides that ``[i]n accordance with the decision of 
the Supreme Court in Cuomo v. Clearing House Assn., L.L.C., 129 S. Ct. 
2710 (2009), an action against a national bank in a court of 
appropriate jurisdiction brought by a state attorney general (or other 
chief law enforcement officer) to enforce an applicable law against a 
national bank and to seek relief as authorized by such law is not an 
exercise of visitorial powers under 12 U.S.C. 484.'' Fourth, it 
redesignates paragraphs (b) and (c) as new paragraphs (c) and (d) and 
makes conforming revisions to Sec.  7.4000(c)(2), which provides an 
exception from the general rule in Sec.  7.4000(a)(1) for such 
visitorial powers as are vested in the courts of justice.
    We did not propose changes to 12 CFR 7.4002, 34.21, and 37.1 and 
therefore make no changes to these provisions in this final rule. 
However, we agree with commenters that these rules remain in effect.

D. Assessments (Part 8)

1. Background
    The Dodd-Frank Act transfers authority to collect assessments for 
Federal savings associations from the OTS to the OCC.\53\ This 
authority is effective as of the transfer date, July 21, 2011.\54\ The 
Dodd-Frank Act also provides that, in establishing the amount of an 
assessment, the Comptroller may consider the nature and scope of the 
activities of the entity, the amount and type of assets it holds, the 
financial and managerial condition of the entity, and any other factor 
that is appropriate.\55\
---------------------------------------------------------------------------

    \53\ See Dodd-Frank Act, section 318(b), 124 Stat. at 1526-1527 
(to be codified at 12 U.S.C. 16) (authorizing the Comptroller to 
collect assessments, fees, or other charges from entities for which 
it is the appropriate Federal banking agency). See also id. at 
section 312(c), 124 Stat. at 1522 (to be codified at 12 U.S.C. 1813) 
(amending the Federal Deposit Insurance Act to designate the OCC as 
the appropriate Federal banking agency for Federal savings 
associations); section 369, 124 Stat. at 1563 (to be codified at 12 
U.S.C. 1467) (amending the HOLA to authorize the Comptroller to 
assess savings associations and affiliates of savings associations 
for the cost of examinations as the Comptroller ``deems necessary or 
appropriate'').
    \54\ Id. at section 312(a), 124 Stat. at 1521 (to be codified at 
12 U.S.C. 5412).
    \55\ Id. at section 318(b), 124 Stat. at 1526-1527 (to be 
codified at 12 U.S.C. 16).
---------------------------------------------------------------------------

    Prior to the transfer date, the OCC and the OTS assessed banks and 
savings associations, respectively, using different methodologies, 
although the agencies' methodologies generally resulted in similar 
levels of assessments. Under the OTS assessment system, assessments 
were due each year on January 31 and July 31, and were calculated based 
on an institution's asset size, condition, and complexity.\56\ The 
asset size component of the assessment was calculated using a table and 
formula contained in the OTS's regulation.\57\ The OTS set specific 
rates that apply to the table through a Thrift Bulletin on assessments 
and fees.\58\
---------------------------------------------------------------------------

    \56\ 12 CFR part 502.
    \57\ Id. at Sec.  502.20.
    \58\ Thrift Bulletin 48-29 (Dec. 2, 2010).
---------------------------------------------------------------------------

    The condition component in the OTS's regulation applied to savings 
associations with Uniform Financial Institutions Rating System (UFIRS) 
ratings of 3, 4, or 5. The condition surcharge is determined by 
multiplying a savings association's size component by 50%, in the case 
of any association that receives a composite UFIRS rating of 3, and 
100% in the case of any association that receives a composite UFIRS 
rating of 4 or 5. Under the OTS regulation, there was no cap on the 
condition surcharge.
    The assessment for complexity was based on a savings association's 
trust assets and on certain non-trust assets. The OTS charged a 
complexity component for trust assets if a savings association had more 
than $1 billion in one of three components: trust assets managed by the 
savings association, the outstanding principal balance of assets that 
are covered by recourse obligations or direct credit substitutes, and 
the principal amount of loans that the institution services for others. 
The OTS charged the complexity component for these categories of assets 
above $1 billion under tiers and rates set out in a Thrift Bulletin.

[[Page 43559]]

    If a savings association administers trust assets of $1 billion or 
less, the OTS could assess fees for its examinations and investigations 
of those institutions. The OTS also could assess a savings association 
for examination or investigation of its affiliates. Again, these fees 
were set in a Thrift Bulletin.
    Under the OCC's assessment regulation, set forth at 12 CFR part 8, 
assessments for each national bank are due on March 31 and September 30 
of each year.\59\ The semiannual assessment for each national bank is 
based on an institution's asset size and is calculated using a table 
and formula in the OCC's regulation.\60\ The OCC sets the specific 
rates for the table each year in the Notice of Comptroller of the 
Currency Fees (Notice of Fees).\61\ The OCC may provide a reduced 
semiannual assessment for each non-lead bank within a bank holding 
company.\62\
---------------------------------------------------------------------------

    \59\ Part 8 contains parallel assessment rules for Federal 
branches and agencies.
    \60\ 12 CFR 8.2(b).
    \61\ Notice of Comptroller of the Currency Fees for Year 2011 
(Dec. 1, 2010), available at http://www.occ.gov/news-issuances/bulletins/2010/bulletin-2010-41.html.
    \62\ A ``lead bank'' is defined in the OCC's regulation as the 
largest national bank controlled by a company based on the total 
assets held by each national bank controlled by that company. 12 CFR 
8.2(a)(6)(ii)(A). A ``non-lead bank'' means a national bank that is 
not the lead bank controlled by a company that controls two or more 
national banks. Id. at Sec.  8.2(a)(6)(ii)(B). The percentage of the 
discount for non-lead banks is set in the annual Notice of Fees.
---------------------------------------------------------------------------

    In addition to the semiannual assessment, the OCC applies a 
separate assessment for its examination of ``independent credit card 
banks'' and ``independent trust banks.'' \63\ A bank is an independent 
credit card bank if it engages primarily in credit card operations and 
is not affiliated with a full-service national bank.\64\ The assessment 
is based on ``receivables attributable,'' defined as the total amount 
of outstanding balances due on credit card accounts owned by the bank 
(the receivables attributable to those accounts), minus receivables 
retained on the bank's balance sheet.
---------------------------------------------------------------------------

    \63\ Id. at Sec. Sec.  8.2(c), 8.6(c). The OCC also assesses a 
fee for special examinations and investigations, such as special 
examinations and investigations of affiliates of national banks. Id. 
at Sec.  8.6.
    \64\ A ``full service national bank'' is defined as a bank that 
generates more than 50% of its interest and non-interest income from 
activities other than credit card operations or trust activities and 
is authorized according to its charter to engage in all types of 
permissible banking activities. Id. at Sec. Sec.  8.2(c)(3)(iii), 
8.6(c)(3)(ii).
---------------------------------------------------------------------------

    An ``independent trust bank'' is a national bank with trust powers 
that has fiduciary and related assets, does not primarily offer full-
service banking, and is not affiliated with a full-service national 
bank.\65\ The independent trust assessment is made up of a minimum 
amount, set in the Notice of Fees, and an additional amount for banks 
with over $1 billion in fiduciary and related assets. The specific rate 
applicable to fiduciary and related assets above $1 billion is also set 
in the annual Notice of Fees.
---------------------------------------------------------------------------

    \65\ Id. at Sec.  8.6(c)(3)(iii).
---------------------------------------------------------------------------

    The OCC applies a condition-based surcharge to the semiannual 
assessment of national banks.\66\ The condition surcharge applies to 
national banks with UFIRS ratings of 3, 4, or 5. The condition 
surcharge is determined by multiplying the general semiannual 
assessment by 1.5, in the case of any national bank that receives a 
composite UFIRS rating of 3, and 2.0 in the case of any national bank 
that receives a composite UFIRS rating of 4 or 5. The condition 
surcharge is assessed against, and limited to, the first $20 billion of 
a national bank's book assets.
---------------------------------------------------------------------------

    \66\ Id. at Sec.  8.2(d).
---------------------------------------------------------------------------

2. Description of the Final Rule
    The OCC received two comments concerning the proposed changes to 
part 8 and the assessment of savings association, both supporting the 
proposal's approach to integrating savings associations into the OCC's 
assessment structure. The OCC is adopting the final rule as proposed.
    The final rule amends part 8 to assess Federal savings associations 
using the same methodologies, rates, fees, and payment due dates that 
apply currently to national banks. The OTS's existing assessment 
regulation is no longer in effect and will be repealed at a later date. 
As a result, the next assessment for savings associations will occur in 
September 2011, and not July 2011.
    Under the OCC's assessment system, some savings associations will 
pay marginally more assessments than in the past, while others will pay 
lower assessments. However, during the first two assessment cycles 
after the transfer date, the OCC will base savings association 
assessments on either the OCC's assessment regulation (as amended to 
include Federal savings associations) or the former OTS assessment 
structure, whichever yields the lower assessment for that savings 
association. After the March 2012 assessment, all national banks and 
Federal savings associations will be assessed using the OCC's 
assessment structure. The OCC intends to implement this phase-in 
through an amended Notice of Fees. The OCC believes that this phase-in 
will allow savings associations sufficient time to adjust to the OCC's 
assessment program.
    One commenter suggested that the OCC add the phase-in period for 
Federal savings associations to the regulatory text. The OCC believes 
that the amended Notice of Fees discussed above, as well as the 
discussion of the phase-in included in the proposed rule and this 
preamble, provide sufficient guidance to Federal savings associations 
concerning the OCC's intention to delay application of higher 
assessments for affected Federal savings associations for two 
assessment cycles. Given the temporary nature of the phase-in, we 
decline to include a reference to the phase-in period in the regulatory 
text.
    This commenter also suggested that the OCC provide an alternate 
assessment statement to Federal savings associations to show savings 
associations what the assessment would have been under the OCC's 
assessment structure, had it been applied. The commenter stated that 
this will assist those Federal savings associations that will pay 
marginally more under the OCC's assessment structure better prepare for 
the shift to OCC assessments in 2012. We agree that such notice would 
be helpful and plan to notify those Federal savings associations that 
will pay a lower assessment during the phase-in of the amount their 
assessments would have been under the OCC's assessment structure.
    The final rule also implements section 605(a) of the Dodd-Frank 
Act, which provides the OCC (and other appropriate Federal banking 
agencies) with authority to conduct examinations of depository-
institution permissible activities of nondepository institution 
subsidiaries of depository institution holding companies. Section 605 
provides specific authority for the OCC and other regulators to assess 
such nondepository institution subsidiaries for the costs of 
examination. The final rule implements this new statutory assessment 
authority.

V. Effective Date

    This final rule is effective on July 21, 2011, except as noted in 
the DATES section. A final rule may be published with an effective date 
that is less than 30 days from publication if an agency finds good 
cause and publishes such with the final rule.\67\ The purpose of a 
delayed effective date is to permit regulated entities to adjust their 
behavior before the final rule takes effect. As described above, the 
OCC is amending its rules to implement various provisions of the Dodd-
Frank Act,

[[Page 43560]]

including the Act's transfer of functions of the OTS to the OCC, the 
Act's provisions regarding preemption and visitorial powers, and the 
Act's amendments relating to the change in control of credit card banks 
and trust banks and deposit-taking by uninsured Federal branches. The 
changes relating to the transfer of the OTS's functions to the OCC are 
essential to facilitating a seamless transition when the OCC assumes 
responsibility for supervising Federal savings associations on the 
transfer date (July 21, 2011) and must be in effect on that date in 
order to ensure that the appropriate regulatory structure is in place. 
Specifically with regard to the preemption and visitorial powers rules, 
it is important for the industry to have guidance by the effective date 
of the relevant Dodd-Frank Act amendments, July 21, 2011. Finally, the 
amendments relating to the change in control of credit card banks and 
trust banks and deposit-taking by uninsured Federal branches simply 
implement statutory changes made effective upon the enactment of the 
Dodd-Frank Act on July 21, 2010. For these reasons, the OCC finds good 
cause to dispense with a delayed effective date.
---------------------------------------------------------------------------

    \67\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (12 U.S.C. 4802) (RCDRIA) requires that 
regulations imposing additional reporting, disclosure, or other 
requirements on insured depository institutions take effect on the 
first day of the calendar quarter after publication of the final rule, 
unless, among other things, the agency determines for good cause that 
the regulations should become effective before such time. The RCDRIA 
does not apply to the amendments to parts 4, 5, 7, 8, 28 and 34 of this 
final rule because these amendments do not impose any additional 
reporting, disclosure, or other requirements.

VI. Regulatory Analysis

1. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b) (RFA), the regulatory flexibility analysis otherwise 
required under section 604 of the RFA is not required if the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities and publishes its certification 
and a short, explanatory statement in the Federal Register along with 
its rule. We have concluded that the final rule does not have a 
significant economic impact on a substantial number of small entities 
currently supervised by the OCC (i.e., national banks and Federal 
branches and agencies of foreign banks). In addition, although the 
final rule will directly affect all Federal savings associations, we 
have concluded that it does not have a significant economic impact on a 
substantial number of small Federal savings associations. Specifically, 
the amendments to part 4 do not contain new compliance requirements. 
Any costs that may be associated with integrating the functions of the 
two agencies, and other changes to part 4, will be borne by the OCC. In 
addition, there are no costs directly associated with the amendments to 
12 CFR 5.50(f) and part 28, implementing sections 603 and 335 of the 
Dodd-Frank Act, respectively, or with the amendments necessary to apply 
national bank preemption standards to Federal savings associations. 
Furthermore, we have determined that the amendments to the preemption 
and visitorial powers provisions affecting national banks will not have 
a significant economic impact on a substantial number of small 
entities. Lastly, although the amendments to part 8, assessments, will 
economically impact a substantial number of small savings associations, 
this impact will not be significant. Therefore, pursuant to section 
605(b) of the RFA, the OCC hereby certifies that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. Accordingly, a final regulatory flexibility analysis is not 
needed.

2. Paperwork Reduction Act

    The rule contains several currently approved collections of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-
3520).\68\ The amendments adopted today do not introduce any new 
collections of information into the rules, nor do they amend the rules 
in a way that substantively modifies the collections of information 
that OMB has approved. Therefore, no PRA submissions to OMB are 
required, with the exception of non-substantive submissions to OMB to 
adjust the number of respondents.
---------------------------------------------------------------------------

    \68\ See OMB Control Nos. 1557-0014, 1557-0200 and 1557-0223.
---------------------------------------------------------------------------

3. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4 (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 an agency to identify and consider a 
reasonable number of regulatory alternatives before promulgating a 
rule. The OCC has determined that this final rule will not result in 
expenditures by state, local, and Tribal governments, or by the private 
sector, of $100 million or more in any one year. Accordingly, this 
final rule is not subject to section 202 of the Unfunded Mandates Act.

List of Subjects

12 CFR Part 4

    National banks, Savings associations, Organization and functions, 
Reporting and recordkeeping requirements, Administrative practice and 
procedure, Freedom of Information Act, Records, Non-public information, 
Post-employment activities.

12 CFR Part 5

    Administrative practice and procedure, National banks, Reporting 
and recordkeeping requirements, Securities.

12 CFR Part 7

    Computer technology, Credit, Insurance, Investments, National 
banks, Savings associations, reporting and recordkeeping requirements, 
Securities, Surety bonds.

12 CFR Part 8

    National banks, Savings associations, Reporting and recordkeeping 
requirements.

12 CFR Part 28

    Foreign banking, National banks, Reporting and recordkeeping 
requirements.

12 CFR Part 34

    Mortgages, National banks, Savings associations, Reporting and 
recordkeeping requirements.

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

PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF 
INFORMATION, CONTRACTING OUTREACH PROGRAM, POST-EMPLOYMENT 
RESTRICTIONS

0
1. The authority citation for part 4 is revised to read as follows:


[[Page 43561]]


    Authority: 12 U.S.C. 1, 12 U.S.C. 93a, 12 U.S.C. 5321, 12 U.S.C. 
5412, and 12 U.S.C. 5414. Subpart A also issued under 5 U.S.C. 552. 
Subpart B also issued under 5 U.S.C. 552; E.O. 12600 (3 CFR 1987 
Comp., p. 235). Subpart C also issued under 5 U.S.C. 301, 552; 12 
U.S.C. 161, 481, 482, 484(a), 1442, 1462a, 1463, 1464 1817(a)(2) and 
(3), 1818(u) and (v), 1820(d)(6), 1820(k), 1821(c), 1821(o), 
1821(t), 1831m, 1831p-1, 1831o, 1867, 1951 et seq., 2601 et seq., 
2801 et seq., 2901 et seq., 3101 et seq., 3401 et seq.; 15 U.S.C. 
77uu(b), 78q(c)(3); 18 U.S.C. 641, 1905, 1906; 29 U.S.C. 1204; 31 
U.S.C. 5318(g)(2), 9701; 42 U.S.C. 3601; 44 U.S.C. 3506, 3510. 
Subpart D also issued under 12 U.S.C. 1833e. Subpart E is also 
issued under 12 U.S.C. 1820(k).


0
2. Revise Sec.  4.2 to read as follows:


Sec.  4.2  Office of the Comptroller of the Currency.

    The OCC is charged with assuring the safety and soundness of, and 
compliance with laws and regulations, fair access to financial 
services, and fair treatment of customers by, the institutions and 
other persons subject to its jurisdiction. The OCC examines, 
supervises, and regulates national banks, Federal branches and agencies 
of foreign banks, and Federal savings associations to carry out this 
mission. The OCC also issues rules and regulations applicable to state 
savings associations.


Sec.  4.3  [Amended]

0
3. Amend Sec.  4.3 in the third sentence by adding ``a member of the 
Financial Stability Oversight Council,'' after ``Federal Deposit 
Insurance Corporation,''.

0
4. Revise Sec.  4.4 to read as follows:


Sec.  4.4  Washington office and Web site.

    The Washington office of the OCC is the main office and 
headquarters of the OCC. The Washington office directs OCC policy, 
oversees OCC operations, and is responsible for the direct supervision 
of certain national banks and Federal savings associations, including 
the largest national banks and the largest Federal savings associations 
(through the Large Bank Supervision Department); other national banks 
and Federal savings associations requiring special supervision; and 
Federal branches and agencies of foreign banks (through the Large Bank 
Supervision Department). The Washington office is located at 250 E 
Street, SW., Washington, DC 20219. The OCC's Web site is at http://www.occ.gov.

0
5. Amend Sec.  4.5 by:
0
a. Revising paragraph (a); and
0
b. In paragraph (b), adding ``and savings association'' after ``support 
the bank''.
    The revision reads as follows:


Sec.  4.5  District and field offices.

    (a) District offices. Each district office of the OCC is 
responsible for the direct supervision of the national banks and 
Federal savings associations in its district, with the exception of the 
national banks and Federal savings associations supervised by the 
Washington office. The four district offices cover the United States, 
Puerto Rico, the Virgin Islands, Guam, and the Northern Mariana 
Islands. The office address and the geographical composition of each 
district follows:

------------------------------------------------------------------------
                                                        Geographical
           District               Office address        composition
------------------------------------------------------------------------
Northeastern District.........  Office of the      Connecticut,
                                 Comptroller of     Delaware, District
                                 the Currency,      of Columbia,
                                 340 Madison        northeast Kentucky,
                                 Avenue, 5th        Maine, Maryland,
                                 Floor, New York,   Massachusetts, New
                                 NY 10173-0002.     Hampshire, New
                                                    Jersey, New York,
                                                    North Carolina,
                                                    Pennsylvania, Puerto
                                                    Rico, Rhode Island,
                                                    South Carolina,
                                                    Vermont, the Virgin
                                                    Islands, Virginia,
                                                    and West Virginia.
Central District..............  Office of the      Illinois, Indiana,
                                 Comptroller of     central and southern
                                 the Currency,      Kentucky, Michigan,
                                 One Financial      Minnesota, eastern
                                 Place, Suite       Missouri, North
                                 2700, 440 South    Dakota, Ohio, and
                                 LaSalle Street,    Wisconsin.
                                 Chicago, IL
                                 60605.
Southern District.............  Office of the      Alabama, Arkansas,
                                 Comptroller of     Florida, Georgia,
                                 the Currency,      Louisiana,
                                 500 North Akard    Mississippi,
                                 Street, Suite      Oklahoma, Tennessee,
                                 1600, Dallas, TX   and Texas.
                                 75201.
Western District..............  Office of the      Alaska, Arizona,
                                 Comptroller of     California,
                                 the Currency,      Colorado, Hawaii,
                                 1225 17th          Idaho, Iowa, Kansas,
                                 Street, Suite      western Missouri,
                                 300, Denver, CO    Montana, Nebraska,
                                 80202.             Nevada, New Mexico,
                                                    Northern Mariana
                                                    Islands, Oregon,
                                                    South Dakota, Utah,
                                                    Washington, Wyoming,
                                                    and Guam.
------------------------------------------------------------------------

* * * * *

0
6. Amend Sec.  4.6 by:
0
a. Revising the section heading;
0
b. In paragraph (a):
0
i. Adding in the first sentence ``and Federal savings associations'' 
after ``examines national banks''; ``(with respect to national banks) 
and 1463(a)(1) and 1464 (with respect to Federal savings 
associations)'' after ``12 U.S.C. 481''; and ``(with respect to 
national banks and Federal savings associations)'' after ``12 U.S.C. 
1820(d)''; and
0
ii. Adding in the second sentence ``and Federal savings association'' 
after ``every national bank''.
0
c. In paragraph (b):
0
i. Adding in the introductory text ``or a Federal savings association'' 
after ``a national bank'';
0
ii. Adding in paragraphs (b)(1), (b)(2), (b)(4), and (b)(5) ``or 
Federal savings association'' after ``bank'' each time it appears; and
0
iii. In paragraph (b)(3) removing ``, the OCC'' in the introductory 
text and revising paragraphs (b)(3)(i) and (b)(3)(ii); and
0
iv. In paragraph (b)(4), adding ``, OTS'' after ``OCC''.
0
d. In paragraph (c), adding ``or Federal savings association'' after 
``national bank''.
    The revisions read as follows:


Sec.  4.6  Frequency of examination of national banks and Federal 
savings associations.

* * * * *
    (b) * * *
    (3) * * *
    (i) The bank or Federal savings association was assigned a rating 
of 1 or 2 for management as part of the bank's or association's rating 
under the Uniform Financial Institutions Rating System; and
    (ii) The bank or Federal savings association was assigned a 
composite rating of 1 or 2 under the Uniform Financial Institutions 
Rating System.
* * * * *

[[Page 43562]]

Sec.  4.7  [Amended]

0
7. In paragraph (a) of Sec.  4.7, remove the phrase ``(h) and (i)'' and 
add in its place ``(g) and (h)''.
0
8. Amend Sec.  4.11 by:
0
a. In paragraph (a), removing ``industry'' and adding in its place 
``and savings association industries'' after the word ``banking'';
0
b. Adding paragraph (b)(4).
    The addition reads as follows:


Sec.  4.11  Purpose and scope.

* * * * *
    (b) * * *
    (4) This subpart does not apply to FOIA requests filed with the 
Office of Thrift Supervision (OTS) before July 21, 2011. These requests 
are subject to the rules of the OTS in effect on July 20, 2011.

0
9. Amend Sec.  4.12 by:
0
a. Removing ``and'' at the end of paragraph (b)(8) and removing the 
period and adding ``; and'' at the end of paragraph (b)(9); and
0
b. Adding paragraph (10).
    The addition reads as follows:


Sec.  4.12  Information available under the FOIA.

* * * * *
    (b) * * *
    (10) Any OTS information similar to that listed in paragraphs 
(b)(1) through (9) of this section, to the extent this information is 
in the possession of the OCC.

0
10. Amend Sec.  4.14 by:
0
a. Adding in paragraph (a)(7), footnote 1, first sentence, ``and 
Federal savings associations'' after ``banks'' and removing ``, such as 
the Consolidated Report of Condition and Income (FFIEC 031-034),'';
0
b. Removing the phrase ``part 11 or 16'' in paragraph (a)(9) and adding 
in its place the phrase ``parts 11, 16, 194 or 197'';
0
c. Removing ``and'' at the end of paragraph (a)(10);
0
d. Removing the period at the end of paragraph (a)(11) and adding in 
its place ``; and'';
0
e. Adding paragraph (a)(12); and
0
f. Revising paragraph (c).
    The additions and revision read as follows:


Sec.  4.14  Public inspection and copying.

    (a) * * *
    (12) Any OTS information similar to that listed in paragraphs 
(a)(1) through (a)(12) of this section, to the extent this information 
is in the possession of the OCC.
* * * * *
    (c) Addresses. The information described in paragraphs (a)(1) 
through (10) and (a)(11) of this section is available from the 
Disclosure Officer, Communications Division, Office of the Comptroller 
of the Currency, 250 E Street, SW., Washington, DC 20219. The 
information described in paragraph (a)(11) of this section in the case 
of both banks and Federal savings associations is available from the 
Licensing Manager at the appropriate district office at the address 
listed in Sec.  4.5(a), or in the case of banks and savings 
associations supervised by Large Bank Supervision, from the Large Bank 
Licensing Expert, Licensing Department, Office of the Comptroller of 
the Currency, 250 E Street, SW., Washington, DC 20219.


Sec.  4.15  [Amended]

0
11. Amend Sec.  4.15 by:
0
a. Adding in paragraph (b)(1) ``through the OCC's FOIA Web portal at 
https://appsec.occ.gov/publicaccesslink/palMain.aspx or'' after ``must 
submit the request or appeal''; and
0
b. Removing in paragraph (c)(2) ``OCC's Director of Communications or 
that person's'' and adding in its place ``Comptroller or the 
Comptroller's''.


Sec.  4.16  [Amended]

0
12. Amend Sec.  4.16:
0
a. In paragraph (b)(1)(i) introductory text by adding ``or to the 
Federal Home Loan Bank Board, the predecessor of the OTS,'' after 
``OCC'';
0
b. In paragraph (b)(1)(i)(C) by removing ``OCC'' and adding ``from the 
OCC or the Federal Home Loan Bank Board, the predecessor of the OTS'' 
after ``confidentiality'';
0
c. In paragraph (b)(1)(ii) introductory text by adding ``or to the OTS 
(or the Federal Home Loan Bank Board, its predecessor agency)'' after 
``OCC'';
0
d. In paragraph (b)(1)(ii)(B) by adding ``or the OTS (or the Federal 
Home Loan Bank Board, its predecessor agency)'' after ``OCC''; and
0
e. In paragraph (b)(2)(iv) by adding ``or the OTS (or the Federal Home 
Loan Bank Board, its predecessor agency)'' after ``OCC''.

0
13. Revise Sec.  4.18 to read as follows:


Sec.  4.18  How to track a FOIA request.

    (a) Tracking number. (1) Internet requests. The OCC will issue a 
tracking number to all FOIA requesters automatically upon receipt of 
the request (as described in Sec.  4.15(g)) by the OCC's Communications 
Department via the OCC's Freedom of Information Request Portal, https://appsec.occ.gov/publicaccesslink/palMain.aspx. The tracking number will 
be sent via electronic mail to the requester.
    (2) If a requester does not have Internet access. The OCC will 
issue a tracking number to FOIA requesters without Internet access 
within 5 days of the receipt of the request (as described in Sec.  
4.15(g)) in the OCC's Communications Department. The OCC will mail the 
tracking number to the requester's physical address, as provided in the 
FOIA request.
    (b) Status of request. FOIA requesters may track the progress of 
their requests via the OCC's Freedom of Information Request Portal, 
https://appsec.occ.gov/publicaccesslink/palMain.aspx. Requesters 
without Internet access may continue to contact the Disclosure Officer, 
Communications Division, Office of the Comptroller of the Currency, at 
(202) 874-4700 to check the status of their FOIA request(s).

0
14. Amend Sec.  4.31 by:
0
a. Adding in paragraph (a)(5) ``Federal savings associations,'' after 
``national banks,'';
0
b. Adding in paragraph (b)(3) ``or state savings association'' after 
``state bank''; and
0
c. Adding paragraph (b)(5).
    The addition reads as follows:


Sec.  4.31  Purpose and scope.

* * * * *
    (b) * * *
    (5) This subpart does not apply to requests for non-public 
information filed with the Office of Thrift Supervision (OTS) before 
July 21, 2011. These requests are subject to the rules of the OTS in 
effect on July 20, 2011.

0
15. Amend Sec.  4.32 by:
0
a. Revising paragraph (b)(1)(i);
0
b. In paragraph (b)(1)(ii) adding ``or the OTS'' after ``OCC'', 
removing ``the OCC's'', and adding ``either agency's'' after ``with'';
0
c. Adding in paragraph (b)(1)(iii) ``or OTS'' after ``compiled by the 
OCC'';
0
d. Revising paragraph (b)(1)(v);
0
e. Adding in paragraph (b)(1)(vi) ``, Federal savings associations, and 
savings and loan holding companies'' after ``national banks'';
0
f. Removing the second sentence in paragraph (b)(2); and
0
g. Revising paragraph (e).
    The revisions read as follows:


Sec.  4.32  Definitions.

* * * * *
    (b) * * *
    (1) * * *
    (i) A record created or obtained:
    (A) By the OCC in connection with the OCC's performance of its 
responsibilities, such as a record concerning supervision, licensing, 
regulation, and examination of a national bank, a Federal savings

[[Page 43563]]

association, a bank holding company, a savings and loan holding 
company, or an affiliate; or
    (B) By the OTS in connection with the OTS's performance of its 
responsibilities, such as a record concerning supervision, licensing, 
regulation, and examination of a Federal savings association, a savings 
and loan holding company, or an affiliate;
* * * * *
    (v) Testimony from, or an interview with, a current or former OCC 
employee, officer, or agent or a former OTS employee, officer, or agent 
concerning information acquired by that person in the course of his or 
her performance of official duties with the OCC or OTS or due to that 
person's official status at the OCC or OTS; and
* * * * *
    (e) Supervised entity includes a national bank or Federal savings 
association, a subsidiary of a national bank or Federal savings 
association, or a Federal branch or agency of a foreign bank licensed 
by the OCC as defined under 12 CFR 28.11(g) and (h), or any other 
entity supervised by the OCC.
* * * * *

0
16. Revise Sec.  4.35(a)(5) to read as follows:


Sec.  4.35  Consideration of requests.

    (a) * * *
    (5) Notice to subject national banks and Federal savings 
associations. Following receipt of a request for non-public OCC 
information, the OCC generally notifies the national bank or Federal 
savings association that is the subject of the requested information, 
unless the OCC, in its discretion, determines that to do so would 
advantage or prejudice any of the parties in the matter at issue.
* * * * *

0
17. Amend Sec.  4.37 by:
0
a. In paragraph (a):
0
i. Adding in the paragraph heading ``; former OTS employees or agents'' 
after ``former OCC employees or agents'';
0
ii. Adding ``or former OTS employee or agent,'' after ``former OCC 
employee or agent'' each time that phrase appears;
0
iii. Adding at the end of paragraph (a)(2)(ii), ``and former OTS 
employees or agents'';
0
b. In paragraph (b):
0
i. Adding in paragraph (b)(1)(i) introductory text ``Federal savings 
association,'' after ``national bank,'';
0
ii. Revising paragraph (b)(2) introductory text;
0
iii. Adding at the end of paragraph (b)(2)(ii) ``or Federal savings 
association'';
0
iv. Adding in paragraph (b)(3) introductory text ``Federal savings 
association,'' after ``national bank,''; and
0
c. In paragraph (c), adding in the first sentence ``and state savings 
association'' after ``state bank''.
    The revision reads as follows:


Sec.  4.37  Persons and entities with access to OCC information; 
prohibition on dissemination.

* * * * *
    (b) * * *
    (2) Exception for national banks and Federal savings associations. 
When necessary or appropriate for business purposes, a national bank, 
Federal savings association, or holding company, or any director, 
officer, or employee thereof, may disclose non-public OCC information, 
including information contained in, or related to, OCC reports of 
examination, to a person or organization officially connected with the 
bank or Federal savings association as officer, director, employee, 
attorney, auditor, or independent auditor. A national bank, Federal 
savings association, or holding company or a director, officer, or 
employee thereof, may also release non-public OCC information to a 
consultant under this paragraph if the consultant is under a written 
contract to provide services to the bank or Federal savings association 
and the consultant has a written agreement with the bank or Federal 
savings association in which the consultant:
* * * * *


Sec.  4.39  [Amended]

0
18. In Sec.  4.39(a), add ``OCC or OTS'' after ``former''.

Appendix A to Subpart C of Part 4 [Amended]

0
19. In Appendix A to subpart C of part 4:
0
a. In I. Model Stipulation, second paragraph, add ``, 1463(a)(1), 
1464(a)(1), and 1464(d)(1)(B)(i)'' after 12 U.S.C. 481''; and
0
b. In II. Model Protective Order, add ``, 1463(a)(1), 1464(a)(1), and 
1464(d)(1)(B)(i)'' after 12 U.S.C. 481'' in the second paragraph.

0
20. Amend Sec.  4.73 by:
0
a. In the definition of ``Consultant'':
0
i. Adding ``savings association,'' after ``national bank,'';
0
ii. Adding ``savings and loan holding company,'' after ``bank holding 
company,'' each time it appears; and
0
iii. Adding ``savings association,'' after ``such bank,'';
0
b. In the definition of ``Control'' adding ``or in section 10 of the 
Home Owners' Loan Act (12 U.S.C. 1467a), as applicable under the 
circumstances'' after ``1841(a))'';
0
c. Adding definitions of ``Savings association'' and ``Savings and loan 
holding company'' in alphabetical order; and
0
d. Revising the definition of ``Senior examiner''.
    The additions and revision read as follows:


Sec.  4.73  Definitions.

* * * * *
    Savings association has the meaning given in section 3 of the FDI 
Act (12 U.S.C. 1813(b)(1)).
    Savings and loan holding company means any company that controls a 
savings association or any other company that is a savings and loan 
holding company (as provided in section 10 of the Home Owners' Loan Act 
(12 U.S.C. 1467a)).
    Senior examiner. For purposes of this subpart, an officer or 
employee of the OCC is considered to be the ``senior examiner'' for a 
particular national bank or savings association if--
    (1) The officer or employee has been authorized by the OCC to 
conduct examinations on behalf of the OCC or had been authorized by the 
Office of Thrift Supervision (OTS) to conduct examinations on behalf of 
the OTS;
    (2) The officer or employee has been assigned continuing, broad, 
and lead responsibility for examining the national bank or savings 
association; and
    (3) The officer's or employee's responsibilities for examining the 
national bank or savings association--
    (i) Represent a substantial portion of the officer's or employee's 
assigned responsibilities; and
    (ii) Require the officer or employee to interact routinely with 
officers or employees of the national bank or savings association, or 
its affiliates.

0
21. Effective July 21, 2012, in Sec.  4.73, revise the definition of 
Senior examiner to read as follows:


Sec.  4.73  Definitions.

* * * * *
    Senior examiner. For purposes of this subpart, an officer or 
employee of the OCC is considered to be the ``senior examiner'' for a 
particular national bank or savings association if--
    (1) The officer or employee has been authorized by the OCC to 
conduct examinations on behalf of the OCC;
    (2) The officer or employee has been assigned continuing, broad, 
and lead responsibility for examining the national bank or savings 
association; and

[[Page 43564]]

    (3) The officer's or employee's responsibilities for examining the 
national bank or savings association--
    (i) Represent a substantial portion of the officer's or employee's 
assigned responsibilities; and
    (ii) Require the officer or employee to interact routinely with 
officers or employees of the national bank or savings association, or 
its affiliates.''

0
22. Revise Sec.  4.74 to read as follows:


Sec.  4.74  One-year post-employment restrictions.

    An officer or employee of the OCC who serves, or former officer or 
employee of the OTS who served, as the senior examiner of a national 
bank or savings association for two or more months during the last 
twelve months of such individual's employment with the OCC or OTS may 
not, within one year after leaving the employment of the OCC or OTS, 
knowingly accept compensation as an employee, officer, director or 
consultant from the national bank, savings association, or any company 
(including a bank holding company or savings and loan holding company) 
that controls the national bank or savings association.

0
23. Effective July 21, 2012, revise Sec.  4.74 to read as follows:


Sec.  4.74  One-year post-employment restrictions.

    An officer or employee of the OCC who serves as the senior examiner 
of a national bank or savings association for two or more months during 
the last twelve months of such individual's employment with the OCC may 
not, within one year after leaving the employment of the OCC, knowingly 
accept compensation as an employee, officer, director or consultant 
from the national bank, savings association, or any company (including 
a bank holding company or savings and loan holding company) that 
controls the national bank or savings association.

0
24. Revise Sec.  4.75 to read as follows:


Sec.  4.75  Waivers.

    The post-employment restrictions set forth in section 10(k) of the 
FDI Act (12 U.S.C. 1820(k)) and Sec.  4.74 do not apply to any officer 
or employee of the OCC, or any former officer or employee of the OCC or 
OTS, if the Comptroller of the Currency certifies, in writing and on a 
case-by-case basis, that granting the individual a waiver of the 
restrictions would not affect the integrity of the OCC's supervisory 
program.

0
25. Effective July 21, 2012, revise Sec.  4.75 to read as follows:


Sec.  4.75  Waivers.

    The post-employment restrictions set forth in section 10(k) of the 
FDI Act (12 U.S.C. 1820(k)) and Sec.  4.74 do not apply to any officer 
or employee of the OCC, or any former officer or employee of the OCC, 
if the Comptroller of the Currency certifies, in writing and on a case-
by-case basis, that granting the individual a waiver of the 
restrictions would not affect the integrity of the OCC's supervisory 
program.

0
26. Amend Sec.  4.76 by revising paragraph (a) to read as follows:


Sec.  4.76  Penalties.

    (a) Penalties under section 10(k) of FDI Act (12 U.S.C. 1820(k)). 
If a senior examiner of a national bank or savings association, after 
leaving the employment of the OCC or OTS, accepts compensation as an 
employee, officer, director, or consultant from that bank, savings 
association, or any company (including a bank holding company or 
savings and loan holding company) that controls that bank or savings 
association in violation of Sec.  4.74, then the examiner shall, in 
accordance with section 10(k)(6) of the FDI Act (12 U.S.C. 1820(k)(6)), 
be subject to one of the following penalties--
    (1) An order--
    (i) Removing the individual from office or prohibiting the 
individual from further participation in the affairs of the relevant 
national bank, savings association, bank holding company, savings and 
loan holding company, or other company that controls such institution 
for a period of up to five years; and
    (ii) Prohibiting the individual from participating in the affairs 
of any insured depository institution for a period of up to five years; 
or
    (2) A civil monetary penalty of not more than $250,000.
* * * * *

0
27. Effective July 21, 2012, amend Sec.  4.76 by revising paragraph (a) 
to read as follows:


Sec.  4.76  Penalties.

    (a) Penalties under section 10(k) of FDI Act (12 U.S.C. 1820(k)). 
If a senior examiner of a national bank or savings association, after 
leaving the employment of the OCC, accepts compensation as an employee, 
officer, director, or consultant from that bank, savings association, 
or any company (including a bank holding company or savings and loan 
holding company) that controls that bank or savings association in 
violation of Sec.  4.74, then the examiner shall, in accordance with 
section 10(k)(6) of the FDI Act (12 U.S.C. 1820(k)(6)), be subject to 
one of the following penalties--
    (1) An order--
    (i) Removing the individual from office or prohibiting the 
individual from further participation in the affairs of the relevant 
national bank, savings association, bank holding company, savings and 
loan holding company, or other company that controls such institution 
for a period of up to five years; and
    (ii) Prohibiting the individual from participating in the affairs 
of any insured depository institution for a period of up to five years; 
or
    (2) A civil monetary penalty of not more than $250,000.
* * * * *

PART 5--RULES, POLICIES, AND PROCEDURES FOR CORPORATE ACTIVITIES

0
28. The authority citation for part 5 continues to read as follows:

    Authority: 12 U.S.C. 1 et seq., 93a, 215a-2, 215a-3, 481, and 
section 5136A of the Revised Statutes (12 U.S.C. 24a).


0
29. Amend Sec.  5.34 by revising paragraph (a) and the first sentence 
of paragraph (e)(3) to read as follows:


Sec.  5.34  Operating subsidiaries.

    (a) * * *

    Authority. 12 U.S.C. 24 (Seventh), 24a, 25b, 93a, 3101 et seq.
* * * * *
    (e) * * *
    (3) Examination and supervision. An operating subsidiary conducts 
activities authorized under this section pursuant to the same 
authorization, terms and conditions that apply to the conduct of such 
activities by its parent national bank, except as otherwise provided 
with respect to the application of state law under sections 1044(e) and 
1045 of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(12 U.S.C. 25b). * * *
* * * * *
0
30. Amend Sec.  5.50 by redesignating paragraph (f)(6) as paragraph 
(f)(7) and adding a new paragraph (f)(6) to read as follows:


Sec.  5.50  Change in bank control; reporting of stock loans.

* * * * *
    (f) * * *
    (6) Disapproval of notice involving credit card banks or trust 
banks. (i) In general. The OCC shall disapprove a notice if the 
proposed change in control occurs before July 21, 2013 and would result 
in the direct or indirect control of a credit card bank or trust bank, 
as

[[Page 43565]]

defined in section 2(c)(2)(F) and (D) of the Bank Holding Company Act 
of 1956 (12 U.S.C. 1841(c)(2)(F) and (D)), by a commercial firm. For 
purposes of this paragraph a company is a ``commercial firm'' if the 
annual gross revenues derived by the company and all of its affiliates 
from activities that are financial in nature (as defined in section 
4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) and, 
if applicable, from the ownership or control of one or more insured 
depository institutions, represent less than 15 percent of the 
consolidated annual gross revenues of the company.
    (ii) Exception to disapproval. Paragraph (f)(6)(i) of this section 
shall not apply to a proposed change in control of a credit card bank 
or trust bank that:
    (A)(1) Is in danger of default, as determined by the OCC;
    (2) Results from the merger or whole acquisition of a commercial 
firm that directly or indirectly controls the credit card bank or trust 
bank in a bona fide merger with or acquisition by another commercial 
firm, as determined by the OCC; or
    (3) Results from the acquisition of voting shares of a publicly 
traded company that controls a credit card bank or trust bank, if, 
after the acquisition, the acquiring shareholder (or group of 
shareholders acting in concert) holds less than 25 percent of any class 
of the voting shares of the company; and
    (B) Has obtained all regulatory approvals otherwise required for 
such change of control under any applicable Federal or state law, 
including review pursuant to section 7(j) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(j)) and 12 CFR 5.50.
* * * * *


Sec.  5.50  [Amended]

0
31. Effective July 21, 2013, amend Sec.  5.50 by removing paragraph 
(f)(6) and redesignating paragraph (f)(7) as paragraph (f)(6).

PART 7--BANK ACTIVITIES AND OPERATIONS

0
32. The authority citation for part 7 is revised to read as follows:

    Authority: 12 U.S.C. 1 et seq., 25b, 71, 71a, 92, 92a, 93, 93a, 
371, 371a, 481, 484, 1465, 1818 and 5412(b)(2)(B).

Subpart D--Preemption

0
33. Amend Sec.  7.4000 by:
0
a. Revising the first sentence of paragraph (a)(1);
0
b. Revising paragraph (a)(2)(iv);
0
c. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively;
0
d. Adding a new paragraph (b); and
0
e. Revising newly designated paragraph (c)(2).
    The additions and revisions read as follows:


Sec.  7.4000  Visitorial powers.

    (a) * * *
    (1) Under 12 U.S.C. 484, only the OCC or an authorized 
representative of the OCC may exercise visitorial powers with respect 
to national banks. * * *
    (2) * * *
    (iv) Enforcing compliance with any applicable Federal or state laws 
concerning those activities, including through investigations that seek 
to ascertain compliance through production of non-public information by 
the bank, except as otherwise provided in paragraphs (a), (b), and (c) 
of this section.
* * * * *
    (b) Exclusion. In accordance with the decision of the Supreme Court 
in Cuomo v. Clearing House Assn., L. L. C., 129 S. Ct. 2710 (2009), an 
action against a national bank in a court of appropriate jurisdiction 
brought by a state attorney general (or other chief law enforcement 
officer) to enforce an applicable law against a national bank and to 
seek relief as authorized by such law is not an exercise of visitorial 
powers under 12 U.S.C. 484.
    (c) * * *
    (2) Exception for courts of justice. National banks are subject to 
such visitorial powers as are vested in the courts of justice. This 
exception pertains to the powers inherent in the judiciary.
* * * * *


Sec.  7.4006  [Removed and Reserved]

0
34. Remove and reserve Sec.  7.4006.

0
35. Amend Sec.  7.4007 by:
0
a. Removing paragraph (b)(1);
0
b. Redesignating paragraph (b)(2) introductory text as paragraph (b) 
introductory text;
0
c. Redesignating former paragraphs (b)(2)(i) through (vii) as 
paragraphs (b)(1) through (7), respectively;
0
d. Revising paragraph (c) introductory text;
0
e. Revising footnote 5 in paragraph (c)(3); and
0
f. Revising paragraph (c)(8).
    The revisions read as follows:


Sec.  7.4007  Deposit-taking.

* * * * *
    (c) State laws that are not preempted. State laws on the following 
subjects are not inconsistent with the deposit-taking powers of 
national banks and apply to national banks to the extent consistent 
with the decision of the Supreme Court in Barnett Bank of Marion 
County, N.A. v. Nelson, Florida Insurance Commissioner, et al. 517 U.S. 
25 (1996):
* * * * *
    (3) Criminal law; \5\

    \5\ But see the distinction drawn by the Supreme Court in Easton 
v. Iowa, 188 U.S. 220, 238 (1903), where the Court stated that 
``[u]ndoubtedly a state has the legitimate power to define and 
punish crimes by general laws applicable to all persons within its 
jurisdiction * * *. But it is without lawful power to make such 
special laws applicable to banks organized and operating under the 
laws of the United States.'' Id. at 239 (holding that Federal law 
governing the operations of national banks preempted a state 
criminal law prohibiting insolvent banks from accepting deposits).

* * * * *
    (8) Any other law that the OCC determines to be applicable to 
national banks in accordance with the decision of the Supreme Court in 
Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance 
Commissioner, et al. 517 U.S. 25 (1996), or that is made applicable by 
Federal law.

0
36. Amend Sec.  7.4008 by:
0
a. Removing paragraph (d)(1);
0
b. Redesignating paragraph (d)(2) introductory text as paragraph (d) 
introductory text;
0
c. Redesignating former paragraphs (d)(2)(i) through (x) as paragraphs 
(d)(1) through (10), respectively; and
0
d. Revising paragraphs (e) introductory text, footnote 7 in paragraph 
(e)(3), and paragraph (e)(8).
    The revisions read as follows:


Sec.  7.4008  Lending.

* * * * *
    (e) State laws that are not preempted. State laws on the following 
subjects are not inconsistent with the non-real estate lending powers 
of national banks and apply to national banks to the extent consistent 
with the decision of the Supreme Court in Barnett Bank of Marion 
County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 
U.S. 25 (1996):
* * * * *
    (3) Criminal law; \7\

    \7\ See supra note 5 regarding the distinction drawn by the 
Supreme Court in Easton v. Iowa, 188 U.S. 220, 238 (1903).

* * * * *
    (8) Any other law that the OCC determines to be applicable to 
national banks in accordance with the decision of the Supreme Court in 
Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance 
Commissioner, et al., 517 U.S.

[[Page 43566]]

25 (1996) or that is made applicable by Federal law.


Sec.  7.4009  [Removed and Reserved]

0
37. Remove and reserve Sec.  7.4009.
0
38. Add Sec.  7.4010 to read as follows:


Sec.  7.4010  Applicability of state law and visitorial powers to 
Federal savings associations and subsidiaries.

    (a) In accordance with section 1046 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 25b), Federal savings 
associations and their subsidiaries shall be subject to the same laws 
and legal standards, including regulations of the OCC, as are 
applicable to national banks and their subsidiaries, regarding the 
preemption of state law.
    (b) In accordance with section 1047 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 1465), the provisions of 
section 5136C(i) of the Revised Statutes regarding visitorial powers 
apply to Federal savings associations and their subsidiaries to the 
same extent and in the same manner as if they were national banks or 
national bank subsidiaries.

PART 8--ASSESSMENT OF FEES

0
39. The authority citation for part 8 is revised to read as follows:

    Authority: 12 U.S.C. 16, 93a, 481, 482, 1467, 1831c, 1867, 3102, 
3108, and 5412(b)(1)(B); and 15 U.S.C. 78c and 78l.


0
40. Section 8.1 is revised to read as follows:


Sec.  8.1  Scope and application.

    The assessments contained in this part are made pursuant to the 
authority contained in 12 U.S.C. 16, 93a, 481, 482, 1467, 1831c, 1867, 
3102, and 3108; and 15 U.S.C. 78c and 78l.

0
41. Section 8.2 is revised to read as follows:


Sec.  8.2  Semiannual assessment.

    (a) Each national bank and each Federal savings association shall 
pay to the Comptroller of the Currency a semiannual assessment fee, due 
by March 31 and September 30 of each year, for the six month period 
beginning on January 1 and July 1 before each payment date. The 
Comptroller of the Currency will calculate the amount due under this 
section and provide a notice of assessments to each national bank and 
each Federal savings association no later than 7 business days prior to 
March 31 and September 30 of each year. The semiannual assessment will 
be calculated as follows:

----------------------------------------------------------------------------------------------------------------
  If the bank's or Federal savings association's total                The semiannual assessment is:
assets (consolidated domestic and foreign subsidiaries) --------------------------------------------------------
                          are:                           This amount--base
--------------------------------------------------------       amount         Plus marginal     Of excess over--
              Over--                  But not over--                              rates
----------------------------------------------------------------------------------------------------------------
             Column A                    Column B             Column C           Column D           Column E
----------------------------------------------------------------------------------------------------------------
             Million                      Million                                                   Million
            (dollars)                    (dollars)           (dollars)                             (dollars)
----------------------------------------------------------------------------------------------------------------
0................................  2...................                 X1                  0
2................................  20..................                 X2                 Y1                  2
20...............................  100.................                 X3                 Y2                 20
100..............................  200.................                 X4                 Y3                100
200..............................  1,000...............                 X5                 Y4                200
1,000............................  2,000...............                 X6                 Y5              1,000
2,000............................  6,000...............                 X7                 Y6              2,000
6,000............................  20,000..............                 X8                 Y7              6,000
20,000...........................  40,000..............                 X9                 Y8             20,000
40,000...........................  250,000.............                X10                 Y9             40,000
250,000..........................  ....................                X11                Y10            250,000
----------------------------------------------------------------------------------------------------------------

    (1) Every national bank and every Federal savings association falls 
into one of the asset-size brackets denoted by Columns A and B. A 
bank's or Federal savings association's semiannual assessment is 
composed of two parts. The first part is the calculation of a base 
amount of the assessment, which is computed on the assets of the bank 
or Federal savings association up to the lower endpoint (Column A) of 
the bracket in which it falls. This base amount of the assessment is 
calculated by the OCC in Column C.
    (2) The second part is the calculation of assessments due on the 
remaining assets of the bank or Federal savings association in excess 
of Column E. The excess is assessed at the marginal rate shown in 
Column D.
    (3) The total semiannual assessment is the amount in Column C, plus 
the amount of the bank's or Federal savings association's assets in 
excess of Column E times the marginal rate in Column D: Assessments = 
C+[(Assets-E) x D].
    (4) Each year, the OCC may index the marginal rates in Column D to 
adjust for the percent change in the level of prices, as measured by 
changes in the Gross Domestic Product Implicit Price Deflator (GDPIPD) 
for each June-to-June period. The OCC may at its discretion adjust 
marginal rates by amounts less than the percentage change in the 
GDPIPD. The OCC will also adjust the amounts in Column C to reflect any 
change made to the marginal rate.
    (5) The specific marginal rates and complete assessment schedule 
will be published in the ``Notice of Comptroller of the Currency 
Fees,'' provided for at Sec.  8.8 of this part. Each semiannual 
assessment is based upon the total assets shown in the national bank's 
or Federal savings association's most recent ``Consolidated Reports of 
Condition and Income'' (Call Report) or ``Thrift Financial Report,'' as 
appropriate, preceding the payment date. Each bank or Federal savings 
association subject to the jurisdiction of the Comptroller of the 
Currency on the date of the second or fourth quarterly Call Report or 
Thrift Financial Report, as appropriate, required by the Office under 
12 U.S.C. 161 and 12 U.S.C. 1464(v) is subject to the full assessment 
for the next six month period.
    (6)(i) Notwithstanding any other provision of this part, the OCC 
may reduce the semiannual assessment for each non-lead bank or non-lead 
Federal savings association by a percentage that it will specify in the 
``Notice of Comptroller of the Currency Fees'' described in Sec.  8.8.
    (ii) For purposes of this paragraph (a)(6):
    (A) Lead bank or lead Federal savings association means the largest 
national bank or Federal savings association

[[Page 43567]]

controlled by a company, based on a comparison of the total assets held 
by each national bank or Federal savings association controlled by that 
company as reported in each bank's or Federal savings association's 
Call Report or Thrift Financial Report, as appropriate, filed for the 
quarter immediately preceding the payment of a semiannual assessment.
    (B) Non-lead bank or non-lead Federal savings association means a 
national bank or Federal savings association that is not the lead bank 
or lead Federal savings association controlled by a company that 
controls two or more national banks or Federal savings associations.
    (C) Control and company with respect to national banks have the 
same meanings as these terms have in sections 2(a)(2) and 2(b), 
respectively, of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(a)(2) and (b)).
    (D) Control and company with respect to Federal savings 
associations have the same meanings as these terms have in section 
10(a) of the Home Owners' Loan Act (12 U.S.C. 1467a(a).
    (b)(1) Each Federal branch and each Federal agency shall pay to the 
Comptroller of the Currency a semiannual assessment fee, due by March 
31 and September 30 of each year, for the six month period beginning on 
January 1 and July 1 before each payment date. The Comptroller of the 
Currency will calculate the amount due under this section and provide a 
notice of assessments to each national bank no later than 7 business 
days prior to March 31 and September 30 of each year.
    (2) The amount of the semiannual assessment paid by each Federal 
branch and Federal agency shall be computed at the same rate as 
provided in the Table in 12 CFR 8.2(a); however, only the total 
domestic assets of the Federal branch or agency shall be subject to 
assessment.
    (3) Each semiannual assessment of each Federal branch or agency is 
based upon the total assets shown in the Federal branch's or agency's 
Call Report most recently preceding the payment date. Each Federal 
branch or agency subject to the jurisdiction of the OCC on the date of 
the second and fourth Call Reports is subject to the full assessment 
for the next six-month period.
    (4)(i) Notwithstanding any other provision of this part, the OCC 
may reduce the semiannual assessment for each non-lead Federal branch 
or agency by an amount that it will specify in the ``Notice of 
Comptroller of the Currency Fees'' described in Sec.  8.8.
    (ii) For purposes of this paragraph (b)(4):
    (A) Lead Federal branch or agency means the largest Federal branch 
or agency of a foreign bank, based on a comparison of the total assets 
held by each Federal branch or agency of that foreign bank as reported 
in each Federal branch's or agency's Call Report filed for the quarter 
immediately preceding the payment of a semiannual assessment.
    (B) Non-lead Federal branch or agency means a Federal branch or 
agency that is not the lead Federal branch or agency of a foreign bank 
that controls two or more Federal branches or agencies.
    (c) Additional assessment for independent credit card banks and 
independent credit card Federal savings associations--(1) General rule. 
In addition to the assessment calculated according to paragraph (a) of 
this section, each independent credit card bank and independent credit 
card Federal savings association will pay an assessment based on 
receivables attributable to credit card accounts owned by the bank or 
Federal savings association. This assessment will be computed by adding 
to its asset-based assessment an additional amount determined by its 
level of receivables attributable. The dollar amount of the additional 
assessment will be published in the ``Notice of Comptroller of the 
Currency of Fees,'' described at Sec.  8.8.
    (2) Independent credit card banks and independent credit card 
Federal savings associations affiliated with full-service national 
banks or Federal savings associations. The OCC will assess an 
independent credit card bank and an independent credit card Federal 
savings association in accordance with paragraph (c)(1) of this 
section, notwithstanding that the bank or Federal savings association 
is affiliated with a full-service national bank or full service Federal 
savings association, if the OCC concludes that the affiliation is 
intended to evade this part.
    (3) Definitions. For purposes of this paragraph (c), the following 
definitions apply:
    (i) Affiliate, with respect to national banks, has the same meaning 
as this term has in 12 U.S.C. 221a(b).
    (ii) Affiliate, with respect to Federal savings associations, has 
the same meaning as in 12 U.S.C. 1462(9).
    (iii) Engaged primarily in card operations means a bank described 
in section 2(c)(2)(F) of the Bank Holding Company Act (12 U.S.C. 
1841(c)(2)(F)) or a bank or a Federal savings association whose ratio 
of total gross receivables attributable to the bank's or Federal 
savings association's balance sheet assets exceeds 50%.
    (iv) Full-service national bank is a national bank that generates 
more than 50% of its interest and non-interest income from activities 
other than credit card operations or trust activities and is authorized 
according to its charter to engage in all types of permissible banking 
activities.
    (v) Full-service Federal savings association is a Federal savings 
association that generates more than 50% of its interest and non-
interest income from activities other than credit card operations or 
trust activities and is authorized according to its charter to engage 
in all types of activities permissible for Federal savings 
associations.
    (vi) Independent credit card bank is a national bank that engages 
primarily in credit card operations and is not affiliated with a full-
service national bank.
    (vii) Independent credit card Federal savings association is a 
Federal savings association that engages primarily in credit card 
operations and is not affiliated with a full-service Federal savings 
association.
    (viii) Receivables attributable is the total amount of outstanding 
balances due on credit card accounts owned by an independent credit 
card bank or an independent credit card Federal savings association 
(the receivables attributable to those accounts) on the last day of the 
assessment period, minus receivables retained on the bank's or Federal 
savings association's balance sheet as of that day.
    (4) Reports of receivables attributable. Independent credit card 
banks and independent credit card Federal savings associations will 
report receivables attributable data to the OCC semiannually at a time 
specified by the OCC.
    (d) Surcharge based on the condition of the bank or Federal savings 
association. Subject to any limit that the OCC prescribes in the 
``Notice of Comptroller of the Currency Fees,'' the OCC shall apply a 
surcharge to the semiannual assessment computed in accordance with 
paragraphs (a) through (c) of this section. This surcharge will be 
determined by multiplying the semiannual assessment computed in 
accordance with paragraphs (a) through (c) of this section by--
    (1) 1.5, in the case of any bank or Federal savings association 
that receives a composite rating of 3 under the Uniform Financial 
Institutions Rating System (UFIRS) and any Federal branch or agency 
that receives a composite rating of 3 under the ROCA rating system 
(which rates risk management, operational controls, compliance, and

[[Page 43568]]

asset quality) at its most recent examination; and
    (2) 2.0, in the case of any bank or Federal savings association 
that receives a composite UFIRS rating of 4 or 5 and any Federal branch 
or agency that receives a composite rating of 4 or 5 under the ROCA 
rating system at its most recent examination.

0
42. Section 8.6 is revised to read as follows:


Sec.  8.6  Fees for special examinations and investigations.

    (a) Fees. Pursuant to the authority contained in 12 U.S.C. 16, 481, 
482, 1467, and 1831c, the Office of the Comptroller of the Currency may 
assess a fee for:
    (1) Examining the fiduciary activities of national banks and 
Federal savings associations and related entities;
    (2) Conducting special examinations and investigations of national 
banks, Federal branches or agencies of foreign banks, and Federal 
savings associations;
    (3) Conducting special examinations and investigations of an entity 
with respect to its performance of activities described in section 7(c) 
of the Bank Service Company Act (12 U.S.C. 1867(c)) if the OCC 
determines that assessment of the fee is warranted with regard to a 
particular bank or Federal savings association because of the high risk 
or unusual nature of the activities performed; the significance to the 
bank's or Federal saving association's operations and income of the 
activities performed; or the extent to which the bank or Federal 
savings association has sufficient systems, controls, and personnel to 
adequately monitor, measure, and control risks arising from such 
activities;
    (4) Conducting special examinations and investigations of 
affiliates of national banks, Federal savings associations, and Federal 
branches or agencies of foreign banks;
    (5) Conducting examinations and investigations made pursuant to 12 
CFR part 5, Rules, Policies, and Procedures for Corporate Activities; 
and
    (6) Conducting examinations of depository-institution permissible 
activities of nondepository institution subsidiaries of depository 
institution holding companies pursuant to section 605(a) of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 1831c).
    (b) Notice of Comptroller of the Currency fees. The OCC publishes 
the fee schedule for fiduciary activities, special examinations and 
investigations, examinations of affiliates and examinations related to 
corporate activities in the ``Notice of Comptroller of the Currency 
Fees'' described in Sec.  8.8.
    (c) Additional assessments on trust banks and trust Federal savings 
associations--(1) Independent trust banks and independent trust Federal 
savings associations. The assessment of independent trust banks and 
independent trust Federal savings associations will include a fiduciary 
and related asset component, in addition to the assessment calculated 
according to Sec.  8.2 of this part, as follows:
    (i) Minimum fee. All independent trust banks and independent trust 
Federal savings associations will pay a minimum fee, to be provided in 
the ``Notice of Comptroller of the Currency Fees.''
    (ii) Additional amount for independent trust banks and independent 
trust Federal savings associations with fiduciary and related assets in 
excess of $1 billion. Independent trust banks and independent trust 
Federal savings associations with fiduciary and related assets in 
excess of $1 billion will pay an amount that exceeds the minimum fee. 
The amount to be paid will be calculated by multiplying the amount of 
fiduciary and related assets by a rate or rates provided by the OCC in 
the ``Notice of Comptroller of the Currency Fees.''
    (iii) Surcharge based on the condition of the bank or of the 
Federal savings association. Subject to any limit that the OCC 
prescribes in the ``Notice of Comptroller of the Currency Fees,'' the 
OCC shall adjust the semiannual assessment computed in accordance with 
paragraphs (c)(1)(i) and (ii) of this section by multiplying that 
figure by 1.5 for each independent trust bank and independent trust 
Federal savings association that receives a composite rating of 3 under 
the Uniform Financial Institutions Rating System (UFIRS) at its most 
recent examination and by 2.0 for each bank that receives a composite 
UFIRS rating of 4 or 5 at such examination.
    (2) Trust banks affiliated with full-service national banks and 
trust Federal savings associations affiliated with full-service Federal 
savings associations. The OCC will assess a trust bank and a trust 
Federal savings association in accordance with paragraph (c)(1) of this 
section, notwithstanding that the bank is affiliated with a full-
service national bank, or that the Federal savings association is 
affiliated with a full-service Federal savings association, if the OCC 
concludes that the affiliation is intended to evade the assessment 
regulation.
    (3) Definitions. For purposes of this paragraph (c) of this 
section, the following definitions apply:
    (i) Affiliate, with respect to a national bank, has the same 
meaning as this term has in 12 U.S.C. 221a(b);
    (ii) Affiliate, with respect to Federal savings associations, has 
the same meaning as in 12 U.S.C. 1462(9).
    (iii) Full-service national bank is a national bank that generates 
more than 50% of its interest and non-interest income from activities 
other than credit card operations or trust activities and is authorized 
according to its charter to engage in all types of permissible banking 
activities.
    (iv) Full-service trust Federal savings association is a Federal 
savings association that generates more than 50% of its interest and 
non-interest income from activities other than credit card operations 
or trust activities and is authorized according to its charter to 
engage in all types of activities permissible for Federal savings 
associations.
    (v) Independent trust bank is a national bank that has trust 
powers, does not primarily offer full-service banking, and is not 
affiliated with a full-service national bank;
    (vi) Independent trust Federal savings association is a Federal 
savings association that has trust powers, does not primarily offer 
full-service banking, and is not affiliated with a full-service Federal 
savings association;
    (vii) Fiduciary and related assets for national banks are those 
assets reported on Schedule RC-T of FFIEC Forms 031 and 041, Line 10 
(columns A and B) and Line 11 (column B), any successor form issued by 
the FFIEC, and any other fiduciary and related assets defined in the 
``Notice of Comptroller of the Currency Fees''; and
    (viii) Fiduciary and related assets for Federal savings 
associations are those assets reported on Schedule FS of OTS Form 1313, 
Line FS21, any successor form issued by the OCC, and any other 
fiduciary and related assets defined in the ``Notice of Comptroller of 
the Currency Fees.''

0
43. Effective December 31, 2011, add the word ``and'' at the end of 
paragraph (vi), revise paragraph (c)(3)(vii), and remove paragraph 
(c)(3)(viii).
    The revision reads as follows:


Sec.  8.6  Fees for special examinations and investigations.

* * * * *
    (c) * * *
    (3) * * *
    (vii) Fiduciary and related assets are those assets reported on 
Schedule RC-T of FFIEC Forms 031 and 041, Line 10

[[Page 43569]]

(columns A and B) and Line 11 (column B), any successor form issued by 
the FFIEC, and any other fiduciary and related assets defined in the 
``Notice of Comptroller of the Currency Fees.''


Sec.  8.7  [Amended]

0
44. Amend Sec.  8.7. paragraph (a) by:
0
a. Removing ``and'' after ``Federal branch,'' and adding ``, and each 
Federal savings association'' after ``each Federal agency'' in the 
first sentence; and
0
b. Adding ``, each Federal savings association,'' after ``each national 
bank'' in the second sentence.

PART 28--INTERNATIONAL BANKING ACTIVITIES

0
45. The authority citation for part 28 continues 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.


Sec.  28.16  [Amended]

0
46. Section 28.16 is amended by removing in paragraph (b) introductory 
text the term ``$100,000'' and adding in its place ``the standard 
maximum deposit insurance amount as defined in 12 U.S.C. 
1821(a)(1)(E)''.

PART 34--REAL ESTATE LENDING AND APPRAISALS

0
47. The authority citation for part 34 is revised to read as follows:

    Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1465, 1701j-
3, 1828(o), 3331 et seq., 5101 et seq., and 5412(b)(2)(B).

Subpart A--General

0
48. Amend Sec.  34.4 by:
0
a. Revising paragraph (a) introductory text;
0
b. Revising paragraph (b) introductory text;
0
c. Revising footnote 2 in paragraph (b)(3); and
0
d. Revising paragraph (b)(9).
    The revisions read as follows:


Sec.  34.4  Applicability of state law.

    (a) A national bank may make real estate loans under 12 U.S.C. 371 
and Sec.  34.3, without regard to state law limitations concerning:
* * * * *
    (b) State laws on the following subjects are not inconsistent with 
the real estate lending powers of national banks and apply to national 
banks to the extent consistent with the decision of the Supreme Court 
in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance 
Commissioner, et al., 517 U.S. 25 (1996):
* * * * *
    (3) Criminal law; \2\

    \2\ But see the distinction drawn by the Supreme Court in Easton 
v. Iowa, 188 U.S. 220, 238 (1903), where the Court stated that 
``[u]ndoubtedly a state has the legitimate power to define and 
punish crimes by general laws applicable to all persons within its 
jurisdiction * * *. But it is without lawful power to make such 
special laws applicable to banks organized and operating under the 
laws of the United States.'' Id. at 239 (holding that Federal law 
governing the operations of national banks preempted a state 
criminal law prohibiting insolvent banks from accepting deposits).
* * * * *
    (9) Any other law that the OCC determines to be applicable to 
national banks in accordance with the decision of the Supreme Court in 
Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance 
Commissioner, et al., 517 U.S. 25 (1996), or that is made applicable by 
Federal law.

0
49. Add Sec.  34.6 to subpart A to read as follows:


Sec.  34.6  Applicability of state law to Federal savings associations 
and subsidiaries.

    In accordance with section 1046 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 25b), Federal savings 
associations and their subsidiaries shall be subject to the same laws 
and legal standards, including regulations of the OCC, as are 
applicable to national banks and their subsidiaries, regarding the 
preemption of state law.

    Dated: July 14, 2011.
John Walsh,
Acting Comptroller of the Currency.
[FR Doc. 2011-18231 Filed 7-20-11; 8:45 am]
BILLING CODE 4810-33-P