[Federal Register Volume 61, Number 101 (Thursday, May 23, 1996)]
[Notices]
[Pages 25869-25870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12926]
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FEDERAL DEPOSIT INSURANCE CORPORATION
Capital Forbearance; Rescission of Policy Statement
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Rescission of policy statement.
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SUMMARY: As part of the FDIC's systematic review of its regulations and
written policies under section 303(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (CDRI), the FDIC is
rescinding its Guidelines for Implementing a Policy of Capital
Forbearance (Policy Statement). The Policy Statement provided
guidelines for certain well-managed viable banks to apply to the FDIC
for capital forbearance. The FDIC is rescinding the Policy Statement
because it is now outmoded.
EFFECTIVE DATE: This Policy Statement is rescinded May 23, 1996.
FOR FURTHER INFORMATION CONTACT: Robert W. Walsh, Manager, (202) 898-
6911, Division of Supervision; Jamey Basham, Counsel, (202) 898-7265,
Legal Division, FDIC, 550 17th Street, N.W., Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION: The FDIC is conducting a systematic review
of its regulations and written policies. Section 303(a) of the CDRI (12
U.S.C. 4803(a)) requires each federal banking agency to streamline and
modify its regulations and written policies in order to improve
efficiency, reduce unnecessary costs, and eliminate unwarranted
constraints on credit availability. Section 303(a) also requires each
federal banking agency to remove inconsistencies and outmoded and
duplicative requirements from its regulations and written policies.
As part of this review, the FDIC has determined that the Policy
Statement is outmoded, and that the FDIC's written policies can be
streamlined by its elimination.
The FDIC adopted the Policy Statement on July 7, 1987. 52 FR 26182
(July 13, 1987). The Policy Statement provided guidelines under which
certain banks, which were well-managed, solvent and viable but were
having difficulty raising needed capital because they served an
inadequately diversified economic sector caught in a severe downturn,
could apply to the FDIC for capital forbearance. Since all capital
improvement plans established under the Policy Statement were required
by the Policy Statement's terms to assure capital restoration by
January 1, 1995, the Policy Statement serves no further purpose.
Moreover, as part of the Federal Deposit Insurance Corporation
[[Page 25870]]
Improvement Act of 1991, Pub. L. 102-242, 105 Stat. 2236, 2253,
Congress adopted the prompt corrective action provisions codified in
section 38 of the Federal Deposit Insurance Act, 12 U.S.C. 1831o,
establishing a statutory structure for addressing insured depository
institutions with declining capital. This statutory structure does not
allow capital forbearance as contemplated in the Policy Statement.
For the above reasons, the Policy Statement is hereby rescinded.
By Order of the Board of Directors.
Dated at Washington, D.C., this 14th day of May, 1996.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 96-12926 Filed 5-22-96; 8:45 am]
BILLING CODE 6714-01-P
