[Federal Register Volume 62, Number 67 (Tuesday, April 8, 1997)]
[Rules and Regulations]
[Pages 16662-16664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8827]
=======================================================================
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 303
RIN 3064-AC03
Applications, Requests, Submittals, Delegations of Authority, and
Notices Required to be Filed by Statute or Regulation
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending
the definition of ``appropriate FDIC regional office'' and other
related terms contained in its applications regulation to change the
way the FDIC designates the appropriate regional office for purposes of
filing applications, requests, submittals, and notices. The amendment
relates to a realignment of the FDIC's regional office operations. As a
result, the FDIC Division of Supervision (DOS) and the Division of
Compliance and Consumer Affairs (DCA) will supervise groups of related
insured institutions from one FDIC regional office. The designated
regional office for a group of institutions will, except in rare
circumstances, be the one in which the group's major policy and
decision makers are located. This location will coincide with the
headquarters location of holding companies or lead institutions in most
instances. Realigning operations in this manner will streamline
supervision processes and simplify communication channels.
All supervisory matters processed in regional offices, including
applications and administrative actions, that involve insured
institutions within a group of related institutions will be processed
in the designated FDIC regional office. Applications will be submitted
directly to the FDIC regional office assigned supervisory
responsibility for the group. The regulation makes no change in the
location of the appropriate region for institutions that are not part
of a group or when a group of related institutions are located within
one region.
EFFECTIVE DATE: This rule is effective April 8, 1997.
FOR FURTHER INFORMATION CONTACT: Christopher J. Spoth, Examination
Specialist, Division of Supervision (202) 898-6611; David K. Mangian,
Regional Director, Division of Compliance and Consumer Affairs (312)
382-7550; Ken A. Quincy, Section Chief, Division of Compliance and
Consumer Affairs (202) 942-3083; or Susan van den Toorn, Counsel, Legal
Division (202) 898-8707.
[[Page 16663]]
SUPPLEMENTARY INFORMATION: The FDIC is amending 12 CFR 303.0(b)(12)
regarding the definition of ``appropriate FDIC region'', ``appropriate
FDIC regional office'', ``appropriate regional director'',
``appropriate deputy regional director'', and ``appropriate regional
counsel'' (collectively, ``appropriate region'') to permit groups of
related insured institutions to be supervised by a single FDIC regional
office. With regard to an insured institution or proposed institution
that is not or will not be part of a group of related institutions, the
appropriate FDIC region will continue to be the FDIC region in which
the institution is or will be located.
The amendment provides that the appropriate FDIC region for groups
of related institutions will be the regional office in which the
group's major policy and decision makers are located or any other
region the FDIC designates on a case-by-case basis. In most cases
involving related institutions, the appropriate FDIC region will be the
region in which the headquarters of a lead institution or of a holding
company is located. All supervisory matters, including applications and
administrative actions, that involve insured institutions within a
group of related institutions will be processed in the appropriate FDIC
regional office.
The phrase ``group of related insured institutions'' is used in the
amended definition because it provides necessary flexibility to
designate the appropriate regional office for supervisory purposes.
Other more specific terms, such as ``affiliates'', or ``subsidiaries of
the same bank holding company'', or ``commonly controlled
institutions'', were considered. However, such terms or phrases are
used in other regulations and do not capture the array of ownership and
control relationships which will be considered ``related'' for purposes
of establishing one FDIC regional office as the appropriate region for
supervising a group of related institutions. For example, the owners of
a group of institutions that are to be supervised together may be
individuals, bank and thrift holding companies, nonregulated parent
companies, and foreign owners, or any combination of these elements in
multiple ownership tiers. Institutions related through ownership by
individuals or entities other than holding companies may be affected,
even where they are not commonly ``controlled'' for other regulatory
purposes (e.g., Regulation O (12 CFR part 215), Change in Bank Control
Act). Similarly, the phrase ``major policy and decision makers are
located'' is used to designate the location of the appropriate FDIC
regional office because other terms, such as ``holding company
headquarters'' or ``location of the lead institution'' may not
accurately describe the location where a group of related institutions
locates its top managing officials.
The provision to permit the FDIC to designate the appropriate
regional office on a case-by-case basis is necessary to give the FDIC
flexibility where using the location of the major policy and decision
makers for determining the appropriate region is inappropriate or
inefficient. The need for such language is demonstrated in the case of
a foreign bank that operates several institutions in the United States,
but whose headquarters, CEO, and major policy and decision makers are
located in a foreign country. In such a case, the FDIC would have the
discretion to select the most appropriate regional office to supervise
the institutions located in the United States. Such flexibility is also
needed in the case of a multibank holding company where major policy
and decision makers are located in several FDIC regions. In such a
case, the most logical region from a supervisory standpoint will be
designated by DOS and DCA.
A letter to all insured institutions will announce the realignment
of DOS and DCA's regional office responsibilities. A separate
explanatory letter will also be sent to each institution that, as a
result of the realignment, will be supervised by a newly designated
FDIC regional office. In the event an institution which is part of a
group of related institutions inadvertently files an application with
the wrong FDIC regional office, the FDIC will forward the document to
the appropriate regional office and notify the institution without
penalizing the institution for a misdirected filing. Each regional
office has information available to advise insured institutions,
applicants, the public, other regulators, and any interested party
regarding identification of an institution's assigned FDIC regional
office.
The purpose of the realignment of FDIC regional office
responsibilities and the amendment is to more efficiently supervise
groups of related institutions by assigning responsibility for the
group to one FDIC regional office based on the location of the group's
major policy and decision makers. The prior part 303 language defines
``appropriate'' to mean that the FDIC supervises institutions from the
region in which the institution is located, regardless of where the
parent company or any related institution in a group is located or
where the group's major policy and decision makers are located. Over
time, with the trend toward industry consolidation and interstate
banking, this approach has become cumbersome for both the FDIC and for
groups of related institutions that operate, or seek to operate, in
more than one FDIC region. In such cases, every FDIC region in which a
related institution operates is directly involved in the group's
business and regulatory affairs, resulting in potential duplication of
supervisory efforts and disorder in multiple communication channels.
The changes to part 303 are being made to facilitate improved
communications between insured institutions and the FDIC and to make
better use of the FDIC's resources in processing applications and
administrative actions for groups of related insured institutions. The
changes do not create any insured institution publication requirements
or impact the institution's or other respondent's right to challenge
any action. The changes also do not impair access to the Board, to the
extent it exists currently in part 303, for review of decisions on any
application or administrative matter. The change in the appropriate
region is procedural in nature. The designation of the FDIC office
which will exercise overall supervision for purposes of receiving
applications and deciding certain regulatory matters has no effect on
the standards against which the merits of an application or
administrative action are to be measured. In addition, any change as to
the appropriate FDIC office in which overall supervisory functions will
be assigned does not alter any of the rights or obligations of any
institution or other respondent.
The FDIC is also eliminating the term ``appropriate regional
manager'' from its definition because the term is no longer a
designated title used by the FDIC.
Exemption From Public Notice and Comment
The amendments are being published in final form without
opportunity for public comment under authority of 5 U.S.C. 553(b)(A)
(Administrative Procedure Act) which exempts from required publication
for comment interpretive rules, general statements of policy, and rules
of agency practice and procedure. Specifically, the amendments relate
to the FDIC's administrative and supervisory procedures concerning the
designation of appropriate regional offices for purposes of filings and
administrative actions. The amendments, which constitute nonsubstantive
changes to the FDIC's Rules of Practice and Procedure, are being made
immediately effective
[[Page 16664]]
inasmuch as the requirement found in 5 U.S.C. 553(d) that substantive
rules be published not less than 30 days prior to their effective date
is inapplicable.
Regulatory Flexibility Act
Under section 605(b) of the Regulatory Flexibility Act (RFA) (5
U.S.C. 605(b)), the final regulatory flexibility analysis otherwise
required under section 604 of the RFA (5 U.S.C. 604) is not required if
the head of the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities
and the agency publishes such certification in the Federal Register
along with this general notice of proposed rulemaking or at the time of
publication of the final rule.
The Board of Directors has concluded after reviewing the final
regulation that it will not have a significant economic impact on a
substantial number of small institutions since the only change, if any,
may be the location in which the institution will make filings and from
which the institution will be supervised by the FDIC. The Board of
Directors therefore hereby certifies pursuant to section 605 of the RFA
that the regulation will not have a significant economic impact on a
substantial number of small entities within the meaning of the RFA.
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) (Public Law 104-121) provides generally for agencies to report
rules to Congress and for Congress to review rules. This final rule is
not a rule for purposes of SBREFA because it is a rule of agency
organization pursuant to SBREFA, 5 U.S.C. 804(3)(c).
Paperwork Reduction Act
As these amendments neither alter existing nor create new record
keeping or reporting requirements, the Paperwork Reduction Act is
inapplicable.
Cost Benefit Analysis
This final rule is generally not expected to result in material
increases in costs and burden to respondents. Some filers, however,
will be required to file materials in a different location.
List of Subjects in 12 CFR Part 303
Administrative practice and procedure, Authority delegations
(Government agencies), Bank deposit insurance, Banks, Banking,
Reporting and recordkeeping requirements, Savings associations.
For the reasons set forth in the preamble, 12 CFR part 303 is
amended as set forth below:
PART 303--APPLICATIONS, REQUESTS, SUBMITTALS, DELEGATIONS OF
AUTHORITY, AND NOTICES REQUIRED TO BE FILED BY STATUTE OR
REGULATION
1. The authority citation for part 303 continues to read as
follows:
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817(j), 1818, 1819
(Seventh and Tenth), 1828, 1831e, 1831o, 1831p-1; 15 U.S.C. 1607.
2. In Sec. 303.0, paragraph (b)(12) is revised to read as follows:
Sec. 303.0 Scope and definitions.
* * * * *
(b) * * *
(12) Appropriate FDIC region, appropriate FDIC regional office,
appropriate regional director, appropriate deputy regional director,
and appropriate regional counsel shall refer to the FDIC region, and
the FDIC regional office, regional director, deputy regional director,
and regional counsel, of the FDIC region, which the FDIC designates as
follows:
(i) When an institution or proposed institution that is the subject
of an application, request, submittal, notice, or administrative action
is not or will not be part of a group of related institutions, the
appropriate region for the institution and any individual associated
with the institution is the FDIC region in which the institution or
proposed institution is or will be located; or
(ii) When an institution or proposed institution that is the
subject of an application, request, submittal, notice, or
administrative action is or will be part of a group of related
institutions, the appropriate region for the institution and any
individual associated with the institution is the FDIC region in which
the group's major policy and decision makers are located, or any other
region the FDIC designates on a case-by-case basis.
* * * * *
By Order of the Board of Directors.
Dated at Washington, D.C., this 25th day of March, 1997.
Federal Deposit Insurance Corporation
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 97-8827 Filed 4-7-97; 8:45 am]
BILLING CODE 6714-01-P
