[Federal Register Volume 83, Number 79 (Tuesday, April 24, 2018)]
[Rules and Regulations]
[Pages 17737-17744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06881]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 83, No. 79 / Tuesday, April 24, 2018 / Rules
and Regulations
[[Page 17737]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 303, 308, 324, 325, 327, 333, 337, 347, 349, 360, 362,
363, 364, 365, and 390
RIN 3064-AE51
Regulatory Capital Rules: Removal of Certain Capital Rules That
Are No Longer Effective Following the Implementation of the Revised
Capital Rules
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule rescinds certain capital regulations of the
FDIC's codified rules (superseded capital rules) that were no longer
effective following the January 1, 2015 implementation of the revised
capital rules. The final rule also makes conforming changes to sections
in the FDIC's codified rules that refer to the superseded capital
rules. The FDIC has concluded that good cause exists to publish this
rule as final without a period of notice and comment and with an
effective date as of the date of its publication in the Federal
Register because this final rule rescinds the superseded capital rules
and other sections of the FDIC's codified rules that refer to the
superseded capital rules and imposes no new requirement on FDIC-
supervised institutions.
DATES: The final rule is effective April 24, 2018.
FOR FURTHER INFORMATION CONTACT: Benedetto Bosco, Chief, Capital Policy
Section; [email protected], Capital Markets Branch, Division of Risk
Management Supervision, (202) 898-6888; Catherine Wood, Counsel,
[email protected]; Michael Phillips, Supervisory Counsel,
[email protected], Supervision and Legislation Branch, Legal Division,
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington,
DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
In 2014, the FDIC comprehensively revised and strengthened its
capital regulations applicable to FDIC-supervised institutions (revised
capital rule).\1\ The revised capital rule was codified in part 324 of
the FDIC's codified rules (effective January 1, 2014, for advanced
approaches banking organizations) and was effective for all non-
advanced approaches FDIC-supervised institutions on January 1, 2015.
Before the effective dates of the revised capital rule, FDIC-supervised
institutions were subject to the superseded capital rules in part 325
and subparts Y and Z of part 390 of the FDIC's codified rules. The
superseded capital rules remain in the Code of Federal Regulations
(CFR), even though they were no longer effective for any FDIC-
supervised institution since January 1, 2015. Maintaining the
superseded capital rules in the FDIC's codified rules could result in
confusion and therefore this final rule removes the superseded capital
rules.
---------------------------------------------------------------------------
\1\ 79 FR 20754 (April 14, 2014).
---------------------------------------------------------------------------
II. Description of the Final Rule
The final rule rescinds part 325, subpart A--Minimum Capital
Requirements, subpart B--Prompt Corrective Action and appendices A
through D, as the rules contained therein have been superseded by part
324. Under the final rule, the annual stress testing rule will remain
in part 325. Part 325 will be retitled to Annual Stress Test and the
stress testing rule will be renumbered to reflect the removed capital
rules. Similarly, the final rule removes the superseded capital rules
contained in part 390 subpart Y--Prompt Corrective Action and part 390,
subpart Z--Capital and related appendices. Under the final rule,
sections in part 390 that are not removed will remain codified in part
390, including certain enforcement authorities related to savings
association's capital requirements. The final rule also makes
conforming technical changes to provisions of the FDIC's codified rules
that refer to part 325 for state nonmember banks and subparts Y and Z
of part 390 for state savings associations in conjunction with the
FDIC's capital rules. However, this final rule does not impact the
legal status of any reference to the superseded capital rules in
outstanding compliance and enforcement orders, agreements, and
memoranda of understanding entered into by the FDIC prior to the
effective date of this final rule. Regardless of whether an outstanding
enforcement order refers to the superseded capital rule, all FDIC-
supervised institutions are subject to the revised capital rule and
must be in compliance with the minimum capital requirements in part
324.\2\
---------------------------------------------------------------------------
\2\ Generally FDIC-supervised institutions can demonstrate
compliance with outstanding enforcement orders referencing the
superseded capital rule by calculating their capital ratios under
the revised capital rule. The FDIC made a finding during the
interagency capital rulemaking process in 2013 that the revised
capital rule is more stringent than the superseded capital rule.
Therefore, an FDIC-supervised institution subject to an enforcement
order under the superseded capital rule may demonstrate its
compliance using its ratios as calculated under the revised capital
rule.
---------------------------------------------------------------------------
III. Administrative Procedure Act
The Administrative Procedure Act (APA) does not require an agency
to publish a notice of proposed rulemaking (NPR) in the Federal
Register if an ``agency for good cause finds (and incorporates the
finding and a brief statement of reasons therefor in the rules issued)
that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.'' \3\ The FDIC finds
that for purposes of the rescission of the superseded capital rules,
good cause exists to not publish a notice of proposed rulemaking in the
Federal Register and, therefore, is issuing this rule as a final rule.
The FDIC believes that a notice of proposed rulemaking is unnecessary
for such purposes because the FDIC published three NPRs and an interim
final rule for comment before issuing the revised capital rules in
2014.\4\ The comment period for those NPRs and interim final rule
provided sufficient public notice that the revised
[[Page 17738]]
capital rules would replace the superseded capital rules for all FDIC-
supervised institutions as of January 1, 2015. This final rule solely
removes the obsolete provisions of, and references to, the superseded
capital rules in the CFR and imposes no new requirement on FDIC-
supervised institutions. Accordingly, the FDIC concludes that good
cause exists to publish the rule as final without a notice and
opportunity to comment.
---------------------------------------------------------------------------
\3\ 5 U.S.C. 553(b).
\4\ Concerning the NPRs for the revised capital rules, see 77 FR
52792 (August 30, 2012); 77 FR 52888 (August 30, 2012); 77 FR 52978
(August 30, 2012). The interim final rule for the revised capital
rules was issued in September 10, 2013 (78 FR 55340). In the
preamble to the interim final rule, the FDIC stated: ``The interim
final rule will replace the FDIC's general risk-based capital rules,
advanced approaches rule, market risk rule, and leverage rules in
accordance with the transition provisions described below.'' Also,
section 324.1(f) of the revised capital rules states the timing for
the implementation of the revised capital rules. See 12 CFR
324.1(f).
---------------------------------------------------------------------------
Section 553(d)(3) of the APA provides that, for good cause found
and published with the rule, an agency does not have to comply with the
requirement that a substantive rule be published not less than 30 days
before its effective date.\5\ The final rule will be effective
immediately upon its publication in the Federal Register. The FDIC
invokes the good cause exception to the APA's 30-day publication
requirement for the reasons discussed above.
---------------------------------------------------------------------------
\5\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------
IV. Regulatory Analyses
A. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA),
requires an agency, in connection with a notice of proposed rulemaking,
to prepare an Initial Regulatory Flexibility Analysis describing the
impact of the proposed rule on small entities (defined by the Small
Business Administration for purposes of the RFA to include banking
entities with total assets of $550 million or less) or to certify that
the proposed rule would not have a significant economic impact on a
substantial number of small entities. The RFA also requires an agency,
in connection with a final rule, to prepare a Final Regulatory
Flexibility Act (FRFA) analysis describing the impact of the final rule
on small entities. Neither an IRFA nor FRFA is required, however, if
the rule is issued under the APA provision allowing the agency to
forego notice and comment rulemaking for good cause. Therefore, the
FDIC has not prepared either an IRFA or an FRFA in connection with this
final rule. Nevertheless, the FDIC notes that the final rule does not
impose any burden on small banking entities as it only rescinds
obsolete provisions in the FDIC's CFR.
B. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501-3521), the FDIC may not conduct or sponsor, and
a respondent is not required to respond to, an information collection
unless it displays a currently valid Office of Management and Budget
(OMB) control number. The FDIC reviewed the rule and determined that it
does not create any new, or revise any existing, collection of
information under section 3504(h) of the Paperwork Reduction Act of
1980. Consequently, no information collection request will be submitted
to the OMB for review.
C. Small Business Regulatory Enforcement Fairness Act
The Office of Management and Budget has determined that the final
rule is not a ``major rule'' within the meaning of the Small Business
Regulatory Enforcement Fairness Act of 1996 (Title II, Pub. L. 104-
121).
D. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
The FDIC has determined that the final rule will not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, enacted as part of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act of 1999
(Pub. L. 105-277, 112 Stat. 2681).
E. Plain Language
Section 722 of the Gramm-Leach-Bliley Act requires the federal
banking agencies to use plain language in all final rules published
after January 1, 2000. The FDIC has sought to present the final rule in
a simple and straightforward manner.
F. Riegle Community Development and Regulatory Improvement Act of 1994
Under the Riegle Community Development and Regulatory Improvement
Act of 1994, 12 U.S.C. 4802, (RCDRIA), there is a requirement that
``[n]ew regulations and amendments to regulations prescribed by a
Federal banking agency which impose additional reporting, disclosures,
or other new requirements on insured depository institutions shall take
effect on the first day of a calendar quarter which begins on or after
the date on which the regulations are published in final form'' absent
a good cause determination by the agency.\6\ The final rule imposes no
additional reporting, disclosure, or other new requirements on insured
depository institutions and therefore is not subject to the effective
date requirement in RCDRIA.
---------------------------------------------------------------------------
\6\ 12 U.S.C. 4802(b).
---------------------------------------------------------------------------
List of Subjects
12 CFR Part 303
Administrative practice and procedure, Bank deposit insurance,
Banks, banking, Reporting and recordkeeping requirements, Savings
associations.
12 CFR Part 308
Administrative practice and procedure, Bank deposit insurance,
Banks, banking, Claims, Crime, Equal access to justice, Fraud,
Investigations, Lawyers, Penalties.
12 CFR Part 324
Administrative practice and procedure, Banks, banking, Reporting
and recordkeeping requirements, Savings associations.
12 CFR Part 325
Banks, banking, Reporting and recordkeeping requirement.
12 CFR Part 327
Bank deposit insurance, Banks, banking, Savings associations.
12 CFR Part 333
Banks, banking.
12 CFR Part 337
Banks, banking, Reporting and recordkeeping requirements,
Securities.
12 CFR Part 347
Authority delegations (Government agencies), Bank deposit
insurance, Banks, banking, Credit, Foreign banking, Investments,
Reporting and recordkeeping requirements, U.S. Investments abroad.
12 CFR Part 349
Administrative practice and procedure, Banks, banking, Holding
companies, Reporting and recordkeeping requirements, Savings
associations, Swaps.
12 CFR Part 360
Savings associations.
12 CFR Part 362
Administrative practice and procedure, Authority delegations
(Government agencies), Bank deposit insurance, Banks, banking,
Investments, Reporting and recordkeeping requirements.
12 CFR Part 363
Accounting, Administrative practice and procedure, Banks, banking,
Reporting and recordkeeping requirements.
12 CFR Part 364
Banks, banking, Information.
[[Page 17739]]
12 CFR Part 365
Banks, banking, Mortgages.
12 CFR Part 390
Administrative practice and procedure, Advertising, Aged, Civil
rights, Conflict of interests, Credit, Crime, Equal employment
opportunity, Fair housing, Government employees, Individuals with
disabilities, Reporting and recordkeeping requirements, Savings
associations.
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends 12 CFR parts 303, 308, 324, 325, 327, 333,
337, 347, 349, 360, 362, 363, 364, 365, and 390 as follows:
PART 303--FILING PROCEDURES
0
1. The authority citation for part 303 continues to read as follows:
Authority: 12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819(a)
(Seventh and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o, 1831p-1,
1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207; 5414; 15 U.S.C. 1601-
1607.
0
2. Section 303.2 is amended by revising paragraphs (b), (ee), and (ff)
to read as follows:
Sec. 303.2 Definitions.
* * * * *
(b) Adjusted part 324 total assets means adjusted 12 CFR part 324
total assets as calculated and reflected in the FDIC's Report of
Examination.
* * * * *
(ee) Tier 1 capital shall have the same meaning as provided in
Sec. 324.2 of this chapter.
(ff) Total assets shall have the same meaning as provided in Sec.
324.401(g) of this chapter.
* * * * *
0
3. Section 303.64 is amended by revising paragraph (a)(4)(i) to read as
follows:
Sec. 303.64 Processing.
(a) * * *
(4) * * *
(i) Immediately following the merger transaction, the resulting
institution will be well-capitalized pursuant to subpart H of part 324
of this chapter (12 CFR part 324); and
* * * * *
0
4. Section 303.181 is amended by revising paragraph (c)(4) to read as
follows:
Sec. 303.181 Definitions.
* * * * *
(c) * * *
(4) Is well-capitalized as defined in subpart H of part 324 of this
chapter; and
* * * * *
0
5. Section 303.184 is amended by revising paragraph (d)(1)(ii) to read
as follows:
Sec. 303.184 Moving an insured branch of a foreign bank.
* * * * *
(d) * * *
(1) * * *
(ii) The applicant is at least adequately capitalized as defined in
subpart H of part 324 of this chapter;
* * * * *
0
6. Section 303.200 is amended by revising paragraphs (a)(2) and (b) to
read as follows:
Sec. 303.200 Scope.
(a) * * *
(2) Definitions of the capital categories referenced in this Prompt
Corrective Action subpart may be found in subpart H of part 324 of this
chapter.
(b) Institutions covered. Restrictions and prohibitions contained
in subpart H of part 324 of this chapter apply primarily to state
nonmember banks and insured branches of foreign banks, as well as to
directors and senior executive officers of those institutions. Portions
of subpart H of part 324 of this chapter also apply to all insured
depository institutions that are deemed to be critically
undercapitalized.
* * * * *
0
7. Section 303.241 is amended by revising paragraph (c)(4) to read as
follows:
Sec. 303.241 Reduce or retire capital stock or capital debt
instruments.
* * * * *
(c) * * *
(4) If the proposal involves a series of transactions affecting
Tier 1 capital components which will be consummated over a period of
time which shall not exceed twelve months, the application shall
certify that the insured depository institution will maintain itself as
a well-capitalized institution as defined in part 324 of this chapter
both before and after each of the proposed transactions;
* * * * *
PART 308--RULES OF PRACTICE AND PROCEDURE
0
8. The authority citation for part 308 continues to read as follows:
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505,
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828,
1829, 1829b, 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b),
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u,
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub.L. 104-134, sec. 3100(s), 110
Stat. 1321; Pub.L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 124
Stat. 1376; Pub.L. 114-74, sec. 701, 129 Stat. 584.
0
9. Section 308.200 is revised to read as follows:
Sec. 308.200 Scope.
The rules and procedures set forth in this subpart apply to banks,
insured branches of foreign banks and senior executive officers and
directors of banks that are subject to the provisions of section 38 of
the Federal Deposit Insurance Act (section 38) (12 U.S.C. 1831o) and
subpart H of part 324 of this chapter.
0
10. Section 308.202 is amended by revising paragraphs (a)(1)(i)(A) and
(a)(1)(ii) to read as follows:
Sec. 308.202 Procedures for reclassifying a bank based on criteria
other than capital.
(a) * * *
(1) * * *
(i) Grounds for reclassification. (A) Pursuant to Sec. 324.403(d)
of this chapter, the FDIC may reclassify a well-capitalized bank as
adequately capitalized or subject an adequately capitalized or
undercapitalized institution to the supervisory actions applicable to
the next lower capital category if:
(1) The FDIC determines that the bank is in unsafe or unsound
condition; or
(2) The FDIC, pursuant to section 8(b)(8) of the FDI Act (12 U.S.C.
1818(b)(8)), deems the bank to be engaged in an unsafe or unsound
practice and not to have corrected the deficiency.
* * * * *
(ii) Prior notice to institution. Prior to taking action pursuant
to Sec. 324.403(d) of this chapter, the FDIC shall issue and serve on
the bank a written notice of the FDIC's intention to reclassify it.
* * * * *
0
11. Section 308.204 is amended by revising paragraphs (b)(2) and (c) to
read as follows:
Sec. 308.204 Enforcement of directives.
* * * * *
(b) * * *
(2) Failure to implement capital restoration plan. The failure of a
bank to implement a capital restoration plan required under section 38,
or subpart H of part 324 of this chapter, or the failure of a company
having control of a bank
[[Page 17740]]
to fulfill a guarantee of a capital restoration plan made pursuant to
section 38(e)(2) of the FDI Act shall subject the bank to the
assessment of civil money penalties pursuant to section 8(i)(2)(A) of
the FDI Act.
(c) Other enforcement action. In addition to the actions described
in paragraphs (a) and (b) of this section, the FDIC may seek
enforcement of the provisions of section 38 or subpart H of part 324 of
this chapter through any other judicial or administrative proceeding
authorized by law.
* * * * *
PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
0
12. The authority citation for part 324 continues to read as follows:
Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b),
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n),
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub.L. 102-233,
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.L. 102-242,
105 Stat. 2236, 2355, as amended by Pub.L. 103-325, 108 Stat. 2160,
2233 (12 U.S.C. 1828 note); Pub.L. 102-242, 105 Stat. 2236, 2386, as
amended by Pub.L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828
note); Pub.L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).
0
13. Section 324.22 is amended by revising footnote 22 in paragraph
(b)(2)(iii) to read as follows:
Sec. 324.22 Regulatory capital adjustments and deductions.
* * * * *
(b) * * *
(2) * * *
(iii) * * *
\22\ These rules include the regulatory capital requirements set
forth at 12 CFR part 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 324
(FDIC).
* * * * *
PART 325--ANNUAL STRESS TEST
0
14. The authority citation for part 325 continues to read as follows:
Authority: 12 U.S.C. 5365(i)(2), 12 U.S.C. 5412(b)(2)(C), 12
U.S.C. 1818, 12 U.S.C. 1819(a)(Tenth), 12 U.S.C. 1831o, and 12
U.S.C. 1831p-1.
0
15. The heading for part 325 is revised to read as set forth above.
Subparts A and B [Removed]
0
16. Remove subparts A and B.
Subpart C [Amended]
0
17. Remove the heading for subpart C.
Sec. Sec. 325.201 through 325.207 [Redesignated as Sec. Sec. 325.1
through 325.7]
0
18. Redesignate Sec. Sec. 325.201 through 325.207 as Sec. Sec. 325.1
through 325.7, respectively.
0
19. Amend newly redesignated Sec. 325.1 by revising paragraph (c)(5)
to read as follows:
Sec. 325.1 Authority, purpose, and reservation of authority.
* * * * *
(c) * * *
(5) Notice and comment procedures: In exercising its authority to
require different or additional stress tests and different or
additional scenarios (including components for the scenarios) under
paragraph (c)(2) of this section, the Corporation will apply notice and
response procedures in the same manner and to the same extent as the
notice and response procedures in 12 CFR 324.5, as appropriate.
* * * * *
Appendices A, B, C, and D [Removed]
0
20. Remove appendices A, B, C, and D.
PART 327--ASSESSMENTS
0
21. The authority citation for part 327 continues to read as follows:
Authority: 12 U.S.C. 1441, 1813, 1815, 1817-19, 1821.
0
22. Appendix A to subpart A of part 327 is amended by revising footnote
5 in section VI to read as follows:
Appendix A to Subpart A of Part 327--Method to Derive Pricing
Multipliers and Uniform Amount
* * * * *
VI. * * *
\5\ Market risk is defined in 12 CFR 324.202.
0
23. Appendix C to subpart A of part 327 is amended by revising the
appendix heading and the first and second sentences in the first
paragraph in section I.A.5 to read as follows:
Appendix C to Subpart A to Part 327--Description of Concentration
Measures
I. * * *
A. * * *
5. * * *
Higher-risk securitizations are defined as securitization
exposures (except securitizations classified as trading book),
where, in aggregate, more than 50 percent of the assets backing the
securitization meet either the criteria for higher-risk C & I loans
or securities, higher-risk consumer loans, or nontraditional
mortgage loans, except those classified as trading book. A
securitization exposure is as defined in 12 CFR 324.2, as it may be
amended from time to time. * * *
* * * * *
PART 333--EXTENSION OF CORPORATE POWERS
0
24. The authority citation for part 333 continues to read as follows:
Authority: 12 U.S.C. 1816, 1818, 1819 (``Seventh'', ``Eighth''
and ``Tenth''), 1828, 1828(m), 1831p-1(c).
0
25. Section 333.4 is amended by revising the fourth sentence in
paragraph (a) to read as follows:
Sec. 333.4 Conversions from mutual to stock form.
(a) Scope. * * * As determined by the Board of Directors of the
FDIC on a case-by-case basis, the requirements of paragraphs (d), (e),
and (f) of this section do not apply to mutual-to-stock conversions of
insured mutual state savings banks whose capital category under Sec.
324.403 of this chapter is ``undercapitalized'', ``significantly
undercapitalized'' or ``critically undercapitalized''. * * *
* * * * *
PART 337--UNSAFE AND UNSOUND BANKING PRACTICES
0
26. The authority citation for part 337 continues to read as follows:
Authority: 12 U.S.C. 375a(4), 375b, 1463(a)(1), 1816, 1818(a),
1818(b), 1819, 1820(d), 1828(j)(2), 1831, 1831f, 5412.
0
27. Section 337.6 is amended by revising footnote 12 in paragraph
(a)(3)(i) and the second sentence in footnote 13 in paragraph
(a)(3)(iii) to read as follows:
Sec. 337.6 Brokered deposits.
* * * * *
(a) * * *
(3) * * *
(i) * * *
\12\ For the most part, the capital measure terms are defined in
the following regulations: FDIC--12 CFR part 324, subpart H; Board of
Governors of the Federal Reserve System--12 CFR part 208; and Office of
the Comptroller of the Currency--12 CFR part 6.
* * * * *
(iii) * * *
\13\ * * * Provisions specifying the effective date of
determination of capital category are generally published in the
following regulations: FDIC--12 CFR 324.402; Board of Governors of the
Federal Reserve System--12 CFR part 208, subpart D; and Office of the
Comptroller of the Currency--12 CFR 6.3.
* * * * *
[[Page 17741]]
PART 347--INTERNATIONAL BANKING
0
28. The authority citation for part 347 continues to read as follows:
Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820(d), 1828,
3103, 3104, 3105, 3108, 3109; Title IX, Pub. L. 98-181, 97 Stat.
1153 (12 U.S.C. 3901 et seq.).
0
29. Section 347.102 is amended by revising paragraphs (u) and (v) to
read as follows:
Sec. 347.102 Definitions.
* * * * *
(u) Tier 1 capital means Tier 1 capital as defined in Sec. 324.2
of this chapter.
(v) Well capitalized means well capitalized as defined in Sec.
324.403 of this chapter.
PART 349--DERIVATIVES
Subpart B--Retail Foreign Exchange Transactions
0
30. The authority citation for part 349, subpart B, continues to read
as follows:
Authority: 12 U.S.C. 1813(q), 1818, 1819, and 3108; 7 U.S.C.
2(c)(2)(E), 27 et seq.
0
31. Section 349.20 is revised to read as follows:
Sec. 349.20 Capital requirements.
An FDIC-supervised insured depository institution offering or
entering into retail forex transactions must be well capitalized as
defined by 12 CFR part 324, unless specifically exempted by the FDIC in
writing.
PART 360--RESOLUTION AND RECEIVERSHIP RULES
0
32. The authority citation for part 360 continues to read as follows:
Authority: 12 U.S.C. 1821(d)(1), 1821(d)(10)(C), 1821(d)(11),
1821(e)(1), 1821(e)(8)(D)(i), 1823(c)(4), 1823(e)(2); Sec. 401(h),
Pub. L. 101-73, 103 Stat. 357.
0
33. Section 360.5 is amended by revising paragraph (b) to read as
follows:
Sec. 360.5 Definition of qualified financial contracts.
* * * * *
(b) Repurchase agreements. The following agreements shall be deemed
``repurchase agreements'' under section 11(e)(8)(D)(v) of the Federal
Deposit Insurance Act, as amended (12 U.S.C. 1821(e)(8)(D)(v)): A
repurchase agreement on qualified foreign government securities is an
agreement or combination of agreements (including master agreements)
which provides for the transfer of securities that are direct
obligations of, or that are fully guaranteed by, the central
governments (as set forth at 12 CFR 324.2 (definition of sovereign
exposure), as may be amended from time to time) of the OECD-based group
of countries (as generally discussed in 12 CFR 324.32) against the
transfer of funds by the transferee of such securities with a
simultaneous agreement by such transferee to transfer to the transferor
thereof securities as described above, at a date certain not later than
one year after such transfers or on demand, against the transfer of
funds.
* * * * *
0
34. Section 360.9 is amended by revising paragraph (e)(6) to read as
follows:
Sec. 360.9 Large-bank deposit insurance determination modernization.
* * * * *
(e) * * *
(6) Notwithstanding the general requirements of this paragraph (e),
on a case-by-case basis, the FDIC may accelerate, upon notice, the
implementation timeframe of all or part of the requirements of this
section for a covered institution that: Has a composite rating of 3, 4,
or 5 under the Uniform Financial Institution's Rating System, or in the
case of an insured branch of a foreign bank, an equivalent rating; is
undercapitalized, as defined under the prompt corrective action
provisions of 12 CFR part 324; or is determined by the appropriate
Federal banking agency or the FDIC in consultation with the appropriate
Federal banking agency to be experiencing a significant deterioration
of capital or significant funding difficulties or liquidity stress,
notwithstanding the composite rating of the institution by its
appropriate Federal banking agency in its most recent report of
examination. In implementing this paragraph (e)(6), the FDIC must
consult with the covered institution's primary federal regulator and
consider the: Complexity of the institution's deposit systems and
operations, extent of the institution's asset quality difficulties,
volatility of the institution's funding sources, expected near-term
changes in the institution's capital levels, and other relevant factors
appropriate for the FDIC to consider in its roles as insurer and
possible receiver of the institution.
* * * * *
PART 362--ACTIVITIES OF INSURED STATE BANKS AND INSURED SAVINGS
ASSOCIATIONS
0
35. The authority citation for part 362 continues to read as follows:
Authority: 12 U.S.C. 1816, 1818, 1819(a)(Tenth), 1828(j),
1828(m), 1828a, 1831a, 1831e, 1831w, 1843(l).
0
36. Section 362.2 is amended by revising paragraphs (s) and (t) to read
as follows:
Sec. 362.2 Definitions.
* * * * *
(s) Tier one capital has the same meaning as set forth in part 324
of this chapter for an insured State nonmember bank or insured state
savings association. For other state-chartered depository institutions,
the term ``tier one capital'' has the same meaning as set forth in the
capital regulations adopted by the appropriate Federal banking agency.
(t) Well-capitalized has the same meaning set forth in part 324 of
this chapter for an insured State nonmember bank or insured state
savings association. For other state-chartered depository institutions,
the term ``well-capitalized'' has the same meaning as set forth in the
capital regulations adopted by the appropriate Federal banking agency.
0
37. Section 362.4 is amended by revising paragraph (e)(3) to read as
follows:
Sec. 362.4 Subsidiaries of insured State banks.
* * * * *
(e) * * *
(3) Use such regulatory capital amount for the purposes of the
bank's assessment risk classification under part 327 of this chapter
and its categorization as a ``well-capitalized'', an ``adequately
capitalized'', an ``undercapitalized'', or a ``significantly
undercapitalized'' institution as defined in Sec. 324.403(b) of this
chapter, provided that the capital deduction shall not be used for
purposes of determining whether the bank is ``critically
undercapitalized'' under part 324 of this chapter.
0
38. Section 362.17 is amended by revising paragraph (d) to read as
follows:
Sec. 362.17 Definitions.
* * * * *
(d) Tangible equity and Tier 2 capital have the same meaning as set
forth in part 324 of this chapter.
* * * * *
PART 363--ANNUAL INDEPENDENT AUDITS AND REPORTING REQUIREMENTS
0
39. The authority citation for part 363 continues to read as follows:
Authority: 12 U.S.C. 1831m.
[[Page 17742]]
0
40. Appendix A to part 363 is amended by revising Table 1 to Appendix A
to read as follows:
Appendix A to Part 363--Guidelines and Interpretations
* * * * *
Table 1 to Appendix A--Designated Federal Laws and Regulations Applicable to:
--------------------------------------------------------------------------------------------------------------------------------------------------------
State member State non- Savings
National banks banks member banks associations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Insider Loans--Parts and/or Sections of Title 12 of the United States Code
--------------------------------------------------------------------------------------------------------------------------------------------------------
375a......................................... Loans to Executive Officers of Banks. [radic] [radic] (A) (A)
375b......................................... Extensions of Credit to Executive [radic] [radic] (A) (A)
Officers, Directors, and Principal
Shareholders of Banks.
1468(b)...................................... Extensions of Credit to Executive ............... ............... ............... [radic]
Officers, Directors, and Principal
Shareholders.
1828(j)(2)................................... Extensions of Credit to Officers, ............... ............... [radic] ...............
Directors, and Principal
Shareholders.
1828(j)(3)(B)................................ Extensions of Credit to Officers, (B) ............... (C) ...............
Directors, and Principal
Shareholders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parts and/or Sections of Title 12 of the Code of Federal Regulations
--------------------------------------------------------------------------------------------------------------------------------------------------------
31........................................... Extensions of Credit to Insiders..... [radic] ............... ............... ...............
32........................................... Lending Limits....................... [radic] ............... ............... ...............
215.......................................... Loans to Executive Officers, [radic] [radic] (D) (E)
Directors, and Principal
Shareholders of Member Banks.
337.3........................................ Limits on Extensions of Credit to ............... ............... [radic] ...............
Executive Officers, Directors, and
Principal Shareholders of Insured
Nonmember Banks.
390.338 (state savings associations)......... Loans by Savings Associations to ............... ............... ............... [radic]
Their Executive Officers, Directors,
and Principal Shareholders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dividend Restrictions--Parts and/or Sections of Title 12 of the United States Code
--------------------------------------------------------------------------------------------------------------------------------------------------------
56........................................... Prohibition on Withdrawal of Capital [radic] [radic] ............... ...............
and Unearned Dividends.
60........................................... Dividends and Surplus Fund........... [radic] [radic] ............... ...............
1467a(f)..................................... Declaration of Dividend.............. ............... ............... ............... [radic]
1831o(d)(1).................................. Prompt Corrective Action--Capital [radic] [radic] [radic] [radic]
Distributions Restricted.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parts and/or Sections of Title 12 of the Code of Federal Regulations
--------------------------------------------------------------------------------------------------------------------------------------------------------
5 Subpart E.................................. Payment of Dividends................. [radic] ............... ............... ...............
6.6.......................................... Prompt Corrective Action-- [radic] ............... ............... ...............
Restrictions on Undercapitalized
Institutions.
208.5........................................ Dividends and Other Distributions.... ............... [radic] ............... ...............
208.45....................................... Prompt Corrective Action-- ............... [radic] ............... ...............
Restrictions on Undercapitalized
Institutions.
324.405...................................... Prompt Corrective Action-- ............... ............... [radic] ...............
Restrictions on Undercapitalized
Institutions.
390.342-.348 (state savings associations).... Capital Distributions................ ............... ............... ............... [radic]
390.455 (state savings associations)......... Prompt Corrective Action-- ............... ............... ............... [radic]
Restrictions on Undercapitalized
Institutions.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(A) Subsections (g) and (h) of section 22 of the Federal Reserve Act [12 U.S.C. 375a, 375b]
(B) Applies only to insured Federal branches of foreign banks.
(C) Applies only to insured State branches of foreign banks.
(D) See 12 CFR 337.3.
(E) See 12 CFR 390.338 (state savings associations).
PART 364--STANDARDS FOR SAFETY AND SOUNDNESS
0
41. The authority citation in part 364 continues to read as follows:
Authority: 12 U.S.C. 1818 and 1819 (Tenth), 1831p-1; 15 U.S.C.
1681b, 1681s, 1681w, 6801(b), 6805(b)(1).
0
42. Appendix A to part 364 is amended by revising the last sentence in
section I.A. to read as follows:
Appendix A to Part 364--Interagency Guidelines Establishing Standards
for Safety and Soundness
* * * * *
I. * * *
A. * * *
* * * Nothing in these Guidelines limits the authority of the
FDIC pursuant to section 38(i)(2)(F) of the FDI Act (12 U.S.C.
1831o) and part 324 of title 12 of the Code of Federal Regulations.
* * * * *
[[Page 17743]]
PART 365--REAL ESTATE LENDING STANDARDS
0
43. The authority citation for part 365 continues to read as follows:
Authority: 12 U.S.C. 1828(o) and 5101 et seq.
0
44. Appendix A to subpart A of part 365 is amended by revising footnote
2 to the ``Loans in Excess of the Supervisory Loan-to-Value Limits''
section to read as follows:
Appendix A to Subpart A of Part 365--Interagency Guidelines for Real
Estate Lending Policies
* * * * *
Loans in Excess of the Supervisory Loan-to-Value Limits
* * * * *
\2\ For state non-member banks and state savings associations,
``total capital'' refers to that term described in 12 CFR 324.2.
* * * * *
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
45. The authority citation for part 390 is revised to read as follows:
Authority: 12 U.S.C. 1819.
Sec. 390.101 [Amended]
0
46. Section 390.101 is amended in paragraph (f) by removing ``subpart
Z'' and adding in its place ``12 CFR part 324.''
0
47. Section 390.264 is revised to read as follows:
Sec. 390.264 Real estate lending standards; purpose and scope.
This section, and Sec. 390.265, issued pursuant to section 18(o)
of the Federal Deposit Insurance Act, (12 U.S.C. 1828(o)), prescribe
standards for real estate lending to be used by State savings
associations and all their includable subsidiaries, as defined in part
324 of this chapter, over which the State savings associations exercise
control, in adopting internal real estate lending policies.
0
48. The appendix to Sec. 390.265 is amended by revising footnote 4 to
read as follows:
Sec. 390.265 Real estate lending standards.
* * * * *
Appendix to Sec. 390.265--Interagency Guidelines for Real Estate
Lending Policies
* * * * *
\4\ For the state member banks, the term ``total capital'' is
defined at 12 CFR 217.2. For insured state non-member banks, the
term ``total capital'' is defined at 12 CFR 324.2. For national
banks, the term ``total capital'' is defined at 12 CFR 3.2. For
state savings associations, the term ``total capital'' is defined at
12 CFR 324.2.
* * * * *
0
49. Section 390.316 is amended by revising paragraph (c) to read as
follows:
Sec. 390.316 With recourse.
* * * * *
(c) This definition does not apply for purposes of determining the
capital adequacy requirements under part 324 of this chapter.
0
50. Section 390.341 is amended by revising paragraphs (a),
(c)(1)(i)(G), and (d)(2)(ii) to read as follows:
Sec. 390.341 Inclusion of subordinated debt securities and
mandatorily redeemable preferred stock as supplementary capital.
(a) Scope. A State savings association must comply with this
section in order to include subordinated debt securities or mandatorily
redeemable preferred stock (``covered securities'') in supplementary
capital (tier 2 capital) under part 324 of this chapter. If a State
savings association does not include covered securities in
supplementary capital, it is not required to comply with this section.
* * * * *
(c) * * *
(1) * * *
(i) * * *
(G) State or refer to a document stating that the State savings
association must obtain FDIC approval before the voluntarily prepayment
of principal on subordinated debt securities, the acceleration of
payment of principal on subordinated debt securities, or the
voluntarily redemption of mandatorily redeemable preferred stock (other
than scheduled redemptions), if the State savings association is
undercapitalized, significantly undercapitalized, or critically
undercapitalized as described in subpart H of part 324 of this chapter,
fails to meet the regulatory capital requirements in part 324, or would
fail to meet any of these standards following the payment.
* * * * *
(d) * * *
(2) * * *
(ii) The State savings association is at least adequately
capitalized under subpart H of part 324 of this chapter and meets the
regulatory capital requirements in part 324.
* * * * *
0
51. Section 390.343 is amended by revising paragraphs (b) and (d) to
read as follows:
Sec. 390.343 What is a capital distribution?
* * * * *
(b) Your payment to repurchase, redeem, retire or otherwise acquire
any of your shares or other ownership interests, any payment to
repurchase, redeem, retire, or otherwise acquire debt instruments
included in your total capital under part 324 of this chapter, and any
extension of credit to finance an affiliate's acquisition of your
shares or interests;
* * * * *
(d) Any other distribution charged against your capital accounts if
you would not be well capitalized, as set forth in subpart H of part
324 of this chapter, following the distribution; and
* * * * *
0
52. Section 390.344 is amended by revising the definition of Capital to
read as follows:
Sec. 390.344 Definitions applicable to capital distributions.
* * * * *
Capital means total capital, as computed under part 324 of this
chapter.
* * * * *
Sec. 390.345 [Amended]
0
53. Section 390.345 is amended as follows:
0
a. In paragraph (a)(3), by removing ``Sec. 390.453(b)(2)'' and adding
in its place ``subpart H of part 324 of this chapter.''
0
b. In paragraph (b), by removing ``Sec. 390.453(b)(1)'' and ``subpart
Z'' wherever they appear and add in their place ``subpart H of part 324
of this chapter.''
0
54. Section 390.348 is amended by revising paragraph (a) to read as
follows:
Sec. 390.348 Will the FDIC permit my capital distribution?
* * * * *
(a) You will be undercapitalized, significantly undercapitalized,
or critically undercapitalized as set forth in subpart H of part 324 of
this chapter, following the capital distribution. If so, the FDIC will
determine if your capital distribution is permitted under 12 U.S.C.
1831o(d)(1)(B).
* * * * *
0
55. Section 390.362 is amended by revising paragraphs (a)(1)(i) and
(iii) to read as follows:
Sec. 390.362 Who must give prior notice?
(a) * * *
(1) * * *
(i) You do not comply with all minimum capital requirements under
part 324 of this chapter;
* * * * *
[[Page 17744]]
(iii) The FDIC has notified you, in connection with its review of a
capital restoration plan required under section 38 of the Federal
Deposit Insurance Act or subpart H of part 324 of this chapter or
otherwise, that a notice is required under Sec. Sec. 390.360 through
390.368; or
* * * * *
Sec. Sec. 390.450 through 390.455 [Removed and Reserved]
0
56. Remove and reserve Sec. Sec. 390.450 through 390.455.
0
57. Section 390.457 is amended by revising paragraphs (a)(1)(i)(A) and
(a)(1)(ii) to read as follows:
Sec. 390.457 Procedures for reclassifying a State savings association
based on criteria other than capital.
(a) * * *
(1) * * *
(i) * * *
(A) Pursuant to Sec. 324.403(d) of this chapter, the FDIC may
reclassify a well capitalized State savings association as adequately
capitalized or subject an adequately capitalized or undercapitalized
institution to the supervisory actions applicable to the next lower
capital category if:
(1) The FDIC determines that the State savings association is in
unsafe or unsound condition; or
(2) The FDIC deems the State savings association to be engaged in
an unsafe or unsound practice and not to have corrected the deficiency.
* * * * *
(ii) Prior notice to institution. Prior to taking action pursuant
to Sec. 324.403(d) of this chapter, the FDIC shall issue and serve on
the State savings association a written notice of the FDIC's intention
to reclassify the State savings association.
* * * * *
Subpart Z--[Removed and Reserved]
0
58. Remove and reserve subpart Z.
Dated at Washington, DC, on March 20, 2018.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2018-06881 Filed 4-23-18; 8:45 am]
BILLING CODE 6714-01-P