SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is repealing
its regulations governing reporting on lending by a State nonmember
bank and its correspondent banks to executive officers and principal
shareholders. The FDIC is taking this action in accordance with the
Financial Services Regulatory Relief Act of 2006, section 601, which
repealed the provision under which the FDIC promulgated these
DATES: This rule becomes effective on December 22, 2006.
FOR FURTHER INFORMATION CONTACT: Karen Jones Currie Examination
Specialist, FDIC, 550 17th Street, NW., Washington, DC 20429;
telephone: (202) 898-3981; or electronic mail:
Michelle Borzillo, Counsel, FDIC, 550 17th Street, NW., Washington, DC
20230; telephone: (202) 898-7400; facsimile: (202) 898-8815; or
electronic mail: firstname.lastname@example.org.
On December 28, 1983, the FDIC issued a final rule entitled
``Reports and Public Disclosure of Indebtedness of Executive Officers
and Principal Shareholders to a State Nonmember Bank and Its
Correspondent Banks.'' This rule implemented section 7(k) of the
Federal Deposit Insurance Act (``FDI Act'') and section 106(b)(2)(G) of
the Bank Holding Company Act Amendments of 1970 (``BHCA Amendments'')
contained in sections 428 and 429 of the Garn-St. Germain Depository
Institutions Act of 1982 (``Garn-St. Germain Act''). It restated the
existing statutory requirement which required insiders to report to the
board of directors of their bank any indebtedness to the correspondent
banks of that bank. The statute also provided that the bank or the
agency shall make the information available, upon request, to the
public. The appropriate Federal banking agencies were authorized to
issue rules and regulations to require the reporting and public
disclosure of information concerning insider indebtedness.
II. Repeal of the Reports and Public Disclosure of Indebtedness of
Executive Officers and Principal Shareholders
On October 13, 2006, the President signed into law Public Law
109-351, the Financial Services Regulatory Relief Act of 2006 (the
Act). Section 601 of the Act struck the following statutory provisions: Requirement that a bank must include a separate report
with its quarterly Reports of Condition and Income (``Call Report'') on
any extensions of credit the bank has made to its executive officers
since its last Call Report (section 22(g)(9) of the Federal Reserve
Act, codified at 12 U.S.C. 375a(9)); Requirement that an executive officer of a bank file a
report with the bank's board of directors whenever the executive
officer obtains an extension of credit from another bank in an amount
that exceeds the amount the executive officer could obtain from the
bank (section 22(g)(6) of the Federal Reserve Act, codified at 12
U.S.C. 375a(6)); Requirement that an executive officer or principal
shareholder of a bank must file an annual report with the bank's board
of directors during any year in which the officer or shareholder has an
outstanding extension of credit from a correspondent bank of the bank
(section 106(b)(2)(G)(i) of the BHCA, codified at 12 U.S.C.
1972(2)(G)(i)); and The authorization of the Federal banking agencies to issue
regulations that require the reporting and public disclosure of
information related to extensions of credit received by an executive
officer or principal shareholder of a bank from a correspondent bank of
the bank (section 106(b)(2)(G)(ii) of the BHCA, codified at 12 U.S.C.
Neither the repeal of Section 106 (b)(2)(G) of the BHCA
nor part 349 changes the substantive restrictions on loans by
depository institutions to their executive officers and principal
shareholders or loans to executive officers and principal shareholders
of depository institutions by their correspondent banks.
Because the new law strikes the specific requirement
the rule on Reports and Public Disclosure of
Indebtedness of Executive Officers and Principal Shareholders to a
State Nonmember Bank and Its Correspondent Banks, and because the FDIC
does not believe that the reports at issue contribute significantly to
the effective monitoring of insider lending or the prevention of
insider abuse, the FDIC is repealing its regulations at part 349.
III. Exemption From Public Comment
The Act repeals the specific statutory requirements for these
reports. However, the FDIC retains authority under other provisions of
law to collect information regarding insider lending by depository
institutions. The FDIC does not believe these reports contribute
significantly to the effective monitoring of insider lending or the
prevention of insider abuse. Under these circumstances, providing prior
notice and an opportunity for public comment on whether to repeal these
rules would serve no useful purpose. As a result, under authority at 5
U.S.C. 553(b)(B), FDIC finds good cause to waive such procedures.
Moreover, no Federal agency's or private sector entity's interest will
be adversely affected by their repeal. Further, and for the same
reason, FDIC finds good cause pursuant to 553(d)(3) to waive the
requirement of a 30-day delay in effect for this rule. Thus, this rule
is effective immediately.
Regulatory Flexibility Act
As prior notice and an opportunity for public comment are not
required under 5 U.S.C. 553 or any other law, the analytical
requirements of the Regulatory Flexibility Act are inapplicable. Thus,
no regulatory flexibility analysis is required and none has been
Paperwork Reduction Act
At the FDIC's request, the Office of Management and Budget
has deleted the collection of information associated with this rule
(formerly approved by OMB under Control No. 3064-0023, ``Reports of
Indebtedness of Executive Officers and Principal Shareholders to
Correspondent Banks and to Own Bank,'' collected using FFIEC form 004).
The reduction in paperwork burden imposed on the public resulting from
the elimination of this collection of information will be 47,998 hours
a year. The Federal Financial Institutions Examination Council (FFIEC)
is providing notice to all affected parties that they will no longer
need to provide this information to the agencies.
Also, as discussed above, section 601 of the Act eliminated
requirement that a bank include a separate report with its Call Report
each quarter on any extensions of credit the bank has made to its
executive officers since the date of its last Call Report. Accordingly,
as of December 31, 2006, the FDIC will no longer require banks to
provide the ``Special Report'' on loans to executive officers, which
had been included after the final page of the Call Report forms in
previous quarters. At the FDIC's request, OMB has approved this change
in the Call Report. The resulting reduction in paperwork burden imposed
on the public will be 5,247 hours a year.
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of
(SBREFA) (Title II, Pub. L. 104-121) provides generally for agencies to
report rules to Congress and the General Accounting Office (GAO) for
review. The reporting requirement is triggered when a federal agency
issues a final rule. The FDIC will file the appropriate reports with
Congress and the GAO as required by SBREFA. The Office of Management
and Budget has determined that the rule does not constitute a ``major
rule'' as defined by SBREFA.
List of Subjects in 12 CFR Part 349
Reports, Public disclosure, Indebtedness of principal
Indebtedness of executive officers, State nonmember banks,
For the reasons stated above, the Board of Directors of the Federal
Deposit Insurance Corporation hereby amends title 12, chapter III of
the Code of Federal Regulations under the authority of 5 U.S.C. 553 by
removing and reserving part 349.
PART 349--[REMOVED AND RESERVED]
Dated at Washington, DC, this 22nd day of December, 2006.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
[FR Doc. E6-22260 Filed 12-28-06; 8:45 am]