[Federal Register Volume 77, Number 135 (Friday, July 13, 2012)]
[Rules and Regulations]
[Pages 41256-41258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17061]



Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1902

RIN 0575-AC94

Federal Deposit Insurance Corporation Limit Change

AGENCY: Rural Housing Service, Rural Business-Cooperative Service, 
Rural Utilities Service and Farm Service Agency, USDA.

ACTION: Direct final rule.


SUMMARY: Rural Development is amending its regulations to address the 
change in the standard maximum deposit insurance amount under the 
Federal Deposit Insurance Corporation (FDIC).

DATES: This rule is effective without further action September 26, 2012 
unless we receive written adverse comments on or before September 11, 
2012. If adverse comment is received, we will publish a timely 
withdrawal of the rule in the Federal Register.

ADDRESSES: You may submit comments to this rule by any of the following 
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 1400

[[Page 41257]]

Independence Avenue SW., Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments via Federal 
Express Mail or other courier service requiring a street address to the 
Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, 300 7th Street SW., 7th Floor, Washington, 
DC 20024.
    All written comments will be available for public inspection during 
regular work hours at 300 7th Street SW., 7th Floor address listed 

FOR FURTHER INFORMATION CONTACT: Ms. Linda Price, Rural Development, 
U.S. Department of Agriculture, 1400 Independence Avenue SW., Stop 
0786, Washington, DC 20250-0786; email: linda.price@wdc.usda.gov; 
telephone (202) 690-2151.


Executive Order 12866--Classification

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and has not been reviewed by the Office of 
Management and Budget (OMB).

Programs Affected

    The programs described by this rule are listed in the Catalog of 
Federal Domestic Assistance Programs under number(s) 10.405 Farm Labor 
Housing Loans and Grants, 10.410 Very Low to Moderate Income Housing 
Loans, 10.411 Rural Housing Site Loans and Self-Help Housing Land 
Development Loans, 10.415 Rural Rental Housing Loans, 10.417 Very Low-
Income Housing Repair Loans and Grants, 10.420 Rural Self-Help Housing 
Technical Assistance, 10.427 Rural Rental Assistance Payments, 10.433 
Rural Housing Preservation Grants, 10.444 Direct Housing-Natural 
Disaster Loans and Grants, 10.446 Rural Community Development 
Initiative, 10.447 The Rural Development Multi-Family Housing 
Revitalization Demonstration Program, 10.448 Rural Development Multi-
Family Housing Voucher Demonstration Program, 10.759 Part 1774 Special 
Evaluation Assistance for Rural Communities and Household Programs 
(SEARCH), 10.760 Water and Waste Disposal Systems for Rural 
Communities, 10.761 Technical Assistance and Training Grants, 10.762 
Solid Waste Management Grants, 10.763 Emergency Community Water 
Assistance Grants, 10.766 Community Facilities Loans and Grants, 10.770 
Water and Waste Disposal Loans and Grants (section 306C), 10.780 
Community Facilities Loans and Grants, 10.781 Water and Waste Disposal 
Systems for Rural Communities--ARRA, 10.788 Very low to Moderate Income 
Housing Loans--Direct, 10.864 Grant Program to Establish a Fund for 
Financing Water and Wastewater Projects.

Non-Discrimination Statement

    The U.S. Department of Agriculture (USDA) prohibits discrimination 
in all its programs and activities on the basis of race, color, 
national origin, age, disability, and where applicable, sex, marital 
status, familial status, parental status, religion, sexual orientation, 
genetic information, political beliefs, reprisal, or because of all or 
part of an individual's income is derived from any public assistance 
program. (Not all prohibited bases apply to all programs.) Persons with 
disabilities who require alternative means for communication of program 
information (Braille, large print, audiotape, etc.) should contact 
USDA's TARGET Center at (202) 720-2600 (voice and TDD). To file a 
complaint or discrimination, write USDA, Director, Office of Civil 
Rights, 1400 Independence Avenue SW., Washington, DC 20250-9419, or 
call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal 
opportunity provider, employer, and lender.

Civil Rights Impact Statement

    No major civil rights impact is likely to result from the 
announcement of this Notice. It will not have a negative civil rights 
impact on very-low income, low-income, moderate income and minority 

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' Rural Development has determined 
that this action does not constitute a major Federal action 
significantly affecting the quality of the human environment and, in 
accordance with the National Environmental Policy Act (NEPA) of 1969, 
42 U.S.C. 4321 et seq., an Environmental Impact Statement is not 

Executive Order 12372, Intergovernmental consultation

    The program is subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. Consultation will be completed at the time of the action 

Executive Order 12988, Civil Justice

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards provided in section 3 of the Executive Order. 
Additionally, (1) all State and local laws and regulations that are in 
conflict with this rule will be preempted; (2) no retroactive effect 
will be given to the rule; and (3) administrative appeal procedures, if 
any, must be exhausted before litigation against the Department or its 
Agencies may be initiated, in accordance with the regulations of the 
National Appeals Division of USDA at 7 CFR part 11.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
final rule impose substantial direct compliance costs on State and 
local Governments. Therefore, consultation with States is not required.

Regulatory Flexibility Act Certification

    Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 
605(b), the Agency certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The Agency 
made this determination based on the fact that this regulation only 
impacts those who choose to participate in the program. Small entity 
applicants will not be impacted to a greater extent than large entity 

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal Governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Executive Order 13175, Consultation and Coordination With Indian Tribal 

    This executive order imposes requirements on Rural Development in 
the development of regulatory policies that have tribal implications or 
preempt tribal laws. Rural Development has determined that the final 
rule does not have a substantial direct effect on one or more Indian 
tribe(s) or on either the relationship or the distribution of powers 
and responsibilities between the Federal Government and Indian tribes. 
Thus, this final rule is not subject to the requirements of Executive 
Order 13175.

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If a tribe determines that this rule has implications of which Rural 
Development is not aware and would like to engage with Rural 
Development on this rule, please contact Rural Development's Native 
American Coordinator at AIAN@wdc.usda.gov.

Paperwork Reduction Act

    This rule contains no new reporting or recordkeeping burdens under 
OMB control number 0575-0158 that would require approval under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act, to promote the use of the Internet and other information 
technologies, to provide increased opportunities for citizens to access 
Government information and services electronically.

I. Background

    Section 335(a), of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Pub. L. 111-203, July 21, 2010) (``Act'') increased the 
standard maximum deposit insurance amount to $250,000 under the Federal 
Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)). This change is also 
reflected in FDIC's regulations at 12 CFR 330.1(o). The change made 
under the Act was in response to the instability of the financial 
markets. The permanent increase from $100,000 to $250,000 took a 
measure of insecurity out of the market. Rural Development funds, 
disbursed to a financial institution on behalf of a Rural Development 
borrower, are now protected up to $250,000. Similar to what is 
currently stated in 7 CFR 1902.6 and 1902.7, anything above the FDIC 
maximum insured amount will be required to be secured by pledging 

II. Discussion of Change

    The Agency is revising 7 CFR 1902.6(d) and 1902.7(a), to reflect 
the FDIC's change in the standard maximum deposit insurance amount. 
Accordingly, the Agency is revising the above referenced regulations in 
this final rule to change the reference from $100,000 to a more general 
reference of the maximum amount insurable by the Federal government. By 
making this change, Rural Development's regulations will remain 
consistent with the FDIC regulations even if the FDIC limit is revised 
again or the authority for deposit insurance is transferred to another 
Federal government entity.

List of Subjects in 7 CFR Part 1902

    Accounting; Banks, banking; Grant programs--Housing and community 
development; Loan programs--Agriculture; Loan programs--Housing and 
community development.

    For the reasons set forth in the preamble, chapter XVIII, title 7, 
of the Code of Federal Regulations is amended as follows:



1. The authority citation for part 1902 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 7 U.S.C. 6991, et seq.; 
42 U.S.C. 1480; Reorganization Plan No. 2 of 1953 (5 U.S.C. App.).

Subpart A--Supervised Bank Accounts of Loan, Grant, and Other Funds

2. Paragraph (d) Sec.  1902.6 is revised to read as follows.

Sec.  1902.6  Establishing supervised bank accounts.

* * * * *
    (d) For each borrower, if the amount of any loan and grant funds, 
plus any borrower contributions and funds from other sources to be 
deposited in the supervised bank account will exceed the maximum amount 
insurable by the Federal government, the financial institution will be 
required to pledge collateral for the excess over that limit before the 
deposit is made (see Sec.  1902.7 of this subpart). If the supervised 
bank account is a joint account, any amount over the maximum amount 
insurable by the federal government must be collateralized.
* * * * *

3. Paragraph (a) of Sec.  1902.7 is revised to read as follows:

Sec.  1902.7  Pledging collateral for deposit of funds in supervised 
bank accounts.

    (a) Funds in excess of the maximum amount insurable by the Federal 
government, per financial institution, deposited for borrowers in 
supervised bank accounts, must be secured by pledging acceptable 
collateral with the Federal Reserve Bank (FRB) in an amount not less 
than the excess. If the supervised bank account is a joint account, any 
amount over the maximum amount insurable by the federal government must 
be collateralized.
* * * * *

    Dated: June 8, 2012.
Dallas Tonsager,
Under Secretary, Rural Development.
    Dated: June 1, 2012.
Michael T. Scuse,
Under Secretary, Farm and Foreign Agriculture Services.
[FR Doc. 2012-17061 Filed 7-12-12; 8:45 am]