[Federal Register Volume 83, Number 79 (Tuesday, April 24, 2018)]
[Rules and Regulations]
[Pages 17737-17744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06881]



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 Rules and Regulations
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
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  Federal Register / Vol. 83, No. 79 / Tuesday, April 24, 2018 / Rules 
and Regulations  

[[Page 17737]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 303, 308, 324, 325, 327, 333, 337, 347, 349, 360, 362, 
363, 364, 365, and 390

RIN 3064-AE51


Regulatory Capital Rules: Removal of Certain Capital Rules That 
Are No Longer Effective Following the Implementation of the Revised 
Capital Rules

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: This final rule rescinds certain capital regulations of the 
FDIC's codified rules (superseded capital rules) that were no longer 
effective following the January 1, 2015 implementation of the revised 
capital rules. The final rule also makes conforming changes to sections 
in the FDIC's codified rules that refer to the superseded capital 
rules. The FDIC has concluded that good cause exists to publish this 
rule as final without a period of notice and comment and with an 
effective date as of the date of its publication in the Federal 
Register because this final rule rescinds the superseded capital rules 
and other sections of the FDIC's codified rules that refer to the 
superseded capital rules and imposes no new requirement on FDIC-
supervised institutions.

DATES: The final rule is effective April 24, 2018.

FOR FURTHER INFORMATION CONTACT: Benedetto Bosco, Chief, Capital Policy 
Section; [email protected], Capital Markets Branch, Division of Risk 
Management Supervision, (202) 898-6888; Catherine Wood, Counsel, 
[email protected]; Michael Phillips, Supervisory Counsel, 
[email protected], Supervision and Legislation Branch, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    In 2014, the FDIC comprehensively revised and strengthened its 
capital regulations applicable to FDIC-supervised institutions (revised 
capital rule).\1\ The revised capital rule was codified in part 324 of 
the FDIC's codified rules (effective January 1, 2014, for advanced 
approaches banking organizations) and was effective for all non-
advanced approaches FDIC-supervised institutions on January 1, 2015. 
Before the effective dates of the revised capital rule, FDIC-supervised 
institutions were subject to the superseded capital rules in part 325 
and subparts Y and Z of part 390 of the FDIC's codified rules. The 
superseded capital rules remain in the Code of Federal Regulations 
(CFR), even though they were no longer effective for any FDIC-
supervised institution since January 1, 2015. Maintaining the 
superseded capital rules in the FDIC's codified rules could result in 
confusion and therefore this final rule removes the superseded capital 
rules.
---------------------------------------------------------------------------

    \1\ 79 FR 20754 (April 14, 2014).
---------------------------------------------------------------------------

II. Description of the Final Rule

    The final rule rescinds part 325, subpart A--Minimum Capital 
Requirements, subpart B--Prompt Corrective Action and appendices A 
through D, as the rules contained therein have been superseded by part 
324. Under the final rule, the annual stress testing rule will remain 
in part 325. Part 325 will be retitled to Annual Stress Test and the 
stress testing rule will be renumbered to reflect the removed capital 
rules. Similarly, the final rule removes the superseded capital rules 
contained in part 390 subpart Y--Prompt Corrective Action and part 390, 
subpart Z--Capital and related appendices. Under the final rule, 
sections in part 390 that are not removed will remain codified in part 
390, including certain enforcement authorities related to savings 
association's capital requirements. The final rule also makes 
conforming technical changes to provisions of the FDIC's codified rules 
that refer to part 325 for state nonmember banks and subparts Y and Z 
of part 390 for state savings associations in conjunction with the 
FDIC's capital rules. However, this final rule does not impact the 
legal status of any reference to the superseded capital rules in 
outstanding compliance and enforcement orders, agreements, and 
memoranda of understanding entered into by the FDIC prior to the 
effective date of this final rule. Regardless of whether an outstanding 
enforcement order refers to the superseded capital rule, all FDIC-
supervised institutions are subject to the revised capital rule and 
must be in compliance with the minimum capital requirements in part 
324.\2\
---------------------------------------------------------------------------

    \2\ Generally FDIC-supervised institutions can demonstrate 
compliance with outstanding enforcement orders referencing the 
superseded capital rule by calculating their capital ratios under 
the revised capital rule. The FDIC made a finding during the 
interagency capital rulemaking process in 2013 that the revised 
capital rule is more stringent than the superseded capital rule. 
Therefore, an FDIC-supervised institution subject to an enforcement 
order under the superseded capital rule may demonstrate its 
compliance using its ratios as calculated under the revised capital 
rule.
---------------------------------------------------------------------------

III. Administrative Procedure Act

    The Administrative Procedure Act (APA) does not require an agency 
to publish a notice of proposed rulemaking (NPR) in the Federal 
Register if an ``agency for good cause finds (and incorporates the 
finding and a brief statement of reasons therefor in the rules issued) 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' \3\ The FDIC finds 
that for purposes of the rescission of the superseded capital rules, 
good cause exists to not publish a notice of proposed rulemaking in the 
Federal Register and, therefore, is issuing this rule as a final rule. 
The FDIC believes that a notice of proposed rulemaking is unnecessary 
for such purposes because the FDIC published three NPRs and an interim 
final rule for comment before issuing the revised capital rules in 
2014.\4\ The comment period for those NPRs and interim final rule 
provided sufficient public notice that the revised

[[Page 17738]]

capital rules would replace the superseded capital rules for all FDIC-
supervised institutions as of January 1, 2015. This final rule solely 
removes the obsolete provisions of, and references to, the superseded 
capital rules in the CFR and imposes no new requirement on FDIC-
supervised institutions. Accordingly, the FDIC concludes that good 
cause exists to publish the rule as final without a notice and 
opportunity to comment.
---------------------------------------------------------------------------

    \3\ 5 U.S.C. 553(b).
    \4\ Concerning the NPRs for the revised capital rules, see 77 FR 
52792 (August 30, 2012); 77 FR 52888 (August 30, 2012); 77 FR 52978 
(August 30, 2012). The interim final rule for the revised capital 
rules was issued in September 10, 2013 (78 FR 55340). In the 
preamble to the interim final rule, the FDIC stated: ``The interim 
final rule will replace the FDIC's general risk-based capital rules, 
advanced approaches rule, market risk rule, and leverage rules in 
accordance with the transition provisions described below.'' Also, 
section 324.1(f) of the revised capital rules states the timing for 
the implementation of the revised capital rules. See 12 CFR 
324.1(f).
---------------------------------------------------------------------------

    Section 553(d)(3) of the APA provides that, for good cause found 
and published with the rule, an agency does not have to comply with the 
requirement that a substantive rule be published not less than 30 days 
before its effective date.\5\ The final rule will be effective 
immediately upon its publication in the Federal Register. The FDIC 
invokes the good cause exception to the APA's 30-day publication 
requirement for the reasons discussed above.
---------------------------------------------------------------------------

    \5\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------

IV. Regulatory Analyses

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), 
requires an agency, in connection with a notice of proposed rulemaking, 
to prepare an Initial Regulatory Flexibility Analysis describing the 
impact of the proposed rule on small entities (defined by the Small 
Business Administration for purposes of the RFA to include banking 
entities with total assets of $550 million or less) or to certify that 
the proposed rule would not have a significant economic impact on a 
substantial number of small entities. The RFA also requires an agency, 
in connection with a final rule, to prepare a Final Regulatory 
Flexibility Act (FRFA) analysis describing the impact of the final rule 
on small entities. Neither an IRFA nor FRFA is required, however, if 
the rule is issued under the APA provision allowing the agency to 
forego notice and comment rulemaking for good cause. Therefore, the 
FDIC has not prepared either an IRFA or an FRFA in connection with this 
final rule. Nevertheless, the FDIC notes that the final rule does not 
impose any burden on small banking entities as it only rescinds 
obsolete provisions in the FDIC's CFR.

B. Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501-3521), the FDIC may not conduct or sponsor, and 
a 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 FDIC reviewed the rule and determined that it 
does not create any new, or revise any existing, collection of 
information under section 3504(h) of the Paperwork Reduction Act of 
1980. Consequently, no information collection request will be submitted 
to the OMB for review.

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 (Title II, Pub. L. 104-
121).

D. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

E. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act requires the federal 
banking agencies to use plain language in all final rules published 
after January 1, 2000. The FDIC has sought to present the final rule in 
a simple and straightforward manner.

F. Riegle Community Development and Regulatory Improvement Act of 1994

    Under the Riegle Community Development and Regulatory Improvement 
Act of 1994, 12 U.S.C. 4802, (RCDRIA), there is a requirement that 
``[n]ew regulations and amendments to regulations prescribed by a 
Federal banking agency which impose additional reporting, disclosures, 
or other new requirements on insured depository institutions shall take 
effect on the first day of a calendar quarter which begins on or after 
the date on which the regulations are published in final form'' absent 
a good cause determination by the agency.\6\ The final rule imposes no 
additional reporting, disclosure, or other new requirements on insured 
depository institutions and therefore is not subject to the effective 
date requirement in RCDRIA.
---------------------------------------------------------------------------

    \6\ 12 U.S.C. 4802(b).
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 303

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Reporting and recordkeeping requirements, Savings 
associations.

12 CFR Part 308

    Administrative practice and procedure, Bank deposit insurance, 
Banks, banking, Claims, Crime, Equal access to justice, Fraud, 
Investigations, Lawyers, Penalties.

12 CFR Part 324

    Administrative practice and procedure, Banks, banking, Reporting 
and recordkeeping requirements, Savings associations.

12 CFR Part 325

    Banks, banking, Reporting and recordkeeping requirement.

12 CFR Part 327

    Bank deposit insurance, Banks, banking, Savings associations.

12 CFR Part 333

    Banks, banking.

12 CFR Part 337

    Banks, banking, Reporting and recordkeeping requirements, 
Securities.

12 CFR Part 347

    Authority delegations (Government agencies), Bank deposit 
insurance, Banks, banking, Credit, Foreign banking, Investments, 
Reporting and recordkeeping requirements, U.S. Investments abroad.

12 CFR Part 349

    Administrative practice and procedure, Banks, banking, Holding 
companies, Reporting and recordkeeping requirements, Savings 
associations, Swaps.

12 CFR Part 360

    Savings associations.

12 CFR Part 362

    Administrative practice and procedure, Authority delegations 
(Government agencies), Bank deposit insurance, Banks, banking, 
Investments, Reporting and recordkeeping requirements.

12 CFR Part 363

    Accounting, Administrative practice and procedure, Banks, banking, 
Reporting and recordkeeping requirements.

12 CFR Part 364

    Banks, banking, Information.

[[Page 17739]]

12 CFR Part 365

    Banks, banking, Mortgages.

12 CFR Part 390

    Administrative practice and procedure, Advertising, Aged, Civil 
rights, Conflict of interests, Credit, Crime, Equal employment 
opportunity, Fair housing, Government employees, Individuals with 
disabilities, Reporting and recordkeeping requirements, Savings 
associations.

Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit 
Insurance Corporation amends 12 CFR parts 303, 308, 324, 325, 327, 333, 
337, 347, 349, 360, 362, 363, 364, 365, and 390 as follows:

PART 303--FILING PROCEDURES

0
1. The authority citation for part 303 continues to read as follows:

    Authority: 12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819(a) 
(Seventh and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o, 1831p-1, 
1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207; 5414; 15 U.S.C. 1601-
1607.


0
2. Section 303.2 is amended by revising paragraphs (b), (ee), and (ff) 
to read as follows:


Sec.  303.2  Definitions.

* * * * *
    (b) Adjusted part 324 total assets means adjusted 12 CFR part 324 
total assets as calculated and reflected in the FDIC's Report of 
Examination.
* * * * *
    (ee) Tier 1 capital shall have the same meaning as provided in 
Sec.  324.2 of this chapter.
    (ff) Total assets shall have the same meaning as provided in Sec.  
324.401(g) of this chapter.
* * * * *

0
3. Section 303.64 is amended by revising paragraph (a)(4)(i) to read as 
follows:


Sec.  303.64  Processing.

    (a) * * *
    (4) * * *
    (i) Immediately following the merger transaction, the resulting 
institution will be well-capitalized pursuant to subpart H of part 324 
of this chapter (12 CFR part 324); and
* * * * *

0
4. Section 303.181 is amended by revising paragraph (c)(4) to read as 
follows:


Sec.  303.181  Definitions.

* * * * *
    (c) * * *
    (4) Is well-capitalized as defined in subpart H of part 324 of this 
chapter; and
* * * * *

0
5. Section 303.184 is amended by revising paragraph (d)(1)(ii) to read 
as follows:


Sec.  303.184  Moving an insured branch of a foreign bank.

* * * * *
    (d) * * *
    (1) * * *
    (ii) The applicant is at least adequately capitalized as defined in 
subpart H of part 324 of this chapter;
* * * * *

0
6. Section 303.200 is amended by revising paragraphs (a)(2) and (b) to 
read as follows:


Sec.  303.200  Scope.

    (a) * * *
    (2) Definitions of the capital categories referenced in this Prompt 
Corrective Action subpart may be found in subpart H of part 324 of this 
chapter.
    (b) Institutions covered. Restrictions and prohibitions contained 
in subpart H of part 324 of this chapter apply primarily to state 
nonmember banks and insured branches of foreign banks, as well as to 
directors and senior executive officers of those institutions. Portions 
of subpart H of part 324 of this chapter also apply to all insured 
depository institutions that are deemed to be critically 
undercapitalized.
* * * * *

0
7. Section 303.241 is amended by revising paragraph (c)(4) to read as 
follows:


Sec.  303.241  Reduce or retire capital stock or capital debt 
instruments.

* * * * *
    (c) * * *
    (4) If the proposal involves a series of transactions affecting 
Tier 1 capital components which will be consummated over a period of 
time which shall not exceed twelve months, the application shall 
certify that the insured depository institution will maintain itself as 
a well-capitalized institution as defined in part 324 of this chapter 
both before and after each of the proposed transactions;
* * * * *

PART 308--RULES OF PRACTICE AND PROCEDURE

0
8. The authority citation for part 308 continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 
1829, 1829b, 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub.L. 104-134, sec. 3100(s), 110 
Stat. 1321; Pub.L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 124 
Stat. 1376; Pub.L. 114-74, sec. 701, 129 Stat. 584.


0
9. Section 308.200 is revised to read as follows:


Sec.  308.200  Scope.

    The rules and procedures set forth in this subpart apply to banks, 
insured branches of foreign banks and senior executive officers and 
directors of banks that are subject to the provisions of section 38 of 
the Federal Deposit Insurance Act (section 38) (12 U.S.C. 1831o) and 
subpart H of part 324 of this chapter.

0
10. Section 308.202 is amended by revising paragraphs (a)(1)(i)(A) and 
(a)(1)(ii) to read as follows:


Sec.  308.202  Procedures for reclassifying a bank based on criteria 
other than capital.

    (a) * * *
    (1) * * *
    (i) Grounds for reclassification. (A) Pursuant to Sec.  324.403(d) 
of this chapter, the FDIC may reclassify a well-capitalized bank as 
adequately capitalized or subject an adequately capitalized or 
undercapitalized institution to the supervisory actions applicable to 
the next lower capital category if:
    (1) The FDIC determines that the bank is in unsafe or unsound 
condition; or
    (2) The FDIC, pursuant to section 8(b)(8) of the FDI Act (12 U.S.C. 
1818(b)(8)), deems the bank to be engaged in an unsafe or unsound 
practice and not to have corrected the deficiency.
* * * * *
    (ii) Prior notice to institution. Prior to taking action pursuant 
to Sec.  324.403(d) of this chapter, the FDIC shall issue and serve on 
the bank a written notice of the FDIC's intention to reclassify it.
* * * * *

0
11. Section 308.204 is amended by revising paragraphs (b)(2) and (c) to 
read as follows:


Sec.  308.204  Enforcement of directives.

* * * * *
    (b) * * *
    (2) Failure to implement capital restoration plan. The failure of a 
bank to implement a capital restoration plan required under section 38, 
or subpart H of part 324 of this chapter, or the failure of a company 
having control of a bank

[[Page 17740]]

to fulfill a guarantee of a capital restoration plan made pursuant to 
section 38(e)(2) of the FDI Act shall subject the bank to the 
assessment of civil money penalties pursuant to section 8(i)(2)(A) of 
the FDI Act.
    (c) Other enforcement action. In addition to the actions described 
in paragraphs (a) and (b) of this section, the FDIC may seek 
enforcement of the provisions of section 38 or subpart H of part 324 of 
this chapter through any other judicial or administrative proceeding 
authorized by law.
* * * * *

PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS

0
12. The authority citation for part 324 continues to read as follows:

    Authority:  12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub.L. 102-233, 
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.L. 102-242, 
105 Stat. 2236, 2355, as amended by Pub.L. 103-325, 108 Stat. 2160, 
2233 (12 U.S.C. 1828 note); Pub.L. 102-242, 105 Stat. 2236, 2386, as 
amended by Pub.L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 
note); Pub.L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).


0
13. Section 324.22 is amended by revising footnote 22 in paragraph 
(b)(2)(iii) to read as follows:


Sec.  324.22  Regulatory capital adjustments and deductions.

* * * * *
    (b) * * *
    (2) * * *
    (iii) * * *
    \22\ These rules include the regulatory capital requirements set 
forth at 12 CFR part 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 324 
(FDIC).
* * * * *

PART 325--ANNUAL STRESS TEST

0
14. The authority citation for part 325 continues to read as follows:

    Authority: 12 U.S.C. 5365(i)(2), 12 U.S.C. 5412(b)(2)(C), 12 
U.S.C. 1818, 12 U.S.C. 1819(a)(Tenth), 12 U.S.C. 1831o, and 12 
U.S.C. 1831p-1.


0
15. The heading for part 325 is revised to read as set forth above.

Subparts A and B [Removed]

0
16. Remove subparts A and B.

Subpart C [Amended]

0
17. Remove the heading for subpart C.


Sec. Sec.  325.201 through 325.207  [Redesignated as Sec. Sec.  325.1 
through 325.7]

0
18. Redesignate Sec. Sec.  325.201 through 325.207 as Sec. Sec.  325.1 
through 325.7, respectively.

0
19. Amend newly redesignated Sec.  325.1 by revising paragraph (c)(5) 
to read as follows:


Sec.  325.1  Authority, purpose, and reservation of authority.

* * * * *
    (c) * * *
    (5) Notice and comment procedures: In exercising its authority to 
require different or additional stress tests and different or 
additional scenarios (including components for the scenarios) under 
paragraph (c)(2) of this section, the Corporation will apply notice and 
response procedures in the same manner and to the same extent as the 
notice and response procedures in 12 CFR 324.5, as appropriate.
* * * * *

Appendices A, B, C, and D [Removed]

0
20. Remove appendices A, B, C, and D.

PART 327--ASSESSMENTS

0
21. The authority citation for part 327 continues to read as follows:

    Authority: 12 U.S.C. 1441, 1813, 1815, 1817-19, 1821.


0
22. Appendix A to subpart A of part 327 is amended by revising footnote 
5 in section VI to read as follows:

Appendix A to Subpart A of Part 327--Method to Derive Pricing 
Multipliers and Uniform Amount

* * * * *
    VI. * * *
    \5\ Market risk is defined in 12 CFR 324.202.

0
23. Appendix C to subpart A of part 327 is amended by revising the 
appendix heading and the first and second sentences in the first 
paragraph in section I.A.5 to read as follows:

Appendix C to Subpart A to Part 327--Description of Concentration 
Measures

    I. * * *
    A. * * *
    5. * * *
    Higher-risk securitizations are defined as securitization 
exposures (except securitizations classified as trading book), 
where, in aggregate, more than 50 percent of the assets backing the 
securitization meet either the criteria for higher-risk C & I loans 
or securities, higher-risk consumer loans, or nontraditional 
mortgage loans, except those classified as trading book. A 
securitization exposure is as defined in 12 CFR 324.2, as it may be 
amended from time to time. * * *
* * * * *

PART 333--EXTENSION OF CORPORATE POWERS

0
24. The authority citation for part 333 continues to read as follows:

    Authority: 12 U.S.C. 1816, 1818, 1819 (``Seventh'', ``Eighth'' 
and ``Tenth''), 1828, 1828(m), 1831p-1(c).


0
25. Section 333.4 is amended by revising the fourth sentence in 
paragraph (a) to read as follows:


Sec.  333.4  Conversions from mutual to stock form.

    (a) Scope. * * * As determined by the Board of Directors of the 
FDIC on a case-by-case basis, the requirements of paragraphs (d), (e), 
and (f) of this section do not apply to mutual-to-stock conversions of 
insured mutual state savings banks whose capital category under Sec.  
324.403 of this chapter is ``undercapitalized'', ``significantly 
undercapitalized'' or ``critically undercapitalized''. * * *
* * * * *

PART 337--UNSAFE AND UNSOUND BANKING PRACTICES

0
26. The authority citation for part 337 continues to read as follows:

    Authority: 12 U.S.C. 375a(4), 375b, 1463(a)(1), 1816, 1818(a), 
1818(b), 1819, 1820(d), 1828(j)(2), 1831, 1831f, 5412.


0
27. Section 337.6 is amended by revising footnote 12 in paragraph 
(a)(3)(i) and the second sentence in footnote 13 in paragraph 
(a)(3)(iii) to read as follows:


Sec.  337.6  Brokered deposits.

* * * * *
    (a) * * *
    (3) * * *
    (i) * * *
    \12\ For the most part, the capital measure terms are defined in 
the following regulations: FDIC--12 CFR part 324, subpart H; Board of 
Governors of the Federal Reserve System--12 CFR part 208; and Office of 
the Comptroller of the Currency--12 CFR part 6.
* * * * *
    (iii) * * *
    \13\ * * * Provisions specifying the effective date of 
determination of capital category are generally published in the 
following regulations: FDIC--12 CFR 324.402; Board of Governors of the 
Federal Reserve System--12 CFR part 208, subpart D; and Office of the 
Comptroller of the Currency--12 CFR 6.3.
* * * * *

[[Page 17741]]

PART 347--INTERNATIONAL BANKING

0
28. The authority citation for part 347 continues to read as follows:

    Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820(d), 1828, 
3103, 3104, 3105, 3108, 3109; Title IX, Pub. L. 98-181, 97 Stat. 
1153 (12 U.S.C. 3901 et seq.).


0
29. Section 347.102 is amended by revising paragraphs (u) and (v) to 
read as follows:


Sec.  347.102  Definitions.

* * * * *
    (u) Tier 1 capital means Tier 1 capital as defined in Sec.  324.2 
of this chapter.
    (v) Well capitalized means well capitalized as defined in Sec.  
324.403 of this chapter.

PART 349--DERIVATIVES

Subpart B--Retail Foreign Exchange Transactions

0
30. The authority citation for part 349, subpart B, continues to read 
as follows:

    Authority: 12 U.S.C. 1813(q), 1818, 1819, and 3108; 7 U.S.C. 
2(c)(2)(E), 27 et seq.


0
31. Section 349.20 is revised to read as follows:


Sec.  349.20  Capital requirements.

    An FDIC-supervised insured depository institution offering or 
entering into retail forex transactions must be well capitalized as 
defined by 12 CFR part 324, unless specifically exempted by the FDIC in 
writing.

PART 360--RESOLUTION AND RECEIVERSHIP RULES

0
32. The authority citation for part 360 continues to read as follows:

    Authority: 12 U.S.C. 1821(d)(1), 1821(d)(10)(C), 1821(d)(11), 
1821(e)(1), 1821(e)(8)(D)(i), 1823(c)(4), 1823(e)(2); Sec. 401(h), 
Pub. L. 101-73, 103 Stat. 357.


0
33. Section 360.5 is amended by revising paragraph (b) to read as 
follows:


Sec.  360.5  Definition of qualified financial contracts.

* * * * *
    (b) Repurchase agreements. The following agreements shall be deemed 
``repurchase agreements'' under section 11(e)(8)(D)(v) of the Federal 
Deposit Insurance Act, as amended (12 U.S.C. 1821(e)(8)(D)(v)): A 
repurchase agreement on qualified foreign government securities is an 
agreement or combination of agreements (including master agreements) 
which provides for the transfer of securities that are direct 
obligations of, or that are fully guaranteed by, the central 
governments (as set forth at 12 CFR 324.2 (definition of sovereign 
exposure), as may be amended from time to time) of the OECD-based group 
of countries (as generally discussed in 12 CFR 324.32) against the 
transfer of funds by the transferee of such securities with a 
simultaneous agreement by such transferee to transfer to the transferor 
thereof securities as described above, at a date certain not later than 
one year after such transfers or on demand, against the transfer of 
funds.
* * * * *

0
34. Section 360.9 is amended by revising paragraph (e)(6) to read as 
follows:


Sec.  360.9  Large-bank deposit insurance determination modernization.

* * * * *
    (e) * * *
    (6) Notwithstanding the general requirements of this paragraph (e), 
on a case-by-case basis, the FDIC may accelerate, upon notice, the 
implementation timeframe of all or part of the requirements of this 
section for a covered institution that: Has a composite rating of 3, 4, 
or 5 under the Uniform Financial Institution's Rating System, or in the 
case of an insured branch of a foreign bank, an equivalent rating; is 
undercapitalized, as defined under the prompt corrective action 
provisions of 12 CFR part 324; or is determined by the appropriate 
Federal banking agency or the FDIC in consultation with the appropriate 
Federal banking agency to be experiencing a significant deterioration 
of capital or significant funding difficulties or liquidity stress, 
notwithstanding the composite rating of the institution by its 
appropriate Federal banking agency in its most recent report of 
examination. In implementing this paragraph (e)(6), the FDIC must 
consult with the covered institution's primary federal regulator and 
consider the: Complexity of the institution's deposit systems and 
operations, extent of the institution's asset quality difficulties, 
volatility of the institution's funding sources, expected near-term 
changes in the institution's capital levels, and other relevant factors 
appropriate for the FDIC to consider in its roles as insurer and 
possible receiver of the institution.
* * * * *

PART 362--ACTIVITIES OF INSURED STATE BANKS AND INSURED SAVINGS 
ASSOCIATIONS

0
35. The authority citation for part 362 continues to read as follows:

    Authority: 12 U.S.C. 1816, 1818, 1819(a)(Tenth), 1828(j), 
1828(m), 1828a, 1831a, 1831e, 1831w, 1843(l).


0
36. Section 362.2 is amended by revising paragraphs (s) and (t) to read 
as follows:


Sec.  362.2  Definitions.

* * * * *
    (s) Tier one capital has the same meaning as set forth in part 324 
of this chapter for an insured State nonmember bank or insured state 
savings association. For other state-chartered depository institutions, 
the term ``tier one capital'' has the same meaning as set forth in the 
capital regulations adopted by the appropriate Federal banking agency.
    (t) Well-capitalized has the same meaning set forth in part 324 of 
this chapter for an insured State nonmember bank or insured state 
savings association. For other state-chartered depository institutions, 
the term ``well-capitalized'' has the same meaning as set forth in the 
capital regulations adopted by the appropriate Federal banking agency.

0
37. Section 362.4 is amended by revising paragraph (e)(3) to read as 
follows:


Sec.  362.4  Subsidiaries of insured State banks.

* * * * *
    (e) * * *
    (3) Use such regulatory capital amount for the purposes of the 
bank's assessment risk classification under part 327 of this chapter 
and its categorization as a ``well-capitalized'', an ``adequately 
capitalized'', an ``undercapitalized'', or a ``significantly 
undercapitalized'' institution as defined in Sec.  324.403(b) of this 
chapter, provided that the capital deduction shall not be used for 
purposes of determining whether the bank is ``critically 
undercapitalized'' under part 324 of this chapter.

0
38. Section 362.17 is amended by revising paragraph (d) to read as 
follows:


Sec.  362.17  Definitions.

* * * * *
    (d) Tangible equity and Tier 2 capital have the same meaning as set 
forth in part 324 of this chapter.
* * * * *

PART 363--ANNUAL INDEPENDENT AUDITS AND REPORTING REQUIREMENTS

0
39. The authority citation for part 363 continues to read as follows:

    Authority: 12 U.S.C. 1831m.


[[Page 17742]]



0
40. Appendix A to part 363 is amended by revising Table 1 to Appendix A 
to read as follows:

Appendix A to Part 363--Guidelines and Interpretations

* * * * *

                                      Table 1 to Appendix A--Designated Federal Laws and Regulations Applicable to:
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         State member      State non-        Savings
                                                                                       National banks       banks         member banks     associations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Insider Loans--Parts and/or Sections of Title 12 of the United States Code
--------------------------------------------------------------------------------------------------------------------------------------------------------
375a.........................................  Loans to Executive Officers of Banks.         [radic]          [radic]              (A)              (A)
375b.........................................  Extensions of Credit to Executive             [radic]          [radic]              (A)              (A)
                                                Officers, Directors, and Principal
                                                Shareholders of Banks.
1468(b)......................................  Extensions of Credit to Executive      ...............  ...............  ...............         [radic]
                                                Officers, Directors, and Principal
                                                Shareholders.
1828(j)(2)...................................  Extensions of Credit to Officers,      ...............  ...............         [radic]   ...............
                                                Directors, and Principal
                                                Shareholders.
1828(j)(3)(B)................................  Extensions of Credit to Officers,                 (B)   ...............               (C) ...............
                                                Directors, and Principal
                                                Shareholders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Parts and/or Sections of Title 12 of the Code of Federal Regulations
--------------------------------------------------------------------------------------------------------------------------------------------------------
31...........................................  Extensions of Credit to Insiders.....         [radic]   ...............  ...............  ...............
32...........................................  Lending Limits.......................         [radic]   ...............  ...............  ...............
215..........................................  Loans to Executive Officers,                  [radic]          [radic]              (D)              (E)
                                                Directors, and Principal
                                                Shareholders of Member Banks.
337.3........................................  Limits on Extensions of Credit to      ...............  ...............         [radic]   ...............
                                                Executive Officers, Directors, and
                                                Principal Shareholders of Insured
                                                Nonmember Banks.
390.338 (state savings associations).........  Loans by Savings Associations to       ...............  ...............  ...............         [radic]
                                                Their Executive Officers, Directors,
                                                and Principal Shareholders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Dividend Restrictions--Parts and/or Sections of Title 12 of the United States Code
--------------------------------------------------------------------------------------------------------------------------------------------------------
56...........................................  Prohibition on Withdrawal of Capital          [radic]          [radic]   ...............  ...............
                                                and Unearned Dividends.
60...........................................  Dividends and Surplus Fund...........         [radic]          [radic]   ...............  ...............
1467a(f).....................................  Declaration of Dividend..............  ...............  ...............  ...............         [radic]
1831o(d)(1)..................................  Prompt Corrective Action--Capital             [radic]          [radic]          [radic]          [radic]
                                                Distributions Restricted.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Parts and/or Sections of Title 12 of the Code of Federal Regulations
--------------------------------------------------------------------------------------------------------------------------------------------------------
5 Subpart E..................................  Payment of Dividends.................         [radic]   ...............  ...............  ...............
6.6..........................................  Prompt Corrective Action--                    [radic]   ...............  ...............  ...............
                                                Restrictions on Undercapitalized
                                                Institutions.
208.5........................................  Dividends and Other Distributions....  ...............         [radic]   ...............  ...............
208.45.......................................  Prompt Corrective Action--             ...............         [radic]   ...............  ...............
                                                Restrictions on Undercapitalized
                                                Institutions.
324.405......................................  Prompt Corrective Action--             ...............  ...............         [radic]   ...............
                                                Restrictions on Undercapitalized
                                                Institutions.
390.342-.348 (state savings associations)....  Capital Distributions................  ...............  ...............  ...............         [radic]
390.455 (state savings associations).........  Prompt Corrective Action--             ...............  ...............  ...............         [radic]
                                                Restrictions on Undercapitalized
                                                Institutions.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(A) Subsections (g) and (h) of section 22 of the Federal Reserve Act [12 U.S.C. 375a, 375b]
(B) Applies only to insured Federal branches of foreign banks.
(C) Applies only to insured State branches of foreign banks.
(D) See 12 CFR 337.3.
(E) See 12 CFR 390.338 (state savings associations).

PART 364--STANDARDS FOR SAFETY AND SOUNDNESS

0
41. The authority citation in part 364 continues to read as follows:

    Authority: 12 U.S.C. 1818 and 1819 (Tenth), 1831p-1; 15 U.S.C. 
1681b, 1681s, 1681w, 6801(b), 6805(b)(1).

0
42. Appendix A to part 364 is amended by revising the last sentence in 
section I.A. to read as follows:

Appendix A to Part 364--Interagency Guidelines Establishing Standards 
for Safety and Soundness

* * * * *
    I. * * *
    A. * * *
    * * * Nothing in these Guidelines limits the authority of the 
FDIC pursuant to section 38(i)(2)(F) of the FDI Act (12 U.S.C. 
1831o) and part 324 of title 12 of the Code of Federal Regulations.
* * * * *

[[Page 17743]]

PART 365--REAL ESTATE LENDING STANDARDS

0
43. The authority citation for part 365 continues to read as follows:

    Authority: 12 U.S.C. 1828(o) and 5101 et seq.


0
44. Appendix A to subpart A of part 365 is amended by revising footnote 
2 to the ``Loans in Excess of the Supervisory Loan-to-Value Limits'' 
section to read as follows:

Appendix A to Subpart A of Part 365--Interagency Guidelines for Real 
Estate Lending Policies

* * * * *
    Loans in Excess of the Supervisory Loan-to-Value Limits
* * * * *
    \2\ For state non-member banks and state savings associations, 
``total capital'' refers to that term described in 12 CFR 324.2.
* * * * *

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

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

    Authority: 12 U.S.C. 1819.


Sec.  390.101  [Amended]

0
46. Section 390.101 is amended in paragraph (f) by removing ``subpart 
Z'' and adding in its place ``12 CFR part 324.''


0
47. Section 390.264 is revised to read as follows:


Sec.  390.264  Real estate lending standards; purpose and scope.

    This section, and Sec.  390.265, issued pursuant to section 18(o) 
of the Federal Deposit Insurance Act, (12 U.S.C. 1828(o)), prescribe 
standards for real estate lending to be used by State savings 
associations and all their includable subsidiaries, as defined in part 
324 of this chapter, over which the State savings associations exercise 
control, in adopting internal real estate lending policies.


0
48. The appendix to Sec.  390.265 is amended by revising footnote 4 to 
read as follows:


Sec.  390.265  Real estate lending standards.

* * * * *

Appendix to Sec.  390.265--Interagency Guidelines for Real Estate 
Lending Policies

* * * * *
    \4\ For the state member banks, the term ``total capital'' is 
defined at 12 CFR 217.2. For insured state non-member banks, the 
term ``total capital'' is defined at 12 CFR 324.2. For national 
banks, the term ``total capital'' is defined at 12 CFR 3.2. For 
state savings associations, the term ``total capital'' is defined at 
12 CFR 324.2.
* * * * *

0
49. Section 390.316 is amended by revising paragraph (c) to read as 
follows:


Sec.  390.316  With recourse.

* * * * *
    (c) This definition does not apply for purposes of determining the 
capital adequacy requirements under part 324 of this chapter.


0
50. Section 390.341 is amended by revising paragraphs (a), 
(c)(1)(i)(G), and (d)(2)(ii) to read as follows:


Sec.  390.341  Inclusion of subordinated debt securities and 
mandatorily redeemable preferred stock as supplementary capital.

    (a) Scope. A State savings association must comply with this 
section in order to include subordinated debt securities or mandatorily 
redeemable preferred stock (``covered securities'') in supplementary 
capital (tier 2 capital) under part 324 of this chapter. If a State 
savings association does not include covered securities in 
supplementary capital, it is not required to comply with this section.
* * * * *
    (c) * * *
    (1) * * *
    (i) * * *
    (G) State or refer to a document stating that the State savings 
association must obtain FDIC approval before the voluntarily prepayment 
of principal on subordinated debt securities, the acceleration of 
payment of principal on subordinated debt securities, or the 
voluntarily redemption of mandatorily redeemable preferred stock (other 
than scheduled redemptions), if the State savings association is 
undercapitalized, significantly undercapitalized, or critically 
undercapitalized as described in subpart H of part 324 of this chapter, 
fails to meet the regulatory capital requirements in part 324, or would 
fail to meet any of these standards following the payment.
* * * * *
    (d) * * *
    (2) * * *
    (ii) The State savings association is at least adequately 
capitalized under subpart H of part 324 of this chapter and meets the 
regulatory capital requirements in part 324.
* * * * *

0
51. Section 390.343 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  390.343  What is a capital distribution?

* * * * *
    (b) Your payment to repurchase, redeem, retire or otherwise acquire 
any of your shares or other ownership interests, any payment to 
repurchase, redeem, retire, or otherwise acquire debt instruments 
included in your total capital under part 324 of this chapter, and any 
extension of credit to finance an affiliate's acquisition of your 
shares or interests;
* * * * *
    (d) Any other distribution charged against your capital accounts if 
you would not be well capitalized, as set forth in subpart H of part 
324 of this chapter, following the distribution; and
* * * * *

0
52. Section 390.344 is amended by revising the definition of Capital to 
read as follows:


Sec.  390.344  Definitions applicable to capital distributions.

* * * * *
    Capital means total capital, as computed under part 324 of this 
chapter.
* * * * *


Sec.  390.345  [Amended]

0
53. Section 390.345 is amended as follows:
0
a. In paragraph (a)(3), by removing ``Sec.  390.453(b)(2)'' and adding 
in its place ``subpart H of part 324 of this chapter.''
0
b. In paragraph (b), by removing ``Sec.  390.453(b)(1)'' and ``subpart 
Z'' wherever they appear and add in their place ``subpart H of part 324 
of this chapter.''


0
54. Section 390.348 is amended by revising paragraph (a) to read as 
follows:


Sec.  390.348  Will the FDIC permit my capital distribution?

* * * * *
    (a) You will be undercapitalized, significantly undercapitalized, 
or critically undercapitalized as set forth in subpart H of part 324 of 
this chapter, following the capital distribution. If so, the FDIC will 
determine if your capital distribution is permitted under 12 U.S.C. 
1831o(d)(1)(B).
* * * * *

0
55. Section 390.362 is amended by revising paragraphs (a)(1)(i) and 
(iii) to read as follows:


Sec.  390.362  Who must give prior notice?

    (a) * * *
    (1) * * *
    (i) You do not comply with all minimum capital requirements under 
part 324 of this chapter;
* * * * *

[[Page 17744]]

    (iii) The FDIC has notified you, in connection with its review of a 
capital restoration plan required under section 38 of the Federal 
Deposit Insurance Act or subpart H of part 324 of this chapter or 
otherwise, that a notice is required under Sec. Sec.  390.360 through 
390.368; or
* * * * *


Sec. Sec.  390.450 through 390.455  [Removed and Reserved]

0
56. Remove and reserve Sec. Sec.  390.450 through 390.455.


0
57. Section 390.457 is amended by revising paragraphs (a)(1)(i)(A) and 
(a)(1)(ii) to read as follows:


Sec.  390.457  Procedures for reclassifying a State savings association 
based on criteria other than capital.

    (a) * * *
    (1) * * *
    (i) * * *
    (A) Pursuant to Sec.  324.403(d) of this chapter, the FDIC may 
reclassify a well capitalized State savings association as adequately 
capitalized or subject an adequately capitalized or undercapitalized 
institution to the supervisory actions applicable to the next lower 
capital category if:
    (1) The FDIC determines that the State savings association is in 
unsafe or unsound condition; or
    (2) The FDIC deems the State savings association to be engaged in 
an unsafe or unsound practice and not to have corrected the deficiency.
* * * * *
    (ii) Prior notice to institution. Prior to taking action pursuant 
to Sec.  324.403(d) of this chapter, the FDIC shall issue and serve on 
the State savings association a written notice of the FDIC's intention 
to reclassify the State savings association.
* * * * *

Subpart Z--[Removed and Reserved]

0
58. Remove and reserve subpart Z.

    Dated at Washington, DC, on March 20, 2018.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2018-06881 Filed 4-23-18; 8:45 am]
BILLING CODE 6714-01-P