[Federal Register Volume 86, Number 53 (Monday, March 22, 2021)]
[Rules and Regulations]
[Pages 15076-15081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05443]


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DEPARTMENT OF TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3 and 5

[Docket ID OCC-2021-0002]
RIN 1557-AF09

FEDERAL RESERVE SYSTEM

12 CFR Part 217

[Regulation Q; Docket No. R-1741 ]
RIN 7100-AG11

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 324

RIN 3064-AF73


Regulatory Capital Rule: Emergency Capital Investment Program

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); and Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Interim final rule; request for public comment.

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SUMMARY: In order to support and facilitate the timely implementation 
and acceptance of the Congressionally authorized Emergency Capital 
Investment Program (ECIP) for the Department of the Treasury to make 
capital investments in low- and moderate-income community financial 
institutions, the OCC, Board, and FDIC (together, the agencies) are 
issuing an interim final rule that provides that preferred stock issued 
under ECIP qualifies as additional tier 1 capital and that subordinated 
debt issued under ECIP qualifies as tier 2 capital under the agencies' 
capital rule.

DATES: This rule is effective on March 22, 2021. Comments must be 
received on or before May 21, 2021.

ADDRESSES: 
    OCC: Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal, if possible. Please use the title 
``Amendments to the Capital Rule to Facilitate the Emergency Capital 
Investment Program'' to facilitate the organization and distribution of 
the comments. You may submit comments by any of the following methods:
    Federal eRulemaking Portal: Go to https://www.regulations.gov/. 
Enter ``Docket ID OCC-2021-0002'' in the Search Box and click 
``Search.'' Public comments can be submitted via the ``Comment'' box 
below the displayed document information or by clicking on the document 
title and then clicking the ``Comment'' box on the top-left side of the 
screen. For help with submitting effective comments please click on 
``View Commenter's Checklist.'' For assistance with the Regulations.gov 
site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
Friday, 9am-5pm ET or email [email protected].
    Mail: Chief Counsel's Office, Attn: Comment Processing, Office of 
the Comptroller of the Currency, 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
    Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, Washington, 
DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2021-0002'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website without change, including any business or 
personal information provided such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this action by the following method:
    Go to https://www.regulations.gov/. Enter ``Docket ID OCC-2021-
0002'' in the Search box and click ``Search.'' Click on the 
``Documents'' tab and then the document's title. After clicking the 
document's title, click the ``Browse Comments'' tab. Comments can be 
viewed and filtered by clicking on the ``Sort By'' drop-down on the 
right side of the screen or the ``Refine Results'' options on the left 
side of the screen. Supporting materials can be viewed by clicking on 
the ``Documents'' tab and filtered by clicking on the ``Sort By'' drop-
down on the right side of the

[[Page 15077]]

screen or the ``Refine Documents Results'' options on the left side of 
the screen. For assistance with the Regulations.gov site, please call 
(877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 9 a.m.-5 
p.m. ET or email [email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.
    Board: You may submit comments, identified by Docket No. R-1741 and 
RIN No. 7100-AG11, by any of the following methods:
    Agency Website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
    Email: [email protected]. Include docket number and 
RIN in the subject line of the message.
    Fax: (202) 452-3819 or (202) 452-3102.
    Mail: Ann E. Misback, Secretary, Board of Governors of the Federal 
Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 
20551.
    All public comments are available from the Board's website at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove sensitive 
personally identifiable information at the commenter's request. Public 
comments may also be viewed electronically or in paper form in Room 
3515, 1801 K Street NW, Washington, DC 20006 between 9:00 a.m. and 5:00 
p.m. on weekdays.
    FDIC: You may submit comments using any of the following methods:
    Agency Website: https://www.fdic.gov/regulations/laws/federal. 
Follow the instructions for submitting comments on the agency website.
    Email: [email protected]. Include RIN 3064-AF73 on the subject line 
of the message.
    Mail: James P. Sheesley, Assistant Executive Secretary, Attention: 
Comments RIN 3064-AF73, Federal Deposit Insurance Corporation, 550 17th 
Street NW, Washington, DC 20429.
    Hand Delivery: Comments may be hand delivered to the guard station 
at the rear of the 550 17th Street NW building (located on F Street) on 
business days between 7 a.m. and 5 p.m.
    Public Inspection: All comments received, including any personal 
information provided, will be posted generally without change to 
https://www.fdic.gov/regulations/laws/federal.

FOR FURTHER INFORMATION CONTACT: 
    OCC: Margot Schwadron, Director, or Andrew Tschirhart, Risk Expert, 
Capital Policy, (202) 649-6370; or Carl Kaminski, Special Counsel, or 
Daniel Perez, Counsel, Chief Counsel's Office, (202) 649-5490, Office 
of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 
20219.
    Board: Constance Horsley, Deputy Associate Director, (202) 452-
5239, Naima Jefferson, Lead Financial Institution Policy Analyst, (202) 
912-4613, Senait Kahsay, Senior Financial Institution Policy Analyst 
II, (202) 245-4209, Eusebius Luk, Senior Financial Institution Policy 
Analyst I, (202) 452-2874, Division of Supervision and Regulation; 
Benjamin McDonough, Associate General Counsel, (202) 452-2036, Mark 
Buresh, Senior Counsel, (202) 452-5270, Mary Watkins, Counsel, (202) 
452-3722, Legal Division, Board of Governors of the Federal Reserve 
System, 20th and C Streets NW, Washington, DC 20551.
    FDIC: Benedetto Bosco, Chief, Capital Policy Section, 
[email protected]; Noah Cuttler, Senior Policy Analyst, 
[email protected]; [email protected]; Capital Markets Branch, 
Division of Risk Management Supervision, (202) 898-6888; Gregory Feder, 
Counsel, [email protected]; Suzanne Dawley, Counsel, [email protected]; 
Francis Kuo, Counsel, [email protected]; Amanda Ledig, Attorney, 
[email protected]; Supervision and Legislation Branch, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, 
DC 20429. For the hearing impaired only, Telecommunication Device for 
the Deaf (TDD), (800) 925-4618.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Discussion
III. Request for Comment
IV. Administrative Law Matters
    A. Administrative Procedure Act
    B. Congressional Review Act
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Riegle Community Development and Regulatory Improvement Act 
of 1994
    F. Unfunded Mandates Reform Act of 1995
    G. Use of Plain Language

I. Background

    On December 27, 2020, the Consolidated Appropriations Act, 2021,\1\ 
was signed into law and added a new Section 104A to the Community 
Development Banking and Financial Institutions Act of 1994 (the Act). 
Section 104A of the Act authorizes the Secretary of the Treasury to 
establish the Emergency Capital Investment Program (ECIP or Program) 
through which the Department of the Treasury (Treasury) can make 
capital investments in certain low- and moderate-income community 
financial institutions. The Act states that the purpose of these 
capital investments is to support the efforts of low- and moderate-
income community financial institutions to, among other things, provide 
loans, grants, and forbearance for small businesses, minority-owned 
businesses, and consumers in low-income and underserved communities, 
including persistent poverty counties, which may be disproportionately 
impacted by the economic effects of the Coronavirus 2019 (COVID-19) 
event.\2\ Treasury's authority to make capital investments under ECIP 
is time limited. The Program will end six months after the date on 
which the national emergency concerning the COVID-19 outbreak 
terminates.\3\
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    \1\ Public Law 116-260.
    \2\ Id.
    \3\ Id.
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    Under ECIP, a financial institution is generally eligible to 
receive capital investments from Treasury if it is a low- and moderate-
income community financial institution, which is defined by the Act to 
include any financial institution that is (1) a community development 
financial institution or minority depository institution,\4\ and (2) an 
insured depository institution, bank holding company, savings and loan 
holding company, or federally insured credit union (collectively, 
eligible banking organizations).
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    \4\ The terms ``Community Development Financial Institution'' 
and ``Minority Depository Institution'' are defined in section 104A 
of the Act.
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    Under ECIP, Treasury can acquire senior preferred stock from 
eligible banking organizations (Senior Preferred Stock). Additionally, 
if the Secretary of the Treasury determines that an eligible banking 
organization cannot feasibly issue preferred stock, such as a bank 
organized as an S corporation \5\ or mutual banking organization, 
Treasury can acquire subordinated debt instruments (Subordinated Debt) 
from such an eligible banking organization.\6\ Under the Act, Treasury 
is required to seek to establish the terms of preferred stock issued 
under ECIP to enable such instruments to qualify as tier 1 capital 
under the respective capital rule of the OCC, Board, and FDIC 
(together, the agencies).\7\
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    \5\ An S corporation is corporation that has elected Subchapter 
S corporation status under the Internal Revenue Code.
    \6\ Section 104A(d)(5)(B) of the Act.
    \7\ Section 104A(f) of the Act.
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    On March 4, 2021, Treasury published the terms of the Senior

[[Page 15078]]

Preferred Stock and Subordinated Debt.\8\ As described in the terms 
published by Treasury, Senior Preferred Stock issued under ECIP will be 
noncumulative, perpetual preferred stock that is senior to the issuer's 
common stock and pari passu with (or, in some cases, senior to) the 
issuer's most senior class of existing preferred stock. Subordinated 
Debt issued under ECIP will be unsecured subordinated debt. The 
Subordinated Debt will rank junior to all other debt of the issuer 
except that it will rank senior to mutual capital certificates or 
similar instruments issued by a mutual banking organization and to any 
equity instruments issued by an S corporation.
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    \8\ The term sheets for the Senior Preferred Stock and 
Subordinated Debt may be found on Treasury's website. For a complete 
description of the terms of the instruments, see https://home.treasury.gov/policy-issues/cares/emergency-capital-investment-program.
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    Under the terms of Senior Preferred Stock, participating eligible 
banking organizations will not be required to pay dividends until two 
years after issuance of the Senior Preferred Stock, and then will be 
subject to a noncumulative dividend with a rate not to exceed 2 percent 
that may fluctuate based on certain lending growth criteria applied to 
the issuer. A participating eligible banking organization is prohibited 
from paying dividends under certain circumstances, including if the 
participating eligible banking organization determines that the payment 
would be detrimental to the financial health of the institution. Under 
the terms of the Subordinated Debt, interest payments on the 
Subordinated Debt would be subject to determinants and constraints 
similar to those described above, but the interest payments would be 
cumulative and deferrable.
    The Act requires Treasury to establish restrictions on executive 
compensation, share buybacks, and dividend payments for issuers of 
capital instruments issued under ECIP, as well as restrictions on 
conflicts of interest.\9\ The Act permits Treasury to establish other 
terms and conditions for participation in ECIP. On March 4, 2021, 
Treasury issued an interim final rule that established restrictions on 
executive compensation, capital distributions, and luxury expenditures 
for ECIP.\10\
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    \9\ Section 104A(h) of the Act.
    \10\ See Emergency Capital Investment Program--Restrictions on 
Executive Compensation, Share Buybacks, and Dividends, https://home.treasury.gov/system/files/136/ECIP-interim-final-rule.pdf.
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II. Discussion

    The Senior Preferred Stock and Subordinated Debt will feature 
characteristics that are similar to those of instruments that qualify 
under the agencies' capital rule as additional tier 1 capital and tier 
2 capital, respectively. As discussed above, the Act directs the 
Secretary of the Treasury to seek to establish the terms of the Senior 
Preferred Stock to enable these instruments to receive ``Tier 1'' 
capital treatment. Further, the establishment of ECIP and the capital 
investments being made thereunder help support the efforts of low- and 
moderate-income community financial institutions to provide financial 
intermediary services in low-income and underserved communities. To 
facilitate implementation of ECIP, the agencies are revising the 
capital rule to provide that the Senior Preferred Stock will qualify as 
additional tier 1 capital and Subordinated Debt will qualify as tier 2 
capital.11 12 These revisions are based on the terms and 
conditions of the Senior Preferred Stock and Subordinated Debt provided 
in the Senior Preferred Stock term sheet and the Subordinated Debt term 
sheet published by the U.S. Department of the Treasury on March 4, 
2021. If the terms and conditions for the Senior Preferred Stock or 
Subordinated Debt are modified in the future such that they differ 
materially from the terms and conditions provided in the term sheets, 
the agencies may reevaluate whether such capital treatment remains 
appropriate.
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    \11\ See 12 CFR 3.20 (OCC); 12 CFR 217.20 (Board); 12 CFR 324.20 
(FDIC).
    \12\ Certain small bank holding companies and savings and loan 
holdings companies are subject to the Board's Small Bank Holding 
Company and Savings and Loan Holding Company Policy Statement (12 
CFR part 225, app. C) rather than the Board's capital rule. The 
Policy Statement requires subject companies to maintain specified 
debt-to-equity ratios and specifies how certain types of debt 
instruments and preferred stock instruments are to be included for 
purposes of the debt-to-equity ratios. For purposes of the Policy 
Statement, Senior Preferred Stock issued under ECIP is redeemable 
preferred stock, which is subject to certain limitations under the 
Policy Statement, and Subordinated Debt issued under ECIP is debt.
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    In addition, the OCC is adding language to its licensing rule, 
which sets forth certain requirements applicable to subordinated debt 
issued by a national bank. Paragraph (d)(2) of section 5.47 prohibits a 
national bank from including in a subordinated debt note any provision 
or covenant that unduly restricts or otherwise acts to unduly limit the 
authority of a national bank or interferes with the OCC's supervision 
of the national bank. To facilitate the ability of a national bank to 
issue subordinated debt through ECIP, the OCC is adding new paragraph 
(j) to section 5.47. This new paragraph clarifies that provisions and 
covenants added to a subordinated debt document pursuant to 
requirements imposed by the Treasury Department for purposes of ECIP 
will not be considered, under paragraph (d)(2) of section 5.47, to 
unduly restrict or otherwise act to unduly limit the authority of a 
national bank or interfere with the OCC's supervision of the national 
bank.

III. Request for Comment

    The agencies seek comment on all aspects of this interim final 
rule. In particular, the agencies seek comment on the regulatory 
capital treatment of the Senior Preferred Stock and Subordinated Debt 
issued under ECIP and on the following specific question:
    Question: For banking organizations subject to the Board's Small 
Bank Holding Company and Savings and Loan Holding Company Policy 
Statement, what are the advantages and disadvantages of including 
Senior Preferred Stock as equity and Subordinated Debt as debt for 
purposes of meeting the debt-to-equity ratio? What are the advantages 
and disadvantages of including Senior Preferred Stock subject to the 
limits described in the Policy Statement as redeemable preferred stock? 
What are the advantages and disadvantages of excluding Subordinated 
Debt from debt for purposes of the debt-to-equity ratio?

IV. Administrative Law Matters

A. Administrative Procedure Act

    The agencies are issuing the interim final rule without prior 
notice and the opportunity for public comment and the 30-day delayed 
effective date ordinarily prescribed by the Administrative Procedure 
Act (APA).\13\ Pursuant to section 553(b)(B) of the APA, general notice 
and the opportunity for public comment are not required with respect to 
a rulemaking when an ``agency for good cause finds (and incorporates 
the finding and a brief statement of reasons therefore in the rules 
issued) that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' \14\
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    \13\ 5 U.S.C. 553.
    \14\ 5 U.S.C. 553(b)(B).
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    As discussed above, the purpose of capital investments made under 
ECIP is to support the efforts of low- and moderate-income community 
financial institutions and the communities they serve, which may be 
disproportionately impacted by the economic effects of the COVID-19 
event. The Act also requires Treasury to seek to establish the terms of 
senior preferred stock instruments issued under the Program such that 
these instruments would be considered

[[Page 15079]]

additional tier 1 capital under the agencies' capital rule.
    The agencies believe that the public interest is best served by 
implementing the interim final rule immediately upon publication in the 
Federal Register. The interim final rule will facilitate implementation 
of ECIP by providing certainty that the Senior Preferred Stock may be 
included in additional tier 1 capital and Subordinated Debt may be 
included in tier 2 capital under the capital rule. As noted above, 
Treasury's authority to make new capital investments in ECIP will end 
six months after the date on which the national emergency concerning 
the COVID-19 outbreak declared by the President on March 13, 2020, 
under the National Emergencies Act terminates.\15\ For these reasons, 
the agencies find that there is good cause consistent with the public 
interest to issue the rule without advance notice and comment.\16\
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    \15\ Public Law 116-260.
    \16\ 5 U.S.C. 553(b)(B).
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    The APA also requires a 30-day delayed effective date, except for 
(1) substantive rules that grant or recognize an exemption or relieve a 
restriction; (2) interpretative rules and statements of policy; or (3) 
as otherwise provided by the agency for good cause.\17\ Because the 
interim final rule relieves a restriction, the interim final rule is 
exempt from the APA's delayed effective date requirement.\18\
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    \17\ 5 U.S.C. 553(d).
    \18\ 5 U.S.C. 553(d)(1).
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    In addition, the agencies find good cause to publish the interim 
final rule with an immediate effective date for the same reasons set 
forth above under the discussion of section 553(b)(B) of the APA. While 
the agencies believe that there is good cause to issue the interim 
final rule without advance notice and comment and with an immediate 
effective date, as noted, the agencies are interested in the views of 
the public on all aspects of the interim final rule.

B. Congressional Review Act

    For purposes of Congressional Review Act (CRA), the Office of 
Management and Budget (OMB) makes a determination as to whether a final 
rule constitutes a ``major'' rule.\19\ If a rule is deemed a ``major 
rule'' by the OMB, the CRA generally provides that the rule may not 
take effect until at least 60 days following its publication.\20\
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    \19\ 5 U.S.C. 801 et seq.
    \20\ 5 U.S.C. 801(a)(3).
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    The CRA defines a ``major rule'' as any rule that the Administrator 
of the Office of Information and Regulatory Affairs of the OMB finds 
has resulted in or is likely to result in (A) an annual effect on the 
economy of $100,000,000 or more; (B) a major increase in costs or 
prices for consumers, individual industries, Federal, State, or local 
government agencies or geographic regions; or (C) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export markets.
    For the same reasons set forth above, the agencies are adopting the 
interim final rule without the delayed effective date generally 
prescribed under the CRA. The delayed effective date required by the 
CRA does not apply to any rule for which an agency for good cause finds 
(and incorporates the finding and a brief statement of reasons therefor 
in the rule issued) that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.\21\
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    \21\ 5 U.S.C. 808.
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    As required by the CRA, the agencies will submit the interim final 
rule and other appropriate reports to Congress and the Government 
Accountability Office for review.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) states that no agency may 
conduct or sponsor, nor is the respondent required to respond to, an 
information collection unless it displays a currently valid OMB control 
number.\22\ The agencies have reviewed this interim final rule and have 
determined that this interim final rule does not introduce any new 
information collections or revise any existing information collections 
pursuant to the PRA for the agencies. In addition, the Board has 
reviewed this interim final rule pursuant to authority delegated by 
OMB. Therefore, no submissions will be made by the agencies to OMB for 
review.
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    \22\ 44 U.S.C. 3501-3521.
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D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \23\ requires an agency to 
consider whether the rules it proposes will have a significant economic 
impact on a substantial number of small entities.\24\ The RFA applies 
only to rules for which an agency publishes a general notice of 
proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed 
previously, consistent with section 553(b)(B) of the APA, the agencies 
have determined for good cause that general notice and opportunity for 
public comment is unnecessary, and therefore the agencies are not 
issuing a notice of proposed rulemaking. Accordingly, the agencies have 
concluded that the RFA's requirements relating to initial and final 
regulatory flexibility analysis do not apply.
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    \23\ 5 U.S.C. 601 et seq.
    \24\ Under regulations issued by the Small Business 
Administration, a small entity includes a depository institution, 
bank holding company, or savings and loan holding company with total 
assets of $600 million or less and trust companies with total assets 
of $41.5 million or less. See 13 CFR 121.201.
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    Nevertheless, the agencies seek comment on whether, and the extent 
to which, the interim final rule would affect a significant number of 
small entities.

E. Riegle Community Development and Regulatory Improvement Act of 1994

    Section 302(a) of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (RCDRIA) \25\ requires that each federal 
banking agency, in determining the effective date and administrative 
compliance requirements for new regulations that impose 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 regulations would place on depository 
institutions, including small depository institutions, and customers of 
depository institutions, as well as the benefits of such regulations.
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    \25\ 12 U.S.C. 4802(a).
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    In addition, section 302(b) of RCDRIA requires new regulations and 
amendments to regulations that impose additional reporting, 
disclosures, 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.\26\ The agencies have determined that the 
final rule would not impose additional reporting, disclosure, or other 
requirements; therefore, the requirements of the RCDRIA do not apply.
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    \26\ 12 U.S.C. 4802.
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F. Unfunded Mandates Reform Act of 1995

    The OCC analyzes proposed rules for the factors listed in Section 
202 of the Unfunded Mandates Reform Act of 1995 before promulgating a 
final rule for which a general notice of proposed rulemaking was 
published.\27\ As

[[Page 15080]]

discussed above, the OCC has determined that publication of a general 
notice of proposed rulemaking is not in the public interest.
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    \27\ 2 U.S.C. 1532.
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G. Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \28\ requires the Federal 
banking agencies to use plain language in all proposed and final rules 
published after January 1, 2000. In light of this requirement, the 
agencies have sought to present the interim final rule in a simple and 
straightforward manner and invite comment on the use of plain language. 
For example:
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    \28\ Public Law 106-102, 113 Stat. 1338, 1471, 12 U.S.C. 4809.
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     Is the material organized to suit your needs? If not, how 
could the agencies present the interim final rule more clearly?
     Are the requirements in the interim final rule clearly 
stated? If not, how could the interim final rule be more clearly 
stated?
     Does the interim final rule contain technical language or 
jargon that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the interim final rule easier to 
understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the agencies incorporate to make 
the interim final rule easier to understand?

List of Subjects

12 CFR Part 3

    Administrative practice and procedure, Capital, National banks, 
Risk.

12 CFR Part 5

    Administrative practice and procedure, Federal savings 
associations, National banks, Reporting and recordkeeping requirements, 
Securities.

12 CFR Part 217

    Administrative practice and procedure, Banks, Banking, Capital, 
Federal Reserve System, Holding companies.

12 CFR Part 324

    Administrative practice and procedure, Banks, Banking, Confidential 
business information, Investments, Reporting and recordkeeping 
requirements, Savings associations.

Department of the Treasury

Office of the Comptroller of the Currency

Authority and Issuance

    For the reasons stated in the joint preamble, the Office of the 
Comptroller of the Currency amends chapter I of Title 12 of the Code of 
Federal Regulations as follows:

PART 3--CAPITAL ADEQUACY STANDARDS

0
1. The authority citation for part 3 continues to read as follows:

    Authority:  12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and 
Pub. L. 116-136, 134 Stat. 281.


0
2. Section 3.20 is amended by:
0
a. Redesignating footnotes 11 through 15 as footnotes 1 through 5, 
footnote 16 as footnote 7, and footnotes 17 through 20 as footnotes 8 
through 11, respectively;
0
b. Redesignating paragraph (c)(3) as paragraph (c)(3)(i);
0
c. Adding paragraph (c)(3)(ii);
0
d. Redesignating paragraph (d)(4) as paragraph (d)(4)(i); and
0
e. Adding paragraph (d)(4)(ii).
    The additions and revisions read as follows:


Sec.  3.20   Capital components and eligibility criteria for regulatory 
capital instruments.

* * * * *
    (c) * * *
    (3) * * *
    (ii) Any preferred stock instruments issued under the U.S. 
Department of the Treasury's Emergency Capital Investment Program 
pursuant to section 104A of the Community Development Banking and 
Financial Institutions Act of 1994, added by the Consolidated 
Appropriations Act, 2021.\6\
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    \6\ Public Law 116-260.
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* * * * *
    (d) * * *
    (4) * * *
    (ii) Any debt instruments issued under the U.S. Department of the 
Treasury's Emergency Capital Investment Program pursuant to section 
104A of the Community Development Banking and Financial Institutions 
Act of 1994, added by the Consolidated Appropriations Act, 2021.\12\
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    \12\ Public Law 116-260.
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* * * * *

PART 5--RULES, POLICIES, AND PROCEDURES FOR CORPORATE ACTIVITIES

0
3. The authority citation for part 5 continues to read as follows:

    Authority:  12 U.S.C. 1 et seq., 24a, 35, 93a, 214a, 215, 215a, 
215a-1, 215a-2, 215a-3, 215c, 371d, 481, 1462a, 1463, 1464, 1817(j), 
1831i, 1831u, 2901 et seq., 3101 et seq., 3907, and 5412(b)(2)(B).


0
4. Section 5.47 is amended by adding paragraph (j):


Sec.  5.47   Subordinated debt issued by a national bank.

* * * * *
    (j) Subordinated debt issued under the Emergency Capital Investment 
Program. A provision or covenant included in a subordinated debt 
document does not unduly restrict or otherwise act to unduly limit the 
authority of a national bank or interfere with the OCC's supervision of 
the national bank, for purposes of paragraph (d)(2) of this section, if 
the provision or covenant is included pursuant to requirements imposed 
by the U.S. Department of the Treasury and the subordinated debt is 
issued under the U.S. Department of the Treasury's Emergency Capital 
Investment Program pursuant to section 104A of the Community 
Development Banking and Financial Institutions Act of 1994, added by 
the Consolidated Appropriations Act, 2021.

Board of Governors of the Federal Reserve System

12 CFR Chapter II

Authority and Issuance

    For the reasons stated in the preamble, the Board of Governors of 
the Federal Reserve System amends 12 CFR chapter II as follows:

PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND 
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)

0
5. The authority citation for part 217 continues to read as follows:

    Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 
1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904, 
3906-3909, 4808, 5365, 5368, 5371, 5371 note, and sec. 4012, Pub. L. 
116-136, 134 Stat. 281.


0
6. Section 217.20 is amended by:
0
a. Redesignating paragraph (c)(3) as paragraph (c)(3)(i);
0
b. Adding paragraph (c)(3)(ii);
0
c. Redesignating paragraph (d)(4) as paragraph (d)(4)(i); and
0
d. Adding paragraph (d)(4)(ii).
    The additions and revisions read as follows:


Sec.  217.20   Capital components and eligibility criteria for 
regulatory capital instruments.

* * * * *
    (c) * * *

[[Page 15081]]

    (3) * * *
    (ii) Any preferred stock instrument issued under the U.S. 
Department of the Treasury's Emergency Capital Investment Program 
pursuant to section 104A of the Community Development Banking and 
Financial Institutions Act of 1994, added by the Consolidated 
Appropriations Act, 2021.\16\
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    \16\ Public Law 116-260.
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* * * * *
    (d) * * *
    (4) * * *
    (ii) Any debt instrument issued under the U.S. Department of the 
Treasury's Emergency Capital Investment Program pursuant to section 
104A of the Community Development Banking and Financial Institutions 
Act of 1994, added by the Consolidated Appropriations Act, 2021.\21\
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    \21\ Public Law 116-260.
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* * * * *

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit 
Insurance Corporation amends chapter III of Title 12 of the Code of 
Federal Regulations as follows:

PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS

0
7. 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); 
Pub. L. 115-174; section 4014 Sec.  201, Pub. L. 116-136, 134 Stat. 
281 (15 U.S.C. 9052).


0
8. Amend Sec.  324.20 by:
0
a. Redesignating footnotes 17 through 21 as footnotes 18 through 22;
0
b. Redesignating paragraph (c)(3) as paragraph (c)(3)(i);
0
c. Adding paragraph (c)(3)(ii);
0
d. Redesignating paragraph (d)(4) as paragraph (d)(4)(i); and
0
e. Adding paragraph (d)(4)(ii).
    The additions and revisions read as follows:


Sec.  324.20   Capital components and eligibility criteria for 
regulatory capital instruments.

* * * * *
    (c) * * *
    (3) * * *
    (ii) Any preferred stock instruments issued under the U.S. 
Department of the Treasury's Emergency Capital Investment Program 
pursuant to section 104A of the Community Development Banking and 
Financial Institutions Act of 1994, added by the Consolidated 
Appropriations Act, 2021.\17\
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    \17\ Public Law 116-260.
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* * * * *
    (d) * * *
    (4) * * *
    (ii) Any debt instruments issued under the U.S. Department of the 
Treasury's Emergency Capital Investment Program pursuant to section 
104A of the Community Development Banking and Financial Institutions 
Act of 1994, added by the Consolidated Appropriations Act, 2021.\23\
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    \23\ Public Law 116-260.
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* * * * *

Blake J. Paulson,
Acting Comptroller of the Currency.

    By order of the Board of Governors of the Federal Reserve 
System.
Ann Misback,
Secretary of the Board.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on or about March 5, 2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021-05443 Filed 3-19-21; 8:45 am]
BILLING CODE 4810-33-P; 6714-01-P; 6210-01-P