E7-24743. Federal Savings Association Bylaws; Integrity of Directors; Withdrawal of Proposed Rule

AGENCY:

Office of Thrift Supervision, Treasury.

ACTION:

Proposed rule; withdrawal.

SUMMARY:

The Office of Thrift Supervision (OTS) is withdrawing the proposed rule. The proposed rule would have amended OTS's regulations concerning corporate governance to permit federally chartered savings associations and mutual holding companies (collectively, federal savings associations) to adopt a preapproved bylaw that would have precluded certain persons from serving on the adopting federal savings association's board of directors, and from nominating others to so serve. In addition, the proposed preapproved bylaw would have precluded any entity owned or controlled by a prohibited person from nominating anyone to serve on the adopting federal savings association's board of directors.^[1]

DATES:

The amendments to 12 CFR 544.5 and 552.5 proposed in the Federal Register on February 14, 2006, at 71 FR 7695, are withdrawn as of December 20, 2007.

FOR FURTHER INFORMATION CONTACT:

Aaron B. Kahn, Assistant Chief Counsel, Business Transactions Division, [phone]; or Donald W. Dwyer, Director, Applications, Examinations and Supervision-Operations, [phone], Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

I. Background

In 2001 OTS adopted a regulation that provided for preapproved optional bylaws for federally chartered savings associations. OTS simultaneously promulgated an optional preapproved bylaw providing integrity standards for directors of such associations. On February 14, 2006, OTS published a proposed rule, which, if adopted, would have amended the rules governing the permissible bylaws for federal savings associations to permit a federal savings association to adopt an optional bylaw precluding persons who, among other things, have ever been subject to certain cease and desist orders entered by any of the banking agencies from serving on the adopting federal savings association's board of directors. In addition, under the optional bylaw provision, persons precluded from serving as a director could have been prohibited from nominating others to serve as a director, and entities controlled by a ineligible person could have similarly been precluded from nominating directors.^[2]

OTS received ten comments on the proposed rule. Eight comments favored the proposal and/or sought to extend the restrictions included in the proposed optional bylaw. Two comments objected to the proposal.

After reviewing the public comments, as well as other relevant considerations, OTS has concluded that the proposed rule should be withdrawn.

Withdrawal of the Proposed Rule

In light of the foregoing, OTS withdraws its proposal published in the Federal Register on February 14, 2006 at 71 FR 7695.

Dated: December 14, 2007.

By the Office of Thrift Supervision.

John M. Reich,

Director.

Footnotes

1.  OTS proposed amending regulations governing bylaws of federal stock and federal mutual savings associations. However, OTS's regulations governing mutual holding companies incorporate the bylaw provisions of federal stock and federal mutual savings associations.

2.  71 FR 7695 (Feb. 14, 2006).