2020-18937. Supplemental Lending Limits Program: Technical Correction

AGENCY:

Office of the Comptroller of the Currency (OCC), Treasury.

ACTION:

Correcting amendment.

SUMMARY:

On July 14, 2020, the Office of the Comptroller of the Currency (OCC) published in the Federal Register a final rule that, among other revisions, made technical changes to the OCC's supplemental lending limits rule. This correcting amendment makes a correction to those regulations by reinstating two paragraphs to the lending limits rules that were inadvertently deleted.

DATES:

This rule is effective on October 1, 2020.

FOR FURTHER INFORMATION CONTACT:

Marta E. Stewart-Bates, Senior Attorney, Chief Counsel's Office, [phone], for persons who are deaf or hearing impaired, TTY, [phone], Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

I. Background and Description of Correcting Amendment

On July 14, 2020, the OCC published in the Federal Register a final rule ^[1] that made technical changes to the OCC's supplemental lending limits rules, among other revisions. Specifically, the terms “small business loans” and “small farm loans or extensions of credit” were replaced with the terms “loans to small businesses” and “loans or extensions of credit to small farms,” respectively, to conform with the Call Report instructions. These technical changes were made to the supplemental lending limits rules in §§ 32.7(a)(1), 32.7(a)(2), and 32.7(d). However, §§ 32.7(a)(4) and (a)(5) were inadvertently deleted by the final rule. This correcting amendment reinstates §§ 32.7(a)(4) and (a)(5).

II. Administrative Law Matters

A. Administrative Procedure Act

The OCC is issuing this correcting amendment without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).^[2] Pursuant to section 553(b)(B) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” ^[3]

The OCC finds that public notice and comment are unnecessary because this correcting amendment makes a technical change to correct an erroneous removal of two paragraphs in the supplemental lending limits rule. Therefore, there is good cause to dispense with the APA prior notice and public comment process.

The APA also requires a 30-day delayed effective date, except for: (1) Substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.^[4] As described above, there is good cause to issue this correcting amendment without a delayed effective date. Therefore, this correcting amendment is exempt from the APA's delayed effective date requirement.^[5]

B. Congressional Review Act

For purposes of the Congressional Review Act, the Office of Management and Budget (OMB) makes a determination as to whether a final rule constitutes a “major rule.” ^[6] If a rule is deemed a “major rule” by the OMB, the Congressional Review Act generally provides that the rule may not take effect until at least 60 days following its publication.^[7]

The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.^[8]

The delayed effective date required by the Congressional Review Act does not apply to “any rule which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” ^[9] For the same reasons set forth above, the OCC finds that it has good cause to adopt this correcting amendment without the delayed effective date generally prescribed under the Congressional Review Act. As required by the Congressional Review Act, the OCC will submit the correcting amendment and other appropriate reports to Congress and the Government Accountability Office for review.

C. Riegle Community Development and Regulatory Improvement Act of 1994

Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),^[10] in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), each Federal banking agency must consider, consistent with the principle of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form, with certain exceptions, including for good cause.^[11] For the reasons described above, the OCC finds good cause exists under section 302 of RCDRIA to publish this correcting amendment with an immediate effective date. As such, the correcting amendment will be effective immediately.

D. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) ^[12] requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities.^[13] The RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, consistent with section 553(b)(B) of the APA, the OCC has determined for good cause that general notice and opportunity for public comment is unnecessary, and, therefore, the OCC is not issuing a notice of proposed rulemaking. Accordingly, the OCC has concluded that the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply.

E. Unfunded Mandates

As a general matter, the Unfunded Mandates Act of 1995 (UMRA) ^[14] requires the preparation of a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. However, the UMRA does not apply to final rules for which a general notice of proposed rulemaking was not published.^[15] Therefore, because the OCC has found good cause to dispense with notice and comment for this correcting amendment, the OCC has not prepared an economic analysis of the rule under the UMRA.

List of Subjects in 12 CFR Part 32

• National banks
• Reporting and recordkeeping requirements

For the reasons set out in the preamble, the OCC corrects 12 CFR part 32 by making the following correcting amendment:

PART 32—LENDING LIMITS

1. The authority citation for part 32 continues to read as follows:

Authority: 12 U.S.C. 1 et seq., 12 U.S.C. 84, 93a, 1462a, 1463, 1464(u), 5412(b)(2)(B), and 15 U.S.C. 1639h.

2. Section 32.7 is amended by adding paragraphs (a)(4) and (5) to read as follows:

§ 32.7

Residential real estate loans, loans to small businesses, and loans or extensions of credit to small farms (“Supplemental Lending Limits Program”).

(a) * * *

(4) The total outstanding amount of a national bank's or savings association's loans and extensions of credit to one borrower made under § 32.3(a) and (b), together with loans and extensions of credit to the borrower made pursuant to paragraphs (a)(1), (2), and (3) of this section, shall not exceed 25 percent of the bank's or savings association's capital and surplus.

(5) The total outstanding amount of a national bank's or savings association's loans and extensions of credit to all of its borrowers made pursuant to the supplemental lending limits provided in paragraphs (a)(1), (2), and (3) of this section may not exceed 100 percent of the bank's or saving association's capital and surplus.

* * * * *

Jonathan V. Gould,

Senior Deputy Comptroller and Chief Counsel.

Footnotes

1.  85 FR 42630.

2.  5 U.S.C. 553.

3.  5 U.S.C. 553(b)(3)(A).

4.  5 U.S.C. 553(d).

5.  5 U.S.C. 553(d)(1).

6.  5 U.S.C. 801 et seq.

7.  5 U.S.C. 801(a)(3).

8.  5 U.S.C. 804(2).

9.  5 U.S.C. 808(2).

10.  12 U.S.C. 4802(a).

11.  12 U.S.C. 4802.

12.  5 U.S.C. 601 et seq.

13.  Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with total assets of $600 million or less and trust companies with total assets of $41.5 million or less. See 13 CFR 121.201.

14.  2 U.S.C. 1531 et seq.

15.  See 2 U.S.C. 1532(a).