[Federal Register Volume 83, Number 227 (Monday, November 26, 2018)]
[Rules and Regulations]
[Pages 60333-60337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25659]



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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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 The Code of Federal Regulations is sold by the Superintendent of Documents. 
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  Federal Register / Vol. 83 , No. 227 / Monday, November 26, 2018 / 
Rules and Regulations  

[[Page 60333]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 303, 333, and 390

RIN 3064-AE23


Transferred OTS Regulations Regarding Fiduciary Powers of State 
Savings Associations and Consent Requirements for the Exercise of Trust 
Powers

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 regulations entitled Fiduciary Powers 
of State Savings Associations, from the Code of Federal Regulations, 
and to amend current FDIC regulations regarding consent to exercise 
trust powers to reflect the applicability of these parts to both State 
savings associations and State nonmember banks.

DATES: The final rule is effective January 1, 2019.

FOR FURTHER INFORMATION CONTACT: Michael W. Orange, Senior Examination 
Specialist-Trust, Division of Risk Management and Supervision, 678-916-
2289, [email protected]; Karen J. Currie, Senior Examination Specialist, 
Division of Risk Management and Supervision, 202-898-3981, 
[email protected]; Annmarie Boyd, Counsel, Legal Division, 202-898-3714, 
[email protected]; or Alexander S. Bonander, Attorney, Legal Division, 
202-898-3621, [email protected]; Federal Deposit Insurance 
Corporation, 550 17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Act provided for a substantial reorganization of the 
regulation of State and Federal savings associations and their holding 
companies.\1\ Beginning July 21, 2011, the transfer date established by 
section 311 of the Dodd-Frank Act, 12 U.S.C. 5411, the powers, duties, 
and functions formerly performed by the Office of Thrift Supervision 
(OTS) were divided between 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, as to savings and loan holding companies. Section 316(b) of the 
Dodd-Frank Act, 12 U.S.C. 5414(b), provides the manner of treatment for 
all orders, resolutions, determinations, regulations, and advisory 
materials, that were issued, made, prescribed, or allowed to become 
effective by the OTS. The section provides that, if such regulatory 
issuances 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, 
Public Law 111-203, 124 Stat. 1376 (2010) (12 U.S.C. 5301 et seq.).
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    Section 316(c) of the Dodd-Frank Act, 12 U.S.C. 5414(c), further 
directed the FDIC and OCC to consult with one another and to publish a 
list of the continued OTS regulations that would be enforced by each 
agency. 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, 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, 12 U.S.C. 
5412(c), 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'' for State savings associations and State nonmember 
banks, as it does here, the FDIC is authorized to issue, modify, and 
rescind regulations involving such institutions.
    On June 14, 2011, pursuant to this authority, the FDIC's Board of 
Directors reissued and redesignated certain transferred regulations of 
the former OTS as FDIC regulations. When these transferred OTS 
regulations were published as new FDIC regulations in the Federal 
Register on August 5, 2011,\3\ the FDIC specifically noted that it 
would evaluate the transferred OTS regulations and might later 
incorporate them into other FDIC rules, amend them, or rescind them, as 
appropriate.
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    \3\ 76 FR 47652 (Aug. 5, 2011).
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II. Part 390 Subpart J: Fiduciary Powers of State Savings Associations

    The OTS regulation formerly found at 12 CFR 550.10(b)(1), which 
covered the fiduciary powers (also known as trust powers) of State 
savings associations, was transferred to the FDIC with only nominal 
changes and is now found in the FDIC's rules at 12 CFR part 390, 
subpart J (Subpart J). Subpart J provides that a State savings 
association must conduct its fiduciary operations in accordance with 
applicable State law and must exercise its fiduciary powers in a safe 
and sound manner.

III. State Nonmember Banks and Trust Powers

    Unlike the explicit requirement applicable to State savings 
associations in Subpart J, there is no express rule requiring State 
nonmember banks to conduct fiduciary operations in accordance with 
applicable State law and to exercise their fiduciary powers in a safe 
and sound manner. However, the FDIC has long recognized that State 
nonmember banks, like State savings associations, must comply with 
State law when exercising trust or fiduciary powers.\4\ This reflects a 
widely

[[Page 60334]]

understood industry principle that the trust powers of State chartered 
institutions are granted under State law and are primarily administered 
by the State chartering authority.\5\
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    \4\ FDIC Trust Examination Manual, http://www.fdic.gov/regulations/examinations/trustmanual/section_10/section_x.html#B1. 
(The trust powers of State nonmember banks are granted under State 
law and the administration of trust powers primarily rests with the 
State as a State nonmember bank's chartering authority.).
    \5\ Id.
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    State nonmember banks are generally required to file an application 
for consent to exercise trust powers.\6\ Therefore, if a State 
nonmember bank seeks to change the nature of its current business to 
include trust activities, section 333.2 requires the bank to obtain the 
FDIC's prior written consent.\7\ Under section 333.101(b), however, 
prior written consent is not required when a State nonmember bank seeks 
to act as trustee or custodian of certain qualified retirement, 
education, and health savings accounts, or other similar accounts in 
which the bank's duties are essentially custodial or ministerial in 
nature and the acceptance of such accounts without trust powers is not 
contrary to applicable State law.\8\
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    \6\ Banks granted trust powers by statute or charter prior to 
December 1, 1950, are considered grandfathered from the requirement 
to obtain consent to exercise trust powers. See 12 CFR 303.242(a).
    \7\ A State nonmember bank is required to obtain the FDIC's 
prior written consent before changing its general character or type 
of business. 12 CFR 333.2.
    \8\ These accounts include Individual Retirement Accounts 
(IRAs), Self-Employed Retirement Plans, Roth IRAs, Coverdell 
Education Savings Accounts, Health Savings Accounts, and other 
accounts in which: (1) The bank's duties are essentially custodial 
or ministerial in nature; (2) the bank is required to invest the 
funds from such plans only in its own time or savings deposits or in 
any other assets at the direction of the customer; and (3) the 
bank's acceptance of such accounts without trust powers is not 
contrary to applicable State law. See 12 CFR 333.101(b).
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    Section 303.242 contains application procedures that a State 
nonmember bank must follow to obtain the FDIC's prior written consent 
before engaging in trust activities.\9\ Prior to granting such consent, 
the FDIC considers whether the bank will conduct trust operations in a 
safe and sound manner, consistent with State law.
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    \9\ State nonmember banks must file an application to obtain the 
FDIC's prior written consent to exercise trust powers unless: (1) 
The bank received authority to exercise trust powers by its 
chartering authority prior to December 1, 1950; or (2) the insured 
depository institution continues to conduct trust activities 
pursuant to the authority granted to it by its chartering authority 
subsequent to a charter conversion or withdrawal from membership in 
the Federal Reserve System. 12 CFR 303.242(a).
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IV. The Proposed Rule

    On April 10, 2018, the FDIC issued a Notice of Proposed Rulemaking 
(NPR or Proposed Rule) entitled Transferred OTS Regulations Regarding 
Fiduciary Powers of State Savings Associations and Consent Requirements 
for the Exercise of Trust Powers.\10\ The NPR proposed to: (1) Rescind 
Subpart J in its entirety; (2) add a new section 333.3 explicitly 
providing that State savings associations and State nonmember banks 
must obtain the FDIC's prior written consent before exercising trust 
powers by following the procedures contained in section 303.242; (3) 
revise section 333.101 to provide that State savings associations, as 
well as State nonmember banks, are not considered to be exercising 
trust powers when acting as trustees or custodians for certain 
qualified retirement, education, and health savings accounts, or other 
similar accounts in which the bank's duties are essentially custodial 
or ministerial in nature and the acceptance of such accounts without 
trust powers is not contrary to applicable State law; and (4) revise 
section 303.242 to make its application procedures applicable to both 
State savings associations and State nonmember banks and incorporate a 
listing of documents required to be submitted with the application for 
consent to exercise trust powers.
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    \10\ 83 FR 15327 (Apr. 10, 2018).
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V. Comments

    The FDIC issued the NPR with a 60-day comment period that closed on 
June 11, 2018. The FDIC requested comments on all aspects of the 
Proposed Rule, including whether Subpart J should be retained and what 
positive or negative impacts could result from the proposed revisions 
to parts 333 and 303, including the impact on State savings 
associations not currently exercising trust powers that would need to 
obtain FDIC consent if they chose to do so in the future. The FDIC 
received no comments on the Proposed Rule. Accordingly, the FDIC is 
adopting the Proposed Rule largely as proposed, but without 
incorporating the listing of documents in section 303.242. As discussed 
further below, this change is intended to avoid unnecessary duplication 
or confusion with the existing application form and further regulatory 
revisions in the event of any future changes to the documentation 
listed on the form.

VI. Explanation of the Final Rule

    As discussed in the NPR, the FDIC concluded that the rescission of 
Subpart J would streamline the FDIC rules and regulations, and no 
comments were received on this issue. Therefore, the final rule removes 
and rescinds 12 CFR part 390, subpart J in its entirety.
    The final rule adds a new section 333.3, unchanged from the NPR, 
explicitly requiring State savings associations and State nonmember 
banks to obtain the FDIC's prior written consent before exercising 
trust powers. For State nonmember banks, section 333.3 makes explicit 
the FDIC's existing requirement that State nonmember banks receive the 
FDIC's consent before initially exercising trust powers, as such an 
action would constitute a change in the bank's general character or 
business under 12 CFR 333.2. For State savings associations, Section 
333.3 adds a new requirement to obtain the FDIC's prior written consent 
should they choose in the future to exercise trust powers granted by 
their State chartering authorities. In effect, section 333.3 makes the 
requirement to file an application consistent for both State savings 
associations and State nonmember banks.
    The final rule, like the NPR, also revises section 333.101(b) to 
permit both State savings associations and State nonmember banks to act 
as custodians for qualifying retirement, education, and health savings 
accounts, or other similar accounts without being deemed to exercise 
trust powers, and therefore without obtaining the FDIC's prior written 
consent.
    The final rule, like the NPR, makes the application procedures in 
section 303.242 applicable to both State savings associations and State 
nonmember banks. Accordingly, under section 303.242(a) of the final 
rule, neither State savings associations nor State nonmember banks are 
required to receive the FDIC's prior written consent to exercise trust 
powers when: (1) The institution received authority to exercise trust 
powers from its chartering authority prior to December 1, 1950; or (2) 
the institution continues to conduct trust activities pursuant to 
authority granted by its chartering authority subsequent to a charter 
conversion or withdrawal from membership in the Federal Reserve System. 
The NPR originally proposed to amend section 303.242 (c) to list 
specific documents typically filed as part of an application to 
exercise trust powers.\11\ Upon further consideration, the FDIC 
determined not to list these items in the final rule in order to avoid 
duplication with the items already listed in the instructions on the 
existing application form for consent to exercise trust powers and the 
need for additional, corresponding changes to section 303.242(c) to 
reflect any future updates to the existing

[[Page 60335]]

form.\12\ Accordingly, the final rule does not change section 
303.242(c), which continues to provide that the required filing shall 
consist of the completed application form.\13\
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    \11\ 83 FR 15327, 15320.
    \12\ FDIC, Application for Consent to Exercise Trust Powers, 
https://www.fdic.gov/formsdocuments/6200-09.pdf.
    \13\ 12 CFR 303.242(c).
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VII. Regulatory Process

A. The Paperwork Reduction Act

    Certain provisions of the final rule contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act (PRA) of 1995, codified at 44 U.S.C. 3501-3521. In 
accordance with the PRA, the FDIC may not conduct or sponsor, and the 
respondent is not required to respond to, an information collection 
unless it displays a currently valid Office of Management and Budget 
(OMB) control number. The OMB control number for this collection of 
information is 3064-0025.\14\ As required by the PRA and OMB 
implementing regulations (5 CFR part 1320), when the NPR was published, 
the FDIC submitted the information collection requirements contained in 
this final rulemaking to OMB for review and approval. OMB filed its 
Notice of Action preapproving this submission on May 16, 2018.
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    \14\ The information collection for Application for Consent to 
Exercise Trust Powers, OMB No. 3064-0025, was renewed by OMB on 
August 30, 2017, and now expires on August 31, 2020.
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    The final rule, like the NPR, would rescind and remove Part 390, 
Subpart J from Title 12 of the Code of Federal Regulations, amend Parts 
303 and 333 to clarify the existing consent requirements for State 
nonmember banks, and incorporate references to State savings 
associations into those parts. These changes would not add additional 
burden to the FDIC's current information collection under OMB control 
number 3064-0025, Application for Consent to Exercise Trust Powers. 
However, the revision of Parts 303 and 333 to include State savings 
associations as potential filers would add additional burden to the 
FDIC's current information collection under OMB control number 3064-
0025, as State savings associations would be required to complete the 
designated application and submit required documentation to comply with 
Parts 303 and 333. Currently, there are a total of forty one State 
savings associations. There is only one State savings association 
currently exercising trust powers, so there are forty State savings 
associations that would potentially need to seek the FDIC's consent 
pursuant to the proposed revisions to Parts 303 and 333 before 
exercising trust powers.\15\
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    \15\ Call Report Data, June 2018.
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    In the NPR, the FDIC proposed to revise this information collection 
as follows:
    Title: Application for Consent to Exercise Trust Powers.
    OMB Number: 3064-0025.
    Form Number: FDIC 6200/09.
    Affected Public: Insured State nonmember banks and insured State 
savings associations wishing to exercise trust powers.

----------------------------------------------------------------------------------------------------------------
                                                    Estimated       Estimated                      Total annual
                                Type of burden      number of       hours per      Frequency of      estimated
                                                   respondents      response         response     burden (hours)
----------------------------------------------------------------------------------------------------------------
Eligible depository            Reporting.......               9               8  On Occasion....              72
 institutions.
Not-eligible depository        Reporting.......               4              24  On Occasion....              96
 institutions.
                                                ----------------------------------------------------------------
    Totals...................  ................              13  ..............  ...............             168
----------------------------------------------------------------------------------------------------------------

    The FDIC did not receive any comments on its proposed revisions to 
this information collection. Accordingly, the information collection 
revisions are adopted as proposed in the NPR and replicated in the 
chart above.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \16\ requires that, in 
connection with a final rulemaking, an agency prepare and make 
available for public comment a final regulatory flexibility analysis 
that describes the impact of the proposed rule on small entities 
(defined in regulations promulgated by the United States Small Business 
Administration to include banking organizations with total assets of 
less than or equal to $550 million). However, a 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.\17\ As 
discussed above and in the NPR, the FDIC has authority to issue, modify 
and rescind regulations as the appropriate Federal banking agency for 
State savings associations and State nonmember banks. In addition to 
the approach taken in the NPR and final rule, the FDIC also considered 
the alternative of maintaining the status quo, which would have 
retained the separate regulatory regimes for State savings associations 
and State non-member banks.
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    \16\ 5 U.S.C. 601 et seq.
    \17\ The FDIC supervises 3,675institutions, of which 2,850 are 
``small entities'' according to the terms of RFA. There are 2,832 
small state non-member banks and 38 small state savings 
associations. See Call Report Data, June 2018.
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    The final rule amends part 333 to state that both State savings 
associations and State nonmember banks seeking to exercise trust powers 
must obtain FDIC consent. The final rule is not expected to impact 
State nonmember banks, as it results in no substantive changes for 
those institutions. Prior to the final rule, State nonmember banks were 
subject to the longstanding interpretation that the initial exercise of 
trust powers granted by a chartering authority constituted a change in 
the character of the bank's business under 12 CFR 333.2, and thereby 
required the FDIC's prior written approval. The final rule clarifies 
this issue by explicitly stating the longstanding requirement that 
State nonmember banks obtain the FDIC's prior written approval before 
exercising trust powers for the first time.
    As discussed above, the revisions to part 333 require a filing by 
those State savings associations that seek to exercise trust powers in 
the future. However, a State savings association's application for the 
FDIC's consent to exercise trust powers would be a one-time process 
that is not anticipated to create a significant economic impact. The 
information requested on the application form would require a State 
savings association to identify the type of trust power it seeks to 
exercise and to provide documentation that includes

[[Page 60336]]

proof of the adoption of the FDIC's Statement of Principles of Trust 
Department Management, identification of the applicable trust officer, 
trust committee, trust counsel, servicing arrangements, proof of the 
requisite approvals by the appropriate State authority, a projection of 
the proposed trust activity's three-year performance, and a statement 
of its impact on the applicant.\18\
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    \18\ FDIC 6200/09 (10-05).
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    Based on the FDIC's supervisory experience, most of the 
documentation required, such as State approval, servicing arrangements, 
and designation of personnel to serve as appropriate trust counsel, 
trust officer, and trust committee directors, is based on information 
and resources that a State savings association applicant would already 
possess or have to establish in order to exercise trust powers, 
regardless of whether it seeks the FDIC's prior written consent. 
Submitting existing information is not expected to create significant, 
additional expenses for a State savings association seeking the FDIC's 
prior written consent to exercise trust powers. The FDIC estimates that 
it will receive relatively few applications, given the small overall 
number of State savings associations (40) that would be affected by the 
rule if they sought to exercise trust powers. In addition, no comments 
were received pertaining to the RFA discussion in the NPR.
    For these reasons, the FDIC certifies that the final rule would not 
have a significant economic impact on a substantial number of small 
entities, within the meaning of those terms as used in the RFA. 
Accordingly, a regulatory flexibility analysis is not required.

C. Small Business Regulatory Enforcement Fairness Act

    The OMB 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).\19\ As required by SBREFA, the FDIC will 
submit the final rule and other appropriate reports to Congress and the 
Government Accountability Office for review.
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    \19\ 5 U.S.C. 801 et seq.
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D. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \20\ 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 no comments were received, the FDIC has sought to 
present the final rule in a simple and straightforward manner.
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    \20\ Public Law 106-102, section 722, 113 Stat. 1338, 1471 
(1999).
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E. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\21\ in determining the effective 
date and administrative compliance requirements for a new regulation 
that imposes additional reporting, disclosure, or other requirements on 
insured depository institutions, each Federal banking agency must 
consider, consistent with principles of safety and soundness and the 
public interest, any administrative burdens that such regulations would 
place on depository institutions, including small depository 
institutions, and customers of depository institutions, as well as the 
benefits of such regulations. In addition, section 302(b) of RCDRIA 
requires new regulations and amendments to regulations that impose 
additional reporting, disclosure, or other new requirements on insured 
depository institutions generally to take effect on the first day of a 
calendar quarter that begins on or after the date on which the 
regulations are published in final form.\22\
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    \21\ 12 U.S.C. 4802(a).
    \22\ 12 U.S.C. 4802.
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    In accordance with these provisions, the FDIC considered any 
administrative burdens, as well as benefits, that the final rule would 
place on depository institutions and their customers in determining the 
effective date and administrative compliance requirements of the final 
rule. The final rule imposes a new requirement on State savings 
associations to obtain the FDIC's consent before exercising trust 
powers granted by State chartering authorities and, in accordance with 
RCDRIA and the Administrative Procedure Act,\23\ will be effective no 
earlier than the first day of the calendar quarter that is at least 30 
days following the date on which the final rule is published in the 
Federal Register. However, as discussed above, the application 
primarily requires submission of pre-existing documentation and is not 
expected to be burdensome for depository institutions or their 
customers. The final rule also provides greater clarity to FDIC-
supervised institutions and results in greater consistency in the 
application process.
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    \23\ 5 U.S.C. 553(d).
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F. 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 ten years in order to identify any 
outdated or otherwise unnecessary regulations imposed on insured 
institutions.\24\ The FDIC, along with the other Federal banking 
agencies, submitted a Joint Report to Congress on March 21, 2017 
(EGRPRA Report), discussing how the review was conducted, what has been 
done to date to address regulatory burden, and further measures to 
address issues identified during the review process. As noted in the 
EGRPRA Report, the FDIC is continuing to streamline and clarify its 
regulations through the OTS rule integration process. By removing 
outdated or unnecessary regulations, such as Subpart J, and amending 
Parts 303 and 333, this rule complements other actions the FDIC has 
taken, separately and with the other Federal banking agencies, to 
further the EGRPRA mandate.
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    \24\ Public Law 104-208, 110 Stat. 3009 (1996).
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List of Subjects

12 CFR Part 303

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

12 CFR Part 333

    Banks, banking, Corporate powers, Savings associations, Trusts and 
trustees.

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 308, 333, and 390 as follows:

PART 303--FILING PROCEDURES

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


[[Page 60337]]


    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, 5415 and 15 
U.S.C. 1601-1607.

0
2. Revise Sec.  303.242 to read as follows:


Sec.  303.242  Exercise of trust powers.

    (a) Scope. This section contains the procedures to be followed by a 
State nonmember bank or State savings association that seeks to obtain 
the FDIC's prior written consent to exercise trust powers. The FDIC's 
prior written consent to exercise trust powers is not required in the 
following circumstances:
    (1) Where a State nonmember bank or State savings association 
received authority to exercise trust powers from its chartering 
authority prior to December 1, 1950; or
    (2) Where the institution continues to conduct trust activities 
pursuant to authority granted by its chartering authority subsequent to 
a charter conversion or withdrawal from membership in the Federal 
Reserve System.
    (b) Where to file. Applicants shall submit to the appropriate FDIC 
office a completed form, ``Application for Consent to Exercise Trust 
Powers.'' This form may be obtained from any FDIC regional director.
    (c) Content of filing. The filing shall consist of the completed 
trust application form.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in Sec.  303.2(r) will be acknowledged in 
writing by the FDIC and will receive expedited processing, unless the 
applicant is notified in writing to the contrary and provided with the 
basis for that decision. The FDIC may remove an application from 
expedited processing for any of the reasons set forth in Sec.  
303.11(c)(2.). Absent such removal, an application processed under 
expedited procedures will be deemed approved 30 days after the FDIC's 
receipt of a substantially complete application.
    (f) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.

PART 333--EXTENSION OF CORPORATE POWERS

0
3. The authority citation for part 333 is revised to read as follows:

    Authority:  12 U.S.C. 1816; 1817(i); 1818; 1819(a) (``Seventh'', 
``Eighth'', and ``Tenth''), 1828, 1828(m), 1831p-1(c), 5414 and 
5415.

0
4. Add Sec.  333.3 to read as follows:


Sec.  333.3  Consent required for exercise of trust powers.

    Except as provided in 12 CFR 303.242(a), a State nonmember bank or 
State savings association seeking to exercise trust powers must obtain 
prior written consent from the FDIC. Procedures for obtaining the 
FDIC's prior written consent are set forth in 12 CFR 303.242.

0
5. Revise Sec.  333.101(b) to read as follows:


Sec.  333.101  Prior consent not required.

* * * * *
    (b) An insured State nonmember bank or State savings association, 
not exercising trust powers, may act as trustee or custodian of 
Individual Retirement Accounts established pursuant to the Employee 
Retirement Income Security Act of 1974 (26 U.S.C. 408), Self-Employed 
Retirement Plans established pursuant to the Self-Employed Individuals 
Retirement Act of 1962 (26 U.S.C. 401), Roth Individual Retirement 
Accounts and Coverdell Education Savings Accounts established pursuant 
to the Taxpayer Relief Act of 1997 (26 U.S.C. 408A and 530 
respectively), Health Savings Accounts established pursuant to the 
Medicare Prescription Drug Improvement and Modernization Act of 2003 
(26 U.S.C. 223), and other similar accounts without the prior written 
consent of the Corporation provided:
    (1) The bank's or savings association's duties as trustee or 
custodian are essentially custodial or ministerial in nature,
    (2) The bank or savings association is required to invest the funds 
from such plans only
    (i) In its own time or savings deposits, or
    (ii) In any other assets at the direction of the customer, provided 
the bank or savings association does not exercise any investment 
discretion or provide any investment advice with respect to such 
account assets, and
    (3) The bank's or savings association's acceptance of such accounts 
without trust powers is not contrary to applicable State law.

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

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

    Authority: 12 U.S.C. 1819.

Subpart J--[Removed and reserved]

0
7. Remove and reserve subpart J, consisting of Sec.  390.190.

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

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2018-25659 Filed 11-23-18; 8:45 am]
BILLING CODE 6714-01-P