[Federal Register Volume 59, Number 205 (Tuesday, October 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26150]
[[Page Unknown]]
[Federal Register: October 25, 1994]
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Parts 500, 506, 508, 545, 552, 558, 563, 564, 574, 590
[No. 94-166]
Miscellaneous Technical Amendments
AGENCY: Office of Thrift Supervision, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of Thrift Supervision (OTS) is adopting several
technical corrections and clarifications to its regulations on home
loans and other real estate loans, hearings, operating subsidiaries,
appraisals, interest rate risk management procedures, and its
incorporation and standard conversion regulations. The OTS is also
amending its insider transactions rule and removing or revising
obsolete or superseded provisions concerning investment limitations,
stock ownership, conservatorships, and remote service units. Finally,
the agency is adding a waiver provision affecting regulations that are
not statutorily mandated.
EFFECTIVE DATE: January 1, 1995.
FOR FURTHER INFORMATION CONTACT: Elissa Schwartz, Senior Paralegal,
(202) 906-7908, or Deborah Dakin, Assistant Chief Counsel, (202) 906-
6445, Regulations and Legislation Division, Chief Counsel's Office,
Office of Thrift Supervision, 1700 G Street, NW., Washington DC 20552.
SUPPLEMENTARY INFORMATION: On April 21, 1994, the Office of Thrift
Supervision (OTS) proposed several technical corrections to revise,
clarify, or remove obsolete or ambiguous regulations.\1\
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\1\59 FR 18979 (April 21, 1994).
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The agency received three comments in response to the proposal. Two
comments were submitted by trade associations and one comment was
submitted by a private law firm. All of the commenters supported the
proposal.
I. Amendments Described in April 21 Proposal
Today, the OTS is adopting the amendments in the proposal, as
described below.
Stock Loans
Section 205 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA)\2\ amended section 7(j)(9) of the
Federal Deposit Insurance Act and modified the reporting criteria and
procedures of that section, thereby superseding existing section
574.5(b) of OTS's regulations. Rather than amend section 574.5(b) to
conform to amended section 7(j)(9), the OTS has chosen to rescind the
regulation because the statute is self-implementing and OTS finds it
unnecessary merely to repeat the statutory language.
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\2\Pub. L. 102-242, 105 Stat. 2236 (1991).
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Directors
Through its final rule on regulatory review,\3\ the OTS lowered the
number of directors required for a Federal savings association from
seven to five, consistent with the required number of national bank
directors. An additional reference in section 552.3, which was
overlooked in the earlier rulemaking, is now being changed to conform
with the new requirement.
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\3\58 FR 4308 (Jan. 14, 1993).
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Operating Subsidiaries
The OTS is adding a clarifying technical amendment restructuring
section 545.81(d). This replacement language more clearly sets forth
the requirements that apply when a federal savings association that
owned a service corporation on November 30, 1992, wishes to have that
service corporation deemed an operating subsidiary.
Insider Transactions
Pursuant to and in accordance with section 4(a) of the Home Owners'
Loan Act and section 106(b)(2)(H)(i) of the Bank Holding Company
Amendments Act of 1970,4 as revised by section 306(j) of the
Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA),5 the OTS is amending its regulation pertaining to
insider transactions by incorporating by means of cross-reference
subpart B of the Federal Reserve Board's Regulation O, 12 CFR Part 215,
subpart B, as now or hereafter in effect.
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\4\12 U.S.C. 1972(2)(H)(i).
\5\Pub. L. 102-242, 105 Stat. 2359.
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Investments
Section 563.96, which restricts the amount savings associations may
invest in savings accounts and debt securities hedged with forward
commitments according to a complex formula set forth in the rule, is
being removed in light of the Federal Reserve Board's (FRB) final rule
on interbank liabilities.6 The FRB's final rule limits such
investments to 25% of capital. Since the FRB rule applies to savings
associations, section 563.96 is deleted as unnecessary.
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\6\57 FR 60086 (Dec. 18, 1992).
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Loan Documentation
The OTS is amending its interim final loan documentation regulation
to broaden eligibility to any institution that was assigned a CAMEL
rating of 3 in its most recent report of examination and that has
obtained written permission from its Regional Director to employ the
exemption.
Remote Service Units
Section 545.141(d), which addresses privacy of account data
concerning an RSU account, is deleted because the OTS believes that
Regulation E of the Federal Reserve Board, 12 CFR Part 205, which
governs electronic funds transfers by all financial institutions,
including savings associations, provides adequate protection for
consumers' interests in this area. Second, the OTS is revising section
545.141(e) to reflect earlier revisions to 12 CFR Part 568, ``Minimum
Security Devices.''
Waivers and Miscellaneous Changes
The agency is adding a provision expressly setting forth its
existing authority to waive any non-statutorily required regulation for
good cause. This authority is separate and apart from, and is not meant
to limit, the agency's statutorily based authority (e.g., under the
Depository Institutions Disaster Relief Act of 1992) to waive certain
regulations and its inherent authority to decide whether or not to take
enforcement actions against violations of its regulations. See Heckler
v. Chaney, 470 U.S. 821 (1985).
Sections 545.33, 545.35 and 563.93 are being revised to correct
internal references.
II. Technical Amendment to Service Corporation Rules
One of the commenters suggested an additional amendment that OTS
believes has merit. As required by section 18(m) of the Federal Deposit
Insurance Act,\7\ the OTS's service corporation regulation, 12 CFR
545.74, requires a Federal savings association to give the OTS and the
Federal Deposit Insurance Corporation (FDIC) 30 days prior notice
before either establishing a new service corporation or engaging in a
new activity through an existing service corporation.\8\ That same
statutory provision exempts Federal savings banks chartered before
October 15, 1982. An earlier regulatory amendment inadvertently removed
the reference to this exemption.\9\ The OTS is taking this opportunity
to reinstate the regulatory exemption as it was adopted in April,
1992.\10\
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\7\12 U.S.C. 1828(m).
\8\12 CFR 545.74(b)(2).
\9\Operating Subsidiaries and Service Corporations Final Rule,
57 FR 48949 (October 29, 1992).
\10\Applications Restructuring Final Rule, 57 FR 14340 (April
20, 1992).
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III. Additional Technical Amendments
In addition to the amendments set forth in the proposal, several
technical revisions are being made to other OTS regulations. The agency
finds good cause pursuant to 5 U.S.C. 553 to adopt these amendments
without public notice and comment because of their purely technical and
clarifying nature. First, erroneous cross-references and obsolete
titles have been removed from the service corporation regulations.
Further erroneous cross-references have been corrected in (1) the
hearing rules at section 508.13, (2) section 564.4 of the appraisal
rule, and (3) the interest rate risk management procedures at section
563.176. Third, the agency's regulations setting forth procedures to be
followed in taking possession of a savings association that has been
placed into conservatorship or receivership have been modified. Fourth,
the authority citation for part 590 is being corrected. Lastly, a
codification correction is being made to the standard conversion
regulations, in addition to the proposed amendment to those
regulations.
IV. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (Pub.
L. 96-354, 5 U.S.C. 601), it is certified that this technical
regulation will not have a significant economic impact on a substantial
number of small savings associations, small service corporations or
other small entities. It merely revises or removes existing
inconsistencies or obsolete regulations.
V. Executive Order 12866
The Acting Director has determined that this document is not a
``significant regulatory action'' for purposes of Executive Order
12866.
VI. Paperwork Reduction Act
The recordkeeping requirement contained in this final rule has been
submitted to and approved by the Office of Management and Budget in
accordance with the requirements of the Paperwork Reduction Act (44
U.S.C. 3504(h)) under Control No. 1550-0083. The recordkeeping
requirement contained in this rule is found at 12 CFR 563.170(c). The
likely recordkeepers will be well- or adequately-capitalized savings
associations who received a CAMEL rating of 1, 2 or 3 in their most
recent examinations.
Comments concerning the collection of information under this final
rule should be directed to the Office of Management and Budget,
Paperwork Reduction Project (1550-0083), Washington, DC 20503, with
copies to the Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552.
List of Subjects
12 CFR Part 500
Organization and functions (Government agencies), Reporting and
recordkeeping requirements.
12 CFR Part 506
Reporting and recordkeeping requirements.
12 CFR Part 508
Administrative practice and procedure, Crime, Savings associations.
12 CFR Part 545
Accounting, Consumer protection, Credit, Electronic funds
transfers, Investments, Manufactured homes, Mortgages, Reporting and
recordkeeping requirements, Savings associations.
12 CFR Parts 552
Reporting and recordkeeping requirements, Savings associations,
Securities.
12 CFR Part 558
Savings associations.
12 CFR Part 563
Accounting, Advertising, Crime, Currency, Investments, Mortgages,
Reporting and recordkeeping requirements, Savings associations,
Securities, Surety bonds.
12 CFR Part 564
Appraisals, Mortgages, Real estate appraisal, Reporting and
recordkeeping requirements, Savings associations.
12 CFR Part 574
Administrative practice and procedure, Holding companies, Reporting
and recordkeeping requirements, Savings associations, Securities.
12 CFR Part 590
Banks, banking, Loan programs--housing and community development,
Manufactured homes, Mortgages, Savings associations.
Accordingly, the Office of Thrift Supervision hereby amends
subchapters A, C and D, chapter V, title 12 of the Code of Federal
Regulations as set forth below.
SUBCHAPTER A--ORGANIZATION AND PROCEDURES
PART 500--ORGANIZATION AND CHANNELING OF FUNCTIONS
1. The authority citation for part 500 is revised to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1464.
2. Section 500.30 is amended by adding a sixth sentence at the end
of paragraph (a) to read as follows:
Sec. 500.30 General statement concerning procedures and forms.
(a) * * * The Director may, for good cause and to the extent
permitted by statute, waive the applicability of any provision of this
chapter.
* * * * *
PART 506--INFORMATION COLLECTION REQUIREMENTS UNDER THE PAPERWORK
REDUCTION ACT
3. The authority citation for part 506 continues to read as
follows:
Authority: 44 U.S.C. 3501 et seq.
4. Section 506.1 is amended by adding in numerical order one new
entry to the table in paragraph (b) to read as follows:
Sec. 506.1 OMB control numbers assigned pursuant to the Paperwork
Reduction Act.
* * * * *
(b) Display.
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Current OMB
12 CFR part or section where identified and described control No.
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*****
563.170(c)................................................. 1550-0083
*****
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PART 508--REMOVALS, SUSPENSIONS, AND PROHIBITIONS WHERE A CRIME IS
CHARGED OR PROVEN
5. The authority citation for part 508 is revised to read as
follows:
Authority: 12 U.S.C. 1464, 1818.
Sec. 508.13 [Amended]
6. Section 508.13 is amended by removing the phrase ``Sec. 509.39
of this subchapter'' in paragraph (b), and by adding in lieu thereof
the phrase ``Sec. 509.38 of this subchapter''.
SUBCHAPTER C--REGULATIONS FOR FEDERAL SAVINGS ASSOCIATIONS
PART 545--OPERATIONS
7. The authority citation for part 545 continues to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1828.
Sec. 545.33 [Amended]
8. Section 545.33 is amended by removing the phrase ``this
paragraph (e)'' in the first sentence of the introductory text to
paragraph (c), adding in lieu thereof the phrase ``this paragraph
(c)''.
Sec. 545.35 [Amended]
9. Section 545.35 is amended by removing the phrase ``this
paragraph (d)'' in the second sentence of paragraph (b), adding in lieu
thereof the phrase ``this paragraph (b)''.
Sec. 545.74 [Amended]
10. Section 545.74 is amended by removing the phrase ``The
association'' in paragraph (b)(2) and by adding in lieu thereof the
phrase ``Except as provided in 12 U.S.C. 1828(m)(5), every Federal
savings association''; by removing the phrase ``section 302(d)'' in
paragraph (c)(5)(v) and by adding in lieu thereof the phrase ``section
301(d)''; and by removing the phrase ``District Director'' in paragraph
(d)(1)(iv) and by adding in lieu thereof the word ``Office''.
11. Section 545.81 is amended by revising the heading of paragraph
(d), by revising paragraphs (d)(1) introductory text and (d)(2), and by
adding paragraph (d) introductory text to read as follows:
Sec. 545.81 Operating subsidiaries.
* * * * *
(d) Converting service corporations to operating subsidiaries. A
service corporation that on November 30, 1992 was owned by a Federal
savings association and engaged in activities permissible for a Federal
savings association to undertake directly; is owned by that Federal
savings association; engages solely in activities that a Federal
savings association may undertake directly; and meets the control
criteria set forth in this section, may be deemed to be an operating
subsidiary provided that:
(1) If the Federal savings association is eligible for ``expedited
treatment'' under Sec. 516.3 of this chapter, the Federal savings
association creates and maintains appropriate internal records. The
record shall consist of a certification by the Board of Directors of
the association containing:
* * * * *
(2) If the Federal savings association is not eligible for
``expedited treatment'' under Sec. 516.3 of this chapter, the Federal
savings association follows the application procedures set forth in
paragraph (c)(2) of this section and receives the OTS's prior written
approval. The corporation will be deemed to be an operating subsidiary
on the date of the OTS's written approval.
* * * * *
12. Section 545.141 is amended by removing and reserving paragraph
(d); and by revising paragraph (e) to read as follows:
Sec. 545.141 Remote Service Units (RSUs).
* * * * *
(e) Security. A Federal savings association shall protect
electronic data against fraudulent alterations or disclosure. All RSUs
shall meet the minimum security devices requirements of part 568 of
this chapter.
* * * * *
PART 552--INCORPORATION, ORGANIZATION, AND CONVERSION OF FEDERAL
STOCK ASSOCIATIONS
13. The authority citation for part 552 continues to read as
follows:
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a.
Sec. 552.3 [Amended]
14. Section 552.3 is amended by removing the paragraph designation
for paragraph (a) and by removing the phrase ``fewer than seven'' in
section 7 of the federal stock charter form, adding in lieu thereof the
phrase ``fewer than five''.
PART 558--POSSESSION BY CONSERVATORS AND RECEIVERS FOR FEDERAL AND
STATE SAVINGS ASSOCIATIONS
15. The authority citation for part 558 continues to read as
follows:
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a.
16. Section 558.1 is amended by removing the word ``and'' found
between the words ``association'' and ``in'' in paragraph (a); and by
revising paragraph (b)(6) to read as follows:
Sec. 558.1 Procedure upon taking possession.
* * * * *
(b) * * *
(6) Post a notice on the door of the principal and other offices of
the savings association in the form prescribed by the Director of the
OTS.
* * * * *
17. Section 558.2 is revised to read as follows:
Sec. 558.2 Notice of appointment.
If the Director of the OTS appoints a conservator or receiver under
this part, notice of the appointment shall be filed immediately for
publication in the Federal Register.
SUBCHAPTER D--REGULATIONS APPLICABLE TO ALL SAVINGS ASSOCIATIONS
PART 563--OPERATIONS
18. The authority citation for part 563 is revised to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468,
1817, 1828, 3806; 42 U.S.C. 4106.
19. Section 563.43 is amended by revising the introductory text, by
removing the word ``and'' at the end of paragraph (c), by removing the
period at the end of paragraph (d) and adding in lieu thereof ``; and''
and by adding a new paragraph (e) to read as follows:
Sec. 563.43 Loans by savings associations to their executive officers,
directors and principal shareholders.
Pursuant to 12 U.S.C. 1463(a) and 1468, a savings association, its
subsidiaries and its insiders (as defined) shall be subject to the
restrictions contained in 12 CFR Part 215, subparts A and B of the
Federal Reserve Board's Regulation O, with the exception of 12 CFR
215.13, in the same manner and to the same extent as if the association
were a bank and a member bank of the Federal Reserve System, except
that:
* * * * *
(e) References to the Reserve Bank or the Comptroller shall be
deemed to include the Director of the Office of Thrift Supervision.
Sec. 563.93 [Amended]
20. Section 563.93 is amended by removing the phrase ``paragraph
(b)(13) of this section'' in paragraph (f)(1) and adding in lieu
thereof the phrase ``paragraph (b)(11) of this section''.
Sec. 563.96 [Removed]
21. Section 563.96 is removed.
22. Section 563.170 is amended by revising paragraph (c)(10)(i)(B)
to read as follows:
Sec. 563.170 Examinations and audits; appraisals; establishment and
maintenance of records.
* * * * *
(c) * * *
(10) * * *
(i) * * *
(B) Eligible savings association means any savings association that
is well- or adequately capitalized, as defined in 12 CFR Part 565 and
was either:
(1) Assigned a CAMEL rating of 1 or 2 in its most recent report of
examination; or
(2) assigned a CAMEL rating of 3 in its most recent report of
examination and has obtained written permission from the Regional
Director to employ this exemption.
* * * * *
Sec. 563.176 [Amended]
23. Section 563.176 is amended by removing paragraph (e).
PART 564--APPRAISALS
24. The authority citation for part 564 continues to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1828.
Sec. 564.8 [Amended]
25. Section 564.8 is amended by removing the phrase
``Sec. 564.4(a)(2) through (a)(14)'' in the introductory text of
paragraph (d), and by adding in lieu thereof the phrase ``Sec. 564.4(b)
through (d)''.
PART 574--ACQUISITION OF CONTROL OF SAVINGS ASSOCIATIONS
26. The authority citation for part 574 continues to read as
follows:
Authority: 12 U.S.C. 1467a, 1817.
Sec. 574.5 [Amended]
27. Section 574.5 is amended by removing the phrase ``and other
reports'' from the section heading; by removing paragraph (b); by
removing the phrase ``reports and'' from paragraph (c); and by
redesignating paragraph (c) as new paragraph (b).
SUBCHAPTER G--REGULATIONS FOR FEDERALLY-RELATED MORTGAGE LOANS
PART 590--PREEMPTION OF STATE USURY LAWS
28. The authority citation for part 590 is revised to read as
follows:
Authority: 12 U.S.C. 1735f-7a.
Dated: September 9, 1994.
By the Office of Thrift Supervision.
Jonathan L. Fiechter,
Acting Director.
[FR Doc. 94-26150 Filed 10-24-94; 8:45 am]
BILLING CODE 6720-01-P
