[Federal Register Volume 85, Number 232 (Wednesday, December 2, 2020)]
[Rules and Regulations]
[Pages 77345-77364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26138]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 /
Rules and Regulations
[[Page 77345]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Parts 3, 4, and 52
[Docket ID OCC-2020-0044]
RIN 1557-AF06
FEDERAL RESERVE SYSTEM
12 CFR Parts 208, 211, 212, 217, 225, 235, and 238
[Docket No. R-1731]
RIN 7100-AG01
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 304, 324, 337, 347, and 348
RIN 3064-AF67
Temporary Asset Thresholds
AGENCY: Office of the Comptroller of the Currency, Treasury (OCC);
Board of Governors of the Federal Reserve System (Board); and Federal
Deposit Insurance Corporation (FDIC).
ACTION: Interim final rule, request for public comment.
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SUMMARY: To mitigate temporary transition costs on banking
organizations related to the coronavirus disease 2019 (COVID event),
the OCC, Board, and the FDIC (together, the agencies) are issuing an
interim final rule to permit national banks, savings associations,
state banks, bank holding companies, savings and loan holding
companies, and U.S. branches and agencies of foreign banking
organizations with under $10 billion in total assets as of December 31,
2019, (community banking organizations) to use asset data as of
December 31, 2019, in order to determine the applicability of various
regulatory asset thresholds during calendar years 2020 and 2021. For
the same reasons, the Board is temporarily revising the instructions to
a number of its regulatory reports to provide that community banking
organizations may use asset data as of December 31, 2019, in order to
determine reporting requirements for reports due in calendar years 2020
or 2021.
DATES:
Effective date: This rule is effective on December 2, 2020.
Comment date: Comments must be received on or before February 1,
2021.
ADDRESSES: Comments should be directed to:
OCC: You may submit comments to the OCC by any of the methods set
forth below. Commenters are encouraged to submit comments through the
Federal eRulemaking Portal, if possible. Please use the title
``Temporary Asset Thresholds'' to facilitate the organization and
distribution of the comments. You may submit comments by any of the
following methods:
Federal eRulemaking Portal--Regulations.gov Classic or
Regulations.gov Beta.
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2020-0044'' in the Search Box and click ``Search.''
Click on ``Comment Now'' to submit public comments. For help with
submitting effective comments, please click on ``View Commenter's
Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page
to get information on using Regulations.gov, including instructions for
submitting public comments.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov classic
homepage. Enter ``Docket ID OCC-2020-0044'' in the Search Box and click
``Search.'' Public comments can be submitted via the ``Comment'' box
below the displayed document information or click on the document title
and click the ``Comment'' box on the top-left side of the screen. For
help with submitting effective comments, please click on ``Commenter's
Checklist.'' For assistance with the Regulations.gov Beta site, please
call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 9
a.m.-5 p.m. ET or email to [email protected].
Mail: Chief Counsel's Office, Attn: Comment Processing,
Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E-
218, Washington, DC 20219.
Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2020-0044'' in your comment.
In general, the OCC will enter all comments received into the
docket and publish the comments on the Regulations.gov website without
change, including any business or personal information provided such as
name and address information, email addresses, or phone numbers.
Comments received, including attachments and other supporting
materials, are part of the public record and subject to public
disclosure. Do not include any information in your comment or
supporting materials that you consider confidential or inappropriate
for public disclosure.
You may review comments and other related materials that pertain to
this rulemaking action by the following methods:
Regulations.gov Classic or Regulations.gov Beta:
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2020-0044'' in the Search box and click ``Search.''
Click on ``Open Docket Folder'' on the right side of the screen.
Comments and supporting materials can be viewed and filtered by
clicking on ``View all documents and comments in this docket'' and then
using the filtering tools on the left side of the screen. Click on the
``Help'' tab on the Regulations.gov home page to get information on
using Regulations.gov. The docket may be viewed after the close of the
comment period in the same manner as during the comment period.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov classic
homepage. Enter ``Docket ID OCC 2020-0044'' in the Search Box and click
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and
filtered by clicking on the ``Sort By'' drop-down on the right side of
the screen or the ``Refine Results'' options on the left side of the
screen. Supporting Materials can be viewed by clicking on the
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down
on the right side of the
[[Page 77346]]
screen or the ``Refine Results'' options on the left side of the
screen. For assistance with the Regulations.gov Beta site please call
(877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 9 a.m.-5
p.m. ET or email [email protected]. The docket may be
viewed after the close of the comment period in the same manner as
during the comment period.
Board: You may submit comments, identified by Docket No. R-1731 and
RIN No. 7100-AG01, by any of the following methods:
Agency Web Site: http://www.federalreserve.gov. Follow the
instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
E-mail: [email protected]. Include docket
number and RIN in the subject line of the message.
Fax: (202) 452-3819 or (202) 452-3102.
Mail: Ann E. Misback, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue NW,
Washington, DC 20551.
All public comments are available from the Board's website at
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical reasons or to remove sensitive
PII at the commenter's request. Public comments may also be viewed
electronically or in paper form in Room 146, 1709 New York Avenue NW,
Washington, DC 20006, between 9:00 a.m. and 5:00 p.m. on weekdays.
FDIC: You may submit comments on the notice of proposed rulemaking
using any of the following methods:
Agency Website: https://www.fdic.gov/regulations/laws/federal. Follow the instructions for submitting comments on the agency
website.
Email: [email protected]. Include RIN 3064-AF67 on the
subject line of the message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW,
Washington, DC 20429.
Hand Delivery: Comments may be hand delivered to the guard
station at the rear of the 550 17th Street NW building (located on F
Street) on business days between 7 a.m. and 5 p.m.
Public Inspection: All comments received, including any
personal information provided, will be posted generally without change
to https://www.fdic.gov/regulations/laws/federal.
FOR FURTHER INFORMATION CONTACT:
OCC: Alison MacDonald, Special Counsel, or Kevin Korzeniewski,
Counsel, Chief Counsel's Office, (202) 649-5490.
Board: Juan Climent, Assistant Director, (202) 872-7526, Eric
Kennedy, Assistant Director, (202) 263-4887, Nancy J. Oakes, Manager,
(202) 452-3413, Teresa Scott, Manager, (202) 973-6114, Naima Jefferson,
Lead Financial Institution Policy Analyst, (202) 912-4613, Daniel
Newman, Senior Data Governance Analyst, (202) 973-7409, Senait Kahsay,
Senior Financial Institution Policy Analyst II, (202) 245-4209, Joseph
Willcox, Senior Financial Institution Policy Analyst II, (202) 452-
3663, Division of Supervision and Regulation; Laurie Schaffer, Deputy
General Counsel (202) 452-2272, Benjamin McDonough, Associate General
Counsel, (202) 973-7432, Jonah Kind, Counsel (202) 452-2045, Justyna
Bolter, Senior Attorney (202) 452-2686, Christopher Danello, Attorney,
(202) 736-1960, Legal Division, Board of Governors of the Federal
Reserve System, 20th and C Streets NW, Washington, DC 20551. For users
of Telecommunication Device for the Deaf (TDD), (202) 263-4869.
FDIC: Rae-Ann Miller, Associate Director, Risk Management Policy,
(202) 898-3898, Bobby R. Bean, Associate Director, Capital Markets,
(202) 898-6705; William Piervincenzi, Supervisory Counsel, (202) 898-
6957, Nefretete A. Smith, Counsel, (202) 898-6851, Michael B. Phillips,
Counsel, (202) 898-3581, Jennifer M. Jones, Counsel, (202) 898-6768,
[email protected], Supervision and Legislation Branch, Legal Division,
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington,
DC 20429. For the hearing impaired only, Telecommunication Device for
the Deaf (TDD), (800) 925-4618.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Discussion
A. Interim Final Rule
B. Reservation of Authority
C. Regulatory Reporting Changes
III. Request for Comment
IV. Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E. Riegle Community Development and Regulatory Improvement Act
of 1994
F. Unfunded Mandates Reform Act of 1995
G. Use of Plain Language
I. Background
In light of strains in economic conditions related to the COVID
event and stress in U.S. financial markets, the agencies have taken a
number of actions intended to: (i) Restore market functioning and
support the flow of credit to households, businesses, and communities
and (ii) increase flexibility and reduce regulatory reporting burden.
Among those actions, the agencies have issued a number of rules and
supervisory guidance communications designed to mitigate the
consequences of the COVID event and to facilitate the safe and
effective operations of banking organizations.\1\
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\1\ See ``Supervisory and Regulatory Actions in Response to
COVID-19,'' available at https://www.federalreserve.gov/supervisory-regulatory-action-response-covid-19.htm.; ``COVID-19
(Coronavirus),'' available at https://occ.gov/topics/supervision-and-examination/bank-operations/covid-19-information/convid-19-info-index.html; ``Coronavirus (COVID-19) Information for Bankers and
Consumers,'' available at https://www.fdic.gov/coronavirus/. See
also ``The FDIC Approves Interim Final Rule to Provide Temporary
Relief from Part 363 Audit and Reporting Requirements,'' available
at https://www.fdic.gov/news/financial-institution-letters/2020/fil20099.html and Final Rule Mitigating the Deposit Insurance
Assessment Effect of Participation in the Paycheck Protection
Program (PPP), the PPP Liquidity Facility, and the Money Market
Mutual Fund Liquidity Facility at https://www.fdic.gov/news/financial-institution-letters/2020/fil20063.html.
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Community banking organizations have played an instrumental role in
the nation's financial response to the COVID event, and many have
experienced significant balance sheet growth as a result of the COVID
event and the policy response to the event. Policies encouraging banks
to work with their customers, such as the Small Business
Administration's (SBA's) Paycheck Protection Program (PPP) \2\ and the
interagency statement encouraging financial institutions to work with
borrowers affected by the COVID event,\3\ have resulted in much-needed
emergency liquidity being offered to small businesses, including, but
not limited to, individuals operating sole proprietorships or acting as
independent contractors, certain franchisees, nonprofit corporations,
veterans organizations, Tribal businesses, and households. As a result,
during the COVID event many community banking organizations have
experienced an unexpected and sharp increase in assets, swelling their
balance sheets in some cases by more than 25 percent.\4\ Much of this
growth,
[[Page 77347]]
particularly that related to participation in PPP, is expected to be
temporary.
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\2\ The SBA's PPP was created under the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act) in response to market distress
caused by the COVID-19 event. Public Law 116-136, 134 Stat. 281.
\3\ ``Revised Interagency Statement on Loan Modifications by
Financial Institutions Working with Customers Affected by the
Coronavirus'' (Apr. 7, 2020), available at https://www.occ.gov/news-issuances/news-releases/2020/nr-ia-2020-50a.pdf.
\4\ Data derived from the Consolidated Reports of Condition and
Income (Call Report) and Financial Statements for Holding Companies
(FR Y-9C) data December 31, 2019 to June 30, 2020.
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PPP loans are a special asset class of government-guaranteed assets
designed to incentivize businesses to keep workers on payroll. To
encourage lending to small businesses through the SBA's PPP, the Board
established the PPP Liquidity Facility on April 9, 2019.\5\ Under the
PPP Liquidity Facility, each of the Federal Reserve Banks may extend
non-recourse loans to banking organizations that pledge PPP loans,
which continue to be assets on the balance sheets of banking
organizations, as collateral.\6\ The last day for lenders to make a PPP
loan was August 8, 2020,\7\ and depending on SBA determinations, a
significant amount of PPP debt forgiveness may occur in the fourth
calendar quarter of 2020 or early in the first calendar quarter of
2021. However, as a result of the PPP loan forgiveness process, many
PPP-related assets remain on community banking organizations' balance
sheets. The SBA recently released a simpler loan forgiveness
application for PPP loans of $50,000 or less, which will likely result
in PPP-related assets being removed from community banking
organization's balance sheets at a faster rate.\8\
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\5\ See https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
\6\ See Paycheck Protection Program Liquidity Facility Term
Sheet, available at https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a7.pdf.
\7\ U.S. Small Business Administration, ``Notice: Paycheck
Protection Program closed August 8, 2020,'' available at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-0.
\8\ U.S. Small Business Administration, ``SBA and Treasury
Announce Simpler PPP Forgiveness for Loans of $50,000 or Less'',
October 8, 2020 available at https://www.sba.gov/article/2020/oct/08/sba-treasury-announce-simpler-ppp-forgiveness-loans-50000-or-less.
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According to SBA statistics, collectively all lenders with less
than $10 billion in assets originated 2,745,204 PPP loans totaling
$233.7 billion, which buttressed the paychecks of more than 26 million
American workers and represented more than 52.6 percent of the number
of loans originated under the program.\9\ This data suggests that the
percentage of PPP loans originated by community banking organizations
far exceeds those organizations' market share as a percentage of total
banking system assets illustrating the outsized impact that
participation in the PPP has had on community banking
organizations.\10\
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\9\ U.S. Small Business Administration, ``Paycheck Protection
Program (PPP) Report: Approvals through 08/08/2020,'' available at
https://home.treasury.gov/system/files/136/SBA-Paycheck-Protection-Program-Loan-Report-Round2.pdf.
\10\ As of the June 30, 2020, approximately 80 percent of
depository institutions with assets less than $10 billion reported
PPP loans on their Call Report.
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Community banking organizations are subject to a wide range of
statutory requirements, regulations, and reporting requirements
predicated on their risk profile and asset size.\11\ Due to their
response to the COVID event, many community banking organizations have
been, or may soon be, pushed over an asset threshold that could subject
them to additional regulation or to additional reporting
requirements.\12\ In the absence of regulatory burden relief, complying
with these new or more stringent regulatory standards, especially if
the community banking organization's assets are expected to be above a
threshold for a limited time, would impose significant transition and
compliance costs on community banking organizations. This interim final
rule gives community banking organizations more time to either reduce
their balance sheets by shedding temporary growth, or to prepare for
higher regulatory and reporting standards.
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\11\ The agencies recognize there are some guidance documents
that include asset-based thresholds of $10 billion or below. In
these instances, the agencies are confirming that these thresholds
are exemplary only and not suggestive of requirements. For the
reasons discussed above, the agencies will take the same perspective
on asset-based thresholds in guidance as they are taking with regard
to asset-based regulatory thresholds.
\12\ Based on data as of June 30, 2020, the agencies estimate
that around 44 holding companies and 582 community banks crossed a
regulatory threshold set at $10 billion or less.
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II. Discussion
A. Interim Final Rule
A number of regulations contain asset-based thresholds that
determine whether a banking organization is required to comply with a
given regulatory requirement or provide a mandatory regulatory report,
or whether a banking organization is otherwise eligible for a
particular regulatory treatment. Asset-based regulatory thresholds are
meant to ensure that the regulatory requirements applicable to a
banking organization are appropriate, given the banking organization's
likely risk profile and, in some cases, the potential risk that the
banking organization poses to U.S. financial stability.
As discussed above, many community banking organizations have
experienced an unexpected and sharp increase in assets since the
beginning of the COVID event. This rapid growth has caused the assets
of certain community banking organizations to rise above certain asset-
based thresholds in the agencies' regulations, and may cause other
community banking organizations to do so in the near future. As noted,
much of this growth, especially growth related to PPP lending, is
likely to be temporary, and the increase in assets currently held by a
community banking organization may not reflect a change in the
organization's longer-term risk profile.
In the absence of regulatory burden relief, community banking
organizations that experience an increase in assets above one or more
regulatory thresholds would face significant transition costs necessary
to comply with new or more stringent regulatory and reporting
standards. Given the rapid and unexpected nature of community banking
organization asset growth in 2020, many community banking organizations
are unlikely to have planned for these transition costs. Further, to
the extent this asset growth is temporary, it does not reflect changes
in community banking organizations' risk profiles, and many community
banking organizations that cross above asset-based regulatory
thresholds could fall back below the thresholds. Additionally,
community banking organizations that are approaching certain asset
thresholds in the agencies' regulations may become reluctant to
continue lending if this would subject them to new or more stringent
regulatory and reporting standards. Therefore, the agencies believe it
is appropriate to provide temporary regulatory burden relief to
community banking organizations that have risen above, or will rise
above, certain asset-based regulatory thresholds. The relief should
promote further lending and avoid potentially temporary, but
significant, transition costs that community banking organizations
would otherwise face to comply with new standards.
In order to provide this regulatory burden relief, the agencies are
issuing this interim final rule to temporarily change, for a number of
asset-based regulatory thresholds, the date as of when a community
banking organization measures its assets for the purpose of determining
whether it exceeds the threshold (referred to as the ``measurement
date''). Specifically, the interim final rule will permit community
banking organizations, through December 31, 2021, to determine the
applicability of certain asset-based regulatory thresholds using asset
data as of December 31, 2019, if the organization's assets as of that
date were less than its assets on the date as
[[Page 77348]]
of which the applicability of a given threshold would normally be
determined. This means that asset growth in 2020 or 2021 will not
trigger new regulatory requirements for these community banking
organizations until January 1, 2022, at the earliest. This temporary
regulatory burden relief reflects that much of the asset growth since
the start of the COVID event, especially growth related to PPP lending,
is generally expected to be temporary in nature and therefore likely
does not reflect changes in community banking organizations' risk
profile.
The agencies are limiting the regulatory burden relief in this
interim final rule to banking organizations that had less than $10
billion in assets as of December 31, 2019. Banking organizations with
under $10 billion in assets likely have fewer resources available to
prepare and comply with previously unanticipated regulatory
requirements, especially during a time of economic uncertainty and
disruption. Further, as discussed above, community banking
organizations have originated a disproportionately large percentage of
PPP loans, as compared with the organizations' market share; therefore,
as compared to larger organizations, a larger portion of any increase
in asset size at community banking organizations is likely to be
temporary, and is therefore less likely to reflect a change in an
organization's risk profile or business activities.
This temporary regulatory burden relief applies to the following
asset-based regulatory thresholds: \13\
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\13\ This interim final rule does not address the exemption in
the Board's Regulation H from certain flood insurance escrow
requirements for qualifying state member banks (less than $1 billion
in assets as of December 31 of either of the two prior calendar
years, provided other conditions are also met), 12 CFR 208.25(e)(3),
or the provision in the Board's Regulation BB defining small bank
and intermediate small bank for purposes of determining applicable
Community Reinvestment Act evaluation procedures. As currently
defined in Regulation BB: a small bank is a bank that, as of
December 31 of either of the prior two calendar years, had assets of
less than $1.305 billion; an intermediate small bank is a small bank
with assets of at least $326 million as of December 31 of both of
the prior two calendar years and less than $1.305 billion as of
December 31 of either of the prior two calendar years; and a large
bank is a bank with assets of at least $1.305 billion as of December
31 of both of the prior two calendar years, 12 CFR 228.12(u)(1). As
indicated, the asset-based thresholds in these provisions take into
account assets as of the end of the two previous calendar years.
Therefore, the earliest that a bank with assets that did not exceed
one of these thresholds as of December 31, 2019, could exceed the
threshold is January 1, 2022. As a result, consistent with this
interim final rule, asset growth in 2020 or 2021 will not trigger
new regulatory requirements until January 1, 2022, at the earliest.
For similar reasons, the interim final rule does not adjust
thresholds in the OCC and the FDIC's flood insurance escrow rule at
12 CFR 22.5(c) (OCC) and 12 CFR 339.5(c) (FDIC) and Community
Reinvestment Act regulatory thresholds for small banks and
intermediate banks at 12 CFR part 25 (OCC) and 12 CFR 345 (FDIC).
The OCC also is not adjusting thresholds for depository institution
management interlocks at 12 CFR part 26, as this part already
permits any affected bank to request a waiver related to
unanticipated asset growth.
\14\ This interim final rule only provides temporary relief with
regard to the measurement date of assets. Other criteria that apply
to certain of the affected regulatory provisions remain in effect,
and the measurement date for other quantities has not been changed
by this interim final rule.
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Asset measurement Asset measurement
Regulation Regulatory threshold Asset-based threshold Rule location date (prior to date (for
effect \14\ January 1, 2022) requirements in 2022)
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OCC: Capital Adequacy Standards Eligibility for $10 billion in total OCC: 12 CFR 3.12..... December 31, 2019, or End of the most
(Part 3). community bank consolidated assets. Board: 12 CFR 217.12. the end of the most recent calendar
Board: Capital Adequacy of Bank leverage ratio FDIC: 12 CFR 324.12.. recent calendar quarter.
Holding Companies, Savings and framework. quarter, whichever
Loan Holding Companies, and State results in a lower
Member Banks (Regulation Q). amount.
FDIC: Capital Adequacy of FDIC-
Supervised Institutions.
Board: Debit Card Interchange Fees Exemption for small $10 billion in assets. Board: 12 CFR December 31, 2019, or December 31, 2021.
and Routing (Regulation II). issuers. 235.5(a). December 31, 2020,
whichever results in
a lower amount.
Board: Management Official Exemption from $10 billion in total Board: 12 CFR December 31, 2019, or End of the most
Interlocks (Regulation L). prohibition on assets. 212.3(c) the end of the recent fiscal year.
FDIC: Management Official service as a FDIC: 12 CFR 348.3(c) depository
Interlocks. ``management organization's most
official'' of recent fiscal year,
multiple institutions. whichever results in
a lower amount.
Exemption for honorary $100 million in total Board: 12 CFR
or advisory directors assets. 212.2(j)(1)
from definition of FDIC: 12 CFR
``management 348.2(k)(1)..
official''.
Exemption from $50 million in total Board: 12 CFR
relevant metropolitan assets. 212.3(b).
statistical area FDIC: 12 CFR
prohibition. 348.3(b)..
Board: Savings and Loan Holding Interlocks--Major $10 billion........... Board: 12 CFR December 31, 2019, or End of the most
Companies (Regulation LL). asset prohibition. 238.93(c). the end of the recent fiscal year.
organization's most
recent fiscal year,
whichever results in
a lower amount.
Audit requirement for $500 million.......... Board: 12 CFR December 31, 2019, or End of the most
safety and soundness 238.5(b). end of the recent fiscal year.
purposes. organization's most
recent fiscal year,
whichever results in
a lower amount.
Informational $150 million.......... Board: 12 CFR December 31, 2019, or End of the most
requirements for 238.53(c)(2)(iii)-(i the end of the most recent calendar
acquisition of a v). recent calendar quarter.
company. quarter, whichever
results in a lower
amount.
[[Page 77349]]
Interlocks--Exemption $100 million.......... Board: 12 CFR December 31, 2019, or End of the most
for honorary or 238.92(j)(1) the end of the recent fiscal year.
advisory directors organization's most
from definition of recent fiscal year,
``management whichever results in
official''. a lower amount.
Interlocks--Exemption $50 million........... Board: 12 CFR December 31, 2019, or End of the most
from relevant 238.93(b) the end of the recent fiscal year.
metropolitan organization's most
statistical area recent fiscal year,
prohibition. whichever results in
a lower amount.
OCC: Regulatory Reporting (Part 52) Eligibility for $5 billion............ OCC: 12 CFR 52.2 December 31, 2019, or June 30, 2021.
Board: Membership of State Banking reduced reporting of Board: 12 CFR June 30, 2020,
Institutions in the Federal the Consolidated 208.122(b). whichever results in
Reserve System (Regulation H). Reports of Condition FDIC: 12 CFR a lower amount.
FDIC: Forms, Instructions, and and Income (Call 304.12(a).
Reports. Report).
OCC: Organization and Functions Eligibility for 18- $3 billion............ OCC: 12 CFR 4.6(b)... December 31, 2019, or End of most recent
(Part 4, Subpart A). month examination Board: 12 CFR the end of the most calendar quarter.
Board: Membership of State Banking cycle. 208.64(b). recent calendar
Institutions in the Federal FDIC: 12 CFR quarter, whichever
Reserve System (Regulation H). 337.12(b). results in a lower
FDIC: Unsafe and Unsound Bank amount.
Practices.
Board: Membership of State Banking Eligibility for $150 million.......... 12 CFR 208.36(b)..... December 31, 2019, or End of the most
Institutions in the Federal streamlined method of the end of the recent fiscal year.
Reserve System (Regulation H). compliance with the bank's most recent
reporting fiscal year,
requirements of the whichever results in
Securities and a lower amount.
Exchange Commission.
Bank Holding Companies and Change Various thresholds in $3 billion, $300 12 CFR 225.4(b)(2) December 31, 2019, or Normally applicable
in Bank Control (Regulation Y). the Board's rules million, $150 (iii)(A)-(B), the end of the most asset measurement
regarding bank million, and $50 225.14(a)(1)(v)(A)(1 recent calendar date.
holding companies and million. )-(2), quarter, whichever
change in bank 225.14(a)(1)(vi), results in a lower
control (Regulation 224.14(c)(6)(ii), amount.
Y) concerning filing 225.17(a)(6),
requirements and 225.23(a)(1)(iii)(A)
permissible (1)-(2),
activities. 225.23(c)(5)(ii),
225.24(a)(2)(iv)-(v)
, 225.28(b)(11)(vi),
and Appendix C.
OCC: Organization and Functions Eligibility for an 18- $3 billion............ OCC: 12 CFR 4.7(b)... December 31, 2019, or End of most recent
(Part 4, Subpart A). month examination Board: 12 CFR the end of the most calendar quarter.
Board: International Banking cycle for U.S. 211.26(c)(2). recent calendar
Operations (Regulation K).. branches and agencies FDIC: 12 CFR quarter, whichever
FDIC: International Banking........ of foreign banks. 347.211(b). results in a lower
amount.
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As a result of this temporary regulatory burden relief, a community
banking organization that was below one of the above-listed asset
thresholds as of December 31, 2019, generally will be deemed to remain
below that threshold through the end of 2021, plus any applicable
transition period provided by the regulation. For example, the Board's
rules regarding debit card interchange fees and routing include an
exemption for small issuers, which provides that a debit card issuer is
not required to comply with certain requirements with respect to an
electronic debit transaction if the issuer holds the account that is
debited and the issuer, together with its affiliates, has assets of
less than $10 billion as of the end of the calendar year preceding the
date of the electronic debit transaction.\15\ Pursuant to this interim
final rule, an issuer that, together with its affiliates, had assets of
$9.9 billion as of December 31, 2019, $10.1 billion as of December 30,
2020, and $10.1 billion as of December 31, 2021, would be deemed to
remain below the $10 billion threshold for purposes of this rule
through the end of 2021, at which point the six-month transition period
provided by 12 CFR 235.5(a)(3) would begin. Therefore, this issuer
would not be required to comply with the Board's rules regarding debit
card interchange fees and routing until July 1, 2022.
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\15\ 12 CFR 235.5(a).
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The temporary regulatory burden relief provided by this interim
final rule applies through the end of 2021, so that a community banking
organization within the scope of the temporary regulatory burden relief
will not be required to comply with the regulatory or reporting
requirements covered by this interim final rule until the beginning of
2022 (plus any applicable transition period),\16\ at the earliest,
[[Page 77350]]
assuming that the organization remains above the relevant threshold.
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\16\ See 12 CFR 3.12(c) (OCC); 12 CFR 217.12(c) (Board); 12 CFR
324.12(c) (FDIC) (community bank leverage ratio framework); 12 CFR
235.5(a)(3) (rules regarding debit card interchange fees and
routing).
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The agencies have determined not to amend in this interim final
rule a provision in the agencies' regulations regarding section 13 of
the Bank Holding Company Act (BHC Act) (commonly known as the Volcker
Rule). The Volcker Rule generally applies to ``banking entities,''
which include insured depository institutions, their affiliates, and
any company that controls an insured depository institution, among
other companies.\17\ For purposes of the Volcker Rule, the definition
of ``insured depository institution'' excludes an insured depository
institution if the insured depository institution, and every entity
that controls it, has total consolidated assets equal to or less than
$10 billion, as long as the total consolidated trading assets and
liabilities of the insured depository institution, and every entity
that controls it, are equal to or less than five percent of the insured
depository institution's total consolidated assets.\18\
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\17\ 12 CFR 44.2(c) (OCC); 12 CFR 248.2(c) (Board); 12 CFR
324.12(c) (FDIC).
\18\ 12 CFR 44.2(r) (OCC); 12 CFR 248.2(r)(2) (Board); 12 CFR
351.2(r)(2) (FDIC). The Economic Growth, Regulatory Relief, and
Consumer Protection Act (EGRRCPA), enacted on May 24, 2018, amended
section 13 of the BHC Act by modifying the definition of ``banking
entity,'' to exclude certain small firms from section 13's
restrictions. EGRRCPA, Public Law 115-174, section 203 (May 24,
2018). This amendment was effective upon EGRRCPA's enactment.
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The agencies have determined that it is not necessary to amend the
Volcker Rule regulations in order to provide temporary regulatory
burden relief to a bank or any of its subsidiaries or affiliates that
become a ``banking entity'' for purposes of the Volcker Rule because
the assets of the bank or any entity that controls it increase above
the $10 billion asset threshold. Under section 13 of the BHC Act and
the Board's rule implementing the conformance period in the Volcker
Rule,\19\ an entity that newly becomes a ``banking entity'' for
purposes of the Volcker Rule has two years to come into compliance with
the requirements of the Volcker Rule, and may seek an extension of the
conformance period from the Board.\20\ A banking entity that ceases to
be a banking entity during that period--for example by virtue of
reducing its asset size--would no longer be subject to the Volcker
Rule.
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\19\ Pursuant to sections (c)(2) and (c)(6) of the Volcker Rule
(12 U.S.C. 1851(c)(2) and (c)(6)), the Board has sole authority to
issue rules to implement the Volcker Rule conformance period.
\20\ See 12 CFR 225.181(a)(2), (3).
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The regulation implementing the statutory Volcker Rule conformance
period have not yet been updated to account for the change in the
definition of ``banking entity'' implemented by EGRRCPA. However, the
Board notes that because the changes EGRRCPA made to the Volcker Rule
were effective immediately upon enactment, the conformance period
regulation should be read in a way that is consistent with EGRRCPA and
takes into account the amendments it made to the definition of
``banking entity.'' Under this interpretation, a company may become a
new banking entity by virtue of crossing the $10 billion asset
threshold under the definition of ``banking entity,'' as amended by
EGRRCPA. Therefore, for the sake of clarification, the Board confirms
that a company that was not a banking entity, or a subsidiary or
affiliate of a banking entity, and then becomes a banking entity for
purposes of the Volcker Rule because it, or any subsidiary or
affiliate, exceeds $10 billion in assets, will qualify for the
conformance period described in the Volcker Rule and the Board's
implementing regulations.\21\ This interpretation covers any company
that crossed the $10 billion asset threshold after the enactment of
EGRRCPA on May 24, 2018, including a company that crossed the threshold
after December 31, 2019.
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\21\ Although the conformance regulation refers to a requirement
that a company was not a banking entity as of July 21, 2010,
EGRRCPA's change to the definition of ``banking entity'' means that
a firm that was below the asset threshold as of July 21, 2010,
regardless of whether it was subject to the Volcker Rule at the
time, is eligible for the conformance period if it becomes a banking
entity due to exceeding the asset threshold.
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A. Reservation of Authority
The temporary regulatory burden relief described above is generally
available to community banking organizations that meet the requirements
described above. However, there may be limited instances in which such
regulatory burden relief would be inappropriate. In order to address
certain such situations, the agencies may use existing reservations of
authority in their respective regulations to require a community
banking organization to comply with a given regulatory requirement that
would otherwise not be applicable to the organization pursuant to the
relief provided by this interim final rule. Additionally, with respect
to each of the asset-based regulatory thresholds that did not
previously include a reservation of authority, the interim final rule
creates a new reservation of authority pursuant to which an agency may
determine that a community banking organization is not eligible to use
the relief provision with respect to one or more of the asset
thresholds covered by the rule if the relevant agency makes an
institution-specific determination that permitting the institution to
determine its assets in accordance with that relief provision would not
be appropriate based on the organization's risk
profile.22 23 When making any such determination, the
agencies would consider all relevant factors, including the extent of
asset growth of the community banking organization since December 31,
2019; the causes of such growth, including whether growth occurred as a
result of mergers or acquisitions; whether such growth is likely to be
temporary or permanent; whether the community banking organization has
become involved in any additional activities since December 31, 2019,
and, if so, the risk of such activities; the asset size of any parent
companies; and the type of assets held by the community banking
organization.\24\
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\22\ With respect to the exemption for small issuers from the
Board's rules regarding debit card interchange fees and routing, the
reservation of authority will concern a determination related to the
issuer's asset profile, rather than its risk profile, due to
differences in the relevant statutory framework.
\23\ The interim final rule does not include a new reservation
of authority in connection with the temporary relief provided with
respect to the $3 billion threshold in the agencies' rules that
determines, in part, a depository institution's eligibility for an
18-month examination cycle, because the rules already contain a
reservation of authority pursuant to which each agency may examine
any depository institution that it supervises as frequently as the
agency deems necessary. 12 CFR 4.6(c) and 4.7(c) (OCC); 12 CFR
208.64(c) (Board); 12 CFR 337.12(c) and 12 CFR 347.211(c) (FDIC).
Amendments to the agencies' capital regulations governing
eligibility for use of the community bank leverage ratio framework
and regulations affecting the prohibition on certain management
official interlocks each include a reservation of authority. The
agencies may exercise this reservation of authority to determine
that such relief provisions shall not apply to a supervised
institution if the relevant agency determines that such relief would
not be commensurate with the risk posed by the institution.
Amendments to the regulations governing eligibility to use the FFIEC
051 do not include new reservations of authority because the
existing reservations of authority would continue to apply. The
existing Call Reports rules reserve the authority of each agency to
require a depository intuition otherwise eligible for reduced
reporting to file the FFIEC 041 version of the report of condition.
12 CFR 52.4 (OCC); 12 CFR 304.14 (FDIC).
\24\ The temporary regulatory burden relief provided by this
interim final rule does not eliminate any existing authority of the
Board to apply a regulatory standard, such as a standard related to
application processing, to a community banking organization that,
due to its asset size, would otherwise not qualify for the standard.
For example, a bank holding company that meets certain
characteristics, including asset-size limits, may be eligible for
streamlined application processing. However, the Board or its
delegatee may in its discretion notify such organizations that a
full application is required in order to permit a closer review of
the proposal. Nothing in this interim final rule affects the Board's
authority to exercise such discretion, to request information that
is needed to analyze the relevant statutory factors for an
application or notice, or to consider the ability of a community
banking organization that files a notice or application with the
Board to comply with statutory or regulatory requirements that may
be applicable to the organization upon expiration of the relief
provided by this interim final rule.
Certain provisions of the Board's Regulation Y include asset-
based thresholds of $10 billion or below that are based on the pro
forma consolidated assets of a bank holding company or the
consolidated risk-weighted assets of a bank holding company
immediately following consummation of a proposed transaction. With
regard to these thresholds, the interim final rule permits bank
holding companies, through 2021, to calculate pro forma assets by
adding together the assets that each company involved in a business
combination had as of December 31, 2019. However, the calculation of
pro forma or combined assets must also include the December 31,
2019, assets of any company with which any company that is party to
a proposed business combination has itself combined with since
December 31, 2019.
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[[Page 77351]]
In particular, in determining that the community banking
organization is not eligible to use a regulatory burden relief
provision, the relevant agency will consider whether a community
banking organization crossed an asset-based regulatory threshold due to
a merger or acquisition that significantly increases the community
banking organization's asset size. Asset growth that occurs as a result
of a merger or acquisition is planned, unlike the growth that many
community banking organizations have experienced since the beginning of
the COVID event. Community banking organizations crossing a regulatory
threshold as a result of a merger or acquisition therefore have had the
opportunity to prepare for the change in regulatory requirements.
Additionally, asset growth caused by a merger or acquisition is
generally expected to be permanent and therefore not impose transition
costs for a requirement expected to be temporary. The reservations of
authority included in this interim final rule are not limited to
situations in which there has been a merger or acquisition because,
even in the absence of a merger or acquisition transaction, significant
asset growth at a community banking organization may reflect a material
change in the business model, risk profile, or complexity of the
community banking organization. Nonetheless, the agencies expect to
apply the reservation of authority only in limited circumstances, such
as when there is significant growth due to a merger or acquisition or
when there is a material change in the business model, risk profile, or
complexity of the community banking organization.
B. Regulatory Reporting Changes
Similar to the Board's regulations, a number of the Board's
regulatory reports contain asset-based thresholds that determine
whether a banking organization is required to report certain
information. For the same reason that the Board is providing the
regulatory burden relief discussed above with regard to determining the
applicability of asset-based thresholds contained in the Board's
regulations, the Board is temporarily revising certain of its
regulatory reports that contain asset-based reporting thresholds set at
$10 billion or less pursuant to the Board's authority to temporarily
revise a collection of information without providing the opportunity
for public comment. This regulatory burden relief applies to reports
with as-of dates up to and including December 31, 2021. Specifically,
with regard to each of the regulatory reports discussed below, through
December 31, 2021, a banking organization will be permitted to
determine the applicability of asset-based reporting thresholds set at
$10 billion or less using asset data as of December 31, 2019, if the
organization's assets as of that date were less than its assets on the
date as of which the applicability of a given threshold would normally
be determined. The revisions to the affected reports do not affect the
substantive reporting instructions for any item, schedule, or report.
Rather, they merely affect which banking organizations are required to
report certain items, schedules, or reports.
As with regard to asset-based regulatory thresholds, and for the
same reasons, the Board will retain a reservation of authority with
regard to each of the affected reports, pursuant to which the Board
would retain the authority to require a banking organization to use an
asset measurement date other than December 31, 2019, to determine
compliance with a reporting threshold. The Board will use the same
factors in determining whether to exercise its reservation of authority
with regard to reporting thresholds as with regard to regulatory
thresholds.
The regulatory burden relief discussed above applies to the
following information collections:
Financial Statements for Holding Companies (FR Y-9
Reports; OMB No. 7100-0128);
Statements of U.S. Nonbank Subsidiaries of U.S. Holding
Companies (FR Y-11 and FR Y-11S; 7100-0244);
Reports of Foreign Banking Organizations (FR Y-7N, FR Y-
7NS, and FR Y-7Q; 7100-0125); and
Statements of Foreign Subsidiaries of U.S. Banks (FR 2314
and FR 2314S; OMB No. 7100-0073).
The agencies plan to publish a separate Federal Register notice
that will address corresponding changes to the Call Reports.
The following chart summarizes the manner in which banking
organizations will be required to determine the applicability of
various reporting thresholds through the end of 2021 and afterwards.
Table 1--Reporting Requirements for Affected Federal Reserve Reports
Under the Interim Final Rule and After Regulatory Burden Relief Ends \1\
------------------------------------------------------------------------
Filers use assets
as of these dates
Reporting to determine
Information collection applicability for reporting
2020-2021 requirement for
2022 \2\
------------------------------------------------------------------------
FR Y-9C (quarterly)-- Report filing not Use 06/30/2021
Consolidated Financial required for total assets to
Statements for Holding holding company determine
Companies. below the $3 reporting
billion asset applicability for
threshold using reports with 2022
the lesser of as-of dates.
most current
filing applicable
date or 12/31/
2019 as-of-date.
FR Y-9LP (quarterly)--Parent Report filing not Use 06/30/2021
Company Only Financial required for total assets to
Statements for Large Holding holding company determine
Companies. below the $3 reporting
billion asset applicability for
threshold using reports with 2022
the lesser of as-of dates.
most current
filing applicable
date or 12/31/
2019 as-of-date.
[[Page 77352]]
FR Y-11 (quarterly)--Financial Quarterly report Use 06/30/2021
Statements of U.S. Nonbank filing not total assets to
Subsidiaries of U.S. Bank required if determine
Holding Companies. nonbank eligibility for
subsidiary had reports with 2022
assets of at as-of dates.
least $500
million but less
than $1 billion
using the lesser
of most current
filing applicable
date or 12/31/
2019 as-of-date
and does not meet
any the other
criteria to file
quarterly.
FR Y-11 (annual)--Financial Annual report Use total assets
Statements of U.S. Nonbank filing not as of the
Subsidiaries of U.S. Bank required if reporting as-of
Holding Companies. nonbank date (12/31/2022)
subsidiary has to determine
assets of less reporting
than $500 million applicability.
using the lesser
of most current
filing applicable
date or 12/31/
2019 as-of-date.
FR Y-11S (annual)--Abbreviated Report filing not Use total assets
Financial Statements of U.S. required if as of the
Nonbank Subsidiaries of U.S. nonbank reporting as-of
Holding Co. subsidiary was date (12/31/2022)
not greater than to determine
$250 million and reporting
less than $500 applicability.
million using the
lesser of most
current filing
applicable date
or 12/31/2019 as-
of-date and does
not meet the
other filing
criteria.
FR Y-7N (quarterly)--Financial Quarterly report Use total assets
Statements of U.S. Nonbank filing not as of the
Subsidiaries Held by Foreign required if reporting as-of
Banking Organizations. nonbank date to determine
subsidiary was reporting
below the $1 applicability.
billion asset
threshold using
the lesser of
most current
filing applicable
date or 12/31/
2019 as-of-date
and does not meet
any other filing
criteria.
FR Y-7N (annual)--Financial Report filing not Use total assets
Statements of U.S. Nonbank required if as of the
Subsidiaries Held by Foreign nonbank reporting as-of
Banking Organizations. subsidiary was date (12/31/2022)
not greater than to determine
$500 million and reporting
less than $1 applicability.
billion using
lesser of most
current filing
applicable date
or 12/31/2019 as-
of-date and does
not meet any
other filing
criteria.
FR Y-7NS (annual)--Abbreviated Report filing not Use total assets
Financial Statements of U.S. required if as of the
Nonbank Subsidiaries Held by nonbank reporting as-of
Foreign Banking Organizations. subsidiary was date (12/31/2022)
not greater than to determine
$250 million and reporting
less than $500 applicability.
million using the
lesser of most
current filing
applicable date
or 12/31/2019 as-
of-date and does
not meet the
other filing
criteria.
FR 2314 (quarterly)--Financial Quarterly report Use 06/30/2021
Statements of Foreign filing not total assets to
Subsidiaries of U.S. Banking required if determine
Organizations. nonbank eligibility for
subsidiary has reports with 2022
assets less than as-of dates.
$1 billion using
the lesser of
most current
filing applicable
date or 12/31/
2019 as-of-date
and does not meet
any of other
criteria to file
quarterly.
FR 2314 (annual)--Financial Report filing not Use total assets
Statements of Foreign required if as of the
Subsidiaries of U.S. Banking nonbank was not reporting as-of
Organizations. greater than $500 date (12/31/2022)
million and less to determine
than $1 billion reporting
in total assets applicability.
using lesser of
most current
filing applicable
date or 12/31/
2019 as-of-date.
FR 2314S (annual)--Abbreviated Report filing not Use total assets
Financial Statements of Foreign required if as of the
Subsidiaries of U.S. Banking nonbank was not reporting as-of
Org. greater than $250 date (12/31/2022)
million and less to determine
than $500 million reporting
in total asset applicability.
using the lesser
of most current
filing applicable
date or 12/31/
2019 as-of-date.
------------------------------------------------------------------------
\1\ During 2020-2021, applicability of new reporting requirements would
be based on the December 31, 2019 data. For example, a holding company
that does not currently file the FR Y-9C will not use its June 2020
total consolidated assets (TCA) to determine the March 31, 2021,
filing requirement, and would not be required to file the FR Y-9C
report until March 21, 2022. After the regulatory burden relief ends,
the institution would use June 30, 2021, TCA to determine initial
filing for the March 31, 2022, reporting period.
\2\ Beginning January 1, 2022, asset measurement for applicability of
reporting will revert-back to how institutions determined
applicability prior to the reporting relief.
II. Request for Comment
The agencies seek comment on all aspects of this interim final
rule. In particular, the agencies seek comment on the duration of the
temporary regulatory burden relief and on the following specific
question:
(1): What are the advantages and disadvantages of requiring
community banking organizations subject to this interim final rule to
determine compliance with regulatory thresholds using the lesser of an
organization's assets as of December 31, 2019, and its assets on the
date as of which the applicability of a given threshold would normally
be determined? What would be the advantages and disadvantages of an
alternative measurement date? Commenters are invited to describe other
dates and the advantages and disadvantages of any such dates.
III. Administrative Law Matters
A. Administrative Procedure Act
The agencies are issuing the interim final rule without prior
notice and the opportunity for public comment and without the 30-day
delayed effective date ordinarily prescribed by the
[[Page 77353]]
Administrative Procedure Act (APA).\25\ 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.'' \26\
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\25\ 5 U.S.C. 553.
\26\ 5 U.S.C. 553(b)(B).
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As discussed above, the interim final rule provides temporary
regulatory burden relief to community banking organizations crossing
regulatory and reporting asset thresholds in 2020 and 2021. Many
community banking organizations have experienced dramatic and
unexpected increases in their assets as a result of their efforts to
support the economy during the ongoing COVID event. As noted, a
significant portion of this asset growth can be traced to participation
by community banking organizations in emergency lending programs
sponsored by the U.S. government, other lending related to the COVID
event, and an unexpected surge in deposits. The interim final rule
facilitates the ability of community banking organizations to
temporarily defer the implementation of regulatory and reporting
thresholds that would not have been applicable had they not experienced
this growth in assets. Therefore, the interim final rule benefits
community banking organizations from the above referenced regulations
and reports by providing temporary regulatory burden relief. The
interim final rule does not impose any requirements on any covered
community banking organizations.
The agencies believe that the public interest is best served by
making the interim final rule effective immediately upon publication in
the Federal Register. The agencies believe that issuing the interim
final rule will ensure that community banking organizations will not be
unnecessarily required to comply with threshold-based regulatory
standards that may not be appropriate given the organizations' likely
long-term risk profile and activities after the reversal of any
temporary growth. The interim final rule also will allow community
banking organizations to avoid the costs of temporarily complying with
regulatory requirements, allowing the banking organizations to continue
to focus on the provision of credit during this time of economic
stress. In addition, the agencies believe that providing a notice and
comment period prior to issuance of the interim final rule is
impracticable, as community banking organizations may start incurring
transition costs prior to the end of 2020 in anticipation of needing to
comply with additional requirements starting as early as December 31,
2020. For these reasons, the agencies find there is good cause
consistent with the public interest to issue the interim final rule
without advance notice and comment.
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.\27\ The
agencies find good cause to publish the interim final rule with an
immediate effective date for the same reasons set forth above under the
discussion of section 553(b)(B) of the APA.
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\27\ 5 U.S.C. 553(d).
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While the agencies believe there is good cause to issue the interim
final rule without advance notice and comment and with an immediate
effective date, the agencies are requesting comment on all aspects of
the interim final rule.
B. Congressional Review Act
For purposes of Congressional Review Act (CRA), OMB makes a
determination as to whether a final rule constitutes a ``major''
rule.\28\ If a rule is deemed a ``major rule'' by the OMB, the CRA
generally provides that the rule may not take effect until at least 60
days following its publication.\29\
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\28\ 5 U.S.C. 801 et seq.
\29\ 5 U.S.C. 801(a)(3).
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The CRA 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.\30\
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\30\ 5 U.S.C. 804(2).
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For the same reasons set forth above, the agencies are adopting the
interim final rule without the delayed effective date generally
prescribed under the CRA. The delayed effective date required by the
CRA does not apply to any rule for 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. In
light of current market uncertainty and because community banking
organizations may start incurring transition costs prior to the end of
2020 in anticipation of needing to comply with additional requirements
starting as early as December 31, 2020, the agencies believe that
delaying the effective date of the rule would be contrary to the public
interest.
As required by the CRA, the agencies will submit the final rule and
other appropriate reports to Congress and the Government Accountability
Office for review.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) states that no agency may
conduct or sponsor, nor is a respondent required to respond to, an
information collection unless it displays a currently valid OMB control
number.\31\ The interim final rule affects the agencies' current
information collections for the Call Reports (FFIEC 031, FFIEC 041, and
FFIEC 051). The OMB control numbers for the Call Reports of the
agencies are: OCC OMB No. 1557-0081; Board OMB No. 7100-0036; and FDIC
OMB No. 3064-0052.
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\31\ 44 U.S.C. 3501-3521.
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For purposes of the Call Reports, any change resulting from the
relief provided by this interim final rule should be minimal and result
in a zero net change in hourly burden under the agencies' information
collections. Submissions will, however, be made by the agencies to OMB.
The changes to the instructions of the Call Reports will be addressed
in a separate Federal Register notice.
In addition, this interim final rule does not introduce any new
information collections. It does, however, temporarily impact the
following information collections: FR Y-9 Reports; FR Y-11; FR Y-11S;
FR Y-7N; FR Y-7NS; FR 2314; and FR 2314S. The Board has reviewed this
interim final rule pursuant to authority delegated by the OMB. The
Board has temporarily revised the instructions for these information
collections to reflect changes made in the interim final rule.
On June 15, 1984, OMB delegated to the Board authority under the
PRA to approve a temporary revision to a collection of information
without
[[Page 77354]]
providing opportunity for public comment if the Board determines that a
change in an existing collection must be instituted quickly and that
public participation in the approval process would defeat the purpose
of the collection or substantially interfere with the Board's ability
to perform its statutory obligation.
The Board's delegated authority requires that the Board, after
temporarily approving a collection, solicit public comment on a
proposal to extend the temporary collection for a period not to exceed
three years. Therefore, the Board is inviting comment on a proposal to
extend these information collections for three years with such
revisions. The Board invites public comment on the information
collections, which are being reviewed under authority delegated by the
OMB under the PRA. Comments are invited on the following:
a. Whether the collections of information are necessary for the
proper performance of the Board's functions, including whether the
information has practical utility;
b. The accuracy of the Board's estimate of the burden of the
proposed information collections, including the validity of the
methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the
information to be collected;
d. Ways to minimize the burden of information collection on
respondents, including through the use of automated collection
techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation,
maintenance, and purchase of services to provide information.
Comments must be submitted on or before February 1, 2021. At the
end of the comment period, the comments and recommendations received
will be analyzed to determine the extent to which the Board should
modify the information collection.
Approval Under OMB Delegated Authority of the Temporary Revision of,
and Proposal To Extend for Three Years, With Revision, the Following
Information Collections
1. Report Title: Financial Statements for Holding Companies
Agency form number: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9ES, and FR
Y-9CS.
OMB control number: 7100-0128.
Effective date: December 2, 2020.
Frequency: Quarterly, semiannually, and annually.
Respondents: Bank holding companies, savings and loan holding
companies, securities holding companies, and U.S. intermediate holding
companies (collectively, holding companies).
Estimated number of respondents: FR Y-9C (non-advanced approaches
community bank leverage ratio holding companies with less than $5
billion in total assets): 71; FR Y-9C (non-advanced approaches
community bank leverage ratio holding companies with $5 billion or more
in total assets): 35; FR Y-9C (non-advanced approaches, non-community
bank leverage ratio, holding companies with less than $5 billion in
total assets): 84; FR Y-9C (non-advanced approaches, non-community bank
leverage ratio holding companies, with $5 billion or more in total
assets): 154; FR Y-9C (advanced approaches holding companies): 19; FR
Y-9LP: 434; FR Y-9SP: 3,960; FR Y-9ES: 83; FR Y-9CS: 236.
Estimated annual burden hours:
Reporting
FR Y-9C (non-advanced approaches community bank leverage ratio
holding companies with less than $5 billion in total assets): 8,284
hours; FR Y-9C (non-advanced approaches community bank leverage ratio
holding companies with $5 billion or more in total assets): 4,920; FR
Y-9C (non-advanced approaches non community bank leverage ratio holding
companies with less than $5 billion in total assets): 13,779; FR Y-9C
(non-advanced approaches non-community bank leverage ratio holding
companies with $5 billion or more in total assets): 28,940 hours; FR Y-
9C (advanced approaches holding companies): 3,747 hours; FR Y-9LP:
9,149 hours; FR Y-9SP: 42,768 hours; FR Y-9ES: 42 hours; FR Y-9CS: 472
hours.
Recordkeeping
FR Y-9C (non-advanced approaches holding companies with less than
$5 billion in total assets): 620 hours; FR Y-9C (non-advanced
approaches holding companies with $5 billion or more in total assets):
756 hours; FR Y-9C (advanced approaches holding companies): 76 hours;
FR Y-9LP: 1,736 hours; FR Y-9SP: 3,960 hours; FR Y-9ES: 42 hours; FR Y-
9CS: 472 hours.
General description of report: The FR Y-9 family of reporting forms
continues to be the primary source of financial data on holding
companies that examiners rely on in the intervals between on-site
inspections. Financial data from these reporting forms are used to
detect emerging financial problems, to review performance and conduct
pre-inspection analysis, to monitor and evaluate capital adequacy, to
evaluate holding company mergers and acquisitions, and to analyze a
holding company's overall financial condition to ensure the safety and
soundness of its operations. The FR Y-9C, FR Y-9LP, and FR Y-9SP serve
as standardized financial statements for the consolidated holding
company. The Board requires holding companies to provide standardized
financial statements to fulfill the Board's statutory obligation to
supervise these organizations. The FR Y-9ES is a financial statement
for holding companies that are Employee Stock Ownership Plans. The
Board uses the voluntary FR Y-9CS (a free-form supplement) to collect
additional information deemed to be critical and needed in an expedited
manner. Holding companies file the FR Y-9C quarterly, the FR Y-9LP
quarterly, the FR Y-9SP semiannually, the FR Y-9ES annually, and the FR
Y-9CS on a schedule that is determined when this supplement is used.
Legal authorization and confidentiality: The Board has the
authority to impose the reporting and recordkeeping requirements
associated with the FR Y-9 family of reports on bank holding companies
pursuant to section 5 of the BHC Act, (12 U.S.C. 1844); on savings and
loan holding companies pursuant to section 10(b)(2) and (3) of the Home
Owners' Loan Act, (12 U.S.C. 1467a(b)(2) and (3)); on U.S. intermediate
holding companies pursuant to section 5 of the BHC Act, (12 U.S.C
1844), as well as pursuant to sections 102(a)(1) and 165 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),
(12 U.S.C. 511(a)(1) and 5365); and on securities holding companies
pursuant to section 618 of the Dodd-Frank Act, (12 U.S.C.
1850a(c)(1)(A)). The FR Y-9 series of reports, and the recordkeeping
requirements set forth in the respective instructions to each report,
are mandatory, except for the FR Y-9CS, which is voluntary.
With respect to the FR Y-9C, Schedule HI Memoranda item 7.g,
Schedule HC-P item 7.a, and Schedule HC-P item 7.b are considered
confidential commercial and financial information under exemption 4 of
the Freedom of Information Act (FOIA), (5 U.S.C. 552(b)(4)), as is
Schedule HC Memoranda item 2.b for both the FR Y-9C and FR Y-9SP
reports. Such treatment is appropriate under exemption 4 of the FOIA (5
U.S.C. 552(b)(4)) because these data items reflect commercial and
financial information that is both customarily and actually treated as
private by the
[[Page 77355]]
submitter, and which the Board has previously assured submitters will
be treated as confidential. It also appears that disclosing these data
items may reveal confidential examination and supervisory information,
and in such instances, this information would also be withheld pursuant
to exemption 8 of the FOIA (5 U.S.C. 552(b)(8)), which protects
information related to the supervision or examination of a regulated
financial institution.
In addition, for both the FR Y-9C report and the FR Y-9SP report,
Schedule HC Memoranda item 2.b, the name and email address of the
external auditing firm's engagement partner, is considered confidential
commercial information and protected by exemption 4 of the FOIA (5
U.S.C. 552(b)(4)) if the identity of the engagement partner is treated
as private information by holding companies. The Board has assured
respondents that this information will be treated as confidential since
the collection of this data item was proposed in 2004.
Additionally, items on the FR Y-9C, Schedule HC-C regarding loans
modified under Section 4013 (Memoranda item 16.a, ``Number of Section
4013 loans outstanding'', and Memoranda item 16.b, ``Outstanding
balance of Section 4013 loans'') are considered confidential. While the
Board generally makes institution-level FR Y-9C report data publicly
available, the Board believes the disclosure of these items at the
holding company level would not be in the public interest.\32\ Such
information is permitted to be collected on a confidential basis,
consistent with 5 U.S.C. 552(b)(8).\33\ Holding companies may be
reluctant to offer modifications under Section 4013 if information on
these modifications is publicly available, as analysts, investors, and
other users of public FR Y-9C report information may penalize an
institution for using the relief provided by the CARES Act.
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\32\ See 12 U.S.C. 1464(v)(2).
\33\ Exemption 8 of the Freedom of Information Act (FOIA)
specifically exempts from disclosure information ``contained in or
related to examination, operating, or condition reports prepared by,
on behalf of, or for the use of an agency responsible for the
regulation or supervision of financial institutions.''
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Aside from the data items described above, the remaining data items
on the FR Y-9 report and the FR Y-9SP report are generally not accorded
confidential treatment. The data items collected on FR Y-9LP, FR Y-9ES,
and FR Y-9CS reports, are also generally not accorded confidential
treatment. As provided in the Board's Rules Regarding Availability of
Information (12 CFR part 261), however, a respondent may request
confidential treatment for any data items the respondent believes
should be withheld pursuant to a FOIA exemption. The Board will review
any such request to determine if confidential treatment is appropriate,
and will inform the respondent if the request for confidential
treatment has been denied.
To the extent that the instructions to the FR Y-9C, FR Y-9LP, FR Y-
9SP, and FR Y-9ES reports each respectively direct a financial
institution to retain the workpapers and related materials used in
preparation of each report, such material would only be obtained by the
Board as part of the examination or supervision of the financial
institution. Accordingly, such information may be considered
confidential pursuant to exemption 8 of the FOIA (5 U.S.C. 552(b)(8)).
In addition, the financial institution's workpapers and related
materials may also be protected by exemption 4 of the FOIA, to the
extent such financial information is treated as confidential by the
respondent (5 U.S.C. 552(b)(4)).
2. Report Title: Financial Statements of U.S. Nonbank Subsidiaries of
U.S. Holding Companies and Abbreviated Financial Statements of U.S
Nonbank Subsidiaries of U.S. Holding Companies
Agency form number: FR Y-11 and FR Y-11S.
OMB control number: 7100-0244.
Effective date: December 2, 2020.
Frequency: Quarterly and annually.
Respondents: Domestic bank holding companies, savings and loan
holding companies, securities holding companies, and intermediate
holding companies.
Estimated number of respondents: FR Y-11 (quarterly): 445; FR Y-11
(annually): 189; FR Y-11S: 273.
Estimated annual burden hours: FR Y-11 (quarterly): 13,528 hours;
FR Y-11 (annually): 1,436 hours; FR Y-11S: 273 hours.
General description of report: The FR Y-11 family of reports
collects financial information for individual U.S. nonbank subsidiaries
of domestic holding companies, which is essential for monitoring the
subsidiaries' potential impact on the condition of the holding company
or its subsidiary banks. Holding companies file the FR Y-11 on a
quarterly or annual basis or the FR Y-11S on an annual basis,
predominantly based on whether the organization meets certain asset
size thresholds.
Legal authorization and confidentiality: The Board has the
authority to require bank holding companies and any subsidiary thereof,
savings and loan holding companies and any subsidiary thereof, and
securities holding companies and any affiliate thereof to file the FR
Y-11 pursuant to, respectively, section 5(c) of the BHC Act (12 U.S.C.
1844(c)), section 10(b) of the Homeowners' Loan Act (12 U.S.C.
1467a(b)), and section 618 of the Dodd-Frank Act (12 U.S.C. 1850a).
Information collected in these reports generally is not considered
confidential. However, because the information is collected as part of
the Board's supervisory process, certain information may be afforded
confidential treatment pursuant to exemption 8 of the FOIA (5 U.S.C.
552(b)(8)). Individual respondents may request that certain data be
afforded confidential treatment pursuant to exemption 4 of the FOIA if
the data has not previously been publically disclosed and the release
of the data would likely cause substantial harm to the competitive
position of the respondent (5 U.S.C. 552(b)(4)). Additionally,
individual respondents may request that personally identifiable
information be afforded confidential treatment pursuant to exemption 6
of the FOIA if the release of the information would constitute a
clearly unwarranted invasion of personal privacy (5 U.S.C. 552(b)(6)).
The applicability of the FOIA exemptions 4 and 6 would be determined on
a case-by-case basis.
3. Report Title: The Financial Statements of U.S. Nonbank Subsidiaries
Held by Foreign Banking Organizations, Abbreviated Financial Statements
of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations, and
the Capital and Asset Report of Foreign Banking Organizations
Agency form number: FR Y-7N, FR Y-7NS, and FR Y-7Q.
OMB control number: 7100-0125.
Effective date: December 2, 2020.
Frequency: Quarterly and annually.
Respondents: Foreign banking organizations.
Estimated number of respondents: FR Y-7N (quarterly): 35; FR Y-7N
(annually): 19; FR Y-7NS: 22; FR Y-7Q (quarterly): 130; FR Y-7Q
(annually): 29.
Estimated annual burden hours: FR Y-7N (quarterly): 1,064 hours; FR
Y-7N (annually): 144 hours; FR Y-7NS: 22 hours; FR Y-7Q (quarterly):
1,560 hours; FR Y-7Q (annually): 44 hours.
General description of report: The FR Y-7N and the FR Y-7NS are
used to assess a foreign banking organization's ability to be a
continuing source of strength to its U.S. nonbank operations and to
determine compliance with U.S.
[[Page 77356]]
laws and regulations. Foreign banking organizations file the FR Y-7N
quarterly or annually, or the FR Y-7NS annually, predominantly based on
asset size thresholds. The FR Y-7Q is used to assess consolidated
regulatory capital and asset information from all foreign banking
organizations. The FR Y-7Q is filed quarterly by foreign banking
organizations that have effectively elected to become or be treated as
a U.S. financial holding company and by foreign banking organizations
that have total consolidated assets of $50 billion or more, regardless
of financial holding company status. All other foreign banking
organizations file the FR Y-7Q annually.
Legal authorization and confidentiality: With respect to foreign
banking organizations and their subsidiary intermediate holding
companies, section 5(c) of the BHC Act, in conjunction with section 8
of the International Banking Act (12 U.S.C. 3106), authorizes the board
to require foreign banking organizations and any subsidiary thereof to
file the FR Y-7N reports, and the FR Y-7Q. Information collected in
these reports generally is not considered confidential. However,
because the information is collected as part of the Board's supervisory
process, certain information may be afforded confidential treatment
pursuant to exemption 8 of the FOIA (5 U.S.C. 552(b)(8)). Individual
respondents may request that certain data be afforded confidential
treatment pursuant to exemption 4 of the FOIA if the data has not
previously been publicly disclosed and the release of the data would
likely cause substantial harm to the competitive position of the
respondent (5 U.S.C. 552(b)(4)). Additionally, individual respondents
may request that personally identifiable information be afforded
confidential treatment pursuant to exemption 6 of the FOIA if the
release of the information would constitute a clearly unwarranted
invasion of personal privacy (5 U.S.C. 552(b)(6)). The applicability of
the FOIA exemptions 4 and 6 would be determined on a case-by-case
basis.
4. Report Title: Financial Statements of Foreign Subsidiaries of U.S.
Banking Organizations and the Abbreviated Financial Statements of
Foreign Subsidiaries of U.S. Banking Organizations
Agency form number: FR 2314 and FR 2314S.
OMB control number: 7100-0073.
Effective date: December 2, 2020.
Frequency: Quarterly and annually.
Respondents: U.S. state member banks, bank holding companies,
savings and loan holding companies, intermediate holding companies, and
Edge or agreement corporations.
Estimated number of respondents: FR 2314 (quarterly): 439; FR 2314
(annually): 239; FR 2314S: 300.
Estimated annual burden hours: FR 2314 (quarterly): 12,643 hours;
FR 2314 (annually): 1,768 hours; FR 2314S: 300 hours.
General description of report: The FR 2314 family of reports is the
only source of comprehensive and systematic data on the assets,
liabilities, and earnings of the foreign nonbank subsidiaries of U.S.
banking organizations, and the data are used to monitor the growth,
profitability, and activities of these foreign companies. The data help
the Board identify present and potential problems of these companies,
monitor their activities in specific countries, and develop a better
understanding of activities within the industry and within specific
institutions. Parent organizations (state member banks, Edge and
agreement corporations, or holding companies) file the FR 2314 on a
quarterly or annual basis, or the FR 2314S on an annual basis,
predominantly based on whether the organization meets certain asset
size thresholds.
Legal authorization and confidentiality: The Board has the
authority to require bank holding companies and any subsidiary thereof,
savings and loan holding companies and any subsidiary thereof, and
securities holding companies and any affiliate thereof to file the FR
2314 pursuant to, respectively, section 5(c) of the BHC Act (12 U.S.C.
1844(c)), section 10(b) of the Homeowners' Loan Act (12 U.S.C.
1467a(b)), and section 618 of the Dodd-Frank Act (12 U.S.C. 1850a). The
Board has the authority to require state member banks, agreement
corporations, and Edge corporations to file the FR 2314 pursuant to,
respectively, sections 9(6), 25(7), and 25A(17) of the Federal Reserve
Act (12 U.S.C. 324, 602, and 625). With respect to foreign banking
organizations and their subsidiary intermediate holding companies,
section 5(c) of the BHC Act, in conjunction with section 8 of the
International Banking Act (12 U.S.C. 3106), authorizes the board to
require foreign banking organizations and any subsidiary thereof to
file the FR 2314 reports. These reports are mandatory.
Information collected in these reports generally is not considered
confidential. However, because the information is collected as part of
the Board's supervisory process, certain information may be afforded
confidential treatment pursuant to exemption 8 of the FOIA (5 U.S.C.
552(b)(8)). Individual respondents may request that certain data be
afforded confidential treatment pursuant to exemption 4 of the FOIA if
the data has not previously been publically disclosed and the release
of the data would likely cause substantial harm to the competitive
position of the respondent (5 U.S.C. 552(b)(4)). Additionally,
individual respondents may request that personally identifiable
information be afforded confidential treatment pursuant to exemption 6
of the FOIA if the release of the information would constitute a
clearly unwarranted invasion of personal privacy (5 U.S.C. 552(b)(6)).
The applicability of the FOIA exemptions 4 and 6 would be determined on
a case-by-case basis.
Current actions: The interim final rule adjusts for community
banking organizations the measurement dates for certain total asset
thresholds that would otherwise trigger additional information
collection requirements for the remainder of calendar years 2020
through the end of 2021. The temporary relief applies only to filing
requirements associated with asset-based reporting thresholds of $10
billion or less. Table 1 of the interim final rule contains a summary
of affected reports, reporting applicability for 2020-2021, and the
dates for determining reporting requirements for 2022.
To implement the interim final rule, the Board is temporarily
revising the instructions for the following reports: FR Y-9C, FR Y-9LP,
FR Y-11, FR Y-11S, FR Y-7N, FR Y-7NS, FR 2314, and FR 2314S. The
revised instructions instruct community banking organizations to use
the lesser of total assets as of December 31, 2019, or the most recent
applicable measurement period to determine the applicability of asset-
based filing thresholds for the remainder of calendar years 2020
through the end of 2021. All reporting eligibility criteria for these
information collections, besides the temporarily revised total assets
measurement date, continue to apply. Financial institutions must revert
back to normal rules for determining applicability of the reporting
requirements in calendar year 2022, as summarized in Table 1.
The Board believes the changes to the measurement dates for the
total asset thresholds used to determine additional reporting
requirements will not result in a change in the burden estimates
currently approved by OMB. Therefore, the burden estimates for these
reports remain unchanged by the interim final rule.
The FR Y-9C instructions currently contain filing thresholds of $5
billion
[[Page 77357]]
and $10 billion that trigger the reporting of additional schedules and
the reporting of certain data items at a higher frequently. These
thresholds would be impacted by the changes in the interim final rule.
Whether additional FR Y-9C requirements apply would normally be based
on total consolidated assets as of June 30 of the prior year. With the
revisions in the interim final rule, community banking organizations
may instead use the lesser of total consolidated assets as of December
31, 2019, or June 30, 2020, to determine whether additional filing
requirements are applicable.
Specifically, the additional filing requirements for the FR Y-9C
that would otherwise be triggered by the $5 billion and $10 billion
threshold are as follows:
The $5 billion threshold requires these holding companies
to report Schedule HI-C, Part I, Disaggregated Data on the Allowance
for Loan and Lease Losses; Schedule HC-D, Trading Assets and
Liabilities; Schedule HC-P, 1-4 Family Residential Mortgage Banking
Activities in Domestic Offices; Schedule HC-Q, Assets and Liabilities
Measured at Fair Value; Schedule HC-S, Servicing, Securitization, and
Asset Sale Activities; and Schedule HC-V, Variable Interest Entities.
The $5 billion threshold requires these holding companies
to report Schedule HI item 1.e, interest income from trading assets;
Schedule HI item 2.c, interest on trading liabilities and other
borrowed money; Schedule HI item 2.d, interest on subordinated notes
and debentures and on mandatory convertible securities; Schedule HI
item 5.c, trading revenue; Schedule HI items 5.d.(1) through 5.d.(5),
related to various fees and commissions on securities brokerage
investments, investment banking, and insurance; Schedule HI item 5.e,
venture capital revenue; Schedule HI item 5.g, net securitization
income; Schedule HI Memoranda item 1, net interest income on a fully
taxable equivalent basis; Schedule HI Memoranda item 2, net income
before applicable income taxes, and discontinued operations; Schedule
HI Memoranda items 8.a.(1) through 8.b.(2), discontinued operations and
applicable income tax effect; Schedule HI Memoranda items 9.a through
9.e, related to trading revenue; Schedule HI Memoranda item 11, credit
losses on derivatives; Schedule HI Memoranda items 12.a through 12.c,
detail pertaining to income from the sale and servicing of mutual funds
and annuities (in domestic offices); Schedule HI Memoranda items 14.a.
through 14.b.(1), related to net gains (losses) recognized in earnings
on assets and liabilities that are reported at fair value under a fair
value option; Schedule HI Memoranda item 15, stock-based employee
compensation expense; Schedule HI-B, Part I, items 4.a and 4.b, columns
A and B, commercial and industrial loans; Schedule HI-B, Part I, item
6, columns A and B, loans to foreign governments and official
institutions; Schedule HI-B, Part I, items 8.a and 8.b, lease finance
receivables; Schedule HI-B, Part I, Memoranda item 2, columns A and B,
loans secured by real estate to non-U.S. addressees; Schedule HI-B,
Part I, Memoranda item 3, uncollectible retail credit card fees and
finance charges reversed against income; Schedule HI-B, Part II,
Memoranda item 1, allocated transfer risk reserve; Schedule HI-B, Part
II, Memoranda item 2, separate valuation allowance for uncollectible
retail credit card fees and finance charges; Schedule HI-B, Part II,
Memoranda item 3, allowance for loan and lease losses attributable to
retail credit card fees and finance charges; Schedule HI-B, Part II,
Memoranda item 4, allowance for post-acquisition credit losses on
purchased credit-impaired loans; Schedule HC-B, items 4.a.(1) through
4.a.(3), residential pass-through securities; Schedule HC-C, items 4.a
and 4.b, commercial and industrial loans; Schedule HC-C, items 9.b.(1)
through 9.b.(2), column A and B, loans for purchasing or carrying
securities and all other loans; Schedule HC-C, items 10.a and 10.b,
column A, lease financing receivables; Schedule HC-C Memoranda items
1.e.(1) and 1.e.(2), commercial and industrial loans; Schedule HC-C
Memoranda item 3, loans secured by real estate to non-U.S. addressees;
Schedule HC-C Memoranda item 4, outstanding credit card fees and
finance charges; Schedule HC-C Memoranda items 12.a through 12.d, loans
and leases held for investment (not subject to the requirements of FASB
ASC 310-30) that are acquired in business combinations with acquisition
dates in the current calendar year; Schedule HC-K, item 4.a, trading
assets; Schedule HC-L item 1.b.(1), unused consumer credit card lines;
Schedule HC-L 1.b.(2), other unused credit card lines; Schedule HC-L
item 1.d, securities underwriting; Schedule HC-L items 2.a and 3.a,
financial and performance standby letters of credit conveyed to others;
Schedule HC-L items 7.a through 7.d.(2)(b), related to credit
derivatives; Schedule HC-L items 11.a through 14.b.(2), pertaining to
derivatives positions; Schedule HC-M items 6.a.(1)(a)(1) through 6.d,
pertaining to assets covered by loss-sharing agreements with the
Federal Deposit Insurance Corporation; Schedule HC-N, items 8.a and
8.b, columns A, B, and C; Schedule HC-N items 12.a.(1)(a) through 12.f,
pertaining to loans and leases which are covered by loss-sharing
agreements with the Federal Deposit Insurance Corporation; Schedule HC-
N Memoranda items 1.e.(1) and 1.e.(2), columns A, B, and C, commercial
and industrial loans; and Schedule HC-N Memoranda item 6, fair value of
derivative contract amounts carried as assets.
The $5 billion threshold requires these holding companies
to report quarterly rather than annual Schedule HI Memoranda items 6.a
through 6.j, other noninterest income; Schedule HI Memoranda items 7.a
through 7.p, other noninterest expense; and Schedule HI Memoranda 16,
noncash income from negative amortization on closed-end loans secured
by 1-4 family residential properties; and quarterly rather than semi-
annual, Schedule HI Memoranda item 17, other-than-temporary impairment
losses on held-to-maturity and available-for-sale debt securities
recognized in earnings; Schedule HI-C, Part II, items 7 through 11,
disaggregated data on the allowance for credit losses; Schedule HC-C
Memoranda items 1.a.(1) through 1.f.(3)(c), pertaining to loans
restructured in troubled debt restructurings that are in compliance
with their modified terms; Schedule HC-N Memoranda items 1.a.(1)
through 1.d.(2) and 1.e.(3) through 1.f.(3)(c), related to loans
restructured in troubled debt restructurings that are in compliance
with their modified terms; Schedule HC-R, Part II, items 1 through 25,
columns A through U, risk-weighted assets; Schedule HC-R, Part II
Memoranda item 1, current credit exposure across all derivative
contracts; Schedule HC-R, Part II Memoranda item 2, columns A, B, and
C, notional principal amounts of over-the-counter derivative contracts;
and Schedule HC-R, Part II, Memoranda item 3, columns A, B, and C,
notional principal amounts of centrally cleared derivatives contracts.
The $10 billion threshold requires these holding companies
to report Schedule HI Memoranda items 10.a and 10.b, related to net
gains/losses on credit derivatives; Schedule HC-B Memoranda items 5.a
through 5.f, related to asset-backed securities; Schedule HC-B
Memoranda items 6.a through 6.g, related to structured financial
products by underlying collateral or reference assets; Schedule HC-L
item 15, pertaining to the additional information on over-the-
[[Page 77358]]
counter derivatives; and Schedule HC-S items 6 and 10, and Schedule HC-
S Memoranda item 3, related to securitization activity. Holding
companies that cross the $10 billion threshold would be ineligible to
opt-in into the community bank leverage ratio framework and would be
required to file the additional Schedule HC-R, Part I and HC-R, Part II
line items.
The Board has determined that the temporary revisions to these
collections of information must be instituted quickly and that public
participation in the approval process would defeat the purpose of the
collections. Delaying the revisions would cause public harm if firms
were adversely affected due to participating in the PPP or had to bear
temporary compliance costs.
In addition, the Board proposes to extend the collections of
information for three years with the revisions discussed above.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \34\ requires an agency to
consider whether the rules it proposes will have a significant economic
impact on a substantial number of small entities.\35\ 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 agencies
have determined for good cause that general notice and opportunity for
public comment is unnecessary, and therefore the agencies are not
issuing a notice of proposed rulemaking. Accordingly, the agencies have
concluded that the RFA's requirements relating to initial and final
regulatory flexibility analysis do not apply.
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\34\ 5 U.S.C. 601 et seq.
\35\ 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.
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Nevertheless, the agencies seek comment on whether, and the extent
to which, the interim final rule would affect a significant number of
small entities.
E. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (RCDRIA) \36\ requires that each
Federal banking agency, in determining the effective date and
administrative compliance requirements for new regulations that impose
additional reporting, disclosure, or other requirements on insured
depository institutions, each federal banking agency must consider,
consistent with principles of safety and soundness and the public
interest, any administrative burdens that regulations would place on
depository institutions, including small depository institutions, and
customers of depository institutions, as well as the benefits of such
regulations.
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\36\ 12 U.S.C. 4802(a).
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In addition, section 302(b) of RCDRIA requires new regulations and
amendments to regulations that impose additional reporting,
disclosures, or other new requirements on insured depository
institutions 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.\37\ The agencies have determined that the
final rule would not impose additional reporting, disclosure, or other
requirements; therefore, the requirements of the RCDRIA do not apply.
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\37\ 12 U.S.C. 4802.
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F. Unfunded Mandates Reform Act of 1995
As a general matter, the Unfunded Mandates Reform Act of 1995
(UMRA), 2 U.S.C. 1531 et seq., 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. See 2 U.S.C. 1532(a). Therefore, because the OCC has found
good cause to dispense with notice and comment for this interim final
rule, the OCC has not prepared an economic analysis of the rule under
the UMRA.
G. Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act \38\ requires the Federal
banking agencies to use plain language in all proposed and final rules
published after January 1, 2000. In light of this requirement, the
agencies have sought to present the interim final rule in a simple and
straightforward manner and invite comment on the use of plain language.
For example:
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\38\ Public Law 106-102, 113 Stat. 1338, 1471, 12 U.S.C. 4809.
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Is the material organized to suit your needs? If not, how
could the agencies present the interim final rule more clearly?
Are the requirements in the interim final rule clearly
stated? If not, how could the interim final rule be more clearly
stated?
Does the interim final rule contain technical language or
jargon that is not clear? If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the interim final rule easier to
understand? If so, what changes would achieve that?
Is this section format adequate? If not, which of the
sections should be changed and how?
What other changes can the agencies incorporate to make
the interim final rule easier to understand?
List of Subjects
12 CFR Part 3
Administrative practice and procedure, Capital, Federal savings
associations, National banks, Risk.
12 CFR Part 4
Administrative practice and procedure, Freedom of information,
Individuals with disabilities, Minority businesses, Organization and
functions (Government agencies), Reporting and recordkeeping
requirements, Women.
12 CFR Part 52
Banks, Banking, Reporting and recordkeeping requirements.
12 CFR Part 208
Accounting, Agriculture Banks, Banking, Confidential business
information, Consumer protection, Crime Currency, Federal Reserve
System, Flood insurance, Insurance, Investments, Mortgages, Reporting
and recordkeeping requirements, Securities.
12 CFR Part 211
Exports, Federal Reserve System, Foreign banking, Holding
companies, Investments.
12 CFR Part 212
Antitrust, Banks, Banking, Holding companies.
12 CFR Part 217
Administrative practice and procedure, Banks, Banking, Federal
Reserve System, Holding companies, Investments, National banks,
Reporting and recordkeeping requirements, Securities.
12 CFR Part 225
Administrative practice and procedure, Banks, Banking, Capital
planning, Holding companies, Reporting and recordkeeping requirements,
Securities, Stress testing.
[[Page 77359]]
12 CFR Part 235
Accounting, Banks, Banking.
12 CFR Part 238
Administrative practice and procedure, Banks, Banking, Federal
Reserve System, Reporting and recordkeeping requirements, Securities.
12 CFR Part 304
Bank deposit insurance, Banks, Banking, Freedom of information,
Reporting and recordkeeping requirements.
12 CFR Part 324
Administrative practice and procedure, Banks, Banking, Capital,
Capital adequacy, Reporting and recordkeeping requirements, State non-
member banks, Savings associations.
12 CFR Part 337
Banks, Banking, Reporting and recordkeeping requirements, Savings
associations.
12 CFR Part 347
Authority delegations (Government agencies), Bank deposit
insurance, Banks, Banking, Credit, Foreign banking, Investments,
Reporting and recordkeeping requirements, U.S. investments abroad.
12 CFR Part 348
Antitrust, Banks, Banking, Holding companies, Savings associations.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Chapter I
Authority and Issuance
For the reasons stated in the joint preamble, the Office of the
Comptroller of the Currency amends chapter I of Title 12 of the Code of
Federal Regulations as follows:
PART 3--CAPITAL ADEQUACY STANDARDS
0
1. The authority citation for part 3 continues to read as follows:
Authority: 12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818,
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and
Pub. L. 116-136, 134 Stat. 281.
0
2. Section 3.12 is amended by adding paragraph (a)(4) to read as
follows:
Sec. 3.12 Community bank leverage ratio framework.
(a) * * *
(4)(i) Temporary relief. From December 2, 2020 through December 31,
2021, except as provided in paragraph (a)(4)(ii) of this section, the
total consolidated assets of a national bank or Federal savings
association for purposes of paragraph (a)(2)(ii) of this section shall
be the lesser of:
(A) The total consolidated assets reported by the national bank or
Federal savings association in its Call Report as of December 31, 2019;
and
(B) The total consolidated assets of the national bank or Federal
savings association calculated in accordance with the reporting
instructions to the Call Report as of the end of the most recent
calendar quarter.
(ii) Reservation of authority. The temporary relief provided under
paragraph (a)(4)(i) of this section does not apply to a national bank
or Federal savings association if the OCC determines that permitting
the institution to determine its assets in accordance with that
paragraph would not be commensurate with the risk posed by the
institution. When making this determination, the OCC will consider all
relevant factors, including the extent of asset growth of the national
bank or Federal savings association since December 31, 2019; the causes
of this growth, including whether this growth occurred as a result of a
merger or acquisition; whether such growth is likely to be temporary or
permanent; whether the national bank or Federal savings association has
become involved in any additional activities since December 31, 2019;
and the type of assets held by the national bank or Federal savings
association. The OCC will notify a national bank or Federal savings
association of a determination under this paragraph. A national bank or
Federal savings association may, not later than 30 days after the date
of a determination by the OCC, inform the OCC, in writing, of why the
national bank or Federal savings association should be eligible for the
temporary relief. The OCC will make a final determination after
reviewing any response.
* * * * *
PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF
INFORMATION, CONTRACTING OUTREACH PROGRAM, POST-EMPLOYMENT
RESTRICTIONS FOR SENIOR EXAMINERS
SUBPART A--Organization and Functions
0
3. The authority citation for part 4 continues to read as follows:
Authority: 5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161, 481, 482, 484(a),
1442, 1462a, 1463, 1464 1817(a), 1818, 1820, 1821, 1831m, 1831p-1,
1831o, 1833e, 1867, 1951 et seq., 2601 et seq., 2801 et seq., 2901 et
seq., 3101 et seq., 3401 et seq., 5321, 5412, 5414; 15 U.S.C. 77uu(b),
78q(c)(3); 18 U.S.C. 641, 1905, 1906; 29 U.S.C. 1204; 31 U.S.C.
5318(g)(2), 9701; 42 U.S.C. 3601; 44 U.S.C. 3506, 3510; E.O. 12600 (3
CFR, 1987 Comp., p. 235).
0
4. Section 4.6 is amended by adding paragraph (d) to read as follows:
Sec. 4.6 Frequency of examination of national banks and Federal
savings associations.
* * * * *
(d) Through December 31, 2021, for purposes of determining
eligibility for the 18-month rule described in paragraph (b) of this
section, the OCC may determine the total assets of a national bank or
Federal savings association by reference to the total assets of the
national bank or Federal savings association as reported by the
national bank or Federal savings association in its Call Report as of
December 31, 2019.
0
5. Section 4.7 is amended by adding paragraph (d) to read as follows:
Sec. 4.7 Frequency of examination of Federal agencies and branches.
* * * * *
(d) Through December 31, 2021, for purposes of determining
eligibility for the 18-month rule described in paragraph (b) of this
section, the OCC may determine total assets of a Federal branch or
agency by reference to the total assets of the Federal branch or agency
as reported by the Federal branch or agency as of December 31, 2019.
PART 52--REGULATORY REPORTING
0
6. The authority citation for part 52 continues to read as follows:
Authority: 12 U.S.C. 93a, 161, 1463(a), 1464(v), and
1817(a)(12).
0
7. Add Sec. 52.5 to read as follows:
Sec. 52.5 Temporary relief.
In determining whether it meets the asset threshold in paragraph
(1) of the definition of ``covered depository institution'' in Sec.
52.5 of this part, for purposes of a report required to be submitted
for calendar year 2021, a national bank, Federal savings association,
or insured Federal branch may refer to the lesser of its total
consolidated assets as reported in its report of condition as of
December 31, 2019, and its total consolidated assets as reported in its
report of condition for the second calendar quarter of 2020.
[[Page 77360]]
Board of Governors of the Federal Reserve System
12 CFR Chapter I
Authority and Issuance
For the reasons stated in the joint preamble, chapter II of title
12 of the Code of Federal Regulations is amended as follows:
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL
RESERVE SYSTEM (REGULATION H)
0
8. The authority citation for part 208 continues to read as follows:
Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-
338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1817(a)(3),
1817(a)(12), 1818, 1820(d)(9), 1833(j), 1828(o), 1831, 1831o, 1831p-
1, 1831r-1, 1831w, 1831x, 1835a, 1882, 2901-2907, 3105, 3310, 3331-
3351, 3905-3909, 5371, and 5371 note; 15 U.S.C. 78b, 78I(b), 78l(i),
780-4(c)(5), 78q, 78q-1, 78w, 1681s, 1681w, 6801, and 6805; 31
U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
Subpart C--Bank Securities and Securities-Related Activities
0
9. Amend Sec. 208.36 by adding paragraph (b)(3) to read as follows:
Sec. 208.37 Reporting requirements for State member banks subject to
the Securities Exchange Act of 1934.
* * * * *
(b) * * *
(3) Notwithstanding paragraph (b)(1) of this section, a member bank
may, from December 2, 2020, through December 31, 2021, make the
election described in paragraph (b)(1) of this section if it has no
foreign offices and had total assets of $150 million or less,
determined based on the lesser of total assets as of December 31, 2019,
and total assets as of the end of the bank's most recent fiscal year.
The relief provided under this paragraph (b)(3) of this section does
not apply to a member bank if the Board determines that permitting the
member bank to determine its assets in accordance with that paragraph
would not be commensurate with the risk profile of the member bank.
When making this determination, the Board will consider all relevant
factors, including the extent of asset growth of the member bank since
December 31, 2019; the causes of such growth, including whether growth
occurred as a result of mergers or acquisitions; whether such growth is
likely to be temporary or permanent; whether the member bank has become
involved in any additional activities since December 31, 2019; the
asset size of any parent companies; and the type of assets held by the
member bank. In making a determination pursuant to this paragraph
(b)(3), the Board will apply notice and response procedures in the same
manner and to the same extent as the notice and response procedures in
12 CFR 263.202.
* * * * *
Subpart D--Miscellaneous Requirements
0
10. Amend Sec. 208.64 by adding paragraph (d) to read as follows:
Sec. 208.64 Frequency of examination.
* * * * *
(d)(1) Except as provided in paragraph (c) of this section, from
December 2, 2020, through December 31, 2021, for purposes of
determining eligibility for the extended examination cycle described in
paragraph (b) of this section, the total assets of a member bank shall
be determined based on the lesser of:
(i) The assets of the member bank as of December 31, 2019; and
(ii) The assets of the member bank as of the end of the most recent
calendar quarter.
(2) Nothing in paragraph (d)(1) of this section limits the
authority of the Federal Reserve to examine any member bank as
frequently as the agency deems necessary pursuant to paragraph (c) of
this section.
* * * * *
Subpart K--Forms, Instructions and Reports
0
11. Amend Sec. 208.121 by revising the definition of ``Covered
depository institution'' to read as follows:
Sec. 208.121 Definitions.
* * * * *
Covered depository institution means a state member bank that meets
all of the following criteria:
(1) Has less than $5 billion in total consolidated assets as
reported in its report of condition for the second calendar quarter of
the preceding year, except that, during the calendar year 2021, a state
member bank shall determine whether it meets the requirement in
paragraph (1) of this section by using the lesser of its total
consolidated assets as reported in its report of condition as of
December 31, 2019, and its total consolidated assets as reported in its
report of condition for the second calendar quarter of 2020. The relief
provided under this paragraph (1) of this section does not apply to a
state member bank if the Board determines that permitting the state
member bank to determine its assets in accordance with that paragraph
would not be commensurate with the risk profile of the state member
bank. When making this determination, the Board will consider all
relevant factors, including the extent of asset growth of the state
member bank since December 31, 2019; the causes of such growth,
including whether growth occurred as a result of mergers or
acquisitions; whether such growth is likely to be temporary or
permanent; whether the state member bank has become involved in any
additional activities since December 31, 2019; the asset size of any
parent companies; and the type of assets held by the state member bank.
In making a determination pursuant to this paragraph (1), the Board
will apply notice and response procedures in the same manner and to the
same extent as the notice and response procedures in 12 CFR 263.202.
(2) Has no foreign offices, as defined in this section;
(3) Is not required to or has not elected to use 12 CFR part 217,
subpart E, to calculate its risk-based capital requirements; and
(4) Is not a large institution or highly complex institution, as
such terms are defined in 12 CFR 327.8, or treated as a large
institution, as requested under 12 CFR 327.16(f).
* * * * *
PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)
0
12. The authority citation for part 211 continues to read as follows:
Authority: 12 U.S.C. 221 et seq., 1818, 1835a, 1841 et seq.,
3101 et seq., 3901 et seq., and 5101 et seq.; 15 U.S.C. 1681s,
1681w, 6801 and 6805.
Subpart B--Foreign Banking Organizations
0
13. Amend Sec. 211.26 by adding paragraph (c)(2)(iii) to read as
follows:
Sec. 211.26 Examination of offices and affiliates of foreign banks.
* * * * *
(c) * * *
(2) * * *
(iii)(A) Except as provided in paragraph (c)(2)(iii)(B) of this
section, from December 2, 2020 through December 31, 2021, for purposes
of determining eligibility for the extended examination cycle described
in paragraph (c)(2) of this section, the total assets of a branch or
agency shall be determined based on the lesser of:
[[Page 77361]]
(1) The total assets of the branch or agency as of December 31,
2019; and
(2) The total assets of the branch or agency as of the end of the
most recent calendar quarter.
(B) The relief provided under paragraph (c)(2)(iii)(A) of this
section does not apply to a branch or agency if the Board determines
that permitting the branch or agency to determine its assets in
accordance with that paragraph would not be commensurate with the risk
profile of the branch or agency. When making this determination, the
Board will consider all relevant factors, including the extent of asset
growth of the branch or agency since December 31, 2019; the causes of
such growth, including whether growth occurred as a result of mergers
or acquisitions; whether such growth is likely to be temporary or
permanent; whether the branch or agency has become involved in any
additional activities since December 31, 2019; the asset size of any
parent companies; and the type of assets held by the branch or agency.
In making a determination pursuant to this paragraph (c)(2)(iii)(B),
the Board will apply notice and response procedures in the same manner
and to the same extent as the notice and response procedures in 12 CFR
263.202.
* * * * *
PART 212--MANAGEMENT OFFICIAL INTERLOCKS
0
14. The authority citation for part 212 continues to read as follows:
Authority: 12 U.S.C. 3201-3208; 15 U.S.C. 19.
0
15. Amend Sec. 212.2 by adding paragraph (o)(3) to read as follows:
Sec. 212.2 Definitions.
* * * * *
(o) * * *
(3)(i) Notwithstanding paragraph (o)(1) of this section, and except
as provided in paragraph (o)(3)(ii) of this section, from December 2,
2020, through December 31, 2021, the term total assets, with respect to
a depository organization, means the lesser of assets of the depository
organization reported on a consolidated basis as of December 31, 2019,
and assets reported as of the end of the depository organization's most
recent fiscal year on a consolidated basis as of December 31, 2020.
(ii) The relief provided under paragraph (o)(3)(i) of this section
does not apply to a depository organization if the Board determines
that permitting the depository organization to determine its assets in
accordance with that paragraph would not be commensurate with the risk
profile of the depository organization. When making this determination,
the Board will consider all relevant factors, including the extent of
asset growth of the depository organization since December 31, 2019;
the causes of such growth, including whether growth occurred as a
result of mergers or acquisitions; whether such growth is likely to be
temporary or permanent; whether the depository organization has become
involved in any additional activities since December 31, 2019; the
asset size of any parent companies; and the type of assets held by the
depository organization. In making a determination pursuant to this
paragraph (o)(3)(ii), the Board will apply notice and response
procedures in the same manner and to the same extent as the notice and
response procedures in 12 CFR 263.202.
* * * * *
PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)
0
16. The authority citation for part 217 continues to read as follows:
Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a,
1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904,
3906-3909, 4808, 5365, 5368, 5371, 5371 note, and sec. 4012, Pub. L.
116-136, 134 Stat. 281.
Subpart B--Capital Ratio Requirements and Buffers
0
17. Amend Sec. 217.12 by adding paragraph (a)(4) to read as follows:
Sec. 217.12 Community bank leverage ratio framework.
(a) * * *
(4) Temporary relief for 2020 and 2021. (i) Except as provided in
paragraph (a)(4)(ii) of this section, from December 2, 2020, through
December 31, 2021, for purposes of determining whether a Board-
regulated institution satisfies the criterion in paragraph (a)(2)(ii)
of this section, the total consolidated assets of a Board-regulated
institution for purposes of paragraph (a)(2)(ii) of this section shall
be determined based on the lesser of:
(A) The total consolidated assets reported by the institution in
the Call Report, FR Y-9C, or FR Y-9SP, as applicable, as of December
31, 2019; and
(B) The total consolidated assets calculated in accordance with the
reporting instructions to the Call Report or to Form FR Y-9C, as
applicable, as of the end of the most recent calendar quarter.
(ii) The relief provided under this paragraph (a)(4)(i) does not
apply to a Board-regulated institution if the Board determines that
permitting the Board-regulated institution to determine its assets in
accordance with that paragraph would not be commensurate with the risk
profile of the Board-regulated institution. When making this
determination, the Board will consider all relevant factors, including
the extent of asset growth of the Board-regulated institution since
December 31, 2019; the causes of such growth, including whether growth
occurred as a result of mergers or acquisitions; whether such growth is
likely to be temporary or permanent; whether the Board-regulated
institution has become involved in any additional activities since
December 31, 2019; the asset size of any parent companies; and the type
of assets held by the Board-regulated institution. In making a
determination pursuant to this paragraph (a)(4)(ii), the Board will
apply notice and response procedures in the same manner and to the same
extent as the notice and response procedures in 12 CFR 263.202.
* * * * *
PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
(REGULATION Y)
0
18. The authority citation for part 225 continues to read as follows:
Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-
1, 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3906,
3907, and 3909; 15 U.S.C. 1681s, 1681w, 6801 and 6805.
Subpart A--General Provisions
0
19. Add Sec. 225.10 to subpart A to read as follows:
Sec. 225.10 Temporary relief for 2020 and 2021.
(a) Except as provided in paragraph (c) of this section and subject
to the provisions of paragraph (d) of this section, from December 2,
2020, through December 31, 2021, the consolidated assets, consolidated
risk-weighted assets, total consolidated assets, and total assets of a
bank holding company for purposes of Sec. Sec. 225.4(b)(2)(iii)(A) and
(B), 225.14(a)(1)(v)(A)(1) and (2), 225.14(a)(1)(vi),
225.23(a)(1)(iii)(A)(1) and (2), 225.24(a)(2)(iv) and (v), and
225.28(b)(11)(vi) shall be determined based on the lesser of each such
amount as of December 31, 2019, and as of the otherwise applicable
asset measurement date of the relevant paragraph.
[[Page 77362]]
(b) Except as provided in paragraph (c) of this section and subject
to the provisions of paragraph (d) of this section, from December 2,
2020, through December 31, 2021, for purposes of determining the
applicability of Sec. Sec. 224.14(c)(6)(ii), 225.17(a)(6), and
225.23(c)(5)(ii) of this part and appendix C to this part, the pro
forma consolidated assets of a bank holding company and the
consolidated risk-weighted assets of a bank holding company immediately
following consummation of a transaction each shall be calculated as the
lesser of:
(1) Such amount calculated as the sum of the assets of each company
involved in the proposed business combination, as well as any company
with which any such company has combined since December 31, 2019, as of
December 31, 2019; and
(2) Such amount calculated as the sum of the assets of each company
involved in the proposed business combination as of the end of the most
recent calendar quarter.
(c) The relief provided under paragraphs (a) and (b) of this
section does not apply to a bank holding company if the Board
determines that permitting the bank holding company to determine its
assets in accordance with that paragraph would not be commensurate with
the risk profile of the bank holding company. When making this
determination, the Board will consider all relevant factors, including
the extent of asset growth of the bank holding company since December
31, 2019; the causes of such growth, including whether growth occurred
as a result of mergers or acquisitions; whether such growth is likely
to be temporary or permanent; whether the bank holding company has
become involved in any additional activities since December 31, 2019;
the asset size of any parent companies; and the type of assets held by
the bank holding company. In making a determination pursuant to this
section, the Board will apply notice and response procedures in the
same manner and to the same extent as the notice and response
procedures in 12 CFR 263.202.
(d) Nothing in this section limits the discretion of the Board or
its delegatee to disallow the use of any expedited action process,
require the submission of additional information in connection with a
notice or application, or consider the ability of a bank holding
company filing a notice or application under this part to comply with
any statutory or regulatory requirements that may be applicable to the
bank holding company upon expiration of the relief provided by this
section.
PART 235--DEBIT CARD INTERCHANGE FEES AND ROUTING (REGULATION II)
0
20. The authority citation for part 235 continues to read as follows:
Authority: 15 U.S.C. 1693o-2.
0
21. The heading for part 235 is revised to read as set forth above.
0
22. Amend Sec. 235.5 by adding paragraph (a)(4) to read as follows:
Sec. 235.5 Exemptions.
* * * * *
(a) * * *
(4)(i) Temporary relief for 2020 and 2021. Except as provided in
paragraph (a)(4)(ii) of this section, for purposes of determining
eligibility for the exemption for small issuers described in paragraph
(a)(1) of this section, issuer asset size that is calculated as of the
end of the calendar year 2020 shall be determined based on the lesser
of:
(A) The assets of the issuer, together with its affiliates, as of
the end of the calendar year 2019; and
(B) The assets of the issuer, together with its affiliates, as of
the end of the calendar year 2020.
(ii) The relief provided under this paragraph (a)(4) does not apply
to an issuer if the Board determines that permitting the issuer to
determine its assets in accordance with that paragraph would not be
commensurate with the asset profile of the issuer. When making this
determination, the Board will consider all relevant factors, including
the extent of asset growth of the issuer since December 31, 2019; the
causes of such growth, including whether growth occurred as a result of
mergers or acquisitions; whether such growth is likely to be temporary
or permanent; whether the issuer has become involved in any additional
activities since December 31, 2019; the asset size of any parent
companies; and the type of assets held by the issuer. In making a
determination pursuant to this paragraph (a)(4)(ii), the Board will
apply notice and response procedures in the same manner and to the same
extent as the notice and response procedures in 12 CFR 263.202.
* * * * *
PART 238--SAVINGS AND LOAN HOLDING COMPANIES (REGULATION LL)
0
23. The authority citation for part 238 continues to read as follows:
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 1464,
1467, 1467a, 1468, 5365; 1813, 1817, 1829e, 1831i, 1972, 15 U.S.C.
78l.
Subpart A--General Provisions
0
24. Amend Sec. 238.5 by revising paragraph (b) to read as follows:
Sec. 238.5 Audit of savings association holding companies.
* * * * *
(b) Audits required for safety and soundness purposes. (1) The
Board requires an independent audit for safety and soundness purposes
if, as of the beginning of its fiscal year, a savings and loan holding
company controls savings association subsidiary(ies) with aggregate
consolidated assets of $500 million or more.
(2) Except as provided in paragraph (b)(3) of this section, with
regard to a savings and loan holding company's fiscal year beginning in
the calendar years 2020 or 2021, the applicability of the requirement
in paragraph (b)(1) of this section shall be determined based on the
lesser of:
(i) The aggregate consolidated assets of the savings and loan
holding company as of December 31, 2019; and
(ii) The aggregate consolidated assets of the savings and loan
holding company as of the end of its fiscal year ending in calendar
year 2020.
(3) The relief provided under paragraph (b)(2) of this section does
not apply to a savings and loan holding company if the Board determines
that permitting the savings and loan holding company to determine its
assets in accordance with that paragraph would not be commensurate with
the risk profile of the savings and loan holding company. When making
this determination, the Board will consider all relevant factors,
including the extent of asset growth of the savings and loan holding
company since December 31, 2019; the causes of such growth, including
whether growth occurred as a result of mergers or acquisitions; whether
such growth is likely to be temporary or permanent; whether the savings
and loan holding company has become involved in any additional
activities since December 31, 2019; the asset size of any parent
companies; and the type of assets held by the savings and loan holding
company. In making a determination pursuant to this paragraph (b)(3),
the Board will apply notice and response procedures in the same manner
and to the same extent as the notice and response procedures in 12 CFR
263.202.
* * * * *
[[Page 77363]]
Subpart F--Savings and Loan Holding Company Activities and
Acquisitions
0
25. Amend Sec. 238.53 by adding paragraph (c)(3) to read as follows:
Sec. 238.53 Prescribed services and activities of savings and loan
holding companies.
* * * * *
(c) * * *
(3)(i) Except as provided in paragraph (c)(3)(ii) of this section,
from December 2, 2020, until December 31, 2021, the determination of
whether a savings and loan holding company must comply with the filing
requirements in paragraph (c)(2)(iii) or (iv) of this section shall be
made based on the lesser of:
(A) The consolidated assets of the savings and loan holding company
as of December 31, 2019; and
(B) The consolidated assets of the savings and loan holding company
as of the end of the most recent calendar quarter.
(ii) The relief provided under paragraph (c)(3)(i) of this section
does not apply to a savings and loan holding company if the Board
determines that permitting the savings and loan holding company to
determine its assets in accordance with that paragraph would not be
commensurate with the risk profile of the savings and loan holding
company. When making this determination, the Board will consider all
relevant factors, including the extent of asset growth of the savings
and loan holding company since December 31, 2019; the causes of such
growth, including whether growth occurred as a result of mergers or
acquisitions; whether such growth is likely to be temporary or
permanent; whether the savings and loan holding company has become
involved in any additional activities since December 31, 2019; the
asset size of any parent companies; and the type of assets held by the
savings and loan holding company. In making a determination pursuant to
this paragraph (c)(3)(ii), the Board will apply notice and response
procedures in the same manner and to the same extent as the notice and
response procedures in 12 CFR 263.202.
* * * * *
Subpart J--Management Official Interlocks
0
26. Amend Sec. 238.92 by adding paragraph (p)(3) to read as follows:
Sec. 238.92 Definitions.
* * * * *
(p) * * *
(3) Temporary relief for 2020 and 2021. Notwithstanding paragraph
(p)(1) of this section, from December 2, 2020, through December 31,
2021, for purposes of this subpart J, the term total assets, with
respect to a depository organization, means the lesser of assets of the
depository organization reported on a consolidated basis as of December
31, 2019, and assets reported on a consolidated basis as of the end of
the most recent fiscal year. The relief provided under this paragraph
(p)(3) does not apply to a depository organization if the Board
determines that permitting the depository organization to determine its
assets in accordance with that paragraph would not be commensurate with
the risk profile of the depository organization. When making this
determination, the Board will consider all relevant factors, including
the extent of asset growth of the depository organization since
December 31, 2019; the causes of such growth, including whether growth
occurred as a result of mergers or acquisitions; whether such growth is
likely to be temporary or permanent; whether the depository
organization has become involved in any additional activities since
December 31, 2019; the asset size of any parent companies; and the type
of assets held by the depository organization. In making a
determination pursuant to this paragraph (p)(3), the Board will apply
notice and response procedures in the same manner and to the same
extent as the notice and response procedures in 12 CFR 263.202.
* * * * *
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Chapter III
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends chapter III of Title 12, Code of Federal
Regulations as follows:
PART 304--FORMS, INSTRUCTIONS, AND REPORTS
0
27. The authority citation for part 304 continues to read as follows:
Authority: 12 U.S.C. 1464(v), 1817(a), and 1819 Tenth.
0
28. Amend Sec. 304.12 by adding paragraph (a)(6) to read as follows:
Sec. 304.12 Definitions.
(a) * * *
(6) In determining whether an insured depository institution meets
the asset threshold in paragraph (1) of the definition of ``covered
depository institution'' in paragraph (a)(1) of this section, for
purposes of a report required to be submitted for calendar year 2021,
an insured depository institution may refer to the lesser of its total
consolidated assets as reported in its report of condition as of
December 31, 2019, and its total consolidated assets as reported in its
report of condition for the second calendar quarter of 2020.
PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
0
29. The authority citation for part 324 is revised to read as follows:
Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b),
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n),
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233,
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242,
105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160,
2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386,
as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828
note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note),
Pub. L. 115-174; section 4014 Sec. 201, Pub. L. 116-136, 134 Stat.
281 (15 U.S.C. 9052).
0
30. Amend Sec. 324.12 by adding paragraph (a)(4) to read as follows:
Sec. 324.12 Community bank leverage ratio framework.
(a) * * *
(4)(i) Temporary relief--From December 2, 2020 through December 31,
2021, for purposes of determining whether an FDIC-supervised
institution satisfies the criterion in paragraph (a)(2)(ii) of this
section, except as provided in paragraph (a)(4)(ii) of this section,
the total consolidated assets of an FDIC-supervised institution for
purposes of paragraph (a)(2)(ii) of this section shall be determined
based on the lesser of:
(A) The total consolidated assets reported by the institution in
the Call Report as of December 31, 2019; and
(B) The total consolidated assets calculated in accordance with the
reporting instructions to the Call Report as of the end of the most
recent calendar quarter.
(ii) Reservation of authority--The temporary relief provided under
this paragraph (a)(4)(i) of this section does not apply to an FDIC-
supervised institution if the FDIC determines that permitting the FDIC-
supervised institution to determine its assets in accordance with that
paragraph would not be commensurate with the risk posed by the
institution. When making this determination, the FDIC will consider all
relevant factors, including the extent of asset growth of the FDIC-
supervised institution since December
[[Page 77364]]
31, 2019; the causes of such growth, including whether growth occurred
as a result of mergers or acquisitions; whether such growth is likely
to be temporary or permanent; whether the FDIC-supervised institution
has become involved in any additional activities since December 31,
2019; and the type of assets held by the FDIC-supervised institution.
The FDIC will notify an FDIC-supervised institution of a determination
under this paragraph. An FDIC-supervised institution may, not later
than 30 days after the date of a determination by the FDIC, inform the
FDIC, in writing, of why the FDIC-supervised institution should be
eligible for the temporary relief. The FDIC will make a final
determination after reviewing any response.
* * * * *
PART 337--UNSAFE AND UNSOUND BANK PRACTICES
0
31. The authority citation for part 337 continues to read as follows:
Authority: 12 U.S.C. 375a(4), 375b, 1463, 1464, 1468, 1816,
1818(a), 1818(b), 1819, 1820(d), 1821(f), 1828(j)(2), 1831, 1831f,
1831g, 5412.
0
32. Amend Sec. 337.12 by adding paragraph (d) to read as follows:
Sec. 337.12 Frequency of examination.
* * * * *
(d) From December 2, 2020, through December 31, 2021, for purposes
of determining eligibility for the extended examination cycle described
in paragraph (b) of this section, the total assets of an institution
shall be determined based on the lesser of:
(1) The assets of the institution as of December 31, 2019; and
(2) The assets of the institution as of the end of the most recent
calendar quarter.
PART 347--INTERNATIONAL BANKING
0
33. The authority citation for part 347 continues to read as follows:
Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103,
3104, 3105, 3108, 3109; Pub. L. 111-203, section 939A, 124 Stat.
1376, 1887 (July 21, 2010) (codified 15 U.S.C. 78o-7 note).
0
34. Amend Sec. 347.211 by adding paragraph (d) to read as follows:
Sec. 347.21 Examination of branches of foreign banks.
* * * * *
(d) From December 2, 2020, through December 31, 2021, for purposes
of determining eligibility for the extended examination cycle described
in paragraph (b) of this section, the total assets of an insured branch
shall be determined based on the lesser of:
(1) The assets of the insured branch as of December 31, 2019; and
(2) The assets of the insured branch as of the end of the most
recent calendar quarter.
PART 348--MANAGEMENT OFFICIAL INTERLOCKS
0
35. The authority citation for part 348 continues to read as follows:
Authority: 12 U.S.C. 1823(k), 3207.
0
36. Amend Sec. 348.2 by adding paragraph (q)(3) to read as follows:
Sec. 348.2 Other definitions and rules of construction.
* * * * *
(q) * * *
(3)(i) Temporary relief for 2020 and 2021. Notwithstanding
paragraph (q)(1) of this section, from December 2, 2020, through
December 31, 2021, except as provided in paragraph (q)(3)(ii) of this
section, the term total assets, with respect to a depository
organization, means the lesser of assets of the depository organization
reported on a consolidated basis as of December 31, 2019, and assets
reported on a consolidated basis as of December 31, 2020.
(ii) Reservation of authority. The temporary relief provided under
this paragraph (q)(3)(i) of this section does not apply to an FDIC-
supervised institution if the FDIC determines that permitting the FDIC-
supervised institution to determine its assets in accordance with that
paragraph would not be commensurate with the risk posed by the
institution. When making this determination, the FDIC will consider all
relevant factors, including the extent of asset growth of the FDIC-
supervised institution since December 31, 2019; the causes of such
growth, including whether growth occurred as a result of mergers or
acquisitions; whether such growth is likely to be temporary or
permanent; whether the FDIC-supervised institution has become involved
in any additional activities since December 31, 2019; and the type of
assets held by the FDIC-supervised institution.
* * * * *
Brian P. Brooks,
Acting Comptroller of the Currency.
By order of the Board of Governors of the Federal Reserve
System.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about November 17, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020-26138 Filed 12-1-20; 8:45 am]
BILLING CODE 6210-01-P