FDIC Federal Register Citations

[Federal Register: April 26, 1999 (Volume 64, Number 79)]

[Rules and Regulations]

[Page 20141-20142]

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

[DOCID:fr26ap99-1]

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Rules and Regulations

Federal Register

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This section of the FEDERAL REGISTER contains regulatory documents

having general applicability and legal effect, most of which are keyed

to and codified in the Code of Federal Regulations, which is published

under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

Prices of new books are listed in the first FEDERAL REGISTER issue of each

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 303

RIN 3064-AC22

Filing Procedures and Delegations of Authority

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The FDIC is amending its procedural regulations for mutual-to-

stock conversion notices to delegate authority from the FDIC's Board of

Directors to the Director and Deputy Director of the Division of

Supervision to act on certain requests for the waiver of the depositor

vote requirements in its mutual-to-stock conversion regulations.

Delegated authority is granted only with respect to requests for the

waiver of the depositor vote requirements involving mutual-to-stock

conversions in situations where applicable state law in effect as of

January 1, 1999, provided for voting by corporators as the only

depositor voting mechanism for mutual-to-stock conversions, or

prohibited proxy voting by depositors of state-chartered, cooperative

savings banks in mutual form. This amendment will expedite the FDIC's

final actions regarding such waiver requests.

EFFECTIVE DATE: May 26, 1999.

FOR FURTHER INFORMATION CONTACT: Division of Supervision: John M. Lane,

Assistant Director, (202) 898-3671; Calvin B. Riddick, Manager, (202)

898-6758; Scott S. Patterson, Review Examiner, (202) 898-6768; Legal

Division: Michael B. Phillips, Counsel, (202) 898-3581.

SUPPLEMENTARY INFORMATION:

I. Background

On November 30, 1994, the FDIC promulgated regulations governing

mutual-to-stock conversions of state nonmember banks. (59 FR 61233

(November 30, 1994)). Under the conversion regulations, as recodified

in 1998, a proposed conversion must be approved by a vote of at least a

majority of the bank's depositors. (12 CFR 333.4(c)(2)). Voting may be

in person or by proxy. Waivers of the requirements in Sec. 333.4 may be

granted by the FDIC's Board of Directors (the Board) for good cause

shown. (12 CFR 333.4(a)). Certain authority involving the FDIC's

conversion regulations is delegated; however, under 12 CFR 303.164(b),

the authority to act on depositor vote waiver requests is reserved to

the Board.

Based on its experience with such waiver requests, the Board has

determined that sufficient precedent has been established to allow a

delegation of the authority to the Director or Deputy Director of the

Division of Supervision (DOS) to act on depositor vote waiver requests

when the requests involve state law in effect as of January 1, 1999,

regarding (i) voting by corporators as the only depositor voting

mechanism for conversions, or (ii) prohibitions under state law

regarding proxy voting by depositors of cooperative savings banks in

mutual form.

II. Final Amendment to Part 303

Since the promulgation of the conversion regulations in 1994, the

Board has approved many depositor waiver requests from mutual savings

banks in Massachusetts and other New England states which concerned (i)

corporator voting in lieu of voting by all eligible depositors or (ii)

prohibitions under state law (for mutual cooperative savings banks)

regarding proxy voting by depositors.

The FDIC Board has determined that sufficient precedent has been

established with respect to waiver requests in the above circumstances

to allow for a delegation of authority to the Director of DOS and

Deputy Director of DOS to approve or deny waiver requests. In its

review of waiver requests from mutual savings banks whose corporators

(not the broader set of eligible depositors) were authorized to vote on

mutual-to-stock conversions, the focus of the Board's inquiry has been

whether a sufficient number of independent corporators voted in favor

of the proposed conversion. This focus accords with the statement in

the preamble to the FDIC's conversion regulations that provides the

following criteria for such determinations: on a case-by-case basis,

the Board will consider waiving the depositor voting requirement if it

is demonstrated, to the Board's satisfaction, that the alternative

voting mechanism established under the applicable state law satisfies

the concerns expressed above regarding the need for a vote on the

conversion by parties that are not insiders and do not have a potential

conflict of interest in reviewing the proposed conversion. (59 FR

61233, 61238 (November 30, 1994)).

With respect to waiver requests based on state prohibitions on

proxy voting by depositors, the focus of inquiry by the Board has been,

among other factors, the efforts expended by the cooperative savings

bank to encourage in-person depositor voting and the number of

depositors with no apparent conflict of interest who attended the

special meeting held by the bank and voted for the conversion.

In order to recognize current state law regarding corporator voting

or prohibitions on proxy voting by depositors, the Board has decided to

only provide the delegation where the request is based upon applicable

state law in effect as of January 1, 1999.

III. Effective Date

This amendment to part 303 is being adopted without opportunity for

public comment in accordance with section 553(b)(A) of the

Administrative Procedure Act (APA) which exempts from required public

comment rules of agency organization, procedure, or practice. As this

amendment modifies a rule concerning internal delegations of authority,

section 553(b)(A) applies.

Section 302 of the Riegle Community Development and Regulatory

Improvement Act of 1994 (CDRI) provides that rules imposing reporting,

disclosure or other new requirements may not be effective earlier than

the first day of the calendar quarter after adoption. This statutory

requirement does not apply to this amendment as there are no additional

reporting, disclosure or other new requirements imposed by this

amendment on insured depository institutions.

IV. Paperwork Reduction Act

In accordance with the requirements of the Paperwork Reduction Act

of 1995, 44 U.S.C. 3501 et seq., the FDIC may not

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conduct or sponsor, and a person is not required to respond to, a

collection of information unless it displays a currently valid Office

of Management and Budget (OMB) control number. Information collection

under the FDIC's mutual-to-stock conversion regulations is approved

under OMB control number 3064-0117 and is valid until July 31, 2000.

This rulemaking does not modify the collection approved by OMB. As this

amendment does not involve any additional recordkeeping or reporting

requirements, no Paperwork Reduction Act analysis is required.

V. Regulatory Flexibility Act

In accordance with section 603(a) of the Regulatory Flexibility

Act, 5 U.S.C. 601-612, no regulatory flexibility analysis is required

with respect to this amendment as the APA does not require that this

amendment be published for public comment.

VI. Assessment of Impact of Federal Regulation on Families

The FDIC has determined that this amendment will not affect family

well-being within the meaning of section 654 of the Treasury and

General Government Appropriations Act of 1999 (Public Law 105-277).

VII. Small Business Regulatory Enforcement Fairness Act

No notice of a final rule is being provided to Congress regarding

this amendment under the Small Business Regulatory Enforcement Fairness

Act of 1996 (SBREFA), 5 U.S.C. 801. SBREFA provides generally for

agencies to report rules to Congress and for major rules not to take

effect until a certain period after the notice has been received.

However, section 251 of SBREFA provides that rules of agency practice

and procedure that do not substantially affect the rights or

obligations of non-agency parties are not subject to the reporting

requirement and may be made effective in accordance with the APA and

any other applicable law. This amendment pertains to the FDIC's

delegations of authority, is procedural in nature and does not

substantially affect the rights of any non-agency party.

List of Subjects in 12 CFR Part 303

Administrative practice and procedure, Authority delegations

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

merger, Branching, Foreign branches, Foreign investments, Golden

parachute payments, Insured branches, Interstate branching, Reporting

and recordkeeping requirements, Savings associations.

For the reasons set forth in the preamble and under the authority

of 12 U.S.C. 1819(a)(Tenth), the FDIC Board of Directors hereby amends

12 CFR part 303 as follows:

PART 303--FILING PROCEDURES AND DELEGATIONS OF AUTHORITY

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

follows:

Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818,

1819(Seventh, and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o,

1831p-1, 1835a, 3104, 3105, 3108, 3207; 15 U.S.C. 1601-1607.

2. Section 303.164 is amended by revising paragraph (b) to read as

follows:

Sec. 303.164 Delegation of authority.

* * * * *

(b) Authority to act on a waiver under Sec. 303.162 is retained by

the Board of Directors, except for requests to waive the depositor vote

requirements in Sec. 333.4(c)(2) of this chapter when the requests are

based on the need for the bank to comply with applicable state law in

effect as of January 1, 1999, that provides for voting by corporators

as the only depositor voting mechanism for state-chartered, mutual

savings banks, or prohibits depositors of state-chartered, cooperative

savings banks in mutual form from voting by proxy. Authority is

delegated to the Director and Deputy Director (DOS) to act on such

waiver requests.

* * * * *

By Order of the Board of Directors.

Dated at Washington, D.C., this 20th day of April, 1999.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 99-10424 Filed 4-23-99; 8:45 am]

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