[Federal Register Volume 66, Number 22 (Thursday, February 1, 2001)]
[Rules and Regulations]
[Pages 8505-8507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2735]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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Federal Register / Vol. 66, No. 22 / Thursday, February 1, 2001 /
Rules and Regulations
[[Page 8505]]
DEPARTMENT OF THE TREASURY
5 CFR Part 3101
RINs 1550-AB43, 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Department of the Treasury
AGENCY: Department of the Treasury.
ACTION: Final rule; amendment.
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SUMMARY: The Department of the Treasury (Department), with the
concurrence of the Office of Government Ethics (OGE), amends the
Supplemental Standards of Ethical Conduct for Employees of the
Department of the Treasury (Treasury Ethics Regulations) to revise the
circumstances under which certain Office of Thrift Supervision (OTS)
employees may obtain credit cards from OTS-regulated savings
associations or their subsidiaries, notwithstanding the general
prohibition against ``covered employees'' obtaining loans or extensions
of credit from these entities. The amendment also eliminates
unnecessary provisions concerning retail store credit cards and
mortgage assumptions.
EFFECTIVE DATE: February 1, 2001.
FOR FURTHER INFORMATION CONTACT: Henry H. Booth, Senior Ethics Counsel,
Office of the Assistant General Counsel (General Law and Ethics),
Department of the Treasury, Room 1410, Washington, DC 20220, (202) 622-
0450; or Caroline Morris, Ethics Counsel, OTS General Law Division,
1700 G Street, NW, Washington, DC 20552, (202) 906-6431.
SUPPLEMENTARY INFORMATION:
I. Background
The Treasury Ethics Regulations were issued in 1995 to minimize
potential conflicts of interest and supplement OGE's Standards of
Ethical Conduct for Employees of the Executive Branch (5 CFR part 2635)
(Standards). See 60 FR 22251 (May 5, 1995), as codified at 5 CFR part
3101. The OTS-pertinent part of the Treasury Ethics Regulations,
Additional rules for OTS employees, at 5 CFR 3101.109 prohibits
``covered OTS employees'' from seeking or obtaining any loan or other
extension of credit from a savings association. The requirement
prevents employees from taking actions that may violate conflict of
interest laws or that may constitute violations of 18 U.S.C. 213
concerning credit extended to examiners. Exceptions to the general
prohibition permit covered OTS employees to obtain a credit card from a
savings association under certain circumstances. See 5 CFR
3101.109(c)(3).
Under the current regulation, most covered OTS employees are
permitted to hold and use savings association credit cards if they
recuse themselves from any work involving savings associations from
which they hold credit cards. This general exception, however, is not
available to covered OTS employees assigned to regional offices who
wish to obtain a credit card from a savings association headquartered
in their region. Under current Treasury Ethics Regulations, no regional
covered employees may obtain credit cards from a savings association
headquartered in their region. See 5 CFR 3101.109(c)(3)(i)(A).
The Department has been prohibiting regional covered OTS employees
from holding credit cards issued by a saving association headquartered
in their region to strengthen public confidence in the integrity of OTS
programs and to facilitate the assignment of work without constraints
arising from employees' credit card recusals. When adopted, this
restriction did not impose a significant burden on regional covered
employees seeking credit cards. Since then, industry consolidation and
conversions to the savings association charter have reduced the credit
card options available to those employees. Further, the current rules
have created problems in terms of staffing certain matters because of
widespread holding of particular cards by covered employees. Subsequent
to the issuance of the Treasury Ethics Regulation, the OTS examined the
extent to which credit cards present conflicts of interest and
concluded that in most instances, neither obtaining nor holding a
credit card creates a conflict of interest or presents a likelihood for
a loss of impartiality by an OTS employee. For these reasons, the
existing credit card exception is being revised so that the general
prohibition more closely conforms to the scope of 18 U.S.C. 213, the
statutory prohibition barring only examiners from accepting credit from
savings associations that they examine. This amended rule changes the
Treasury Ethics Regulations' prohibition against OTS covered employees
obtaining credit and the exceptions to the prohibition in the following
ways.
A. Application to OTS Employees Who Are Not Examiners
To assure that the regional and Washington offices have maximum
flexibility to assign projects to covered employees who are not
examiners, this amendment eliminates the requirement for employees who
are not examiners (attorneys, economists, analysts, etc.) to be recused
from work concerning savings associations that have issued them credit
cards. These employees may obtain a credit card from a savings
association as long as the credit card is obtained and held on terms
and conditions no more favorable than those offered to the general
public.\1\ Both the existing regulation and the regulation as amended
concern the extension of credit by OTS-regulated savings associations
and their subsidiaries. The exceptions in the existing regulation allow
examiners and other covered employees to obtain credit cards from
regulated savings associations under certain circumstances. These
exceptions applied to subsidiaries of regulated savings associations
only by implication. The amended regulation specifically extends the
exceptions for examiners and other covered employees to subsidiaries of
OTS-regulated savings associations from which credit cards may be
obtained. See new Sec. 3101.109(c)(3)(i) and (ii).
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\1\ OTS will continue to require all covered employees to
disclose their savings association credit cards on annual financial
disclosure reports, and to require employees to continue to attest
that their credit cards were obtained and are being held on non-
preferential terms, i.e., on terms and conditions (including
collection policies) no more favorable than those offered to the
general public.
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B. Application to Examiners
OTS is the primary federal regulator of savings associations. OTS
examiners
[[Page 8506]]
assigned to the agency's five regions conduct examinations, make
recommendations and prepare reports for savings associations
headquartered in these respective geographical jurisdictions. The
current rule prohibits examiners from holding credit cards issued by
savings associations headquartered in their region. This rule continues
that provision. In addition, OTS assigns examiners with certain skills
to examine institutions outside their region. Consistent with the
statutory language, the rule has been revised to reflect current
practice of prohibiting examiners from obtaining or holding credit from
savings associations headquartered outside their region if they are
actually assigned to examine the savings associations. The final rule
prohibits an examiner from obtaining a credit card from any savings
associations or their subsidiaries that are headquartered in his or her
region; or if not headquartered in the examiner's region, that he or
she is assigned to examine. The rule retains the requirement that an
examiner must obtain and hold credit cards on terms and conditions no
more favorable than those offered to the general public.
The rule also requires an examiner to submit a written
disqualification from examining a savings association issuing a credit
card to the examiner, but not from participating in other regulatory
and supervisory matters affecting the savings association, such as
applications, investigations, or records review. 18 U.S.C. 212 and 213
do not bar such participation, and permitting this participation by
examiners broadens OTS staffing options for various activities.
Because this rule more clearly connects the credit card restriction
to the examiners' actual or likely work assignments, it will provide
OTS examiners greater access to credit cards without restricting the
flexibility of supervisors in making work assignments and without
increasing the potential for conflicts of interest. Therefore, the rule
is consistent with the fundamental purpose of Treasury Ethics
Regulations restrictions on savings association credit card use by
covered OTS employees.
C. Related Changes
The existing regulations permit covered employees to use exceptions
to the prohibition only under limited circumstances, including when the
employee (1) obtains a credit card sponsored by a retail firm
(Sec. 3101.109(c)(3)(ii)); or (2) obtains the credit through the
assumption of a savings association mortgage on the employee's
residence in accordance with the mortgage's original terms
(Sec. 3101.109(c)(3)(iii)). The amended rule eliminates the reference
to retail store sponsored credit cards, because a retail store credit
card issued by a saving association will be treated no differently than
any other savings association issued card. The amended rule's reference
to mortgage assumptions also is being deleted as unnecessary.
The current rule's prohibition on obtaining credit from a savings
association in Sec. 3101.109(c)(1) applies to ``any loan or extension
of credit, including credit obtained through the use of a credit
card.'' The amended rule shortens and simplifies that provision by
removing the reference to a credit card. It is clear from the content
of the rest of paragraph (c) that credit includes the use of a credit
card.
II. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553(a)(2), (b), and (d), the Department has
found that good cause exists for waiving the regular notice of proposed
rulemaking, opportunity for public comment, and 30-day delayed
effective date for this final rule amendment. This action is being
taken because it is in the public interest that this rule, which
concerns matters of agency management, personnel, organization,
practice and procedure, and which relieves certain restrictions placed
on OTS employees, become effective on the date of publication.
Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
Department certifies that this rule 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.).
Accordingly, no regulatory flexibility analysis is required. The rule
would not increase the regulatory burden on savings associations. The
economic impact of this rule on savings associations, regardless of
size, is expected to be minuscule at most.
Executive Order 12866 Determination
The Department has determined that this final rule does not
constitute a ``significant regulatory action'' for the purposes of
Executive Order 12866.
Unfunded Mandates Reform Act of 1995 Determinations
Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded
Mandates Act) \2\ requires that an agency prepare a budgetary impact
statement before promulgating a rule that includes a Federal mandate
that may result in expenditure by State, local, and tribal governments,
in the aggregate, or by the private sector, of $100 million or more in
any one year. If a budgetary impact statement is required, section 205
of the Unfunded Mandates Act also requires an agency to identify and
consider a reasonable number of regulatory alternatives before
promulgating a rule. As discussed in the preamble, this rule limits the
restrictions on OTS employees borrowing from savings associations. The
Department therefore has determined that the rule will not result in
expenditures by State, local, or tribal governments or by the private
sector of $100 million or more. Accordingly, the Department has not
prepared a budgetary impact statement or specifically addressed the
regulatory alternatives considered.
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\2\ Pub. L. 104-4, 109 Stat. 48 (1995) (codified at 2 U.S.C.
Chs. 17A, 25).
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List of Subjects in 5 CFR Part 3101
Conflict of interests, Ethics, Extensions of credit, Government
employees, OTS employees.
Dated: January 16, 2001.
Neal S. Wolin,
General Counsel, Department of the Treasury.
Approved: January 19, 2001.
Amy L. Comstock,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Department, with the
concurrence of OGE, amends 5 CFR part 3101 as follows:
PART 3101--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE DEPARTMENT OF THE TREASURY
1. The authority citation for part 3101 is revised to read as
follows:
Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in
Government Act of 1978); 18 U.S.C. 212, 213; 26 U.S.C. 7214(b); 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,
2635.203(a), 2635.403(a), 2635.803, 2635.807(a)(2)(ii).
2. In Sec. 3101.109, paragraphs (c)(1) and (c)(3) are revised to
read as follows:
Sec. 3101.109 Additional rules for Office of Thrift Supervision
employees.
* * * * *
(c) Prohibited borrowing--(1) Prohibition on employee borrowing.
Except as provided in this section, no
[[Page 8507]]
covered OTS employee shall seek or obtain any loan or extension of
credit from any OTS-regulated savings association or from an officer,
director, employee, or subsidiary of any such association.
* * * * *
(3) Exceptions--(i) Covered employees other than examiners. Except
for examiners, a covered OTS employee, or the spouse or minor child of
a covered OTS employee, may obtain a credit card from an OTS-regulated
savings association or its subsidiary if the credit card is issued and
held on terms and conditions no more favorable than those offered the
general public.
(ii) Examiners. An examiner, or the spouse or minor child of an
examiner, may obtain or hold a credit card issued by an OTS-regulated
savings association or its subsidiary, if:
(A) The savings association is not headquartered in the examiner's
region;
(B) The examiner is not assigned to examine the savings
association;
(C) The terms and conditions are no more favorable than those
offered to the general public; and
(D) The examiner submits a written disqualification from examining
that savings association. The examiner nonetheless may participate in
other supervisory or regulatory matters involving the savings
association.
* * * * *
[FR Doc. 01-2735 Filed 1-31-01; 8:45 am]
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