Federal Deposit
Insurance Corporation

-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 26
[Docket ID OCC-2007-0006] RIN 1557-AD01

FEDERAL RESERVE SYSTEM
12 CFR Part 212
[Regulation L; Docket No. R-1272]

FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 348
RIN 3064-AD13

DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563f
[Docket ID OTS-2007-0013]
RIN 1550-AC09
 
Management Official Interlocks

AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of
Governors of the Federal Reserve System; Federal Deposit Insurance
Corporation; and Office of Thrift Supervision, Treasury.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board
of Governors of the Federal Reserve System (Board), the Federal Deposit
Insurance Corporation (FDIC), and the Office of Thrift Supervision
(OTS) (collectively, the Agencies) are amending their rules regarding
management interlocks to implement section 610 of the Financial
Services Regulatory Relief Act of 2006 (FSRRA) and to correct
inaccurate cross-references.

DATES: Effective on July 16, 2007, the interim rule as published on
January 11, 2007, (72 FR 1274) is adopted as a final rule without
change.

FOR FURTHER INFORMATION CONTACT:
    OCC: Heidi M. Thomas, Special Counsel, Legislative and Regulatory
Activities Division, (202) 874-4688; Sue Auerbach, Counsel, Bank
Activities and Structure Division, (202) 874-5300; or Jan Kalmus,
Senior Licensing Analyst, Licensing Activities Division, (202) 874-
4608, Office of the Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.
    Board: Andrew S. Baer, Counsel, (202) 452-2246, or Jennifer L.
Sutton, Attorney, (202) 452-3564, Legal Division, Board of Governors of
the Federal Reserve System, 20th Street and Constitution Avenue, NW.,
Washington, DC 20551. For users of Telecommunication Device for the
Deaf (TDD) only, contact (202) 263-4869.
    FDIC: Patricia A. Colohan, Senior Examination Specialist, Division
of Supervision and Consumer Protection, (202) 898-7283, or Mark Mellon,
Counsel, Legal Division, (202) 898-3884.
    OTS: David J. Bristol, Senior Attorney, (202) 906-6461, Business
Transactions Division, Office of Thrift Supervision, or Donald W.
Dwyer, Director of Applications, Examinations and Supervision--
Operations, (202) 906-6414, 1700 G Street NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

I. Background

    The Depository Institution Management Interlocks Act (12 U.S.C.
3201 et seq.) (Interlocks Act or Act) prohibits individuals from
simultaneously serving as a

[[Page 38754]]

management official \1\ at two unaffiliated depository institutions or
their holding companies (collectively, depository organizations) under
certain circumstances. For example, section 203(1) of the Act (12
U.S.C. 3202(1)) prohibits interlocks between unaffiliated depository
organizations if each depository organization (or a depository
institution affiliate thereof) has an office in the same relevant
metropolitan statistical area (RMSA) (RMSA prohibition), unless one of
the depository organizations involved has total assets below a
specified threshold (small institution exception). Prior to enactment
of the FSRRA, the total asset threshold for this small institution
exception was $20 million. However, section 610 of the FSRRA amended
section 203(1) of the Interlocks Act by raising this asset threshold to
$50 million, effective as of October 13, 2006.\2\
---------------------------------------------------------------------------

    \1\ Each of the Agencies' regulations generally define
``management official'' to include a director, an advisory or
honorary director of a depository institution with total assets of
$100 million or more, a senior executive officer, a branch manager,
a trustee of a depository organization under the control of
trustees, and any person who has a representative or nominee serving
in such capacity. See 12 CFR 26.2(j) (OCC); 12 CFR 212.2(j) (Board);
12 CFR 348.2(j) (FDIC); and 12 CFR 563f.2(j) (OTS).
    \2\ Pub. L. 109-351, section 610, 120 Stat. 1966 (Oct. 13,
2006).
---------------------------------------------------------------------------

II. Summary of Interim Rule

    In January 2007, the Agencies adopted on an interim basis, and
requested public comment on, amendments to their rules in order to
implement section 610 of the FSRRA.\3\ Specifically, the interim rules
modified the regulatory RMSA prohibition to conform to revised section
203(1) of the Act by allowing a management official of one depository
organization to serve as a management official of an unaffiliated
depository organization if the depository organizations (or their
depository institution affiliates) have offices in the same RMSA and
one of the depository organizations in question has total assets of
less than $50 million.
---------------------------------------------------------------------------

    \3\ See 72 FR 1274, Jan. 11, 2007.
---------------------------------------------------------------------------

    The interim rule also made technical changes to correct inaccurate
cross-references in the definition of management official in each of
the Agencies' rules.

III. Explanation of Final Rule

    The Agencies received two comments on the interim rule, both of
which were filed by trade associations representing banking
organizations. Both commenters supported the interim rule, stating that
the rule will afford small banking organizations greater access to
qualified individuals who may serve as management officials. Both
commenters also urged the Agencies to consider further raising the
asset threshold for the small institution exception to the RMSA
prohibition. As noted in the interim rule, FSRRA raised the asset
threshold, and neither FSRRA nor the Act gives the Agencies discretion
to modify the asset-size threshold for the small institution exception.
After carefully considering the comments received, the Agencies have
adopted a final rule that is identical to the interim rule.

IV. Regulatory Analysis

Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (12 U.S.C. 4809) requires
the Agencies to use ``plain language'' in all rules published in the
Federal Register after January 1, 2000. The Agencies believe the final
rule is presented in a simple and straightforward manner.

Administrative Procedure Act

    The final rule takes effect upon publication in the Federal
Register. As noted in the interim rule, the changes adopted in the rule
implement a statutory change that took effect upon enactment on October
13, 2006, and the technical corrections of cross-references effected by
the rule are not substantive. The new statutory provision itself gives
the Agencies no discretion to modify the asset-size threshold for the
small institution exception. Accordingly, pursuant to 5 U.S.C. 553(d),
the agencies conclude that there is good cause for making this rule
effective immediately upon publication in the Federal Register.

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA)
(5 U.S.C. 605(b)), the regulatory flexibility analysis otherwise
required under section 603 of the RFA (5 U.S.C. 603) is not required if
the head of the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities
and the agency publishes such certification and a statement explaining
the factual basis for such certification in the Federal Register along
with its rule.
    Pursuant to section 605(b) of the RFA, each of the Agencies
certifies that this final rule will not have a significant economic
impact on a substantial number of small entities. The Agencies expect
that this rule will not create any additional burden on small entities.
The final rule relaxes the criteria for obtaining an exemption from the
RMSA prohibition, and specifically addresses the needs of small
entities by allowing greater numbers of small organizations to qualify
for the small institution exception from the RMSA prohibition.
Accordingly, a regulatory flexibility analysis is not required.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506; 5 CFR 1320 Appendix A.1), the Agencies have determined that no
collections of information pursuant to the Paperwork Reduction Act are
contained in the final rule.

OCC and OTS Executive Order 12866 Statement

    The OCC and OTS each have independently determined that the final
rule is not a ``significant regulatory action'' as defined in Executive
Order 12866. Accordingly, a regulatory assessment is not required.

OCC and OTS Unfunded Mandates Act of 1995 Statement

    Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1532), requires the OCC and OTS to prepare a budgetary impact statement
before promulgating a rule that includes a federal mandate that may
result in the expenditure by state, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year. However, this requirement does not apply to regulations that
incorporate requirements specifically set forth in law. Because this
final rule implements section 610 of the FSRRA, the OTS and OCC have
not conducted an Unfunded Mandates Analysis for this rulemaking.

List of Subjects

12 CFR Part 26

    Antitrust, Holding companies, National banks.

12 CFR Part 212

    Antitrust, Banks, Banking, Holding companies.

12 CFR Part 348

    Antitrust, Banks, Banking, Holding companies.

12 CFR Part 563f

    Antitrust, Holding companies, Reporting and recordkeeping
requirements, Savings associations.

[[Page 38755]]

Office of the Comptroller of the Currency

12 CFR Chapter I

PART 26--MANAGEMENT OFFICIAL INTERLOCKS

0
Accordingly, the interim rule amending 12 CFR Part 26 which was
published at 72 FR 1276 on January 11, 2007, is adopted as a final rule
without change.

Federal Reserve System

12 CFR Chapter II

PART 212--MANAGEMENT OFFICIAL INTERLOCKS

0
Accordingly, the interim rule amending 12 CFR Part 212 which was
published at 72 FR 1276 on January 11, 2007, is adopted as a final rule
without change.

Federal Deposit Insurance Corporation

12 CFR Chapter III

PART 348--MANAGEMENT OFFICIAL INTERLOCKS

0
Accordingly, the interim rule amending 12 CFR Part 348 which was
published at 72 FR 1276 on January 11, 2007, is adopted as a final rule
without change.

Office of Thrift Supervision

12 CFR Chapter V

PART 563f--MANAGEMENT OFFICIAL INTERLOCKS

0
Accordingly, the interim rule amending 12 CFR Part 563f which was
published at 72 FR 1276 on January 11, 2007, is adopted as a final rule
without change.

    Dated: May 11, 2007.
John C. Dugan,
Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve
System, July 10, 2007.
Jennifer J. Johnson,
Secretary of the Board.
    Dated at Washington, DC, this 19th day of June, 2007.
    By order of the Board of Directors.
    Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
    By the Office of Thrift Supervision, May 8, 2007.
John M. Reich,
Director.
[FR Doc. 07-3441 Filed 7-13-07; 8:45 am]

BILLING CODE 4810-33-P