[[Page 31961]]

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Part II

Department of the Treasury

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Office of the Comptroller of the Currency

Office of the Thrift Supervision

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Federal Reserve System

Federal Deposit Insurance Corporation

12 CFR Parts 35, 207, 346, 533

Disclosure and Reporting of CRA-Related Agreements; Proposed Rule

[[Page 31962]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 35

[Docket No. 00-11]
RIN 1557-AB85

FEDERAL RESERVE SYSTEM

12 CFR Part 207

[Regulation G; Docket No. R-1069]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 346

RIN 3064-AC33

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 533

[Docket No. 2000-44]
RIN 1550-AB32

Disclosure and Reporting of CRA-Related Agreements

AGENCIES: Office of the Comptroller of the Currency (OCC); Board of
Governors of the Federal Reserve System (Board); Federal Deposit
Insurance Corporation (FDIC); Office of Thrift Supervision (OTS).

ACTION: Joint notice of proposed rulemaking.

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SUMMARY: The OCC, Board, FDIC, and OTS (collectively, the agencies) are
requesting comment on a proposed rule that implements provisions of the
recently enacted Gramm-Leach-Bliley Act (the GLB Act or the Act). These
provisions require nongovernmental entities or persons, insured
depository institutions, and affiliates of insured depository
institutions that are parties to certain agreements that are in
fulfillment of the Community Reinvestment Act of 1977 to make the
agreements available to the public and the appropriate agency and file
annual reports concerning the agreements with the appropriate agency.
These provisions are contained in section 711 of the Act and are
codified as section 48 of the Federal Deposit Insurance Act (FDI Act).
The rule identifies the types of written agreements that are
covered by section 711 of the GLB Act (referred to as covered
agreements) and defines many of the terms used in the statute. The rule
also describes how the parties to a covered agreement must make the
agreement available to the public and the appropriate agencies and
explains the type of information that must be included in the annual
report filed by a party to a covered agreement.
The agencies solicit comments on all aspects of the proposed rule,
including the specific areas discussed below. The agencies will issue a
final rule after considering comments received.

DATES: Comments must be received on or before July 21, 2000.

ADDRESSES:
OCC: Comments should be addressed to Communications Division,
Office of the Comptroller of the Currency, 250 E Street, SW, Third
floor, Washington, DC 20219, Attention: Docket No. 00-11. In addition,
comments may be sent by facsimile transmission to fax number (202) 874-
5274 or by Internet mail to regs.comments@occ.treas.gov. Comments will
be available for public inspection and photocopying at the same
location.
Board: Comments directed to the Board should refer to Docket No. R-
1069 and may be mailed to Ms. Jennifer J. Johnson, Secretary, Board of
Governors of the Federal Reserve System, 20th and C Streets, NW,
Washington, DC 20551 or mailed electronically to
regs.comments@federalreserve.gov. Comments addressed to Ms. Johnson
also may be delivered to the Board's mailroom between 8:45 a.m. and
5:15 p.m. and, outside those hours, to the security control room. Both
the mailroom and the security control room are accessible from the
Eccles Building courtyard entrance, located on 20th Street between
Constitution Avenue and C Street, NW. Members of the public may inspect
comments in room MP-500 of the Martin Building between 9:00 a.m. and 5
p.m. on weekdays.
FDIC: Written comments should be addressed to Robert E. Feldman,
Executive Secretary, Attention: Comments/OES, Federal Deposit Insurance
Corporation, 550 17th Street, NW, Washington, DC 20429. Comments may be
hand delivered to the guard station at the rear of the 550 17th Street
Building (located on F Street) on business days between 7 a.m. and 5
p.m. (Fax number: (202) 898-3838). Comments may be inspected and
photocopied in the FDIC Public Information Center, Room 100, 801 17th
Street, NW, Washington, DC, between 9 a.m. and 4:30 p.m. on business
days.
Comments may be submitted electronically over the Internet at
www.fdic.gov. Further information concerning this option may be found
below at the ``FDIC's Electronic Public Comment Site.'' Comments also
may be mailed electronically to comments@fdic.gov.
OTS: Send comments to Manager, Dissemination Branch, Information
Management & Services Division, Office of Thrift Supervision, 1700 G
Street, NW, Washington, DC 20552, Attention Docket No. 2000-44. Hand
deliver comments to Public Reference Room, 1700 G Street, NW, lower
level, from 9 a.m. to 5 p.m. on business days. Send facsimile
transmissions to FAX number (202) 906-7755 or (202) 906-6959 (if the
comment is over 25 pages). Send e-mails to public.info@ots.treas.gov
and include your name and telephone number. Interested persons may
inspect comments at 1700 G Street, NW, from 10 a.m. until 4 p.m. on
Tuesdays and Thursdays.

FOR FURTHER INFORMATION CONTACT:
OCC: Michael S. Bylsma, Director, Community and Consumer Law (202)
874-5750; or Karen O. Solomon, Director, Legislative and Regulatory
Activities (202) 874-5090.
Board: Scott G. Alvarez, Associate General Counsel (202) 452-3583,
Kieran J. Fallon, Senior Counsel (202) 452-5270, or Andrew Miller,
Senior Attorney (202) 452-3428, Legal Division; Glenn E. Loney, Deputy
Director (202) 452-3585, or James H. Mann, Attorney (202) 452-3667,
Division of Consumer and Community Affairs; Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, NW,
Washington, DC 20551. For users of Telecommunications Device for the
Deaf (``TDD'') only, contact Janice Simms at (202) 452-4984.
FDIC: Deanna S. Caldwell, Community Affairs Officer (202) 736-0141;
A. Ann Johnson, Counsel, Regulation and Legislation Section (202) 898-
3573; or Joan M. Bateman, Review Examiner (202) 736-0187.
OTS: Richard Bennett, Counsel (Banking and Finance), (202) 906-
7409; Karen Osterloh, Assistant Chief Counsel, (202) 906-6639; or
Richard R. Riese, Director, Compliance Policy, (202) 906-6134, Office
of Thrift Supervision, 1700 G Street, NW, Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

I. Executive Summary of Proposed Rule

Section 711 of the GLB Act (Pub. L. 106-102, 113 Stat. 1338 (1999))
added a new section 48 to the FDI Act (12 U.S.C. 1831y) entitled ``CRA
Sunshine Requirements.'' Section 711 applies to written agreements that
(1) are made in

[[Page 31963]]

fulfillment of the Community Reinvestment Act of 1977 (CRA),\1\ (2)
involve funds or other resources of an insured depository institution
or affiliate with an aggregate value of more than $10,000 in a year, or
loans with an aggregate principal value of more than $50,000 in a year,
and (3) are entered into by an insured depository institution or
affiliate of an insured depository institution and a nongovernmental
entity or person. Section 711 does not, however, cover any agreement
with a nongovernmental entity or person that has not had a CRA contact
with the insured depository institution or affiliate or a banking
agency, such as agreements entered into by entities or persons that
solicit charitable contributions or other funds without regard to the
CRA. Under section 711, the parties to a covered agreement must make
the agreement available to the public and the appropriate agency. The
parties also must file a report annually with the appropriate agency
concerning the disbursement, receipt and use of funds or other
resources under the agreement.
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\1\ 12 U.S.C. 2901 et seq.
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The proposed rule defines various terms necessary for determining
which agreements are covered agreements and provides guidance for
determining when a CRA contact has been made for purposes of
identifying the parties whose agreements are covered by the rule. The
proposed rule also describes the manner and scope of the Act's
disclosure and annual reporting requirements.
Section 711 and the proposed rule apply only to agreements that are
in writing. To be covered, a written agreement may be an understanding
or agreement and need not be a legally binding contract.
Importantly, section 711 applies only to written agreements that
are ``made pursuant to, or in connection with, the fulfillment of the
Community Reinvestment Act.'' Section 711 defines ``fulfillment'' of
the CRA as a ``list of factors'' that the appropriate agency determines
have a material impact on the agency's decision to approve or
disapprove an application for a deposit facility under the CRA or to
assign a CRA examination rating. The agencies propose to adopt for this
purpose the list of factors identified by the agencies in the CRA
regulations jointly issued by the agencies (CRA Regulations).\2\ These
factors include providing the types of loans considered in evaluating
CRA performance, providing community development services, making CRA
qualified investments, fulfilling a CRA strategic plan, providing
retail banking services as described in the CRA Regulations, and
providing or refraining from providing comments or testimony to an
agency concerning the CRA performance of an insured depository
institution.
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\2\ See 12 CFR 25.21-25.29 (OCC); 12 CFR 228.21-228.29 (Board);
12 CFR 345.21-345.29 (FDIC); 12 CFR 563e.21-563e.29 (OTS).
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The GLB Act exempts specific types of agreements from coverage,
even if these agreements would otherwise meet the definition of a
covered agreement. In particular, the Act and the proposed rule do not
apply to any individual mortgage loan. The Act and proposed rule also
do not apply to any specific contract or commitment for any type of
loan or extension of credit to individuals, businesses, farms or other
entities if the funds are loaned at rates that are not substantially
below market rates and the purpose of the loan or extension of credit
does not include any re-lending of the borrowed funds to third parties.
In addition, as noted above, the Act exempts from coverage any
agreement with a nongovernmental entity or person that has not
commented on, testified about, or discussed with the insured depository
institution, or otherwise contacted the institution, concerning the
CRA. The proposed rule adopts the exemption as written in the statute
and includes several examples of contacts that would be exempt under
this provision as well as contacts that would not qualify for this
exemption. An example of a contact that would qualify for this
exemption is the dissemination of a similar fundraising letter to
insured depository institutions and other businesses in the community
encouraging all businesses in the community to meet their obligation to
assist in making the community a better place to live and work. A CRA
contact would be made, and a related agreement would not be exempt
under this provision, if the entity or person had, for example,
submitted comments to an agency concerning the CRA performance of the
insured depository institution, contacted the institution or any
affiliate about providing (or refraining from providing) CRA-related
comments to an agency concerning the institution, or contacted the
institution or any affiliate about the CRA performance of the
institution.
The GLB Act requires those agreements that are covered by section
711, and that are not exempt, to be made available to the public and
the appropriate agency. Section 711 provides that these disclosure
obligations apply only to covered agreements entered into after
November 12, 1999. Section 711 also requires that the agencies' rules
for ensuring compliance with the Act's requirements not impose undue
burden on the parties. Accordingly, the rule proposes to require
disclosure of covered agreements and to define the scope of annual
reports in a manner that fulfills the requirements of section 711 while
at the same time adopting simple procedures that reduce duplicative
reporting and rely on existing reports prepared by the parties for
their own use or to fulfill other requirements.
The rule proposes that each party to a covered agreement be allowed
to fulfill the public disclosure requirement of section 711 by making
the agreement available to any member of the public on request, and
allows each party to recover reasonable copying and mailing costs in
responding to these requests. An insured depository institution may
fulfill its public disclosure obligation by placing a copy of the
agreement in the institution's CRA public file and making it available
in the same manner as other information in the CRA public file.
The proposed rule also requires that each insured depository
institution or affiliate that enters into a covered agreement file a
complete copy of the agreement with the appropriate agency within 30
days of entering into the agreement. To avoid duplication of efforts
and reduce burden, the rule would allow a nongovernmental entity or
person to fulfill its obligation to make a covered agreement available
to the appropriate agency by providing a copy to the agency upon the
agency's request.
In addition to making covered agreements available, the GLB Act
requires that annual reports be filed regarding resources provided and
used under the agreement. These annual reporting obligations apply only
to covered agreements entered into on or after May 12, 2000. For
nongovernmental entities or persons, the type of information required
to be included in an annual report depends on how the entity or person
used the funds or resources received under the covered agreement. If a
nongovernmental entity or person allocates and uses the funds or
resources received under a covered agreement for a specific purpose,
the person's annual report would have to provide a description of the
specific purpose and state the amount used for the specific purpose. If
the entity or person uses the funds or resources received under the
covered agreement for other or general purposes (e.g., general
operating expenses), the rule proposes that the annual report provide

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the detailed, itemized list described in section 711 of how such funds
were used during the year. This list involves disclosure of the total
amount of resources used by the person or entity for compensation of
officers, directors, and employees; administrative expenses; travel
expenses; entertainment expenses; consulting and professional fees; and
other expenses or uses.
In keeping with section 711, the proposed rule includes a number of
provisions designed to reduce the potential reporting burden of
nongovernmental entities or persons. For example, the rule requires a
nongovernmental entity or person to file an annual report only for a
year in which the entity or person has received funds under a covered
agreement. In addition, the annual report filed by a nongovernmental
entity or person may consist of, or incorporate, a report that the
entity or person has prepared for other purposes--such as a Federal or
state tax return or annual financial statements--if the report provides
the information required by the rule. To facilitate the use of reports
that are prepared for other purposes, the rule would allow parties to
file their annual reports on either a fiscal year or calendar year
basis. If a nongovernmental entity or person is a party to five or more
covered agreements, the entity or person may file a single,
consolidated annual report relating to all of the agreements.
Furthermore, a nongovernmental entity or person may fulfill its annual
reporting requirements by sending its annual reports to the insured
depository institution or affiliate that is a party to the agreement
with a request that the institution or affiliate file the reports with
the appropriate agency.
Under the GLB Act, the annual report filed by an insured depository
institution or affiliate generally must include information on the
amount, terms and conditions of any payments, fees, or loans provided
by the institution or affiliate under the covered agreement, as well as
payments, fees or loans received by the institution or affiliate under
the agreement. The annual report of an insured depository institution
or affiliate also must provide aggregate data on any loans,
investments, or services provided under the covered agreement by each
party to the agreement. The rule includes these requirements. The rule
would allow an insured depository institution or affiliate that is a
party to 5 or more covered agreements to file a single, consolidated
annual report for all of the agreements. In addition, if an insured
depository institution and affiliate are parties to the same covered
agreement, the institution and affiliate may file a consolidated annual
report for the agreement.
Section 711 does not authorize any agency to enforce the provisions
of any covered agreement, and the proposed rule adopts this provision.
The GLB Act, however, provides that a covered agreement may become
unenforceable if the appropriate agency determines that a
nongovernmental entity or person that is a party to the agreement has
willfully failed to comply in a material way with the Act's disclosure
and reporting requirements and the entity or person, after receiving
notice, fails to comply with the Act after a reasonable period of time.
The proposed rule includes this provision and clarifies that, in these
circumstances, the covered agreement becomes unenforceable only by the
nongovernmental entity or person that has willfully and materially
failed to comply with section 711.
The Act requires the agencies to consult and coordinate with each
other in drafting the proposed rule to assure, to the extent possible,
that the regulations of each agency are consistent and comparable. The
agencies have gone beyond these requirements and have developed the
proposed rule on an interagency basis. The agencies believe the
adoption of a uniform rule should assist the public in complying with
the requirements of the Act. Furthermore, as required by the Act, the
agencies have sought to ensure that the proposed rule does not place an
undue burden on the parties to covered agreements and protects
proprietary and confidential information to the maximum extent
consistent with the language and purpose of the Act.
The agencies request comment on all aspects of the proposed rule,
including the specific provisions and issues highlighted in this
preamble, and will incorporate comments received into the final rule as
appropriate. The agencies recognize that insured depository
institutions, affiliates, and nongovernmental entities and persons can
not identify agreements that are covered by section 711 until, in
particular, the agencies adopt the list of factors that are considered
to be in ``fulfillment'' of the CRA. Accordingly, the agencies propose
to act expeditiously to adopt a rule in final form following conclusion
of the comment period. Once a final rule is adopted, the parties to
covered agreements will be expected promptly to disclose any agreement
that is covered by section 711 and was entered into after November 12,
1999, and file an annual report for any covered agreement entered into
on or after May 12, 2000, in accordance with the requirements of the
final rule. The agencies request comment on how the parties to covered
agreements entered into after these dates, but before issuance of the
final rule, should be required to comply with the requirements of the
final rule.

II. Detailed Explanation of Proposed Rule

This section provides a more detailed discussion of the proposed
rule and includes examples that are designed to assist users in
understanding the scope and application of the proposed rule. The
examples included in the preamble are not exclusive. The agencies
request comment on whether the examples included in the preamble are
useful and whether additional examples would prove helpful. The
proposed rule includes examples only of situations that would and would
not constitute a CRA contact by a nongovernmental entity or person.
These examples relating to CRA contact are part of the rule. The
agencies request comment on whether examples illustrating other parts
of the rule should be incorporated into the text of the regulation.
In keeping with the goal of consistency among the agencies' rules
and to facilitate compliance, the proposed rule uses the term ``insured
depository institution'' rather than ``bank'' or ``savings
association.'' As discussed below, the rule identifies the specific
agency or agencies with whom a covered agreement and its related annual
reports should be filed, and the agency or agencies that would be
considered a relevant supervisory agency for a covered agreement.
For ease of reference, the rule and the remaining portions of this
preamble refer to a ``nongovernmental entity or person'' as a
``person.'' \3\ The terms ``nongovernmental entity or person'' and
``person,'' as well as several other terms used in the rule, are
defined in section ____.8 of the proposed rule. The rule generally
defines a nongovernmental entity or person to mean any company or
individual other than the Federal government, a state, local or tribal
government, or an insured depository institution or affiliate. The
agencies request comment on whether users would find it more helpful to
have this section of definitions at the beginning of the rule.
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\3\ The OTS rule, however, refers to a ``nongovernmental entity
or person'' as a ``NGEP.''
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The following description applies to each agency's proposed rule.
Since the

[[Page 31965]]

rule of each agency will be codified at a different part of the Code of
Federal Regulations, the following description references the proposed
rule using only the proposed rule's section numbers.

A. Definition of Covered Agreement

Section ____.2 of the proposed rule defines which agreements are
covered by the rule and the term ``fulfillment of the CRA.'' The Act's
exemptions from the definition of a covered agreement also are set
forth in section ____.2.
1. Covered Agreements
The proposed rule defines a covered agreement as any contract,
arrangement, or understanding that meets all of the following four
criteria:
<bullet> The agreement is in writing;
<bullet> The agreement is made pursuant to, or in connection with,
the fulfillment of the CRA, as defined in section ____.2(c) of the
proposed rule;
<bullet> The parties to the agreement include (1) an insured
depository institution or an affiliate of an insured depository
institution, and (2) a person; and
<bullet> The agreement provides for the insured depository
institution or affiliate to provide cash payments, grants, or other
consideration (other than loans) having an aggregate value of more than
$10,000 in any calendar year, or to make loans in an aggregate
principal amount of more than $50,000 in any calendar year.
The proposed rule clarifies that an agreement may be a covered
agreement even if the agreement is not legally binding on the parties.
Under the proposed rule, an exchange of written correspondence
reflecting a mutual agreement or a written agreement that lacks the
consideration necessary for it to be a legally binding contract would
constitute a covered agreement if the agreement meets the four criteria
discussed above. Moreover, to be covered, an agreement may be with an
insured depository institution or any affiliate of an insured
depository institution, including a bank holding company or a nonbank
affiliate.
The following examples illustrate when a written contract,
arrangement or understanding may exist under the rule. The proposed
rule does not attempt to specifically define what constitutes a
``contract,'' ``arrangement,'' or ``understanding.''

Example 1: An organization sends a letter to an insured
depository institution requesting that the institution provide a
$15,000 grant to the organization. The insured depository
institution responds in writing and agrees to provide the grant in
connection with its annual grant program. The exchange of letters
constitutes a written understanding. This written understanding
would be a covered agreement under the proposed rule if the
agreement is made pursuant to, or in connection with, the
fulfillment of the CRA and the agreement is not otherwise exempt
under section ____.2(b).
Example 2: An organization issues a general, written
solicitation for charitable contributions to businesses in its local
community. An insured depository institution makes a $20,000
charitable contribution by check to the organization in response to
the solicitation. The insured depository institution does not have
any written contract, arrangement or understanding with the
organization concerning the donation. The general request for funds
and the check are not themselves a contract, arrangement or
understanding. Since there is no other written agreement between the
insured depository institution and the organization, there is no
covered agreement between the entities.
Example 3: A bank holding company unilaterally issues a press
release announcing that its subsidiary banks have established a goal
of making $100 million of community development grants in low-and
moderate-income (LMI) neighborhoods over the next 5 years. The
unilateral pledge is not a contract, arrangement or understanding
entered into with a person and, therefore, is not a covered
agreement.
Example 4: An association of community groups and an affiliate
of an insured depository institution orally agree that the affiliate
will seek to make $100,000 in grants available to the organization's
constituent members over the next year. The oral agreement is not
reduced to writing. Oral agreements are not within the scope of the
statute and, accordingly, the agreement is not a covered agreement.

The agencies invite comment on whether the rule should define the
terms ``contract,'' ``arrangement'' and ``understanding'' and, if so,
what those definitions should be. The agencies also request comment on
whether any of the examples provided above should be modified or
amended, and whether additional examples would be useful.
2. Exemptions for Certain Agreements
Section 711 specifically exempts certain types of agreements from
coverage even if they otherwise meet the definition of a covered
agreement. Section ____.2(b) of the proposed rule implements these
exemptions.
a. Qualifying Loans
The first statutory exemption is for any individual mortgage loan.
Under this exemption, any mortgage loan made by an insured depository
institution or affiliate to any individual or entity is exempt from the
requirements of section 711. This exemption is available for any
mortgage loan, regardless of the identity of the borrower, the type of
real estate securing the loan, or the rate charged on the loan.
The statute also exempts from coverage ``any specific contract or
commitment for a loan or extension of credit to individuals,
businesses, farms, or other entities if the funds are loaned at rates
[that are] not substantially below market rates and if the purpose of
the loan or extension of credit does not include any re-lending of the
borrowed funds to other parties.'' \4\ Under the statute, this
exemption is available for any type of loan to any individual or entity
if the loan meets the market rate and re-lending restrictions of the
statute.
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\4\ 12 U.S.C. 1831y(e)(1)(B)(ii).
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The agencies request comment on the application of this exemption
to agreements that involve a commitment to make one or more loans or
extensions of credit that meet the market rate and re-lending
restrictions of the statute. In particular, comment is requested on
whether this exemption provides an exemption only for a specific
commitment to make a loan or extension or credit. Under this
interpretation, the exemption would be available for a commitment by an
insured depository institution or affiliate to provide a specific loan
or extension of credit to one or more individuals or entities that is
on market terms and not for purposes of re-lending, such as a loan
commitment typically made in the course of providing a line of credit
to a small business. The agencies also request comment on whether this
exemption includes an exemption for a commitment to make multiple loans
that meet the Act's restrictions. Under this interpretation, a
commitment to make any number or amount of loans that meet the Act's
restrictions over a period of time would be exempt from coverage. The
agencies request comment on which interpretation of the exemption is
more consistent with the language and purposes of the Act.
To be entirely exempt under the proposed rule, an agreement must be
exclusively a loan, extension of credit or loan commitment that meets
the requirements of the exemption. However, as discussed further below,
if an agreement includes a loan, extension of credit or loan commitment
that meets the rule's requirements to be exempt and also provides for
the insured depository institution or affiliate to provide other funds
or resources, the value of the exempt loan, extension of credit or loan
commitment may be excluded in determining whether the

[[Page 31966]]

agreement is in fulfillment of the CRA and meets the Act's dollar
thresholds.\5\
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\5\ The agencies note, however, that if the other consideration
is provided to reduce the effective interest rate paid on the loan
or extension of credit to a rate that is substantially below the
market rate, the loan or extension of credit would not itself be
exempt from coverage.
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The following examples illustrate these provisions of the proposed
rule:

Example 1: An insured depository institution provides a $1
million mortgage loan to an organization pursuant to a written
agreement. The agreement is an individual mortgage loan and is
exempt from coverage under the rule, regardless of the interest rate
on the loan or whether the purpose of the loan was for re-lending.
Example 2: An affiliate of an insured depository institution
provides a $500,000 working capital loan to a small business
pursuant to a written agreement. The loan is made on market terms
and the purposes of the loan do not include re-lending. The
agreement is exempt from coverage under the rule.
Example 3: An insured depository institution enters into a
written agreement with a community development organization to make
$250 million in small business loans in the community over the next
five years. The loans would be made on market terms and not for
purposes of re-lending. Each small business loan made by the insured
depository institution pursuant to the agreement is exempt from
coverage. The agreement by the insured depository institution with
the association, however, is not a commitment to make a specific
loan or extension of credit and would not be exempt under one
interpretation of the exemption. This commitment to make loans would
be exempt under the other interpretation of the exemption.
Example 4: A business organization receives a mortgage loan from
an affiliate of an insured depository institution pursuant to a
written agreement. The agreement also provides that the affiliate
will make a $12,000 investment in a local community development
corporation the following month. The agreement is not an exempt
agreement under the rule because it is not exclusively a mortgage
loan. Although the mortgage loan may be excluded when considering if
the agreement meets the Act's dollar thresholds, the agreement would
meet these thresholds because it provides for the affiliate to make
other payments in excess of $10,000 in a calendar year.

The agencies request comment on these exemptions. In particular,
comment is invited on whether a mortgage loan includes any loan secured
by real estate, or only a loan that is secured by real estate and made
for the purchase or improvement of the real estate or for the
refinancing of such a loan. Comment also is invited on whether the
agencies should define when loans are made at ``substantially below
market rates'' and, if so, what that definition should be. For example,
should the agencies provide that the relevant market rate for a loan is
the rate that would be charged on a comparable transaction (e.g., a
construction loan, permanent financing, a small business loan, or an
unsecured consumer loan) with a comparable person (e.g., a person with
similar financial resources and credit history) that is not a party to
the agreement? In addition, should the agencies provide a formula for
determining whether a loan bears a rate that is substantially below the
market rate? Such a formula could provide, for example, that a rate is
substantially below the market rate if it is more than a specified
percentage (e.g., 10 percent) or number of basis points (e.g., 200
basis points) below the rate that would be charged in a comparable
transaction.
The agencies also request comment on whether the rule should
provide guidance on when a loan is made ``for purposes of re-lending''
and what constitutes ``re-lending'' under the rule. For example, should
the rule provide that the purposes of a loan are determined by
reference to the underlying loan documents or by whom the documents
refer to as the lender?
b. Agreements With Persons Who Have Not Made a CRA Contact
Section 711 also exempts from coverage any agreement entered into
by an insured depository institution or affiliate with a person who has
not commented on, testified about, or discussed with the institution,
or otherwise contacted the institution, concerning the CRA. This
provision broadly exempts from all of the provisions of section 711 any
agreement by an insured depository institution or affiliate with a
person that has not had a contact concerning the CRA (CRA contact). The
Conference Report for the Act indicates that a wide range of
organizations that solicit funds without regard to the CRA may benefit
from this exemption, including civil rights groups, community groups
providing housing or other services in low-income neighborhoods, the
American Legion, and community theater groups.\6\
---------------------------------------------------------------------------

\6\ See H.R. Conf. Rep. No. 106-434 at 179 (1999).
---------------------------------------------------------------------------

The proposed rule adopts the exemptive language contained in
section 711. In addition, the proposed rule provides examples of
actions by a person that would constitute a CRA contact under the rule
and examples of actions that would not constitute a CRA contact under
the rule. These examples are intended to illustrate different types of
actions that are or are not CRA contacts based on the wording and
purpose of the exemption and the scope of the statutory exemption.
These examples are not exclusive. For ease of reference, the proposed
rule divides the examples of actions that constitute a CRA contact into
two categories: contacts with an agency and contacts with an insured
depository institution or affiliate.
As discussed below, the agencies request comment on various aspects
of this exemption. In particular, the agencies invite comment on
whether the rule should provide a more detailed definition of the
exemption. The agencies also request comment on whether the examples
provided are appropriate and useful and, if so, whether other examples
should be included or areas addressed with examples.
CRA Contact with an Agency. As a general matter, a person has made
a CRA contact if the person submits written or oral comments or
testimony to an agency concerning the record of performance or future
performance under the CRA of an insured depository institution or CRA
affiliate.\7\ If a person had this type of contact with an agency and
subsequently enters into an agreement with the insured depository
institution or any affiliate of the insured depository institution that
meets the requirements of section 711, the agreement is not exempt.
---------------------------------------------------------------------------

\7\ As discussed further below, a contact concerning the
performance of a ``CRA affiliate'' of an insured depository
institution is considered to be a contact concerning the CRA
performance of the insured depository institution.
---------------------------------------------------------------------------

``Comments'' and ``testimony'' refer to any type of written
submission or oral statement by a person to an agency. The terms
include the submission of written materials to an agency in connection
with an application by an insured depository institution or company for
a deposit facility or an examination of an insured depository
institution under the CRA, and oral statements made by a person to an
agency during a public or private meeting held concerning a transaction
or CRA examination.
The rule provides two examples of contacts with an agency that
would not constitute a CRA contact. The first example involves a person
that provides written or oral comments or testimony to an agency in
response to a direct request by the agency for comments or testimony
from that person. In such circumstances, the contact would result due
to an action by the agency and imposing the rule's requirements on the
person might impede the agency's ability to obtain necessary or useful
information. This example of a direct request for comments or testimony
does not apply, however, to comments or

[[Page 31967]]

testimony that are provided in response to a general invitation by an
agency for public comments (e.g., a Federal Register notification) in
connection with a CRA performance evaluation or an application for a
deposit facility.
The second example provides that a person does not make a CRA
contact with an agency by making a statement concerning an insured
depository institution at a widely attended conference or seminar on a
general topic, even if representatives of an agency were in attendance
at the conference or seminar when the statement was made. A public or
private meeting or hearing relating to one or more insured depository
institutions or a transaction to acquire a deposit facility is not
considered a widely attended conference or seminar on a general topic.
CRA Contact with Insured Depository Institution or Affiliate.
Contacts by a person with an insured depository institution or
affiliate will not cause an agreement to become subject to the
requirements of section 711 unless the contact is a CRA contact. The
rule provides several examples of the types of contacts with an insured
depository institution or affiliate that are CRA contacts and that
would make the exemption unavailable.
The first example involves a contact with an insured depository
institution or affiliate about providing (or refraining from providing)
written or oral comments or testimony to an agency concerning the
record of performance or future performance under the CRA of the
insured depository institution.
The second example involves a contact with an insured depository
institution or affiliate about providing (or refraining from providing)
written comments to the institution that would have to be included in
the institution's CRA public file. Under the agencies' CRA Regulations,
a written comment generally must be placed in an institution's CRA
public file if it specifically relates to the institution's performance
in helping to meet community credit needs.\8\ Because this information
is intended for consideration by the agencies in the course of a CRA
examination or evaluation of an application for a deposit facility, the
submission of comments for inclusion in an institution's CRA public
file is considered a CRA contact.
---------------------------------------------------------------------------

\8\ See 12 CFR 25.43(a)(1) (OCC); 12 CFR 228.43(a)(1) (Board);
12 CFR 345.43(a)(1) (FDIC); 12 CFR 563e.43(a)(1) (OTS).
---------------------------------------------------------------------------

The third example involves a contact with an insured depository
institution or affiliate concerning the CRA rating of the insured
depository institution, or the CRA record of performance of the insured
depository institution.
The fourth example involves a contact with an insured depository
institution or affiliate concerning actions that should be taken to
improve the CRA performance of the insured depository institution.
The fifth example involves a contact with an insured depository
institution or affiliate concerning any obligation or responsibility
that the insured depository institution may have to meet the banking
needs of its community. In this example, the contact occurs while the
insured depository institution or an affiliate of the institution has
an application for a deposit facility pending before an agency or is
undergoing a publicly announced CRA performance examination.
If a person has one of the contacts described above and
subsequently enters into a covered agreement with the insured
depository institution or any affiliate of the insured depository
institution, the agreement is not exempt under the rule. The rule and
the examples do not contemplate that a discussion or contact must
include any particular words or phrases, such as ``Community
Reinvestment Act,'' ``CRA'' or ``CRA rating'' in order to be a CRA
contact. Instead, the substance and context of the discussion or
contact are the controlling factors.
Under the examples included in the rule, a person would not have a
CRA contact by sending a similar fundraising letter to an insured
depository institution or affiliate and other businesses in the
community encouraging all businesses in the community to meet their
obligation to assist in making the local community a better place to
live and work. In addition, a person would not make a CRA contact by
sending a general offering circular to financial institutions offering
to sell a portfolio of loans and having discussions with a particular
insured depository institution concerning the loan portfolio if no
reference to the CRA or the institution's CRA performance is made in
the offering circular or in the parties' discussions.\9\ A person also
would not make a CRA contact with an insured depository institution or
affiliate by making a statement concerning the institution or affiliate
before a widely attended conference or seminar on a general topic, even
if representatives of the institution or affiliate were in attendance
at the conference or seminar when the statement was made.
---------------------------------------------------------------------------

\9\ A CRA contact would occur under the proposed rule, however,
if the offering materials indicated that the loans in the mortgage
pool would receive favorable consideration by the agencies under the
CRA, or if the parties discussed how the transaction would improve
the institution's CRA performance.
---------------------------------------------------------------------------

The agencies request comment on whether the rule should more
specifically define the terms of the exemption for persons that have
not made a CRA contact or more specifically define when a CRA contact
has occurred and, if so, how a CRA contact should be defined. The
agencies also request comment on the examples of a CRA contact included
in the rule, including whether any of the examples should be amended or
deleted or whether additional examples should be provided. For example,
the agencies request comment on whether a CRA contact under the Act
includes a general discussion about the CRA that does not involve any
discussion of the performance of an insured depository institution
under the CRA or obligation of the institution to serve the banking
needs of its community.
In addition, the agencies request comment on whether the rule can
and should be limited to exclude from the scope of CRA contacts
discussions with an insured depository institution or affiliate
concerning whether particular loans, services, investments or community
development activities are generally eligible for consideration by an
agency under the CRA Regulations. The marketing of products and
services to insured depository institutions frequently may include a
general statement of whether the product or service is eligible for
credit under the CRA. If the rule were limited in this manner, then the
situation described in section ____.2(b)(2)(iii)(D) of the rule would
not be a CRA contact even if the offering circular included a statement
that the loans included in the loan pool were of the type that could be
considered by an agency under the CRA Regulations. A discussion of
whether or how loans, services, investments or activities would impact
a particular institution's CRA rating or performance would, however,
continue to be considered a CRA contact.
The agencies also request comment on whether the rule can and
should be limited to cover only contacts that involve providing CRA-
related comments or testimony to an agency or discussions with an
insured depository institution or affiliate about providing (or
refraining from providing) such comments or testimony to an agency. If
the rule was limited in this fashion, the actions described in section
____.2(b)(2)(ii)(B)(3), (4) and (5) would not constitute a CRA contact
because

[[Page 31968]]

the person did not submit CRA-related comments or testimony to an
agency or discuss with or contact the insured depository institution or
any affiliate about providing (or refraining from providing) CRA-
related comments or testimony to an agency.
Additionally, the agencies request comment on whether there should
be a temporal relationship between a CRA contact and when an agreement
is made. In this regard, under the proposed rule, a covered agreement
entered into in 2001 between an insured depository institution and a
person would not be exempt if the person had submitted a comment to an
agency concerning the CRA performance of the institution several years
earlier. Section 711, however, appears to have been intended to apply
to agreements that result from, or were influenced by, a CRA contact.
Where a CRA contact occurs a significant period of time before the
negotiation of an agreement, however, there may be no link or influence
between the CRA contact and the agreement. Furthermore, the passage of
time may make it difficult for the parties to a covered agreement to
determine or effectively track whether a CRA contact occurred at all.
For these reasons, the agencies specifically request comment on
whether the rule should require that a CRA contact occur within a
specified period, such as two years (or a shorter or longer period),
before the parties entered into the agreement. Similarly, the agencies
request comment on whether a CRA contact should include a contact that
occurs after the parties enter into an agreement, such as within 90
days after the beginning of the term of the agreement, at any time
during the term of the agreement, or some other period of time. For
example, if a person provides comments or testimony to an agency
concerning the CRA performance of an insured depository institution
after entering into an agreement with the institution, would the
person's actions suggest that the agreement and the comments or
testimony were linked?
The agencies also request comment on how the rule and the exemption
discussed above should apply in circumstances where a covered agreement
involves several parties and a CRA contact has been made by or
concerning only one of the parties. For example, how should the rule
apply where several nongovernmental entities or persons enter into a
covered agreement with an insured depository institution and only one
of the entities or persons has made a CRA contact? Similarly, how
should the rule apply where a nongovernmental entity or person has a
CRA contact concerning one insured depository institution and
subsequently enters into a covered agreement jointly with the
institution and several other unaffiliated insured depository
institutions? In addition, how should the rule and exemption apply
where a person has a CRA contact with an agency but the relevant
insured depository institution or affiliate does not know the contact
occurred?
c. Request for Comment on Additional Exemptions
The agencies recognize that the language of section 711 and,
accordingly, the types of agreements captured under the proposed rule
are broad. The agencies are concerned that, in light of this breadth,
certain agreements that were not intended to be covered by the Act may
be considered covered agreements under the proposed rule. For example,
supervisory experience suggests that insured depository institutions
enter into a wide variety of contracts in their normal day-to-day
operations that, directly or indirectly, relate to activities
considered by the agencies in connection with a CRA evaluation. During
the negotiation of these contracts and as an incident to the underlying
business transaction, the parties may discuss whether the activities
contemplated by the contract are viewed favorably under the agencies'
CRA Regulations, involve loans within the institution's CRA assessment
area, or would otherwise improve the institution's CRA performance.
These types of contacts would be CRA contacts under the proposed rule
and a related business agreement would be covered if the agreement was
in fulfillment of the CRA and met the other criteria to be a covered
agreement.
The Act grants the Board the ability to determine, by regulation,
that specific types of contacts are exempt and, consequently, that a
related agreement is not covered by section 711. The agencies
specifically invite comment on whether and how the Board should
exercise its exemptive authority in this area, including whether there
are particular types of CRA contacts that occur and that, given their
context and purpose, do not implicate the concerns of the Act. For
example, if the proposed definition of CRA contact is retained in the
final rule, should the Board exercise its discretion in this area to
provide an exemption for CRA contacts that occur in connection with the
purchase of loans by an insured depository institution or affiliate on
an arm's length basis in the secondary market even where the
negotiation of the agreement included a general discussion of the
effect of the transaction on the CRA performance of the insured
depository institution? Are there other types of contacts that occur in
connection with the ordinary day-to-day business of an insured
depository institution or affiliate that should be exempted from
coverage because, for example, the CRA contact does not involve any
coercive aspect or was initiated by the insured depository institution?
If so, how could such an exemption or exemptions be framed narrowly to
exclude only those types of contacts (and related agreements) that are
not within the intended scope of the Act?
3. Fulfillment of the CRA
Under the GLB Act, a written agreement is a covered agreement only
if it is ``made pursuant to, or in connection with the fulfillment of
the Community Reinvestment Act of 1977.'' \10\ The Act defines
``fulfillment'' of the CRA to mean ``a list of factors that the
appropriate Federal banking agency determines have a material impact on
the agency's decision to (A) approve or disapprove an application for a
deposit facility [under the CRA]; or (B) to assign a rating to an
insured depository institution [under the CRA].'' \11\
---------------------------------------------------------------------------

\10\ 12 U.S.C. 1831y(e)(1)(A).
\11\ Id. at 1831y(e)(2).
---------------------------------------------------------------------------

The Conference Report for the GLB Act indicates that the list of
factors should include ``a full enumeration of the relevant factors
that [an] agency reviews and considers in examining the performance of
an insured financial institution in connection with the CRA, including
any and all items a regulator would attach importance to in determining
the evaluation under the [CRA] of the performance of a financial
institution.'' \12\ The agencies' CRA Regulations set forth the
criteria that the agencies consider in evaluating the CRA performance
of an insured depository institution for purposes of assigning a CRA
rating to an institution and evaluating an application by an
institution or company for a deposit facility under the CRA.\13\ These
regulations permit the agencies to consider broadly the lending,
investment and service activities of an insured depository institution
in evaluating the institution's performance under the CRA.
---------------------------------------------------------------------------

\12\ H.R. Conf. Rep. No. 106-434 at 179 (1999).
\13\ See 12 CFR 25.21-25.29 (OCC); 12 CFR 228.21-228.29 (Board);
12 CFR 345.21-345.29 (FDIC); 12 CFR 563e.21-563e.29 (OTS).
---------------------------------------------------------------------------

For these reasons, the proposed rule would define the list of
factors for purposes of section 711 generally by

[[Page 31969]]

reference to the criteria enumerated in Subpart B of the CRA
Regulations jointly issued by the agencies. These criteria reflect the
factors that the agencies previously have determined have a material
impact on an agency's assignment of a CRA rating and assessment of the
CRA factor in decisions to approve or disapprove an application for a
deposit facility. These factors are summarized in the proposed rule as
follows:
(1) Home purchase, home improvement, small business, small farm,
community development, and consumer lending as described in the lending
test portion of the CRA Regulations, including loan purchases, loan
commitments, and letters of credit;
(2) Making investments, deposits, or grants, or acquiring
membership shares that have as their primary purpose community
development, as described in the investment test portion of the CRA
Regulations;
(3) Delivering retail banking services, as described in the service
test portion of the CRA Regulations;
(4) Providing community development services, as described in the
service test portion of the CRA Regulations;
(5) For a wholesale or limited-purpose insured depository
institution, community development lending, qualified investments, and
community development services, as described in the community
development test portion of the CRA Regulations for wholesale or
limited-purpose insured depository institutions;
(6) For small insured depository institutions, the lending and
other activities described in the small insured depository institution
performance standard of the CRA Regulations; \14\
---------------------------------------------------------------------------

\14\ The terms wholesale insured depository institution,
limited-purpose insured depository institution, and small insured
depository institution refer to a wholesale, limited-purpose or
small bank or savings association as defined in Subpart A of the
relevant agency's CRA Regulations. See 12 CFR 25.12(o), (t) and (w)
(OCC); 12 CFR 228.12(o), (t), and (w) (Board); 12 CFR 345.12(o),
(t), and (w) (FDIC); and 12 CFR 563e.12(n), (s), and (v) (OTS). An
agreement that involves the performance of activities by a
wholesale, limited-purpose or small insured depository institution
is in fulfillment of the CRA only if the agreement involves the
performance of one of the activities within the scope of the
relevant performance test or standard for the particular type of
institution.
---------------------------------------------------------------------------

(7) For an insured depository institution whose CRA performance is
evaluated on the basis of a strategic plan, any element of that plan as
described in the strategic plan portion of the CRA Regulations;
(8) Providing or refraining from providing written or oral comments
or testimony to any agency concerning the record of performance or
future performance under the CRA of an insured depository institution
that is a party to the agreement or an affiliate of a party to the
agreement; and
(9) Providing or refraining from providing written comments to an
insured depository institution that is a party to the agreement or an
affiliate of a party to the agreement that would have to be included in
the institution's CRA public file.
An activity is within the factors enumerated in paragraphs (1)
through (7) if it would be considered by the agencies under the
relevant performance test or standard in the CRA Regulations.\15\ These
activities may be conducted by an insured depository institution that
is a party to the agreement or an affiliate of a party to the
agreement.\16\ In addition, an agreement would be considered in
fulfillment of the CRA if any of these activities is performed by a
nongovernmental entity or person that is a party to the agreement and
an insured depository institution receives favorable consideration for
the activities under the CRA.
---------------------------------------------------------------------------

\15\ Thus, for example, an agreement that relates to the
consumer lending activities of an insured depository institution
would be considered to be in fulfillment of the CRA if the
institution's consumer lending activities were considered by the
appropriate agency at the institution's most recent CRA examination.
Under the CRA Regulations, an institution's consumer lending
activities are considered in certain circumstances by an agency if
such lending constitutes a substantial majority of the institution's
business or the institution has elected to have its consumer lending
activities considered by the appropriate agency. See 12 CFR 25.22(a)
(OCC); 12 CFR 228.22(d) (Board); 12 CFR 345.22(a) (FDIC); 12 CFR
563.22(a) (OTS).
\16\ As discussed further below, a ``CRA affiliate'' of an
insured depository institution is viewed as part of the insured
depository institution. Accordingly, activities performed by a CRA
affiliate of an insured depository institution are considered to be
performed by the insured depository institution.
---------------------------------------------------------------------------

The proposed rule's list of factors also includes providing (or
refraining from providing) CRA-related comments or testimony to an
agency or written comments to an insured depository institution that
must be included in the institution's CRA public file. The agencies'
CRA Regulations generally require the agencies to consider comments
received from the public or included in an insured depository
institution's CRA public file when evaluating the CRA performance of
the institution.\17\ The CRA Regulations also require an agency to
consider written or oral comments submitted to the agency when acting
on applications for a deposit facility.\18\ Accordingly, such comments
and testimony are among the factors that may have a material impact on
an agency's decision to assign a CRA rating or evaluation under the CRA
of an application for a deposit facility.
---------------------------------------------------------------------------

\17\ See 12 CFR 25.21(b)(6) and 25.43(a)(1) (OCC); 12 CFR
228.21(b)(6) and 228.43(a)(1) (Board); 12 CFR 345.21(b)(6) and
345.43(a)(1) (FDIC); 12 CFR 563e.21(b)(6) and 563e.43(a)(1) (OTS).
\18\ See 12 CFR 25.29(c) (OCC); 12 CFR 228.29(b) (Board); 12 CFR
345.29(c) (FDIC); 12 CFR 563e.29(c) (OTS).
---------------------------------------------------------------------------

While the level of activity that will have a material effect on a
CRA rating or an application decision varies with the circumstances
involving the particular insured depository institution, the GLB Act by
its terms requires that the agencies identify the list of factors that
have a material impact on an agency's decision to assign a CRA rating
or to approve an application for a deposit facility under the CRA. The
Act does not appear to incorporate a quantitative threshold for the
agencies to use in defining the list of factors that are material to
such a decision. Instead, the GLB Act explicitly sets a threshold
dollar level for the minimum amount of activities that must be
performed in order for an agreement to be covered by section 711. As
discussed below, these value thresholds are $10,000 in cash payments,
grants or other consideration and $50,000 in loans. For these reasons,
the proposed rule provides that an agreement is in fulfillment of the
CRA if it pertains to a ``factor'' that the agencies determine is
``material'' to an institution's rating or application--such as the
institution's lending--rather than to a level of performance that the
agencies determine is material to the CRA evaluation of that insured
depository institution.
The agencies request comment on this reading of section 711 and on
whether the list of factors properly identifies the ``factors'' that
are material to a CRA evaluation. The agencies also request comment on
whether the agencies have interpreted the statutory mandate to identify
the ``list of factors that * * * have a material impact'' on an
agency's decision to assign a CRA rating and to approve or disapprove
an application under the CRA in a manner consistent with the language
and purposes of section 711. In particular, comment is invited on
whether the proposed list of factors that are considered to be in
fulfillment of the CRA can and should be expanded, restricted, or
altered consistent with the language and purpose of the Act. For
example, although the agencies consider an insured depository
institution's lending in all geographic areas and to borrowers of all
income ranges for certain purposes in evaluating the institution's CRA
performance, can and should the rule's

[[Page 31970]]

list of factors focus on those types of lending (and other activities)
that are reasonably likely to receive favorable consideration under the
CRA Regulations, such as certain types of lending in LMI areas or to
LMI borrowers?
The terms of a written agreement generally determine whether the
contract, arrangement or understanding is in fulfillment of the CRA.
However, the parties to a written agreement may not evade coverage
under the Act by reaching an oral understanding that a party will
submit (or refrain from submitting) oral or written CRA-related
comments or testimony to an agency or written comments to an insured
depository institution that would have to be included in the
institution's CRA public file and excluding this understanding from the
terms of the written agreement. In addition, if an agreement includes a
loan, extension of credit or loan commitment that, if done separately,
would be exempt from coverage and also provides for the insured
depository institution or affiliate to provide other funds or
resources, the parties may exclude the exempt loan, extension of credit
or loan commitment when determining if the agreement is in fulfillment
of the CRA.
The following are examples of agreements that would be in
fulfillment of the CRA under the proposed rule. Unlike the examples of
CRA contacts, these examples are not included in the proposed rule.
Each example illustrates only the fulfillment criteria of the rule and
assumes that the agreement meets the other requirements necessary to be
considered a covered agreement. In this regard, even if an agreement is
in fulfillment of the CRA, it may still be exempt from coverage under
the rule if it is an exempt loan or loan commitment, or if the person
that is a party to the agreement has not had a CRA contact.

Example 1: An insured depository institution enters into an
agreement with a local business organization that provides for the
institution to make $500,000 in small business loans to third
parties in the institution's assessment area in the next two years.
The agreement is in fulfillment of the CRA because an institution's
small business lending activity is considered as part of the lending
test under the CRA Regulations. The agreement might still be exempt
from coverage depending on the scope of the exemption for loan
commitments.
Example 2: An insured depository institution enters into an
agreement with a development corporation to invest $1 million in a
project the purpose of which is the revitalization of an LMI
neighborhood within the institution's assessment area. The agreement
is in fulfillment of the CRA because the investment is a qualified
investment under the CRA Regulations and would be considered as part
of the investment test under the CRA Regulations.
Example 3: An insured depository institution enters into an
agreement with a supermarket chain that provides for the institution
to open a branch in certain of the chain's stores. The agreement is
in fulfillment of the CRA because an institution's record of opening
and closing branches is evaluated in the context of the distribution
of its branches as part of the service test under the CRA
Regulations.
Example 4: An insured depository institution enters into a
written agreement with an organization to provide the organization
with a $25,000 donation to assist in covering the organization's
general operating expenses. A representative of the organization
orally agrees that, in return for the contribution, the organization
will submit a comment to or testify before the appropriate agency in
support of the institution's recently announced proposal to merge
with another insured depository institution. The written agreement
is in fulfillment of the CRA because the organization orally agreed
in connection with the agreement to provide comments or testimony to
an agency concerning the CRA record of performance of the
institution.

The following are examples of agreements that would not be in
fulfillment of the CRA under the proposed rule:

Example 5: An insured depository institution enters into an
agreement with a local theater company for the institution to make a
$20,000 charitable donation to the company for each of the next five
years. The agreement is not in fulfillment of the CRA because the
donation does not have community development as its primary purpose
and, thus, would not be considered a qualified investment under the
CRA Regulations.
Example 6: An insured depository institution enters into an
agreement with a neighborhood association to donate 100 hours of
employee time to the organization's annual effort to clean up the
neighborhood. The agreement is not in fulfillment of the CRA because
the services are not considered community development services or
other qualifying services under the CRA Regulations.

The agencies note that the proposed rule's list of factors does not
include performance of activities designed to ensure compliance with
Federal laws that prohibit discriminatory or other illegal credit
practices, such as the Equal Credit Opportunity Act (15 U.S.C. 1691 et
seq.) and the Fair Housing Act (42 U.S.C. 3601 et seq.). Although the
agencies consider evidence of these practices in evaluating an insured
depository institution's performance under the CRA, the agencies are
concerned that including such activities in the list of factors could
have an unintended and detrimental impact on compliance and enforcement
of the fair lending laws.\19\ The agencies specifically request comment
on whether this view is correct, or whether the list of factors should
be expanded to include activities designed to ensure compliance with
the fair lending laws.
---------------------------------------------------------------------------

\19\ For example, a requirement that an insured depository
institution publicly disclose an agreement to use ``mystery
shoppers'' to test the institution's compliance with the fair
lending laws or to settle a fair lending complaint could deter the
institution from entering into such agreements.
---------------------------------------------------------------------------

Comment also is solicited on whether the list of factors should be
expanded to include other activities. For example, the proposed rule's
list of factors does not specifically include the provision of advisory
or consulting services concerning CRA-related activities. Should the
rule include a reference to these or other activities?
4. Value
A written agreement is a covered agreement only if it calls for an
insured depository institution or affiliate to provide to one or more
persons cash payments, grants, or other consideration of more than
$10,000 in any calendar year, or to make loans that have an aggregate
principal amount of more than $50,000 in any calendar year. The
statutory threshold is based on the total value of payments and loans
provided under the agreement and does not require that these payments
or loans be made to a party to the agreement.\20\ Accordingly, under
the proposed rule, all cash payments, grants, consideration or loans
provided by an insured depository institution or affiliate under the
agreement, including amounts provided to individuals or entities that
are not parties to the agreement, would be considered in determining
whether an agreement meets the rule's dollar thresholds. However, if an
agreement includes a loan, extension of credit or loan commitment that,
if done separately, would be exempt from coverage and also provides for
the institution or affiliate to provide other funds or resources, the
parties may exclude the exempt loan, extension of credit or loan
commitment when determining if the agreement meets the dollar
thresholds of the rule. See discussion under II.A.2.a. above concerning
qualifying loans.
---------------------------------------------------------------------------

\20\ See 12 U.S.C. 1831y(e)(1)(A)(i).
---------------------------------------------------------------------------

Under the proposal, an agreement that provides for payments to be
made in any calendar year in excess of the dollar thresholds
established by the statute is a covered agreement for its entire term.
The agencies believe that using a calendar year period for these
calculations should facilitate

[[Page 31971]]

compliance with the rule by providing all parties to a covered
agreement a uniform basis for determining whether the agreement is
covered by the rule and because the terms of an agreement may not
coincide with the parties' fiscal years. The agencies invite comment on
whether another 12-month period would provide a more appropriate basis
for these calculations.
The following are examples of the value provisions of the proposed
rule. These examples illustrate only the application of the dollar
thresholds of the proposed rule.

Example 1: An insured depository institution enters into an
agreement with a small business investment company pursuant to which
the institution will invest $25,000 in the company. The agreement
meets the dollar threshold criterion to be a covered agreement
because the institution will provide more than $10,000 in funds
(other than loans) under the agreement.
Example 2: An insured depository institution and a community
organization enter into a written agreement pursuant to which the
institution will invest $1 million in a state-sponsored investment
fund that supports affordable housing initiatives for LMI
individuals. The community organization will not receive any funds
or other resources from the insured depository institution or its
affiliates under the agreement. The agreement meets the dollar
threshold criterion for a covered agreement under the proposed rule.
Example 3: An affiliate of an insured depository institution
provides a $100,000 loan to an association of small businesses
pursuant to a written agreement. The loan is on market terms and not
for purposes of re-lending. The agreement also provides for the
affiliate to make a $5,000 grant to the local chamber of commerce's
small business incubator. Because the loan is made on market terms
and not for purposes of re-lending, the loan would be an exempt
agreement under the proposed rule if it were a separate agreement.
Accordingly, the value of the loan may be excluded in determining
the value of the agreement. After excluding the loan, the agreement
would not meet the dollar criterion of the rule.
Example 4: An insured depository institution and a community
development corporation enter into a written agreement that requires
an affiliate of the insured depository institution to provide the
organization with a grant of $5,000 in 2000, $8,000 in 2001, and
$11,000 in 2002. The agreement exceeds the dollar threshold
criterion of the rule because the agreement provides for payments in
excess of $10,000 during 2002. Assuming the agreement meets the
other requirements of the rule and is not otherwise exempt, the
agreement is a covered agreement for its entire term.

The agencies request comment on how the dollar thresholds in the
statute should be applied in situations where an agreement does not
have a specific term or does not specify a timetable for the
disbursement of funds or resources under the agreement. For example, if
an agreement provides that an insured depository institution will make
$40,000 in grants over a 5-year period, but does not specify the years
in which the grants will be made, should the rule create a presumption
that the entire sum ($40,000) is provided in the first year of the
agreement or assume that the value is paid in equal yearly installments
of $8,000? An alternative approach would rely on how the payments are
actually made under the agreement. Under this alternative approach, if
the payments under the agreement actually exceeded $10,000 in a
calendar year, the agreement would then become a covered agreement.
The agencies also invite comment on whether the rule should provide
guidance on how to determine the value of an agreement that does not
specify the amount of payments, grants, loans or other consideration to
be provided under the agreement, such as an agreement for an insured
depository institution to open a branch or to begin offering a new loan
product.
5. Related Agreements Considered a Single Agreement
In two circumstances, section 711 of the GLB Act requires that
separate agreements or contracts be aggregated for purposes of
determining whether the agreements--taken as a whole--meet the
definition of a covered agreement.\21\ Section ____.3 of the rule
implements these requirements. If separate agreements are considered a
single agreement under section ____.3, the combined agreement must
still meet the criteria to be a covered agreement to be covered by the
rule. Loans, extensions of credit and loan commitments that are
specifically excluded from the definition of covered agreement under
____.2(b) of the rule are not required to be aggregated with other
agreements.
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\21\ See 12 U.S.C.1831y(e)(1) and (2).
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a. Agreements Entered Into by the Same Parties
Section ____.3(a) provides that all written contracts,
arrangements, or understandings that are entered into by an insured
depository institution or affiliate of an insured depository
institution will be considered to be part of a single agreement if the
contracts, arrangements, or understandings are entered into with the
same person within a 12-month period and each agreement is in
fulfillment of the CRA. This aggregation rule applies to all written
agreements entered into during the 12-month period by the same person
on the one hand, and any part of the same organization, including an
insured depository institution and any of its affiliates, on the other
hand.

Example 1: In April, an insured depository institution enters
into a written agreement with Community Development Organization,
Inc. pursuant to which the institution makes an $8,000 investment in
the organization. In November of the same year, an affiliate of the
insured depository institution and Community Development
Organization, Inc. enter into a written agreement under which the
affiliate makes an additional $8,000 investment in the organization.
For purposes of this example, both investments are assumed to be
qualified investments under the CRA Regulations and considered in
the evaluation of the institution's CRA performance. The separate
agreements must be aggregated under the rule and the combined
agreement meets the $10,000 dollar threshold of the rule.
Accordingly, the agreements are jointly considered a covered
agreement.
Example 2: In September, an insured depository institution
orally agrees to donate $15,000 of computer equipment to a local
housing organization. In December, the institution and organization
enter into a written agreement for the institution to make a $5,000
CRA qualified investment in local housing project that is eligible
for low-income housing tax credits. The agreements do not need to be
aggregated under the rule because the September agreement was not in
writing.
Example 3: In February, an insured depository institution enters
into a written agreement with Partnership A for the institution to
make a $9,000 grant to Partnership A for the purpose of
rehabilitating affordable-housing units. In August of the same year,
an affiliate of the insured depository institution enters into a
written agreement with Partnership A under which the affiliate makes
a payment of $9,000 so that its employees may have access to the
child care center operated by Partnership A. The August agreement is
not in fulfillment of the CRA. Accordingly, the two agreements would
not be aggregated under the rule.
b. Substantively Related Contracts
Section 711 requires the aggregation of separate but
``substantively related contracts'' even where the contracts are
entered into with different persons. \22\ Unlike the aggregation rule
discussed above, the rule aggregating ``substantively related
contracts'' applies only to separate, written contracts and does not
apply to other types of written arrangements or understandings.
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\22\ See 12 U.S.C. 1831y(e)(1)(A)(ii).
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The rule defines written contracts entered into by an insured
depository institution or any of its affiliates as ``substantively
related'' if the contracts were negotiated in a coordinated

[[Page 31972]]

fashion. The rule does not require that the separate contracts each be
in fulfillment of the CRA or that the parties to the contracts (other
than the banking organization) be the same. Thus, the rule prevents
parties from evading the disclosure and reporting obligations of the
statute by separating out from an agreement payments or grants that may
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not themselves be in fulfillment of the CRA.

Example 1: Two housing organizations jointly approach an insured
depository institution to obtain funding. A representative of the
insured depository institution meets with both organizations at the
same time to discuss their funding needs. The institution enters
into a written contract with one organization to provide it with
$9,000 for the purpose of rehabilitating affordable housing units.
The institution enters into a separate written contract with the
other organization to provide the organization with an unrestricted
grant of $9,000. Because the contracts were negotiated in a
coordinated fashion, the contracts must be aggregated under the
rule. When aggregated, the contracts would meet the statute's
$10,000 dollar threshold and each contract would be a covered
agreement.
Example 2: A bank holding company announces its intention to
acquire an insured depository institution. A Florida-based group and
a California-based group independently approach the bank holding
company to seek funding for specific projects and separately
negotiate written contracts with the bank holding company. The
contracts would not be aggregated under the rule, and each contract
would be a covered agreement only if that contract on its own met
the requirements of the rule.
The agencies request comment on the aggregation rules included in
section ____.3, including the proposed definition of ``substantively
related contracts'' and whether there are alternative definitions that
would achieve the purposes of the statute. The agencies also request
comment on how these aggregation rules should apply when a CRA contact
has not occurred prior to one of the agreements or was made by only one
of the persons that is a party to the agreements. For example, when a
single person enters into two agreements with an insured depository
institution during a 12-month period, but engages in a CRA contact
between the first and second agreement, should the first agreement be
excluded from aggregation because a CRA contact had not occurred at the
time it was entered into? Alternatively, should the agreements be
aggregated because a CRA contact occurred prior to the second agreement
and the agreements otherwise meet the requirements for aggregation
under the rule? Similarly, should substantively related contracts
entered into by separate persons be aggregated under the rule only if
each person had engaged in a CRA contact?
6. CRA Affiliate Treated as Insured Depository Institution
The CRA Regulations provide that an insured depository institution,
at its election, may request that an agency consider certain activities
conducted by an affiliate in evaluating the CRA performance of the
insured depository institution.\23\ In these circumstances, the
selected activities of the affiliate are viewed as activities of the
insured depository institution.
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\23\ See CRA lending test (12 CFR 25.22(c), 228.22(c), 345.22(c)
and 563e.22(c)); CRA investment test (12 CFR 25.23(c), 228.23(c),
345.23(c) and 563e.23(c)); CRA service test (12 CFR 25.24(c),
228.24(c), 345.24(c) and 563e.24(c)); CRA community development test
for wholesale and limited-purpose institutions (12 CFR 25.25(d),
228.25(d), 345.25(d) and 5632.25(d)); and CRA strategic plans (12
CFR 25.27(c), 228.27(c), 245.27(c) and 563e.27(c)).
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The proposed rule generally considers a contact concerning this
type of affiliate, referred to as a ``CRA affiliate,'' of an insured
depository institution to be the equivalent of a contact concerning an
insured depository institution (see section ____.2(b)(2)). Similarly,
an agreement is considered to be in fulfillment of the CRA if it
concerns the performance of any of the activities listed in section
____.2(c) by a ``CRA affiliate'' of an insured depository institution
(see section ____.2(c)).
The proposed rule defines a ``CRA affiliate'' as any company that
is an affiliate of an insured depository institution and whose
activities were considered by an agency in assessing the CRA
performance of the institution at the institution's most recent CRA
examination.\24\ Under the rule, a company is considered a CRA
affiliate only to the extent its activities were taken into account in
the CRA evaluation of an affiliated insured depository institution.
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\24\ See Proposed Rule, section ____.8(c).

Example 1: A person submits a written comment to an agency
concerning the lending performance under the CRA of a mortgage
company that is affiliated with an insured depository institution.
The insured depository institution elected, in accordance with the
agencies' CRA Regulations, to have the lending activities of the
mortgage company considered in the institution's most recent CRA
performance evaluation. The mortgage affiliate, therefore, is
considered a CRA affiliate with respect to its lending activities.
Accordingly, the agreement is in fulfillment of the CRA for purposes
of section 711 and the person has engaged in a CRA contact under
section ____.2(b)(2) because the selected activities of a CRA
affiliate and contacts with an agency regarding a CRA affiliate are
considered activities of and contacts concerning an insured
depository institution.
Example 2: An affiliate of an insured depository institution
engages in mortgage lending and provides credit counseling services.
The insured depository institution elected to have only the mortgage
lending activities of the affiliate considered in its most recent
CRA performance evaluation. The affiliate and a community group
enter into an agreement that provides for the affiliate to provide
credit counseling services in the local community. The agreement is
not in fulfillment of the CRA because the affiliate is not
considered a CRA affiliate with respect to its credit counseling
activities.

To assist persons in complying with the rule, section ____.2(e) of
the proposed rule requires that an insured depository institution or
affiliate inform the other parties to a covered agreement if the
agreement concerns the activities of a CRA affiliate. The institution
or affiliate must provide this notification not later than the time the
agreement is entered into if the affiliate is a CRA affiliate at that
time.
Because the status of an affiliate of an insured depository
institution may change, an agreement that concerns the activities of an
affiliate may become a covered agreement after the date the parties
enter into the agreement. For example, a person may enter into an
agreement that concerns the lending activities of a newly formed
affiliate. If an insured depository institution subsequently elects to
have the lending activities of the new affiliate considered during its
next CRA performance examination, the affiliate would become a CRA
affiliate. In such circumstances, the proposed rule requires the
insured depository institution or affiliate to inform the other parties
to the agreement that the affiliate has become a CRA affiliate within a
reasonable period of time after the change of status occurs.
Where an agreement concerns the activities of an affiliate that
becomes a CRA affiliate, the agreement would be in fulfillment of the
CRA only once the affiliate becomes a CRA affiliate. If the agreement
met the other requirements of the rule, the agreement would become a
covered agreement at that time. Section ____.2(e) clarifies that in
these circumstances the parties to the agreement have no disclosure or
reporting obligations under the rule until the agreement becomes a
covered agreement. In applying the disclosure and reporting
requirements of the rule, the agreement would be considered to have
been entered into on the date it became a covered agreement.
The agencies request comment on the proposed rule's treatment of
CRA affiliates, including whether the

[[Page 31973]]

requirement that an insured depository institution or affiliate inform
the other parties when an agreement concerns a CRA affiliate is useful
and practicable. The agencies also request comment on whether the rule
should provide a similar notice procedure for agreements that involve
an activity of an insured depository institution, such as consumer
lending, that the institution elects for the first time to be
considered under the CRA during the term of the agreement. \25\ In
addition, the agencies request comment on whether there is an
appropriate and less burdensome way for the rule to determine whether
an affiliate is a CRA affiliate at the time the parties enter into an
agreement.
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\25\ See footnote 15 above.
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B. Disclosure of Covered Agreements

Section 711 requires that each party to a covered agreement fully
disclose the agreement in its entirety and make the full text of the
agreement available to the public and the appropriate agency with
supervisory responsibility over the relevant insured depository
institution.
1. Disclosure to the Public
The proposed rule requires that each party to a covered agreement
make a complete copy of the agreement available to any member of the
public upon request. The rule would permit an insured depository
institution to fulfill its public disclosure obligation by placing a
copy of a covered agreement in the institution's CRA public file and
making it available in accordance with the procedures set forth in the
CRA Regulations relating to public files. \26\
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\26\ See 12 CFR 25.43 (OCC); 12 CFR 228.43 (Board); 12 CFR
345.43 (FDIC); 12 CFR 563e.43 (OTS).
---------------------------------------------------------------------------

A party may make a covered agreement available to any individual or
entity that requests the agreement by mailing it to the requestor, and
the proposal would specifically permit the party to charge the
requestor for the costs of copying and mailing the agreement, so long
as the fees are reasonable. The proposal does not otherwise specify or
require a party to employ any particular method in responding to
requests from the public for a covered agreement. For example, a party
also could make an agreement available to an individual or entity with
access to the Internet by posting the agreement on a publicly
accessible website or to members of the public within a local
geographic area by making the agreement available for inspection at an
office within that area.
The proposed rule provides that a party's obligation to make a
covered agreement available to the public terminates 12 months after
the end of the term of the covered agreement. The agencies believe that
this time period would permit interested members of the public adequate
time to obtain a covered agreement from the parties, while not placing
an undue recordkeeping burden on the parties to covered agreements.
Members of the public would continue to be able to obtain copies of a
covered agreement from the relevant supervisory agency under the
Freedom of Information Act (5 U.S.C. 552 et seq.) after this 12-month
period.
The agencies request comment on all aspects of the proposed rule's
public disclosure requirements. Comment is sought on whether the rule
should include illustrative examples of how a party may make an
agreement available to a member of the public and, if so, whether there
are additional methods (other than those discussed above) that should
be allowed for making an agreement available to the public. For
example, should the rule explicitly allow a person to arrange for
another entity or individual to make the person's covered agreements
available to the public, or allow a party to recover reasonable fees
for searching its records for a covered agreement? Comment also is
requested on whether affiliates of insured depository institutions
should be permitted to disclose an agreement to the public by placing
the agreement in the CRA public file of an affiliated insured
depository institution. In addition, comment is invited on whether it
is reasonable, appropriate and consistent with the statute to rely on
access to covered agreements through the agencies for public disclosure
requests made more than 12 months after the term of the agreement and
whether this period should be longer or shorter.
2. Filing of Covered Agreement by Insured Depository Institutions With
Agencies
The rule requires each insured depository institution and affiliate
that is a party to a covered agreement to provide a complete copy of
the agreement to each relevant supervisory agency (as defined below)
within 30 days after the parties enter into the agreement. If two or
more insured depository institutions or affiliates are parties to the
same agreement, the institutions and affiliates may jointly file a copy
of the agreement with the relevant supervisory agencies.
3. Persons Must Make Covered Agreements Available to Agency
Section 711 requires each party to a covered agreement to make the
agreement available to the appropriate agency. Because the relevant
supervisory agencies would receive a copy of any covered agreement from
the insured depository institution or affiliate that is a party to the
agreement, the rule provides that a nongovernmental entity or person
may fulfill its statutory obligation in this area by providing, upon
request from the relevant supervisory agency, a complete copy of the
agreement to the agency. The copy must be provided to the agency within
30 days of the agency's request. As with disclosure to the public, the
rule provides that a person's obligation to make an agreement available
to an agency terminates 12 months after the end of the term of the
agreement.
The agencies believe this procedure will reduce regulatory burden
and avoid duplicative filings. At the same time, this procedure
requires persons to make copies of covered agreements available to the
agencies consistent with the statute.
4. Relevant Supervisory Agency
The Act requires that parties to a covered agreement make the
agreement available to, and file annual reports with, the appropriate
Federal banking agency with supervisory responsibility over the
relevant insured depository institution. The proposed rule uses the
term ``relevant supervisory agency'' to identify the appropriate agency
for a particular covered agreement. Under the rule, the ``relevant
supervisory agency'' is--
<bullet> The OCC in the case where--
* The parties to the agreement include a national bank or
subsidiary of a national bank; or
* A national bank or subsidiary or CRA affiliate of a national bank
provides funds or resources under the agreement;
<bullet> The Board in the case where--
* The parties to the agreement include a state member bank,
subsidiary of a state member bank, bank holding company, or subsidiary
of a bank holding company (other than an insured depository institution
or subsidiary thereof); or
* A state member bank or subsidiary or CRA affiliate of a state
member bank provides funds or resources under the agreement;
<bullet> The FDIC in the case where--
* The parties to the agreement

[[Page 31974]]

include a state nonmember bank or subsidiary of a state nonmember bank;
or
* A state nonmember bank or subsidiary or CRA affiliate of a state
nonmember bank provides funds or resources under the agreement; or
<bullet> The OTS in the case where--
* The parties to the agreement include a savings association,
subsidiary of a savings association, savings and loan holding company
or subsidiary of a savings and loan holding company; or
* A savings association or subsidiary or CRA affiliate of a savings
association provides funds or resources under the agreement.

The agencies believe this definition will ensure that a covered
agreement and its related annual reports are filed with the agency or
agencies that have supervisory authority over the insured depository
institution or affiliate that is involved with the agreement, either as
a party or as a source of funds or resources paid under the agreement.
More than one agency may be the relevant supervisory agency with
respect to a single covered agreement. For example, if a national bank,
state nonmember bank, and a savings association provide funds pursuant
to a covered agreement entered into by their parent bank holding
company, the OCC, FDIC, OTS, and Board would each be a relevant
supervisory agency for the agreement. The agencies solicit comment on
the proposed rule's definition of ``relevant supervisory agency,''
including whether there are alternative definitions that might reduce
the filing burdens of parties while ensuring the appropriate agencies
receive the filings contemplated by the Act.
5. Treatment of Confidential or Proprietary Information
Covered agreements may contain confidential or proprietary
information the disclosure of which may cause competitive or other harm
to one or more of the parties to the agreement. Section 711 of the Act
directs the agencies to ensure that the implementing regulations ``do
not impose an undue burden on the parties [to a covered agreement] and
that proprietary and confidential information is protected.'' \27\ This
provision must be read in harmony with other provisions of section 711
that require that a covered agreement ``shall be in its entirety fully
disclosed, and the full text thereof made available * * * to the
public.'' Other provisions of section 711 require the reporting of the
terms and value of covered agreements, the identity of the parties to
the agreement, and the uses of funds and resources provided under
covered agreements.
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\27\ 12 U.S.C. 1831y(h)(2)(A).
---------------------------------------------------------------------------

In light of these provisions, and in order to ensure the uniform
disclosure of covered agreements under the Act by the parties and the
agencies, the proposed rule would allow a party to a covered agreement
to request a determination from the relevant supervisory agency whether
the agency could withhold specific portions of the agreement from
public disclosure. In considering these requests, the agencies will
apply the procedures and standards of the Freedom of Information Act (5
U.S.C. 552 et seq.) (FOIA), which governs public access to all records
of an agency, including documents filed with the agency by third
parties. If the relevant supervisory agency determines that it could
withhold specific portions of the covered agreement from public
disclosure under FOIA, the proposed rule would permit the parties to
the agreement to also withhold those specific portions of the agreement
from any copies of the agreement directly made available to the public.
A party could withhold from public disclosure only those limited
portions of a covered agreement determined to be exempt from public
disclosure under FOIA by the relevant supervisory agency.
In applying the standards under FOIA, the agencies note that
section 711 may require disclosure of some types of information that an
agency might normally be able to withhold from disclosure under FOIA.
In light of the directive of section 711, the agencies may not be able
to withhold under FOIA--or permit a party to withhold from public
disclosure--many of the provisions contained in a covered agreement.
For example, the agencies might not be able to permit a party to
withhold the amount of payments or loans to be made under the
agreement, the persons receiving such payments or loans, and the terms
of any such payments or loans. It may be possible that only limited
types of information could be withheld from public disclosure under the
proposed rule. Such information might include, for example, individual
account numbers or information detailing a particular institution's
proprietary underwriting criteria.
The agencies welcome comment on whether covered agreements are
likely to contain confidential or proprietary information the
disclosure of which would harm the par