[Federal Register Volume 67, Number 137 (Wednesday, July 17, 2002)]
[Rules and Regulations]
[Pages 46840-46842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17918]
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DEPARTMENT OF THE TREASURY
5 CFR Part 3101
RIN 3209-AA15
Supplemental Standards for Ethical Conduct for Employees of the
Department of Treasury
AGENCY: Department of the Treasury (Department).
ACTION: Final rule; amendment.
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SUMMARY: The Department of the Treasury, with the concurrence of the
Office of Government Ethics, is issuing this final rule to amend the
Supplemental Standards of Ethical Conduct for Employees of the
Department of the Treasury (Supplemental Regulations) that govern the
use of national bank credit cards by employees of the Office of the
Comptroller of the Currency (OCC). This final rule amends the
Supplemental Regulations to follow more closely the statutory
restrictions on the use of national bank credit cards by OCC employees
and to increase OCC supervisors' flexibility in making work
assignments.
EFFECTIVE DATE: July 17, 2002.
FOR FURTHER INFORMATION CONTACT: Virginia R. Canter, Senior Counsel
(Ethics), Office of the Assistant General Counsel (General Law and
Ethics), Department of the Treasury, (202) 622-0450, 1500 Pennsylvania
Avenue, NW., Washington, DC 20220; Barrett Aldemeyer, OCC Ethics
Counsel, (202) 874-4460, or MaryAnn Orr Nash, Counsel, OCC Legislative
and Regulatory Activities Division, (202) 874-5090, 250 E St., SW. ,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION: The Supplemental Standards of Ethical
Conduct for Employees of the Department of Treasury, at 5 CFR 3101.108,
set forth rules that apply to employees of the Office of the
Comptroller of the Currency (OCC). This final rule amends
Sec. 3101.108(b), which prohibits OCC employees from borrowing,
including borrowing through the use of a credit card, from a national
bank except under very limited circumstances.
Under 18 U.S.C. 213, a bank examiner is prohibited from accepting
loans from a bank that he or she examines; 18 U.S.C. 212
correspondingly prohibits a bank from making a loan to someone who
examines or has authority to examine the bank.\1\ Current Supplemental
Regulations implementing section 213 and expanding upon it generally
prohibit examiners and the other ``covered'' OCC employees from seeking
or obtaining any loan or other extension of credit from a national
bank, including through the use of a credit card. 5 CFR 3101.108(b).
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\1\ Under the OCC Ethics Policy, Rules, Policies and Procedures
for Employees (October 1999) (OCC Ethics Policy) the term
``examiner'' does not include supervisory personnel who are not
assigned to the examination of banks. The OCC Ethics Policy will be
revised to reflect the changes made by this final rule and to
clarify that, under 18 U.S.C. 212, ``authority to examine'' also
does not include OCC supervisory personnel. A summary of the OCC
Ethics Policy is available on the OCC's website at http://www.occ.treas.gov/ethics.htm.
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The existing Supplemental Regulations do contain an exception to
this prohibition. A covered OCC employee \2\ generally is permitted to
obtain a credit card from a national bank if: (1) The credit card is
obtained on terms and conditions no more favorable than those offered
to the general public; (2) the employee is not assigned to examine the
bank offering the credit card at the time the credit card is obtained;
and (3) the employee recuses himself or herself from examining or
otherwise participating in the supervision of the bank. Two issues
concerning the scope of the exception have arisen since the issuance of
the current rules in 1995. See 60 FR 22249-22255.
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\2\ ``Covered'' OCC employees include bank examiners and all
other employees designated by the Comptroller under OCC ethics
policies. See 5 CFR 3101.108(b)(3). Under these policies, ``covered
employee'' means any employee, except an administrative employee,
who is required to file financial disclosure reports.
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The first issue under the current credit card rules is that
employees' credit card-related recusals have limited the flexibility of
OCC supervisors to make assignments. The exception to the general
prohibition on obtaining credit generally permits covered OCC employees
to hold and use national bank credit cards if they recuse themselves
from any work involving those banks. See 5 CFR 3101.108(b)(4), as
adopted in 1995. In instances where covered OCC employees holding
national bank credit cards are involved in OCC licensing, policy and
legal staff matters directly involving the bank issuer, the OCC has
found that there is little likelihood of a conflict of interest or a
loss of impartiality and that the breadth of the restriction
unnecessarily hinders the administration of the OCC's programs.
Therefore, this final rule refines the application of the credit card
rules to covered OCC employees and more closely follows the statutory
prohibition.
The second issue is that the current credit card rules have
significantly limited the credit card options available to employees
who work in district offices and on large bank supervision teams. Under
the Supplemental Regulations and the OCC ethics policies (which set
forth the procedures that implement the OCC's portion of the
Supplemental Regulations), covered district employees may not obtain
credit cards from banks headquartered in their district. In addition,
large bank team (formerly known as the ``Multinational Division'')
employees \3\ may not have credit cards from banks supervised by their
large bank team or from banks in the district where they are located.
See 5 CFR 3101.108(b)(4)(i), as adopted in 1995; see also OCC Ethics
Policy at 14.
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\3\ Because they were adopted prior to the recent changes to
OCC's management structure, the Supplemental Regulations refer to
large bank team employees as employees of the ``Multinational
Division.'' This final rule includes a technical correction to make
appropriate changes to terminology.
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The Department originally adopted the Supplemental Regulations'
credit card restrictions on covered OCC district and large bank team
employees, in part, to permit the supervisors of those employees to
make work assignments free from the constraints that would have
otherwise arisen from employees' credit card recusals. At the time they
were adopted by the Department, these restrictions did not present a
serious obstacle to covered district and large bank team employees
obtaining credit cards. Since the issuance of the Supplemental
Regulations, industry consolidation and
[[Page 46841]]
conversions to the national bank charter have reduced sharply the
credit card options available to those employees.
The Department has found that the imposition of such broad
restrictions on obtaining credit cards on covered district and large
bank team employees is not necessary for the administration of the
OCC's supervisory activities. In situations where these covered
employees are unlikely to examine a bank, the Department believes that
the process of obtaining and holding a national bank credit card does
not inherently present a conflict of interest or a likelihood of a loss
of impartiality.
There are several changes made by these final rule amendments to
address these concerns. The final rule changes the general statement of
the prohibition on borrowing at 5 CFR 3101.108(b)(1) to omit the
reference to credit cards as unnecessary and redundant. The import of
the original provision would not be altered by this change.
The final rule also changes the Supplemental Regulations to
eliminate the requirement for non-examiners (attorneys, economists,
Senior Advisors, etc.) to be recused from matters involving banks from
which they hold credit cards. The final rule, at
Sec. 3101.108(b)(4)(i), therefore, provides a general exception
permitting non-examiners to seek or obtain credit cards from national
banks on terms and conditions no more favorable than those offered to
the general public. The final rule further changes the Supplemental
Regulations to limit credit card recusals to examiners and to require
examiners holding national bank credit cards to be recused only from
bank examinations involving the issuing credit card banks, and not
limit their participation in other matters, such as licensing or
supervisory policy decisions affecting the bank. The exception in
Sec. 3101.108(b)(4)(ii) of the final rule, permitting examiners and
their spouses and minor children to hold credit cards from banks the
examiner is not assigned to examine, applies only to examiners and
their spouses and minor children, and not any other covered OCC
employees. The exception is available with respect to a credit card
from a bank an examiner is not assigned to examine provided the credit
card is obtained on terms and conditions no more favorable than those
offered to the general public and the examiner maintains a written
recusal from examinations of the bank.
An examiner is ``assigned to examine'' a bank if the examiner works
either: (A) in a district, and the bank is one that he or she examines
or that is assigned to his or her Assistant Deputy Comptroller (ADC) or
rating official; or (B) in Large Bank Supervision, and the bank is one
to which the examiner is assigned or otherwise actually examines. The
term ``Large Bank Supervision'' in the final rule replaces the term
``Multinational Division'' which is used in the current regulations.
This is a technical change to reflect recent changes to the OCC's
management structure.
The changes to the Supplemental Regulations narrow the current
prohibition on district and large bank team employees by prohibiting
only examiners in districts and large banks from holding credit cards
issued by banks they are assigned to examine. Because this final rule
more clearly connects the credit card restriction to the examiners'
actual or likely work assignments, it will provide covered OCC district
and large bank team examiners greater access to credit cards without
unduly restricting supervisors' flexibility in making assignments or
increasing the potential for conflicts of interest.
The final rule eliminates the retail store exception in 5 CFR
3101.108(b)(4)(ii) as heretofore codified to create a uniform OCC
credit card policy. With the adoption of this final rule, the need for
this exception should diminish because a retail store credit card would
be treated as any other national bank credit card--generally
permissible for examiners who recuse themselves unless the card is
issued by a national bank assigned to the examiners' ADC or by a bank
they examine. The final rule also eliminates the exception for mortgage
assumptions as codified until now in 5 CFR 3101.108(b)(4)(iii) because
this exception arises infrequently and will be better handled by the
OCC ethics staff by way of recusal or waiver pursuant to 5 CFR
3101.108(g).
Matters of Regulatory Procedure
Administrative Procedure Act
Under 5 U.S.C. 553(a)(2), rules relating to agency management or
personnel are exempt from the proposed rulemaking requirements of the
Administrative Procedure Act (APA). As set forth in the description of
the final rule, this rule affects only the OCC and its personnel. Even
if this rulemaking were subject to APA proposed rulemaking procedures,
the Department finds good cause, pursuant to 5 U.S.C. 553 (b) and (d),
to waive the requirements for notice and comment and 30-day delayed
effective date because the rule affects only the OCC and its employees
(and their immediate families) and operates to relieve a restriction
that has resulted in administrative and personnel inefficiencies.
Regulatory Flexibility Act
Because no notice of proposed rulemaking is required for this rule,
the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)
do not apply. However, this final rule will not have a significant
economic impact on a substantial number of small entities in accord
with the spirit and purposes of the Regulatory Flexibility Act. This
rule affects the administrative operations of the OCC and it affects
OCC employees. Any effect on national banks is merely incidental and
creates no cost or burden for a bank.
Executive Order 12866
This final rule does not constitute a ``significant regulatory
action'' for the purposes of Executive Order 12866.
List of Subjects in 5 CFR Part 3101
Conflict of interests, Extensions of credit, Government employees,
OCC employees.
For the reasons set forth in the preamble, the Department of the
Treasury, with the concurrence of the Office of Government Ethics,
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 continues 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. 3101.108, paragraphs (b)(1) and (b)(4) are revised to
read as follows:
Sec. 3101.108 Additional rules for Office of the Comptroller of the
Currency employees.
* * * * *
(b) Prohibited borrowing--(1) Prohibition on employee borrowing.
Except as provided in this section, no covered OCC employee shall seek
or obtain credit from any national bank or from an officer, director,
employee, or subsidiary of any national bank.
* * * * *
(4) Exceptions--(i) Non-examiners. A covered OCC employee, other
than an examiner, or the spouse or minor child of such a covered OCC
employee, may seek or obtain a credit card from a national bank if the
credit card is sought
[[Page 46842]]
or obtained on terms and conditions no more favorable than those
offered to the general public.
(ii) Examiners. (A) An examiner, or the spouse or minor child of an
examiner to whom the prohibition in paragraph (b)(1) of this section
applies, may seek or obtain a credit card from a national bank the
examiner is not assigned to examine so long as the credit card is
obtained on terms and conditions no more favorable than those offered
to the general public and the examiner submits to the Chief Counsel or
designee a written disqualification from the examination of that bank.
Such a recusal would not prevent an examiner from participating in
other bank supervision matters outside the scope of an examination,
such as licensing or supervisory policy decisions.
(B) For purposes of this section, examiners are assigned to examine
a bank if they work:
(1) In a district, and the bank is one they examine or that is
assigned to their Assistant Deputy Comptroller or rating official; or
(2) In Large Bank Supervision or Washington, D.C. Headquarters, and
the bank is one to which they are regularly or otherwise assigned.
* * * * *
Dated: June 27, 2002.
David D. Aufhauser,
General Counsel, Department of the Treasury.
Approved: July 9, 2002.
Amy L. Comstock,
Director, Office of Government Ethics.
[FR Doc. 02-17918 Filed 7-16-02; 8:45 am]
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