[Federal Register Volume 79, Number 150 (Tuesday, August 5, 2014)]
[Proposed Rules]
[Pages 45380-45383]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18262]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 390

RIN 3064-AE17


Removal of Transferred OTS Regulations Regarding Possession by 
Conservators and Receivers for Federal and State Savings Associations

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to 
rescind and remove regulations regarding possession by conservators and 
receivers for federal and state savings associations, which are no 
longer necessary in light of or contradict provisions of the Federal 
Deposit Insurance Act and are not in accordance with FDIC practice and 
procedures. The regulations were 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

[[Page 45381]]

Dodd-Frank Wall Street Reform and Consumer Protection Act.

DATES: Comments must be received on or before October 6, 2014.

ADDRESSES: You may submit comments by any of the following methods:
     FDIC Web site: http://www.fdic.gov/regulations/laws/federal. Follow instructions for submitting comments on the agency Web 
site.
     FDIC Email: [email protected]. Include RIN 3064-AE17 in 
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 note: All comments received will be posted generally without 
change to http://www.fdic.gov/regulations/laws/federal/including any 
personal information provided.

FOR FURTHER INFORMATION CONTACT: Frank C. Campagna, Associate Director, 
Receivership Operations, Division of Resolutions and Receiverships 
(972) 761-8025 or [email protected]; Manuel E. Cabeza, Counsel, Legal 
Division (703) 562-2434 or [email protected]; or Shane Kiernan, Counsel, 
Legal Division (703) 562-2632 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

The Dodd-Frank Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``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,\2\ the powers, duties, and functions formerly performed by the OTS 
were divided among the FDIC as to State savings associations, the 
Office of 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 \3\ 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\ Public Law 111-203, 12 U.S.C. 5301, et seq. (2010).
    \2\ 12 U.S.C. 5411.
    \3\ 12 U.S.C. 5414(b).
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    Section 316(c) of the Dodd-Frank Act \4\ further directed the FDIC 
and the OCC to consult with one another and to publish a list of the 
continued OTS regulations that 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.\5\
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    \4\ 12 U.S.C. 5414(c).
    \5\ 76 FR 39247 (July 6, 2011).
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FDIC's Authority

    Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act \6\ 
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 Federal Deposit 
Insurance Act (the ``FDI Act'') \7\ and other laws as the ``appropriate 
Federal banking agency.'' Section 312(c) of the Dodd-Frank Act amended 
section 3(q) of the FDI Act \8\ 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'' for State savings associations, as it does here, the 
FDIC is authorized to issue, modify and rescind regulations involving 
such associations.
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    \6\ 12 U.S.C. 5412(b)(2)(B)(i)(II).
    \7\ 12 U.S.C. 1811, et seq.
    \8\ 12 U.S.C. 1813(q).
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    As noted, on June 14, 2011, the FDIC's Board of Directors reissued 
and redesignated certain regulations promulgated by the former OTS. 
These transferred OTS regulations were published as FDIC interim rules 
in the Federal Register on August 5, 2011.\9\ 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 other FDIC rules, amending them, or rescinding them, 
as appropriate.
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    \9\ 76 FR 47652 (August 5, 2011).
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    One of the regulations transferred to the FDIC set forth procedures 
to be followed by conservators and receivers for Federal and State 
savings associations upon taking possession of said entities and for 
providing notice of appointment. This OTS regulation, formerly found at 
12 CFR part 558, was transferred to the FDIC with only nominal changes 
and is now sections 390.240 and 390.241 in subpart N.
    The FDIC's authority to act as conservator or receiver and its 
powers and duties in those roles are set forth in the FDI Act \10\ and 
in regulations found in 12 CFR. part 360. The Board has delegated 
authority to staff to establish policies and procedures for carrying 
out receivership operations. The FDI Act and the policies and 
procedures implemented and followed by FDIC staff subsume the 
responsibilities set forth in subpart N.\11\
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    \10\ 12 U.S.C. 1811, et seq.
    \11\ Such policies and procedures include the FDIC Division of 
Resolution and Receivership's Failed Financial Institution Closing 
Manual.
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II. The Proposal

    Section 316(b)(3) of the Dodd-Frank Act \12\ provides that the 
former OTS's regulations will continue in effect until they are 
modified, terminated, set aside, or superseded in accordance with 
applicable law. After careful review of subpart N, the FDIC proposes 
that it be rescinded and removed because it is unnecessary, or because 
it prescribes actions that are duplicative of actions taken by the OCC 
or state chartering authority. The FDIC believes that the provisions of 
the FDI Act and the FDIC's existing policies and procedures 
sufficiently address the provision of notice of appointment and the 
authority to take possession of, and exercise control over, the assets 
of a failed institution, including insured Federal and State savings 
associations.
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    \12\ 12 U.S.C. 5414(c).
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12 CFR 390.240--Procedure Upon Taking Possession

    The FDIC interim rule found at 12 CFR 390.240 (``section 390.240'') 
is the redesignation of the OTS regulation outlining procedures to be 
followed by conservators and receivers for Federal and State savings 
associations for taking possession of said entities upon appointment. 
The FDIC is proposing that section 390.240 be rescinded and removed 
because it is unnecessary. Paragraph (a) requires the conservator or 
receiver to take possession of the failed

[[Page 45382]]

institution's principal office in accordance with the terms of the 
appointment. FDIC's procedure already provides that it takes 
coordinated simultaneous possession of all locations from which a 
failed institution operates. Moreover, the FDIC's powers and duties as 
conservator or receiver are set forth in the FDI Act, not pursuant to 
the ``terms of the . . . appointment.''
    Paragraphs (b)(1) and (b)(5), respectively, provide that the 
conservator or receiver shall immediately take possession of the 
institution's books, records, and assets, and shall succeed to rights, 
titles, powers and privileges of the savings association and its 
stockholders, members, account holders, depositors, officers, and 
directors. These provisions are redundant of the FDI Act, which already 
provides that the FDIC succeeds to ``all rights, titles, powers, and 
privileges of the insured depository institution, and of any 
stockholder, member, accountholder, depositor, officer, or director of 
such institution with respect to the institution and the assets of the 
institution'' when acting as conservator or receiver.\13\
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    \13\ 12 U.S.C. 1821(d)(2)(A).
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    Paragraphs (b)(2), (3), and (4), respectively, instruct the 
conservator or receiver to ``notify in writing, served personally or by 
registered mail or telegraph'' all parties known to be holding or in 
possession of assets of the failed institution that the conservator or 
receiver has succeeded to all rights, powers and privileges of the 
failed institution; file a statement with the Executive Secretary that 
the conservator or receiver took possession of the failed institution; 
and post a notice on the door of the principal and other offices of the 
failed institution in the form, if any, prescribed by the OCC or state 
bank supervisor. For three reasons, these provisions are unnecessary 
given existing FDIC policies and procedures. First, the FDIC's practice 
is to demand the return of assets of the failed institution in whatever 
manner and form that is appropriate under the circumstances. Second, 
the Executive Secretary is provided with a copy of all closing 
documents by FDIC staff. Third, the OCC or state bank supervisor itself 
posts its order closing the institution on the door of the principal 
office.

12 CFR 390.241--Notice of Appointment

    The FDIC interim rule found at 12 CFR 390.241 (``section 390.241'') 
is the redesignation of the OTS regulation outlining procedures for 
giving notice of the appointment of a conservator or receiver for a 
Federal or State savings association. The FDIC is proposing that 
section 390.241 be rescinded and removed because it is unnecessary. 
Specifically, paragraph (a) requires the FDIC to designate the persons 
or entities who are to: (1) Give notice of the appointment ``to any 
officer or employee who is present in and appears to be in charge at 
the principal office of the savings association;'' \14\ (2) serve a 
copy of the order of appointment by (i) ``leaving a certified copy of 
the order of appointment at the principal office of the savings 
association,'' \15\ or (ii) ``handing a certified copy of the order of 
appointment to the previous conservator . . . or the officer or 
employee of the savings association . . . who is present in and appears 
to be in charge at the principal office of the savings association;'' 
\16\ and (3) file with the Executive Secretary of the FDIC a statement 
that includes the date and time that notice of the appointment was 
given and service of the order of appointment was made.'' \17\ It is 
not necessary to include these provisions among the FDIC's regulations 
because the OCC or state chartering authority is responsible for 
providing or serving notice of the appointment of the FDIC as 
conservator or receiver on a Federal or State savings association. 
Further, the FDIC's Executive Secretary maintains records of the 
appointment of the FDIC as conservator or receiver. Paragraph (b), 
which instructs the FDIC to cause a notice of the appointment of the 
conservator or receiver to be published in the Federal Register, is 
unnecessary because the FDIC causes such a publication regarding any 
institution for which it is appointed as conservator or receiver in 
accordance with its policy and procedures. For these reasons, the FDIC 
proposes that subpart N should be rescinded and removed. Rescinding 
subpart N will serve to streamline the FDIC's rules, prevent confusion 
and eliminate unnecessary regulations.
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    \14\ 12 CFR 390.241(a)(1).
    \15\ 12 CFR 390.241(a)(2)(i).
    \16\ 12 CFR 390.241(a)(2)(ii).
    \17\ 12 CFR 390.241(a)(3).
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III. Request for Comments

    The FDIC invites comments on all aspects of the proposal. Written 
comments must be received by the FDIC no later than October 6, 2014.

IV. Regulatory Analysis and Procedure

A. The Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
(44 U.S.C. 3501, et seq.) (``PRA''), the FDIC may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (``OMB'') control number. Removing subpart N will 
not revise any existing information collections pursuant to the PRA. 
Consequently, FDIC has not submitted any information collection request 
to the OMB 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. Rescinding subpart N will leave the FDI Act as 
the sole source of the FDIC's authority to act as conservator or 
receiver for an insured depository institution 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.

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 proposal 
to rescind Subpart N 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.

D. The Economic Growth and Regulatory Paperwork Reduction Act.

    Under section 2222 of the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all 
of its regulations, at least once every 10 years, in order to identify 
any outdated or otherwise unnecessary regulations imposed on insured 
institutions. The FDIC completed the last comprehensive review of its 
regulations under EGRPRA in 2006 and is commencing the next decennial 
review. The action taken on this rule will be included as part of the

[[Page 45383]]

EGRPRA review that is currently under way. As part of that review, the 
FDIC invites comments concerning whether the proposal would impose any 
outdated or unnecessary regulatory requirements on insured depository 
institutions. If you provide such comments, please be specific and 
provide alternatives whenever appropriate.

List of Subjects in Part 390

    Banks and banking; 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 12 CFR part 390 as follows:

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

0
1. The authority citation for part 390 is revised to read as follows:

    Authority: 12 U.S.C. 1819.
    Subpart A also issued under 12 U.S.C. 1820.
    Subpart B also issued under 12 U.S.C. 1818.
    Subpart C also issued under 5 U.S.C. 504; 554-557; 12 U.S.C. 
1464; 1467; 1468; 1817; 1818; 1820; 1829; 3349, 4717; 15 U.S.C. 78 
l; 78o-5; 78u-2; 28 U.S.C. 2461 note; 31 U.S.C. 5321; 42 U.S.C. 
4012a.
    Subpart D also issued under 12 U.S.C. 1817; 1818; 1820; 15 
U.S.C. 78 l.
    Subpart E also issued under 12 U.S.C. 1813; 1831m; 15 U.S.C. 78.
    Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901 et 
seq.
    Subpart G also issued under 12 U.S.C. 2810 et seq., 2901 et 
seq.; 15 U.S.C. 1691; 42 U.S.C. 1981, 1982, 3601-3619.
    Subpart H also issued under 12 U.S.C. 1464; 1831y.
    Subpart I also issued under 12 U.S.C. 1831x.
    Subpart J also issued under 12 U.S.C. 1831p-1.
    Subpart L also issued under 12 U.S.C. 1831p-1.
    Subpart M also issued under 12 U.S.C. 1818.
    Subpart O also issued under 12 U.S.C. 1828.
    Subpart P also issued under 12 U.S.C. 1470; 1831e; 1831n; 1831p-
1; 3339.
    Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
    Subpart R also issued under 12 U.S.C. 1463; 1464; 1831m; 1831n; 
1831p-1.
    Subpart S also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 
1468a; 1817; 1820; 1828; 1831e; 1831o; 1831p-1; 1881-1884; 3207; 
3339; 15 U.S.C. 78b; 78 l; 78m; 78n; 78p; 78q; 78w; 31 U.S.C. 5318; 
42 U.S.C. 4106.
    Subpart T also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78 l; 78m; 78n; 78w.
    Subpart U also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78 l; 78m; 78n; 78p; 78w; 78d-1; 7241; 7242; 7243; 7244; 
7261; 7264; 7265.
    Subpart V also issued under 12 U.S.C. 3201-3208.
    Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78 l; 78m; 78n; 78p; 78w.
    Subpart X also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 
1828; 3331 et seq.
    Subpart Y also issued under 12 U.S.C. 1831o.
    Subpart Z also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 
1828 (note).

Subpart N--[Removed and Reserved]

0
2. Remove and reserve subpart N, consisting of Sec. Sec.  390.240 
through 390.241.

    Dated at Washington, DC, this 15th day of July, 2014.

    By order of the Board of Directors.
    Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-18262 Filed 8-4-14; 8:45 am]
BILLING CODE 6714-01-P