[Federal Register Volume 76, Number 140 (Thursday, July 21, 2011)]
[Rules and Regulations]
[Pages 43549-43569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-18231]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Parts 4, 5, 7, 8, 28, and 34
[Docket ID OCC-2011-0018]
RIN 1557-AD41
Office of Thrift Supervision Integration; Dodd-Frank Act
Implementation
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of the Comptroller of the Currency (OCC) is
adopting amendments to its regulations governing organization and
functions, availability and release of information, post-employment
restrictions for senior examiners, and assessment of fees to
incorporate the transfer of certain functions of the Office of Thrift
Supervision (OTS) to the OCC pursuant to Title III of the Dodd-Frank
Wall Street Reform and Consumer Protection Act. The OCC also is
amending its rules pertaining to preemption and visitorial powers to
implement various sections of the Act; change in control of credit card
banks and trust banks to implement section 603 of the Act; and deposit-
taking by uninsured Federal branches to implement section 335 of the
Act.
DATES: July 21, 2011, except for the amendments to 12 CFR 4.73 in
amendatory instruction 21, 12 CFR 4.74 in amendatory instruction 23, 12
CFR 4.75 in amendatory instruction 25, 12 CFR 4.76 in amendatory
instruction 27, which are effective July 21, 2012; the amendment to 12
CFR 5.50 in amendatory instruction 31, which is effective July 21,
2013; and the amendment to 12 CFR 8.6 in amendatory instruction 43,
which is effective December 31, 2011.
FOR FURTHER INFORMATION CONTACT: Andra Shuster, Senior Counsel, Heidi
Thomas, Special Counsel, Michele Meyer (preemption), Assistant
Director, or Stuart Feldstein, Director, Legislative and Regulatory
Activities Division, (202) 874-5090; Mitchell Plave (assessments),
Special Assistant to the Deputy Chief Counsels, Office of the Chief
Counsel, 202-874-5200; Timothy Ward, Deputy Comptroller for Thrift
Supervision, (202) 874-4468; or Frank Vance, Manager, Disclosure
Services and Administrative Operations, Communications Division, (202)
874-5378, Office of the Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
I. Background
On May 26, 2011, the OCC published in the Federal Register a notice
of proposed rulemaking (NPRM or proposal) to implement Title III, and
certain other provisions, of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Public Law 111-203, 124 Stat. 1376 (2010)
(Dodd-Frank Act or Act). Title III of the Act transfers the powers,
authorities, rights and duties of the OTS to other banking agencies,
including the OCC, on the ``transfer
[[Page 43550]]
date.'' The transfer date is one year after the date of enactment of
the Dodd-Frank Act, July 21, 2011. The Dodd-Frank Act also abolishes
the OTS ninety days after the transfer date.
Specifically, the Dodd-Frank Act transfers to the OCC all functions
of the OTS and the Director of the OTS relating to Federal savings
associations. As a result, the OCC will assume responsibility for the
ongoing examination, supervision, and regulation of Federal savings
associations.\1\ The Act also transfers to the OCC rulemaking authority
of the OTS relating to all savings associations, both state and
Federal.\2\ The legislation continues in effect all OTS orders,
resolutions, determinations, agreements, regulations, interpretive
rules, other interpretations, guidelines, procedures and other advisory
materials in effect the day before the transfer date, and allows the
OCC to enforce these issuances with respect to Federal savings
associations, unless the OCC modifies, terminates, or sets aside such
guidance or until superseded by the OCC, a court, or operation of
law.\3\ Title III also transfers OTS employees to either the OCC or
FDIC, allocated as necessary to perform or support the OTS functions
transferred to the OCC and FDIC, respectively.
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\1\ Dodd-Frank Act, section 312(b)(2)(B)(i)(I), 124 Stat. at
1522 (to be codified at 12 U.S.C. 5412). Title III also transfers
all functions of the OTS relating to state savings associations to
the Federal Deposit Insurance Corporation (FDIC) and all functions
relating to the supervision of any savings and loan holding company
and nondepository institution subsidiaries of such holding
companies, as well as rulemaking authority for savings and loan
holding companies, to the Board of Governors of the Federal Reserve
System (FRB). Dodd-Frank Act, section 312(b)(1) and (2)(A), 124
Stat. at 1521 (to be codified at 12 U.S.C. 5412) (savings and loan
holding companies) and (2)(C), 124 Stat. at 1522 (to be codified at
12 U.S.C. 5412) (state savings associations).
\2\ Id. at section 312(b)(2)(B)(i)(II), 124 Stat. at 1522 (to be
codified at 12 U.S.C. 5412).
\3\ Id. at section 316(b), 124 Stat. at 1525 (to be codified at
12 U.S.C. 5414).
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II. OCC Regulatory Actions To Integrate OTS Functions
As described in the preamble for the proposed rule, the OCC is
undertaking a multi-phased review of its regulations, as well as those
of the OTS, to determine what changes are needed to facilitate the
transfer of supervisory jurisdiction for Federal saving associations to
the OCC. This final rule, described in detail below, is part of the
first phase of this review and includes provisions revising OCC rules
that will be central to internal agency functions and operations
immediately upon the transfer date, such as providing for the OCC's
assessment of Federal savings associations and adapting the OCC's rules
governing the availability and release of information to cover
information pertaining to the supervision of those institutions. This
final rule also amends OCC regulations necessary to implement certain
revisions to the banking laws that either took effect on the enactment
of the Dodd-Frank Act or are effective as of the transfer date.
As part of this first phase of our review of OTS and OCC
regulations, the OCC also will issue an interim final rule with a
request for comments, effective on publication, that republishes those
OTS regulations the OCC has the authority to promulgate and will
enforce as of the transfer date, with nomenclature and other technical
changes.\4\ These republished regulations will supersede the OTS
regulations in Chapter V for purposes of OCC supervision and regulation
of Federal savings associations, and for certain rules for purposes of
the FDIC's supervision of state savings associations. OTS regulations
that will be unnecessary following the transfer of OTS functions to the
OCC, or that are superseded as of the transfer date by provisions of
the Dodd-Frank Act, will be repealed at a later date.
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\4\ Pursuant to section 316(c)(2) of the Dodd-Frank Act, 124
Stat. at 1525 (to be codified at 12 U.S.C. 5415), the OCC and the
FDIC published in the Federal Register on July 6, 2011 a joint
notice that identified those OTS regulations that each agency will
enforce as of the transfer date. 76 FR 39246.
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In future phases of our regulatory review, the OCC will consider
more comprehensive substantive amendments, as necessary, to these
regulations. For example, we may propose to repeal or combine
provisions in cases where OCC and former OTS rules are substantively
identical or substantially overlap. In addition, we may propose to
repeal or modify OCC or former OTS rules where differences in
regulatory approach are not required by statute or warranted by
features unique to either charter. We expect to publish these
amendments in one or more notices of proposed rulemaking, the first of
which we expect to issue later in 2011. This substantive review also
will provide an opportunity for the OCC to ask for comments suggesting
revisions to the rules for both national banks and Federal savings
associations that would remove provisions that are ``outmoded,
ineffective, insufficient, or excessively burdensome,'' consistent with
the goals outlined in an executive order recently issued by the
President.\5\
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\5\ Executive Order 13563, ``Improving Regulation and Regulatory
Review,'' 76 FR 3821 (Jan. 21, 2011).
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III. Description of the Proposal and Comments Received
The NPRM contained amendments to OCC rules at 12 CFR part 4
pertaining to its organization and functions, the availability of
information under the Freedom of Information Act (FOIA), the release of
non-public OCC information, and restrictions on the post-employment
activities of senior examiners; and at 12 CFR part 8, pertaining to
assessments. This NPRM also proposed to amend 12 CFR parts 5 and 28,
pertaining to change in control of credit card banks and trust banks
and deposit-taking by uninsured Federal branches, respectively, and 12
CFR parts 5, 7 and 34, pertaining to preemption and visitorial powers,
pursuant to the Dodd-Frank Act. The public comment period closed on
June 27, 2011, and the OCC received a total of 45, including comments
from consumer advocacy groups, government agencies, representatives of
Congress, associations of state officials, industry trade groups,
Federal and state banks and thrifts, and law firms. Set forth below is
a detailed description of these comments and the resulting final rule.
IV. Section-by-Section Description of Final Rule
A. Part 4
The NPRM contained a number of amendments to part 4 to incorporate
the supervision of Federal savings associations within the OCC. We
received no substantive comments on the proposed amendments to part 4
and therefore adopt them as proposed, with one technical correction to
Sec. 4.14 to include cites to OCC rules applicable to savings
associations.
1. Organization and Functions (Part 4, Subpart A)
Subpart A describes the organization and functions of the OCC and
provides the OCC's principal addresses. The final rule amends subpart A
to reflect the organizational and functional changes resulting from the
transfer of the powers and duties of the OTS to the OCC on the transfer
date. Other changes conform this subpart to additional provisions in
the Dodd-Frank Act, including the Comptroller's membership on the
Financial Stability Oversight Council.
2. Freedom of Information Act (Part 4, Subpart B)
Subpart B contains the OCC's rules for making requests for agency
records and documents under the FOIA. The final rule amends subpart B
to apply these rules to FOIA requests relating to Federal savings
associations received by the OCC as of the transfer date, ensures
[[Page 43551]]
that records of the OTS are subject to the OCC's FOIA regulations, and
makes various technical changes to part 4 to correct technical errors
and to update appropriate references to OCC units charged with handling
FOIA requests. The final rule also provides that the OTS's former rules
will continue to govern requests received by the OTS prior to the
transfer date.
3. Non-Public Information (Part 4, Subpart C)
Subpart C contains OCC rules and procedures for requesting access
to various types of nonpublic information and the OCC's process for
reviewing and responding to such requests. It also clarifies the
persons and entities with which the OCC can share non-public
information. The final rule amends subpart C to cover OTS nonpublic
information transferred to the OCC and, going forward, OCC nonpublic
information related to Federal savings associations. The final rule
also provides that nonpublic information in the possession of former
employees or officials of the OTS will remain subject to
confidentiality safeguards and procedures for requesting access to such
information. As with FOIA requests, the final rule provides that the
OTS's former rules will continue to govern requests for nonpublic
information received by the OTS prior to the transfer date.
4. One-Year Restrictions on Post-Employment Activities of Senior
Examiners (Part 4, Subpart E)
Subpart E sets forth the employment restrictions placed on senior
examiners for one year after these individuals leave the employment of
the OCC. During this period, a former senior examiner of a national
bank is prohibited from accepting compensation from the bank or from an
entity that controls the bank. The OTS adopted nearly identical rules.
The final rule amends subpart E to include senior examiners of savings
associations.
B. Dodd-Frank Act Amendments Affecting Approval of Change in Control
Notices and Acceptance of Deposits by Federal Branches (Parts 5 and 28)
This final rule contains amendments to 12 CFR part 5 to implement
section 603 of the Dodd-Frank Act. Section 603 provides for a three-
year moratorium (with certain exceptions) on the approval of a change
in control of credit card banks, industrial banks and trust banks, if
the change in control would result in a commercial firm controlling
(directly or indirectly) such a bank. The moratorium took effect on the
date of enactment of the Act, i.e., July 21, 2010. The proposal amended
12 CFR 5.50(f) to conform OCC regulations to this section of the Act.
We received no comments on this amendment and adopt it as proposed.
Section 6 of the International Banking Act, 12 U.S.C. 3104(b),
provides that uninsured Federal branches of foreign banks may not
accept deposits in an amount of less than the standard maximum deposit
insurance amount (SMDIA). The SMDIA is defined in 12 U.S.C.
1821(a)(1)(E) to mean $100,000, subject to certain adjustments provided
for in the statute. Section 335 of the Dodd-Frank Act, which takes
effect on the transfer date, amends 12 U.S.C. 1821(a)(1)(E) to change
the amount from $100,000 to $250,000. Section 28.16(b) of the OCC's
regulations states that an uninsured Federal branch may accept initial
deposits of less than $100,000 only from certain persons. In order to
conform this section of the OCC's regulations to the statutory changes
and to prevent the need to continually amend this section for changes
in the SMDIA, the proposal amended 12 CFR 28.16(b) to refer to 12
U.S.C. 1821(a)(1)(E), rather than the obsolete reference to $100,000.
We received no comments on this amendment and adopt it as proposed.
C. Preemption and Visitorial Powers (Parts 5, 7, and 34)
1. Dodd-Frank Act Provisions Affecting Preemption and Visitorial Powers
The Dodd-Frank Act contains provisions, effective as of the
transfer date (July 21, 2011), that affect the scope of preemption for
operating subsidiaries, Federal savings associations, and national
banks.\6\ The Act also sets forth procedural requirements for future
preemption determinations \7\ and codifies the Supreme Court's
visitorial powers decision in Cuomo v. Clearing House Association,
L.L.C.\8\
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\6\ Dodd-Frank Act, sections 1044-1046, 124 Stat. at 2014-2017
(to be codified at 12 U.S.C. 25b, 1465). Section 1044, which amends
chapter one of title LXII of the Revised Statutes by inserting a new
section 5136C (to be codified at 12 U.S.C. 25b), contains the
principal national bank preemption provisions.
\7\ Id. at section 1044(a), 124 Stat. at 2015-2016 (to be
codified at 12 U.S.C. 25b).
\8\ 129 S. Ct. 2710 (June 29, 2009).
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The Act precludes preemption of state law for national bank
subsidiaries, agents and affiliates.\9\ The Act also changes the
preemption standards applicable to Federal savings associations to
conform to those applicable to national banks. The Act specifically
provides that, as of the transfer date, determinations by a court or by
the OCC under the Home Owners' Loan Act (HOLA) with respect to Federal
savings associations must be made in accordance with the laws and legal
standards applicable to national banks regarding the application of
state law.\10\
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\9\ Dodd-Frank Act, sections 1044(a), 1045, 124 Stat. at 1376,
2016, 2017 (to be codified at 12 U.S.C. 25b).
\10\ Id. at section 1046, 124 Stat. at 2017 (to be codified at
12 U.S.C. 1465).
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The Act further provides that ``state consumer financial laws''
\11\ may be preempted only if: (1) Application of such a law would have
a ``discriminatory effect'' on national banks compared with state-
chartered banks in that state; (2) ``in accordance with the legal
standard for preemption in the decision of the Supreme Court in''
Barnett Bank of Marion County, N.A. v. Nelson,\12\ the state consumer
financial law ``prevents or significantly interferes with the exercise
by the national bank of its powers'' (Barnett standard); or (3) the
state consumer financial law is preempted by a provision of Federal law
other than Title LXII of the Revised Statutes.\13\
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\11\ The Dodd-Frank Act defines the term ``state consumer
financial law'' to mean a state law that (1) does not directly or
indirectly discriminate against national banks and that (2) directly
and specifically (3) regulates the manner, content, or terms and
conditions of (4) any financial transaction or related account (5)
with respect to a consumer. Id. at section 1044(a), 124 Stat. at
2014-2015 (to be codified at 12 U.S.C. 25b). The Dodd-Frank Act does
not address the application of state law that is not a ``state
consumer financial law'' to national banks.
\12\ 517 U.S. 25 (1996).
\13\ Dodd-Frank Act, section 1044(a), 124 Stat. at 2015 (to be
codified at 12 U.S.C. 25b).
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The Dodd-Frank Act imposes new procedures and consultation
requirements with respect to how the OCC may reach certain future
preemption determinations and clarifies the criteria for judicial
review of these determinations. Specifically, the Act requires that the
OCC make preemption determinations with regard to state consumer
financial laws under the Barnett standard by regulation or order on a
``case-by-case basis'' in accordance with applicable law.\14\ The Act
defines ``case-by-case basis'' as a determination by the Comptroller as
to the impact of a ``particular'' state consumer financial law on ``any
national bank that is subject to that law'' or the law of any other
state with substantively equivalent terms.\15\ When making a
determination under this provision that a state consumer financial law
has substantively equivalent terms as the law the OCC is preempting,
the OCC
[[Page 43552]]
must first consult with and take into account the views of the Consumer
Financial Protection Bureau (CFPB).\16\
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\14\ Id.
\15\ Id.
\16\ Id.
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The Dodd-Frank Act also requires there to be substantial evidence,
made on the record of the proceeding, to support an OCC order or
regulation that declares inapplicable a state consumer financial law
under the Barnett standard.\17\ Finally, the Act requires the OCC to
conduct a periodic review, subject to notice and comment, every five
years after issuing a preemption determination relating to a state
consumer financial law and to publish a list of such preemption
determinations every quarter.\18\
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\17\ Id. at section 1044(a), 124 Stat. at 2016 (to be codified
at 12 U.S.C. 25b).
\18\ Id.
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Other features of the Dodd-Frank Act address the authority of state
attorneys general to enforce applicable Federal and state laws. The
National Bank Act, at 12 U.S.C. 484, vests in the OCC exclusive
visitorial powers with respect to national banks, subject to certain
express exceptions.\19\ On June 29, 2009, the Supreme Court issued its
opinion in Cuomo. The Court held that when a state attorney general
files a lawsuit to enforce a state law against a national bank,
``[s]uch a lawsuit is not an exercise of `visitorial powers' and thus
the Comptroller erred by extending the definition of `visitorial
powers' to include `prosecuting enforcement actions' in state courts.''
\20\ Conversely, the decision recognized the ``regime of exclusive
administrative oversight by the Comptroller'' \21\ applicable to
national banks. Accordingly, under Cuomo, a state attorney general may
bring an action against a national bank in a court of appropriate
jurisdiction to enforce non-preempted state laws, but is restricted in
conducting non-judicial investigations or oversight of a national
bank.\22\
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\19\ Section 484 provides that ``[n]o national bank shall be
subject to any visitorial powers except as authorized by Federal
law, vested in the courts of justice or such as shall be, or have
been exercised or directed by Congress or by either House thereof or
by any committee of Congress or of either House duly authorized.''
\20\ 129 S. Ct. at 2721.
\21\ Id. at 2718.
\22\ The Court stated that:
The request for information [by the Attorney General] in the
present case was stated to be ``in lieu of'' other action; implicit
was the threat that if the request was not voluntarily honored, that
other action would be taken. All parties have assumed, and we agree,
that if the threatened action would have been unlawful the request-
cum-threat could be enjoined. Here the threatened action was not the
bringing of a civil suit, or the obtaining of a judicial search
warrant based on probable cause, but rather the Attorney General's
issuance of subpoena on his own authority under New York Executive
Law, which permits such subpoenas in connection with his
investigation of ``repeated fraudulent or illegal acts * * * in the
carrying on, conducting or transaction of business.'' See N.Y. Exec.
Law Ann. Sec. 63(12) (West 2002). That is not the exercise of the
power of law enforcement ``vested in the courts of justice'' which
12 U.S.C. 484(a) exempts from the ban on exercise of supervisory
power.
Accordingly, the injunction below is affirmed as applied to the
threatened issuance of executive subpoenas by the Attorney General
for the State of New York, but vacated insofar as it prohibits the
Attorney General from bringing judicial enforcement actions.
Cuomo, 129 S. Ct. at 2721-2722 (emphasis added).
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The Dodd-Frank Act codifies the Supreme Court's decision in Cuomo
regarding enforcement of state law against national banks by providing
that no provision ``of this title'' \23\ or other limits restricting
the visitorial powers to which a national bank is subject shall be
construed to limit or restrict the authority of any state attorney
general to ``bring an action against a national bank in a court of
appropriate jurisdiction to enforce an applicable law and to seek
relief as authorized by such law.'' \24\
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\23\ Dodd-Frank Act, section 1047(a), 124 Stat. at 2018 (to be
codified at 12 U.S.C. 25b) (referring to Title LXII of the Revised
Statutes).
\24\ Id.
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In addition, the Act provides that these visitorial powers
provisions shall apply to Federal savings associations and their
subsidiaries to the same extent and in the same manner as if they were
national banks or national bank subsidiaries.\25\
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\25\ Id. at section 1047(b), 124 Stat. at 2018 (to be codified
at 12 U.S.C. 1465).
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2. Description of the Proposal
The proposal amended provisions of the OCC's regulations relating
to preemption (12 CFR 7.4007, 7.4008, 7.4009, and 34.4) (2004
preemption rules), operating subsidiaries (12 CFR 5.34 and 7.4006), and
visitorial powers (12 CFR 7.4000) to implement the provisions of the
Dodd-Frank Act that affect the scope of national bank and Federal
thrift preemption and codify Cuomo.
First, we proposed rescission of 12 CFR 7.4006, which is the OCC's
regulation concerning the application of state laws to national bank
operating subsidiaries. The proposal also made conforming revisions to
the OCC's operating subsidiary rules at 12 CFR 5.34(a) and paragraph
(e)(3) to refer to new 12 U.S.C. 25b, which includes the codification
of the Dodd-Frank Act preclusion of operating subsidiary
preemption.\26\
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\26\ Id. at section 1045, 124 Stat. at 2017 (to be codified at
12 U.S.C. 25b) provides that Title LXII of the Revised Statutes and
section 24 of the Federal Reserve Act (12 U.S.C. 371) do not
preempt, annul, or affect the applicability of state law to any
subsidiary, affiliate, or agent of a national bank (other than a
subsidiary, affiliate, or agent that is chartered as a national
bank).
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To implement the Act's changes to the preemption standards under
the HOLA to conform to those applicable to national banks, we proposed
adding new Sec. Sec. 7.4010(a) and 34.6 to our regulations. The new
sections provide that state laws apply to Federal savings associations
and their subsidiaries to the same extent and in the same manner as
those laws apply to national banks and their subsidiaries,
respectively. The proposal also added Sec. 7.4010(b) to similarly
subject Federal savings associations and their subsidiaries to the same
visitorial powers provisions in the Dodd-Frank Act that apply to
national banks and their subsidiaries.
In addition, the proposal made conforming changes to the 2004
preemption rules at 12 CFR 7.4007 (concerning deposit-taking), 7.4008
(non-real estate lending), and 34.4 (real estate lending) to reflect
the Act's provisions concerning preemption of state consumer financial
laws. Those rules had provided that ``state laws that obstruct, impair,
or condition a national bank's ability to fully exercise its Federally
authorized * * * powers are not applicable to national banks.'' The
proposal noted that, while the phrase ``obstruct, impair or condition''
had been drawn from and was intended to be consistent with the
standards cited by the Supreme Court in Barnett, the terminology had
resulted in misunderstanding and confusion. Accordingly, the proposal
removed that phrase from these preemption rules. The proposal further
clarified that a state law is not preempted to the extent that result
is consistent with the Barnett decision. The proposal also deleted
Sec. 7.4009, which had provided only that ``state laws that obstruct,
impair, or condition a national bank's ability to fully exercise its
powers to conduct activities under Federal law do not apply to national
banks'' without identifying any types of state laws that would be
preempted.
Finally, the proposal made several changes to the OCC's visitorial
powers regulation, 12 CFR 7.4000, to conform the regulations to the
Supreme Court's decision in the Cuomo case as adopted by the Dodd-Frank
Act. First, it added a reference to 12 U.S.C. 484 in the general rule,
set forth Sec. 7.4000(a)(1), that only the OCC may exercise visitorial
powers with respect to national banks subject to certain exceptions.
Second, to incorporate the Cuomo Court's recognition that nonjudicial
investigations of national banks
[[Page 43553]]
generally constitute an exercise of visitorial powers, the proposal
revised the definition of ``visitorial powers'' in Sec.
7.4000(a)(2)(iv) to clarify that those powers include ``investigating
or enforcing compliance with any applicable Federal or state laws
concerning those activities.'' Third, the proposal added a new
paragraph (b) to provide that ``[i]n accordance with the decision of
the Supreme Court in Cuomo v. Clearing House Assn., L.L.C., 129 S. Ct.
2710 (2009), an action against a national bank in a court of
appropriate jurisdiction brought by a state attorney general (or other
chief law enforcement officer) to enforce a non-preempted state law
against a national bank and to seek relief as authorized thereunder is
not an exercise of visitorial powers under 12 U.S.C. 484.''
3. Comments on the Proposal
Commenters who disagreed with the preemption provisions of the
proposal generally relied on several principal arguments:
[cir] First, that the Barnett standard preemption provision is a
new statutory ``prevent or significantly interfere'' standard that the
proposal impermissibly seeks to broaden. These commenters referred to
portions of the language of the statute and legislative history in
support of their assertion that the Dodd-Frank Act adopts a new
preemption standard, narrower than the Barnett decision's ``conflict''
preemption analysis.
[cir] Second, that the ``obstruct, impair, or condition'' language
introduced in the 2004 preemption rules, which the OCC proposed to
delete, is inconsistent with Barnett and with the ``prevent or
significantly interfere'' preemption standard. Many of these commenters
asserted that the preemption rules adopted by the OCC in 2004 were
impliedly repealed by the Dodd-Frank Act. Therefore, these commenters
disagree with the OCC's conclusion that any portions of the 2004
preemption rules and precedents based on those rules remain applicable.
[cir] Third, by retaining, rather than repealing, rules that
preempt categories of state laws, that the proposal would circumvent
the Dodd-Frank Act procedural and consultation requirements. These
commenters asserted that the preemption of categories and/or terms of
state laws is equivalent to ``occupation of the field,'' rather than
conflict, preemption. These commenters also believe that the Dodd-Frank
Act procedural requirements apply to, and therefore (retroactively)
invalidate, certain precedents, including the 2004 preemption rules,
adopted prior to the Dodd-Frank Act.
In addition, some of these commenters objected to preemption of
state and local laws on grounds that preemption is bad public policy
and asserted that preemption had resulted in predatory lending to
vulnerable consumers and the financial and subprime mortgage lending
crises. A few commenters also asserted that the Dodd-Frank Act limits
the OCC's preemption authority to state consumer financial laws only.
Some of these commenters further asserted that the proposed
visitorial powers amendments:
[cir] Could be construed as prohibiting all types of investigative
activities by state officials, including collecting complaints from
consumers or researching public records.
[cir] Do not reflect the authority of state attorneys general to
enforce compliance with certain Federal laws and regulations to be
issued by the CFPB.\27\
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\27\ Id. at section 1042(a)(2)(B), 124 Stat. at 2013 (to be
codified at 12 U.S.C. 5552) (pertaining to the ability of state
attorneys general to enforce certain new regulations promulgated by
the CFPB).
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[cir] Incorrectly narrow the definition of visitorial powers to the
investigation and enforcement of ``non-preempted,'' rather than
``applicable'' law.
Commenters who supported the preemption and visitorial powers
portions of the proposal expressed agreement with the analysis of the
Dodd-Frank Act preemption provisions and legislative history set out in
the preamble to the proposal. In the view of these commenters, the
Barnett standard preemption provision adopts the conflict preemption
standard that is the fundamental legal standard of the Barnett
decision. Some commenters agreed that the ``obstruct, impair, or
condition'' phrasing used in the 2004 preemption rules was a
distillation of this conflict preemption standard. These commenters
agreed with the position stated in the preamble to the proposal that
eliminating this language does not impact the continued applicability
of precedents based on those rules.
In addition, supporting commenters argued that a contrary position
would also have negative consequences for national banks because it
would eliminate legal certainty concerning which laws apply to their
operations. These commenters asserted that consumer loans and deposit
products are subject to comprehensive regulation, and preemption has
served to provide clarity and certainty as to which regulatory
requirements and standards apply to national banks. These commenters
opined that preemption of multiple, differing, and sometimes
conflicting, state and local laws and regulations is crucial to the
ability of banks and thrifts to conduct multi-state operations in a
safe and sound manner to the benefit of consumers, small businesses,
and the United States economy as a whole. They voiced concern that the
imposition of an overlay of potentially 50 state and an indeterminate
number of local government rules on top of myriad Federal requirements
would have a costly consequence that could materially affect banks and
their ability to serve consumers efficiently and effectively across the
nation and could deter future product innovation and modernized, more
effective consumer disclosures.\28\ These commenters cited studies
showing that compliance with a multiplicity of state laws can increase
costs for consumers and loan losses for banks and decrease credit
availability. Some commenters also noted that uniform national laws,
and the court and regulatory determinations pursuant to them, have been
used in the past as a device to open markets, redress local
protectionist measures, reduce the price of credit, increase the
availability of credit, and increase the efficiency of banks.
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\28\ One commenter noted that a bank operating across state
lines could find itself subject to the law of the state where it
provides the product or service, the law of the state where its
branch is located, or the law of the state where the customer is
located. The bank could also be subject to laws at the county,
municipal, or other level in any or all of these states. The laws of
these locations could be different, and failure to comply with each
state and local law could subject the bank to fines, penalties, and
litigation, and as result cause it to discontinue activities in
certain states to the potential detriment of its customers.
---------------------------------------------------------------------------
Bank and thrift commenters described the scope of their operations
and provided examples of the burdens the application of state and local
laws and regulations would impose. According to these institutions, the
burdens of having to comply with multiple state and local laws would
impair their efficiency in offering core banking products, such as
checking accounts, credit cards, mortgage loans, and deposit products.
Some commenters also voiced concern that their ability to prudently
underwrite loans, offer borrowers needed flexibility, and provide
effective consumer disclosures would be compromised by application of
various state laws.
Finally, commenters also disputed the contention that preemption
encouraged lenders to engage in predatory lending practices that
contributed to the subprime mortgage crisis. Some
[[Page 43554]]
commenters also suggested that the final rule include additional
provisions to: clarify that the OCC's regulations concerning non-
interest fees and charges (12 CFR 7.4002), adjustable rate mortgages
(12 CFR 34.21) and debt cancellation contracts (12 CFR 37.1) remain in
effect; revise, rather than eliminate, 12 CFR 7.4009 to conform with
Sec. Sec. 7.4007, 7.4008, and 34.4; clarify that the abrogation of 12
CFR 7.4006 will not be given retroactive effect,\29\ confirm that the
2004 preemption rules will also apply to Federal savings associations,
to the same extent that those rules apply to national banks; and
confirm that all prior OTS preemption actions that are consistent with
the holding in Barnett, including those based on the HOLA, also
continue to be effective.
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\29\ One commenter also requested clarification that the Dodd-
Frank elimination of agent preemption does not apply to employees of
national banks and Federal thrifts. Employees of national banks and
Federal thrifts acting within the scope of their employment are not
acting as agents of these institutions. Therefore, the elimination
of preemption for agents has no affect on these employees.
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4. Discussion
The OCC has carefully considered all of the points raised by all of
the commenters. As described in detail in the next section and for the
reasons next discussed, the OCC is issuing a final rule that is
substantially the same as the proposal with additional instructive
commentary and certain modifications to the visitorial powers
provisions to address specific concerns that commenters raised and a
clarifying change to Sec. Sec. 7.4010(a) and 34.6 regarding the
applicability of state law to Federal savings associations.
a. The Role of Preemption in the U.S. Banking System
As noted above, in addition to comments on specific aspects of the
proposed rule, some commenters urged general disfavor of the concept of
Federal preemption as applied to the powers of national banks, and some
also contended that preemption in the context of national banks
contributed to predatory lending practices, which, in turn contributed
to the recent financial crisis. Both of these concerns are important to
address as threshold matters.
When Congress established the fundamental structure of the U.S.
banking system in 1863, it created national banks and a national
banking system to operate in parallel with the existing state banking
system--a ``dual banking system.'' Congress did not abolish state
banking, but it did include explicit protections in the new framework
so that national banks would be governed by Federal standards
administered by a new Federal agency--the Office of the Comptroller of
the Currency--and not by state authority.
Perhaps not surprisingly, the independence of national banks from
state authority over their banking business has produced tensions and
disputes over the years. Yet, a long series of Supreme Court decisions
beginning in the earliest years of the national banking system have
confirmed the fundamental principle of Federal preemption as applied to
national banks: that the Federally-granted banking powers of national
banks are governed by national standards set at the Federal level,
subject to supervision and oversight by the OCC. These characteristics
are fundamental to the duality of the ``dual banking system.'' Thus
established, the twin pillars of the national and state banking systems
have been fundamental to the structure--and success--of the U.S.
banking system for nearly 150 years. The Supreme Court's Barnett
decision was a particularly thorough treatment of this background,
applying a conflict preemption standard consistent with over a century
of Supreme Court precedent as the yardstick for determining when state
law applied to a national bank.
With this design, the state and national banking systems have grown
up around each other in this ``dual banking system.'' Encompassing both
large institutions that market products and services regionally,
nationally and globally, and smaller institutions that focus their
business on their immediate communities, this dual system is diverse,
with complex linkages and interdependencies. In this context, and over
time, a benefit has been that the ``national'' part of the dual banking
system, the part that has allowed large and small banks to operate
under uniform national rules across state lines, has helped to foster
the growth of national products and services and multi-state markets.
And the system also has supported the contributions of the state
systems, allowing states to serve as a ``laboratory'' for new
approaches applicable to their state-supervised institutions.
Throughout our history, uniform national standards have proved to
be a powerful engine for prosperity and growth. National standards for
national banks have been very much a part of this history, benefiting
individuals, business and the national economy. In the 21st Century,
the Internet and the advent of technological innovations in the
creation and delivery of financial products and services has
accentuated the geographic seamlessness of financial services markets,
highlighting the importance of uniform standards that attach based on
the product or service being provided, applying wherever and however
the product or service is provided. However, the premise that
Federally-chartered institutions would be subject to standards set at
the Federal, rather than state-by-state level, does not and should
never mean that those institutions are subject to lax standards.
National banks are subject to extensive regulation at the Federal
level--which is being considerably enhanced by many provisions of the
Dodd-Frank Act--and to regular, and in some cases, continuous
examination of their operations.
Because of the degree of regulation and supervision to which
national banks are subject, national banks--and other Federally-
regulated depository institutions--had limited involvement in subprime
lending and the worst subprime loans were originated by nonbank lenders
and brokers \30\ where national bank preemption was not applicable.
National bank preemption did not and does not prevent regulation of
nonbank mortgage lenders and brokers, and going forward, the CFPB's
authority in this area will bring a new level of Federal standards,
oversight and enforcement over this ``shadow banking system.'' Concerns
that have been expressed that Federal consumer protection rules were
not sufficiently
[[Page 43555]]
robust should be addressed by the CFPB's authority and mandate to write
strong Federal consumer protection standards, and its research-based
and consumer-tested rulemaking processes envisioned under the Dodd-
Frank Act.
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\30\ See Testimony of Comptroller of the Currency John C. Dugan
to the Financial Crisis Inquiry Commission, App. B (April 8, 2010);
Department of the Treasury, Financial Regulatory Reform, A New
Foundation: Rebuilding Financial Supervision and Regulation (Jun.
17, 2009), at 69-70 (``worst abuses were made by firms not covered
by the CRA,'' which applies only to insured depository
institutions); Mason, Joseph R., Kulick, Robert B. and Singer, Hal
J., The Economic Impact of Eliminating Preemption of State Consumer
Protection Laws, 12 U. PA. J. Bus. L. 781 at 782 (2010) (the
``overwhelming majority of subprime mortgage loans were originated
by companies that were not subject to preemption * * *''); Committee
on Financial Services, H.R. Rep. No 111-94, Mortgage Reform and
Anti-Predatory Lending Act (May 4, 2009) (``Subprime lenders
included banks, bank affiliates, and non-bank mortgage companies.
According to Mortgage Bankers Association (MBA), more than half of
subprime mortgages were made by mortgage brokers and lenders with no
Federal supervision; a quarter were made by finance companies that
are affiliates of bank holding companies and indirectly regulated by
the Federal Reserve Board; and the rest were made by institutions
directly regulated by Federal financial regulators such as banks,
thrifts, and credit unions.''); Barney Frank, Chairman of the House
Financial Services Committee, Lessons of the Subprime Crisis, Boston
Globe, September 14, 2007, at 11A (``Reasonable regulation of
mortgages by the bank and credit union regulators allowed the market
to function in an efficient and constructive way, while mortgages
made and sold in the unregulated sector led to the crisis.'').
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b. The Barnett Standard Preemption Provision
With respect to the specifics of the proposal, the OCC concludes
that the Dodd-Frank Act does not create a new, stand-alone ``prevents
or significantly interferes'' preemption standard, but rather,
incorporates the conflict preemption legal standard and the reasoning
that supports it in the Supreme Court's Barnett decision. This result
follows from the language of the statute; is supported by language of
other, integrally-related portions of the Dodd-Frank Act preemption
provisions; was so described by its sponsors at the time of enactment
as intending that result; is consistent with the interpretation Federal
courts have accorded virtually identical preemption language in the
Gramm-Leach-Bliley Act of 1999 (GLBA); and subsequently has been
explained as embodying the intent of the sponsors of the language.
As described in the preamble to the proposal, the language of the
Barnett standard preemption provision differs substantially from
earlier versions of the legislation. Its sponsors have explained that
this change was intended to provide consistency and legal certainty by
preserving the preemption principles of the Supreme Court's Barnett
decision, while specifying a process for preemption determinations, and
integrating that process with other reforms implemented by the Dodd-
Frank Act, prospectively. For example, when asked by Senator Carper to
confirm that Section 1044 retained the Barnett standard for determining
preemption of state consumer financial law passed by the Senate,
Chairman Dodd confirmed that was so.\31\
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\31\ As passed by the Senate on May 20, 2010, the legislation
incorporated the ``Carper Amendment,'' which provided that a state
consumer financial law could be ``preempted in accordance with the
legal standards of the decision of the Supreme Court of the United
States in Barnett Bank v. Nelson (517 U.S. 25 (1996)).'' 156 Cong.
Rec. S3866 (daily ed. May 18, 2010). The final version of Section
1044 enacted by Congress reflects the revision to the Carper
Amendment made by the Conference Committee. When discussing that
revision, Senator Carper and Senator Dodd had the following
exchange:
Senator Carper: Mr. President, I am very pleased to see that the
conference committee * * * retained my amendment regarding the
preemption standard for State consumer financial laws with only
minor modifications. I very much appreciate the effort of Chairman
Dodd in fighting to retain the amendment in conference.
Senator Dodd: I thank the Senator. As the Senator knows, his
amendment received strong bipartisan support on the Senate floor and
passed by a vote of 80 to 18. It was therefore a Senate priority to
retain his provision in our negotiations with the House of
Representatives.
Senator Carper: One change made by the conference committee was
to restate the preemption standard in a slightly different way, but
my reading of the language indicates that the conference report
still maintains the Barnett standard for determining when a State
law is preempted.
Senator Dodd: The Senator is correct. That is why the conference
report specifically cites the Barnett Bank of Marion County, N.A. v.
Nelson, Florida Insurance Commissioner, 517 U.S. 25 (1996) case.
There should be no doubt the legislation codifies the preemption
standard stated by the U.S. Supreme Court in that case.
Senator Carper: I again thank the Senator. This will provide
certainty to everyone--those who offer consumers financial products
and to consumer[s] themselves.
156 Cong. Rec. S5902 (daily ed. July 15, 2010) (colloquy between
Senator Carper and Chairman Dodd).
See also 156 Cong. Rec. S5889 (daily ed. July 15, 2010)
(statement by Senator Tim Johnson). And see letter from Senator
Thomas R. Carper and Senator Mark Warner to Acting Comptroller John
Walsh (April 4, 2011); OCC Interpretive Letter 1132 (letter from
Acting Comptroller Walsh to Senators Warner and Carper) (May 12,
2011) (responding to Senators Carper and Warner and providing
further detail on the OCC's analysis of the Dodd-Frank Act
preemption provisions), available at http://www.occ.gov/static/interpretations-and-precedents/may11/int1132.pdf; Letter from
Senator Thomas R. Carper and Senator Mark Warner to Treasury
Secretary Timothy Geithner (July 8, 2011).
---------------------------------------------------------------------------
Some commenters assert, however, that the Barnett standard
provision and the colloquy between Senators Carper and Dodd point to an
intention to adopt a new ``prevent or significantly interfere''
preemption test for state consumer financial law. However, this
assertion fails to take account of both the context and entirety of the
colloquy and is not sustained by the language of the statute, or by the
Barnett decision itself. Section 1044 of the Dodd-Frank Act provides in
pertinent part that a state consumer financial law as applied to a
national bank will be preempted only if, ``in accordance with the legal
standard for preemption in the decision of the Supreme Court of the
United States in [Barnett], the State consumer financial law prevents
or significantly interferes with the exercise by the national bank of
its powers * * * '' \32\ The ``legal standard for preemption'' employed
in the Court's decision is conflict preemption, applied in the context
of powers granted national banks under Federal law.\33\ ``Prevent or
significantly interfere'' is not ``the legal standard for preemption in
the decision''; it is part of the Court's discussion of its reasoning;
an observation made describing other Supreme Court precedent that is
cited in the Court's decision.\34\
---------------------------------------------------------------------------
\32\ Dodd-Frank Act, section 1044(a), 124 Stat. at 2015 (to be
codified at 12 U.S.C. 25b).
\33\ The Barnett decision describes in detail the analysis under
the Barnett conflict preemption standard. 517 U.S. at 32-35.
\34\ 517 U.S. at 33-34.
---------------------------------------------------------------------------
Therefore, in order to apply the Barnett standard preemption
provision in section 1044, the first step is that the preemption
analysis must be ``in accordance with the legal standard for preemption
in the decision of the Supreme Court'' in Barnett. Thus, the analysis
should be a conflict preemption legal standard, and the analysis should
be in accordance with the Court's reasoning applying that standard in
the Barnett decision. The ``prevent or significantly interfere'' phrase
that follows then provides a touchstone to that conflict preemption
standard and analysis.\35\ The phrase cannot be a new, stand-alone
standard, divorced from the reasoning of the decision without ignoring
the language that precedes it, which directs that the legal standard be
the standard for preemption ``in the decision'' of the Court. That
standard is conflict preemption, as supported by the reasoning of the
decision, which includes, but is not bounded by, the ``prevent or
significantly interfere'' formulation. If Congress had intended a
different preemption analysis than the conflict preemption analysis in
Barnett, it would have been rejecting not just Barnett, but also, as
described above, well over a century of judicial precedent upon which
the decision was founded. We decline to infer that result from
legislative language that begins by stating that preemption would be
determined ``in accordance with the legal standard for preemption in
the decision of the Supreme Court'' in Barnett.
---------------------------------------------------------------------------
\35\ We note that a recent decision by the U.S. Court of Appeals
for the 11th Circuit reached the same result. Baptista v. JPMorgan
Chase Bank, N.A., 640 F.3d 1194, 1197 (11th Cir. May 11, 2011)
(``Thus it is clear that under the Dodd-Frank Act, the proper
preemption test asks whether there is a significant conflict between
the state and federal statutes--that is, the test for conflict
preemption.'').
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This result is supported by other portions of the Dodd-Frank Act
and relevant precedent.\36\ Specifically, in the same section 1044, the
related requirement that the OCC must have ``substantial evidence'' on
the record to support adoption of preemption rules or orders refers to
``the legal standard of the decision of the Supreme Court in'' the
Barnett decision, not to any single phrase used in that decision.\37\
It would
[[Page 43556]]
not make sense for this ``substantial evidence'' requirement to require
compliance with a different preemption standard than the standard
intended by the Barnett standard preemption provision.
---------------------------------------------------------------------------
\36\ See, e.g., Dodd-Frank Act, section 1046(a), 124 Stat. at
2017 (to be codified at 12 U.S.C. 1465).
\37\ See id. at section 1044(a), 124 Stat. at 2016 (to be
codified at 12 U.S.C. 25b) (providing that regulations and orders
promulgated under Barnett standard preemption do not affect the
application of a state consumer financial law to a national bank
unless substantial evidence made on the record of the proceeding
supports the specific finding of preemption ``in accordance with the
legal standard of the decision of the Supreme Court of the United
States in Barnett Bank of Marion County, N.A. v. Nelson, Florida,
Florida Insurance Commissioner, et al., 517 U.S. 25 (1996).'').
---------------------------------------------------------------------------
Other textual support is found in the Dodd-Frank Act section
providing that Federal savings associations are to be subject to the
same preemption standards applicable to national banks. Subsection (a)
of section 1046 states that preemption determinations for Federal
savings associations under the Home Owners' Loan Act ``shall be made in
accordance with the laws and legal standards applicable to national
banks regarding preemption of state law.'' The heading of subsection
(b), which immediately follows, is ``Principles of Conflict Preemption
Applicable,'' which can only refer to the national bank preemption
standards to which Federal savings associations are made subject by
subsection (a).
The Barnett standard preemption provision also uses language
virtually identical to that used in section 104(d)(2)(A) of the
GLBA.\38\ The leading case applying that standard similarly treated the
phrase ``prevents or significantly interferes'' as a reference to the
whole of the Court's Barnett preemption analysis and referred to the
GLBA statutory language as ``the traditional Barnett Bank standards.''
\39\
---------------------------------------------------------------------------
\38\ See 15 U.S.C. 6701(d)(2)(A).
\39\ Association of Banks in Insurance Inc. v. Duryee, 270 F.3d
397, at 405, 408 (6th Cir. 2001).
---------------------------------------------------------------------------
Accordingly, because we conclude that the Dodd-Frank Act preserves
the Barnett conflict preemption standard, precedents consistent with
that analysis--which may include regulations adopted consistent with
such a conflict preemption justification--are also preserved.\40\
Further, as of July 21, 2011, those rules and precedents will apply to
Federal savings associations to the same extent that they apply to
national banks.
---------------------------------------------------------------------------
\40\ One commenter asserted that the Dodd-Frank Act expressly
preserves only the OCC's rules concerning the law applicable to
interest rates charged by national banks, and those applicable to
prior contracts. This does not mean, however, that the 2004
preemption rules and precedents in other areas have become invalid.
It is well settled that ``repeals by implication are not favored and
will not be found unless an intent to repeal is `clear and
manifest.' '' Rodriguez v. U.S., 480 U.S. 522, 524 (1987) (internal
citations omitted). Rather, regulatory provisions and other
precedents that are consistent with standards in the Dodd-Frank Act
are preserved.
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c. Deletion of ``Obstruct, Impair, or Condition'' Preemption
Formulation and Retention of the 2004 Preemption Rules
Some commenters asserted that the ``obstruct, impair, or
condition'' phrasing in the 2004 preemption rules was not only
inconsistent with Barnett but also inconsistent with the new, narrower
``prevents or significantly interferes'' standard that they assert is
imposed by the Dodd-Frank Act. As discussed above, we conclude that the
Dodd-Frank Act Barnett standard is the conflict preemption standard
employed in the Court's decision, not a new test. The question remains,
however, of the relationship between that standard and the ``obstruct,
impair or condition'' formulation. As we noted in the preamble to the
proposal, the words ``obstruct, impair or condition'' as used in the
2004 preemption rules were intended to reflect the precedents cited in
Barnett, not to create a new preemption standard. Nevertheless, we
acknowledge that the phrase created confusion and misunderstanding well
before enactment of the Dodd-Frank Act. We also recognize that
inclusion of the ``prevents or significantly interferes'' conflict
preemption formulation in the Barnett standard preemption provision may
have been intended to change the OCC's approach by shifting the basis
of preemption back to the decision itself, rather than placing reliance
on the OCC's effort to distill the Barnett principles in this
manner.\41\
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\41\ As we noted in note 31, the colloquy between Senators
Carper and Dodd clearly demonstrates that Congress did not intend to
change the Barnett standard. But the final language in section 1044
could be read as a rejection of the ``obstruct, impair, or
condition'' formulation used in the 2004 preemption rules.
---------------------------------------------------------------------------
For these reasons, the OCC is deleting the phrase in the final
rule.\42\ Eliminating this language from our regulations will remove
any ambiguity that the conflict preemption principles of the Supreme
Court's Barnett decision are the governing standard for national bank
preemption. In response to concerns raised by commenters about Dodd-
Frank Act legislative intent, misunderstanding and potential
misapplication of the ``obstructs, impairs or conditions'' formulation,
and the relevant legislative history, the OCC also has reconsidered its
position concerning precedent that relied on that standard. To the
extent that an existing preemption precedent is exclusively reliant on
the phrase ``obstructs, impairs, or conditions'' as the basis for a
preemption determination, we believe that validity of the precedent
would need to be reexamined to ascertain whether the determination is
consistent with the Barnett conflict preemption analysis as discussed
above.\43\
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\42\ We decline commenters' request that we also delete this
language from the OCC's bank operations rule at 12 CFR 7.4009 rather
than eliminating the rule in its entirety. We have not had occasion
to apply this rule to particular types of state laws and therefore
its removal should not create uncertainty about the validity of
prior precedent. The application of state consumer financial laws to
national bank operations continues to be subject to a Barnett
conflict preemption analysis.
\43\ Under some circumstances, however, the preemptive effect of
the former regulation could be preserved under Section 1043 of the
Dodd-Frank Act. See Dodd-Frank Act, section 1043, 124 Stat. at 2014
(to be codified at 12 U.S.C. 5553). The OCC has not identified any
OCC-issued preemption precedent that rested only on the ``obstruct,
impair, or condition'' formulation.
---------------------------------------------------------------------------
Some commenters also asserted that the preemption rules promulgated
by the OCC in 2004 are not consistent with the Dodd-Frank Act, or with
Barnett, because they identify categories and/or terms of state laws
that are preempted; some of these commenters equated listing of
categories of preempted state laws with field preemption. However,
these rules are not based on a field preemption standard.\44\ They were
based on the OCC's conclusion that the listed types and terms of state
laws would be preempted by application of the conflict preemption
standard of the Barnett decision.
---------------------------------------------------------------------------
\44\ See McCormick v. Wells Fargo Bank, No. 3:08-0944, 2009 WL
151588, at *2 (S.D. W.Va. Jan 22, 2009).
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The essence of the Barnett conflict preemption analysis is an
evaluation of the extent and nature of an impediment posed by state law
to the exercise of a power granted national banks under Federal
law.\45\ The ``conflict'' that is analyzed in conflict preemption is
the nature and scope of that impediment. Where the same type of
impediment exists under multiple states' laws, a single conclusion of
preemption can apply to multiple laws that contain the same type of
impediment--that generate the same type of conflict with a Federally-
granted power. Accordingly, a conflict preemption analysis can be state
law-specific, or it can apply to provisions or terms in more than one
law that present the same type of conflict.\46\ But in all cases,\47\
there must
[[Page 43557]]
be a conflict that triggers preemption under the standard articulated
in the Barnett decision.\48\ As detailed below, the Dodd-Frank Act's
case-by-case procedural requirement applicable to future determinations
regarding preemption of state consumer financial laws allows
categorical determinations where multiple state laws are identified.
The Act defines ``case-by-case basis'' as a determination by the
Comptroller as to the impact of a ``particular'' state consumer
financial law on ``any national bank that is subject to that law'' or
the law of any other state with substantively equivalent terms.
---------------------------------------------------------------------------
\45\ As noted by the Court in Barnett, these Federal powers
granted national banks may be ``both enumerated and incidental.''
517 U.S. at 32.
\46\ See Dodd-Frank Act, section 1044(a), 124 Stat. at 2015 (to
be codified at 12 U.S.C. 25b).
\47\ The Barnett standard preemption provision of Dodd-Frank
applies to questions concerning the applicability of state consumer
financial laws to national banks; the principles of preemption
articulated in the Barnett decision apply to questions concerning
the application of all types of state laws to national banks.
Contrary to a few commenters' assertions, nothing in Dodd-Frank
affects the OCC's authority to address preemption questions
concerning laws other than ``state consumer financial laws.''
\48\ This is in contrast to the OTS's preemption rules, which
assert an ``occupation of the field'' preemption standard for
Federal savings associations. See, e.g., 12 CFR 557.11(b), 560.2(a).
---------------------------------------------------------------------------
The types and terms of laws that are set out in the 2004 preemption
rules were based on the OCC's experience with the potential impact of
such laws on national bank powers and operations.\49\ We have re-
reviewed those rules in connection with this rulemaking to confirm that
the specific types of laws cited in the rules are consistent with the
standard for conflict preemption in the Supreme Court's Barnett
decision.\50\ For example, in the lending arena, based upon our
assessment as the primary Federal supervisor of national banks, state
laws that would affect the ability of national banks to underwrite and
mitigate credit risk, manage credit risk exposures, and manage loan-
related assets, such as laws concerning the protection of collateral
value, credit enhancements, risk mitigation, loan-to-value standards,
loan amortization and repayment requirements, circumstances when a loan
may be called due and payable, escrow standards, use of credit reports
to assess creditworthiness of borrowers, and origination, managing, and
purchasing and selling extensions of credit or interests therein, would
meaningfully interfere with fundamental and substantial elements of the
business of national banks and with their responsibilities to manage
that business and those risks.
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\49\ Id. at Sec. Sec. 7.4007, 7.4008, 34.4; see 69 FR 1904,
1911 (Jan. 13, 2004) (final preemption rules); see also 68 FR 46119,
46128 (Aug. 5, 2003) (proposed preemption rules).
\50\ We also have added a clarification in the final rule to
specifically state that the OCC will use the Barnett standard for
determining that state laws are applicable to national banks. This
clarification does not effect any substantive change, but simply
modifies the reference to state laws that are not preempted because
they have only an insignificant effect upon national bank powers
according to the Barnett conflict standard, notwithstanding the type
of state law involved.
---------------------------------------------------------------------------
Similarly, disclosure laws that impose requirements that predicate
the exercise of national banks' deposit-taking or lending powers on
compliance with state-dictated disclosure requirements clearly present
a significant interference, within the meaning of Barnett, with the
exercise of those national bank powers. This type of law falls squarely
within the precedent recognized in the Supreme Court's Barnett
decision, notably the Franklin Nat'l Bank decision specifically
discussed and relied upon in Barnett.\51\
---------------------------------------------------------------------------
\51\ Barnett, 517 U.S. at 33; Franklin Nat'l Bank of Franklin
Square v. New York, 347 U.S. 373 (1954). See also American Bankers
Ass'n v. Lockyer, 239 F. Supp. 2d 1000, 1014-1018 (E.D. Cal. 2002)
(the monetary and non-monetary costs of a mandatory disclosure
scheme constituted a significant interference with national banks'
powers under the National Bank Act); Rose v. Chase Bank, N.A., 513
F.3d 1032 (9th Cir. 2008) (a state may not by statute attach civil
liability to the offer of convenience checks that do not carry
state-mandated disclosures.) Lockyer and Rose cited and relied on
the preemption standard in Barnett.
---------------------------------------------------------------------------
And state laws that would alter standards of a national bank's
depository business--setting standards for permissible types and terms
of accounts and for funds availability, similarly would significantly
interfere with management of a core banking business. Moreover, the
imposition of state-based standards on national banks' depository
activities implicates aspects of a bank's overall risk management and
funding strategies, including liquidity, interest rate risk exposure,
funding management, and fraud prevention. State and local law
directives or instructions affecting these areas are significant,
within the meaning of Barnett, since they affect whether and how the
bank may offer a core banking product and manage some of its most basic
funding functions in operating a banking business.
Several commenters identified particular types of laws in the
foregoing categories and explained how they impaired or otherwise
burdened their operations. Those commenters also emphasized that to the
extent that multiple states' requirements may be asserted, the
significance of the interference is magnified. Based upon the OCC's
supervisory experience, these concerns are valid.
d. Dodd-Frank Act Procedural and Consultation Requirements
Some commenters asserted that maintaining any of the preemption
rules contravenes the new Dodd-Frank Act preemption procedures. These
commenters contend that OCC can preempt only on a ``case-by-case
basis'' if a ``particular'' state law, or an equivalent one, prevents
or significantly interferes with the exercise of bank powers, after
consultation with the CFPB. However, these provisions clearly apply to
determinations made under the Barnett standard provisions of the Dodd-
Frank Act that are not effective until July 21, 2011. Actions and
regulations in effect prior to the effective date are not subject to
the case-by-case requirement, but, as discussed above, the continued
validity of those precedents applicable to state consumer financial
laws is subject to the standards of section 1044(b)(1). Future
preemption determinations would be subject to the new Dodd-Frank Act
procedural provisions. Where Congress wanted to make wholesale changes
to existing preemption standards, it clearly did so, as it did by
eliminating field preemption for Federal thrifts and preemption for
operating subsidiaries, and those standards operate prospectively.\52\
---------------------------------------------------------------------------
\52\ See Dodd-Frank Act, sections 1046(a), 1044(a), 124 Stat. at
2017, 2015 (to be codified at 12 U.S.C. 1465, 25b). Earlier versions
of the legislation would have had a retroactive impact by creating
various new standards for preemption under the National Bank Act,
invalidating an extensive body of national bank judicial,
interpretive and regulatory preemption precedent. See H.R. 4173,
111th Cong. Sec. 4404 (as passed by the House of Representatives on
Dec. 11, 2009). The final version of the Dodd-Frank Act legislation
enacted by Congress did not adopt this approach. See, e.g., Landgraf
v. USI Film Products, 511 U.S. 244, 272-73 (1994) (recognizing
presumption against retroactive legislation).
---------------------------------------------------------------------------
e. Visitorial Powers Amendments
As explained above, some commenters voiced concern about the
proposed revision to the definition of visitorial powers at Sec.
7.4000(a)(2)(iv) to include ``[i]nvestigating or enforcing compliance
with any applicable Federal or state laws concerning those
activities.'' This addition, consistent with the concept of visitation,
was intended to include direct investigations of national banks such as
through requests for documents or testimony directed to the bank to
ascertain the bank's compliance with law through mechanisms not
otherwise authorized under the rule. It would not include collecting
information from other sources or from the bank through actions that do
not constitute visitations or as authorized under Federal law. In
response to commenters and to better reflect the Cuomo decision, we
have revised the final rule to clarify this point.
Commenters also opined that the proposed definition does not
reflect the authority of state attorneys general to
[[Page 43558]]
enforce certain Federal laws and certain regulations to be issued by
the CFPB. We believe this authority is addressed in current Sec.
7.4000(a)(3), which provides that the OCC has exclusive visitorial
powers ``[u]nless otherwise provided by Federal law,'' and in Sec.
7.4000(b)(1).
Finally, some commenters asserted that the phrase ``non-preempted
state law'' used in the proposal could be interpreted more narrowly
than the ``applicable law'' phrasing used in the Dodd-Frank Act. We
intended the authority addressed in current Sec. 7.4000(a)(3) in
combination with the phrase ``non-preempted state law'' to have the
result sought by these commenters, but we understand the commenters'
concern regarding the clarity of this result. Accordingly, we have
changed the language of the final rule to simply use the term
``applicable law.'' We note, however, that this is an exception from a
prohibition of certain visitorial actions by an attorney general (or
other chief state law enforcement officer), not an authorization. In
the case of both non-preempted state law and Federal law, the law in
question still must provide authority for the attorney general to
enforce and seek relief as authorized under that applicable law.
5. Description of the Final Rule
For the reasons set forth in this preamble, the final rule amends
provisions of the OCC's regulations relating to preemption (12 CFR
7.4007, 7.4008, 7.4009, and 34.4), operating subsidiaries (12 CFR 5.34
and 7.4006), and visitorial powers (12 CFR 7.4000) as follows:
The final rule adds Sec. Sec. 7.4010(a) and 34.6 to
provide that Federal savings associations and their subsidiaries are
subject to the same laws and legal standards, including OCC
regulations, as are applicable to national banks and their subsidiaries
regarding the preemption of state law. The final rule also adds Sec.
7.4010(b) to subject Federal savings associations and their
subsidiaries to the same visitorial powers provisions in the Dodd-Frank
Act that apply to national banks and their subsidiaries.
The final rule makes conforming changes to Sec. Sec.
7.4007, 7.4008, and 34.4. It revises paragraphs (b) in Sec. 7.4007,
(d) in Sec. 7.4008, and (a) in Sec. 34.4 by removing ``state laws
that obstruct, impair, or condition a national bank's ability to fully
exercise its Federally authorized * * * powers are not applicable to
national banks.'' The final rule further clarifies that a state law is
not preempted to the extent consistent with the Barnett decision.
The final rule deletes Sec. 7.4009.
The final rule deletes Sec. 7.4006, which governs
applicability of state laws to national bank operating subsidiaries.
The final rule also makes conforming revisions to 12 CFR 5.34(a) and
paragraph (e)(3) by expressly referencing the new section 12 U.S.C. 25b
adopted by the Dodd-Frank Act.
The final rule makes a number of changes to Sec. 7.4000
to conform the regulations to the Supreme Court's decision in the Cuomo
case as adopted by the Dodd-Frank Act. First, it adds a reference to 12
U.S.C. 484 in Sec. 7.4000(a)(1). Second, it revises paragraph
(a)(2)(iv) to read ``[e]nforcing compliance with any applicable Federal
or state laws concerning those activities, including through
investigations that seek to ascertain compliance through production of
non-public information by the bank, except as otherwise provided in
paragraphs (a), (b) and (c).'' Third, it adds a new paragraph (b),
which specifically provides that ``[i]n accordance with the decision of
the Supreme Court in Cuomo v. Clearing House Assn., L.L.C., 129 S. Ct.
2710 (2009), an action against a national bank in a court of
appropriate jurisdiction brought by a state attorney general (or other
chief law enforcement officer) to enforce an applicable law against a
national bank and to seek relief as authorized by such law is not an
exercise of visitorial powers under 12 U.S.C. 484.'' Fourth, it
redesignates paragraphs (b) and (c) as new paragraphs (c) and (d) and
makes conforming revisions to Sec. 7.4000(c)(2), which provides an
exception from the general rule in Sec. 7.4000(a)(1) for such
visitorial powers as are vested in the courts of justice.
We did not propose changes to 12 CFR 7.4002, 34.21, and 37.1 and
therefore make no changes to these provisions in this final rule.
However, we agree with commenters that these rules remain in effect.
D. Assessments (Part 8)
1. Background
The Dodd-Frank Act transfers authority to collect assessments for
Federal savings associations from the OTS to the OCC.\53\ This
authority is effective as of the transfer date, July 21, 2011.\54\ The
Dodd-Frank Act also provides that, in establishing the amount of an
assessment, the Comptroller may consider the nature and scope of the
activities of the entity, the amount and type of assets it holds, the
financial and managerial condition of the entity, and any other factor
that is appropriate.\55\
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\53\ See Dodd-Frank Act, section 318(b), 124 Stat. at 1526-1527
(to be codified at 12 U.S.C. 16) (authorizing the Comptroller to
collect assessments, fees, or other charges from entities for which
it is the appropriate Federal banking agency). See also id. at
section 312(c), 124 Stat. at 1522 (to be codified at 12 U.S.C. 1813)
(amending the Federal Deposit Insurance Act to designate the OCC as
the appropriate Federal banking agency for Federal savings
associations); section 369, 124 Stat. at 1563 (to be codified at 12
U.S.C. 1467) (amending the HOLA to authorize the Comptroller to
assess savings associations and affiliates of savings associations
for the cost of examinations as the Comptroller ``deems necessary or
appropriate'').
\54\ Id. at section 312(a), 124 Stat. at 1521 (to be codified at
12 U.S.C. 5412).
\55\ Id. at section 318(b), 124 Stat. at 1526-1527 (to be
codified at 12 U.S.C. 16).
---------------------------------------------------------------------------
Prior to the transfer date, the OCC and the OTS assessed banks and
savings associations, respectively, using different methodologies,
although the agencies' methodologies generally resulted in similar
levels of assessments. Under the OTS assessment system, assessments
were due each year on January 31 and July 31, and were calculated based
on an institution's asset size, condition, and complexity.\56\ The
asset size component of the assessment was calculated using a table and
formula contained in the OTS's regulation.\57\ The OTS set specific
rates that apply to the table through a Thrift Bulletin on assessments
and fees.\58\
---------------------------------------------------------------------------
\56\ 12 CFR part 502.
\57\ Id. at Sec. 502.20.
\58\ Thrift Bulletin 48-29 (Dec. 2, 2010).
---------------------------------------------------------------------------
The condition component in the OTS's regulation applied to savings
associations with Uniform Financial Institutions Rating System (UFIRS)
ratings of 3, 4, or 5. The condition surcharge is determined by
multiplying a savings association's size component by 50%, in the case
of any association that receives a composite UFIRS rating of 3, and
100% in the case of any association that receives a composite UFIRS
rating of 4 or 5. Under the OTS regulation, there was no cap on the
condition surcharge.
The assessment for complexity was based on a savings association's
trust assets and on certain non-trust assets. The OTS charged a
complexity component for trust assets if a savings association had more
than $1 billion in one of three components: trust assets managed by the
savings association, the outstanding principal balance of assets that
are covered by recourse obligations or direct credit substitutes, and
the principal amount of loans that the institution services for others.
The OTS charged the complexity component for these categories of assets
above $1 billion under tiers and rates set out in a Thrift Bulletin.
[[Page 43559]]
If a savings association administers trust assets of $1 billion or
less, the OTS could assess fees for its examinations and investigations
of those institutions. The OTS also could assess a savings association
for examination or investigation of its affiliates. Again, these fees
were set in a Thrift Bulletin.
Under the OCC's assessment regulation, set forth at 12 CFR part 8,
assessments for each national bank are due on March 31 and September 30
of each year.\59\ The semiannual assessment for each national bank is
based on an institution's asset size and is calculated using a table
and formula in the OCC's regulation.\60\ The OCC sets the specific
rates for the table each year in the Notice of Comptroller of the
Currency Fees (Notice of Fees).\61\ The OCC may provide a reduced
semiannual assessment for each non-lead bank within a bank holding
company.\62\
---------------------------------------------------------------------------
\59\ Part 8 contains parallel assessment rules for Federal
branches and agencies.
\60\ 12 CFR 8.2(b).
\61\ Notice of Comptroller of the Currency Fees for Year 2011
(Dec. 1, 2010), available at http://www.occ.gov/news-issuances/bulletins/2010/bulletin-2010-41.html.
\62\ A ``lead bank'' is defined in the OCC's regulation as the
largest national bank controlled by a company based on the total
assets held by each national bank controlled by that company. 12 CFR
8.2(a)(6)(ii)(A). A ``non-lead bank'' means a national bank that is
not the lead bank controlled by a company that controls two or more
national banks. Id. at Sec. 8.2(a)(6)(ii)(B). The percentage of the
discount for non-lead banks is set in the annual Notice of Fees.
---------------------------------------------------------------------------
In addition to the semiannual assessment, the OCC applies a
separate assessment for its examination of ``independent credit card
banks'' and ``independent trust banks.'' \63\ A bank is an independent
credit card bank if it engages primarily in credit card operations and
is not affiliated with a full-service national bank.\64\ The assessment
is based on ``receivables attributable,'' defined as the total amount
of outstanding balances due on credit card accounts owned by the bank
(the receivables attributable to those accounts), minus receivables
retained on the bank's balance sheet.
---------------------------------------------------------------------------
\63\ Id. at Sec. Sec. 8.2(c), 8.6(c). The OCC also assesses a
fee for special examinations and investigations, such as special
examinations and investigations of affiliates of national banks. Id.
at Sec. 8.6.
\64\ A ``full service national bank'' is defined as a bank that
generates more than 50% of its interest and non-interest income from
activities other than credit card operations or trust activities and
is authorized according to its charter to engage in all types of
permissible banking activities. Id. at Sec. Sec. 8.2(c)(3)(iii),
8.6(c)(3)(ii).
---------------------------------------------------------------------------
An ``independent trust bank'' is a national bank with trust powers
that has fiduciary and related assets, does not primarily offer full-
service banking, and is not affiliated with a full-service national
bank.\65\ The independent trust assessment is made up of a minimum
amount, set in the Notice of Fees, and an additional amount for banks
with over $1 billion in fiduciary and related assets. The specific rate
applicable to fiduciary and related assets above $1 billion is also set
in the annual Notice of Fees.
---------------------------------------------------------------------------
\65\ Id. at Sec. 8.6(c)(3)(iii).
---------------------------------------------------------------------------
The OCC applies a condition-based surcharge to the semiannual
assessment of national banks.\66\ The condition surcharge applies to
national banks with UFIRS ratings of 3, 4, or 5. The condition
surcharge is determined by multiplying the general semiannual
assessment by 1.5, in the case of any national bank that receives a
composite UFIRS rating of 3, and 2.0 in the case of any national bank
that receives a composite UFIRS rating of 4 or 5. The condition
surcharge is assessed against, and limited to, the first $20 billion of
a national bank's book assets.
---------------------------------------------------------------------------
\66\ Id. at Sec. 8.2(d).
---------------------------------------------------------------------------
2. Description of the Final Rule
The OCC received two comments concerning the proposed changes to
part 8 and the assessment of savings association, both supporting the
proposal's approach to integrating savings associations into the OCC's
assessment structure. The OCC is adopting the final rule as proposed.
The final rule amends part 8 to assess Federal savings associations
using the same methodologies, rates, fees, and payment due dates that
apply currently to national banks. The OTS's existing assessment
regulation is no longer in effect and will be repealed at a later date.
As a result, the next assessment for savings associations will occur in
September 2011, and not July 2011.
Under the OCC's assessment system, some savings associations will
pay marginally more assessments than in the past, while others will pay
lower assessments. However, during the first two assessment cycles
after the transfer date, the OCC will base savings association
assessments on either the OCC's assessment regulation (as amended to
include Federal savings associations) or the former OTS assessment
structure, whichever yields the lower assessment for that savings
association. After the March 2012 assessment, all national banks and
Federal savings associations will be assessed using the OCC's
assessment structure. The OCC intends to implement this phase-in
through an amended Notice of Fees. The OCC believes that this phase-in
will allow savings associations sufficient time to adjust to the OCC's
assessment program.
One commenter suggested that the OCC add the phase-in period for
Federal savings associations to the regulatory text. The OCC believes
that the amended Notice of Fees discussed above, as well as the
discussion of the phase-in included in the proposed rule and this
preamble, provide sufficient guidance to Federal savings associations
concerning the OCC's intention to delay application of higher
assessments for affected Federal savings associations for two
assessment cycles. Given the temporary nature of the phase-in, we
decline to include a reference to the phase-in period in the regulatory
text.
This commenter also suggested that the OCC provide an alternate
assessment statement to Federal savings associations to show savings
associations what the assessment would have been under the OCC's
assessment structure, had it been applied. The commenter stated that
this will assist those Federal savings associations that will pay
marginally more under the OCC's assessment structure better prepare for
the shift to OCC assessments in 2012. We agree that such notice would
be helpful and plan to notify those Federal savings associations that
will pay a lower assessment during the phase-in of the amount their
assessments would have been under the OCC's assessment structure.
The final rule also implements section 605(a) of the Dodd-Frank
Act, which provides the OCC (and other appropriate Federal banking
agencies) with authority to conduct examinations of depository-
institution permissible activities of nondepository institution
subsidiaries of depository institution holding companies. Section 605
provides specific authority for the OCC and other regulators to assess
such nondepository institution subsidiaries for the costs of
examination. The final rule implements this new statutory assessment
authority.
V. Effective Date
This final rule is effective on July 21, 2011, except as noted in
the DATES section. A final rule may be published with an effective date
that is less than 30 days from publication if an agency finds good
cause and publishes such with the final rule.\67\ The purpose of a
delayed effective date is to permit regulated entities to adjust their
behavior before the final rule takes effect. As described above, the
OCC is amending its rules to implement various provisions of the Dodd-
Frank Act,
[[Page 43560]]
including the Act's transfer of functions of the OTS to the OCC, the
Act's provisions regarding preemption and visitorial powers, and the
Act's amendments relating to the change in control of credit card banks
and trust banks and deposit-taking by uninsured Federal branches. The
changes relating to the transfer of the OTS's functions to the OCC are
essential to facilitating a seamless transition when the OCC assumes
responsibility for supervising Federal savings associations on the
transfer date (July 21, 2011) and must be in effect on that date in
order to ensure that the appropriate regulatory structure is in place.
Specifically with regard to the preemption and visitorial powers rules,
it is important for the industry to have guidance by the effective date
of the relevant Dodd-Frank Act amendments, July 21, 2011. Finally, the
amendments relating to the change in control of credit card banks and
trust banks and deposit-taking by uninsured Federal branches simply
implement statutory changes made effective upon the enactment of the
Dodd-Frank Act on July 21, 2010. For these reasons, the OCC finds good
cause to dispense with a delayed effective date.
---------------------------------------------------------------------------
\67\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------
Section 302 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C. 4802) (RCDRIA) requires that
regulations imposing additional reporting, disclosure, or other
requirements on insured depository institutions take effect on the
first day of the calendar quarter after publication of the final rule,
unless, among other things, the agency determines for good cause that
the regulations should become effective before such time. The RCDRIA
does not apply to the amendments to parts 4, 5, 7, 8, 28 and 34 of this
final rule because these amendments do not impose any additional
reporting, disclosure, or other requirements.
VI. Regulatory Analysis
1. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5
U.S.C. 605(b) (RFA), the regulatory flexibility analysis otherwise
required under section 604 of the RFA is not required if the agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities and publishes its certification
and a short, explanatory statement in the Federal Register along with
its rule. We have concluded that the final rule does not have a
significant economic impact on a substantial number of small entities
currently supervised by the OCC (i.e., national banks and Federal
branches and agencies of foreign banks). In addition, although the
final rule will directly affect all Federal savings associations, we
have concluded that it does not have a significant economic impact on a
substantial number of small Federal savings associations. Specifically,
the amendments to part 4 do not contain new compliance requirements.
Any costs that may be associated with integrating the functions of the
two agencies, and other changes to part 4, will be borne by the OCC. In
addition, there are no costs directly associated with the amendments to
12 CFR 5.50(f) and part 28, implementing sections 603 and 335 of the
Dodd-Frank Act, respectively, or with the amendments necessary to apply
national bank preemption standards to Federal savings associations.
Furthermore, we have determined that the amendments to the preemption
and visitorial powers provisions affecting national banks will not have
a significant economic impact on a substantial number of small
entities. Lastly, although the amendments to part 8, assessments, will
economically impact a substantial number of small savings associations,
this impact will not be significant. Therefore, pursuant to section
605(b) of the RFA, the OCC hereby certifies that this final rule will
not have a significant economic impact on a substantial number of small
entities. Accordingly, a final regulatory flexibility analysis is not
needed.
2. Paperwork Reduction Act
The rule contains several currently approved collections of
information under the Paperwork Reduction Act (44 U.S.C. 3501-
3520).\68\ The amendments adopted today do not introduce any new
collections of information into the rules, nor do they amend the rules
in a way that substantively modifies the collections of information
that OMB has approved. Therefore, no PRA submissions to OMB are
required, with the exception of non-substantive submissions to OMB to
adjust the number of respondents.
---------------------------------------------------------------------------
\68\ See OMB Control Nos. 1557-0014, 1557-0200 and 1557-0223.
---------------------------------------------------------------------------
3. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law
104-4 (2 U.S.C. 1532) (Unfunded Mandates Act), requires that an agency
prepare a budgetary impact statement before promulgating any rule
likely to result in a Federal mandate that may result in the
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. The OCC has determined that this final rule will not result in
expenditures by state, local, and Tribal governments, or by the private
sector, of $100 million or more in any one year. Accordingly, this
final rule is not subject to section 202 of the Unfunded Mandates Act.
List of Subjects
12 CFR Part 4
National banks, Savings associations, Organization and functions,
Reporting and recordkeeping requirements, Administrative practice and
procedure, Freedom of Information Act, Records, Non-public information,
Post-employment activities.
12 CFR Part 5
Administrative practice and procedure, National banks, Reporting
and recordkeeping requirements, Securities.
12 CFR Part 7
Computer technology, Credit, Insurance, Investments, National
banks, Savings associations, reporting and recordkeeping requirements,
Securities, Surety bonds.
12 CFR Part 8
National banks, Savings associations, Reporting and recordkeeping
requirements.
12 CFR Part 28
Foreign banking, National banks, Reporting and recordkeeping
requirements.
12 CFR Part 34
Mortgages, National banks, Savings associations, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, chapter I of title 12 of
the Code of Federal Regulations is amended as follows:
PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF
INFORMATION, CONTRACTING OUTREACH PROGRAM, POST-EMPLOYMENT
RESTRICTIONS
0
1. The authority citation for part 4 is revised to read as follows:
[[Page 43561]]
Authority: 12 U.S.C. 1, 12 U.S.C. 93a, 12 U.S.C. 5321, 12 U.S.C.
5412, and 12 U.S.C. 5414. Subpart A also issued under 5 U.S.C. 552.
Subpart B also issued under 5 U.S.C. 552; E.O. 12600 (3 CFR 1987
Comp., p. 235). Subpart C also issued under 5 U.S.C. 301, 552; 12
U.S.C. 161, 481, 482, 484(a), 1442, 1462a, 1463, 1464 1817(a)(2) and
(3), 1818(u) and (v), 1820(d)(6), 1820(k), 1821(c), 1821(o),
1821(t), 1831m, 1831p-1, 1831o, 1867, 1951 et seq., 2601 et seq.,
2801 et seq., 2901 et seq., 3101 et seq., 3401 et seq.; 15 U.S.C.
77uu(b), 78q(c)(3); 18 U.S.C. 641, 1905, 1906; 29 U.S.C. 1204; 31
U.S.C. 5318(g)(2), 9701; 42 U.S.C. 3601; 44 U.S.C. 3506, 3510.
Subpart D also issued under 12 U.S.C. 1833e. Subpart E is also
issued under 12 U.S.C. 1820(k).
0
2. Revise Sec. 4.2 to read as follows:
Sec. 4.2 Office of the Comptroller of the Currency.
The OCC is charged with assuring the safety and soundness of, and
compliance with laws and regulations, fair access to financial
services, and fair treatment of customers by, the institutions and
other persons subject to its jurisdiction. The OCC examines,
supervises, and regulates national banks, Federal branches and agencies
of foreign banks, and Federal savings associations to carry out this
mission. The OCC also issues rules and regulations applicable to state
savings associations.
Sec. 4.3 [Amended]
0
3. Amend Sec. 4.3 in the third sentence by adding ``a member of the
Financial Stability Oversight Council,'' after ``Federal Deposit
Insurance Corporation,''.
0
4. Revise Sec. 4.4 to read as follows:
Sec. 4.4 Washington office and Web site.
The Washington office of the OCC is the main office and
headquarters of the OCC. The Washington office directs OCC policy,
oversees OCC operations, and is responsible for the direct supervision
of certain national banks and Federal savings associations, including
the largest national banks and the largest Federal savings associations
(through the Large Bank Supervision Department); other national banks
and Federal savings associations requiring special supervision; and
Federal branches and agencies of foreign banks (through the Large Bank
Supervision Department). The Washington office is located at 250 E
Street, SW., Washington, DC 20219. The OCC's Web site is at http://www.occ.gov.
0
5. Amend Sec. 4.5 by:
0
a. Revising paragraph (a); and
0
b. In paragraph (b), adding ``and savings association'' after ``support
the bank''.
The revision reads as follows:
Sec. 4.5 District and field offices.
(a) District offices. Each district office of the OCC is
responsible for the direct supervision of the national banks and
Federal savings associations in its district, with the exception of the
national banks and Federal savings associations supervised by the
Washington office. The four district offices cover the United States,
Puerto Rico, the Virgin Islands, Guam, and the Northern Mariana
Islands. The office address and the geographical composition of each
district follows:
------------------------------------------------------------------------
Geographical
District Office address composition
------------------------------------------------------------------------
Northeastern District......... Office of the Connecticut,
Comptroller of Delaware, District
the Currency, of Columbia,
340 Madison northeast Kentucky,
Avenue, 5th Maine, Maryland,
Floor, New York, Massachusetts, New
NY 10173-0002. Hampshire, New
Jersey, New York,
North Carolina,
Pennsylvania, Puerto
Rico, Rhode Island,
South Carolina,
Vermont, the Virgin
Islands, Virginia,
and West Virginia.
Central District.............. Office of the Illinois, Indiana,
Comptroller of central and southern
the Currency, Kentucky, Michigan,
One Financial Minnesota, eastern
Place, Suite Missouri, North
2700, 440 South Dakota, Ohio, and
LaSalle Street, Wisconsin.
Chicago, IL
60605.
Southern District............. Office of the Alabama, Arkansas,
Comptroller of Florida, Georgia,
the Currency, Louisiana,
500 North Akard Mississippi,
Street, Suite Oklahoma, Tennessee,
1600, Dallas, TX and Texas.
75201.
Western District.............. Office of the Alaska, Arizona,
Comptroller of California,
the Currency, Colorado, Hawaii,
1225 17th Idaho, Iowa, Kansas,
Street, Suite western Missouri,
300, Denver, CO Montana, Nebraska,
80202. Nevada, New Mexico,
Northern Mariana
Islands, Oregon,
South Dakota, Utah,
Washington, Wyoming,
and Guam.
------------------------------------------------------------------------
* * * * *
0
6. Amend Sec. 4.6 by:
0
a. Revising the section heading;
0
b. In paragraph (a):
0
i. Adding in the first sentence ``and Federal savings associations''
after ``examines national banks''; ``(with respect to national banks)
and 1463(a)(1) and 1464 (with respect to Federal savings
associations)'' after ``12 U.S.C. 481''; and ``(with respect to
national banks and Federal savings associations)'' after ``12 U.S.C.
1820(d)''; and
0
ii. Adding in the second sentence ``and Federal savings association''
after ``every national bank''.
0
c. In paragraph (b):
0
i. Adding in the introductory text ``or a Federal savings association''
after ``a national bank'';
0
ii. Adding in paragraphs (b)(1), (b)(2), (b)(4), and (b)(5) ``or
Federal savings association'' after ``bank'' each time it appears; and
0
iii. In paragraph (b)(3) removing ``, the OCC'' in the introductory
text and revising paragraphs (b)(3)(i) and (b)(3)(ii); and
0
iv. In paragraph (b)(4), adding ``, OTS'' after ``OCC''.
0
d. In paragraph (c), adding ``or Federal savings association'' after
``national bank''.
The revisions read as follows:
Sec. 4.6 Frequency of examination of national banks and Federal
savings associations.
* * * * *
(b) * * *
(3) * * *
(i) The bank or Federal savings association was assigned a rating
of 1 or 2 for management as part of the bank's or association's rating
under the Uniform Financial Institutions Rating System; and
(ii) The bank or Federal savings association was assigned a
composite rating of 1 or 2 under the Uniform Financial Institutions
Rating System.
* * * * *
[[Page 43562]]
Sec. 4.7 [Amended]
0
7. In paragraph (a) of Sec. 4.7, remove the phrase ``(h) and (i)'' and
add in its place ``(g) and (h)''.
0
8. Amend Sec. 4.11 by:
0
a. In paragraph (a), removing ``industry'' and adding in its place
``and savings association industries'' after the word ``banking'';
0
b. Adding paragraph (b)(4).
The addition reads as follows:
Sec. 4.11 Purpose and scope.
* * * * *
(b) * * *
(4) This subpart does not apply to FOIA requests filed with the
Office of Thrift Supervision (OTS) before July 21, 2011. These requests
are subject to the rules of the OTS in effect on July 20, 2011.
0
9. Amend Sec. 4.12 by:
0
a. Removing ``and'' at the end of paragraph (b)(8) and removing the
period and adding ``; and'' at the end of paragraph (b)(9); and
0
b. Adding paragraph (10).
The addition reads as follows:
Sec. 4.12 Information available under the FOIA.
* * * * *
(b) * * *
(10) Any OTS information similar to that listed in paragraphs
(b)(1) through (9) of this section, to the extent this information is
in the possession of the OCC.
0
10. Amend Sec. 4.14 by:
0
a. Adding in paragraph (a)(7), footnote 1, first sentence, ``and
Federal savings associations'' after ``banks'' and removing ``, such as
the Consolidated Report of Condition and Income (FFIEC 031-034),'';
0
b. Removing the phrase ``part 11 or 16'' in paragraph (a)(9) and adding
in its place the phrase ``parts 11, 16, 194 or 197'';
0
c. Removing ``and'' at the end of paragraph (a)(10);
0
d. Removing the period at the end of paragraph (a)(11) and adding in
its place ``; and'';
0
e. Adding paragraph (a)(12); and
0
f. Revising paragraph (c).
The additions and revision read as follows:
Sec. 4.14 Public inspection and copying.
(a) * * *
(12) Any OTS information similar to that listed in paragraphs
(a)(1) through (a)(12) of this section, to the extent this information
is in the possession of the OCC.
* * * * *
(c) Addresses. The information described in paragraphs (a)(1)
through (10) and (a)(11) of this section is available from the
Disclosure Officer, Communications Division, Office of the Comptroller
of the Currency, 250 E Street, SW., Washington, DC 20219. The
information described in paragraph (a)(11) of this section in the case
of both banks and Federal savings associations is available from the
Licensing Manager at the appropriate district office at the address
listed in Sec. 4.5(a), or in the case of banks and savings
associations supervised by Large Bank Supervision, from the Large Bank
Licensing Expert, Licensing Department, Office of the Comptroller of
the Currency, 250 E Street, SW., Washington, DC 20219.
Sec. 4.15 [Amended]
0
11. Amend Sec. 4.15 by:
0
a. Adding in paragraph (b)(1) ``through the OCC's FOIA Web portal at
https://appsec.occ.gov/publicaccesslink/palMain.aspx or'' after ``must
submit the request or appeal''; and
0
b. Removing in paragraph (c)(2) ``OCC's Director of Communications or
that person's'' and adding in its place ``Comptroller or the
Comptroller's''.
Sec. 4.16 [Amended]
0
12. Amend Sec. 4.16:
0
a. In paragraph (b)(1)(i) introductory text by adding ``or to the
Federal Home Loan Bank Board, the predecessor of the OTS,'' after
``OCC'';
0
b. In paragraph (b)(1)(i)(C) by removing ``OCC'' and adding ``from the
OCC or the Federal Home Loan Bank Board, the predecessor of the OTS''
after ``confidentiality'';
0
c. In paragraph (b)(1)(ii) introductory text by adding ``or to the OTS
(or the Federal Home Loan Bank Board, its predecessor agency)'' after
``OCC'';
0
d. In paragraph (b)(1)(ii)(B) by adding ``or the OTS (or the Federal
Home Loan Bank Board, its predecessor agency)'' after ``OCC''; and
0
e. In paragraph (b)(2)(iv) by adding ``or the OTS (or the Federal Home
Loan Bank Board, its predecessor agency)'' after ``OCC''.
0
13. Revise Sec. 4.18 to read as follows:
Sec. 4.18 How to track a FOIA request.
(a) Tracking number. (1) Internet requests. The OCC will issue a
tracking number to all FOIA requesters automatically upon receipt of
the request (as described in Sec. 4.15(g)) by the OCC's Communications
Department via the OCC's Freedom of Information Request Portal, https://appsec.occ.gov/publicaccesslink/palMain.aspx. The tracking number will
be sent via electronic mail to the requester.
(2) If a requester does not have Internet access. The OCC will
issue a tracking number to FOIA requesters without Internet access
within 5 days of the receipt of the request (as described in Sec.
4.15(g)) in the OCC's Communications Department. The OCC will mail the
tracking number to the requester's physical address, as provided in the
FOIA request.
(b) Status of request. FOIA requesters may track the progress of
their requests via the OCC's Freedom of Information Request Portal,
https://appsec.occ.gov/publicaccesslink/palMain.aspx. Requesters
without Internet access may continue to contact the Disclosure Officer,
Communications Division, Office of the Comptroller of the Currency, at
(202) 874-4700 to check the status of their FOIA request(s).
0
14. Amend Sec. 4.31 by:
0
a. Adding in paragraph (a)(5) ``Federal savings associations,'' after
``national banks,'';
0
b. Adding in paragraph (b)(3) ``or state savings association'' after
``state bank''; and
0
c. Adding paragraph (b)(5).
The addition reads as follows:
Sec. 4.31 Purpose and scope.
* * * * *
(b) * * *
(5) This subpart does not apply to requests for non-public
information filed with the Office of Thrift Supervision (OTS) before
July 21, 2011. These requests are subject to the rules of the OTS in
effect on July 20, 2011.
0
15. Amend Sec. 4.32 by:
0
a. Revising paragraph (b)(1)(i);
0
b. In paragraph (b)(1)(ii) adding ``or the OTS'' after ``OCC'',
removing ``the OCC's'', and adding ``either agency's'' after ``with'';
0
c. Adding in paragraph (b)(1)(iii) ``or OTS'' after ``compiled by the
OCC'';
0
d. Revising paragraph (b)(1)(v);
0
e. Adding in paragraph (b)(1)(vi) ``, Federal savings associations, and
savings and loan holding companies'' after ``national banks'';
0
f. Removing the second sentence in paragraph (b)(2); and
0
g. Revising paragraph (e).
The revisions read as follows:
Sec. 4.32 Definitions.
* * * * *
(b) * * *
(1) * * *
(i) A record created or obtained:
(A) By the OCC in connection with the OCC's performance of its
responsibilities, such as a record concerning supervision, licensing,
regulation, and examination of a national bank, a Federal savings
[[Page 43563]]
association, a bank holding company, a savings and loan holding
company, or an affiliate; or
(B) By the OTS in connection with the OTS's performance of its
responsibilities, such as a record concerning supervision, licensing,
regulation, and examination of a Federal savings association, a savings
and loan holding company, or an affiliate;
* * * * *
(v) Testimony from, or an interview with, a current or former OCC
employee, officer, or agent or a former OTS employee, officer, or agent
concerning information acquired by that person in the course of his or
her performance of official duties with the OCC or OTS or due to that
person's official status at the OCC or OTS; and
* * * * *
(e) Supervised entity includes a national bank or Federal savings
association, a subsidiary of a national bank or Federal savings
association, or a Federal branch or agency of a foreign bank licensed
by the OCC as defined under 12 CFR 28.11(g) and (h), or any other
entity supervised by the OCC.
* * * * *
0
16. Revise Sec. 4.35(a)(5) to read as follows:
Sec. 4.35 Consideration of requests.
(a) * * *
(5) Notice to subject national banks and Federal savings
associations. Following receipt of a request for non-public OCC
information, the OCC generally notifies the national bank or Federal
savings association that is the subject of the requested information,
unless the OCC, in its discretion, determines that to do so would
advantage or prejudice any of the parties in the matter at issue.
* * * * *
0
17. Amend Sec. 4.37 by:
0
a. In paragraph (a):
0
i. Adding in the paragraph heading ``; former OTS employees or agents''
after ``former OCC employees or agents'';
0
ii. Adding ``or former OTS employee or agent,'' after ``former OCC
employee or agent'' each time that phrase appears;
0
iii. Adding at the end of paragraph (a)(2)(ii), ``and former OTS
employees or agents'';
0
b. In paragraph (b):
0
i. Adding in paragraph (b)(1)(i) introductory text ``Federal savings
association,'' after ``national bank,'';
0
ii. Revising paragraph (b)(2) introductory text;
0
iii. Adding at the end of paragraph (b)(2)(ii) ``or Federal savings
association'';
0
iv. Adding in paragraph (b)(3) introductory text ``Federal savings
association,'' after ``national bank,''; and
0
c. In paragraph (c), adding in the first sentence ``and state savings
association'' after ``state bank''.
The revision reads as follows:
Sec. 4.37 Persons and entities with access to OCC information;
prohibition on dissemination.
* * * * *
(b) * * *
(2) Exception for national banks and Federal savings associations.
When necessary or appropriate for business purposes, a national bank,
Federal savings association, or holding company, or any director,
officer, or employee thereof, may disclose non-public OCC information,
including information contained in, or related to, OCC reports of
examination, to a person or organization officially connected with the
bank or Federal savings association as officer, director, employee,
attorney, auditor, or independent auditor. A national bank, Federal
savings association, or holding company or a director, officer, or
employee thereof, may also release non-public OCC information to a
consultant under this paragraph if the consultant is under a written
contract to provide services to the bank or Federal savings association
and the consultant has a written agreement with the bank or Federal
savings association in which the consultant:
* * * * *
Sec. 4.39 [Amended]
0
18. In Sec. 4.39(a), add ``OCC or OTS'' after ``former''.
Appendix A to Subpart C of Part 4 [Amended]
0
19. In Appendix A to subpart C of part 4:
0
a. In I. Model Stipulation, second paragraph, add ``, 1463(a)(1),
1464(a)(1), and 1464(d)(1)(B)(i)'' after 12 U.S.C. 481''; and
0
b. In II. Model Protective Order, add ``, 1463(a)(1), 1464(a)(1), and
1464(d)(1)(B)(i)'' after 12 U.S.C. 481'' in the second paragraph.
0
20. Amend Sec. 4.73 by:
0
a. In the definition of ``Consultant'':
0
i. Adding ``savings association,'' after ``national bank,'';
0
ii. Adding ``savings and loan holding company,'' after ``bank holding
company,'' each time it appears; and
0
iii. Adding ``savings association,'' after ``such bank,'';
0
b. In the definition of ``Control'' adding ``or in section 10 of the
Home Owners' Loan Act (12 U.S.C. 1467a), as applicable under the
circumstances'' after ``1841(a))'';
0
c. Adding definitions of ``Savings association'' and ``Savings and loan
holding company'' in alphabetical order; and
0
d. Revising the definition of ``Senior examiner''.
The additions and revision read as follows:
Sec. 4.73 Definitions.
* * * * *
Savings association has the meaning given in section 3 of the FDI
Act (12 U.S.C. 1813(b)(1)).
Savings and loan holding company means any company that controls a
savings association or any other company that is a savings and loan
holding company (as provided in section 10 of the Home Owners' Loan Act
(12 U.S.C. 1467a)).
Senior examiner. For purposes of this subpart, an officer or
employee of the OCC is considered to be the ``senior examiner'' for a
particular national bank or savings association if--
(1) The officer or employee has been authorized by the OCC to
conduct examinations on behalf of the OCC or had been authorized by the
Office of Thrift Supervision (OTS) to conduct examinations on behalf of
the OTS;
(2) The officer or employee has been assigned continuing, broad,
and lead responsibility for examining the national bank or savings
association; and
(3) The officer's or employee's responsibilities for examining the
national bank or savings association--
(i) Represent a substantial portion of the officer's or employee's
assigned responsibilities; and
(ii) Require the officer or employee to interact routinely with
officers or employees of the national bank or savings association, or
its affiliates.
0
21. Effective July 21, 2012, in Sec. 4.73, revise the definition of
Senior examiner to read as follows:
Sec. 4.73 Definitions.
* * * * *
Senior examiner. For purposes of this subpart, an officer or
employee of the OCC is considered to be the ``senior examiner'' for a
particular national bank or savings association if--
(1) The officer or employee has been authorized by the OCC to
conduct examinations on behalf of the OCC;
(2) The officer or employee has been assigned continuing, broad,
and lead responsibility for examining the national bank or savings
association; and
[[Page 43564]]
(3) The officer's or employee's responsibilities for examining the
national bank or savings association--
(i) Represent a substantial portion of the officer's or employee's
assigned responsibilities; and
(ii) Require the officer or employee to interact routinely with
officers or employees of the national bank or savings association, or
its affiliates.''
0
22. Revise Sec. 4.74 to read as follows:
Sec. 4.74 One-year post-employment restrictions.
An officer or employee of the OCC who serves, or former officer or
employee of the OTS who served, as the senior examiner of a national
bank or savings association for two or more months during the last
twelve months of such individual's employment with the OCC or OTS may
not, within one year after leaving the employment of the OCC or OTS,
knowingly accept compensation as an employee, officer, director or
consultant from the national bank, savings association, or any company
(including a bank holding company or savings and loan holding company)
that controls the national bank or savings association.
0
23. Effective July 21, 2012, revise Sec. 4.74 to read as follows:
Sec. 4.74 One-year post-employment restrictions.
An officer or employee of the OCC who serves as the senior examiner
of a national bank or savings association for two or more months during
the last twelve months of such individual's employment with the OCC may
not, within one year after leaving the employment of the OCC, knowingly
accept compensation as an employee, officer, director or consultant
from the national bank, savings association, or any company (including
a bank holding company or savings and loan holding company) that
controls the national bank or savings association.
0
24. Revise Sec. 4.75 to read as follows:
Sec. 4.75 Waivers.
The post-employment restrictions set forth in section 10(k) of the
FDI Act (12 U.S.C. 1820(k)) and Sec. 4.74 do not apply to any officer
or employee of the OCC, or any former officer or employee of the OCC or
OTS, if the Comptroller of the Currency certifies, in writing and on a
case-by-case basis, that granting the individual a waiver of the
restrictions would not affect the integrity of the OCC's supervisory
program.
0
25. Effective July 21, 2012, revise Sec. 4.75 to read as follows:
Sec. 4.75 Waivers.
The post-employment restrictions set forth in section 10(k) of the
FDI Act (12 U.S.C. 1820(k)) and Sec. 4.74 do not apply to any officer
or employee of the OCC, or any former officer or employee of the OCC,
if the Comptroller of the Currency certifies, in writing and on a case-
by-case basis, that granting the individual a waiver of the
restrictions would not affect the integrity of the OCC's supervisory
program.
0
26. Amend Sec. 4.76 by revising paragraph (a) to read as follows:
Sec. 4.76 Penalties.
(a) Penalties under section 10(k) of FDI Act (12 U.S.C. 1820(k)).
If a senior examiner of a national bank or savings association, after
leaving the employment of the OCC or OTS, accepts compensation as an
employee, officer, director, or consultant from that bank, savings
association, or any company (including a bank holding company or
savings and loan holding company) that controls that bank or savings
association in violation of Sec. 4.74, then the examiner shall, in
accordance with section 10(k)(6) of the FDI Act (12 U.S.C. 1820(k)(6)),
be subject to one of the following penalties--
(1) An order--
(i) Removing the individual from office or prohibiting the
individual from further participation in the affairs of the relevant
national bank, savings association, bank holding company, savings and
loan holding company, or other company that controls such institution
for a period of up to five years; and
(ii) Prohibiting the individual from participating in the affairs
of any insured depository institution for a period of up to five years;
or
(2) A civil monetary penalty of not more than $250,000.
* * * * *
0
27. Effective July 21, 2012, amend Sec. 4.76 by revising paragraph (a)
to read as follows:
Sec. 4.76 Penalties.
(a) Penalties under section 10(k) of FDI Act (12 U.S.C. 1820(k)).
If a senior examiner of a national bank or savings association, after
leaving the employment of the OCC, accepts compensation as an employee,
officer, director, or consultant from that bank, savings association,
or any company (including a bank holding company or savings and loan
holding company) that controls that bank or savings association in
violation of Sec. 4.74, then the examiner shall, in accordance with
section 10(k)(6) of the FDI Act (12 U.S.C. 1820(k)(6)), be subject to
one of the following penalties--
(1) An order--
(i) Removing the individual from office or prohibiting the
individual from further participation in the affairs of the relevant
national bank, savings association, bank holding company, savings and
loan holding company, or other company that controls such institution
for a period of up to five years; and
(ii) Prohibiting the individual from participating in the affairs
of any insured depository institution for a period of up to five years;
or
(2) A civil monetary penalty of not more than $250,000.
* * * * *
PART 5--RULES, POLICIES, AND PROCEDURES FOR CORPORATE ACTIVITIES
0
28. The authority citation for part 5 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 93a, 215a-2, 215a-3, 481, and
section 5136A of the Revised Statutes (12 U.S.C. 24a).
0
29. Amend Sec. 5.34 by revising paragraph (a) and the first sentence
of paragraph (e)(3) to read as follows:
Sec. 5.34 Operating subsidiaries.
(a) * * *
Authority. 12 U.S.C. 24 (Seventh), 24a, 25b, 93a, 3101 et seq.
* * * * *
(e) * * *
(3) Examination and supervision. An operating subsidiary conducts
activities authorized under this section pursuant to the same
authorization, terms and conditions that apply to the conduct of such
activities by its parent national bank, except as otherwise provided
with respect to the application of state law under sections 1044(e) and
1045 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(12 U.S.C. 25b). * * *
* * * * *
0
30. Amend Sec. 5.50 by redesignating paragraph (f)(6) as paragraph
(f)(7) and adding a new paragraph (f)(6) to read as follows:
Sec. 5.50 Change in bank control; reporting of stock loans.
* * * * *
(f) * * *
(6) Disapproval of notice involving credit card banks or trust
banks. (i) In general. The OCC shall disapprove a notice if the
proposed change in control occurs before July 21, 2013 and would result
in the direct or indirect control of a credit card bank or trust bank,
as
[[Page 43565]]
defined in section 2(c)(2)(F) and (D) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841(c)(2)(F) and (D)), by a commercial firm. For
purposes of this paragraph a company is a ``commercial firm'' if the
annual gross revenues derived by the company and all of its affiliates
from activities that are financial in nature (as defined in section
4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) and,
if applicable, from the ownership or control of one or more insured
depository institutions, represent less than 15 percent of the
consolidated annual gross revenues of the company.
(ii) Exception to disapproval. Paragraph (f)(6)(i) of this section
shall not apply to a proposed change in control of a credit card bank
or trust bank that:
(A)(1) Is in danger of default, as determined by the OCC;
(2) Results from the merger or whole acquisition of a commercial
firm that directly or indirectly controls the credit card bank or trust
bank in a bona fide merger with or acquisition by another commercial
firm, as determined by the OCC; or
(3) Results from the acquisition of voting shares of a publicly
traded company that controls a credit card bank or trust bank, if,
after the acquisition, the acquiring shareholder (or group of
shareholders acting in concert) holds less than 25 percent of any class
of the voting shares of the company; and
(B) Has obtained all regulatory approvals otherwise required for
such change of control under any applicable Federal or state law,
including review pursuant to section 7(j) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(j)) and 12 CFR 5.50.
* * * * *
Sec. 5.50 [Amended]
0
31. Effective July 21, 2013, amend Sec. 5.50 by removing paragraph
(f)(6) and redesignating paragraph (f)(7) as paragraph (f)(6).
PART 7--BANK ACTIVITIES AND OPERATIONS
0
32. The authority citation for part 7 is revised to read as follows:
Authority: 12 U.S.C. 1 et seq., 25b, 71, 71a, 92, 92a, 93, 93a,
371, 371a, 481, 484, 1465, 1818 and 5412(b)(2)(B).
Subpart D--Preemption
0
33. Amend Sec. 7.4000 by:
0
a. Revising the first sentence of paragraph (a)(1);
0
b. Revising paragraph (a)(2)(iv);
0
c. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d),
respectively;
0
d. Adding a new paragraph (b); and
0
e. Revising newly designated paragraph (c)(2).
The additions and revisions read as follows:
Sec. 7.4000 Visitorial powers.
(a) * * *
(1) Under 12 U.S.C. 484, only the OCC or an authorized
representative of the OCC may exercise visitorial powers with respect
to national banks. * * *
(2) * * *
(iv) Enforcing compliance with any applicable Federal or state laws
concerning those activities, including through investigations that seek
to ascertain compliance through production of non-public information by
the bank, except as otherwise provided in paragraphs (a), (b), and (c)
of this section.
* * * * *
(b) Exclusion. In accordance with the decision of the Supreme Court
in Cuomo v. Clearing House Assn., L. L. C., 129 S. Ct. 2710 (2009), an
action against a national bank in a court of appropriate jurisdiction
brought by a state attorney general (or other chief law enforcement
officer) to enforce an applicable law against a national bank and to
seek relief as authorized by such law is not an exercise of visitorial
powers under 12 U.S.C. 484.
(c) * * *
(2) Exception for courts of justice. National banks are subject to
such visitorial powers as are vested in the courts of justice. This
exception pertains to the powers inherent in the judiciary.
* * * * *
Sec. 7.4006 [Removed and Reserved]
0
34. Remove and reserve Sec. 7.4006.
0
35. Amend Sec. 7.4007 by:
0
a. Removing paragraph (b)(1);
0
b. Redesignating paragraph (b)(2) introductory text as paragraph (b)
introductory text;
0
c. Redesignating former paragraphs (b)(2)(i) through (vii) as
paragraphs (b)(1) through (7), respectively;
0
d. Revising paragraph (c) introductory text;
0
e. Revising footnote 5 in paragraph (c)(3); and
0
f. Revising paragraph (c)(8).
The revisions read as follows:
Sec. 7.4007 Deposit-taking.
* * * * *
(c) State laws that are not preempted. State laws on the following
subjects are not inconsistent with the deposit-taking powers of
national banks and apply to national banks to the extent consistent
with the decision of the Supreme Court in Barnett Bank of Marion
County, N.A. v. Nelson, Florida Insurance Commissioner, et al. 517 U.S.
25 (1996):
* * * * *
(3) Criminal law; \5\
\5\ But see the distinction drawn by the Supreme Court in Easton
v. Iowa, 188 U.S. 220, 238 (1903), where the Court stated that
``[u]ndoubtedly a state has the legitimate power to define and
punish crimes by general laws applicable to all persons within its
jurisdiction * * *. But it is without lawful power to make such
special laws applicable to banks organized and operating under the
laws of the United States.'' Id. at 239 (holding that Federal law
governing the operations of national banks preempted a state
criminal law prohibiting insolvent banks from accepting deposits).
* * * * *
(8) Any other law that the OCC determines to be applicable to
national banks in accordance with the decision of the Supreme Court in
Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al. 517 U.S. 25 (1996), or that is made applicable by
Federal law.
0
36. Amend Sec. 7.4008 by:
0
a. Removing paragraph (d)(1);
0
b. Redesignating paragraph (d)(2) introductory text as paragraph (d)
introductory text;
0
c. Redesignating former paragraphs (d)(2)(i) through (x) as paragraphs
(d)(1) through (10), respectively; and
0
d. Revising paragraphs (e) introductory text, footnote 7 in paragraph
(e)(3), and paragraph (e)(8).
The revisions read as follows:
Sec. 7.4008 Lending.
* * * * *
(e) State laws that are not preempted. State laws on the following
subjects are not inconsistent with the non-real estate lending powers
of national banks and apply to national banks to the extent consistent
with the decision of the Supreme Court in Barnett Bank of Marion
County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517
U.S. 25 (1996):
* * * * *
(3) Criminal law; \7\
\7\ See supra note 5 regarding the distinction drawn by the
Supreme Court in Easton v. Iowa, 188 U.S. 220, 238 (1903).
* * * * *
(8) Any other law that the OCC determines to be applicable to
national banks in accordance with the decision of the Supreme Court in
Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al., 517 U.S.
[[Page 43566]]
25 (1996) or that is made applicable by Federal law.
Sec. 7.4009 [Removed and Reserved]
0
37. Remove and reserve Sec. 7.4009.
0
38. Add Sec. 7.4010 to read as follows:
Sec. 7.4010 Applicability of state law and visitorial powers to
Federal savings associations and subsidiaries.
(a) In accordance with section 1046 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 25b), Federal savings
associations and their subsidiaries shall be subject to the same laws
and legal standards, including regulations of the OCC, as are
applicable to national banks and their subsidiaries, regarding the
preemption of state law.
(b) In accordance with section 1047 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 1465), the provisions of
section 5136C(i) of the Revised Statutes regarding visitorial powers
apply to Federal savings associations and their subsidiaries to the
same extent and in the same manner as if they were national banks or
national bank subsidiaries.
PART 8--ASSESSMENT OF FEES
0
39. The authority citation for part 8 is revised to read as follows:
Authority: 12 U.S.C. 16, 93a, 481, 482, 1467, 1831c, 1867, 3102,
3108, and 5412(b)(1)(B); and 15 U.S.C. 78c and 78l.
0
40. Section 8.1 is revised to read as follows:
Sec. 8.1 Scope and application.
The assessments contained in this part are made pursuant to the
authority contained in 12 U.S.C. 16, 93a, 481, 482, 1467, 1831c, 1867,
3102, and 3108; and 15 U.S.C. 78c and 78l.
0
41. Section 8.2 is revised to read as follows:
Sec. 8.2 Semiannual assessment.
(a) Each national bank and each Federal savings association shall
pay to the Comptroller of the Currency a semiannual assessment fee, due
by March 31 and September 30 of each year, for the six month period
beginning on January 1 and July 1 before each payment date. The
Comptroller of the Currency will calculate the amount due under this
section and provide a notice of assessments to each national bank and
each Federal savings association no later than 7 business days prior to
March 31 and September 30 of each year. The semiannual assessment will
be calculated as follows:
----------------------------------------------------------------------------------------------------------------
If the bank's or Federal savings association's total The semiannual assessment is:
assets (consolidated domestic and foreign subsidiaries) --------------------------------------------------------
are: This amount--base
-------------------------------------------------------- amount Plus marginal Of excess over--
Over-- But not over-- rates
----------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
----------------------------------------------------------------------------------------------------------------
Million Million Million
(dollars) (dollars) (dollars) (dollars)
----------------------------------------------------------------------------------------------------------------
0................................ 2................... X1 0
2................................ 20.................. X2 Y1 2
20............................... 100................. X3 Y2 20
100.............................. 200................. X4 Y3 100
200.............................. 1,000............... X5 Y4 200
1,000............................ 2,000............... X6 Y5 1,000
2,000............................ 6,000............... X7 Y6 2,000
6,000............................ 20,000.............. X8 Y7 6,000
20,000........................... 40,000.............. X9 Y8 20,000
40,000........................... 250,000............. X10 Y9 40,000
250,000.......................... .................... X11 Y10 250,000
----------------------------------------------------------------------------------------------------------------
(1) Every national bank and every Federal savings association falls
into one of the asset-size brackets denoted by Columns A and B. A
bank's or Federal savings association's semiannual assessment is
composed of two parts. The first part is the calculation of a base
amount of the assessment, which is computed on the assets of the bank
or Federal savings association up to the lower endpoint (Column A) of
the bracket in which it falls. This base amount of the assessment is
calculated by the OCC in Column C.
(2) The second part is the calculation of assessments due on the
remaining assets of the bank or Federal savings association in excess
of Column E. The excess is assessed at the marginal rate shown in
Column D.
(3) The total semiannual assessment is the amount in Column C, plus
the amount of the bank's or Federal savings association's assets in
excess of Column E times the marginal rate in Column D: Assessments =
C+[(Assets-E) x D].
(4) Each year, the OCC may index the marginal rates in Column D to
adjust for the percent change in the level of prices, as measured by
changes in the Gross Domestic Product Implicit Price Deflator (GDPIPD)
for each June-to-June period. The OCC may at its discretion adjust
marginal rates by amounts less than the percentage change in the
GDPIPD. The OCC will also adjust the amounts in Column C to reflect any
change made to the marginal rate.
(5) The specific marginal rates and complete assessment schedule
will be published in the ``Notice of Comptroller of the Currency
Fees,'' provided for at Sec. 8.8 of this part. Each semiannual
assessment is based upon the total assets shown in the national bank's
or Federal savings association's most recent ``Consolidated Reports of
Condition and Income'' (Call Report) or ``Thrift Financial Report,'' as
appropriate, preceding the payment date. Each bank or Federal savings
association subject to the jurisdiction of the Comptroller of the
Currency on the date of the second or fourth quarterly Call Report or
Thrift Financial Report, as appropriate, required by the Office under
12 U.S.C. 161 and 12 U.S.C. 1464(v) is subject to the full assessment
for the next six month period.
(6)(i) Notwithstanding any other provision of this part, the OCC
may reduce the semiannual assessment for each non-lead bank or non-lead
Federal savings association by a percentage that it will specify in the
``Notice of Comptroller of the Currency Fees'' described in Sec. 8.8.
(ii) For purposes of this paragraph (a)(6):
(A) Lead bank or lead Federal savings association means the largest
national bank or Federal savings association
[[Page 43567]]
controlled by a company, based on a comparison of the total assets held
by each national bank or Federal savings association controlled by that
company as reported in each bank's or Federal savings association's
Call Report or Thrift Financial Report, as appropriate, filed for the
quarter immediately preceding the payment of a semiannual assessment.
(B) Non-lead bank or non-lead Federal savings association means a
national bank or Federal savings association that is not the lead bank
or lead Federal savings association controlled by a company that
controls two or more national banks or Federal savings associations.
(C) Control and company with respect to national banks have the
same meanings as these terms have in sections 2(a)(2) and 2(b),
respectively, of the Bank Holding Company Act of 1956 (12 U.S.C.
1841(a)(2) and (b)).
(D) Control and company with respect to Federal savings
associations have the same meanings as these terms have in section
10(a) of the Home Owners' Loan Act (12 U.S.C. 1467a(a).
(b)(1) Each Federal branch and each Federal agency shall pay to the
Comptroller of the Currency a semiannual assessment fee, due by March
31 and September 30 of each year, for the six month period beginning on
January 1 and July 1 before each payment date. The Comptroller of the
Currency will calculate the amount due under this section and provide a
notice of assessments to each national bank no later than 7 business
days prior to March 31 and September 30 of each year.
(2) The amount of the semiannual assessment paid by each Federal
branch and Federal agency shall be computed at the same rate as
provided in the Table in 12 CFR 8.2(a); however, only the total
domestic assets of the Federal branch or agency shall be subject to
assessment.
(3) Each semiannual assessment of each Federal branch or agency is
based upon the total assets shown in the Federal branch's or agency's
Call Report most recently preceding the payment date. Each Federal
branch or agency subject to the jurisdiction of the OCC on the date of
the second and fourth Call Reports is subject to the full assessment
for the next six-month period.
(4)(i) Notwithstanding any other provision of this part, the OCC
may reduce the semiannual assessment for each non-lead Federal branch
or agency by an amount that it will specify in the ``Notice of
Comptroller of the Currency Fees'' described in Sec. 8.8.
(ii) For purposes of this paragraph (b)(4):
(A) Lead Federal branch or agency means the largest Federal branch
or agency of a foreign bank, based on a comparison of the total assets
held by each Federal branch or agency of that foreign bank as reported
in each Federal branch's or agency's Call Report filed for the quarter
immediately preceding the payment of a semiannual assessment.
(B) Non-lead Federal branch or agency means a Federal branch or
agency that is not the lead Federal branch or agency of a foreign bank
that controls two or more Federal branches or agencies.
(c) Additional assessment for independent credit card banks and
independent credit card Federal savings associations--(1) General rule.
In addition to the assessment calculated according to paragraph (a) of
this section, each independent credit card bank and independent credit
card Federal savings association will pay an assessment based on
receivables attributable to credit card accounts owned by the bank or
Federal savings association. This assessment will be computed by adding
to its asset-based assessment an additional amount determined by its
level of receivables attributable. The dollar amount of the additional
assessment will be published in the ``Notice of Comptroller of the
Currency of Fees,'' described at Sec. 8.8.
(2) Independent credit card banks and independent credit card
Federal savings associations affiliated with full-service national
banks or Federal savings associations. The OCC will assess an
independent credit card bank and an independent credit card Federal
savings association in accordance with paragraph (c)(1) of this
section, notwithstanding that the bank or Federal savings association
is affiliated with a full-service national bank or full service Federal
savings association, if the OCC concludes that the affiliation is
intended to evade this part.
(3) Definitions. For purposes of this paragraph (c), the following
definitions apply:
(i) Affiliate, with respect to national banks, has the same meaning
as this term has in 12 U.S.C. 221a(b).
(ii) Affiliate, with respect to Federal savings associations, has
the same meaning as in 12 U.S.C. 1462(9).
(iii) Engaged primarily in card operations means a bank described
in section 2(c)(2)(F) of the Bank Holding Company Act (12 U.S.C.
1841(c)(2)(F)) or a bank or a Federal savings association whose ratio
of total gross receivables attributable to the bank's or Federal
savings association's balance sheet assets exceeds 50%.
(iv) Full-service national bank is a national bank that generates
more than 50% of its interest and non-interest income from activities
other than credit card operations or trust activities and is authorized
according to its charter to engage in all types of permissible banking
activities.
(v) Full-service Federal savings association is a Federal savings
association that generates more than 50% of its interest and non-
interest income from activities other than credit card operations or
trust activities and is authorized according to its charter to engage
in all types of activities permissible for Federal savings
associations.
(vi) Independent credit card bank is a national bank that engages
primarily in credit card operations and is not affiliated with a full-
service national bank.
(vii) Independent credit card Federal savings association is a
Federal savings association that engages primarily in credit card
operations and is not affiliated with a full-service Federal savings
association.
(viii) Receivables attributable is the total amount of outstanding
balances due on credit card accounts owned by an independent credit
card bank or an independent credit card Federal savings association
(the receivables attributable to those accounts) on the last day of the
assessment period, minus receivables retained on the bank's or Federal
savings association's balance sheet as of that day.
(4) Reports of receivables attributable. Independent credit card
banks and independent credit card Federal savings associations will
report receivables attributable data to the OCC semiannually at a time
specified by the OCC.
(d) Surcharge based on the condition of the bank or Federal savings
association. Subject to any limit that the OCC prescribes in the
``Notice of Comptroller of the Currency Fees,'' the OCC shall apply a
surcharge to the semiannual assessment computed in accordance with
paragraphs (a) through (c) of this section. This surcharge will be
determined by multiplying the semiannual assessment computed in
accordance with paragraphs (a) through (c) of this section by--
(1) 1.5, in the case of any bank or Federal savings association
that receives a composite rating of 3 under the Uniform Financial
Institutions Rating System (UFIRS) and any Federal branch or agency
that receives a composite rating of 3 under the ROCA rating system
(which rates risk management, operational controls, compliance, and
[[Page 43568]]
asset quality) at its most recent examination; and
(2) 2.0, in the case of any bank or Federal savings association
that receives a composite UFIRS rating of 4 or 5 and any Federal branch
or agency that receives a composite rating of 4 or 5 under the ROCA
rating system at its most recent examination.
0
42. Section 8.6 is revised to read as follows:
Sec. 8.6 Fees for special examinations and investigations.
(a) Fees. Pursuant to the authority contained in 12 U.S.C. 16, 481,
482, 1467, and 1831c, the Office of the Comptroller of the Currency may
assess a fee for:
(1) Examining the fiduciary activities of national banks and
Federal savings associations and related entities;
(2) Conducting special examinations and investigations of national
banks, Federal branches or agencies of foreign banks, and Federal
savings associations;
(3) Conducting special examinations and investigations of an entity
with respect to its performance of activities described in section 7(c)
of the Bank Service Company Act (12 U.S.C. 1867(c)) if the OCC
determines that assessment of the fee is warranted with regard to a
particular bank or Federal savings association because of the high risk
or unusual nature of the activities performed; the significance to the
bank's or Federal saving association's operations and income of the
activities performed; or the extent to which the bank or Federal
savings association has sufficient systems, controls, and personnel to
adequately monitor, measure, and control risks arising from such
activities;
(4) Conducting special examinations and investigations of
affiliates of national banks, Federal savings associations, and Federal
branches or agencies of foreign banks;
(5) Conducting examinations and investigations made pursuant to 12
CFR part 5, Rules, Policies, and Procedures for Corporate Activities;
and
(6) Conducting examinations of depository-institution permissible
activities of nondepository institution subsidiaries of depository
institution holding companies pursuant to section 605(a) of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 1831c).
(b) Notice of Comptroller of the Currency fees. The OCC publishes
the fee schedule for fiduciary activities, special examinations and
investigations, examinations of affiliates and examinations related to
corporate activities in the ``Notice of Comptroller of the Currency
Fees'' described in Sec. 8.8.
(c) Additional assessments on trust banks and trust Federal savings
associations--(1) Independent trust banks and independent trust Federal
savings associations. The assessment of independent trust banks and
independent trust Federal savings associations will include a fiduciary
and related asset component, in addition to the assessment calculated
according to Sec. 8.2 of this part, as follows:
(i) Minimum fee. All independent trust banks and independent trust
Federal savings associations will pay a minimum fee, to be provided in
the ``Notice of Comptroller of the Currency Fees.''
(ii) Additional amount for independent trust banks and independent
trust Federal savings associations with fiduciary and related assets in
excess of $1 billion. Independent trust banks and independent trust
Federal savings associations with fiduciary and related assets in
excess of $1 billion will pay an amount that exceeds the minimum fee.
The amount to be paid will be calculated by multiplying the amount of
fiduciary and related assets by a rate or rates provided by the OCC in
the ``Notice of Comptroller of the Currency Fees.''
(iii) Surcharge based on the condition of the bank or of the
Federal savings association. Subject to any limit that the OCC
prescribes in the ``Notice of Comptroller of the Currency Fees,'' the
OCC shall adjust the semiannual assessment computed in accordance with
paragraphs (c)(1)(i) and (ii) of this section by multiplying that
figure by 1.5 for each independent trust bank and independent trust
Federal savings association that receives a composite rating of 3 under
the Uniform Financial Institutions Rating System (UFIRS) at its most
recent examination and by 2.0 for each bank that receives a composite
UFIRS rating of 4 or 5 at such examination.
(2) Trust banks affiliated with full-service national banks and
trust Federal savings associations affiliated with full-service Federal
savings associations. The OCC will assess a trust bank and a trust
Federal savings association in accordance with paragraph (c)(1) of this
section, notwithstanding that the bank is affiliated with a full-
service national bank, or that the Federal savings association is
affiliated with a full-service Federal savings association, if the OCC
concludes that the affiliation is intended to evade the assessment
regulation.
(3) Definitions. For purposes of this paragraph (c) of this
section, the following definitions apply:
(i) Affiliate, with respect to a national bank, has the same
meaning as this term has in 12 U.S.C. 221a(b);
(ii) Affiliate, with respect to Federal savings associations, has
the same meaning as in 12 U.S.C. 1462(9).
(iii) Full-service national bank is a national bank that generates
more than 50% of its interest and non-interest income from activities
other than credit card operations or trust activities and is authorized
according to its charter to engage in all types of permissible banking
activities.
(iv) Full-service trust Federal savings association is a Federal
savings association that generates more than 50% of its interest and
non-interest income from activities other than credit card operations
or trust activities and is authorized according to its charter to
engage in all types of activities permissible for Federal savings
associations.
(v) Independent trust bank is a national bank that has trust
powers, does not primarily offer full-service banking, and is not
affiliated with a full-service national bank;
(vi) Independent trust Federal savings association is a Federal
savings association that has trust powers, does not primarily offer
full-service banking, and is not affiliated with a full-service Federal
savings association;
(vii) Fiduciary and related assets for national banks are those
assets reported on Schedule RC-T of FFIEC Forms 031 and 041, Line 10
(columns A and B) and Line 11 (column B), any successor form issued by
the FFIEC, and any other fiduciary and related assets defined in the
``Notice of Comptroller of the Currency Fees''; and
(viii) Fiduciary and related assets for Federal savings
associations are those assets reported on Schedule FS of OTS Form 1313,
Line FS21, any successor form issued by the OCC, and any other
fiduciary and related assets defined in the ``Notice of Comptroller of
the Currency Fees.''
0
43. Effective December 31, 2011, add the word ``and'' at the end of
paragraph (vi), revise paragraph (c)(3)(vii), and remove paragraph
(c)(3)(viii).
The revision reads as follows:
Sec. 8.6 Fees for special examinations and investigations.
* * * * *
(c) * * *
(3) * * *
(vii) Fiduciary and related assets are those assets reported on
Schedule RC-T of FFIEC Forms 031 and 041, Line 10
[[Page 43569]]
(columns A and B) and Line 11 (column B), any successor form issued by
the FFIEC, and any other fiduciary and related assets defined in the
``Notice of Comptroller of the Currency Fees.''
Sec. 8.7 [Amended]
0
44. Amend Sec. 8.7. paragraph (a) by:
0
a. Removing ``and'' after ``Federal branch,'' and adding ``, and each
Federal savings association'' after ``each Federal agency'' in the
first sentence; and
0
b. Adding ``, each Federal savings association,'' after ``each national
bank'' in the second sentence.
PART 28--INTERNATIONAL BANKING ACTIVITIES
0
45. The authority citation for part 28 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 24 (Seventh), 93a, 161, 602,
1818, 3101 et seq., and 3901 et seq.
Sec. 28.16 [Amended]
0
46. Section 28.16 is amended by removing in paragraph (b) introductory
text the term ``$100,000'' and adding in its place ``the standard
maximum deposit insurance amount as defined in 12 U.S.C.
1821(a)(1)(E)''.
PART 34--REAL ESTATE LENDING AND APPRAISALS
0
47. The authority citation for part 34 is revised to read as follows:
Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1465, 1701j-
3, 1828(o), 3331 et seq., 5101 et seq., and 5412(b)(2)(B).
Subpart A--General
0
48. Amend Sec. 34.4 by:
0
a. Revising paragraph (a) introductory text;
0
b. Revising paragraph (b) introductory text;
0
c. Revising footnote 2 in paragraph (b)(3); and
0
d. Revising paragraph (b)(9).
The revisions read as follows:
Sec. 34.4 Applicability of state law.
(a) A national bank may make real estate loans under 12 U.S.C. 371
and Sec. 34.3, without regard to state law limitations concerning:
* * * * *
(b) State laws on the following subjects are not inconsistent with
the real estate lending powers of national banks and apply to national
banks to the extent consistent with the decision of the Supreme Court
in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al., 517 U.S. 25 (1996):
* * * * *
(3) Criminal law; \2\
\2\ But see the distinction drawn by the Supreme Court in Easton
v. Iowa, 188 U.S. 220, 238 (1903), where the Court stated that
``[u]ndoubtedly a state has the legitimate power to define and
punish crimes by general laws applicable to all persons within its
jurisdiction * * *. But it is without lawful power to make such
special laws applicable to banks organized and operating under the
laws of the United States.'' Id. at 239 (holding that Federal law
governing the operations of national banks preempted a state
criminal law prohibiting insolvent banks from accepting deposits).
* * * * *
(9) Any other law that the OCC determines to be applicable to
national banks in accordance with the decision of the Supreme Court in
Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al., 517 U.S. 25 (1996), or that is made applicable by
Federal law.
0
49. Add Sec. 34.6 to subpart A to read as follows:
Sec. 34.6 Applicability of state law to Federal savings associations
and subsidiaries.
In accordance with section 1046 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 25b), Federal savings
associations and their subsidiaries shall be subject to the same laws
and legal standards, including regulations of the OCC, as are
applicable to national banks and their subsidiaries, regarding the
preemption of state law.
Dated: July 14, 2011.
John Walsh,
Acting Comptroller of the Currency.
[FR Doc. 2011-18231 Filed 7-20-11; 8:45 am]
BILLING CODE 4810-33-P