[Federal Register Volume 64, Number 104 (Tuesday, June 1, 1999)]
[Rules and Regulations]
[Pages 29214-29217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13725]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 4
[Docket No. 99-07]
RIN 1557-AB65
Organization and Functions, Availability and Release of
Information, Contracting Outreach Program
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of the Comptroller of the Currency (OCC) is
amending its disclosure regulation. Among other things, the amendment
clarifies that the OCC may make non-public OCC information available to
a supervised entity and to other persons, as the Comptroller, in his
sole discretion, may
[[Page 29215]]
deem necessary or appropriate, without a request for records or
testimony.
DATES: The final rule is effective on June 1, 1999
FOR FURTHER INFORMATION CONTACT: Ursula Pfeil, Attorney, Legislative
and Regulatory Activities (202) 874-5090; or Stuart Feldstein,
Assistant Director, Legislative and Regulatory Activities (202) 874-
5090, Office of the Comptroller of the Currency, 250 E Street, SW,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
Background
The OCC is amending subpart C of 12 CFR Part 4 which governs the
release of non-public OCC information. Part 4 currently requires a
person seeking non-public OCC information to submit a request in
writing to the OCC. The current rule does not include a procedure for
the release of non-public OCC information to supervised entities and
other persons without a specific request for the information.
The OCC has authority to prescribe rules governing the release of
agency records and information under its grant of statutory authority
to promulgate substantive regulations to carry out the responsibilities
of the office, 12 U.S.C. 93a, as well as under statutes that
contemplate the sharing of information with other agencies and persons.
See, e.g., 12 U.S.C. 481; 12 U.S.C. 1867; 12 U.S.C. 1820(d)(6).
On November 10, 1998, the OCC requested comment on an interim rule
amending part 4. 63 FR 62927. The OCC made three independent changes to
part 4 in the interim rule. First, the interim rule added a new section
that clarifies the OCC's existing authority to make non-public OCC
information available to a supervised entity and to other persons, that
in the sole discretion of the Comptroller may be necessary or
appropriate, without a specific request by a third party. The term
``supervised entity'' is defined in the interim rule to include a
national bank, a subsidiary of a national bank, or a federal branch or
agency of a foreign bank licensed by the OCC.
Second, the OCC amended the definition of non-public OCC
information. Section 4.32 defines non-public OCC information as
information, confidential or otherwise, that the OCC is not required to
release under the Freedom of Information Act (FOIA) (5 U.S.C. 552) or
that the OCC has not yet published or made available under 12 U.S.C.
1818(u), the statute requiring publication of certain enforcement
orders. Section 4.32 provides an illustrative list of the types of
information that qualify as non-public OCC information, including OCC
records contained in, or related to, examination and operating or
condition reports concerning national banks and their subsidiaries and
affiliates. The interim rule amended the definition of non-public OCC
information to include a Suspicious Activity Report (SAR) filed by the
OCC or a supervised entity under 12 CFR 21.11. While the OCC has always
taken the position that SARs are non-public information, the OCC
proposed this change to enhance the ability of banks and the OCC to
protect SARs from being disclosed when SARs are sought by private
litigants.
Third, the OCC emphasized in the interim rule that non-public OCC
information remains the property of the OCC even after it is disclosed
and may not be disclosed to others except as authorized by the OCC. The
interim rule clarified that current and former OCC employees and agents
are prohibited from disclosing or permitting the disclosure of any non-
public OCC information to anyone other than an employee or agent of the
OCC who needs the information for the performance of OCC duties.
Current and former OCC employees and agents who are subpoenaed or
otherwise requested to provide OCC information must notify the OCC
immediately under procedures set forth in Sec. 4.37(a)(2).
Finally, the OCC made conforming changes to the purpose and scope
provisions at Sec. 4.31 of Subpart C to reflect the substantive changes
to the other sections amended.
Description of Comments Received
The OCC received two comments on the interim rule: one from a
national bank and another from a bank trade association. The bank trade
association supported the interim rule as published. The bank objected
to the rule on several grounds. After careful consideration of the
comments received, the OCC is adopting the interim rule with some
clarifying changes.
The Disclosure of Non-Public OCC Information Without a Request
One commenter raised concerns that the new section authorizing
disclosure of confidential information (Sec. 4.36) violates provisions
of the Right to Financial Privacy Act (RFPA) (12 U.S.C. 3401-22) and
the Community Reinvestment Act (CRA) (12 U.S.C. 2906).
Section 4.36 does not authorize the OCC to disclose information in
a manner that would violate the requirements of other federal laws,
including the RFPA or CRA. Rather, this section is intended solely to
clarify that the OCC has the discretionary authority to make
disclosures, in the exercise of its supervisory responsibilities, that
are not prohibited by other applicable statutes without waiting for a
specific request. This amendment does not reflect a change in the OCC's
long-standing policy and practice to respect the confidentiality of
supervisory information. Thus, the OCC will continue to release non-
public OCC information without a request only in rare cases after
consideration of all circumstances. The exercise of discretion to
disclose information under this new section will be limited to a few
senior OCC officials, in line with an appropriate delegation of
authority.
To address the commenter's concern, however, the OCC is adding a
new paragraph to Sec. 4.36 on the OCC's policy regarding the release of
non-public OCC information. This paragraph restates the OCC policy that
non-public OCC information is confidential and privileged and that the
OCC, accordingly, will not normally disclose this information to third
parties.
This approach also ensures greater consistency with the Federal
Reserve Board's (FRB) regulation regarding discretionary disclosures.
The FRB disclosure regulation authorizes the FRB to share confidential
supervisory information with supervised financial institutions and,
from time to time, to authorize other disclosures of confidential
information as necessary. 12 CFR 261.20. The FRB regulation also states
that it is the FRB's policy that confidential supervisory information
is confidential and privileged and that the FRB, accordingly, will not
normally disclose this information to the public. 12 CFR 261.22(a). In
addition, the OCC may continue to impose conditions and limitations on
the disclosure of information through the entry of a protective order
or a written agreement of confidentiality, as provided for under the
old rule.
As noted in the interim rule, in some circumstances, the safety and
soundness or financial stability of national banks may be affected
unless the OCC discloses non-public information to supervised entities
or certain other persons without a request. For example, the OCC's
ability to help national banks attain Year 2000 readiness depends, in
part, on the OCC's ability to share information concerning third
parties with supervised entities and other persons. In this case,
``other persons'' may include self-regulatory organizations or state
banks with whom the OCC seeks to share information.
[[Page 29216]]
Definition of Non-Public OCC Information (SARs)
The interim rule also amended the definition of non-public OCC
information in Sec. 4.32 to to include a SAR filed by the OCC, a
national bank, or a Federal branch or agency of a foreign bank licensed
or chartered by the OCC under 12 CFR 21.11. One commenter, viewing this
change in the context of the amendment previously described, raised
concerns that this change could chill the cooperation between banks and
the OCC and may subject banks to greater liability should the OCC begin
to publicly disclose SARs. This is not the case. The OCC added SARs to
the list of non-public OCC information to protect the confidentiality
of SARs further, particularly in litigation, not to make them more
easily disclosable. The amendment clarifies that SARs, which are
sensitive and confidential documents, are not subject to disclosure
requests under FOIA and are subject to the procedures for the release
of non-public OCC information under part 4. The OCC is committed to
protecting the confidentiality of SARs, and the amendment does not
alter this long-standing policy. Accordingly, the OCC adopts this
provision without modification.
Effective Date
Section 553 of the Administrative Procedure Act permits an agency,
for good cause, to issue a rule to be effective in less than 30 days
from its publication date. 5 U.S.C. 553(d). Likewise, section 302 of
the Riegle Community Development and Regulatory Improvement Act of 1994
(CDRI), Pub. L. 103-325, authorizes a banking agency to issue a rule to
be effective before the first day of the calender quarter that begins
on or after the date on which the regulations are published in final
form if the agency finds good cause for an earlier effective date. 12
U.S.C. 4802(b)(1).
The OCC finds good cause for making this final rule effective upon
publication in the Federal Register. Like the interim rule, this final
rule allows the OCC to disclose non-public OCC information to
supervised entities and other persons in certain enforcement contexts
requiring immediate action where a request for the information may not
be forthcoming or may be delayed. The OCC's ability to help national
banks attain Year 2000 readiness in the short time remaining also
depends, in part, on the OCC's ability to provide information rapidly
concerning third parties to supervised entities and other persons
without a request. The OCC's ability to carry out its mission to ensure
national banks' safety and soundness, in certain circumstances, may be
impaired unless it can make disclosures, as authorized by this final
rule, promptly after acquiring the information in question. For these
reasons, the OCC concludes that a delayed effective date is
impracticable and would be contrary to the public interest. 5 U.S.C.
553(d).
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rule for
which an agency is not required to publish a notice of proposed
rulemaking. 5 U.S.C. 603. In issuing the interim rule, the OCC
concluded, for good cause, that it is not required to publish a notice
of proposed rulemaking. Accordingly, it issued the interim rule without
prior notice and comment to be effective immediately. Since the RFA
does not apply to a rule for which an agency is not required to publish
a notice of proposed rulemaking, the OCC also concludes that the RFA
does not require an initial regulatory flexibility analysis of this
final rule. Nonetheless, since this final rule imposes no new
requirements on any national bank, the OCC finds that this final rule
does not have a significant economic impact on a substantial number of
small entities or create any additional burden on small entities.
OCC Executive Order 12866 Statement
The OCC has determined that this final rule is not a significant
regulatory action under Executive Order 12866.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act (UMA) of 1995, Public Law 104-4,
applies only when an agency is required to promulgate a general notice
of proposed rulemaking or a final rule for which a general notice of
proposed rulemaking was published. 2 U.S.C. 1532. The OCC did not
publish a general notice of proposed rulemaking when it, for good
cause, issued the interim rule with an immediate effective date.
Accordingly, the UMA does not require an unfunded mandates act analysis
of this final rule.
Nonetheless, since this final rule prescribes no mandate of any
kind, the OCC finds that the final rule will not result in expenditure
by State, local, and tribal governments, or by the private sector, of
more than $100 million in any one year. Accordingly, the OCC has not
prepared a budgetary impact statement or specifically addressed the
regulatory alternatives considered.
List of Subjects in 12 CFR Part 4
Freedom of information, National banks, Organization and functions
(Government agencies), Reporting and recordkeeping requirements.
Authority and Issuance
For the reasons set out in the preamble, part 4 of chapter I of
title 12 of the Code of Federal Regulations is amended as follows:
PART 4--ORGANIZATIONS AND FUNCTIONS, AVAILABILITY AND RELEASE OF
INFORMATION, CONTRACTING OUTREACH PROGRAM
Accordingly, the interim rule amending 12 CFR part 4 which was
published at 63 FR 62927 on November 10, 1998, is adopted as a final
rule with the following changes:
Sec. 4.31 [Amended]
1. In Sec. 4.31(b)(3) the term ``Sec. 4.36(c)'' is removed and the
term ``Sec. 4.37(c)'' is added in its place.
2. Section 4.32 is amended by revising paragraph (b)(1)(vii) to
read as follows:
Sec. 4.32 Definitions.
* * * * *
(b) * * *
(1) * * *
(vii) A Suspicious Activity Report filed by the OCC, a national
bank, or a Federal branch or agency of a foreign bank licensed or
chartered by the OCC under 12 CFR 21.11; and
* * * * *
Sec. 4.34 [Amended]
3. In Sec. 4.34, in paragraph (a), the term ``Sec. 4.38(d)'' is
removed and the term ``Sec. 4.39(d)'' is added in its place and the
term ``Sec. 4.36'' is removed and the term ``Sec. 4.37'' is added in
its place, in paragraph (c) introductory text the term ``Sec. 4.36(c)''
is removed and the term ``Sec. 4.37(c)'' is added in its place, and in
paragraphs (c)(1) and (c)(2) the term ``Washington, DC office'' is
removed and the term ``Washington office'' is added in its place.
4. In Sec. 4.36, paragraph (a) is revised, paragraphs (b) and (c)
are redesignated as paragraphs (c) and (d), respectively, a new
paragraph (b) is added, and the heading of paragraph (c) is revised to
read as follows:
Sec. 4.36 Disclosure of non-public OCC information.
(a) Discretionary disclosure of non-public OCC information. The OCC
may make non-public OCC information available to a supervised entity
and to other persons, that in the sole discretion of the Comptroller
may be necessary or
[[Page 29217]]
appropriate, without a request for records or testimony.
(b) OCC policy. It is the OCC's policy regarding non-public OCC
information that such information is confidential and privileged.
Accordingly, the OCC will not normally disclose this information to
third parties.
(c) Conditions and limitations. * * *
* * * * *
5. In Sec. 4.37, paragraph (a)(1) is revised and in paragraphs
(a)(2)(i) and (ii) the term ``Washington, DC office'' is removed and
the term ``Washington office'' is added in its place, to read as
follows:
Sec. 4.37 Persons and entities with access to OCC information;
prohibition on dissemination.
(a) * * *
(1) Generally. Except as authorized by this subpart or otherwise by
the OCC, no current or former OCC employee or agent may, in any manner,
disclose or permit the disclosure of any non-public OCC information to
anyone other than an employee or agent of the Comptroller for use in
the performance of OCC duties.
* * * * *
Appendix A to Subpart C--[Amended]
6. In Appendix A to Subpart C, section II, paragraph 7, the term
``12 CFR 4.38(b)'' is removed and the term ``12 CFR 4.39(c)'' is added
in its place.
Dated: May 20, 1999.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 99-13725 Filed 5-28-99; 8:45 am]
BILLING CODE 4810-33-P
