[Federal Register Volume 80, Number 244 (Monday, December 21, 2015)]
[Rules and Regulations]
[Pages 79250-79255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31940]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 348 and 390

RIN 3064-AE20


Removal of Transferred OTS Regulations Regarding Management 
Official Interlocks and Amendments to FDIC's Rules and Regulations

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is 
adopting a final rule to rescind and remove from the Code of Federal 
Regulations the transferred OTS regulation entitled ``Management 
Official Interlocks.'' This subpart was included in the regulations 
that were transferred to the FDIC from the Office of Thrift Supervision 
(``OTS'') on July 21, 2011, in connection with the implementation of 
applicable provisions of title III of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (``Dodd-Frank Act''). The requirements for 
State savings associations in the transferred OTS regulation are 
substantively similar to those in the FDIC's regulation, which is also 
entitled ``Management Official Interlocks'' and is applicable for all 
insured depository institutions (``IDIs'') for which the FDIC has been 
designated the appropriate Federal banking agency.

DATES: The final rule is effective on January 20, 2016.

FOR FURTHER INFORMATION CONTACT: Jennifer Maree, Counsel, Legal 
Division, (202) 898-6543; Mark Mellon, Counsel, Legal Division, (202) 
898-3884; Karen Currie, Senior Examination Specialist, (202) 898-3981.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Dodd-Frank Act

    The Dodd-Frank Act \1\ 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, codified at 12 U.S.C. 
5411, the powers, duties, and functions formerly performed by the OTS 
were divided among the FDIC, as to State savings associations, the 
Office of the Comptroller of the Currency (``OCC''), as to Federal 
savings associations, and the Board of Governors of the Federal Reserve 
System (``FRB''), as to savings and loan holding companies. Section 
316(b) of the Dodd-Frank Act, codified at 12 U.S.C. 5414(b), provides 
the manner of treatment for all orders, resolutions, determinations, 
regulations, and advisory materials that had been issued, made, 
prescribed, or allowed to become effective by the OTS. The section 
provides that if such materials were in effect on the day before the 
transfer date, they continue to be in effect and are enforceable by or 
against the appropriate successor agency until they are modified, 
terminated, set aside, or superseded in accordance with applicable law 
by such successor agency, by any court of competent jurisdiction, or by 
operation of law.
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    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Pub. L. 111-203, 124 Stat. 1376 (2010).
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    Section 316(c) of the Dodd-Frank Act, codified at 12 U.S.C. 
5414(c), further directed the FDIC and the OCC to consult with one 
another and to publish a list of the continued OTS regulations 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.\2\
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    \2\ 76 FR 39247 (July 6, 2011).
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    Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act, 
codified at 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking 
authority relating to both State and Federal savings associations, 
nothing in the Dodd-Frank Act affected the FDIC's existing authority to 
issue regulations under the Federal Deposit Insurance Act (``FDI Act'') 
and other laws as the ``appropriate Federal banking agency'' or under 
similar statutory terminology. Section 312(c) of the Dodd-Frank Act 
amended the definition of ``appropriate Federal banking agency'' 
contained in section 3(q) of the FDI Act, 12 U.S.C. 1813(q), to add 
State savings associations to the list of entities for which the FDIC 
is designated as the ``appropriate Federal banking agency.'' As a 
result, when the FDIC acts as the designated ``appropriate Federal 
banking agency'' (or under similar terminology) for State

[[Page 79251]]

savings associations, as it does here, the FDIC is authorized to issue, 
modify and rescind regulations involving such associations, as well as 
for State nonmember banks and insured branches of foreign banks.
    As noted, on June 14, 2011, pursuant to this authority, the FDIC's 
Board of Directors reissued and redesignated certain transferring 
regulations of the former OTS. These transferred OTS regulations were 
published as new FDIC regulations in the Federal Register on August 5, 
2011.\3\ When it republished the transferred OTS regulations as new 
FDIC regulations, the FDIC specifically noted that its staff would 
evaluate the transferred OTS rules and might later recommend 
incorporating the transferred OTS regulations into other FDIC rules, 
amending them, or rescinding them, as appropriate.
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    \3\ 76 FR 47652 (Aug. 5, 2011).
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    One of the OTS rules transferred to the FDIC governs OTS oversight 
of management official interlocks in the context of State savings 
associations. The OTS rule, formerly found at 12 CFR part 563f, was 
transferred to the FDIC with only minor nonsubstantive changes and is 
now found in the FDIC's rules at 12 CFR part 390, subpart V (``part 
390, subpart V''), entitled ``Management Official Interlocks.'' Before 
the transfer of the OTS rules and continuing today, the FDIC's rules 
contained 12 CFR part 348 (``part 348''), also entitled ``Management 
Official Interlocks,'' a rule governing FDIC oversight of management 
official interlocks with respect to IDIs for which the FDIC has been 
designated the appropriate Federal banking agency. After careful review 
and comparison of part 390, subpart V and part 348, the FDIC has 
decided to (1) rescind part 390, subpart V, because, as discussed 
below, it is substantively redundant to existing part 348; and (2) 
simultaneously make technical conforming edits to part 348.

II. Proposed Rule

A. Removal of Part 390, Subpart V (Former OTS 12 CFR Part 563f)

    On July 21, 2014, the FDIC published a Notice of Proposed 
Rulemaking (``NPR'' or ``Proposed Rule'') regarding the removal of part 
390, subpart V, which governs management official interlocks for State 
savings associations and their affiliates.\4\ The former OTS rule was 
transferred to the FDIC with only nominal changes. The NPR proposed 
removing part 390, subpart V from the CFR in an effort to streamline 
FDIC regulations for all FDIC-supervised institutions. As discussed in 
the Proposed Rule, the FDIC carefully reviewed the transferred rule, 
part 390, subpart V, and compared it with part 348, an FDIC regulation 
that existed before the transfer of part 390, subpart V and that 
continues to remain in effect today. Like the transferred rule, part 
348 governs management official interlocks for State nonmember insured 
banks and their affiliates. Although the two rules were substantively 
the same, minor technical and conforming amendments were proposed.
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    \4\ 79 FR 42225 (July 21, 2014).
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B. Amendments to Part 348

    The FDIC proposed to modify the scope of part 348, section 
348.1(c), to apply to ``management officials of FDIC-supervised 
institutions and their affiliates'' to conform to and reflect the scope 
of the FDIC's current supervisory responsibilities as the appropriate 
Federal banking agency. The FDIC also proposed to add two new 
definitions into section 348.2. A newly created subsection (i) would 
have defined an ``FDIC-supervised institution'' as ``either an insured 
nonmember bank or a State savings association.'' A newly created 
subsection (p) would have defined ``State savings association'' as 
having ``the same meaning as in section 3(b)(3) of the Federal Deposit 
Insurance Act, 12 U.S.C. 1813(b)(3).'' The proposal would also have 
inserted an exemption from part 390, subpart V, section 390.403(i), 
into a newly created subsection (j) of section 348.4. The exemption 
would have allowed certain interlocking relationships for any State 
savings association that has issued stock in connection with a 
qualified stock issuance pursuant to section 10(q) of the Home Owners' 
Loan Act (``HOLA'').
    If these proposals are finalized, oversight of management official 
interlocks in part 348 will apply to all FDIC-supervised institutions, 
including State savings associations, and part 390, subpart V would be 
removed because it is largely redundant of those rules found in part 
348. Rescinding part 390, subpart V will serve to streamline the FDIC's 
rules and eliminate unnecessary regulations.

III. Comments

    The FDIC issued the NPR with a 60-day comment period, which closed 
on September 19, 2014. The FDIC received no comments on its Proposed 
Rule, and consequently the final rule (``Final Rule'') is adopted as 
proposed without any changes.

IV. Explanation of the Final Rule

    As discussed in the NPR, part 390, subpart V is substantively 
similar to part 348, and the designation of part 348 as a single 
authority of management official interlocks for all FDIC-supervised 
institutions will serve to streamline the FDIC's rules and eliminate 
unnecessary regulations. To that effect, the Final Rule removes and 
rescinds 12 CFR part 390, subpart V in its entirety.
    Consistent with the Proposed Rule, the Final Rule also amends 
section 348.1(c) to modify the scope of part 348. The modified scope, 
reflecting the FDIC's current supervisory responsibilities as the 
appropriate Federal banking agency includes State savings associations 
and their subsidiaries. The Final Rule also adds two new definitions 
into section 348.2. A newly created subsection (i) would define an 
``FDIC-supervised institution'' as ``either an insured nonmember bank 
or a State savings association.'' A newly created subsection (p) would 
define ``State savings association'' as having ``the same meaning as in 
section 3(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 
1813(b)(3).'' The Final Rule also inserts an exemption from part 390, 
subpart V, section 390.403(i), into a newly created subsection (j) of 
section 348.4. The exemption allows certain interlocking relationships 
for any State savings association that has issued stock in connection 
with a qualified stock issuance pursuant to section 10(q) of HOLA.

V. Administrative Law Matters

A. The Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
(``PRA'') of 1995, 44 U.S.C. 3501-3521, 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. The information 
collections contained in part 348 are cleared by OMB under the FDIC's 
``Management Official Interlocks'' information collection (OMB No. 
3064-0118). The FDIC's burden estimates were updated in connection with 
the collection's 2012 renewal to include State savings associations 
transferred from the OTS to the FDIC. The FDIC reviewed its burden 
estimates for the collection at the time it assumed responsibility for 
supervision of State savings associations transferred from the OTS and 
determined that no changes to the burden estimates were necessary. This 
Final Rule does not modify the

[[Page 79252]]

FDIC's existing collection and does not create any new collections of 
information pursuant to the PRA. Therefore, no information collection 
request has been submitted to the OMB for review.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq., 
generally requires an agency to consider whether a final rule will have 
a significant economic impact on a substantial number of small entities 
(defined in regulations promulgated by the Small Business 
Administration to include banking organizations with total assets of 
less than or equal to $550 million).\5\ Pursuant to section 605(b) of 
the RFA, a final regulatory flexibility analysis is not required if the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities, and publishes its 
certification and a short explanatory statement in the Federal Register 
together with the rule. For the reasons provided below, the FDIC 
certifies that the Final Rule will not have a significant economic 
impact on a substantial number of small entities. Accordingly, a 
regulatory flexibility analysis is not required.
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    \5\ 5 U.S.C. 601 et seq.
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    As discussed in the notice of proposed rulemaking, part 390, 
subpart V was transferred from OTS part 563f, which governed management 
official interlocks. OTS part 563f had been in effect since 1979, and 
all State savings associations were required to comply with it. Because 
it is redundant of existing part 348 of the FDIC's rules, the FDIC 
proposes rescinding and removing part 390, subpart V. As a result, all 
FDIC-supervised institutions--including State savings associations and 
their affiliates--would be required to comply with part 348 for 
management official interlocks. Because all State savings associations 
and their affiliates have been required to comply with substantially 
similar management official interlocks rules since 1979, the FDIC 
certifies that the Final Rule will have no significant economic impact 
on small entities or State savings associations.

C. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the Final 
Rule is not a ``major rule'' within the meaning of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (``SBREFA''), 5 U.S.C. 801 
et seq.

D. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, 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. In the NPR, 
the FDIC invited comments on whether the Proposed Rule was clearly 
stated and effectively organized, and how the FDIC might make it easier 
to understand. Although the FDIC did not receive any comments, the FDIC 
sought to present the Final Rule in a simple and straightforward 
manner.

E. 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 
depository institutions.\6\ The FDIC completed the last comprehensive 
review of its regulations under EGRPRA in 2006 and is commencing the 
next decennial review, which is expected to be completed by 2016. The 
NPR solicited comments on whether the proposed rescission of part 390, 
subpart V and amendments to part 348 would impose any outdated or 
unnecessary regulatory requirements on insured depository institutions. 
No comments on this issue were received. Upon review, the FDIC does not 
believe that part 348, as amended by the Final Rule, imposes any 
outdated or unnecessary regulatory requirements on any insured 
depository institutions.
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    \6\ Public Law 104-208, 110 Stat. 3009 (Sept. 30, 1996).
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List of Subjects

12 CFR Part 348

    Banks, banking; Management official interlocks; Savings 
associations

12 CFR Part 390

    Management official interlocks

Authority and Issuance

    For the reasons stated in the preamble, the Board of Directors of 
the Federal Deposit Insurance Corporation amends parts 348 and 390 of 
title 12 of the Code of Federal Regulations as follows:

0
1. Revise part 348 to read as follows:

PART 348--MANAGEMENT OFFICIAL INTERLOCKS

Sec.
348.1 Purpose and scope.
348.2 Other definitions and rules of construction.
348.3 Prohibitions.
348.4 Interlocking relationships permitted by statute.
348.5 Small market share exemption.
348.6 General exemption.
348.7 Change in circumstances.
348.8 Enforcement.

    Authority: 12 U.S.C. 3207, 12 U.S.C. 1823(k).


Sec.  348.1  Purpose and scope.

    (a) Authority. This part is issued under the provisions of the 
Depository Institution Management Interlocks Act (Interlocks Act) (12 
U.S.C. 3201 et seq.), as amended.
    (b) Purpose. The purpose of the Interlocks Act and this part is to 
foster competition by generally prohibiting a management official from 
serving two nonaffiliated depository organizations in situations where 
the management interlock likely would have an anticompetitive effect.
    (c) Scope. This part applies to management officials of FDIC-
supervised institutions and their affiliates.


Sec.  348.2  Other definitions and rules of construction.

    For purposes of this part, the following definitions apply:
    (a) Affiliate. (1) The term affiliate has the meaning given in 
section 202 of the Interlocks Act (12 U.S.C. 3201). For purposes of 
section 202, shares held by an individual include shares held by 
members of his or her immediate family. ``Immediate family'' means 
spouse, mother, father, child, grandchild, sister, brother or any of 
their spouses, whether or not any of their shares are held in trust.
    (2) For purposes of section 202(3)(B) of the Interlocks Act (12 
U.S.C. 3201(3)(B)), an affiliate relationship involving an FDIC-
supervised institution based on common ownership does not exist if the 
FDIC determines, after giving the affected persons the opportunity to 
respond, that the asserted affiliation was established in order to 
avoid the prohibitions of the Interlocks Act and does not represent a 
true commonality of interest between the depository organizations. In 
making this determination, the FDIC considers, among other things, 
whether a person, including members of his or her immediate family 
whose shares are necessary to constitute the group, owns a nominal 
percentage of the shares of one of the organizations and the percentage 
is substantially disproportionate to that person's ownership of shares 
in the other organization.

[[Page 79253]]

    (b) Area median income means:
    (1) The median family income for the metropolitan statistical area 
(MSA), if a depository organization is located in an MSA; or
    (2) The statewide nonmetropolitan median family income, if a 
depository organization is located outside an MSA.
    (c) Community means a city, town, or village, and contiguous or 
adjacent cities, towns, or villages.
    (d) Contiguous or adjacent cities, towns, or villages means cities, 
towns, or villages whose borders touch each other or whose borders are 
within 10 road miles of each other at their closest points. The 
property line of an office located in an unincorporated city, town, or 
village is the boundary line of that city, town, or village for the 
purpose of this definition.
    (e) Depository holding company means a bank holding company or a 
savings and loan holding company (as more fully defined in section 202 
of the Interlocks Act (12 U.S.C. 3201)) having its principal office 
located in the United States.
    (f) Depository institution means a commercial bank (including a 
private bank), a savings bank, a trust company, a savings and loan 
association, a building and loan association, a homestead association, 
a cooperative bank, an industrial bank, or a credit union, chartered 
under the laws of the United States and having a principal office 
located in the United States. Additionally, a United States office, 
including a branch or agency, of a foreign commercial bank is a 
depository institution.
    (g) Depository institution affiliate means a depository institution 
that is an affiliate of a depository organization.
    (h) Depository organization means a depository institution or a 
depository holding company.
    (i) FDIC-supervised institution means either an insured state 
nonmember bank or a State savings association.
    (j) Low- and moderate-income areas means census tracts (or, if an 
area is not in a census tract, block numbering areas delineated by the 
United States Bureau of the Census) where the median family income is 
less than 100 percent of the area median income.
    (k) Management official. (1) The term management official means:
    (i) A director;
    (ii) An advisory or honorary director of a depository institution 
with total assets of $100 million or more;
    (iii) A senior executive officer as that term is defined in 12 CFR 
303.101(b).
    (iv) A branch manager;
    (v) A trustee of a depository organization under the control of 
trustees; and
    (vi) Any person who has a representative or nominee serving in any 
of the capacities in this paragraph (j)(1).
    (2) The term management official does not include:
    (i) A person whose management functions relate exclusively to the 
business of retail merchandising or manufacturing;
    (ii) A person whose management functions relate principally to the 
business outside the United States of a foreign commercial bank; or
    (iii) A person described in the provisos of section 202(4) of the 
Interlocks Act (12 U.S.C. 3201(4)) (referring to an officer of a State-
chartered savings bank, cooperative bank, or trust company that neither 
makes real estate mortgage loans nor accepts savings).
    (l) Office means a principal or branch office of a depository 
institution located in the United States. Office does not include a 
representative office of a foreign commercial bank, an electronic 
terminal, or a loan production office.
    (m) Person means a natural person, corporation, or other business 
entity.
    (n) Relevant metropolitan statistical area (RMSA) means an MSA, a 
primary MSA, or a consolidated MSA that is not comprised of designated 
Primary MSAs to the extent that these terms are defined and applied by 
the Office of Management and Budget.
    (o) Representative or nominee means a natural person who serves as 
a management official and has an obligation to act on behalf of another 
person with respect to management responsibilities. The FDIC will find 
that a person has an obligation to act on behalf of another person only 
if the first person has an agreement, express or implied, to act on 
behalf of the second person with respect to management 
responsibilities. The FDIC will determine, after giving the affected 
persons an opportunity to respond, whether a person is a representative 
or nominee.
    (p) State savings association has the same meaning as in section 
(3)(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).
    (q) Total assets. (1) The term total assets includes assets 
measured on a consolidated basis and reported in the most recent fiscal 
year-end Consolidated Report of Condition and Income.
    (2) The term total assets does not include:
    (i) Assets of a diversified savings and loan holding company as 
defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C. 
1467a(a)(1)(F)) other than the assets of its depository institution 
affiliate;
    (ii) Assets of a bank holding company that are exempt from the 
prohibitions of section 4 of the Bank Holding Company Act of 1956 
pursuant to an order issued under section 4(d) of that Act (12 U.S.C. 
1843(d)) other than the assets of its depository institution affiliate; 
or
    (iii) Assets of offices of a foreign commercial bank other than the 
assets of its United States branch or agency.
    (r) United States means the United States of America, any State or 
territory of the United States of America, the District of Columbia, 
Puerto Rico, Guam, American Samoa, and the Virgin Islands.


Sec.  348.3  Prohibitions.

    (a) Community. A management official of a depository organization 
may not serve at the same time as a management official of an 
unaffiliated depository organization if the depository organizations in 
question (or a depository institution affiliate thereof) have offices 
in the same community.
    (b) RMSA. A management official of a depository organization may 
not serve at the same time as a management official of an unaffiliated 
depository organization if the depository organizations in question (or 
a depository institution affiliate thereof) have offices in the same 
RMSA and each depository organization has total assets of $50 million 
or more.
    (c) Major assets. A management official of a depository 
organization with total assets exceeding $2.5 billion (or any affiliate 
of such an organization) may not serve at the same time as a management 
official of an unaffiliated depository organization with total assets 
exceeding $1.5 billion (or any affiliate of such an organization), 
regardless of the location of the two depository organizations. The 
FDIC will adjust these thresholds, as necessary, based on the year-to-
year change in the average of the Consumer Price Index for the Urban 
Wage Earners and Clerical Workers, not seasonally adjusted, with 
rounding to the nearest $100 million. The FDIC will announce the 
revised thresholds by publishing a final rule without notice and 
comment in the Federal Register.


Sec.  348.4  Interlocking relationships permitted by statute.

    The prohibitions of Sec.  348.3 do not apply in the case of any one 
or more of the following organizations or to a subsidiary thereof:
    (a) A depository organization that has been placed formally in 
liquidation, or which is in the hands of a receiver,

[[Page 79254]]

conservator, or other official exercising a similar function;
    (b) A corporation operating under section 25 or section 25A of the 
Federal Reserve Act (12 U.S.C. 601 et seq. and 12 U.S.C. 611 et seq., 
respectively) (Edge Corporations and Agreement Corporations);
    (c) A credit union being served by a management official of another 
credit union;
    (d) A depository organization that does not do business within the 
United States except as an incident to its activities outside the 
United States;
    (e) A State-chartered savings and loan guaranty corporation;
    (f) A Federal Home Loan bank or any other bank organized solely to 
serve depository institutions (a bankers' bank) or solely for the 
purpose of providing securities clearing services and services related 
thereto for depository institutions and securities companies;
    (g) A depository organization that is closed or is in danger of 
closing as determined by the appropriate Federal depository 
institutions regulatory agency and is acquired by another depository 
organization. This exemption lasts for five years, beginning on the 
date the depository organization is acquired;
    (h) A savings association whose acquisition has been authorized on 
an emergency basis in accordance with section 13(k) of the Federal 
Deposit Insurance Act (12 U.S.C. 1823(k)) with resulting dual service 
by a management official that would otherwise be prohibited under the 
Interlocks Act which may continue for up to 10 years from the date of 
the acquisition provided that the FDIC has given its approval for the 
continuation of such service;
    (i)(1) A diversified savings and loan holding company (as defined 
in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C. 
1467a(a)(1)(F))) with respect to the service of a director of such 
company who is also a director of an unaffiliated depository 
organization if:
    (i) Both the diversified savings and loan holding company and the 
unaffiliated depository organization notify their appropriate Federal 
depository institutions regulatory agency at least 60 days before the 
dual service is proposed to begin; and
    (ii) The appropriate regulatory agency does not disapprove the dual 
service before the end of the 60-day period.
    (2) The FDIC may disapprove a notice of proposed service if it 
finds that:
    (i) The service cannot be structured or limited so as to preclude 
an anticompetitive effect in financial services in any part of the 
United States;
    (ii) The service would lead to substantial conflicts of interest or 
unsafe or unsound practices; or
    (iii) The notificant failed to furnish all the information required 
by the FDIC.
    (3) The FDIC may require that any interlock permitted under this 
paragraph (h) be terminated if a change in circumstances occurs with 
respect to one of the interlocked depository organizations that would 
have provided a basis for disapproval of the interlock during the 
notice period; and
    (j) Any FDIC-supervised institution which is a State savings 
association that has issued stock in connection with a qualified stock 
issuance pursuant to section 10(q) of the Home Owners' Loan Act, except 
that this paragraph (j) shall apply only with regard to service as a 
single management official of such State savings association or any 
subsidiary of such State savings association by a single management 
official of a savings and loan holding company which purchased the 
stock issued in connection with such qualified stock issuance, and 
shall apply only when the FDIC has determined that such service is 
consistent with the purposes of the Interlocks Act and the Home Owners' 
Loan Act.


Sec.  348.5  Small market share exemption.

    (a) Exemption. A management interlock that is prohibited by Sec.  
348.3 is permissible, if:
    (1) The interlock is not prohibited by Sec.  348.3(c); and
    (2) The depository organizations (and their depository institution 
affiliates) hold, in the aggregate, no more than 20 percent of the 
deposits in each RMSA or community in which both depository 
organizations (or their depository institution affiliates) have 
offices. The amount of deposits shall be determined by reference to the 
most recent annual Summary of Deposits published by the FDIC for the 
RMSA or community.
    (b) Confirmation and records. Each depository organization must 
maintain records sufficient to support its determination of eligibility 
for the exemption under paragraph (a) of this section, and must 
reconfirm that determination on an annual basis.


Sec.  348.6  General exemption.

    (a) Exemption. The FDIC may by agency order exempt an interlock 
from the prohibitions in Sec.  348.3 if the FDIC finds that the 
interlock would not result in a monopoly or substantial lessening of 
competition and would not present safety and soundness concerns.
    (b) Presumptions. In reviewing an application for an exemption 
under this section, the FDIC will apply a rebuttable presumption that 
an interlock will not result in a monopoly or substantial lessening of 
competition if the depository organization seeking to add a management 
official:
    (1) Primarily serves low- and moderate-income areas;
    (2) Is controlled or managed by persons who are members of a 
minority group, or women;
    (3) Is a depository institution that has been chartered for less 
than two years; or
    (4) Is deemed to be in ``troubled condition'' as defined in Sec.  
303.101(c).
    (c) Duration. Unless a shorter expiration period is provided in the 
FDIC approval, an exemption permitted by paragraph (a) of this section 
may continue so long as it does not result in a monopoly or substantial 
lessening of competition, or is unsafe or unsound. If the FDIC grants 
an interlock exemption in reliance upon a presumption under paragraph 
(b) of this section, the interlock may continue for three years, unless 
otherwise provided by the FDIC in writing.
    (d) Procedures. Procedures for applying for an exemption under this 
section are set forth in 12 CFR 303.249.


Sec.  348.7  Change in circumstances.

    (a) Termination. A management official shall terminate his or her 
service or apply for an exemption if a change in circumstances causes 
the service to become prohibited. A change in circumstances may include 
an increase in asset size of an organization, a change in the 
delineation of the RMSA or community, the establishment of an office, 
an increase in the aggregate deposits of the depository organization, 
or an acquisition, merger, consolidation, or reorganization of the 
ownership structure of a depository organization that causes a 
previously permissible interlock to become prohibited.
    (b) Transition period. A management official described in paragraph 
(a) of this section may continue to serve the FDIC-supervised 
institution involved in the interlock for 15 months following the date 
of the change in circumstances. The FDIC may shorten this period under 
appropriate circumstances.


Sec.  348.8  Enforcement.

    Except as provided in this section, the FDIC administers and 
enforces the Interlocks Act with respect to FDIC-supervised 
institutions and their affiliates and may refer any case of a 
prohibited interlocking relationship involving these entities to the 
Attorney

[[Page 79255]]

General of the United States to enforce compliance with the Interlocks 
Act and this part. If an affiliate of an FDIC-supervised institution is 
subject to the primary regulation of another federal depository 
organization supervisory agency, then the FDIC does not administer and 
enforce the Interlocks Act with respect to that affiliate.

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

Subpart V--Management Official Interlocks

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

    Authority: 12 U.S.C. 1819.

    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 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; 78l; 78m; 78n; 78w.
    Subpart U also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w; 78d-1; 7241; 7242; 7243; 7244; 
7261; 7264; 7265.
    Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78l; 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 V--[Removed and reserved]

0
3. Remove and reserve subpart V consisting of Sec. Sec.  390.400 
through 390.408.

    Dated at Washington, DC, this 15th day of December 2015.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2015-31940 Filed 12-18-15; 8:45 am]
BILLING CODE 6714-01-P