[Federal Register: January 27, 1997 (Volume 62, Number 17)]
[Rules and Regulations]
[Page 3771-3773]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ja97-1]
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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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[[Page 3771]]
FEDERAL DEPOSIT INSURANCE CORPORATION
5 CFR Part 3201
RIN 3064-AA08, 3209-AA15
Supplemental Standards of Ethical Conduct For Employees of the
Federal Deposit Insurance Corporation
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule; amendment.
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SUMMARY: The FDIC, with the concurrence of the Office of Government
Ethics (OGE), is amending the Supplemental Standards of Ethical Conduct
for Employees of the Federal Deposit Insurance Corporation to allow
certain employees in the FDIC's Division of Supervision (DOS) and
Division of Compliance and Consumer Affairs (DCA) to obtain credit
cards from State chartered nonmember banks that are headquartered
outside the geographical jurisdiction of the field office to which the
employee is assigned. The FDIC is also making minor changes in its
Supplemental Standards to conform them to previous organizational
changes.
EFFECTIVE DATE: January 27, 1997.
FOR FURTHER INFORMATION CONTACT: Richard M. Handy, Assistant Executive
Secretary (Ethics), Office of the Executive Secretary of the Federal
Deposit Insurance Corporation, 550 17th Street, N.W., Washington, D.C.
20429; telephone (202) 898-7271.
SUPPLEMENTARY INFORMATION:
I. Background
The FDIC is the primary regulator for State chartered banks that
are not members of the Federal Reserve System. FDIC bank examinations
are generally conducted by examiners assigned to the FDIC's DOS or DCA.
Both divisions maintain numerous field offices that report to one of
eight regional offices. The responsibility for examining any particular
State nonmember bank belongs to the field office whose geographical
jurisdiction includes that bank's headquarters. Bank examination
reports and recommendations are sent from the field office to its
regional office for approval.
In order to minimize potential conflicts of interest between
examiners and the banks they examine, the FDIC's ethics regulations
have traditionally prohibited examiners from obtaining credit from
State nonmember banks. Since 1988, the FDIC's employee ethics
regulation has made an exception to the general prohibition to allow
examiners in the field offices and regional offices to accept credit in
the form of credit cards from State nonmember banks headquartered
outside the FDIC region to which they are assigned, subject to certain
conditions. Also since 1988, an exception for headquarters employees
subject to the general credit restriction has allowed them to obtain
credit cards from any State nonmember bank. Any employee who avails him
or herself of the credit card exception was required to disqualify him
or herself from taking any official action affecting the State
nonmember bank that issued the credit card. The disqualification
requirement prevents employees from taking actions that would
constitute a conflict of interest for the employee, thus avoiding
violations of the Federal conflict of interest statute (18 U.S.C. 208)
or subpart D of the Office of Government Ethics' Standards of Ethical
Conduct for Executive Branch Employees that apply to FDIC employees, 5
CFR part 2635. See also OGE's recent final 18 U.S.C. 208 regulation, 61
FR 6830-66851 (part III) (December 18, 1996). The general State
nonmember bank credit prohibition and its exception are consistent
with, but not the same as, 18 U.S.C. 213 which prohibits examiners from
accepting credit from any institution that they have previously
examined.
The FDIC's employee ethics regulation (5 CFR part 3201) was
comprehensively revised in 1995 to supplement OGE's executive branch-
wide employee ethics regulation. See 60 FR 20171-20178 (April 25,
1995), as amended at 61 FR 35915-35916 (July 9, 1996). The FDIC's
present general credit restriction applies to designated DOS and DCA
employees, most but not all of whom are bank examiners. See
Sec. 3201.102(c)(1). The credit card exception for headquarters
employees which allows them to acquire credit cards from any State
nonmember bank, subject to the disqualification requirement, is at
Sec. 3201.102(c)(1)(i). The credit card exception for employees
assigned to DOS and DCA regional and field offices that allows them to
acquire credit cards from State nonmember banks headquartered outside
their region of assignment, subject to the disqualification
requirement, is at Sec. 3201.102(c)(1)(ii).
Thus, at present, employees of all field offices within a region
are prohibited from getting any credit, including a credit card, from
any State nonmember bank headquartered in their region, even from banks
that are examined by a different field office than the one to which
they are assigned. The narrowness of the credit card exception has
allowed management the maximum flexibility to assign employees within
their region as staffing needs require. This is because, in most cases,
the combination of the broad credit restriction and the narrow
exception to it has meant that most examiners assigned to a region have
no credit from any State nonmember bank located within that region.
Absent disqualifications that result from an extension of credit, the
employees can be assigned to work on any bank within the region as well
as their field office as the need arises.
However, the current Sec. 3201.102(c)(1)(ii) prohibition and narrow
exception has kept DOS and DCA employees from obtaining credit that
many citizens consider important in conducting their personal business.
For example, in certain cases, department stores have transferred their
customer credit accounts to State nonmember banks from which examiners
in the region of the bank's headquarters are prohibited from accepting
credit cards. In other cases, nationally chartered banks from whom DOS
and DCA employees can generally obtain credit issue their credit cards
through State chartered nonmember banks. In such cases, DOS and DCA
employees covered by Sec. 3201.102(c)(1)(ii) are prohibited from
accepting credit available to others.
[[Page 3772]]
In order to alleviate somewhat the difficulty in obtaining credit
card credit by employees covered by Sec. 3201.102(c)(1)(ii), the FDIC
has determined to modify the exception to the prohibition in a way that
still maintains protection against potential conflicts of interest.
Specifically, the FDIC has determined to expand the
Sec. 3201.102(c)(1)(ii) exception to allow employees assigned to a
field office to obtain credit cards from State nonmember banks that are
headquartered outside their field office's geographical examination
responsibility. Thus, for example, an employee assigned to one of the
17 field offices within the Atlanta Regional Office will be able to
obtain credit card credit from State nonmember banks headquartered in
the other 16 field offices within the region that were previously not
allowed. Potential conflicts of interest will still be avoided by
continuing the requirement that any employee who obtains credit card
credit pursuant to the newly expanded exception shall disqualify him or
herself from taking any official action regarding the issuer of that
credit.
The broadened exception to the Sec. 3201.102(c)(1) prohibition may
reduce FDIC management's flexibility, in certain cases, to reassign
employees to different offices. However, management has determined that
the increased availability of credit to its employees is worth the
increased effort required. Similarly, employees who obtain previously
prohibited credit as a result of this change must recognize that their
ability to accept assignments will be narrowed to the extent that they
use this expanded exception to the rule.
The change in the exception would not affect DOS or DCA employees
assigned to the Washington office who would continue to be allowed by
Sec. 3201.102(c)(1)(i) to obtain credit through the use of a credit
card from any State nonmember bank. Nor will the change affect DOS or
DCA employees whose official assignment is to a regional office. Since
those employees can take action affecting any State nonmember bank
within their region, they will still be permitted to obtain credit
cards only from State nonmember banks headquartered outside their
region of assignment.
The FDIC is also making a couple of other minor changes in
Sec. 3201.102 to reflect organizational changes that have occurred
since the regulation was finalized. First, Sec. 3201.102(c)(2), which
identifies the employees to whom the credit restriction of
Sec. 102(c)(1) applies, is amended to delete two references to the
positions of Executive Director for Supervision, Resolutions, and
Compliance and Regional Manager which no longer exist. Second, the FDIC
is amending Sec. 3201.102(d) which prohibits employees of certain FDIC
divisions who have certain listed official duties from accepting credit
from an FDIC-insured depository institution for two years after their
last participation in an official matter affecting that institution.
The amendment adds to the list of divisions covered by Sec. 3201.102(d)
the Division of Insurance which was created after the FDIC's
supplemental employee ethics regulation was made final and substitutes
the new Division of Resolutions and Receiverships for the former
Division of Depositor and Asset Services and the Division of
Resolutions.
II. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553(a)(2), (b) and (d), the Board of Directors
has found that good cause exists for waiving the regular notice of
proposed rulemaking and 30-day delayed effective date as to this final
rule amendment. This action is being taken because it is in the public
interest that this rule, which concerns matters of agency organization,
practice and procedure and which relieves certain restrictions placed
on FDIC employees, become effective on the date of publication.
Regulatory Flexibility Act
The Board of Directors has concluded that the amendment to the rule
will not impose a significant economic hardship on small institutions.
Therefore, the Board of Directors hereby certifies pursuant to Sec. 605
of the Regulatory Flexibility Act (5 U.S.C. 605) that the amended
regulation will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.).
Paperwork Reduction Act
The Board of Directors has determined that the amended regulation
does not contain any information collection requirements that require
the approval of the Office of Management and Budget pursuant to the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
List of Subjects in 5 CFR Part 3201
Administrative practice and procedure, Conflict of interests,
Government employees, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Federal Deposit
Insurance Corporation, with the concurrence of the Office of Government
Ethics, is amending 5 CFR part 3201 as follows:
PART 3201--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE FEDERAL DEPOSIT INSURANCE CORPORATION
1. The authority citation for part 3201 continues to read as
follows:
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); 12 U.S.C. 1819(a), 1822; 26 U.S.C. 1043; E.O. 12674,
54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731,
55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.403,
2635.502, and 2635.803.
2. Section 3201.102 is amended as set forth below:
A. Removing the word ``and'' at the end of paragraph (c)(1)(i);
B. Revising paragraph (c)(1)(ii);
C. Adding a new paragraph (c)(1)(iii);
D. Removing the words ``the Executive Director for Supervision,
Resolutions, and Compliance,'' in both places in which they appear and
the words ``Regional Manager,'' where it appears in paragraph (c)(2);
and
E. Amending paragraph (c)(3) by removing the phrase ``(c)(1)(i) or
(c)(1)(ii)'' and adding in its place the phrase ``(c)(1)(i),
(c)(1)(ii), or (c)(1)(iii);'' and
F. Amending paragraph (d)(2) by removing the words ``Division of
Depositor and Asset Services, Division of Resolutions'' and adding in
their place ``Division of Resolutions and Receiverships,'' and adding
``Division of Insurance,'' before the words ``Legal Division.'' The
revised paragraph (c)(1)(ii) and the added paragraph (c)(1)(iii) read
as follows:
Sec. 3201.102 Extensions of credit from FDIC-insured depository
institutions.
* * * * *
(c) * * *
(1) * * *
(ii) For an employee assigned to a regional office, credit extended
by an FDIC-insured State nonmember bank headquartered outside the
employee's region of official assignment through the use of a credit
card on the same terms and conditions as are offered to the general
public; and
(iii) For an employee assigned to a field office, credit extended
by an FDIC-insured State nonmember bank headquartered outside the
employee's field office of official assignment through the use of a
credit card on the same terms and conditions as are offered to the
general public.
* * * * *
Dated at Washington, D.C. this 11th day of December 1996.
[[Page 3773]]
By Order of the Board of Directors.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
Concurred in this 17th day of January 1997.
Stephen D. Potts,
Director, Office of Government Ethics.
[FR Doc. 97-1867 Filed 1-24-97; 8:45 am]
BILLING CODE 6714-01-P
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