[Federal Register Volume 59, Number 40 (Tuesday, March 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4527]
[[Page Unknown]]
[Federal Register: March 1, 1994]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 327
RIN 3064-AB35
Assessments
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Board of Directors (Board) of the Federal Deposit
Insurance Corporation (FDIC) proposes to amend its regulations
governing computation of an institution's assessment base to provide
for the subtraction of certain liabilities arising under depository
institution investment contracts. The subject liabilities are those not
treated as insured deposits under section 11(a)(8) of the Federal
Deposit Insurance Act (FDI Act). Under the proposal, these liabilities
would be excluded from the deposit base on which deposit insurance
premiums are assessed, thereby reducing assessment payments for
affected institutions. The purpose of the amendment is to give effect,
by regulation, to apparent congressional intent.
DATES: Written comments must be received by the FDIC on or before March
31, 1994.
ADDRESSES: Written comments shall be addressed to the Office of the
Executive Secretary, Federal Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC, 20429. Comments may be hand-delivered to
room F-400, 1776 F Street, NW., Washington, DC 20429, on business days
between 8:30 a.m. and 5 p.m. (FAX number: (202) 898-3838). Comments
will be available for inspection in room 7118, 550 17th Street, NW.,
Washington, DC, between 9 a.m. and 4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT: William Farrell, Chief, Assessments
Management Section, Division of Finance, (703) 516-5546; or Gerald J.
Gervino, Senior Attorney, (202) 898-3723; Federal Deposit Insurance
Corporation, Washington, DC 20429.
SUPPLEMENTARY INFORMATION: Prior to December 1993, liabilities arising
under bank or thrift investment contracts (BICs) that qualified as
deposits under section 3(l) of the FDI Act, 12 U.S.C. 1813(l), were
insured in accordance with the statutory and regulatory provisions
governing federal deposit insurance coverage. Similarly, BIC
liabilities that qualified as deposits were included in an
institution's deposit base for the purpose of calculating the
institution's deposit insurance premiums.
Effective December 19, 1993, a new section 11(a)(8) was added to
the FDI Act by section 311(a)(1) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (FDICIA). Under this new provision,
codified at 12 U.S.C. 1821(a)(8), liabilities arising under certain
depository institution investment contracts are no longer treated as
insured deposits.
A companion provision to the new section 11(a)(8) was a new
subparagraph (D) added to section 7(b)(6) of the FDI Act by section
311(a)(2) of FDICIA, which also became effective December 19, 1993.
Section 7(b)(6)(D) excluded from an institution's insurance assessment
base any liability of the institution not treated as an insured deposit
pursuant to section 11(a)(8).
Although section 11(a)(8) continues in force, its companion
provision does not. Section 7(b)(6), as amended effective December 19,
1993, was superseded as of January 1, 1994, by a totally revised
version of section 7(b) that provides for a risk-based assessment
system. The existing section 7(b), 12 U.S.C. 1817(b), as amended by
section 302(a) of FDICIA, omits all provisions of the superseded
section 7(b) that dealt with the computation of an institution's
deposit insurance assessment base. Under the existing provisions,
definition of the assessment base is to be determined by the FDIC.
The FDIC believes that it is appropriate and desirable to give
continued effect, by regulation, to the intent of Congress, as
reflected in superseded section 7(b)(6), that investment-contract
liabilities not treated as insured deposits under section 11(a)(8) of
the FDI Act should be excluded from the universe of deposits on which
insurance assessments are paid. The proposed amendment would maintain
the balance we believe Congress intended in enacting the former section
7(b)(6) as a companion to section 11(a)(8).
Accordingly, the Board proposes to amend its assessments regulation
to exclude from an institution's assessment base, as computed under
part 327.4, those investment contract liabilities not treated as
insured deposits under section 11(a)(8) of the FDI Act.
The Board hereby requests comments on the proposed amendment.
Interested persons are invited to submit written comment during a 30-
day comment period.
Paperwork Reduction Act
No collections of information pursuant to section 3504(h) of the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.) are contained in the
proposed rule. Consequently, no information has been submitted to the
Office of Management and Budget for review.
Regulatory Flexibility Act
The Board hereby certifies that the proposed rule would not have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.). It would not impose burdens on depository institutions of any
size and would not have the type of economic impact addressed by the
Act.
List of Subjects in 12 CFR Part 327
Assessments, Bank deposit insurance, Financing Corporation, Savings
associations.
For the reasons stated in the preamble, the Board proposes to amend
12 CFR part 327 as follows:
1. The authority citation for part 327 continues to read as
follows:
Authority: 12 U.S.C. 1441, 1441b, 1817-1819.
2. Section 327.4 is amended by removing the period at the end of
paragraph (b)(2)(iv)(B) and adding a semicolon in lieu thereof, and by
adding paragraph (b)(2)(v) to read as follows:
Sec. 327.4 Average assessment base.
* * * * *
(b) * * *
(2) * * *
(v) Liabilities arising from a depository institution investment
contract that are not treated as insured deposits under section
11(a)(8) of Federal Deposit Insurance Act (12 U.S.C. 1821(a)(8)).
* * * * *
By order of the Board of Directors.
Dated at Washington, DC, this 22nd day of February, 1994.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-4527 Filed 2-28-94; 8:45 am]
BILLING CODE 6714-01-P
