[Federal Register Volume 79, Number 215 (Thursday, November 6, 2014)]
[Rules and Regulations]
[Pages 65873-65879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-26173]



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  Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / 
Rules and Regulations  

[[Page 65873]]



DEPARTMENT OF THE TREASURY

5 CFR Part 3101


Supplemental Standards of Ethical Conduct for Employees of the 
Department of the Treasury

AGENCY: Department of the Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury (the ``Department'' or 
``Treasury''), with the concurrence of the Office of Government Ethics 
(OGE), is amending the Supplemental Standards of Ethical Conduct for 
Employees of the Department of the Treasury (the ``Supplemental 
Standards''). The Supplemental Standards apply only to Department 
personnel and augment the Standards of Ethical Conduct for Employees of 
the Executive Branch (``OGE Standards''). This final rule amends the 
Supplemental Standards to account for current Department structure 
resulting from organizational changes that established new offices or 
bureaus within Treasury and transferred certain functions and/or 
bureaus from the Department. This final rule also amends the 
Supplemental Standards applicable to employees of the Office of the 
Comptroller of the Currency (OCC), which generally prohibit OCC 
employees from investing in or borrowing from OCC supervised 
institutions.

DATES: Effective: November 6, 2014.

FOR FURTHER INFORMATION CONTACT: Elizabeth Horton, Deputy Assistant 
General Counsel for Ethics, Office of the General Counsel, Department 
of the Treasury, 1500 Pennsylvania Avenue NW., Room 2221, Washington DC 
20220; (202) 622-0450.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 7, 1992, OGE published the OGE Standards. See 57 FR 
35006-35067, as corrected at 57 FR 48557, 57 FR 52483, and 60 FR 51167, 
with additional grace period extensions for certain existing provisions 
at 59 FR 4779-4780, 60 FR 6390-6391, and 60 FR 66857-66858. The OGE 
Standards, codified at 5 CFR part 2635, effective February 3, 1993, 
established uniform standards of ethical conduct that apply to all 
executive branch personnel. Section 2635.105 of the OGE Standards 
authorizes an agency, with the concurrence of OGE, to adopt agency-
specific supplemental regulations that are necessary to properly 
implement its ethics program. In 1995, the Department, with OGE's 
concurrence, established the Supplemental Standards. See 60 FR 22249-
22255 (May 5, 1995), as codified at 5 CFR part 3101. Employees of the 
Department are subject to standards of ethical conduct promulgated by 
OGE and Treasury. The Supplemental Standards are necessary for 
successful implementation of the Department's ethics program in light 
of Treasury's unique programs and operations.
    Treasury is now amending the Supplemental Standards to account for 
current Department structure resulting from organizational changes that 
established new offices or bureaus within Treasury and transferred 
certain functions and/or bureaus from the Department. This rule also 
amends the Supplemental Standards applicable to employees of the Office 
of the Comptroller of the Currency (OCC), which generally prohibit OCC 
employees from investing in or borrowing from OCC supervised 
institutions.

II. Amendments Related to Treasury Organizational Changes

    This final rule amends the Supplemental Standards to reflect 
current organizational structure mandated by various statutes that 
resulted in the establishment of new offices or bureaus within Treasury 
and the transfer of certain functions and/or bureaus from the 
Department. As currently organized and relevant to the Supplemental 
Standards, the Bureaus of Alcohol, Tobacco and Firearms (ATF), Federal 
Law Enforcement Training Center (FLETC), the United States Customs 
Service (USCS), and the United States Secret Service (USSS) are no 
longer bureaus of the Department. New bureaus and/or offices include 
the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Office of the 
Treasury Inspector General for Tax Administration (TIGTA), and the 
Office of the Special Inspector General for the Troubled Asset Relief 
Program (SIGTARP). Additionally, the Office of Thrift Supervision (OTS) 
was abolished by statute and certain functions of OTS have been 
integrated into OCC. The Department also consolidated the Bureau of 
Public Debt (BPD) and the Financial Management Service (FMS) into a new 
Bureau of the Fiscal Service (BFS).
    These amendments to the Supplemental Standards are necessary in 
light of Title I of the Internal Revenue Service Restructuring and 
Reform Act of 1998 (``RRA '98''),\1\ Title III, section 361(a)(2), of 
the USA PATRIOT Act,\2\ Titles IV, VIII and XI of the Homeland Security 
Act of 2002 (Homeland Security Act),\3\ Title I of the Emergency 
Economic Stabilization Act of 2008 (EESA),\4\ and Title III of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act).\5\
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    \1\ Title I section 1103 of RRA '98 amended the Inspector 
General Act of 1978 at 5 U.S.C. App. 3 Sec.  2.
    \2\ 31 U.S.C. 310.
    \3\ 6 U.S.C. 203, 381, and 531.
    \4\ 12 U.S.C. 5231.
    \5\ Title III section 313 of Public Law 111-203 (2010), 12 
U.S.C. 5413.
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    Office of Treasury Inspector General for Tax Administration 
(TIGTA): Section 1103 of RRA '98 established TIGTA. Consistent with its 
authority, TIGTA exercises the duties and responsibilities of an 
Inspector General organization on all matters relating to the Internal 
Revenue Service (IRS), Treasury's largest bureau. Generally, TIGTA 
provides independent oversight of IRS activities. While TIGTA is 
organizationally placed within Treasury, it exercises distinct and 
separate functions from other Treasury offices and bureaus. Section 
2635.203(a) of the OGE Standards authorizes an executive department, by 
supplemental regulation, to designate as a separate agency a component 
of the department that exercises a distinct and separate function. 
Pursuant to this authority, the Department amends the Supplemental

[[Page 65874]]

Standards to designate TIGTA as a separate agency in Sec.  3101.102 for 
purposes of the OGE regulations contained in subpart B of 5 CFR part 
2635 governing gifts from outside sources (the ``OGE Gift Rules'') and 
5 CFR 2635.807 governing teaching, speaking or writing (the ``OGE 
Teaching-Speaking-Writing Rules'').
    This rule further amends Sec.  3101.106 of the Supplemental 
Standards, Additional rules for Internal Revenue Service employees, to 
include TIGTA staff in the restrictions against making certain attorney 
or accountant recommendations in connection with IRS official business, 
from engaging in particular outside employment and business activities 
related to Federal, state or local government tax matters, and from 
engaging in accounting, interpretation of financial records or the 
record-making phase of accounting related to tax matters. TIGTA 
personnel provide oversight of IRS activities, and the prohibitions in 
this section are consistent with TIGTA's oversight role of IRS and its 
longstanding internal policy.
    The Financial Crimes Enforcement Network (FinCEN): The USA PATRIOT 
Act established FinCEN as a bureau of the Treasury in 2001. FinCEN is 
dedicated to enhancing the integrity of the financial systems by 
facilitating the detection and deterrence of financial crime through a 
legislative framework commonly known as the Bank Secrecy Act. FinCEN 
exercises distinct and separate functions from other Treasury bureaus 
and offices. Pursuant to 5 CFR 2635.203(a), this final rule amends 
Sec.  3101.102 of the Supplemental Standards to designate FinCEN as a 
separate agency for purposes of the OGE Gift Rules and the OGE 
Teaching-Speaking-Writing Rules.
    Transfer of Certain Bureaus and/or Functions out of Treasury: The 
Homeland Security Act established a new agency, the Department of 
Homeland Security, which integrated all or a part of 22 different 
Federal departments and agencies. Relevant to Treasury, Titles IV and 
VIII of the Act mandated, with some exceptions, the transfer of all 
Department functions, personnel, assets and liabilities of the U.S. 
Customs Service (USCS), the Federal Law Enforcement Training Center 
(FLETC), and the U.S. Secret Service (USSS) to the Secretary of 
Homeland Security. Effective in 2003, these Bureaus are no longer a 
part of Treasury. Accordingly, Sec.  3101.102 is amended to remove 
USCS, FLETC, and USSS as designated separate agencies. Moreover, 
Sec. Sec.  3101.110 and 3101.111, which provide additional rules for 
USCS and USSS employees, respectively, are hereby removed from part 
3101.
    Title XI of the Homeland Security Act of 2002 also created the 
Bureau of Alcohol, Tobacco, Firearms and Explosives within the 
Department of Justice, comprised in part of the transferred 
authorities, functions, personnel and assets of Treasury's Bureau of 
Alcohol, Tobacco and Firearms (ATF). Accordingly, Sec.  3101.102 is 
also amended to remove ATF as a designated separate agency. Per section 
1111(c) of the Act, however, Treasury retained certain revenue 
collection functions under chapters 51 and 52 of the Internal Revenue 
Code of 1986, sections 4181 and 4182 of the Internal Revenue Code of 
1986, and title 27 of the United States Code. Effective in 2003, 
Treasury exercised these retained duties through the establishment of a 
new bureau, the Alcohol and Tobacco Tax and Trade Bureau (TTB). TTB's 
duties generally focus on excise taxation of alcohol, tobacco, firearms 
and ammunition products and the regulation of the operations and 
practices of certain alcohol and tobacco producers. TTB exercises 
distinct and separate functions from other Treasury bureaus and 
offices. Pursuant to 5 CFR 2635.203(a), the Department amends Sec.  
3101.102 to designate TTB as a separate agency for purposes of the OGE 
Gift Rules and the OGE Teaching-Speaking-Writing Rules. In addition, 
Sec.  3101.105, Additional rules for Bureau of Alcohol, Tobacco and 
Firearms employees, is amended to remove references to ATF and add TTB 
references in their place.
    Office of the Special Inspector General for the Troubled Asset 
Relief Program (SIGTARP): EESA established the Office of Financial 
Stability within the Department of the Treasury and authorized the 
Troubled Asset Relief Program (TARP). In Title I, EESA also created 
SIGTARP. Like TIGTA, SIGTARP exercises the duties and responsibilities 
of an Inspector General organization, focusing on matters relating to 
the purchase, management and sale of assets under TARP. SIGTARP is 
organizationally placed within Treasury, but exercises distinct and 
separate functions from other Treasury offices and bureaus. Pursuant to 
5 CFR 2635.203(a), the Department amends the Supplemental Standards to 
designate SIGTARP as a separate agency in Sec.  3101.102 for purposes 
of the OGE Gift Rules and the OGE Teaching-Speaking-Writing Rules.
    The Offices of Thrift Supervision and Comptroller of the Currency 
(OTS and OCC): The Dodd-Frank Act provides for a comprehensive overhaul 
of financial services regulation in the United States. Under Title III 
of the Dodd-Frank Act, OCC assumed, as of July 21, 2011, all functions 
of OTS related to Federal savings associations and the rulemaking 
authority of OTS related to all savings associations, both Federal and 
state. OTS was abolished ninety days later.\6\ Title III also provided 
for the transfer of OTS employees to either OCC or the Federal Deposit 
Insurance Corporation (FDIC), allocated as necessary to perform or 
support OTS functions transferred to OCC and FDIC, respectively.\7\ 
This rule amends the Supplemental Standards to reflect the foregoing 
changes. Pursuant to 5 CFR 2635.203(a), this final rule removes OTS 
from Sec.  3101.102 as a separate agency and removes Sec.  3101.109, 
Additional rules for Office of Thrift Supervision employees, from part 
3101.
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    \6\ Dodd-Frank Act section 312(b)(2)(B)(i), 12 U.S.C. 
5412(b)(2)(B)(i). Title III provides for the transfer of all 
supervisory 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 non-depository 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 (Board).
    \7\ Dodd-Frank Act section 322(a), 12 U.S.C. 5432(a). Title X of 
the Dodd-Frank Act provided for the transfer of certain authorities 
regarding a number of consumer protection laws from the Federal 
banking agencies to the Consumer Financial Protection Bureau.
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    Bureau of the Fiscal Service: Effective in October 2012, Treasury 
consolidated the Financial Management Service (FMS) and Bureau of the 
Public Debt (BPD) into a new Bureau of the Fiscal Service (BFS). BFS 
will carry out the former missions of FMS and BPD, generally, engaging 
in the borrowing of money needed to operate the Federal government, 
administering the public debt, receiving and disbursing public monies, 
and maintaining government accounts. BFS exercises distinct and 
separate functions from other Treasury bureaus and offices. Pursuant to 
5 CFR 2635.203(a), this final rule amends Sec.  3101.102 of the 
Supplemental Standards to designate BFS as a separate agency for 
purposes of the OGE Gift Rules and the OGE Teaching-Speaking-Writing 
Rules.

III. Additional Amendments to OCC Supplemental Standards

    The Supplemental Standards, at 5 CFR 3101.108, set forth rules that 
apply solely to employees of OCC. The Supplemental Standards address 
potential conflicts of interest by prohibiting OCC employees, subject 
to certain exceptions, from investing in or

[[Page 65875]]

borrowing from the institutions supervised by the agency. This rule 
amends both the borrowing and securities prohibitions, and the 
exceptions thereto, to ensure that a single set of ethics rules, 
covering transactions and relationships with all types of entities now 
supervised by OCC, is in place for all OCC employees.
    In addition, other amendments to the Supplemental Standards 
implement changes to 18 U.S.C. 212 and 213, which generally prohibit an 
examiner from accepting a loan or gratuity from a financial institution 
that he or she examines.\8\ These statutes were amended by the 
Preserving Independence of Financial Institution Examinations Act of 
2003 (Examinations Act),\9\ which creates two exceptions to the general 
prohibition. Under the Examinations Act, it is no longer prohibited for 
an examiner to hold a consumer credit card account or obtain a loan 
secured by residential real property that is used as the principal 
residence of the examiner if: (1) The examiner satisfies any financial 
requirements for the credit card or residential real property loan that 
are generally applicable to all applicants for the same type of credit 
card account or residential real property loan; and (2) the terms and 
conditions for the card or loan are generally no more favorable to the 
examiner than those generally applicable to credit card accounts or 
residential real property loans offered by the financial institution to 
other cardholders or borrowers in comparable circumstances.\10\ Those 
exceptions to the borrowing prohibition are included in this rule.
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    \8\ 18 U.S.C. 213 generally prohibits an examiner from accepting 
a loan or gratuity from a financial institution examined by the 
examiner. The companion statute, 18 U.S.C. 212, prohibits officers, 
directors or employees of financial institutions from offering a 
loan or gratuity to an examiner. Criminal penalties apply for 
violations of these statutes.
    \9\ Pub. L. 108-198, 117 Stat. 2900 (2003), codified at 18 
U.S.C. 212(c)(4).
    \10\ 18 U.S.C. 212(c)(4).
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A. Prohibited Financial Interests

1. General Prohibition
    Section 3108.108(a)(1) currently prohibits OCC employees (and their 
spouses and minor children) from owning, directly or indirectly, 
securities of any commercial bank (including both national and state-
chartered banks) or commercial bank affiliate, including a bank holding 
company. Because OCC now directly supervises Federal savings 
associations, the final rule amends 5 CFR. 3101.108(a) to expand this 
list of institutions in which an OCC employee may not invest to include 
Federal savings associations, state savings associations, affiliates of 
savings associations (including savings and loan holding companies), 
and foreign banks, which may own U.S. commercial banks or savings 
associations. In addition, the final rule clarifies the following 
exceptions to this general prohibition.
2. Exceptions to the Securities Prohibition
a. Mutual Funds
    The final rule also amends Sec.  3101.108(a)(3)(i) to clarify the 
types of publicly traded or publicly available mutual funds in which 
OCC employees (and their spouses or minor children) may invest. The 
current rule provides an exception for OCC employees (and their spouses 
or minor children) to invest in a publicly traded or publicly available 
mutual fund or other collective investment fund or in a widely held 
pension or similar fund provided that the fund does not invest more 
than 25 percent of its assets in the securities of the institutions in 
which OCC employees are prohibited from investing. The inclusion of a 
percentage test in this provision has made the exception difficult to 
administer because the percentage of a mutual fund's investment in a 
particular sector may change frequently. The final rule eliminates the 
25 percent asset test and provides instead that OCC employees (and 
their spouses or minor children) may invest in any publicly traded or 
publicly available mutual fund, collective investment fund or pooled 
investment fund, or widely-held pension or similar fund that does not 
have a stated policy of concentration in the financial services 
industry, provided that neither the employee nor the employee's spouse 
exercises or has the ability to exercise control over the financial 
interests held by the fund or the selection of fund holdings.
b. Exempt Holding Companies
    The final rule also amends 5 CFR 3101.108(a)(3)(ii) to expand the 
exception to the investment prohibition for certain holding companies 
that own nonbank banks or credit card banks to also include savings and 
loan holding companies where the ownership or operation of savings 
associations is not a significant activity (generally less than 15 
percent of the assets) of the holding company. However, an employee who 
owns such an interest would be disqualified from participating in the 
regulation or supervision of the savings associations. This exception 
is intended to permit interests of a character unlikely to raise 
questions regarding the objective and impartial performance of OCC 
employees' official duties or the possible misuse of their positions. 
An example of an exempt holding company would be a large retailer that 
is a savings and loan holding company where the savings association 
constitutes only 14 percent of the holding company's assets. The 
companies to which this exception applies will be identified on a list 
maintained by the OCC Ethics Counsel and updated on a quarterly basis.
c. Foreign Bank Securities
    The final rule also includes a new exception at 5 CFR 
3101.108(a)(3)(iii) that establishes the conditions under which OCC 
employees (and their spouses or minor children) may invest in the 
securities of foreign banks. The exception permits OCC employees (and 
their spouses or minor children) to invest in the securities of any 
foreign bank that does not own a commercial bank or savings association 
in the United States. The exception is available to OCC employees (and 
their spouses or minor children), except where the OCC employee is 
assigned to examine a Federal branch or agency of that foreign bank.
d. Use of Institution as Custodian or Trustee
    The final rule amends the redesignated Sec.  3101.108(a)(3)(iv) to 
expand the exception that permits OCC employees to use institutions 
under OCC's supervision as custodian or trustee of accounts containing 
tax-deferred retirement accounts. Because the general investment 
prohibition will be expanded to include Federal and state savings 
associations, it is appropriate to correspondingly expand the exception 
to include those institutions as well. The amended provision will 
permit OCC employees to use a commercial bank, a savings association or 
an affiliate of a commercial bank or savings association as custodian 
or trustee of accounts containing tax-deferred retirement funds.

B. Prohibited Borrowing

1. General Prohibition
    Section 3101.108(b)(1) of the current Supplemental Standards 
generally prohibits covered OCC employees,\11\ subject to certain 
exceptions discussed below, from seeking or obtaining credit

[[Page 65876]]

from a national bank or from any officer, director, employee or 
subsidiary of any national bank.\12\ This prohibition extends to the 
spouses and minor children of covered OCC employees, unless the loan or 
extension of credit meets certain standards.\13\ To reflect the OCC's 
assumption of supervisory duties for Federal savings associations, the 
final rule amends 5 CFR 3101.108(b)(1) to prohibit covered OCC 
employees from seeking or obtaining credit from any national bank or 
Federal savings association as well as any officer, director, employee 
or subsidiary of those institutions.
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    \11\ ``Covered'' OCC employees include bank examiners and all 
other employees designated by the Comptroller under OCC ethics 
policies. See 5 CFR 3101.108(b)(3). Under these policies, ``covered 
employee'' means any employee, except any administrative employee, 
who is required to file financial disclosure reports.
    \12\ 5 CFR 3101.108(b)(1) (2005).
    \13\ 5 CFR 3101.108(b)(2).
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2. Exceptions to the Borrowing Prohibition
a. Credit Cards
    The Supplemental Standards currently include an exception to the 
general borrowing prohibition for credit card accounts. Under the 
current rule, covered OCC employees, except examiners, may obtain and 
hold a credit card from a national bank or its subsidiary if the credit 
card is issued on terms and conditions no more favorable than those 
offered to the general public.\14\ The regulations state that an 
examiner (or a spouse or minor child of an examiner) may obtain and 
hold a credit card from a national bank or its subsidiary only if the 
credit card is issued on terms and conditions no more favorable than 
those offered to the general public and the examiner submits to the 
Chief Counsel or designee a written disqualification from the 
examination of that bank.\15\
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    \14\ 5 CFR 3101.108(b)(4)(i).
    \15\ 5 CFR 3101.108(b)(4)(ii).
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    With the passage of the Examinations Act, examiners are no longer 
prohibited from obtaining and holding credit cards from national banks, 
Federal savings associations and their subsidiaries.\16\ The final rule 
amends the Supplemental Standards to implement this change and to 
remove the requirement for written disqualification as unnecessary 
because the terms and conditions of a credit card account are generally 
established according to a formula of creditworthiness and income 
rather than as a result of negotiation and, therefore, the risk of 
examiner conflicts of interest is minimal. Thus, the final rule permits 
all covered OCC employees (and their spouses or minor children) to 
seek, obtain and hold credit cards issued by national banks, Federal 
savings associations and their subsidiaries if: the applicant satisfies 
all financial requirements set by the lender that are generally 
applicable to all applicants for the same type of credit card account; 
and the applicable terms and conditions are no more favorable than 
those generally applicable to credit card accounts offered by the same 
lender to other cardholders in comparable circumstances.
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    \16\ The term ``subsidiary'' has the meaning set forth in 12 
U.S.C. 1813(w)(4).
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    An employee who holds a credit card (or whose spouse or minor child 
holds a credit card) must submit a written recusal notice to his or her 
supervisor and ethics official if the cardholder becomes involved in an 
adversarial dispute with the issuer of the credit card account. A 
cardholder is involved in an adversarial dispute if he or she is 
delinquent in payments on the credit card account; the issuer and the 
cardholder are negotiating to restructure the credit card debt; the 
cardholder disputes the terms and conditions of the account; or the 
cardholder becomes involved in any disagreement with the issuer that 
may cast doubt on the employee's ability to remain impartial with 
respect to the issuer.
b. Loans Secured by Principal Residence
    The Supplemental Standards currently do not provide an exception to 
the borrowing prohibition that would permit any OCC employees to obtain 
principal residence mortgage loans from supervised institutions. As 
noted previously, under the Examinations Act, examiners may now obtain 
such loans. The final rule therefore includes a new exception to the 
borrowing prohibition to permit all covered OCC employees to seek and 
obtain these loans from national banks, Federal savings associations, 
and their subsidiaries under certain conditions that ensure compliance 
with 18 U.S.C. 213.
    Under this exception the applicant must satisfy all financial 
requirements set by the lender for the residential real property loan 
that are generally applicable to borrowers for the same type of loan, 
and the terms and conditions applicable to the loan must be no more 
favorable than those generally applicable to the same type of loan 
offered by the same lender to other borrowers in comparable 
circumstances. In order to manage the risks of real or perceived 
conflicts of interest that may be associated with the negotiation of a 
real property loan, the OCC will require a covered employee who seeks 
or obtains (or whose spouse or minor child seeks or obtains) from a 
national bank, a Federal savings association or a subsidiary of either 
institution a real property loan secured by the applicant's principal 
residence to observe from the time of the initial application any 
recusal established under OCC ethics policy.\17\
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    \17\ Covered OCC employees will also be required to disclose the 
status of such loans on their annual financial disclosure reports.
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3. Pre-existing Credit
    Section 3101.108(b)(5) currently permits covered OCC employees (and 
their spouses and minor children) to retain pre-existing credit from 
national banks if the loan was incurred prior to employment with the 
OCC or is held by a national bank as a result of the sale or transfer 
of the loan to the bank or due to the conversion or merger of the 
lender into a national bank. Due to the OCC's expanded supervisory 
responsibilities over Federal savings associations as of the transfer 
date, the final rule amends 5 CFR 3101.108(b)(5) to provide the same 
treatment for pre-existing credit from both national banks and Federal 
savings associations, including credit obtained from Federal savings 
associations prior to the transfer of the supervision of those 
institutions to the OCC. An employee who retains pre-existing credit 
(or whose spouse or minor child retains pre-existing credit) from a 
national bank or Federal savings association must observe any recusal 
established under OCC ethics policy.
4. Prohibited Recommendations
    Section 3101.108(d) currently prohibits OCC employees from making 
recommendations or suggestions, directly or indirectly, concerning the 
acquisition or sale or other divestiture of securities of any 
commercial bank or commercial bank affiliate, including a bank holding 
company. The OCC has determined that OCC employees should be prohibited 
from making recommendations with regard to the same set of institutions 
in which they are prohibited from investing. Therefore, the final rule 
expands this section to prohibit OCC employees from making any 
recommendations with regard to any commercial bank (including both 
national and state-chartered banks), Federal savings association, state 
savings association, or any affiliate of these institutions (including 
bank holding companies, savings and loan holding companies, and the 
non-bank subsidiaries of either type of holding company), and foreign 
banks that own a commercial bank or savings association in the United 
States.

C. Technical Changes

    The final rule amends certain other provisions of the Supplemental 
Standards to expand existing references

[[Page 65877]]

to banks, commercial banks, national banks and national bank affiliates 
to include references to Federal savings associations. The definition 
of covered employee in Sec.  3101.108(b)(3) is amended to refer to 
``OCC examiner,'' rather than ``OCC bank examiner.'' Section 
3101.108(e) is amended to prohibit the purchase of assets from Federal 
savings associations as well as national banks. Section 3101.108(f)(1) 
is amended to prohibit outside employment with banks, savings 
associations, and the affiliates of both banks and savings 
associations, and the definition of covered OCC employee, for purposes 
of this section, is amended to refer to ``OCC examiner,'' rather than 
``OCC bank examiner.''

Administrative Procedure Act

    Under 5 U.S.C. 553(a)(2), rules relating to agency management or 
personnel are exempt from the rulemaking requirements of the 
Administrative Procedure Act (APA). As set forth in the description of 
the final rule, this rule affects only the Department and its 
personnel. Even if this rulemaking were subject to APA proposed 
rulemaking procedures, the Department finds good cause, pursuant to 5 
U.S.C. 553(b) and (d), to waive the requirements for notice and comment 
because the rule affects only Treasury staff and also operates to put 
in place a set of ethical rules appropriate for OCC employees after the 
transfer date.

Regulatory Flexibility Act Analysis

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply.

Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act) requires an agency to prepare a budgetary impact 
statement before promulgating a rule that includes a federal mandate 
that may result in 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. This rule generally accounts for changes to 
Treasury's mission and organization and restricts OCC employees, 
subject to certain exceptions, from engaging in certain borrowing, 
investment, and outside employment activities. The Department therefore 
has determined that the rule will not result in expenditures by state, 
local or tribal governments or by the private sector of $100 million or 
more. Accordingly, the Department has not prepared a budgetary impact 
statement or specifically addressed the regulatory alternatives 
considered.

Lists of Subjects in 5 CFR Part 3101

    Conflict of interests, Ethics, Extensions of credit, Government 
employees, OCC employees.

    For the reasons set forth in the preamble, the Department, with the 
concurrence of OGE, amends 5 CFR part 3101 as follows:

PART 3101--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF THE TREASURY

0
1. The authority citation for part 3101 continues to read as follows:

    Authority:  5 U.S.C 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 18 U.S.C. 212, 213, 26 U.S.C. 7214(b); E.O. 
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.203(a), 2635.403(a), 2635.803, 2635.807(a)(2)(ii).


0
2. Revise Sec.  3101.102 to read as follows:


Sec.  3101.102  Designation of separate agency components.

    Pursuant to 5 CFR 2635.203(a), each of the following components of 
the Department of the Treasury is designated as a separate agency for 
purposes of the regulations contained in subpart B of 5 CFR part 2635 
governing gifts from outside sources and 5 CFR 2635.807 governing 
teaching, speaking or writing:
    (a) Alcohol and Tobacco Tax and Trade Bureau (TTB);
    (b) Bureau of Engraving and Printing;
    (c) Bureau of the Fiscal Service (BFS);
    (d) Financial Crimes Enforcement Network (FinCEN);
    (e) Internal Revenue Service (IRS);
    (f) Office of the Comptroller of the Currency (OCC);
    (g) Office of the Inspector General;
    (h) Office of the Special Inspector General for the Troubled Asset 
Relief Program (SIGTARP);
    (i) Office of the Treasury Inspector General for Tax Administration 
(TIGTA); and
    (j) United States Mint.

    Note to Sec.  3101.102:  As a result of the designations 
contained in this section, employees of the remaining parts of the 
Department of the Treasury (e.g., employees in Departmental Offices) 
will also be treated as employees of an agency that is separate from 
all of the above listed bureaus and offices for purposes of 
determining whether the donor of a gift is a prohibited source under 
5 CFR 2635.203(d) and for identifying an employee's ``agency'' under 
5 CFR 2635.807 governing teaching, speaking and writing. For 
purposes of this section, employees in the Legal Division shall be 
considered to be part of the bureaus or offices in which they serve.


0
3. Section 3101.105 is revised to read as follows:


Sec.  3101.105  Additional rules for Alcohol and Tobacco Tax and Trade 
Bureau employees.

    The following rules apply to the employees of the Alcohol and 
Tobacco Tax and Trade Bureau and are in addition to Sec. Sec.  3101.101 
through 3101.104.
    (a) Prohibited financial interests. Except as provided in this 
section, no employee of TTB, or spouse or minor child of a TTB 
employee, shall have, directly or indirectly, any financial interest, 
including compensated employment, in the alcohol, tobacco, firearms or 
explosives industries. The term financial interest is defined in Sec.  
2635.403(c) of this title.
    (b) Waiver. An agency designee, with the advice and legal clearance 
of the DAEO or Office of the Chief Counsel, may grant a written waiver 
of the prohibition in paragraph (a) of this section on a determination 
that the financial interest is not prohibited by 26 U.S.C. 7214(b) and 
that, in the mind of a reasonable person with knowledge of the 
particular circumstances, the financial interest will not create an 
appearance of misuse of position or loss of impartiality, or call into 
question the impartiality and objectivity with which TTB's programs are 
administered. A waiver under this paragraph may require appropriate 
conditions, such as execution of a written disqualification.

0
4. Section 3101.106 is revised to read as follows:


Sec.  3101.106  Additional rules for Internal Revenue Service and 
Treasury Inspector General for Tax Administration employees.

    The following rules apply to the employees of the Internal Revenue 
Service and the Treasury Inspector General for Tax Administration and 
are in addition to Sec. Sec.  3101.101 through 3101.104.
    (a) Prohibited recommendations. Employees of the IRS or TIGTA shall 
not recommend, refer or suggest, specifically or by implication, any 
attorney, accountant, or firm of attorneys or accountants to any person 
in connection with any official business which involves or may involve 
the IRS.

[[Page 65878]]

    (b) Prohibited outside employment. Involvement by an employee of 
the IRS or TIGTA in the following types of outside employment or 
business activities is prohibited and shall constitute a conflict with 
the employee's official duties pursuant to 5 CFR 2635.802:
    (1) Performance of legal services involving Federal, State or local 
tax matters;
    (2) Appearing on behalf of any taxpayer as a representative before 
any Federal, State, or local government agency, in an action involving 
a tax matter except on written authorization of the Commissioner of 
Internal Revenue or the Treasury Inspector General for Tax 
Administration;
    (3) Engaging in accounting, or the use, analysis, and 
interpretation of financial records when such activity involves tax 
matters;
    (4) Engaging in bookkeeping, the recording of transactions, or the 
record-making phase of accounting, when such activity is directly 
related to a tax determination; and
    (5) Engaging in the preparation of tax returns for compensation, 
gift, or favor.
    (c) Seasonal employees. Seasonal employees of the IRS while in non-
duty status may engage in outside employment or activities other than 
those prohibited by paragraph (b) of this section without obtaining 
prior written permission.

0
5. Section 3101.108 is amended by:
0
a. Revising paragraphs (a)(1) and (a)(3)(i) and (ii);
0
b. Redesignating paragraphs (a)(3)(iii) and (iv) as paragraphs 
(a)(3)(iv) and (v), respectively, and adding a new paragraph 
(a)(3)(iii);
0
c. Revising newly designated paragraph (a)(3)(iv) and paragraphs 
(b)(1), (b)(3)(i), (b)(4) and (5), (d), (e), (f)(1), and (f)(2)(i).
    The addition and revisions read as follows.


Sec.  3101.108  Additional rules for Office of the Comptroller of the 
Currency employees.

* * * * *
    (a) * * *
    (1) Prohibition. Except as provided in paragraphs (a)(3) and (g) of 
this section, no OCC employee, or spouse or minor child of an OCC 
employee, shall own, directly or indirectly, securities of any 
commercial bank (including both national and state-chartered banks), 
Federal savings association, state savings association, or of any 
affiliate of these institutions (including bank holding companies, 
savings and loan holding companies, and non-bank subsidiaries of either 
type of holding company), or of any foreign bank.
* * * * *
    (3) * * *
    (i) Owning an interest in a publicly traded or publicly available 
mutual fund, other collective investment fund or pooled investment 
product, or a widely-held pension or other similar fund if the fund 
does not have a stated policy of concentration in the financial 
services industry and neither the employee nor the employee's spouse 
exercises or has the ability to exercise control over the financial 
interests held by the fund or the selection of fund holdings;
    (ii) Owning securities in a publicly traded company owning banks or 
savings associations if--
    (A) By virtue of the limited activities of the banks or savings 
associations, the ownership of banks or savings associations does not 
cause their parent holding company to become a bank holding company 
under the Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq, (for 
example, a bank engaged only in credit card activities);
    (B) For savings and loan holding companies, the ownership or 
operation of savings associations is not a significant activity 
(generally less than 15% of the assets) of the holding company;
    (C) The company is identified as meeting the requirements of (A) or 
(B) above on a list maintained by the OCC Ethics Counsel; and
    (D) The employee owning or seeking to purchase the securities does 
not participate in the regulation or supervision of any bank or savings 
association owned or operated by the company;
    (iii) Owning the securities of a foreign bank that does not own a 
commercial bank or savings association in the United States provided 
that the employee owning the securities does not participate in the 
regulation or supervision of any Federal branch or agency operated by 
the foreign bank;
    (iv) Using a commercial bank, a savings association or an affiliate 
of a commercial bank or savings association as custodian or trustee of 
accounts containing tax-deferred retirement funds; or
    (b) * * *
    (1) Prohibition on employee borrowing. Except as provided in this 
section, no covered OCC employee shall seek or obtain credit from any 
national bank or Federal savings association or from any officer, 
director, employee or subsidiary of a national bank or Federal savings 
association.
* * * * *
    (3) * * *
    (i) An OCC examiner; and
* * * * *
    (4) Exceptions--(i) Credit cards. A covered OCC employee or the 
spouse or minor child of such a covered OCC employee may seek, obtain 
or hold a credit card from a national bank, a Federal savings 
association or a subsidiary of a national bank or Federal savings 
association if--
    (A) The applicant satisfies all financial requirements set by the 
lender that are generally applicable to all applicants for the same 
type of credit card account;
    (B) The terms and conditions applicable with respect to the credit 
card account and any credit extended under the account are no more 
favorable generally to the applicant than the terms and conditions that 
are generally applicable to credit card accounts offered by the same 
lender to other cardholders in comparable circumstances;
    (C) An employee who holds a credit card (or whose spouse or minor 
child holds a credit card) must submit a written recusal notice to his 
or her supervisor and ethics official if the cardholder becomes 
involved in an adversarial dispute with the issuer of the credit card 
account. A cardholder is involved in an adversarial dispute if he or 
she is delinquent in payments on the credit card account; the issuer 
and the cardholder are negotiating to restructure the credit card debt; 
the cardholder disputes the terms and conditions of the account; or the 
cardholder becomes involved in any disagreement with the issuer that 
may cast doubt on the employee's ability to remain impartial with 
respect to the issuer.
    (ii) Loans secured by principal residence. A covered OCC employee 
or the spouse or minor child of a covered OCC employee may seek and 
obtain a loan from a national bank, a Federal savings association or a 
subsidiary of a national bank or Federal savings association subject to 
the following conditions:
    (A) The loan is secured by residential real property that is the 
applicant's principal residence;
    (B) The applicant must satisfy all financial requirements set by 
the lender for the residential real property loan that are generally 
applicable to borrowers for the same type of residential real property 
loan; and
    (C) The terms and conditions applicable with respect to the 
residential real property loan and any credit extended under the loan 
must be no more favorable generally to the

[[Page 65879]]

applicant than the terms and conditions that are generally applicable 
to residential real property loans offered by the same lender to other 
borrowers in comparable circumstances.
    (iii) A covered employee who seeks or obtains a real property loan 
from a national bank, Federal savings association or a subsidiary of a 
national bank or Federal savings association or whose spouse or minor 
child obtains a real property loan under the requirements of paragraph 
(b)(4)(ii) above must observe from the time of the initial application 
any recusal established under OCC ethics policy.
    (5) Pre-existing credit. (i) This section does not prohibit a 
covered OCC employee, or spouse or minor child of a covered OCC 
employee from retaining a loan or extension of credit from a national 
bank or Federal savings association on its original terms, and subject 
to any recusal established under OCC ethics policy, if the loan or 
extension of credit:
    (A) Was incurred prior to employment by the OCC;
    (B) Was obtained from a lender that was not supervised by the OCC 
at the time it was obtained; or
    (C) Is held by a national bank or Federal savings association or 
subsidiary thereof as the result of the sale or transfer of a loan to 
the national bank or Federal savings association or the conversion or 
merger of the lender into a national bank or Federal savings 
association.
    (ii) Any renewal or renegotiation of a pre-existing loan or 
extension of credit will be treated as a new loan subject to the 
prohibitions in paragraph (b)(1) of this section.
* * * * *
    (d) Prohibited recommendations. Employees of the OCC shall not make 
recommendations or suggestions, directly or indirectly, concerning the 
acquisition or sale or other divestiture of securities of any 
commercial bank (including both national and state-chartered banks), 
Federal savings association, state savings association, affiliate of 
these institutions (including bank holding companies, savings and loan 
holding companies, and any non-bank subsidiaries of either type of 
holding company), or foreign bank that owns a commercial bank or 
savings association in the United States.
    (e) Prohibited purchase of assets. No employee of the OCC, or 
spouse or minor child of an OCC employee, shall purchase, directly or 
indirectly, an asset (i.e. real property, automobiles, furniture, or 
similar items) from a national bank or Federal savings association or 
an affiliate of a national bank or a Federal savings association, 
including a bank or savings and loan holding company, unless it is sold 
at a public auction or by other means which ensure that the selling 
price is the asset's fair market value.
    (f) Outside employment--(1) Prohibition on Outside Employment. No 
covered OCC employee shall perform services for compensation for any 
bank, savings association or a bank or savings association affiliate, 
or for any officer, director or employee of, or for any person 
connected in any capacity with a bank, savings association or bank or 
savings association affiliate.
    (2) * * *
    (i) An OCC examiner; and
* * * * *


Sec.  3101.109  [Removed]

0
5. Remove Sec.  3101.109.


Sec.  3101.110  [Removed]

0
6. Remove Sec.  3101.110.


Sec.  3101.111  [Removed]

0
7. Remove reserved Sec.  3101.111.

    Dated: October 14, 2014.

    By the Department of the Treasury.
Christopher J. Meade,
General Counsel.
    Dated: October 24, 2014.

    By the Office of Government Ethics.
Walter M. Shaub,
Director.
[FR Doc. 2014-26173 Filed 11-5-14; 8:45 am]
BILLING CODE 4810-25-P