Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks (rule, 85 FR 22345, April 22, 2020)
Summary
An interim final rule from the Board of Governors of the Federal Reserve System, published in the Federal Register on April 22, 2020 (Vol. 85, No. 78), effective that day, with a request for comments (Docket No. 1714). The Board excepts certain Paycheck Protection Program (PPP) loans from the requirements of section 22(h) of the Federal Reserve Act and Regulation O, which govern bank loans to executive officers, directors and principal shareholders. It cites disruptions caused by the Coronavirus Disease 2019 and strains in U.S. financial markets. The rule notes that only loans made between February 15, 2020, and June 30, 2020, are eligible for the PPP. The Board reasons that PPP loans carry standard terms set by the program, including an interest rate of 100 basis points that lenders may not alter, and that the Board has determined they pose minimal risk.
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“Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks (rule, 85 FR 22345, April 22, 2020).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/loans-to-executive-officers-directors-and-principal-shareholders-of-me-3c11340e8b/
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22345
Rules and Regulations Federal Register
Vol. 85, No. 78
Wednesday, April 22, 2020
This section of the FEDERAL REGISTER All public comments will be made and many other countries. In addition,
contains regulatory documents having general available on the Board’s website at financial markets have experienced
applicability and legal effect, most of which http://www.federalreserve.gov/ significant volatility. The magnitude
are keyed to and codified in the Code of generalinfo/foia/ProposedRegs.cfm as and persistence of the overall effects on
Federal Regulations, which is published under submitted, unless modified for technical the economy remain highly uncertain.
50 titles pursuant to 44 U.S.C. 1510.
reasons or to remove personally In light of these developments, Congress
The Code of Federal Regulations is sold by identifiable information at the passed the Coronavirus Aid, Relief, and
the Superintendent of Documents. commenter’s request. Accordingly, Economic Security (CARES) Act which,
comments will not be edited to remove among other things, created the
any identifying or contact information. Paycheck Protection Program (PPP) to
FEDERAL RESERVE SYSTEM Public comments also may be viewed facilitate lending to small businesses
electronically or in paper form in Room affected by COVID–19.
12 CFR Part 215 146, 1709 New York Avenue NW, Under the PPP, qualified lenders,
Washington, DC 20006, between 9:00 including many depository institutions
[Regulation O; Docket No. 1714] subject to section 22(h) of the Federal
a.m. and 5:00 p.m. on weekdays.
FOR FURTHER INFORMATION CONTACT: Reserve Act and the Board’s Regulation
RIN 7100–AF 88
Laurie Schaffer, Deputy General O,1 may make loans to small businesses
Loans to Executive Officers, Directors, Counsel, (202) 452–2272, Alison Thro, for payroll-related and other purposes
and Principal Shareholders of Member Deputy Associate General Counsel, specified in the CARES Act.2 Loans that
Banks (202) 452–3236, Benjamin McDonough, meet the requirements for the PPP (PPP
Assistant General Counsel, (202) 452– loans) set forth by the Small Business
AGENCY: Board of Governors of the Administration (SBA) are guaranteed as
2036, Josh Strazanac, Senior Attorney,
Federal Reserve System (Board). (202) 452–2457, Jasmin Keskinen, Legal to the unpaid principal and accrued
ACTION: Interim final rule with request Assistant, (202) 475–6650, Legal interest of the loan. The guarantee for
for comments. Division; or Anna Lee Hewko, Associate PPP loans provided by the SBA is
Director, (202) 530–6360, Constance backed by the full faith and credit of the
SUMMARY: In light of recent disruptions United States. Only loans made between
Horsley, Deputy Associate Director,
in economic conditions caused by the February 15, 2020, and June 30, 2020,
(202) 452–5239, Kathryn Ballintine,
Coronavirus Disease 2019 and current are eligible for the PPP.3 The SBA has
Manager, (202) 452–2555, Joe
strains in U.S. financial markets, the issued several interim final rules to
Maldonado, Senior Financial Policy
Board is issuing an interim final rule implement the PPP.4
Analyst, (202) 973–7341, Division of
that excepts certain loans that are Under the PPP, eligible borrowers
Supervision and Regulation; Board of
guaranteed under the Small Business generally include businesses with fewer
Governors of the Federal Reserve
Administration’s Paycheck Protection than 500 employees or that are
System, 20th Street and Constitution
Program from the requirements of otherwise considered by the SBA to be
Avenue NW, Washington, DC 20551.
section 22(h) of the Federal Reserve Act small, including individuals operating
Users of Telecommunication Device for
and the corresponding provisions of the sole proprietorships, entities that are
Deaf (TDD) only, call (202) 263–4869.
Board’s Regulation O. independent contractors of other
SUPPLEMENTARY INFORMATION:
DATES: This rule is effective April 22, businesses, certain franchisees,
2020. Comments on the interim final Table of Contents nonprofit corporations, veterans
rule must be received no later than June organizations, and Tribal businesses.5
I. Background
8, 2020. A. The Paycheck Protection Program and The loan amount under the PPP is
ADDRESSES: You may submit comments, Small Business Administration Lending limited to the lesser of $10 million and
identified by Docket No. R–1714 and Restrictions 250 percent of a borrower’s average
RIN 7100 AF 88, by any of the following B. Insider Lending Restrictions in the monthly payroll costs.6
methods: Federal Reserve Act and Regulation O Under the PPP, a borrower may apply
• Agency Website: http://
II. The Interim Final Rule to a PPP qualified lender for forgiveness
III. Administrative Law Matters of the portion of a PPP loan that is used
www.federalreserve.gov. Follow the A. Administrative Procedure Act
instructions for submitting comments at B. Congressional Review Act 1 12 U.S.C. 375b; 12 CFR part 215.
https://www.federalreserve.gov/ C. Paperwork Reducation Act 2 Public Law 116–136, 134 Stat. 281. CARES Act
generalinfo/foia/ProposedRegs.cfm. D. Regulatory Flexibility Act section 1102(a)(2).
• Email: regs.comments@ E. Riegle Community Development and 3 Id.
federalreserve.gov. Include docket and Regulatory Improvement Act of 1994 4 Interim Final Rule: ‘‘Business Loan Program
RIN numbers in the subject line of the F. Use of Plain Language Temporary Changes; Paycheck Protection Program’’
(April 2, 2020) (85 FR 20811); Interim Final Rule:
message. I. Background
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‘‘Business Loan Program Temporary Changes;
• Fax: (202) 452–3819 or (202) 452– Paycheck Protection Program’’ (April 2, 2020) (85
3102. A. The Paycheck Protection Program FR 20817); Interim Final Rule: ‘‘Business Loan
• Mail: Ann E. Misback, Secretary, and Small Business Administration Program Temporary Changes; Paycheck Protection
Board of Governors of the Federal Lending Restrictions Program—Additional Eligibility Criteria and
Requirements for Certain Pledges of Loans’’ (April
Reserve System, 20th Street and The spread of the Coronavirus Disease 14, 2020) (85 FR 21747).
Constitution Avenue NW, Washington, 2019 (COVID–19) has disrupted 5 Id.
DC 20551. economic activity in the United States 6 Id.
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22346 Federal Register / Vol. 85, No. 78 / Wednesday, April 22, 2020 / Rules and Regulations
in the first eight weeks of the loan for B. Insider Lending Restrictions in the extends to 100 percent of the PPP loan
payroll costs and certain mortgage, rent, Federal Reserve Act and Regulation O amount. PPP loans also are less
and utility payments. The SBA will Among other things, section 22(h) and susceptible to insider abuse than other
reimburse the PPP lender for the Regulation O impose requirements on a extensions of credit from a bank to an
forgiven amount of any PPP loan.7 PPP bank regarding extensions of credit insider, other loans guaranteed by the
loans will have a maturity of two years made to insiders 14 of the bank or its SBA, or other extensions of credit that
and an interest rate of 100 basis points.8 affiliates. Loans to insiders are subject to the Board previously has determined
PPP lenders may not alter these terms. quantitative limits, prior approval pose minimal risk.23 Unlike these other
requirements by the bank’s board, and extensions of credit, PPP loans have
PPP loans are subject to the same standard terms that do not allow for
rules, conditions, and requirements as qualitative requirements concerning
loan terms.15 Regulation O also requires variation between borrowers, so banks
all other loans made under section 7(a) are unable to modify the terms of PPP
banks to keep certain records and make
of the Small Business Act, unless loans to be more favorable for insiders
certain disclosures concerning
otherwise specified by the SBA in its extensions of credit subject to the rule.16 than for borrowers that are not insiders.
interim final rules administering the Under section 22(h), an ‘‘extension of Furthermore, like the PPP, which only
PPP.9 Normally, SBA regulations would credit’’ includes, among other things, applies to loans made between February
prohibit a PPP lender from making a ‘‘making or renewing any loan, granting 15 and June 30, 2020, the exception in
PPP loan to ‘‘[b]usinesses in which the a line of credit, or entering into any this interim final rule only applies to
[PPP lender] or any of its Associates similar transaction as a result of which loans made during the same time
owns an equity interest’’ (SBA lending the person becomes obligated (directly period. Excepting PPP loans from the
restrictions).10 SBA regulations define or indirectly, or by any means definition of ‘‘extension of credit’’ in
an ‘‘Associate’’ of a PPP lender to be whatsoever) to pay money or its section 22(h) and the corresponding
‘‘[a]n officer, director, key employee, or equivalent to the bank.’’ 17 Accordingly, provisions of Regulation O is
holder of 20 percent or more of the PPP loans from a bank to an insider, appropriate in light of these
value of the [PPP] [l]ender’s . . . stock including the insider’s related circumstances.
or debt instruments’’ and any entity in interests,18 would be subject to the Accordingly, the Board has
which one of these individuals or requirements of section 22(h) and determined that PPP loans pose
certain relatives ‘‘own or controls at Regulation O. minimal risk. These PPP loans will not
least 20 percent.’’ 11 The Housing and Community be subject to section 22(h) or the
Development Act of 1992 (HCDA) 19 corresponding provisions of Regulation
On April 14, 2020, the SBA issued an amended section 22(h) to authorize the O if they are not prohibited by the SBA
interim final rule stating, among other Board to adopt, by regulation, lending restrictions. The exception will
things, that SBA lending restrictions exceptions to the definition of help banks, particularly in smaller
‘‘shall not apply to prohibit an ‘‘extension of credit’’ in section 22(h) for communities, to give effect to the PPP’s
otherwise eligible business owned (in transactions that ‘‘pose minimal risk.’’ purpose of helping small businesses to
whole or part) by an outside director or Therefore, the Board may except PPP continue to operate under current
holder of less than 30 percent equity loans from the restrictions imposed by economic conditions. The Board is
interest in a PPP [l]ender from obtaining section 22(h) and the corresponding providing the temporary exclusion in
a PPP loan from the PPP [l]ender on provisions of Regulation O if it the interim final rule to allow banking
whose board the director serves or in determines that PPP loans pose minimal organizations to make PPP loans to a
which the equity owner holders an risk.20 broad range of small businesses within
interest, provided that the eligible II. The Interim Final Rule their communities, consistent with
business owned by the director or applicable law and safe and sound
equity holder follows the same process The legislative history of the HCDA banking practices. As noted, the SBA
as similarly situated customer or states that a transaction poses minimal explicitly has prohibited a banking
account holder of the [l]ender.’’ 12 The risk when the risk is ‘‘minuscule organization from favoring in processing
interim final rule also stated that SBA compared to that of other loans.’’ 21 PPP time or prioritization a PPP application
loans are guaranteed by the SBA, and of one of its directors or equity holders
lending restrictions would continue to
the guarantee is backed by the full faith and the Board will administer this
apply to officers and key employees of
and credit of the United States. Unlike interim final rule accordingly.
a PPP lender, and that ‘‘[f]avoritism by
other SBA loans authorized under SBA lending restrictions continue to
[a PPP] [l]ender in processing time or section 7(a) of the Small Business Act,22
prioritization of [a] director’s or equity apply to certain PPP loans that also
the SBA’s guarantee for PPP loans would be subject to section 22(h) and
holder’s PPP application is
prohibited.’’ 13 14 Insider means an executive officer, director, or
the corresponding provisions of
principal shareholder, and includes any related
Regulation O. Excepting PPP loans that
7 CARES Act section 1106. interest of such a person. 12 CFR 215.2(h). would be prohibited by the SBA lending
8 Interim Final Rule: ‘‘Business Loan Program 15 See 12 CFR 215.4. restrictions from the requirements of
Temporary Changes; Paycheck Protection Program’’ 16 See 12 CFR 215.8, 215.9, and 215.10. section 22(h) and the corresponding
(April 2, 2020). 17 12 U.S.C. 375b(9)(D)(i)(I).
provisions in Regulation O would not
9 Interim Final Rule: ‘‘Business Loan Program 18 Related interest of a person means a company
achieve any meaningful regulatory
Temporary Changes; Paycheck Protection Program’’ that is controlled by that person or a political or
(April 2, 2020) at 85 FR 20816. campaign committee that is controlled by that
purpose. Excepting these loans from one
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10 13 CFR 120.110(o). person or the funds or services of which will benefit regime and not the other also may create
11 13 CFR 120.10. that person. 12 CFR 215.2(n). confusion because some lenders may
12 Interim Final Rule: ‘‘Business Loan Program 19 Public Law 102–550, section 955, 106 Stat.
Temporary Changes; Paycheck Protection 3672 (1992). 23 The Board previously excepted certain
20 12 U.S.C. 375b(9)(D)(ii).
Program—Additional Eligibility Criteria and transactions from the aggregate lending limit in
Requirements for Certain Pledges of Loans’’ (April 21 See 138 Cong. Rec. S17, 914–15 (daily ed.
§ 215.4(d) of Regulation O based on a determination
14, 2020). October 8, 1992). that these transactions posed ‘‘minimal risk.’’ See
13 Id. at 85 FR 21750. 22 15 U.S.C. 636(a)(1)(A). 58 FR 26507 (May 4, 1993).
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Federal Register / Vol. 85, No. 78 / Wednesday, April 22, 2020 / Rules and Regulations 22347
mistakenly interpret an exception under cause.28 Because the rules relieve a of the rule would be contrary to the
one regime to extend to both regimes. restriction by providing an exception to public interest.
This determination does not impact the definition of ‘‘extension of credit’’ in As required by the Congressional
the application of other restrictions that section 22(h) and Regulation O, the Review Act, the Board will submit the
may apply to PPP loans, including interim final rule is exempt from the final rule and other appropriate reports
section 22(g) of the Federal Reserve Act APA’s delayed effective date to Congress and the Government
or § 215.5 of Regulation O.24 This requirement.29 Accountability Office for review.
determination also does not affect the While the Board believes that there is
SBA lending restrictions. C. Paperwork Reduction Act
good cause to issue the rule without
Question 1: What are the advantages advance notice and comment and with The Paperwork Reduction Act (44
and disadvantages of excepting PPP an immediate effective date, the Board U.S.C. 3501–3521) (PRA) states that no
loans from the definition of ‘‘extension is interested in the views of the public agency may conduct or sponsor, nor is
of credit’’ in section 22(h) and the and requests comment on all aspects of the respondent required to respond to,
corresponding provisions of the Board’s the interim final rule. an information collection unless it
Regulation O? displays a currently valid Office of
Question 2: What are the most B. Congressional Review Act Management and Budget (OMB) control
appropriate terms and conditions for number. On June 15, 1984, OMB
this exception and why? For purposes of the Congressional delegated to the Board authority under
Review Act, the Office of Management the PRA to approve and assign OMB
III. Administrative Law Matters and Budget (OMB) makes a control numbers to collections of
A. Administrative Procedure Act determination as to whether a final rule information conducted or sponsored by
constitutes a ‘‘major’’ rule.30 If a rule is the Board, as well as the authority to
The Board is issuing the interim final deemed a ‘‘major rule’’ by the OMB, the
rule without prior notice and the temporarily approve a new collection of
Congressional Review Act generally information without providing
opportunity for public comment and the provides that the rule may not take
delayed effective date ordinarily opportunity for public comment if the
effect until at least 60 days following its Board determines that a change in an
prescribed by the Administrative publication.31
Procedure Act (APA)).25 Pursuant to existing collection must be instituted
section 553(b)(B) of the APA, general The Congressional Review Act defines quickly and that public participation in
notice and the opportunity for public a ‘‘major rule’’ as any rule that the the approval process would defeat the
comment are not required with respect Administrator of the Office of purpose of the collection or
to a rulemaking when an ‘‘agency for Information and Regulatory Affairs of substantially interfere with the Board’s
good cause finds (and incorporates the the OMB finds has resulted in or is ability to perform its statutory
finding and a brief statement of reasons likely to result in (A) an annual effect obligation.
therefor in the rules issued) that notice on the economy of $100,000,000 or This interim final rule does not
and public procedure thereon are more; (B) a major increase in costs or contain any collections of information
impracticable, unnecessary, or contrary prices for consumers, individual subject to the PRA. However, the
to the public interest.’’ 26 industries, Federal, State, or local interim final rule does indirectly affect
The Board believes that the public government agencies or geographic certain recordkeeping and disclosure
interest is best served by implementing regions, or (C) significant adverse effects requirements in Regulation O that have
the interim final rule immediately. As on competition, employment, not previously been cleared by the
discussed above, the spread of COVID– investment, productivity, innovation, or Board under the PRA. In order to
19 has disrupted economic activity in on the ability of United States-based accurately account for these
the United States and other countries. In enterprises to compete with foreign- requirements pursuant to the PRA, the
addition, U.S. financial markets have based enterprises in domestic and Board has temporarily approved a new
featured substantial levels of volatility. export markets.32 collection of information titled
The magnitude and persistence of Recordkeeping and Disclosure
For the same reasons set forth above, Requirements Associated with
COVID–19 on the economy remain the Board is adopting the interim final
uncertain. In light of the substantial Regulation O (FR O; OMB No. 7100–
rule without the delayed effective date NEW).
disruptions in the economy, and the generally prescribed under the
likelihood that this interim final rule The Board’s delegated authority
Congressional Review Act. The delayed
would help ameliorate those disruptions requires that the Board, after
effective date required by the
by promoting lending to small temporarily approving a collection,
Congressional Review Act does not
businesses, the Board finds that there is solicit public comment to extend the
apply to any rule for which an agency
good cause consistent with the public information collections for a period not
for good cause finds (and incorporates
interest to issue the rule without to exceed three years. Therefore, the
the finding and a brief statement of
advance notice and comment.27 Board is inviting comment to extend the
reasons therefor in the rule issued) that
The APA also requires a 30-day FR O information collection for three
notice and public procedure thereon are
delayed effective date, except for (1) years.
impracticable, unnecessary, or contrary
substantive rules which grant or The Board invites public comment on
to the public interest.33 In light of
recognize an exemption or relieve a the following information collection,
current market uncertainty, the Board
restriction; (2) interpretative rules and which is being reviewed under
believes that delaying the effective date
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statements of policy; or (3) as otherwise authority delegated by the OMB under
provided by the agency for good 28 5 U.S.C. 553(d).
the PRA. Comments must be submitted
29 5 U.S.C. 553(d)(1).
on or before June 22, 2020. Comments
24 12 U.S.C. 375a; 12 CFR 215.5. 30 5 U.S.C. 801 et seq. are invited on the following:
25 5 U.S.C. 553. 31 5 U.S.C. 801(a)(3). a. Whether the collection of
26 5 U.S.C. 553(b)(B). 32 5 U.S.C. 804(2). information is necessary for the proper
27 5 U.S.C. 553(b)(B); 553(d)(3). 33 5 U.S.C. 808. performance of the Board’s functions,
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22348 Federal Register / Vol. 85, No. 78 / Wednesday, April 22, 2020 / Rules and Regulations
including whether the information has to prevent the evasions of the sections. records may be disposed of after two
practical utility; Accordingly, the Board has promulgated years from the date of the request.
b. The accuracy of the Board’s the Board’s Regulation O to effectuate The recordkeeping and disclosure
estimate of the burden of the Congress’ purpose of preventing insider requirements in §§ 215.8 and 215.9 of
information collection, including the abuse in banks. Regulation O are required by section
validity of the methodology and Regulation O contains certain 306(o) of Public Law 102–242, 105 Stat.
assumptions used; recordkeeping and disclosure 2236 (1991) and authorized under 12
c. Ways to enhance the quality, requirements. Pursuant to § 215.8 of U.S.C. 1817(k).
utility, and clarity of the information to Regulation O, respondents must Current actions: The Board has
be collected; maintain records necessary for temporarily approved the collections of
d. Ways to minimize the burden of compliance with the requirements of information contained within
information collection on respondents, Regulation O.35 Any recordkeeping Regulation O. The Board has
including through the use of automated method adopted by a respondent shall determined that this collection of
collection techniques or other forms of identify, through an annual survey, all information must be instituted quickly
information technology; and insiders of the respondent and maintain and that public participation in the
e. Estimates of capital or startup costs records of all extensions of credit to approval process would defeat the
and costs of operation, maintenance, insiders of the respondent, including purpose of the collection of information,
and purchase of services to provide the amount and terms of each such as these collections of information are
information. extension of credit. Additionally, any contained in an existing regulation, and
At the end of the comment period, the recordkeeping method adopted by a the inability of the Board to enforce
comments and recommendations respondent shall maintain records of these collection of information
received will be analyzed to determine extensions of credit to insiders of the requirements due to noncompliance
the extent to which the Board should respondent’s affiliates by using either with the PRA would interfere with the
modify the collection. the survey method or borrower inquiry Board’s ability to perform its statutory
Final Approval Under OMB Delegated method, as set forth in Regulation O, or duties.
a different recordkeeping method if the The Board also invites comment to
Authority of the Temporary
appropriate Federal banking agency extend the FR O information collection
Implementation of, and Solicitation of
determines that the respondent’s for three years.
Comment To Extend for Three Years,
the Following Information Collection method is at least as effective as the D. Regulatory Flexibility Act
listed methods.
Collection title: Recordkeeping and Pursuant to § 215.9 of Regulation O, The Regulatory Flexibility Act
Disclosure Requirements Associated upon receipt of a written request from (RFA) 37 requires an agency to consider
with Regulation O. the public, a respondent must make whether the rules it proposes will have
Agency form number: FR O. available the names of each of its a significant economic impact on a
OMB control number: 7100–NEW. executive officers and each of its substantial number of small entities.38
Effective Date: April 22, 2020. The RFA applies only to rules for which
principal shareholders to whom, or to
Frequency: Annual, event generated. an agency publishes a general notice of
whose related interests, the member
Respondents: Member banks of the proposed rulemaking pursuant to 5
bank had outstanding as of the end of
Federal Reserve System, savings U.S.C. 553(b). As discussed previously,
the latest previous quarter of the year,
associations, and any subsidiary of such consistent with section 553(b)(B) of the
an extension of credit that, when
institutions. APA, the Board has determined for good
Estimated number of respondents: aggregated with all other outstanding
extensions of credit at such time from cause that general notice and
Recordkeeping (§§ 215.8 and 215.9): opportunity for public comment are
1,570; disclosure (§ 215.9): 1,570. the member bank to such person and to
all related interests of such person, unnecessary, and therefore the Board is
Estimated average hours per response: not issuing a notice of proposed
Recordkeeping (§§ 215.8 and 215.9): 4; equaled or exceeded 5 percent of the
member bank’s capital and unimpaired rulemaking. Accordingly, the Board has
disclosure (§ 215.9): 2. concluded that the RFA’s requirements
Estimated annual burden hours: surplus or $500,000, whichever amount
is less.36 Respondents are not required relating to initial and final regulatory
Recordkeeping (§§ 215.8 and 215.9): flexibility analysis do not apply.
6,280; disclosure (§ 215.9): 3,140; total: to disclose the specific amounts of
individual extensions of credit. Nevertheless, the Board seeks
9,420. comment on whether, and the extent to
General description of information Additionally, each respondent must
maintain records of all requests for the which, the interim final rule would
collection: affect a significant number of small
Sections 22(g) and (h) of the Federal information described above and the
disposition of such requests. These entities.
Reserve Act 34 retstrict certain
transactions between banks and their E. Riegle Community Development and
insiders or insiders of their affiliates. 35 A respondent that is prohibited by law or by Regulatory Improvement Act of 1994
an express resolution of the board of directors of the
Insiders include executive officers, respondent from making an extension of credit to Pursuant to section 302(a) of the
directors, principal shareholders, and any company or other entity that is covered by Riegle Community Development and
companies controlled by such persons. Regulation O as a company is not required to Regulatory Improvement Act
Congress enacted sections 22(g) and (h) maintain any records of the related interests of the
insiders of the respondent or its affiliates or to
(RCDRIA),39 in determining the effective
to prevent bank insiders from abusing
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inquire of borrowers whether they are related
their positions to gain favorable interests of the insiders of the respondent or its 37 5 U.S.C. 601 et seq.
treatment from their associated banks. affiliates. 12 CFR 215.8(d). 38 Under regulations issued by the SBA, a small
Congress authorized the Board to 36 No such disclosure is required if the aggregate entity includes a depository institution, bank
amount of all extensions of credit outstanding at holding company, or savings and loan holding
prescribe rules and regulations as company with total assets of $600 million or less
such time from the member bank to the executive
necessary to effectuate the purposes and officer or principal shareholder of the respondent and trust companies with total assets of $41.5
and to all related interests of such a person does million or less. See 13 CFR 121.201.
34 12 U.S.C. 375a, 375b. not exceed $25,000. 39 12 U.S.C. 4802(a).
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Federal Register / Vol. 85, No. 78 / Wednesday, April 22, 2020 / Rules and Regulations 22349
date and administrative compliance List of Subjects in 12 CFR Part 215 DEPARTMENT OF HOMELAND
requirements for new regulations that SECURITY
impose additional reporting, disclosure, Credit, Penalties, Reporting and
or other requirements on insured recordkeeping requirements. U.S. Customs and Border Protection
depository institutions (IDIs), the Authority and Issuance
Federal banking agencies must consider, DEPARTMENT OF THE TREASURY
consistent with the principle of safety For the reasons stated in the
and soundness and the public interest, preamble, the Board of Governors of the 19 CFR Part 24
any administrative burdens that such Federal Reserve System amends 12 CFR
regulations would place on depository chapter II as follows: [USCBP–2020–0017; CBP Dec. 20–05]
institutions, including small depository
institutions, and customers of PART 215—LOANS TO EXECUTIVE RIN 1515–AE54
depository institutions, as well as the OFFICERS, DIRECTORS, AND Temporary Postponement of the Time
benefits of such regulations. In addition, PRINCIPAL SHAREHOLDERS OF To Deposit Certain Estimated Duties,
section 302(b) of RCDRIA requires new MEMBER BANKS (REGULATION O) Taxes, and Fees During the National
regulations and amendments to
Emergency Concerning the Novel
regulations that impose additional ■ 1. The authority citation for part 215 Coronavirus Disease (COVID–19)
reporting, disclosures, or other new is revised to read as follows: Outbreak
requirements on IDIs generally to take
effect on the first day of a calendar Authority: 12 U.S.C. 248(a), 375a(10), AGENCY: U.S. Customs and Border
quarter that begins on or after the date 375b(9) and (10), 1468, 1817(k), 5412; Pub. L. Protection, Department of Homeland
on which the regulations are published 102–242, 105 Stat. 2236 (1991) (12 U.S.C. Security; Department of the Treasury.
in final form, with certain exceptions, 1811 note) and Pub. L. 116–136, 134 Stat.
281. ACTION: Temporary final rule.
including for good cause.40 For the
reasons described above, the Board ■ 2. In § 215.3:
SUMMARY: In light of the President’s
finds good cause exists under section Proclamation Declaring a National
302 of RCDRIA to publish this interim ■ a. In paragraph (b)(6), remove the Emergency Concerning the Novel
final rule with an immediate effective words ‘‘of this part’’ and the word ‘‘or’’ Coronavirus Disease (COVID–19)
date. at the end of the paragraph; (Presidential Proclamation 9994) under
As such, the final rule will be ■ b. In paragraph (b)(7), remove the the National Emergencies Act on March
effective immediately on publication. period at the end of the paragraph and 13, 2020, and the President’s Executive
Nevertheless, the Board seeks comment add ‘‘; or’’ in its place; and Order entitled ‘‘National Emergency
on RCDRIA. Authority to Temporarily Extend
■ c. Add paragraph (b)(8).
F. Use of Plain Language Deadlines for Certain Estimated
The addition reads as follows: Payments’’ authorizing the Secretary of
Section 722 of the Gramm-Leach- the Treasury to exercise the authority
Bliley Act 41 requires the Federal § 215.3 Extension of credit.
under section 318(a) of the Tariff Act of
banking agencies to use plain language * * * * * 1930, issued on April 18, 2020, the
in all proposed and final rules (b) * * * Secretary of the Treasury, in
published after January 1, 2000. The consultation with the designee of the
Board has sought to present the interim (8) Except for purposes of § 215.5, a
loan: Secretary of Homeland Security (U.S.
final rule in a simple and Customs and Border Protection (CBP)),
straightforward manner. The Board (i) In which the participation by the is amending the CBP regulations to
invites comments on whether there are Small Business Administration on a temporarily postpone the deadline for
additional steps it could take to make deferred basis is 100 percent pursuant to importers of record with a significant
the rule easier to understand. For section 1102(a)(1) of Public Law 116– financial hardship to deposit certain
example: 136 (to be codified at 15 U.S.C. estimated duties, taxes, and fees that
• Have we organized the material to 636(a)(2)(F)); they would ordinarily be obligated to
suit your needs? If not, how could this pay as of the date of entry, or
material be better organized? (ii) That is made during the period
beginning on February 15, 2020, and withdrawal from warehouse, for
• Are the requirements in the consumption, for merchandise entered
regulation clearly stated? If not, how ending on June 30, 2020; and
in March or April 2020, for a period of
could the regulation be more clearly (iii) That would not be prohibited by 90 days from the date that the deposit
stated? 13 CFR 120.110(o) or rules or would otherwise have been due but for
• Does the regulation contain interpretations thereof issued by the this emergency action. This temporary
language or jargon that is not clear? If Small Business Administration. postponement does not permit return of
so, which language requires
* * * * * any deposits of estimated duties, taxes,
clarification?
• Would a different format (grouping and/or fees that have been paid. This
Dated: April 17, 2020.
and order of sections, use of headings, temporary postponement also does not
By order of the Board of Governors of the apply to entries, or withdrawals from
paragraphing) make the regulation Federal Reserve System.
easier to understand? If so, what warehouse, subject to certain specified
khammond on DSKJM1Z7X2PROD with RULES
Ann Misback, trade remedies, and any entry summary
changes to the format would make the
regulation easier to understand? Secretary of the Board. that includes merchandise subject to
• What else could we do to make the [FR Doc. 2020–08574 Filed 4–20–20; 11:15 am] those trade remedies is not eligible
regulation easier to understand? BILLING CODE P under this rule.
DATES: Effective date: April 20, 2020.
40 12 U.S.C. 4802. Comments must be received by May 20,
41 12 U.S.C. 4809. 2020.
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