[Federal Register: February 7, 1995 (Volume 60, Number 25)]
[Proposed Rules]
[Page 7139-7140]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 348
RIN 3064-AB30
Management Official Interlocks
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Withdrawal of proposed rulemaking.
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SUMMARY: The FDIC is withdrawing a proposed amendment to its
regulations that implement the Depository Institution Management
Interlocks Act. The proposal would have created limited exemptions to
the prohibition on management official interlocks for depository
institutions that control only a small percentage of the total deposits
in the community or relevant metropolitan statistical area in which the
institutions are located. Recent statutory changes have limited the
FDIC's authority to create such exemptions by regulation.
DATES: This withdrawal of the proposed rule is made on February 7,
1995.
FOR FURTHER INFORMATION CONTACT: Curtis Vaughn, Examination Specialist,
[[Page 7140]] Division of Supervision, (202) 898-6759; or Mark Mellon,
Senior Attorney, Regulation and Legislation Section, Legal Division,
(202) 898-3854, Federal Deposit Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
The Proposed Rule
On February 22, 1994, the Board of Directors of the FDIC approved
for public comment a proposed rule to amend Part 348 of FDIC
regulations, Management Official Interlocks, which implements the
Depository Institution Management Interlocks Act (the Interlocks Act).
The Interlocks Act generally prohibits certain management official
interlocks between unaffiliated depository institutions, depository
holding companies, and their affiliates. The proposed amendment,
undertaken as part of a joint initiative by the FDIC, the Board of
Governors of Federal Reserve Board and the Office of the Comptroller of
the Currency, would have created an exception to the bar on management
interlocks for depository institutions that control only a small
percentage of the total deposits in the community or relevant
metropolitan statistical area where the institutions are located (the
small market share exemption). The proposed rule was published in the
Federal Register on April 20, 1994 and the comment period expired on
June 20, 1994. 59 FR 18764.
The Riegle Community Development and Regulatory Improvement Act
On September 23, 1994, President Clinton signed the Riegle
Community Development and Regulatory Improvement Act of 1994 into law
(Pub. L. 103-325, 108 Stat. 2160) (the RCDRI Act).
Section 338 of the RCDRI Act modified the authority of the federal
banking agencies to create regulatory exceptions to the bar on
management interlocks. It provides that exemptions may be granted on a
case-by-case basis for: interlocks to improve the provision of credit
to low- and moderate-income areas, increase the competitive position of
minority- and women-owned institutions, or strengthen the management of
newly chartered institutions that are in an unsafe or unsound
condition. Federal banking agencies may establish a program to permit
such interlocks on a case-by-case basis for a period of two years, with
authorization to grant an additional extension of two more years.\1\
\1\Although the wording of these exemptions is slightly
different, in essence Congress codified the existing regulatory
exceptions that are available under Part 348 (with the exception of
Sec. 348.4(b)(5): ``Loss of management officials due to change in
circumstance'').
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Section 338 also amended the Interlocks Act in such a way as to
limit the authority of the federal banking agencies to create other
exceptions to the prohibition on management interlocks solely to a
case-by-case basis and then, only if a statutorily defined high
standard is met, may an exception be granted.\2\ Under the Interlocks
Act as amended, in order for an exception to be granted, the federal
banking agency must determine that (1) the service of the management
official is critical to safe and sound operations of the affected
depository institution, depository holding company or company; (2) the
service will not have an anticompetitive effect; and (3) any additional
requirements which the agency may impose have been satisfied. The board
of directors of the affected depository institution must also provide a
resolution to the appropriate federal banking agency indicating that no
other candidate who is willing to serve possesses the necessary
expertise.
\2\Prior to the RCDRI Act amendments, federal banking agencies
had the authority under section 209 of the Interlocks Act (12 U.S.C.
3207) to promulgate rules and regulations permitting service by a
management official which would otherwise be prohibited by the
Interlocks Act.
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Effect of Legislation on Proposal
It is the opinion of the Board of Directors of the FDIC that the
proposed amendment is not consistent with the limited authority to
create exceptions on a bank-specific and case-by-case basis given the
FDIC under the Interlocks Act as amended. Accordingly, the Board of
Directors of the FDIC hereby withdraws from active consideration the
proposed amendment to Part 348 of Title 12 of the Code of Federal
Regulations which was published on April 20, 1994 (59 FR 18764).
List of Subjects in 12 CFR Part 348
Antitrust, Banks, banking, Holding companies.
By order of the Board of Directors.
Dated at Washington, D.C., this 31st day of January, 1995.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 95-2857 Filed 2-6-95; 8:45 am]
BILLING CODE 6714-01-P