[Federal Register Volume 78, Number 171 (Wednesday, September 4, 2013)]
[Proposed Rules]
[Pages 54401-54403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21356]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 78, No. 171 / Wednesday, September 4, 2013 / 
Proposed Rules  

[[Page 54401]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 336 and 390

RIN 3064-AD98


Removal of Transferred OTS Regulations Regarding Post-Employment 
Activities of Senior Examiners

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this notice of proposed rulemaking, the Federal Deposit 
Insurance Corporation (FDIC) proposes to rescind and remove from the 
Code of Federal Regulations 12 CFR part 390, subpart A, entitled 
Restrictions on Post-Employment Activities of Senior Examiners. This 
subpart was included in the regulations that were transferred to the 
FDIC from the Office of Thrift Supervision (OTS) on July 21, 2011, in 
connection with the implementation of applicable provisions of Title 
III of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act''). Upon removal of 12 CFR part 390, subpart A, the 
restrictions for post-employment activities of senior examiners of all 
insured depository institutions for which the FDIC has been designated 
the appropriate federal banking agency will be found at 12 CFR part 
336, subpart C, entitled One-Year Restriction on Post-employment 
Activities of Senior Examiners. The proposed rule would not change 12 
CFR part 336, subpart C.
    This notice of proposed rulemaking also proposes to revise the 
definition section of 12 CFR part 336, subpart B.

DATES: Comments must be received on or before November 4, 2013.

ADDRESSES: You may submit comments by any of the following methods:
     FDIC Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on 
the agency Web site.
     FDIC Email: [email protected]. Include RIN  3064-
AD84 on the subject line of the message.
     FDIC Mail: Robert E. Feldman, Executive Secretary, 
Attention: Comments, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivery to FDIC: Comments may be hand-delivered to 
the guard station at the rear of the 550 17th Street Building (located 
on F Street) on business days between 7 a.m. and 5 p.m.
    Please include your name, affiliation, address, email address, and 
telephone number(s) in your comment. Where appropriate, comments should 
include a short Executive Summary consisting of no more than five 
single-spaced pages. All statements received, including attachments and 
other supporting materials, are part of the public record and are 
subject to public disclosure. You should submit only information that 
you wish to make publicly available.

    Please note: All comments received will be posted generally 
without change to http://www.fdic.gov/regulations/laws/federal/propose.html, including any personal information provided. Paper 
copies of public comments may be requested from the Public 
Information Center by telephone at 1-877-275-3342 or 1-703-562-2200.


FOR FURTHER INFORMATION CONTACT: Robert J. Fagan, Ethics Program 
Manager, Legal Division (703) 562-2704 or [email protected]; Michelle 
Borzillo, Senior Counsel, Legal Division (703) 562-6083 or 
[email protected]; or Randy Thomas, Counsel, Legal Division (703) 562-
6454 or [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

The Dodd-Frank Act

    The Dodd-Frank Act,\1\ signed into law on July 21, 2010, provided 
for a substantial reorganization of the regulation of State and Federal 
savings associations and their holding companies. Beginning July 21, 
2011, the ``transfer date'' established by section 311 of the Dodd-
Frank Act (12 U.S.C. 5411), the powers, duties, and functions formerly 
performed by the OTS were divided among the FDIC; as to State savings 
associations, the Office of the Comptroller of the Currency (OCC); as 
to Federal savings associations, and the Board of Governors of the 
Federal Reserve System (FRB), as to savings and loan holding companies. 
Section 316(b) of the Dodd-Frank Act (12 U.S.C. 5414(b)) provides the 
manner of treatment for all orders, resolutions, determinations, 
regulations, and other advisory materials, that were issued, made, 
prescribed, or allowed to become effective by the OTS. The section 
provides that if such advisory materials were in effect on the day 
before the transfer date, they continue in effect and are enforceable 
by or against the appropriate successor agency until they are modified, 
terminated, set aside, or superseded in accordance with applicable law 
by such successor agency, by any court of competent jurisdiction, or by 
operation of law.
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    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Pub. L. 111-203, 12 U.S.C. 5301 et seq.
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    Section 316(c) of the Dodd-Frank Act (12 U.S.C. 5414(c)) further 
directed the FDIC and the OCC to consult with one another and to 
publish a list of the continued OTS regulations which would be enforced 
by the FDIC and the OCC, respectively. On June 14, 2011, the FDIC's 
Board of Directors approved a ``List of OTS Regulations to be Enforced 
by the OCC and the FDIC Pursuant to the Dodd-Frank Wall Street Reform 
and Consumer Protection Act.'' This list was published by the FDIC and 
the OCC as a Joint Notice in the Federal Register on July 6, 2011.\2\
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    \2\ 76 FR 39247 (July 6, 2011).
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    Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act (12 
U.S.C. 5412(b)(2)(B)(i)(II)) granted the OCC rulemaking authority 
relating to both State and Federal savings associations, nothing in the 
Dodd-Frank Act affected the FDIC's existing authority to issue 
regulations under the FDI Act and other laws as the ``appropriate 
Federal banking agency'' or under similar statutory authority. Section 
312(c) of the Dodd-Frank Act amended section 3(q) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(q)) and designated the FDIC as 
the ``appropriate Federal banking agency'' for State savings 
associations. As a result, when the FDIC acts as the designated 
``appropriate Federal banking agency'' (or under similar authority) for 
State savings associations, as it does here, the FDIC is authorized to 
issue, modify and rescind regulations involving such associations.

[[Page 54402]]

    As noted above, on June 14, 2011, operating pursuant to this 
authority, the FDIC's Board of Directors reissued and redesignated 
certain transferring regulations of the former OTS. These transferred 
OTS regulations were published as new FDIC regulations in the Federal 
Register on August 5, 2011.\3\ When it republished the transferred OTS 
regulations as new FDIC regulations, the FDIC specifically noted that 
its staff would evaluate the transferred OTS rules and might later 
recommend incorporating the transferred OTS regulations into FDIC rules 
that existed before the transfer, or amending them, or rescinding them, 
as appropriate.
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    \3\ 76 FR 47652 (August 5, 2011).
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    One of the regulations transferred to the FDIC covers OTS 
restrictions on the post-employment activities of its senior examiners. 
The OTS's regulation, formerly found at 12 CFR part 507, was 
transferred to the FDIC with only nominal changes and is now found in 
the FDIC's rules at 12 CFR part 390, subpart A. Before the transfer, 
the FDIC's rules included 12 CFR part 336, subpart C, a rule governing 
restrictions on the post-employment activities of its senior examiners. 
After careful review and comparison of 12 CFR part 390, subpart A--
Restrictions on Post-Employment Activities of Senior Examiners and 12 
CFR part 336, subpart C--One-Year Restriction on Post-employment 
Activities of Senior Examiners, the FDIC proposes to rescind 12 CFR, 
part 390, subpart A, because this subpart largely duplicates 12 CFR 
part 336, subpart C.
    The rules found at 12 CFR, part 336, subpart C and 12 CFR part 507 
were issued in 2005, as part of a joint interagency rulemaking among 
the FDIC, the FRB, the OCC, and the OTS. The agencies issued 
substantively similar rules that implemented section 6303(b) of the 
Intelligence Reform and Terrorism Prevention Act of 2004.\4\ This Act 
added a new section 10(k) to the FDI Act (12 U.S.C. 1820(k)), which 
imposed post-employment restrictions on senior examiners of depository 
institutions and their holding companies. By its terms, the Act 
required the Federal banking agencies to consult with each other to 
ensure that the rules and regulations that they issued were, to the 
extent possible, consistent and comparable, taking into account any 
differences in their respective supervisory programs. 12 U.S.C. 
1820(k)(4)(B).
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    \4\ 70 FR 45323 (August 5, 2005).
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    As a result of that joint rulemaking, the four then-existing 
federal banking agencies adopted very similar, though not identical, 
rules that outlined the post-employment restrictions on their senior 
examiners. For example, the waiver provision for the transferred OTS 
rules, currently found at 12 CFR 390.4, permits the FDIC's Chairperson, 
or his designee, on a case-by-case basis, to waive post-employment 
restrictions. Similarly, the analogous FDIC rule, 12 CFR 303.12, 
permits the FDIC's Board of Directors to waive the applicability of any 
regulation, including those governing post-employment restrictions for 
FDIC's senior examiners, upon a showing of good cause.
    After comparing the FDIC's rules with the transferred OTS rule 
relating to post-employment restrictions for senior examiners, the FDIC 
has concluded that part 336, subpart C more fully and appropriately 
implements section 10(k) of the FDIA for the purposes of the FDIC, 
because it focuses on service as a senior examiner of all insured 
depository institutions, while the transferred OTS rules found at part 
390, subpart A, apply only to senior examiners of savings associations 
and their holding companies.
    Therefore, based on the above, the FDIC proposes to rescind and 
remove from the Code of Federal Regulations the former OTS rules 
located at 12 CFR part 390, subpart A. If the proposed rule is adopted, 
all of the FDIC's senior examiners (including those former OTS 
examiners who were transferred to the FDIC when the OTS was abolished), 
regardless of whether they evaluate insured state banks or insured 
State savings associations, will be subject to the post-employment 
restrictions currently set forth in 12 CFR part 336, subpart C. Thus, 
for example, the part 336, subpart C rule will continue to prohibit an 
FDIC examiner who has served as a senior examiner of an insured 
institution (whether state bank or state savings association) for at 
least 2 months during the last 12 months of employment with the FDIC 
from knowingly accepting compensation as an employee, officer, 
director, or consultant from such insured institution or any company 
that controls that institution. 12 CFR 336.12(a).
    In addition, this notice of proposed rulemaking proposes to revise 
12 CFR part 336, subpart B by deleting a reference to the ``Office of 
Thrift Supervision'' in the definition of ``Federal banking agency'' 
described in section 336.3(e) and adding the words ``predecessors or'' 
in front of the word ``successors''. This proposed revision will help 
avoid any public confusion by deleting the reference to the former 
Office of Thrift Supervision while retaining the indirect reference to 
that former agency by adding a reference to ``predecessors'' to the 
definition of ``Federal Banking agency''. Further, by including 
predecessor agencies of the FDIC as Federal banking agencies for 
purposes of this part, the proposed rule would restrict a potential 
employee who had been associated with a State savings association from 
future FDIC employment if the potential employee had been subject to a 
final enforcement action by the former OTS. See 12 CFR 336.4(a)(2) and 
336.5(a)(2).

II. The Proposal

    Regarding the functions of the former OTS that were transferred to 
the FDIC, section 316(b)(3) of the Dodd-Frank Act (12 U.S.C. 5414(c)) 
in pertinent part provides that the former OTS's regulations will be 
enforceable by the FDIC until they are modified, terminated, set aside, 
or superseded in accordance with applicable law. After reviewing the 
former OTS rules regarding restrictions on post-employment activities 
of senior examiners currently found in 12 CFR part 390, subpart A, the 
FDIC, as the appropriate federal banking agency for State savings 
associations, proposes to rescind these regulations in their entirety. 
The FDIC believes that the rules found at 12 CFR part 336, subpart C 
should alone apply to the post-employment activities of senior 
examiners who examine either insured State banks or insured State 
savings associations and that the rules found at 12 CFR part 390, 
subpart A are essentially duplicative to those found in part 336, 
subpart C. Rescinding part 390, subpart A will serve to streamline the 
FDIC's rules and eliminate unnecessary regulations.
    The FDIC is also proposing in this notice of proposed rulemaking to 
revise 12 CFR part 336, Subpart B by deleting a reference to the 
``Office of Thrift Supervision'' in the definition of ``Federal banking 
agency'' described in section 336.3(e) and by adding the words 
``predecessors or'' in front of the word ``successors''. Deletion of 
the reference to that former federal agency should help eliminate any 
public confusion. However, adding the reference to ``predecessors'' in 
section 336.3(e) provides an indirect reference to the Office of Thrift 
Supervision if appropriate in the context of subpart B--Minimum 
Standards of Fitness for Employment With the Federal Deposit Insurance 
Corporation. With the proposed amendment, even though the OTS no longer 
exists as Federal banking agency, no person would be permitted to 
become employed by the FDIC if they

[[Page 54403]]

had been subject to a final removal or prohibition enforcement order of 
the former OTS, as a predecessor Federal banking agency to the FDIC.

III. Request for Comments

    The FDIC invites comments on all aspects of the proposed 
rulemaking. In particular, the FDIC requests comments on the following 
questions:
    Are the provisions of 12 CFR part 336, subpart C sufficient to 
provide consistent post-employment restrictions for the FDIC's senior 
examiners, regardless of whether the senior examiners evaluated insured 
state banks or insured State savings associations? Please substantiate 
your response.
    Should part 390, subpart A pertaining to post-employment 
restrictions for senior examiners be retained in whole or in part? 
Please substantiate your response.
    What negative impacts, if any, can you foresee in the FDIC's 
proposal to rescind Part 390, Subpart A and remove it from the Code of 
Federal Regulations and to revise the definition of Federal banking 
agency in section 336.3(e)? Please substantiate your response.
    Written comments must be received by the FDIC no later than 
November 4, 2013.

IV. Regulatory Analysis and Procedure

A. The Paperwork Reduction Act

    The FDIC proposes to rescind and remove from its regulations 12 CFR 
part 390, subpart A. This rule was transferred with only nominal 
changes to the FDIC from the OTS when the OTS was abolished by Title 
III of the Dodd-Frank Act. Part 390, Subpart A is redundant and largely 
duplicative of the FDIC's rule at part 336 regarding the one-year post-
employment restrictions for senior examiners. Removing part 390, 
subpart A and revising the definition of Federal banking agency in 
section 336.3(e) will not involve any new collections of information 
pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). 
Consequently, no information collection has been submitted to the 
Office of Management and Budget for review.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601, et seq. (RFA), 
requires that each federal agency either (1) certify that a proposed 
rule would not, if adopted in final form, have a significant economic 
impact on a substantial number of small entities, or (2) prepare an 
initial regulatory flexibility analysis of the rule and publish the 
analysis for comment. Twelve CFR part 336, subpart C was issued as part 
of an interagency rulemaking designed to implement section 10(k) of the 
FDI Act, 12 U.S.C. 1820(k). This rule has a limited scope: it imposes 
post-employment restrictions on certain senior examiners employed by 
the FDIC and does not impose any obligations or restrictions on banking 
organizations, including small banking organizations. On this basis, 
the FDIC certifies that this proposal, if it is adopted in final form, 
would not have a significant impact on a substantial number of small 
entities, within the meaning of those terms as used in the RFA. 
Notwithstanding this certification, the FDIC invites comments on the 
impact of this rule on small entities.

C. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 
Stat. 1338, 1471, 12 U.S.C. 4809, requires each Federal banking agency 
to use plain language in all of its proposed and final rules published 
after January 1, 2000. As a federal banking agency subject to the 
provisions of this section, the FDIC has sought to present the proposed 
rule to rescind part 390, subpart A and to revise the definition at 
section 336.3(e) in a simple and straightforward manner. The FDIC 
invites comments on whether the proposal is clearly stated and 
effectively organized, and how the FDIC might make the proposal easier 
to understand.

List of Subjects in 12 CFR Parts 336 and 390

    Banks, banking; Conflicts of interest; Government employees; 
Savings associations.

Authority and Issuance

    For the reasons stated in the preamble and under the authority of 
12 U.S.C. 5412, the Board of Directors of the Federal Deposit Insurance 
Corporation proposes to amend part 336, subpart B, and part 390, 
subpart A, of title 12 of the Code of Federal Regulations as follows:

PART 336--FDIC EMPLOYEES

0
1. The authority citation for part 336 continues to read as follows:

    Authority:  61 FR 28728, June 6, 1996, unless otherwise noted.

0
2. In Sec.  336.3, revise paragraph (e) to read as follows:


Sec.  336.3  Definitions.

* * * * *
    (e) Federal Banking agency means the Office of the Comptroller of 
the Currency, the Board of Governors of the Federal Reserve System, or 
the Federal Deposit Insurance Corporation, or their predecessors or 
successors.
* * * * *

PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT 
SUPERVISION

0
3. The authority citation for part 390 is amended by removing the 
additional authority for subpart A.

    Authority:  12 U.S.C. 1819.
* * * * *

Subpart A--[Removed and Reserved]

0
4. Remove and reserve subpart A, consisting of Sec. Sec.  390.1 through 
390.5.

    Dated at Washington, DC, this 28th day of August, 2013.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2013-21356 Filed 9-3-13; 8:45 am]
BILLING CODE 6714-01-P