FDIC Federal Register Citations

[Federal Register: April 8, 1997 (Volume 62, Number 67)]

[Rules and Regulations]

[Page 16662-16664]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr08ap97_dat-2]

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 303

RIN 3064-AC03

Applications, Requests, Submittals, Delegations of Authority, and

Notices Required to be Filed by Statute or Regulation

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending

the definition of ``appropriate FDIC regional office'' and other

related terms contained in its applications regulation to change the

way the FDIC designates the appropriate regional office for purposes of

filing applications, requests, submittals, and notices. The amendment

relates to a realignment of the FDIC's regional office operations. As a

result, the FDIC Division of Supervision (DOS) and the Division of

Compliance and Consumer Affairs (DCA) will supervise groups of related

insured institutions from one FDIC regional office. The designated

regional office for a group of institutions will, except in rare

circumstances, be the one in which the group's major policy and

decision makers are located. This location will coincide with the

headquarters location of holding companies or lead institutions in most

instances. Realigning operations in this manner will streamline

supervision processes and simplify communication channels.

All supervisory matters processed in regional offices, including

applications and administrative actions, that involve insured

institutions within a group of related institutions will be processed

in the designated FDIC regional office. Applications will be submitted

directly to the FDIC regional office assigned supervisory

responsibility for the group. The regulation makes no change in the

location of the appropriate region for institutions that are not part

of a group or when a group of related institutions are located within

one region.

EFFECTIVE DATE: This rule is effective April 8, 1997.

FOR FURTHER INFORMATION CONTACT: Christopher J. Spoth, Examination

Specialist, Division of Supervision (202) 898-6611; David K. Mangian,

Regional Director, Division of Compliance and Consumer Affairs (312)

382-7550; Ken A. Quincy, Section Chief, Division of Compliance and

Consumer Affairs (202) 942-3083; or Susan van den Toorn, Counsel, Legal

Division (202) 898-8707.

[[Page 16663]]

SUPPLEMENTARY INFORMATION: The FDIC is amending 12 CFR 303.0(b)(12)

regarding the definition of ``appropriate FDIC region'', ``appropriate

FDIC regional office'', ``appropriate regional director'',

``appropriate deputy regional director'', and ``appropriate regional

counsel'' (collectively, ``appropriate region'') to permit groups of

related insured institutions to be supervised by a single FDIC regional

office. With regard to an insured institution or proposed institution

that is not or will not be part of a group of related institutions, the

appropriate FDIC region will continue to be the FDIC region in which

the institution is or will be located.

The amendment provides that the appropriate FDIC region for groups

of related institutions will be the regional office in which the

group's major policy and decision makers are located or any other

region the FDIC designates on a case-by-case basis. In most cases

involving related institutions, the appropriate FDIC region will be the

region in which the headquarters of a lead institution or of a holding

company is located. All supervisory matters, including applications and

administrative actions, that involve insured institutions within a

group of related institutions will be processed in the appropriate FDIC

regional office.

The phrase ``group of related insured institutions'' is used in the

amended definition because it provides necessary flexibility to

designate the appropriate regional office for supervisory purposes.

Other more specific terms, such as ``affiliates'', or ``subsidiaries of

the same bank holding company'', or ``commonly controlled

institutions'', were considered. However, such terms or phrases are

used in other regulations and do not capture the array of ownership and

control relationships which will be considered ``related'' for purposes

of establishing one FDIC regional office as the appropriate region for

supervising a group of related institutions. For example, the owners of

a group of institutions that are to be supervised together may be

individuals, bank and thrift holding companies, nonregulated parent

companies, and foreign owners, or any combination of these elements in

multiple ownership tiers. Institutions related through ownership by

individuals or entities other than holding companies may be affected,

even where they are not commonly ``controlled'' for other regulatory

purposes (e.g., Regulation O (12 CFR part 215), Change in Bank Control

Act). Similarly, the phrase ``major policy and decision makers are

located'' is used to designate the location of the appropriate FDIC

regional office because other terms, such as ``holding company

headquarters'' or ``location of the lead institution'' may not

accurately describe the location where a group of related institutions

locates its top managing officials.

The provision to permit the FDIC to designate the appropriate

regional office on a case-by-case basis is necessary to give the FDIC

flexibility where using the location of the major policy and decision

makers for determining the appropriate region is inappropriate or

inefficient. The need for such language is demonstrated in the case of

a foreign bank that operates several institutions in the United States,

but whose headquarters, CEO, and major policy and decision makers are

located in a foreign country. In such a case, the FDIC would have the

discretion to select the most appropriate regional office to supervise

the institutions located in the United States. Such flexibility is also

needed in the case of a multibank holding company where major policy

and decision makers are located in several FDIC regions. In such a

case, the most logical region from a supervisory standpoint will be

designated by DOS and DCA.

A letter to all insured institutions will announce the realignment

of DOS and DCA's regional office responsibilities. A separate

explanatory letter will also be sent to each institution that, as a

result of the realignment, will be supervised by a newly designated

FDIC regional office. In the event an institution which is part of a

group of related institutions inadvertently files an application with

the wrong FDIC regional office, the FDIC will forward the document to

the appropriate regional office and notify the institution without

penalizing the institution for a misdirected filing. Each regional

office has information available to advise insured institutions,

applicants, the public, other regulators, and any interested party

regarding identification of an institution's assigned FDIC regional

office.

The purpose of the realignment of FDIC regional office

responsibilities and the amendment is to more efficiently supervise

groups of related institutions by assigning responsibility for the

group to one FDIC regional office based on the location of the group's

major policy and decision makers. The prior part 303 language defines

``appropriate'' to mean that the FDIC supervises institutions from the

region in which the institution is located, regardless of where the

parent company or any related institution in a group is located or

where the group's major policy and decision makers are located. Over

time, with the trend toward industry consolidation and interstate

banking, this approach has become cumbersome for both the FDIC and for

groups of related institutions that operate, or seek to operate, in

more than one FDIC region. In such cases, every FDIC region in which a

related institution operates is directly involved in the group's

business and regulatory affairs, resulting in potential duplication of

supervisory efforts and disorder in multiple communication channels.

The changes to part 303 are being made to facilitate improved

communications between insured institutions and the FDIC and to make

better use of the FDIC's resources in processing applications and

administrative actions for groups of related insured institutions. The

changes do not create any insured institution publication requirements

or impact the institution's or other respondent's right to challenge

any action. The changes also do not impair access to the Board, to the

extent it exists currently in part 303, for review of decisions on any

application or administrative matter. The change in the appropriate

region is procedural in nature. The designation of the FDIC office

which will exercise overall supervision for purposes of receiving

applications and deciding certain regulatory matters has no effect on

the standards against which the merits of an application or

administrative action are to be measured. In addition, any change as to

the appropriate FDIC office in which overall supervisory functions will

be assigned does not alter any of the rights or obligations of any

institution or other respondent.

The FDIC is also eliminating the term ``appropriate regional

manager'' from its definition because the term is no longer a

designated title used by the FDIC.

Exemption From Public Notice and Comment

The amendments are being published in final form without

opportunity for public comment under authority of 5 U.S.C. 553(b)(A)

(Administrative Procedure Act) which exempts from required publication

for comment interpretive rules, general statements of policy, and rules

of agency practice and procedure. Specifically, the amendments relate

to the FDIC's administrative and supervisory procedures concerning the

designation of appropriate regional offices for purposes of filings and

administrative actions. The amendments, which constitute nonsubstantive

changes to the FDIC's Rules of Practice and Procedure, are being made

immediately effective

[[Page 16664]]

inasmuch as the requirement found in 5 U.S.C. 553(d) that substantive

rules be published not less than 30 days prior to their effective date

is inapplicable.

Regulatory Flexibility Act

Under section 605(b) of the Regulatory Flexibility Act (RFA) (5

U.S.C. 605(b)), the final regulatory flexibility analysis otherwise

required under section 604 of the RFA (5 U.S.C. 604) 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 in the Federal Register

along with this general notice of proposed rulemaking or at the time of

publication of the final rule.

The Board of Directors has concluded after reviewing the final

regulation that it will not have a significant economic impact on a

substantial number of small institutions since the only change, if any,

may be the location in which the institution will make filings and from

which the institution will be supervised by the FDIC. The Board of

Directors therefore hereby certifies pursuant to section 605 of the RFA

that the regulation will not have a significant economic impact on a

substantial number of small entities within the meaning of the RFA.

Small Business Regulatory Enforcement Fairness Act

The Small Business Regulatory Enforcement Fairness Act of 1996

(SBREFA) (Public Law 104-121) provides generally for agencies to report

rules to Congress and for Congress to review rules. This final rule is

not a rule for purposes of SBREFA because it is a rule of agency

organization pursuant to SBREFA, 5 U.S.C. 804(3)(c).

Paperwork Reduction Act

As these amendments neither alter existing nor create new record

keeping or reporting requirements, the Paperwork Reduction Act is

inapplicable.

Cost Benefit Analysis

This final rule is generally not expected to result in material

increases in costs and burden to respondents. Some filers, however,

will be required to file materials in a different location.

List of Subjects in 12 CFR Part 303

Administrative practice and procedure, Authority delegations

(Government agencies), Bank deposit insurance, Banks, Banking,

Reporting and recordkeeping requirements, Savings associations.

For the reasons set forth in the preamble, 12 CFR part 303 is

amended as set forth below:

PART 303--APPLICATIONS, REQUESTS, SUBMITTALS, DELEGATIONS OF

AUTHORITY, AND NOTICES REQUIRED TO BE FILED BY STATUTE OR

REGULATION

1. The authority citation for part 303 continues to read as

follows:

Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817(j), 1818, 1819

(Seventh and Tenth), 1828, 1831e, 1831o, 1831p-1; 15 U.S.C. 1607.

2. In Sec. 303.0, paragraph (b)(12) is revised to read as follows:

Sec. 303.0 Scope and definitions.

* * * * *

(b) * * *

(12) Appropriate FDIC region, appropriate FDIC regional office,

appropriate regional director, appropriate deputy regional director,

and appropriate regional counsel shall refer to the FDIC region, and

the FDIC regional office, regional director, deputy regional director,

and regional counsel, of the FDIC region, which the FDIC designates as

follows:

(i) When an institution or proposed institution that is the subject

of an application, request, submittal, notice, or administrative action

is not or will not be part of a group of related institutions, the

appropriate region for the institution and any individual associated

with the institution is the FDIC region in which the institution or

proposed institution is or will be located; or

(ii) When an institution or proposed institution that is the

subject of an application, request, submittal, notice, or

administrative action is or will be part of a group of related

institutions, the appropriate region for the institution and any

individual associated with the institution is the FDIC region in which

the group's major policy and decision makers are located, or any other

region the FDIC designates on a case-by-case basis.

* * * * *

By Order of the Board of Directors.

Dated at Washington, D.C., this 25th day of March, 1997.

Federal Deposit Insurance Corporation

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 97-8827 Filed 4-7-97; 8:45 am]

BILLING CODE 6714-01-P