[Federal Register Volume 79, Number 81 (Monday, April 28, 2014)]
[Proposed Rules]
[Pages 23297-23300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09296]


 ========================================================================
 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. 79, No. 81 / Monday, April 28, 2014 / 
Proposed Rules  

[[Page 23297]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 8

[Docket ID. OCC-2014-0009]
RIN 1557-AD82


Assessment of Fees

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

ACTION: Proposed rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) proposes 
to increase assessments for certain national banks and Federal savings 
associations (FSAs). Under the proposal, assessment increases for banks 
and FSAs with assets of more than $40 billion would range between 0.32 
percent and approximately 14 percent, depending on the total assets of 
the institution as reflected in its June 30, 2014, Consolidated Report 
of Condition and Income (Call Report). The proposal would not increase 
assessments for banks or FSAs with $40 billion or less in total assets. 
In conjunction with the proposed increase in assessments, the OCC 
proposes to update its assessment rules to conform with section 318 of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act (the 
Dodd-Frank Act), which reaffirmed the authority of the Comptroller of 
the Currency (the Comptroller) to set the amount of, and methodology 
for, assessments. The proposed rule would also revise the assessment 
rules to update references to the annual Notice of Comptroller of the 
Currency Fees (Notice of Fees). If adopted as final, the OCC will 
implement the increase in assessments by issuing an amended Notice of 
Fees. This amended Notice of Fees would become effective as of the 
semiannual assessment due on September 30, 2014.

DATES: Comments must be received on or before June 12, 2014.

ADDRESSES: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
the Federal eRulemaking Portal or email, if possible. Please use the 
title ``Assessment of Fees'' to facilitate the organization and 
distribution of the comments. You may submit comments by any of the 
following methods:
     Federal eRulemaking Portal--``regulations.gov'': Go to 
http://www.regulations.gov. Enter ``Docket ID OCC-2014-0009'' in the 
Search Box and click ``Search.'' Results can be filtered using the 
filtering tools on the left side of the screen. Click on ``Comment 
Now'' to submit public comments.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
submitting public comments.
     Email: [email protected].
     Mail: Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency, 400 7th Street SW., Suite 
3E-218, Mail Stop 9W-11, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW., Suite 3E-218, 
Mail Stop 9W-11, Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2014-0009'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish those comments 
on the Regulations.gov Web site without change, including any business 
or personal information that you provide such as name and address 
information, email addresses, or phone numbers. Comments received, 
including attachments and other supporting materials, are part of the 
public record and subject to public disclosure. Do not enclose any 
information in your comment or supporting materials that you consider 
confidential or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this rulemaking action by any of the following methods:
     Viewing Comments Electronically: Go to http://www.regulations.gov. Enter ``Docket ID OCC-2014-0009'' in the Search 
box and click ``Search.'' Comments can be filtered by Agency using the 
filtering tools on the left side of the screen.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
viewing public comments, viewing other supporting and related 
materials, and viewing the docket after the close of the comment 
period.
     Viewing Comments Personally: You may personally inspect 
and photocopy comments at the OCC, 400 7th Street SW., Washington, DC. 
For security reasons, the OCC requires that visitors make an 
appointment to inspect comments. You may do so by calling (202) 649-
6700. Upon arrival, visitors will be required to present valid 
government-issued photo identification and to submit to security 
screening in order to inspect and photocopy comments.
     Docket: You may also view or request available background 
documents and project summaries using the methods described above.

FOR FURTHER INFORMATION CONTACT: Gary Crane, Deputy Chief Financial 
Officer, Financial Management, (202) 649-5540, or Mitchell Plave, 
Special Counsel, or Henry Barkhausen, Attorney, Legislative and 
Regulatory Activities Division, (202) 649-5490, for persons who are 
deaf or hard of hearing, TTY, (202) 649-5597.

SUPPLEMENTARY INFORMATION: 

I. Background

    The National Bank Act \1\ and the Home Owners' Loan Act \2\ 
authorize the Comptroller to fund the OCC's operations through 
assessments, fees, and other charges on national banks and FSAs.\3\ The 
Comptroller sets assessments, fees, and other charges to meet the OCC's 
expenses in carrying out its supervisory activities.\4\ In setting 
assessments, the Comptroller has broad authority to consider variations 
among institutions, including the nature and scope of the activities of 
the entity, the amount and type of assets that the entity holds, the 
financial and managerial condition of the entity, and any other

[[Page 23298]]

factor the Comptroller determines is appropriate.\5\
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    \1\ Revised Statutes of the United States, Title LXII, 12 U.S.C. 
1 et seq.
    \2\ The Home Owners' Loan Act, 12 U.S.C. 1461 et seq.
    \3\ 12 U.S.C. 16, 481, 482, 1467.
    \4\ 12 U.S.C. 16, 482.
    \5\ 12 U.S.C. 16. See also 12 U.S.C. 1467 (providing that the 
Comptroller has the authority to recover costs of examination of 
FSAs ``as the Comptroller deems necessary or appropriate.'').
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    The OCC collects assessments from national banks and FSAs in 
accordance with 12 CFR part 8. Under part 8, the base assessment for 
banks and FSAs is calculated using a table with eleven categories, or 
brackets, each of which comprises a range of asset-size values. The 
assessment for each bank and FSA is the sum of a base amount, which is 
the same for every national bank and FSA in its asset-size bracket, 
plus a marginal amount, which is computed by applying a marginal 
assessment rate to the amount in excess of the lower boundary of the 
asset-size bracket.\6\ The marginal assessment rate declines as asset 
size increases, reflecting economies of scale in bank examination and 
supervision.
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    \6\ 12 CFR 8.2(a).
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    The OCC's annual Notice of Fees sets forth the marginal assessment 
rates applicable to each asset-size bracket for each year, as well as 
other assessment components and fees.\7\ Under part 8, the OCC may 
adjust the marginal rates to account for inflation.\8\ The OCC may 
issue an interim or amended Notice of Fees if the Comptroller 
determines that it is necessary to meet the OCC's supervisory 
obligations.\9\
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    \7\ See 12 CFR 8.8(a) (providing for the Notice of Fees). Under 
part 8, the OCC also collects assessments from Federal branches and 
Federal agencies. The changes in the proposed amended Notice of Fees 
would also apply to assessments of Federal branches and Federal 
agencies.
    \8\ 12 CFR 8.2(a)(4).
    \9\ 12 CFR 8.8(b).
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    In recent years, marginal assessment rates for most national banks 
were relatively stable, which in part reflected a stable regulatory 
landscape. Since the enactment of the Dodd-Frank Act,\10\ the OCC's 
responsibilities have expanded and changed in several important ways. 
These include taking on responsibility for the supervision of FSAs and 
the need to devote appropriate resources to the implementation of the 
Dodd-Frank Act and supervising compliance with its requirements. The 
Dodd-Frank Act and other post-crisis reforms have increased the level 
and complexity of OCC supervisory activities, especially with respect 
to large institutions. The marginal rates on the assets of large banks 
and FSAs in excess of $40 billion were not increased between 1995 and 
2013.\11\ We have recently reviewed those rates and believe that an 
adjustment beyond an increase for inflation is appropriate in light of 
our increased supervisory responsibilities.
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    \10\ Public Law 111-203, 124 Stat. 1376 (2010).
    \11\ In the 1994 Notice of Fees, the OCC increased the marginal 
rates for all asset brackets, including the bracket that applied to 
assets above $40 billion. From 1995 through 2013, the marginal rate 
for that asset bracket did not increase; moreover, it was lowered in 
2008, when the OCC added a new bracket that applied to assets in 
excess of $250 billion and lowered the marginal rates for all asset 
brackets. (See OCC Bulletin 2008-3, Notice of Comptroller of the 
Currency Fees for Year 2008 (February 19, 2008); 73 FR 9012 
(February 19, 2008)). In the Notice of Fees for 2014, published on 
December 12, 2013, the OCC removed the $20 billion assets cap on 
inflation adjustments. (See OCC Bulletin 2013-37, Office of the 
Comptroller of the Currency Fees and Assessments.) The OCC first 
assessed FSAs in 2011, after the functions of the Office of Thrift 
Supervision (OTS) were assigned to the OCC under the Dodd-Frank Act. 
Since September 2012, the OCC has applied the same assessment 
schedule to national banks and FSAs. Therefore, where the OCC 
implemented full inflation indexation in 2014, that adjustment 
applied to FSAs.
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II. Description of the Proposed Rule

A. Increase to Marginal Rates

    Under the proposal, marginal assessment rates for national banks 
and FSAs with assets of more than $40 billion would increase by 14.5 
percent and would be effective for the assessment due on September 30, 
2014. Marginal rates for banks and FSAs with $40 billion or less in 
assets would remain the same as set out in the 2014 Notice of Fees, 
published on December 12, 2013. The actual projected assessment 
increase for banks with more than $40 billion in assets would range 
between 0.32 percent and 14 percent, depending on each institution's 
total assets, with an average projected increase of 12 percent. This 
range is based on year-end 2013 bank and FSA assets. On an annual 
basis, this 12 percent increase represents .0008 percent of return on 
assets (ROA) for those banks and FSAs. Accordingly, we expect the 
effect on the twenty-five institutions with more than $40 billion in 
total assets to be nominal. Most banks and FSAs (1,134 national banks 
and 494 FSAs, or approximately 99 percent of entities supervised by the 
OCC) have assets of $40 billion or less and would not be affected by 
the increase.
    The proposal would continue the OCC's present assessment 
methodology and would not change the asset bracket table in 12 CFR 
8.2(a). The proposal would increase total OCC assessment revenue by an 
amount ranging between 7 percent and 7.5 percent. The proposed marginal 
rates for national banks and FSAs with over $40 billion in assets are 
reflected in the following table:

                                    Proposed General Assessment Fee Schedule
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     If the amount of total balance-sheet assets                   The semiannual assessment will be
 (consolidated domestic and foreign subsidiaries) is -----------------------------------------------------------
                     (millions)
-----------------------------------------------------     This amount            Plus           Of excess over
              Over                   But not over                                                 (millions)
----------------------------------------------------------------------------------------------------------------
$0..............................                  $2              $5,997         0.000000000                  $0
2...............................                  20               5,997         0.000236725                   2
20..............................                 100              10,258         0.000189379                  20
100.............................                 200              25,408         0.000123092                 100
200.............................               1,000              37,717         0.000104156                 200
1,000...........................               2,000             121,041         0.000085218               1,000
2,000...........................               6,000             206,259         0.000075749               2,000
6,000...........................              20,000             509,255         0.000064454               6,000
20,000..........................              40,000           1,411,611         0.000048553              20,000
40,000..........................             250,000           2,382,671         0.000037936              40,000
250,000.........................  ..................          10,349,260         0.000037556             250,000
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    The following is a table that shows examples of how the increase in 
assessments would affect national banks and FSAs:

[[Page 23299]]



                                                 Proposed Assessment Increases for Selected Asset Sizes
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        Total assets  (billions)                $41             $50            $100            $200            $500           $1,000          $2,000
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Semi-annual assessment:
    Proposed............................      $2,420,607      $2,762,032      $4,658,831      $8,452,431     $19,738,260     $38,516,260     $76,072,260
    Current.............................       2,415,803       2,713,991       4,370,591       7,683,791      17,540,391      33,940,391      66,740,391
    Change..............................           4,804          48,041         288,240         768,640       2,197,869       4,575,869       9,331,869
    Increase (percent)..................           0.20%           1.77%           6.59%          10.00%          12.53%          13.48%          13.98%
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    The proposed increase in marginal assessment rates primarily 
reflects changes in the OCC's supervisory responsibilities. Among those 
changes were expenses resulting from the integration of the OTS staff 
into the OCC and other associated costs. For example, under the Dodd-
Frank Act, the OCC succeeded by operation of law to the OTS's 
assessment structure, which was different from the OCC's assessment 
system. The OCC concluded that it would be inefficient and inequitable 
to maintain two separate assessment structures and eliminated the OTS's 
assessment system. Therefore, FSAs are assessed under the same 
structure (part 8) as national banks. This integration resulted in 
lower overall assessment revenues for the OCC than the OCC would have 
collected had it continued the OTS system for assessing FSAs. At the 
same time, the OCC incurred expenses associated with geographically 
aligning its integrated workforce with the institutions we supervise 
and ensuring the continuation of the statutorily protected salary 
levels and benefits that had been provided by the OTS.
    The OCC recognizes the ongoing need to improve efficiencies and 
contain costs and is taking steps to do so. For example, the OCC 
currently is implementing an enterprise-wide self-assessment process to 
identify how to make OCC processes more efficient and effective. We are 
undertaking this effort pursuant to a strategic initiative designed to 
address how we can more effectively utilize existing resources, and 
limit the increase in the agency's costs.
    The OCC proposes to raise assessments specifically for banks and 
FSAs with more than $40 billion in assets for a number of reasons. 
First, the proposed increase in assessments reflects new supervisory 
and regulatory obligations for the OCC created by the Dodd-Frank Act. 
Many of these new obligations require additional resources, with most 
of those resources allotted for large bank supervision and regulation. 
For example, section 165(i) of the Dodd-Frank Act requires financial 
companies with more than $10 billion in assets, including national 
banks and FSAs, to conduct annual stress tests and submit results to 
their regulators. The OCC has devoted considerable resources to 
developing the regulation, guidance, and reporting templates necessary 
to implement this statutory requirement, and the OCC must allocate a 
substantial number of supervisory personnel to review each year's 
stress testing submissions. Other provisions of the Dodd-Frank Act 
similarly require the OCC to participate in interagency rulemakings and 
to supervise the compliance of national banks and FSAs with major 
financial reform initiatives.\12\ Supervising compliance with these 
significant new regulations requires a substantial commitment of 
resources on an ongoing basis.
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    \12\ See, e.g., section 619, 124 Stat. at 1620 (prohibitions on 
proprietary trading and on investing in, sponsoring, or having 
certain relationships with a hedge fund or a private equity fund); 
section 941(b), 124 Stat. at 1890 (credit risk retention 
requirements).
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    Second, the increase for large banks and FSAs reflects the fact the 
OCC did not raise marginal rates on the assets of large banks and FSAs 
in excess of $40 billion between 1995 and 2013; \13\ moreover, the OCC 
lowered those marginal rates in 2008 when the bracket for assets in 
excess of $250 billion was added. Third, the proposal reflects the 
relatively modest effect the increase would have on the ROA of banks 
and FSAs with over $40 billion in total assets.
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    \13\ The OCC did not increase the marginal rates for FSAs after 
the OCC became the supervisor of those entities on July 21, 2011, 
although the actual assessment rates for particular FSAs may have 
increased or decreased when the OCC applied the OCC's assessment 
structure to FSAs.
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    By contrast, a rate increase would strain the limited resources of 
community banks and FSAs and would be unwarranted for these smaller 
institutions, in light of the fact that the bulk of the OCC's new 
responsibilities are directed toward large institutions. For these 
reasons, the OCC has determined that it is not appropriate to raise 
marginal assessments for community banks and FSAs.

B. Proposed Revisions to Part 8

    The proposed rule would amend 12 CFR part 8 to make it consistent 
with the proposal to increase the marginal assessment rates. 
Specifically, we propose to revise 12 CFR 8.2(a)(4) to recognize that 
the OCC may increase the marginal rates in amounts that exceed the rate 
of inflation, as under the current proposal. In addition, the proposed 
rule would revise 12 CFR 8.1 to reflect section 318 of the Dodd-Frank 
Act, which reaffirmed the Comptroller's broad discretion to set 
assessments and to determine the assessment methodology. The proposed 
rule would also update 12 CFR 8.8 to reflect the new title the OCC uses 
for the annual notice of fees and assessments. The new title is the 
``Office of the Comptroller of the Currency Notice of Fees and 
Assessments.''

III. Request for Comment

    The OCC requests comment on all aspects of the proposed revised 
marginal rates for assessments due on September 30, 2014 and the 
proposed changes to part 8.

IV. Regulatory Analysis

Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520), the 
OCC may not conduct or sponsor, and a person is not required to respond 
to, an information collection unless the information collection 
displays a valid Office of Management and Budget (OMB) control number. 
This notice of proposed rulemaking amends part 8, which has an approved 
information collection under the PRA (OMB Control No. 1557-0223). The 
amendments proposed today do not introduce any new collections of 
information, nor do they amend part 8 in a way that modifies the 
collection of information that OMB has approved. Therefore, no PRA 
submission to OMB is required.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
requires generally that, in connection with a notice of proposed 
rulemaking, an agency prepare

[[Page 23300]]

and make available for public comment an initial regulatory flexibility 
analysis that describes the impact of a proposed rule on small 
entities. However, the regulatory flexibility analysis otherwise 
required under the RFA is not required if an agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities (defined in regulations promulgated by the 
Small Business Administration (SBA) to include banking organizations 
with total assets of less than or equal to $500 million) and publishes 
its certification and a brief explanatory statement in the Federal 
Register together with the rule.
    As of December 31, 2013, the OCC supervised 1,760 banks (1,153 
commercial banks, 62 trust companies, 497 Federal savings associations, 
and 48 branches or agencies of foreign banks). Approximately 1,195 of 
OCC-supervised banks are small entities based on the SBA's definition 
of small entities for RFA purposes. As discussed in the SUPPLEMENTARY 
INFORMATION above, the proposed increase in assessments will only 
affect institutions with more than $40 billion in total assets. As 
such, pursuant to section 605(b) of the RFA, the OCC certifies that 
this proposal would not have a significant economic impact on a 
substantial number of small entities. Accordingly, an initial 
regulatory flexibility analysis is not required.

Unfunded Mandates Reform Act

    The OCC has analyzed the proposed rule under the factors in the 
Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this 
analysis, the OCC considered whether the proposed rule includes 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 (adjusted annually for inflation). The 
OCC has determined that this proposed rule will not result in 
expenditures by State, local, and tribal governments, or the private 
sector, of $100 million or more in any one year. Accordingly, this 
proposal is not subject to section 202 of the Unfunded Mandates Act.

List of Subjects in 12 CFR Part 8

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

Department of the Treasury

Office of the Comptroller of the Currency

Authority and Issuance
    For the reasons set forth in the preamble, the OCC proposes to 
amend 12 CFR part 8 as follows:

PART 8--ASSESSMENT OF FEES

0
1. The authority citation for part 8 continues 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
2. Section 8.2 is amended by revising paragraphs (a) introductory text 
and (a)(4) 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 
collection on March 31 and September 30 of each year. In setting 
assessments, the Comptroller of the Currency may take into account the 
nature and scope of the activities of a national bank or Federal 
savings association, the amount and type of assets that the entity 
holds, the financial and managerial condition of the entity, and any 
other factor the Comptroller of the Currency determines is appropriate, 
as provided by 12 U.S.C. 16. The semiannual assessment will be 
calculated as follows:
* * * * *
    (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 other 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.
0
3. Section 8.8 is revised to read as follows:


Sec.  8.8  Notice of Office of the Comptroller of the Currency fees and 
assessments.

    (a) December notice of fees and assessments. A notice of ``Office 
of the Comptroller of the Currency Fees and Assessments'' shall be 
published no later than the first business day in December of each year 
for fees to be charged by the Office during the upcoming year. These 
fees will be effective January 1 of that upcoming year.
    (b) Interim notice of fees and assessments. The OCC may issue an 
``Interim Office of the Comptroller of the Currency Fees and 
Assessments'' or an ``Amended Office of the Comptroller of the Currency 
Fees and Assessments'' from time to time throughout the year as 
necessary. Interim or amended notices will be effective 30 days after 
issuance.

    Dated: April 18, 2014.
Thomas J. Curry,
Comptroller of the Currency.
[FR Doc. 2014-09296 Filed 4-25-14; 8:45 am]
BILLING CODE 4810-33-P