[Federal Register Volume 60, Number 67 (Friday, April 7, 1995)]
[Rules and Regulations]
[Pages 17635-17636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8578]
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FEDERAL RESERVE SYSTEM
12 CFR Part 215
[Regulation O; Docket No. R-0874]
Loans to Executive Officers, Directors, and Principal
Shareholders of Member Banks; Loans to Holding Companies and Affiliates
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board is revising Regulation O to implement a recent
amendment to section 22(g) of the Federal Reserve Act, contained in the
Riegle Community Development and Regulatory Improvement Act of 1994.
The revision provides that prior approval of the board of directors is
not required before a member bank may make a loan to an executive
officer that is secured by a first lien on the executive officer's
residence.
EFFECTIVE DATE: April 7, 1995.
FOR FURTHER INFORMATION CONTACT: Gordon Miller, Attorney (202/452-
2534), Legal Division, Board of Governors of the Federal Reserve
System. For the hearing impaired only, Telecommunications Device for
the Deaf (TDD), Dorothea Thompson (202/452-3544).
SUPPLEMENTARY INFORMATION
Background
The Riegle Community Development and Regulatory Improvement Act of
1994 (CDR Act), Pub. L. 103-325, 108 Stat. 2160 (1994), effective
September 23, 1994, amended section 22(g) of the Federal Reserve Act,
12 U.S.C. 375a, to eliminate the requirement that prior approval of the
board of directors be granted before a member bank may make a loan to
an executive officer of the member bank that is secured by a first lien
on the executive officer's residence. Such loans remain subject to the
general requirement for prior approval under section 22(h) of the
Federal Reserve Act. See 12 U.S.C. 375b(3); 12 CFR 215.4(b). The Board
is revising Regulation O (12 CFR Part 215), effective April 7, 1995, to
conform to the amendment.
Need for Final Rule Without Comment
The elimination of the prior approval requirement for loans to an
executive officer secured by a first lien on the executive officer's
residence was effective immediately upon enactment of the CDR Act, and
required no action on the part of the Board to take effect. The Board
therefore finds that it is [[Page 17636]] necessary to revise
Regulation O in order to eliminate a requirement that is superseded by
the CDR Act, and to clarify that member banks may take advantage of the
recent amendment to section 22(g) of the Federal Reserve Act.
The Board, for good cause, finds that the notice and public comment
procedure normally required is impractical, unnecessary, and contrary
to the public interest under 5 U.S.C. 553(b)(B). The Board further
finds under 5 U.S.C. 553(d)(1) that the final rule is a substantive
rule that relieves a restriction on lending and therefore is making the
final rule effective on April 7, 1995, without regard for the 30-day
period provided for in 5 U.S.C. 553(d).
Final Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an
agency to publish a final regulatory flexibility analysis at the time
it promulgates a final rule. One of the requirements of a final
regulatory flexibility analysis, a succinct statement of the need for,
and objectives of, the final rule (5 U.S.C. 604(a)(1)), is contained in
the supplementary information above. For the reasons stated above
concerning the need for public comment, the Board has not sought public
comment on the final rule, and the Board has not considered any
alternatives to the final rule.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.
3507, and 5 CFR 1320.130, the Board, under authority delegated by the
Office of Management and Budget, has reviewed its amendments to
Regulation O. The Board has determined that its final rule imposes no
additional reporting or recordkeeping requirements, and that there are
no relevant federal rules that duplicate, overlap, or conflict with the
proposed rule. The final rule will apply to all member banks,
regardless of size. The final rule should not have a negative economic
impact on small institutions. Instead, the rule should relieve the
regulatory burden on all member banks.
List of Subjects in 12 CFR Part 215
Credit, Federal Reserve System, Penalties, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Board is amending 12
CFR Part 215, as set forth below:
PART 215--LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL
SHAREHOLDERS OF MEMBER BANKS (REGULATION O)
1. The authority citation for part 215 continues to read as
follows:
Authority: 12 U.S.C. 248(i), 375a(10), 375b(9) and (10),
1817(k)(3) and 1972(2)(G)(ii); Pub. L. 102-242, 105 Stat. 2236.
2. In Sec. 215.5, paragraph (c)(2) introductory text is revised to
read as follows:
Sec. 215.5 Additional restrictions on loans to executive officers of
member banks.
* * * * *
(c) * * *
(2) In any amount to finance or refinance the purchase,
construction, maintenance, or improvement of a residence of the
executive officer, provided:
* * * * *
By order of the Board of Governors of the Federal Reserve
System, April 3, 1995.
William W. Wiles,
Secretary of the Board.
[FR Doc. 95-8578 Filed 4-6-95; 8:45 am]
BILLING CODE 6210-01-P
