Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans (rule, 85 FR 20387, April 13, 2020)
Summary
An interim final rule from the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC) letting banking organizations neutralize the regulatory capital effects of participating in the Paycheck Protection Program Lending Facility (PPPL Facility). The Board authorized each of the Federal Reserve Banks to participate in the facility under section 13(3) of the Federal Reserve Act. The treatment is similar to the one the agencies gave for the Federal Reserve’s money market fund facility. It also applies the CARES Act requirement that Paycheck Protection Program loans receive a zero percent risk weight. It was published in the Federal Register on April 13, 2020 (Vol. 85, No. 71) and took effect that day; comments were due by May 13, 2020.
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Cite this document
“Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans (rule, 85 FR 20387, April 13, 2020).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/regulatory-capital-rule-paycheck-protection-program-lending-facility-a-8fe020aded/
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20387
Rules and Regulations Federal Register
Vol. 85, No. 71
Monday, April 13, 2020
This section of the FEDERAL REGISTER Paycheck Protection Program the ‘‘Comment’’ box below the
contains regulatory documents having general established by the Coronavirus Aid, displayed document information or by
applicability and legal effect, most of which Relief, and Economic Security Act clicking on the document title and then
are keyed to and codified in the Code of (CARES Act). To facilitate use of this clicking the ‘‘Comment’’ box on the top-
Federal Regulations, which is published under Federal Reserve facility, the Office of left side of the screen. For help with
50 titles pursuant to 44 U.S.C. 1510.
the Comptroller of the Currency, the submitting effective comments please
The Code of Federal Regulations is sold by Board, and the Federal Deposit click on ‘‘Commenter’s Checklist.’’ For
the Superintendent of Documents. Insurance Corporation (together, the assistance with the Regulations.gov Beta
agencies) are adopting this interim final site, please call (877) 378–5457 (toll
rule to allow banking organizations to free) or (703) 454–9859 Monday–Friday,
DEPARTMENT OF THE TREASURY neutralize the regulatory capital effects 9 a.m.–5 p.m. ET or email regulations@
of participating in the facility. This erulemakinghelpdesk.com.
Office of the Comptroller of the treatment is similar to the treatment • Email: regs.comments@
Currency extended previously by the agencies in occ.treas.gov.
connection with the Federal Reserve’s • Mail: Chief Counsel’s Office,
12 CFR Part 3 Money Market Mutual Fund Liquidity Attention: Comment Processing, Office
[Docket No. OCC–2020–0018] Facility. In addition, as mandated by of the Comptroller of the Currency, 400
section 1102 of the CARES Act, loans 7th Street SW, Suite 3E–218,
RIN 1557–AE90
originated under the Small Business Washington, DC 20219.
FEDERAL RESERVE SYSTEM Administration’s Paycheck Protection • Hand Delivery/Courier: 400 7th
Program will receive a zero percent risk Street SW, Suite 3E–218, Washington,
12 CFR Part 217 weight under the agencies’ regulatory DC 20219.
capital rule. • Fax: (571) 465–4326.
[Regulations Q; Docket No. R–1712] DATES: Instructions: You must include
RIN 7100–AF86 Effective date: The interim final rule ‘‘OCC’’ as the agency name and ‘‘Docket
is effective April 13, 2020. ID OCC–2020–0018’’ in your comment.
FEDERAL DEPOSIT INSURANCE Comment date: Comments on the In general, the OCC will enter all
CORPORATION interim final rule must be received no comments received into the docket and
later than May 13, 2020. publish the comments on the
12 CFR Part 324 ADDRESSES: Regulations.gov website without
OCC: Commenters are encouraged to change, including any business or
RIN 3064–AF49 personal information provided such as
submit comments through the Federal
eRulemaking Portal or email, if possible. name and address information, email
Regulatory Capital Rule: Paycheck
Please use the title ‘‘Regulatory Capital addresses, or phone numbers.
Protection Program Lending Facility
Rule: Paycheck Protection Program Comments received, including
and Paycheck Protection Program
Lending Facility and Paycheck attachments and other supporting
Loans
Protection Program Loans’’ to facilitate materials, are part of the public record
AGENCY: Office of the Comptroller of the the organization and distribution of the and subject to public disclosure. Do not
Currency (OCC), Board of Governors of comments. You may submit comments include any information in your
the Federal Reserve System (Board), and by any of the following methods: comment or supporting materials that
Federal Deposit Insurance Corporation • Federal eRulemaking Portal— you consider confidential or
(FDIC). Regulations.gov Classic or inappropriate for public disclosure.
ACTION: Interim final rule; request for Regulations.gov Beta: Regulations.gov You may review comments and other
comment. Classic: Go to https:// related materials that pertain to this
www.regulations.gov/. Enter ‘‘Docket ID rulemaking action by any of the
SUMMARY: To provide liquidity to small OCC–2020–0018’’ in the Search Box and following methods:
business lenders and the broader credit click ‘‘Search.’’ Click on ‘‘Comment • Viewing Comments Electronically—
markets, to help stabilize the financial Now’’ to submit public comments. For Regulations.gov Classic or
system, and to provide economic relief help with submitting effective Regulations.gov Beta: Regulations.gov
to small businesses nationwide, the comments please click on ‘‘View Classic: Go to https://
Board of Governors of the Federal Commenter’s Checklist.’’ Click on the www.regulations.gov/. Enter ‘‘Docket ID
Reserve System (Board) authorized each ‘‘Help’’ tab on the Regulations.gov home OCC–2020–0018’’ in the Search box and
of the Federal Reserve Banks to page to get information on using click ‘‘Search.’’ Click on ‘‘Open Docket
participate in the Paycheck Protection Regulations.gov, including instructions Folder’’ on the right side of the screen.
Program Lending Facility (PPPL for submitting public comments. Comments and supporting materials can
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Facility), pursuant to section 13(3) of Regulations.gov Beta: Go to https:// be viewed and filtered by clicking on
the Federal Reserve Act. Under the beta.regulations.gov/ or click ‘‘Visit ‘‘View all documents and comments in
PPPL Facility, each of the Federal New Regulations.gov Site’’ from the this docket’’ and then using the filtering
Reserve Banks will extend non-recourse Regulations.gov Classic homepage. tools on the left side of the screen. Click
loans to eligible financial institutions to Enter ‘‘Docket ID OCC–2020–0018’’ in on the ‘‘Help’’ tab on the
fund loans guaranteed by the Small the Search Box and click ‘‘Search.’’ Regulations.gov home page to get
Business Administration under the Public comments can be submitted via information on using Regulations.gov.
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20388 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations
The docket may be viewed after the Follow instructions for submitting E. Riegle Community Development and
close of the comment period in the same comments on the Agency website. Regulatory Improvement Act of 1994
F. Use of Plain Language
manner as during the comment period. • Email: Comments@FDIC.gov.
G. Unfunded Mandates Act
Regulations.gov Beta: Go to https:// Include ‘‘RIN 3064–AF49’’ on the
beta.regulations.gov/ or click ‘‘Visit subject line of the message. I. Background
New Regulations.gov Site’’ from the • Mail: Robert E. Feldman, Executive The spread of the coronavirus disease
Regulations.gov Classic homepage. Secretary, Attention: Comments/RIN 2019 (COVID–19) has slowed economic
Enter ‘‘Docket ID OCC–2020–0018’’ in 3064–AF49, Federal Deposit Insurance activity in many countries, including
the Search Box and click ‘‘Search.’’ Corporation, 550 17th Street NW, the United States. Financial conditions
Click on the ‘‘Comments’’ tab. Washington, DC 20429. have tightened markedly, and the cost of
Comments can be viewed and filtered FOR FURTHER INFORMATION CONTACT: credit has risen for most borrowers.
by clicking on the ‘‘Sort By’’ drop-down Small businesses are acutely impacted
OCC: Margot Schwadron, Director, or
on the right side of the screen or the by the COVID–19 pandemic. As
Andrew Tschirhart, Risk Expert, Capital
‘‘Refine Results’’ options on the left side millions of Americans have been
and Regulatory Policy, (202) 649–6370;
of the screen. Supporting materials can ordered to stay home, severely reducing
or Carl Kaminski, Special Counsel, or
be viewed by clicking on the their ability to engage in normal
Christopher Rafferty, Counsel, Chief
‘‘Documents’’ tab and filtered by commerce, revenue streams for many
Counsel’s Office, (202) 649–5490, for
clicking on the ‘‘Sort By’’ drop-down on small businesses have collapsed. This
persons who are deaf or hearing
the right side of the screen or the has resulted in severe liquidity
impaired, TTY, (202) 649–5597, Office
‘‘Refine Results’’ options on the left side constraints at small businesses and has
of the Comptroller of the Currency, 400
of the screen.’’ For assistance with the forced many small businesses to close
7th Street SW, Washington, DC 20219.
Regulations.gov Beta site, please call temporarily or furlough employees.
Board: Anna Lee Hewko, Associate
(877) 378–5457 (toll free) or (703) 454– Continued access to financing will be
Director, (202) 530–6360, Constance
9859 Monday–Friday, 9 a.m.–5 p.m. ET crucial for small businesses to weather
Horsley, Deputy Associate Director,
or email regulations@ economic disruptions caused by
(202) 452–5239, Elizabeth MacDonald,
erulemakinghelpdesk.com. COVID–19 and, ultimately, to help
Manager, (202) 457–6316, Cecily Boggs,
The docket may be viewed after the restore economic activity.
Senior Financial Institution Policy
close of the comment period in the same As part of the Coronavirus Aid, Relief,
Analyst II, (202) 530–6209, or Eusebius
manner as during the comment period. and Economic Security Act (CARES
Luk, Senior Financial Institution Policy
Board: You may submit comments, Act) and in recognition of the exigent
Analyst I, (202) 452–2874, Division of
identified by Docket No. R–1712; RIN circumstances faced by small
Supervision and Regulation; Benjamin
7100–AF86, by any of the following businesses, Congress created the
McDonough, Assistant General Counsel, Paycheck Protection Program (PPP). PPP
methods:
(202) 452–2036, Asad Kudiya, Senior
• Agency Website: http:// covered loans are fully guaranteed as to
Counsel, (202) 475–6358, or David principal and accrued interest by the
www.federalreserve.gov. Follow the
Alexander, Senior Counsel, (202) 452– Small Business Administration (SBA),
instructions for submitting comments at
2877, Legal Division, Board of the amount of each being determined at
http://www.federalreserve.gov/
Governors of the Federal Reserve the time the guarantee is exercised. As
generalinfo/foia/ProposedRegs.cfm.
System, 20th Street and Constitution
• Email: regs.comments@ a general matter, SBA guarantees are
Avenue NW, Washington, DC 20551. backed by the full faith and credit of the
federalreserve.gov. Include docket and
Users of Telecommunication Device for U.S. Government. PPP covered loans
RIN numbers in the subject line of the
Deaf (TDD) only, call (202) 263–4869. also afford borrowers forgiveness up to
message.
FDIC: Bobby R. Bean, Associate
• Fax: (202) 452–3819 or (202) 452– the principal amount of the PPP covered
Director, bbean@fdic.gov; Benedetto loan, if the proceeds of the PPP covered
3102.
Bosco, Chief, Capital Policy Section,
• Mail: Ann E. Misback, Secretary, loan are used for certain expenses. The
bbosco@fdic.gov; Noah Cuttler, Senior SBA reimburses PPP lenders for any
Board of Governors of the Federal
Policy Analyst, ncuttler@fdic.gov; amount of a PPP covered loan that is
Reserve System, 20th Street and
regulatorycapital@fdic.gov; Capital forgiven. PPP lenders are not held liable
Constitution Avenue NW, Washington,
Markets Branch, Division of Risk for any representations made by PPP
DC 20551.
Management Supervision, (202) 898– borrowers in connection with a
All public comments will be made
6888; or Michael Phillips, Counsel, borrower’s request for PPP covered loan
available on the Board’s website at
mphillips@fdic.gov; Catherine Wood, forgiveness.
http://www.federalreserve.gov/
Counsel, cawood@fdic.gov; Supervision Under the PPP, eligible borrowers
generalinfo/foia/ProposedRegs.cfm as
and Legislation Branch, Legal Division, generally include businesses with fewer
submitted, unless modified for technical
Federal Deposit Insurance Corporation, than 500 employees or that are
reasons or to remove personally
550 17th Street NW, Washington, DC otherwise considered by the SBA to be
identifiable information at the
20429. For the hearing impaired only, small, including individuals operating
commenter’s request. Accordingly,
Telecommunication Device for the Deaf sole proprietorships or acting as
comments will not be edited to remove
(TDD), (800) 925–4618. independent contractors, certain
any identifying or contact information.
For security reasons, the Board requires SUPPLEMENTARY INFORMATION: franchisees, nonprofit corporations,
that visitors make an appointment to veterans organizations, and Tribal
Table of Contents
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inspect comments. You may do so by businesses.1 The loan amount under the
calling (202) 452–3684. I. Background PPP would be limited to the lesser of
II. The Interim Final Rule $10 million and 250 percent of a
FDIC: You may submit comments, III. Administrative Law Matters
identified by RIN 3064–AF49, by any of A. Administrative Procedure Act 1 For more information on the Paycheck
the following methods: B. Congressional Review Act Protection Program, see https://www.sba.gov/
• Agency Website: https:// C. Paperwork Reduction Act funding-programs/loans/coronavirus-relief-options/
www.fdic.gov/regulations/laws/federal. D. Regulatory Flexibility Act paycheck-protection-program-ppp.
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Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations 20389
borrower’s average monthly payroll function of participating in the PPPL a zero percent risk weight to the portion
costs.2 Facility, the banking organization must of exposures that is guaranteed by a U.S.
In order to provide liquidity to small originate and hold PPP covered loans Government agency for purposes of the
business lenders and the broader credit (that is, assets that are eligible collateral banking organization’s risk-based
markets, and to help stabilize the pledged to the Federal Reserve Banks) capital requirements.9 Section 1102 of
financial system, on April 7, 2020, the on its balance sheet.6 As a result, an the CARES Act requires banking
Board, with approval of the Secretary of eligible banking organization that organizations to apply a zero percent
the Treasury, authorized each of the participates in the PPPL Facility could risk weight to PPP covered loans.
Federal Reserve Banks to extend credit potentially be subject to increased Accordingly, and consistent with
under the Paycheck Protection Program regulatory capital requirements. Section 1102 of the CARES Act, the
Lending Facility (PPPL Facility), The agencies believe that the agencies are amending sections 32 and
pursuant to section 13(3) of the Federal regulatory capital requirements for PPP 131 of the capital rule to clarify that PPP
Reserve Act.3 Under the PPPL Facility, covered loans pledged by a banking covered loans originated by a banking
each of the Federal Reserve Banks will organization to a Federal Reserve Bank organization under the Paycheck
extend non-recourse loans to as part of the PPPL Facility do not Protection Program will receive a zero
institutions that are eligible to make PPP reflect the substantial protections from percent risk weight.
covered loans, including depository risk provided to the banking The agencies seek comment on all
institutions subject to the agencies’ organization by the facility. Because of aspects of the interim final rule.
capital rules.4 Under the PPPL Facility, the non-recourse nature of the Federal
only PPP covered loans that are Reserve’s extension of credit to the IV. Administrative Law Matters
guaranteed by the SBA under the banking organization, the banking A. Administrative Procedure Act
Paycheck Protection Program with organization is not exposed to credit or
respect to both principal and interest market risk from the pledged PPP The agencies are issuing the interim
and that are originated by an eligible covered loans. Therefore, the agencies final rule without prior notice and the
institution may be pledged as collateral believe that it would be appropriate to opportunity for public comment and the
to the Federal Reserve Banks (eligible exclude the effects of these pledged PPP delayed effective date ordinarily
collateral). covered loans from the banking prescribed by the Administrative
To facilitate the use of this Federal organization’s regulatory capital.7 Procedure Act (APA).10 Pursuant to
Reserve facility, the agencies are Specifically, the interim final rule section 553(b)(B) of the APA, general
adopting the interim final rule, which would permit banking organizations to notice and the opportunity for public
allows banking organizations to exclude exposures pledged as collateral comment are not required with respect
neutralize the regulatory capital effects to the PPPL Facility from a banking to a rulemaking when an ‘‘agency for
of loans pledged to the PPPL Facility. organization’s total leverage exposure, good cause finds (and incorporates the
This relief, which applies to both risk- average total consolidated assets, finding and a brief statement of reasons
based and leverage capital ratios, advanced approaches-total risk- therefor in the rules issued) that notice
including the community bank leverage weighted assets, and standardized total and public procedure thereon are
ratio, is consistent with the treatment risk-weighted assets, as applicable.8 impracticable, unnecessary, or contrary
that the agencies previously provided to Question 1: The agencies invite to the public interest.’’ 11
banking organizations to facilitate use of comment on the advantages and The agencies believe that the public
the Federal Reserve’s Money Market disadvantages of neutralizing the effects interest is best served by implementing
Mutual Fund Liquidity Facility.5 of participating in the PPPL Facility on the interim final rule immediately upon
regulatory capital requirements. How publication in the Federal Register. As
III. The Interim Final Rule does the approach in the interim final discussed above, the spread of COVID–
A. Regulatory Capital Treatment of rule support the objectives of the 19 has slowed economic activity in
PPPL Facility Exposures facility? What other steps could be taken many countries, including the United
The agencies’ capital rules require to support the objectives of the facility? States. Financial conditions have
banking organizations to comply with What safety and soundness concerns tightened markedly, and the cost of
risk-based and leverage capital should the agencies consider in credit has risen for most borrowers.
requirements, which are expressed as a connection with the approach in the Small businesses are acutely impacted
ratio of regulatory capital to assets and interim final rule? by the COVID–19 pandemic. As
certain other exposures. Risk-based B. Regulatory Capital Treatment of PPP millions of Americans have been
capital requirements are based on risk- Covered Loans ordered to stay home, severely reducing
weighted assets, whereas leverage their ability to engage in normal
The agencies’ regulatory capital rule commerce, revenue streams for many
capital requirements are based on a requires a banking organization to apply
measure of average total consolidated small businesses have collapsed. This
assets or total leverage exposure. 6 Under the Small Business Administration’s
has resulted in severe liquidity
Participation in the PPPL Facility will interim final rule, a lender may request that the constraints at small businesses and has
affect the balance sheet of an eligible Small Business Administration purchase the forced many small businesses to close
banking organization because, as a expected forgiveness amount of a PPP covered loan temporarily or furlough employees.
or pool of PPP covered loans at the end of week Continued access to financing will be
seven of the covered period. See Interim Final Rule
2 Id.
‘‘Business Loan Program Temporary Changes; crucial for small businesses to weather
economic disruptions caused by
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3 12 U.S.C. 343(3). Paycheck Protection Program,’’ https://
4 See 12 part 3 (OCC); 12 CFR part 217 (Board); www.sba.gov/sites/default/files/2020-04/PPP- COVID–19 and, ultimately, to help
12 CFR part 324 (FDIC). IFRN%20FINAL_0.pdf. restore economic activity.
5 See Regulatory Capital Rule: Money Market 7 This includes covered PPP loans originated
Mutual Fund Liquidity Facility, 80 FR 16232 beginning on April 3, 2020, and pledged to the
9 See 12 CFR 3.32(a)(1) (OCC); 12 CFR
(March 23, 2020). This treatment also is consistent Federal Reserve Banks in connection with this
with relief provided in connection with the Asset- facility. 217.32(a)(1) (Board); 12 CFR 324.32(a)(1) (FDIC).
8 This treatment would extend to the community 10 5 U.S.C. 553.
Backed Commercial Paper Money Market Mutual
Fund Facility in 2008, 73 FR 55706 (Sept. 26, 2008). bank leverage ratio. 11 5 U.S.C. 553(b)(B).
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20390 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations
In order to provide liquidity to small date generally prescribed under the changes made in this interim final rule.
business lenders and the broader credit CRA. The delayed effective date On June 15, 1984, OMB delegated to the
markets, and to stabilize the financial required by the CRA does not apply to Board authority under the PRA to
system, the Board, with approval of the any rule for which an agency for good temporarily approve a revision to a
Secretary of the Treasury, authorized cause finds (and incorporates the collection of information without
each of the Federal Reserve Banks to finding and a brief statement of reasons providing opportunity for public
extend credit under the PPPL Facility, therefor in the rule issued) that notice comment if the Board determines that a
and the interim final rule will facilitate and public procedure thereon are change in an existing collection must be
this Federal Reserve lending program. impracticable, unnecessary, or contrary instituted quickly and that public
For these reasons, the agencies find that to the public interest.18 In light of participation in the approval process
there is good cause consistent with the current market uncertainty, the agencies would defeat the purpose of the
public interest to issue the rule without believe that delaying the effective date collection or substantially interfere with
advance notice and comment.12 of the rule would be contrary to the the Board’s ability to perform its
The APA also requires a 30-day public interest. statutory obligation.
delayed effective date, except for (1) As required by the CRA, the agencies The Board’s delegated authority
substantive rules that grant or recognize will submit the interim final rule and requires that the Board, after
an exemption or relieve a restriction; (2) other appropriate reports to Congress temporarily approving a collection,
interpretative rules and statements of and the Government Accountability solicit public comment on a proposal to
policy; or (3) as otherwise provided by Office for review. extend the temporary collection for a
the agency for good cause.13 Because the C. Paperwork Reduction Act period not to exceed three years.
rules relieve a restriction, the interim Therefore, the Board is inviting
final rule is exempt from the APA’s The Paperwork Reduction Act of 1995 comment to extend the FR Y–9 reports
delayed effective date requirement.14 (PRA) states that no agency may for three years, with revision. The Board
While the agencies believe that there conduct or sponsor, nor is the invites public comment on the FR Y–9
is good cause to issue the interim final respondent required to respond to, an reports, which are being reviewed under
rule without advance notice and information collection unless it displays authority delegated by the OMB under
comment and with an immediate a currently valid OMB control the PRA. Comments are invited on the
effective date, the agencies are number.19 The interim final rule affects following:
interested in the views of the public and the agencies’ current information a. Whether the collection of
requests comment on all aspects of the collections for the Consolidated Reports information in the interim final rule is
interim final rule. of Condition and Income (Call Reports) necessary for the proper performance of
(FFIEC 031, FFIEC 041, and FFIEC 051) the Board’s functions, including
B. Congressional Review Act and the Regulatory Capital Reporting for whether the information has practical
For purposes of Congressional Review Institutions Subject to the Advanced utility;
Act (CRA), the Office of Management Capital Adequacy Framework (FFIEC b. The accuracy of the Board’s
and Budget (OMB) makes a 101). The OMB control numbers for the estimate of the burden of the
determination as to whether a final rule Call Reports of the agencies are: OCC information collection in the interim
constitutes a ‘‘major’’ rule.15 If a rule is OMB No. 1557–0081; Board OMB No. final rule, including the validity of the
deemed a ‘‘major rule’’ by the OMB, the 7100–0036; and FDIC OMB No. 3064– methodology and assumptions used;
CRA generally provides that the rule 0052. The OMB control numbers for c. Ways to enhance the quality,
may not take effect until at least 60 days FFIEC 101 of the agencies are: OCC utility, and clarity of the information to
following its publication.16 OMB No. 1557–0239; Board OMB No. be collected;
The CRA defines a ‘‘major rule’’ as 7100–0319; and FDIC OMB No. 3064– d. Ways to minimize the burden of
any rule that the Administrator of the 0159. The Board has reviewed the information collection on respondents,
Office of Information and Regulatory interim final rule pursuant to authority including through the use of automated
Affairs of the OMB finds has resulted in delegated by the OMB. collection techniques or other forms of
or is likely to result in (1) an annual Although there is a substantive information technology; and
effect on the economy of $100,000,000 change to the actual calculation of total e. Estimates of capital or startup costs
or more; (2) a major increase in costs or leverage exposure, average total and costs of operation, maintenance,
prices for consumers, individual consolidated assets, standardized total and purchase of services to provide
industries, Federal, State, or local risk-weighted assets, and advanced information.
government agencies or geographic approaches total risk-weighted assets, as Comments must be submitted on or
regions, or (3) significant adverse effects applicable, for purposes of the Call before May 13, 2020. At the end of the
on competition, employment, Reports, the change should be minimal comment period, the comments and
investment, productivity, innovation, or and result in a zero net change in hourly recommendations received will be
on the ability of United States-based burden under the agencies’ information analyzed to determine the extent to
enterprises to compete with foreign- collections. Submissions will, however, which the Board should modify the
based enterprises in domestic and be made by the agencies to OMB. The interim final rule.
export markets.17 changes to the instructions of the Call Adopted Revision, With Extension for
For the same reasons set forth above, Reports and FFIEC 101 will be Three Years, of the Following
the agencies are adopting the interim addressed in a separate Federal Register Information Collection:
notice. Report title: Financial Statements for
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final rule without the delayed effective
The Board has temporarily revised the Holding Companies.
12 5 U.S.C. 553(b)(B). instructions to the Financial Statements Agency form number: FR Y–9C; FR Y–
13 5 U.S.C. 553(d). for Holding Companies (FR Y–9 reports; 9LP; FR Y–9SP; FR Y–9ES; FR Y–9CS.
14 5 U.S.C. 553(d)(1). OMB No. 7100–0128) to reflect the OMB control number: 7100–0128.
15 5 U.S.C. 801 et seq. Effective date: June 30, 2020.
16 5 U.S.C. 801(a)(3). 18 5 U.S.C. 808. Frequency: Quarterly, semiannually,
17 5 U.S.C. 804(2). 19 4 U.S.C. 3501–3521. and annually.
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Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations 20391
Affected public: Businesses or other General description of report: The FR ‘‘Representation and warranty reserves
for-profit. Y–9 reports continue to be the primary for 1–4 family residential mortgage
Respondents: Bank holding source of financial data on holding loans sold to other parties’’ are
companies (BHCs), savings and loan companies that examiners rely on in the considered confidential commercial and
holding companies (SLHCs),20 securities intervals between on-site inspections. financial information. Such treatment is
holding companies (SHCs), and U.S. Financial data from these reporting appropriate under exemption 4 of the
intermediate holding companies (IHCs) forms are used to detect emerging Freedom of Information Act (FOIA) (5
(collectively, holding companies (HCs)). financial problems, to review U.S.C. 552(b)(4)) because these data
Estimated number of respondents: FR performance and conduct pre- items reflect commercial and financial
Y–9C (non-advanced approaches (AA) inspection analysis, to monitor and information that is both customarily and
community bank leverage ratio (CBLR) evaluate capital adequacy, to evaluate actually treated as private by the
HCs) with less than $5 billion in total HC mergers and acquisitions, and to submitter, and which the Board has
assets—71, FR Y–9C (non-AA CBLR analyze a holding company’s overall previously assured submitters will be
HCs) with $5 billion or more in total financial condition to ensure the safety treated as confidential. It also appears
assets—35, FR Y–9C (non-AA non-CBLR and soundness of its operations. The FR that disclosing these data items may
HCs) with less than $5 billion in total Y–9C, FR Y–9LP, and FR Y–9SP serve reveal confidential examination and
assets—84, FR Y–9C (non-AA non-CBLR as standardized financial statements for supervisory information, and in such
HCs) with $5 billion or more in total the consolidated HC. The Board requires instances, this information would also
assets—154, FR Y–9C (AA HCs)—19, FR HCs to provide standardized financial be withheld pursuant to exemption 8 of
Y–9LP—434, FR Y–9SP—3,960, FR Y– statements to fulfill the Board’s the FOIA (5 U.S.C. 552(b)(8)), which
9ES—83, FR Y–9CS—236. statutory obligation to supervise these protects information related to the
Estimated average hours per response: organizations. The FR Y–9ES is a supervision or examination of a
Reporting financial statement for HCs that are regulated financial institution.
Employee Stock Ownership Plans. The In addition, for both the FR Y–9C
FR Y–9C (non-AA CBLR HCs) with Board uses the FR Y–9CS (a free-form report and the FR Y–9SP report,
less than $5 billion in total assets— supplement) to collect additional Schedule HC’s memorandum item 2.b.,
29.14, FR Y–9C (non-AA CBLR HCs) information deemed to be critical and the name and email address of the
with $5 billion or more in total assets— needed in an expedited manner. HCs external auditing firm’s engagement
35.11, FR Y–9C (non-AA non-CBLR file the FR Y–9C on a quarterly basis, partner, is considered confidential
HCs) with less than $5 billion in total the FR Y–9LP quarterly, the FR Y–9SP commercial information and protected
assets—40.98, FR Y–9C (non-AA non- semiannually, the FR Y–9ES annually, by exemption 4 of the FOIA (5 U.S.C.
CBLR HCs) with $5 billion or more in and the FR Y–9CS on a schedule that is 552(b)(4)) if the identity of the
total assets—46.95, FR Y–9C (AA determined when this supplement is engagement partner is treated as private
HCs)—48.59, FR Y–9LP—5.27, FR Y– used. information by HCs. The Board has
9SP—5.40, FR Y–9ES—0.50, FR Y– Legal authorization and assured respondents that this
9CS—0.50. confidentiality: The Board has the information will be treated as
Recordkeeping authority to impose the reporting and confidential since the collection of this
recordkeeping requirements associated data item was proposed in 2004.
FR Y–9C—1, FR Y–9LP—1, FR Y– with the FR Y–9 family of reports on Aside from the data items described
9SP—0.50, FR Y–9ES—0.50, FR Y– BHCs pursuant to section 5 of the Bank above, the remaining data items on the
9CS—0.50. Holding Company Act of 1956 (BHC FR Y–9C report and the FR Y–9SP
Estimated annual burden hours: Act) (12 U.S.C. 1844); on SLHCs report are generally not accorded
Reporting pursuant to section 10(b)(2) and (3) of confidential treatment. The data items
the Home Owners’ Loan Act (12 U.S.C. collected on FR Y–9LP, FR Y–9ES, and
FR Y–9C (non-AA CBLR HCs) with 1467a(b)(2) and (3)), as amended by FR Y–9CS reports, are also generally not
less than $5 billion in total assets— sections 369(8) and 604(h)(2) of the accorded confidential treatment. As
8,276, FR Y–9C (non-AA CBLR HCs) Dodd-Frank Wall Street and Consumer provided in the Board’s Rules Regarding
with $5 billion or more in total assets— Protection Act (Dodd-Frank Act); on Availability of Information (12 CFR part
4,915, FR Y–9C (non-AA non-CBLR U.S. IHCs pursuant to section 5 of the 261), however, a respondent may
HCs) with less than $5 billion in total BHC Act (12 U.S.C 1844), as well as request confidential treatment for any
assets—13,769, FR Y–9C (non-AA non- pursuant to sections 102(a)(1) and 165 data items the respondent believes
CBLR HCs) with $5 billion or more in of the Dodd-Frank Act (12 U.S.C. should be withheld pursuant to a FOIA
total assets—28,921, FR Y–9C (AA 511(a)(1) and 5365); and on SHCs exemption. The Board will review any
HCs)—3,693, FR Y–9LP—9,149, FR Y– pursuant to section 618 of the Dodd- such request to determine if confidential
9SP—42,768, FR Y–9ES—42, FR Y– Frank Act (12 U.S.C. 1850a(c)(1)(A)). treatment is appropriate, and will
9CS—472. The obligation to submit the FR Y–9 inform the respondent if the request for
Recordkeeping reports, and the recordkeeping confidential treatment has been denied.
requirements set forth in the respective To the extent the instructions to the
FR Y–9C—1,452, FR Y–9LP—1,736, FR Y–9C, FR Y–9LP, FR Y–9SP, and FR
instructions to each report, are
FR Y–9SP—3,960, FR Y–9ES—42, FR Y–9ES reports each respectively direct
mandatory.
Y–9CS—472. With respect to the FR Y–9C report, the financial institution to retain the
Schedule HI’s memoranda data item 7(g) workpapers and related materials used
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20 An SLHC must file one or more of the FR Y–
9 family of reports unless it is: (1) A grandfathered
‘‘FDIC deposit insurance assessments,’’ in preparation of each report, such
unitary SLHC with primarily commercial assets and Schedule HC–P’s data item 7(a) material would only be obtained by the
thrifts that make up less than 5 percent of its ‘‘Representation and warranty reserves Board as part of the examination or
consolidated assets; or (2) a SLHC that primarily for 1–4 family residential mortgage supervision of the financial institution.
holds insurance-related assets and does not
otherwise submit financial reports with the SEC
loans sold to U.S. government agencies Accordingly, such information is
pursuant to section 13 or 15(d) of the Securities and government sponsored agencies,’’ considered confidential pursuant to
Exchange Act of 1934. and Schedule HC–P’s data item 7(b) exemption 8 of the FOIA (5 U.S.C.
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20392 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations
552(b)(8)). In addition, the workpapers proposed rulemaking pursuant to 5 straightforward manner. The agencies
and related materials may also be U.S.C. 553(b). As discussed previously, invite comments on whether there are
protected by exemption 4 of the FOIA, consistent with section 553(b)(B) of the additional steps it could take to make
to the extent such financial information APA, the agencies have determined for the rule easier to understand. For
is treated as confidential by the good cause that general notice and example:
respondent (5 U.S.C. 552(b)(4)). opportunity for public comment is • Have we organized the material to
Current actions: The Board has unnecessary, and therefore the agencies suit your needs? If not, how could this
temporarily revised the instructions for are not issuing a notice of proposed material be better organized?
the FR Y–9C to reflect the exclusion of rulemaking. Accordingly, the agencies
PPP loans pledged to the PPPL Facility have concluded that the RFA’s • Are the requirements in the
from the institution’s total leverage requirements relating to initial and final regulation clearly stated? If not, how
exposure, average total consolidated regulatory flexibility analysis do not could the regulation be more clearly
assets, advanced approaches total risk- apply. stated?
weighted assets, and standardized total Nevertheless, the agencies seek • Does the regulation contain
risk-weighted assets, as applicable.21 comment on whether, and the extent to language or jargon that is not clear? If
Specifically, the Board has temporarily which, the interim final rule would so, which language requires
revised the FR Y–9C instructions to affect a significant number of small clarification?
permit HCs to assign a zero percent risk entities.
weight to covered loans pledged to the • Would a different format (grouping
PPPL Facility for purposes of E. Riegle Community Development and and order of sections, use of headings,
determining the risk-weighted assets Regulatory Improvement Act of 1994 paragraphing) make the regulation
and leverage ratio. HCs would report Pursuant to section 302(a) of the easier to understand? If so, what
these covered loans pledged to the PPPL Riegle Community Development and changes to the format would make the
Facility in Schedule HC–R, Part II, item Regulatory Improvement Act regulation easier to understand? What
5.d., ‘‘Loans and leases held for (RCDRIA),25 in determining the effective else could we do to make the regulation
investment: All other exposures’’ as date and administrative compliance easier to understand?
appropriate, in both Column A (Totals) requirements for new regulations that G. Unfunded Mandates Act
and Column C (0% risk-weight impose additional reporting, disclosure,
category).22 The average of such assets or other requirements on insured As a general matter, the Unfunded
purchased would be reported in depository institutions (IDIs), each Mandates Act of 1995 (UMRA), 2 U.S.C.
Schedule HC–R, part I, item 29, ‘‘LESS: Federal banking agency must consider, 1531 et seq., requires the preparation of
Other deductions from (additions to) consistent with the principle of safety a budgetary impact statement before
assets for leverage ratio purposes,’’ and and soundness and the public interest, promulgating a rule that includes a
thus excluded from Schedule HC–R, any administrative burdens that such Federal mandate that may result in the
item 30, ‘‘Total assets for the leverage regulations would place on depository expenditure by State, local, and tribal
ratio.’’ institutions, including small depository governments, in the aggregate, or by the
The Board has determined that the institutions, and customers of private sector, of $100 million or more
revisions to the FR Y–9C must be depository institutions, as well as the in any one year. However, the UMRA
instituted quickly and that public benefits of such regulations. In addition, does not apply to final rules for which
participation in the approval process section 302(b) of RCDRIA requires new a general notice of proposed rulemaking
would defeat the purpose of the regulations and amendments to was not published. See 2 U.S.C. 1532(a).
collection of information, as delaying regulations that impose additional Therefore, because the OCC has found
the revisions would result in the reporting, disclosures, or other new good cause to dispense with notice and
collection of inaccurate information and requirements on IDIs generally to take comment for the interim final rule, the
would interfere with the Board’s ability effect on the first day of a calendar OCC has not prepared an economic
to perform its statutory duties. quarter that begins on or after the date analysis of the rule under the UMRA.
The Board also proposes to extend the on which the regulations are published
FR Y–9 reports for three years, with the in final form, with certain exceptions, List of Subjects
revisions discussed above. including for good cause.26 For the 12 CFR Part 3
D. Regulatory Flexibility Act reasons described above, the agencies
find good cause exists under section 302 Administrative practice and
The Regulatory Flexibility Act procedure, Capital, Federal savings
(RFA) 23 requires an agency to consider of RCDRIA to publish the interim final
rule with an immediate effective date. associations, National banks, Risk.
whether the rules it proposes will have
As such, the interim final rule will be
a significant economic impact on a 12 CFR Part 217
effective immediately. Nevertheless, the
substantial number of small entities.24
agencies seek comment on RCDRIA. Administrative practice and
The RFA applies only to rules for which
an agency publishes a general notice of F. Use of Plain Language procedure, Banks, Banking, Capital,
Federal Reserve System, Holding
Section 722 of the Gramm-Leach- companies, Reporting and
21 This treatment also would apply to those
banking organizations that have elected to opt into
Bliley Act 27 requires the Federal recordkeeping requirements, Risk,
the CBLR framework. banking agencies to use plain language Securities.
in all proposed and final rules
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22 Reporting in Schedule HC–R, Part II, only
applies to non CBLR holding companies. published after January 1, 2000. The 12 CFR Part 324
23 5 U.S.C. 601 et seq.
agencies have sought to present the
24 Under regulations issued by the Small Business
interim final rule in a simple and Administrative practice and
Administration, a small entity includes a depository procedure, Banks, banking, Reporting
institution, bank holding company, or savings and
loan holding company with total assets of $600
25 12 U.S.C. 4802(a). and recordkeeping requirements,
million or less and trust companies with total assets 26 12 U.S.C. 4802. Savings associations, State non-member
of $41.5 million or less. See 13 CFR 121.201. 27 12 U.S.C. 4809. banks.
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Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations 20393
DEPARTMENT OF THE TREASURY savings association may exclude ■ 9. Amend § 217.131 by adding
Office of the Comptroller of the exposures pledged as collateral for a paragraph (e)(3)(viii) to read as follows:
Currency non-recourse loan that is provided as
§ 217.131 Mechanics for calculating total
part of the Paycheck Protection Program
12 CFR Chapter I wholesale and retail risk-weighted assets.
Lending Facility, announced by the
Federal Reserve Board on April 7, 2020, * * * * *
Authority and Issuance (e) * * *
from total leverage exposure, average
For the reasons stated in the (3) * * *
total consolidated assets, advanced (viii) The risk-weighted asset amount
preamble, the Office of the Comptroller
approaches total risk-weighted assets, for a Paycheck Protection Program
of the Currency amends part 3 of
and standardized total risk-weighted covered loan as defined in section
chapter I of title 12, Code of Federal
assets, as applicable. For the purpose of 7(a)(36) of the Small Business Act (15
Regulations as follows:
this section, a national bank’s or Federal U.S.C. 636(a)(36)) equals zero.
PART 3—CAPITAL ADEQUACY savings association’s liability under the
facility must be reduced by the * * * * *
STANDARDS ■ 10. Add § 217.305 to read as follows:
principal amount of the loans pledged
■ 1. The authority citation for part 3 is as collateral for funds advanced under § 217.305 Exposures related to the
revised to read as follows: the facility. Paycheck Protection Program Lending
Authority: 12 U.S.C. 93a, 161, 1462, BOARD OF GOVERNORS OF THE Facility.
1462a, 1463, 1464, 1818, 1828(n), 1828 note, FEDERAL RESERVE SYSTEM Notwithstanding any other section of
1831n note, 1835, 3907, 3909, 5412(b)(2)(B), this part, a Board-regulated institution
and Pub. L. 116–136, 134 Stat. 281. 12 CFR Chapter II may exclude exposures pledged as
■ 2. Amend § 3.2 in the definition of Authority and Issuance collateral for a non-recourse loan that is
‘‘Corporate exposure’’ by revising provided as part of the Paycheck
For the reasons stated in the
paragraphs (12) and (13) and adding Protection Program Lending Facility,
preamble, the Board of Governors of the
paragraph (14) to read as follows: announced by the Board on April 7,
Federal Reserve System amends 12 CFR
chapter II as follows: 2020, from total leverage exposure,
§ 3.2 Definitions.
average total consolidated assets,
* * * * * advanced approaches total risk-
Corporate exposure * * * PART 217—CAPITAL ADEQUACY OF
BANK HOLDING COMPANIES, weighted assets, and standardized total
(12) A policy loan;
SAVINGS AND LOAN HOLDING risk-weighted assets, as applicable. For
(13) A separate account; or
(14) A Paycheck Protection Program COMPANIES, AND STATE MEMBER the purpose of this section, a Board-
covered loan as defined in section BANKS (REGULATION Q) regulated institution’s liability under
7(a)(36) of the Small Business Act (15 the facility must be reduced by the
U.S.C. 636(a)(36)). ■ 6. The authority citation for part 217 principal amount of the loans pledged
is revised to read as follows: as collateral for funds advanced under
* * * * * the facility.
Authority: 12 U.S.C. 248(a), 321–338a,
■ 3. Amend § 3.32 by adding paragraph
481–486, 1462a, 1467a, 1818, 1828, 1831n, FEDERAL DEPOSIT INSURANCE
(a)(1)(iii) to read as follows: 1831o, 1831p–1, 1831w, 1835, 1844(b), 1851, CORPORATION
§ 3.32 General risk weights. 3904, 3906–3909, 4808, 5365, 5368, 5371 and
5371 note; Pub. L. 116–136, 134 Stat. 281. 12 CFR Chapter III
(a) * * *
(1) * * * ■ 7. Amend § 217.2 in the definition of Authority and Issuance
(iii) A national bank or Federal ‘‘Corporate exposure’’ by revising
For the reasons set forth in the joint
savings association must assign a zero paragraphs (12) and (13) and adding
preamble, chapter III of title 12 of the
percent risk weight to a Paycheck paragraph (14) to read as follows:
Code of Federal Regulations is amended
Protection Program covered loan as § 217.2 Definitions. as follows:
defined in section 7(a)(36) of the Small
Business Act (15 U.S.C. 636(a)(36)). * * * * *
PART 324—CAPITAL ADEQUACY OF
Corporate exposure * * *
* * * * * (12) A policy loan; FDIC-SUPERVISED INSTITUTIONS
■ 4. Amend § 3.131 by adding paragraph (13) A separate account; or ■ 11. The authority citation for part 324
(e)(3)(viii) to read as follows: (14) A Paycheck Protection Program is revised to read as follows:
covered loan as defined in section
§ 3.131 Mechanics for calculating total Authority: 12 U.S.C. 1815(a), 1815(b),
wholesale and retail risk-weighted assets. 7(a)(36) of the Small Business Act (15
1816, 1818(a), 1818(b), 1818(c), 1818(t),
U.S.C. 636(a)(36)). 1819(Tenth), 1828(c), 1828(d), 1828(i),
* * * * *
(e) * * * * * * * * 1828(n), 1828(o), 1831o, 1835, 3907, 3909,
(3) * * * ■ 8. Amend § 217.32 by adding 4808; 5371; 5412; Pub. L. 102–233, 105 Stat.
(viii) The risk-weighted asset amount paragraph (a)(1)(iii) to read as follows: 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.
L. 102–242, 105 Stat. 2236, 2355, as amended
for a Paycheck Protection Program
§ 217.32 General risk weights. by Pub. L. 103–325, 108 Stat. 2160, 2233 (12
covered loan as defined in section U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.
7(a)(36) of the Small Business Act (15 (a) * * *
2236, 2386, as amended by Pub. L. 102–550,
U.S.C. 636(a)(36)) equals zero. (1) * * * 106 Stat. 3672, 4089 (12 U.S.C. 1828 note);
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(iii) A Board-regulated institution Pub. L. 111–203, 124 Stat. 1376, 1887 (15
* * * * *
must assign a zero percent risk weight U.S.C. 78o–7 note); Pub. L. 115–174; Pub. L.
■ 5. Add § 3.305 to read as follows:
to a Paycheck Protection Program 116–136, 134 Stat. 281.
§ 3.305 Exposures related to the Paycheck covered loan as defined in section ■ 12. Amend § 324.2 in the definition of
Protection Program Lending Facility. 7(a)(36) of the Small Business Act (15 ‘‘Corporate exposure’’ by revising
Notwithstanding any other section of U.S.C. 636(a)(36)). paragraphs (12) and (13) and adding
this part, a national bank or Federal * * * * * paragraph (14) to read as follows:
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20394 Federal Register / Vol. 85, No. 71 / Monday, April 13, 2020 / Rules and Regulations
§ 324.2 Definitions. By order of the Board of Directors. Examining the AD Docket
* * * * * Dated at Washington, DC, on or about April
7, 2020.
You may examine the AD docket on
Corporate exposure * * * the internet at https://
(12) A policy loan; Robert E. Feldman,
(13) A separate account; or www.regulations.gov by searching for
Executive Secretary. and locating Docket No. FAA–2019–
(14) A Paycheck Protection Program [FR Doc. 2020–07712 Filed 4–10–20; 8:45 am]
covered loan as defined in section 0728; or in person at Docket Operations
7(a)(36) of the Small Business Act (15
BILLING CODE 4810–33–P 6210–01–P 6714–01–P between 9 a.m. and 5 p.m., Monday
U.S.C. 636(a)(36)). through Friday, except Federal holidays.
The AD docket contains this final rule,
* * * * *
the regulatory evaluation, any
■ 13. Section 324.32 is amended by DEPARTMENT OF TRANSPORTATION
comments received, and other
adding paragraph (a)(1)(iii) to read as information. The address for Docket
follows: Federal Aviation Administration
Operations is U.S. Department of
§ 324.32 General risk weights. 14 CFR Part 39 Transportation, Docket Operations, M–
(a) * * * 30, West Building Ground Floor, Room
(1) * * * [Docket No. FAA–2019–0728; Product W12–140, 1200 New Jersey Avenue SE,
(iii) An FDIC-supervised institution Identifier 2019–NM–071–AD; Amendment Washington, DC 20590.
must assign a zero percent risk weight 39–19892; AD 2020–07–13] FOR FURTHER INFORMATION CONTACT:
to a Paycheck Protection Program Steven Dzierzynski, Aerospace
covered loan as defined in section RIN 2120–AA64 Engineer, Avionics and Electrical
7(a)(36) of the Small Business Act (15 Systems Services Section, FAA, New
U.S.C. 636(a)(36)). Airworthiness Directives; Bombardier, York ACO Branch, 1600 Stewart
Inc., Airplanes Avenue, Suite 410, Westbury, NY
* * * * *
■ 14. Amend § 324.131 by revising AGENCY: Federal Aviation 11590; phone: 516–228–7367; fax: 516–
paragraph (e)(3)(viii) to read as follows: Administration (FAA), Department of 794–5531; email: 9-avs-nyaco-cos@
Transportation (DOT). faa.gov.
§ 324.131 Mechanics for calculating total
ACTION: Final rule. SUPPLEMENTARY INFORMATION:
wholesale and retail risk-weighted assets.
* * * * * SUMMARY: The FAA is adopting a new Discussion
(e) * * * airworthiness directive (AD) for certain
(3) * * * Transport Canada Civil Aviation
Bombardier, Inc., Model BD–100–1A10 (TCCA), which is the aviation authority
(viii) The risk-weighted asset amount airplanes. This AD was prompted by a
for a Paycheck Protection Program for Canada, has issued Canadian AD
report that during ALTS CAP or (V) CF–2019–12, dated April 3, 2019
covered loan as defined in section ALTS CAP mode, the flight guidance/
7(a)(36) of the Small Business Act (15 (‘‘Canadian AD CF–2019–12’’) (also
autopilot does not account for engine referred to as the Mandatory Continuing
U.S.C. 636(a)(36)) equals zero. failure while capturing an altitude. This Airworthiness Information, or ‘‘the
* * * * * AD requires revising the existing MCAI’’), to correct an unsafe condition
■ 15. Add § 324.304 to read as follows: airplane flight manual (AFM) to provide for certain Bombardier, Inc., Model BD–
the flightcrew with new warnings for 100–1A10 airplanes. You may examine
§ 324.304 Exposures related to the
‘‘Autoflight’’ and ‘‘Engine Failure in the MCAI in the AD docket on the
Paycheck Protection Program Lending
Facility. Climb During ALTS CAP.’’ The FAA is internet at https://www.regulations.gov
issuing this AD to address the unsafe by searching for and locating Docket No.
Notwithstanding any other section of
condition on these products. FAA–2019–0728.
this part, an FDIC-supervised institution
may exclude exposures pledged as DATES: This AD is effective May 18, The FAA issued a notice of proposed
collateral for a non-recourse loan that is 2020. rulemaking (NPRM) to amend 14 CFR
provided as part of the Paycheck The Director of the Federal Register part 39 by adding an AD that would
Protection Program Lending Facility, approved the incorporation by reference apply to certain Bombardier, Inc., Model
announced by the Federal Reserve on of certain publications listed in this AD BD–100–1A10 airplanes. The NPRM
April 7, 2020, from total leverage as of May 18, 2020. published in the Federal Register on
exposure, average total consolidated ADDRESSES: For service information November 6, 2019 (84 FR 59739). The
assets, advanced approaches total risk- identified in this final rule, contact NPRM was prompted by a report that
weighted assets, and standardized total Bombardier, Inc., 200 Côte-Vertu Road during ALTS CAP or (V) ALTS CAP
risk-weighted assets, as applicable. For West, Dorval, Québec H4S 2A3, Canada; mode, the flight guidance/autopilot does
the purpose of this section, an FDIC- North America toll-free phone: 1–866– not account for engine failure while
supervised institution’s liability under 538–1247 or direct-dial phone: 1–514– capturing an altitude. The NPRM
the facility must be reduced by the 855–2999; email: ac.yul@ proposed to require revising the existing
principal amount of the loans pledged aero.bombardier.com; internet: http:// AFM to provide the flightcrew with new
as collateral for funds advanced under www.bombardier.com. You may view warnings for ‘‘Autoflight’’ and ‘‘Engine
the facility. this service information at the FAA, Failure in Climb During ALTS CAP.’’
Transport Standards Branch, 2200 The FAA is issuing this AD to address
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Brian P. Brooks, South 216th St., Des Moines, WA. For the occurrence of an engine failure
First Deputy Comptroller of the Currency. information on the availability of this during or before a climb while in ALTS
By order of the Board of Governors of the material at the FAA, call 206–231–3195. CAP or (V) ALTS CAP mode, as it could
Federal Reserve System. It is also available on the internet at cause the airspeed to drop significantly
Ann Misback, https://www.regulations.gov by below the safe operating speed and may
Secretary of the Board. searching for and locating Docket No. require flightcrew intervention to
Federal Deposit Insurance Corporation. FAA–2019–0728. maintain a safe operating speed. See the
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