Temporary Asset Thresholds (rule, 85 FR 77345, December 2, 2020)
Summary
An interim final rule with request for public comment of the Office of the Comptroller of the Currency (OCC), the Board and the Federal Deposit Insurance Corporation (FDIC), printed in the Federal Register as 85 FR 77345 (December 2, 2020). The agencies say the rule is meant to mitigate temporary costs on banking organizations related to the coronavirus disease 2019 (COVID event). It permits banking organizations with under $10 billion in total assets as of December 31, 2019 to use asset data from that date in determining the applicability of various regulatory asset thresholds. The OCC part carries RIN 1557–AF06, with comments filed under "Docket ID OCC–2020–0044". The rule is effective on December 2, 2020. Federal Reserve System amendments cover 12 CFR Parts 208, 211, 212, 217, 225 and others.
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Cite this document
“Temporary Asset Thresholds (rule, 85 FR 77345, December 2, 2020).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/temporary-asset-thresholds-rule-85-fr-77345-december-2-2020-e951573a57/
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77345
Rules and Regulations Federal Register
Vol. 85, No. 232
Wednesday, December 2, 2020
This section of the FEDERAL REGISTER For the same reasons, the Board is Comptroller of the Currency, 400 7th
contains regulatory documents having general temporarily revising the instructions to Street SW, Suite 3E–218, Washington,
applicability and legal effect, most of which a number of its regulatory reports to DC 20219.
are keyed to and codified in the Code of provide that community banking • Hand Delivery/Courier: 400 7th
Federal Regulations, which is published under organizations may use asset data as of Street SW, Suite 3E–218, Washington,
50 titles pursuant to 44 U.S.C. 1510.
December 31, 2019, in order to DC 20219.
The Code of Federal Regulations is sold by determine reporting requirements for Instructions: You must include
the Superintendent of Documents. reports due in calendar years 2020 or ‘‘OCC’’ as the agency name and ‘‘Docket
2021. ID OCC–2020–0044’’ in your comment.
DATES: In general, the OCC will enter all
DEPARTMENT OF THE TREASURY comments received into the docket and
Effective date: This rule is effective on
December 2, 2020. publish the comments on the
Office of the Comptroller of the Regulations.gov website without
Currency Comment date: Comments must be
received on or before February 1, 2021. change, including any business or
ADDRESSES: Comments should be personal information provided such as
12 CFR Parts 3, 4, and 52 name and address information, email
directed to:
[Docket ID OCC–2020–0044] OCC: You may submit comments to addresses, or phone numbers.
the OCC by any of the methods set forth Comments received, including
RIN 1557–AF06
below. Commenters are encouraged to attachments and other supporting
FEDERAL RESERVE SYSTEM submit comments through the Federal materials, are part of the public record
eRulemaking Portal, if possible. Please and subject to public disclosure. Do not
12 CFR Parts 208, 211, 212, 217, 225, use the title ‘‘Temporary Asset include any information in your
235, and 238 Thresholds’’ to facilitate the comment or supporting materials that
organization and distribution of the you consider confidential or
[Docket No. R–1731] comments. You may submit comments inappropriate for public disclosure.
RIN 7100–AG01 by any of the following methods: You may review comments and other
• Federal eRulemaking Portal— related materials that pertain to this
FEDERAL DEPOSIT INSURANCE Regulations.gov Classic or rulemaking action by the following
CORPORATION Regulations.gov Beta. methods:
Regulations.gov Classic: Go to https:// • Regulations.gov Classic or
12 CFR Parts 304, 324, 337, 347, and www.regulations.gov/. Enter ‘‘Docket ID Regulations.gov Beta:
348 OCC–2020–0044’’ in the Search Box and Regulations.gov Classic: Go to https://
click ‘‘Search.’’ Click on ‘‘Comment www.regulations.gov/. Enter ‘‘Docket ID
RIN 3064–AF67 OCC–2020–0044’’ in the Search box and
Now’’ to submit public comments. For
help with submitting effective click ‘‘Search.’’ Click on ‘‘Open Docket
Temporary Asset Thresholds
comments, please click on ‘‘View Folder’’ on the right side of the screen.
AGENCY: Office of the Comptroller of the Commenter’s Checklist.’’ Click on the Comments and supporting materials can
Currency, Treasury (OCC); Board of ‘‘Help’’ tab on the Regulations.gov home be viewed and filtered by clicking on
Governors of the Federal Reserve page to get information on using ‘‘View all documents and comments in
System (Board); and Federal Deposit Regulations.gov, including instructions this docket’’ and then using the filtering
Insurance Corporation (FDIC). for submitting public comments. tools on the left side of the screen. Click
ACTION: Interim final rule, request for Regulations.gov Beta: Go to https:// on the ‘‘Help’’ tab on the
public comment. beta.regulations.gov/ or click ‘‘Visit Regulations.gov home page to get
New Regulations.gov Site’’ from the information on using Regulations.gov.
SUMMARY: To mitigate temporary Regulations.gov classic homepage. Enter The docket may be viewed after the
transition costs on banking ‘‘Docket ID OCC–2020–0044’’ in the close of the comment period in the same
organizations related to the coronavirus Search Box and click ‘‘Search.’’ Public manner as during the comment period.
disease 2019 (COVID event), the OCC, comments can be submitted via the Regulations.gov Beta: Go to https://
Board, and the FDIC (together, the ‘‘Comment’’ box below the displayed beta.regulations.gov/ or click ‘‘Visit
agencies) are issuing an interim final document information or click on the New Regulations.gov Site’’ from the
rule to permit national banks, savings document title and click the Regulations.gov classic homepage. Enter
associations, state banks, bank holding ‘‘Comment’’ box on the top-left side of ‘‘Docket ID OCC 2020–0044’’ in the
companies, savings and loan holding the screen. For help with submitting Search Box and click ‘‘Search.’’ Click on
companies, and U.S. branches and effective comments, please click on the ‘‘Comments’’ tab. Comments can be
agencies of foreign banking ‘‘Commenter’s Checklist.’’ For viewed and filtered by clicking on the
organizations with under $10 billion in assistance with the Regulations.gov Beta ‘‘Sort By’’ drop-down on the right side
total assets as of December 31, 2019, site, please call (877) 378–5457 (toll of the screen or the ‘‘Refine Results’’
(community banking organizations) to free) or (703) 454–9859 Monday–Friday, options on the left side of the screen.
use asset data as of December 31, 2019, 9 a.m.–5 p.m. ET or email to Supporting Materials can be viewed by
in order to determine the applicability regulations@erulemakinghelpdesk.com. clicking on the ‘‘Documents’’ tab and
of various regulatory asset thresholds • Mail: Chief Counsel’s Office, Attn: filtered by clicking on the ‘‘Sort By’’
during calendar years 2020 and 2021. Comment Processing, Office of the drop-down on the right side of the
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77346 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
screen or the ‘‘Refine Results’’ options Counsel, Chief Counsel’s Office, (202) intended to: (i) Restore market
on the left side of the screen. For 649–5490. functioning and support the flow of
assistance with the Regulations.gov Beta Board: Juan Climent, Assistant credit to households, businesses, and
site please call (877) 378–5457 (toll free) Director, (202) 872–7526, Eric Kennedy, communities and (ii) increase flexibility
or (703) 454–9859 Monday–Friday, 9 Assistant Director, (202) 263–4887, and reduce regulatory reporting burden.
a.m.–5 p.m. ET or email regulations@ Nancy J. Oakes, Manager, (202) 452– Among those actions, the agencies have
erulemakinghelpdesk.com. The docket 3413, Teresa Scott, Manager, (202) 973– issued a number of rules and
may be viewed after the close of the 6114, Naima Jefferson, Lead Financial supervisory guidance communications
comment period in the same manner as Institution Policy Analyst, (202) 912– designed to mitigate the consequences
during the comment period. 4613, Daniel Newman, Senior Data of the COVID event and to facilitate the
Board: You may submit comments, Governance Analyst, (202) 973–7409, safe and effective operations of banking
identified by Docket No. R–1731 and Senait Kahsay, Senior Financial organizations.1
RIN No. 7100–AG01, by any of the Institution Policy Analyst II, (202) 245– Community banking organizations
following methods: 4209, Joseph Willcox, Senior Financial have played an instrumental role in the
• Agency Web Site: http:// Institution Policy Analyst II, (202) 452– nation’s financial response to the
www.federalreserve.gov. Follow the 3663, Division of Supervision and COVID event, and many have
instructions for submitting comments at Regulation; Laurie Schaffer, Deputy experienced significant balance sheet
https://www.federalreserve.gov/apps/ General Counsel (202) 452–2272, growth as a result of the COVID event
foia/proposedregs.aspx. Benjamin McDonough, Associate and the policy response to the event.
• E-mail: regs.comments@ General Counsel, (202) 973–7432, Jonah Policies encouraging banks to work with
federalreserve.gov. Include docket Kind, Counsel (202) 452–2045, Justyna their customers, such as the Small
number and RIN in the subject line of Bolter, Senior Attorney (202) 452–2686, Business Administration’s (SBA’s)
the message. Christopher Danello, Attorney, (202) Paycheck Protection Program (PPP) 2
• Fax: (202) 452–3819 or (202) 452– 736–1960, Legal Division, Board of and the interagency statement
3102. Governors of the Federal Reserve
• Mail: Ann E. Misback, Secretary, encouraging financial institutions to
System, 20th and C Streets NW, work with borrowers affected by the
Board of Governors of the Federal Washington, DC 20551. For users of
Reserve System, 20th Street and COVID event,3 have resulted in much-
Telecommunication Device for the Deaf needed emergency liquidity being
Constitution Avenue NW, Washington, (TDD), (202) 263–4869.
DC 20551. offered to small businesses, including,
FDIC: Rae-Ann Miller, Associate but not limited to, individuals operating
All public comments are available Director, Risk Management Policy, (202)
from the Board’s website at http:// sole proprietorships or acting as
898–3898, Bobby R. Bean, Associate independent contractors, certain
www.federalreserve.gov/generalinfo/ Director, Capital Markets, (202) 898–
foia/ProposedRegs.cfm as submitted, franchisees, nonprofit corporations,
6705; William Piervincenzi, Supervisory veterans organizations, Tribal
unless modified for technical reasons or Counsel, (202) 898–6957, Nefretete A.
to remove sensitive PII at the businesses, and households. As a result,
Smith, Counsel, (202) 898–6851, during the COVID event many
commenter’s request. Public comments Michael B. Phillips, Counsel, (202) 898–
may also be viewed electronically or in community banking organizations have
3581, Jennifer M. Jones, Counsel, (202) experienced an unexpected and sharp
paper form in Room 146, 1709 New 898–6768, jennjones@fdic.gov,
York Avenue NW, Washington, DC increase in assets, swelling their balance
Supervision and Legislation Branch, sheets in some cases by more than 25
20006, between 9:00 a.m. and 5:00 p.m. Legal Division, Federal Deposit
on weekdays. percent.4 Much of this growth,
Insurance Corporation, 550 17th Street
FDIC: You may submit comments on NW, Washington, DC 20429. For the 1 See ‘‘Supervisory and Regulatory Actions in
the notice of proposed rulemaking using hearing impaired only, Response to COVID–19,’’ available at https://
any of the following methods: Telecommunication Device for the Deaf www.federalreserve.gov/supervisory-regulatory-
• Agency Website: https:// (TDD), (800) 925–4618. action-response-covid-19.htm.; ‘‘COVID–19
www.fdic.gov/regulations/laws/federal. (Coronavirus),’’ available at https://occ.gov/topics/
SUPPLEMENTARY INFORMATION: supervision-and-examination/bank-operations/
Follow the instructions for submitting
covid-19-information/convid-19-info-index.html;
comments on the agency website. Table of Contents ‘‘Coronavirus (COVID–19) Information for Bankers
• Email: comments@fdic.gov. Include and Consumers,’’ available at https://www.fdic.gov/
I. Background
RIN 3064–AF67 on the subject line of II. Discussion
coronavirus/. See also ‘‘The FDIC Approves Interim
the message. Final Rule to Provide Temporary Relief from Part
A. Interim Final Rule
• Mail: Robert E. Feldman, Executive B. Reservation of Authority
363 Audit and Reporting Requirements,’’ available
at https://www.fdic.gov/news/financial-institution-
Secretary, Attention: Comments, Federal C. Regulatory Reporting Changes letters/2020/fil20099.html and Final Rule
Deposit Insurance Corporation, 550 17th III. Request for Comment Mitigating the Deposit Insurance Assessment Effect
Street NW, Washington, DC 20429. IV. Administrative Law Matters of Participation in the Paycheck Protection Program
• Hand Delivery: Comments may be A. Administrative Procedure Act (PPP), the PPP Liquidity Facility, and the Money
B. Congressional Review Act Market Mutual Fund Liquidity Facility at https://
hand delivered to the guard station at www.fdic.gov/news/financial-institution-letters/
the rear of the 550 17th Street NW C. Paperwork Reduction Act
2020/fil20063.html.
D. Regulatory Flexibility Act
building (located on F Street) on 2 The SBA’s PPP was created under the
E. Riegle Community Development and Coronavirus Aid, Relief, and Economic Security Act
business days between 7 a.m. and 5 p.m. Regulatory Improvement Act of 1994
• Public Inspection: All comments F. Unfunded Mandates Reform Act of 1995
(CARES Act) in response to market distress caused
by the COVID–19 event. Public Law 116–136, 134
received, including any personal G. Use of Plain Language Stat. 281.
information provided, will be posted 3 ‘‘Revised Interagency Statement on Loan
generally without change to https:// I. Background Modifications by Financial Institutions Working
www.fdic.gov/regulations/laws/federal. In light of strains in economic with Customers Affected by the Coronavirus’’ (Apr.
7, 2020), available at https://www.occ.gov/news-
FOR FURTHER INFORMATION CONTACT: conditions related to the COVID event issuances/news-releases/2020/nr-ia-2020-50a.pdf.
OCC: Alison MacDonald, Special and stress in U.S. financial markets, the 4 Data derived from the Consolidated Reports of
Counsel, or Kevin Korzeniewski, agencies have taken a number of actions Condition and Income (Call Report) and Financial
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77347
particularly that related to participation that participation in the PPP has had on assets of certain community banking
in PPP, is expected to be temporary. community banking organizations.10 organizations to rise above certain asset-
PPP loans are a special asset class of Community banking organizations are based thresholds in the agencies’
government-guaranteed assets designed subject to a wide range of statutory regulations, and may cause other
to incentivize businesses to keep requirements, regulations, and reporting community banking organizations to do
workers on payroll. To encourage requirements predicated on their risk so in the near future. As noted, much of
lending to small businesses through the profile and asset size.11 Due to their this growth, especially growth related to
SBA’s PPP, the Board established the response to the COVID event, many PPP lending, is likely to be temporary,
PPP Liquidity Facility on April 9, 2019.5 community banking organizations have and the increase in assets currently held
Under the PPP Liquidity Facility, each been, or may soon be, pushed over an by a community banking organization
of the Federal Reserve Banks may asset threshold that could subject them may not reflect a change in the
extend non-recourse loans to banking to additional regulation or to additional organization’s longer-term risk profile.
organizations that pledge PPP loans, reporting requirements.12 In the absence In the absence of regulatory burden
which continue to be assets on the of regulatory burden relief, complying relief, community banking organizations
balance sheets of banking organizations, with these new or more stringent that experience an increase in assets
as collateral.6 The last day for lenders to regulatory standards, especially if the above one or more regulatory thresholds
make a PPP loan was August 8, 2020,7 community banking organization’s would face significant transition costs
and depending on SBA determinations, assets are expected to be above a necessary to comply with new or more
a significant amount of PPP debt threshold for a limited time, would stringent regulatory and reporting
forgiveness may occur in the fourth impose significant transition and standards. Given the rapid and
calendar quarter of 2020 or early in the compliance costs on community unexpected nature of community
first calendar quarter of 2021. However, banking organizations. This interim banking organization asset growth in
as a result of the PPP loan forgiveness final rule gives community banking 2020, many community banking
process, many PPP-related assets remain organizations more time to either reduce organizations are unlikely to have
on community banking organizations’ their balance sheets by shedding planned for these transition costs.
balance sheets. The SBA recently temporary growth, or to prepare for Further, to the extent this asset growth
released a simpler loan forgiveness higher regulatory and reporting is temporary, it does not reflect changes
application for PPP loans of $50,000 or standards. in community banking organizations’
less, which will likely result in PPP- risk profiles, and many community
II. Discussion
banking organizations that cross above
related assets being removed from
A. Interim Final Rule asset-based regulatory thresholds could
community banking organization’s
A number of regulations contain fall back below the thresholds.
balance sheets at a faster rate.8
asset-based thresholds that determine Additionally, community banking
According to SBA statistics, organizations that are approaching
collectively all lenders with less than whether a banking organization is
required to comply with a given certain asset thresholds in the agencies’
$10 billion in assets originated regulations may become reluctant to
2,745,204 PPP loans totaling $233.7 regulatory requirement or provide a
mandatory regulatory report, or whether continue lending if this would subject
billion, which buttressed the paychecks them to new or more stringent
of more than 26 million American a banking organization is otherwise
eligible for a particular regulatory regulatory and reporting standards.
workers and represented more than 52.6 Therefore, the agencies believe it is
percent of the number of loans treatment. Asset-based regulatory
thresholds are meant to ensure that the appropriate to provide temporary
originated under the program.9 This regulatory burden relief to community
data suggests that the percentage of PPP regulatory requirements applicable to a
banking organization are appropriate, banking organizations that have risen
loans originated by community banking above, or will rise above, certain asset-
organizations far exceeds those given the banking organization’s likely
risk profile and, in some cases, the based regulatory thresholds. The relief
organizations’ market share as a should promote further lending and
percentage of total banking system potential risk that the banking
organization poses to U.S. financial avoid potentially temporary, but
assets illustrating the outsized impact significant, transition costs that
stability.
As discussed above, many community community banking organizations
Statements for Holding Companies (FR Y–9C) data would otherwise face to comply with
December 31, 2019 to June 30, 2020.
banking organizations have experienced
5 See https://www.federalreserve.gov/newsevents/ an unexpected and sharp increase in new standards.
pressreleases/monetary20200409a.htm. assets since the beginning of the COVID In order to provide this regulatory
6 See Paycheck Protection Program Liquidity event. This rapid growth has caused the burden relief, the agencies are issuing
Facility Term Sheet, available at https:// this interim final rule to temporarily
www.federalreserve.gov/newsevents/pressreleases/ 10 As of the June 30, 2020, approximately 80 change, for a number of asset-based
files/monetary20200728a7.pdf. percent of depository institutions with assets less regulatory thresholds, the date as of
7 U.S. Small Business Administration, ‘‘Notice:
than $10 billion reported PPP loans on their Call when a community banking
Paycheck Protection Program closed August 8, Report.
2020,’’ available at https://www.sba.gov/funding- 11 The agencies recognize there are some
organization measures its assets for the
programs/loans/coronavirus-relief-options/ guidance documents that include asset-based purpose of determining whether it
paycheck-protection-program#section-header-0. thresholds of $10 billion or below. In these exceeds the threshold (referred to as the
8 U.S. Small Business Administration, ‘‘SBA and
instances, the agencies are confirming that these ‘‘measurement date’’). Specifically, the
Treasury Announce Simpler PPP Forgiveness for thresholds are exemplary only and not suggestive
Loans of $50,000 or Less’’, October 8, 2020 available
interim final rule will permit
of requirements. For the reasons discussed above,
at https://www.sba.gov/article/2020/oct/08/sba- the agencies will take the same perspective on community banking organizations,
treasury-announce-simpler-ppp-forgiveness-loans- asset-based thresholds in guidance as they are through December 31, 2021, to
50000-or-less. taking with regard to asset-based regulatory determine the applicability of certain
9 U.S. Small Business Administration, ‘‘Paycheck thresholds. asset-based regulatory thresholds using
Protection Program (PPP) Report: Approvals 12 Based on data as of June 30, 2020, the agencies
through 08/08/2020,’’ available at https:// estimate that around 44 holding companies and 582
asset data as of December 31, 2019, if
home.treasury.gov/system/files/136/SBA-Paycheck- community banks crossed a regulatory threshold set the organization’s assets as of that date
Protection-Program-Loan-Report-Round2.pdf. at $10 billion or less. were less than its assets on the date as
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77348 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
of which the applicability of a given does not reflect changes in community banking organizations have originated a
threshold would normally be banking organizations’ risk profile. disproportionately large percentage of
determined. This means that asset The agencies are limiting the PPP loans, as compared with the
growth in 2020 or 2021 will not trigger regulatory burden relief in this interim organizations’ market share; therefore,
new regulatory requirements for these final rule to banking organizations that as compared to larger organizations, a
community banking organizations until had less than $10 billion in assets as of larger portion of any increase in asset
January 1, 2022, at the earliest. This December 31, 2019. Banking size at community banking
temporary regulatory burden relief organizations with under $10 billion in organizations is likely to be temporary,
reflects that much of the asset growth assets likely have fewer resources and is therefore less likely to reflect a
since the start of the COVID event, available to prepare and comply with change in an organization’s risk profile
especially growth related to PPP previously unanticipated regulatory or business activities.
lending, is generally expected to be requirements, especially during a time This temporary regulatory burden
of economic uncertainty and disruption. relief applies to the following asset-
temporary in nature and therefore likely
Further, as discussed above, community based regulatory thresholds: 13
Asset measurement date
Regulatory threshold Asset measurement date
Regulation Asset-based threshold 14 Rule location (for requirements in
effect (prior to January 1, 2022) 2022)
OCC: Capital Adequacy Eligibility for community $10 billion in total con- OCC: 12 CFR 3.12 ......... December 31, 2019, or End of the most recent
Standards (Part 3). bank leverage ratio solidated assets. Board: 12 CFR 217.12 the end of the most re- calendar quarter.
Board: Capital Adequacy framework. FDIC: 12 CFR 324.12 cent calendar quarter,
of Bank Holding Com- whichever results in a
panies, Savings and lower amount.
Loan Holding Compa-
nies, and State Mem-
ber Banks (Regulation
Q).
FDIC: Capital Adequacy
of FDIC- Supervised
Institutions.
Board: Debit Card Inter- Exemption for small $10 billion in assets ........ Board: 12 CFR 235.5(a) December 31, 2019, or December 31, 2021.
change Fees and issuers. December 31, 2020,
Routing (Regulation II). whichever results in a
lower amount.
Board: Management Offi- Exemption from prohibi- $10 billion in total assets Board: 12 CFR 212.3(c) December 31, 2019, or End of the most recent
cial Interlocks (Regula- tion on service as a FDIC: 12 CFR 348.3(c) the end of the deposi- fiscal year.
tion L). ‘‘management official’’ tory organization’s
FDIC: Management Offi- of multiple institutions. most recent fiscal year,
cial Interlocks. whichever results in a
lower amount.
Exemption for honorary $100 million in total as- Board: 12 CFR
or advisory directors sets. 212.2(j)(1)
from definition of FDIC: 12 CFR
‘‘management official’’. 348.2(k)(1).
Exemption from relevant $50 million in total assets Board: 12 CFR 212.3(b)
metropolitan statistical FDIC: 12 CFR 348.3(b).
area prohibition.
Board: Savings and Loan Interlocks—Major asset $10 billion ....................... Board: 12 CFR 238.93(c) December 31, 2019, or End of the most recent
Holding Companies prohibition. the end of the organi- fiscal year.
(Regulation LL). zation’s most recent
fiscal year, whichever
results in a lower
amount.
Audit requirement for $500 million .................... Board: 12 CFR 238.5(b) December 31, 2019, or End of the most recent
safety and soundness end of the organiza- fiscal year.
purposes. tion’s most recent fis-
cal year, whichever re-
sults in a lower amount.
Informational require- $150 million .................... Board: 12 CFR 238.53(c) December 31, 2019, or End of the most recent
ments for acquisition of (2)(iii)–(iv). the end of the most re- calendar quarter.
a company. cent calendar quarter,
whichever results in a
lower amount.
13 This interim final rule does not address the billion as of December 31 of either of the prior two and Community Reinvestment Act regulatory
exemption in the Board’s Regulation H from certain calendar years; and a large bank is a bank with thresholds for small banks and intermediate banks
flood insurance escrow requirements for qualifying assets of at least $1.305 billion as of December 31 at 12 CFR part 25 (OCC) and 12 CFR 345 (FDIC).
state member banks (less than $1 billion in assets of both of the prior two calendar years, 12 CFR The OCC also is not adjusting thresholds for
as of December 31 of either of the two prior 228.12(u)(1). As indicated, the asset-based depository institution management interlocks at 12
calendar years, provided other conditions are also thresholds in these provisions take into account CFR part 26, as this part already permits any
met), 12 CFR 208.25(e)(3), or the provision in the assets as of the end of the two previous calendar affected bank to request a waiver related to
Board’s Regulation BB defining small bank and years. Therefore, the earliest that a bank with assets unanticipated asset growth.
intermediate small bank for purposes of that did not exceed one of these thresholds as of 14 This interim final rule only provides
determining applicable Community Reinvestment December 31, 2019, could exceed the threshold is
temporary relief with regard to the measurement
Act evaluation procedures. As currently defined in January 1, 2022. As a result, consistent with this
Regulation BB: a small bank is a bank that, as of interim final rule, asset growth in 2020 or 2021 will date of assets. Other criteria that apply to certain
December 31 of either of the prior two calendar not trigger new regulatory requirements until of the affected regulatory provisions remain in
years, had assets of less than $1.305 billion; an January 1, 2022, at the earliest. For similar reasons, effect, and the measurement date for other
intermediate small bank is a small bank with assets the interim final rule does not adjust thresholds in quantities has not been changed by this interim
of at least $326 million as of December 31 of both the OCC and the FDIC’s flood insurance escrow rule final rule.
of the prior two calendar years and less than $1.305 at 12 CFR 22.5(c) (OCC) and 12 CFR 339.5(c) (FDIC)
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77349
Asset measurement date
Regulatory threshold Asset measurement date
Regulation Asset-based threshold 14 Rule location (prior to January 1, 2022) (for requirements in
effect 2022)
Interlocks—Exemption for $100 million .................... Board: 12 CFR December 31, 2019, or End of the most recent
honorary or advisory 238.92(j)(1) the end of the organi- fiscal year.
directors from definition zation’s most recent
of ‘‘management offi- fiscal year, whichever
cial’’. results in a lower
amount.
Interlocks—Exemption $50 million ...................... Board: 12 CFR 238.93(b) December 31, 2019, or End of the most recent
from relevant metro- the end of the organi- fiscal year.
politan statistical area zation’s most recent
prohibition. fiscal year, whichever
results in a lower
amount.
OCC: Regulatory Report- Eligibility for reduced re- $5 billion ......................... OCC: 12 CFR 52.2 December 31, 2019, or June 30, 2021.
ing (Part 52). porting of the Consoli- Board: 12 CFR June 30, 2020, which-
Board: Membership of dated Reports of Con- 208.122(b) ever results in a lower
State Banking Institu- dition and Income (Call FDIC: 12 CFR 304.12(a) amount.
tions in the Federal Report).
Reserve System (Reg-
ulation H)
FDIC: Forms, Instruc-
tions, and Reports
OCC: Organization and Eligibility for 18-month $3 billion ......................... OCC: 12 CFR 4.6(b) ...... December 31, 2019, or End of most recent cal-
Functions (Part 4, Sub- examination cycle. Board: 12 CFR 208.64(b) the end of the most re- endar quarter.
part A). FDIC: 12 CFR 337.12(b) cent calendar quarter,
Board: Membership of whichever results in a
State Banking Institu- lower amount.
tions in the Federal
Reserve System (Reg-
ulation H).
FDIC: Unsafe and Un-
sound Bank Practices.
Board: Membership of Eligibility for streamlined $150 million .................... 12 CFR 208.36(b) ........... December 31, 2019, or End of the most recent
State Banking Institu- method of compliance the end of the bank’s fiscal year.
tions in the Federal with the reporting re- most recent fiscal year,
Reserve System (Reg- quirements of the Se- whichever results in a
ulation H). curities and Exchange lower amount.
Commission.
Bank Holding Companies Various thresholds in the $3 billion, $300 million, 12 CFR 225.4(b)(2) December 31, 2019, or Normally applicable asset
and Change in Bank Board’s rules regarding $150 million, and $50 (iii)(A)–(B), the end of the most re- measurement date.
Control (Regulation Y). bank holding compa- million. 225.14(a)(1)(v)(A)(1)– cent calendar quarter,
nies and change in (2), 225.14(a)(1)(vi), whichever results in a
bank control (Regula- 224.14(c)(6)(ii), lower amount.
tion Y) concerning fil- 225.17(a)(6),
ing requirements and 225.23(a)(1)(iii)(A)(1)–
permissible activities. (2), 225.23(c)(5)(ii),
225.24(a)(2)(iv)–(v),
225.28(b)(11)(vi), and
Appendix C.
OCC: Organization and Eligibility for an 18-month $3 billion ......................... OCC: 12 CFR 4.7(b) ...... December 31, 2019, or End of most recent cal-
Functions (Part 4, Sub- examination cycle for Board: 12 CFR the end of the most re- endar quarter.
part A). U.S. branches and 211.26(c)(2) cent calendar quarter,
Board: International agencies of foreign FDIC: 12 CFR whichever results in a
Banking Operations banks. 347.211(b) lower amount.
(Regulation K).
FDIC: International Bank-
ing.
As a result of this temporary has assets of less than $10 billion as of rules regarding debit card interchange
regulatory burden relief, a community the end of the calendar year preceding fees and routing until July 1, 2022.
banking organization that was below the date of the electronic debit The temporary regulatory burden
one of the above-listed asset thresholds transaction.15 Pursuant to this interim relief provided by this interim final rule
as of December 31, 2019, generally will final rule, an issuer that, together with applies through the end of 2021, so that
be deemed to remain below that its affiliates, had assets of $9.9 billion as a community banking organization
threshold through the end of 2021, plus of December 31, 2019, $10.1 billion as within the scope of the temporary
any applicable transition period of December 30, 2020, and $10.1 billion regulatory burden relief will not be
provided by the regulation. For as of December 31, 2021, would be required to comply with the regulatory
example, the Board’s rules regarding deemed to remain below the $10 billion or reporting requirements covered by
debit card interchange fees and routing threshold for purposes of this rule this interim final rule until the
include an exemption for small issuers, through the end of 2021, at which point
beginning of 2022 (plus any applicable
which provides that a debit card issuer the six-month transition period
transition period),16 at the earliest,
is not required to comply with certain provided by 12 CFR 235.5(a)(3) would
requirements with respect to an begin. Therefore, this issuer would not 16 See 12 CFR 3.12(c) (OCC); 12 CFR 217.12(c)
electronic debit transaction if the issuer be required to comply with the Board’s (Board); 12 CFR 324.12(c) (FDIC) (community bank
holds the account that is debited and leverage ratio framework); 12 CFR 235.5(a)(3) (rules
the issuer, together with its affiliates, 15 12 CFR 235.5(a). regarding debit card interchange fees and routing).
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77350 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
assuming that the organization remains account for the change in the definition relief provision with respect to one or
above the relevant threshold. of ‘‘banking entity’’ implemented by more of the asset thresholds covered by
The agencies have determined not to EGRRCPA. However, the Board notes the rule if the relevant agency makes an
amend in this interim final rule a that because the changes EGRRCPA institution-specific determination that
provision in the agencies’ regulations made to the Volcker Rule were effective permitting the institution to determine
regarding section 13 of the Bank immediately upon enactment, the its assets in accordance with that relief
Holding Company Act (BHC Act) conformance period regulation should provision would not be appropriate
(commonly known as the Volcker Rule). be read in a way that is consistent with based on the organization’s risk
The Volcker Rule generally applies to EGRRCPA and takes into account the profile.22 23 When making any such
‘‘banking entities,’’ which include amendments it made to the definition of determination, the agencies would
insured depository institutions, their ‘‘banking entity.’’ Under this consider all relevant factors, including
affiliates, and any company that interpretation, a company may become the extent of asset growth of the
controls an insured depository a new banking entity by virtue of community banking organization since
institution, among other companies.17 crossing the $10 billion asset threshold December 31, 2019; the causes of such
For purposes of the Volcker Rule, the under the definition of ‘‘banking growth, including whether growth
definition of ‘‘insured depository entity,’’ as amended by EGRRCPA. occurred as a result of mergers or
institution’’ excludes an insured Therefore, for the sake of clarification, acquisitions; whether such growth is
depository institution if the insured the Board confirms that a company that likely to be temporary or permanent;
depository institution, and every entity was not a banking entity, or a subsidiary whether the community banking
that controls it, has total consolidated or affiliate of a banking entity, and then organization has become involved in
assets equal to or less than $10 billion, becomes a banking entity for purposes any additional activities since December
as long as the total consolidated trading of the Volcker Rule because it, or any 31, 2019, and, if so, the risk of such
assets and liabilities of the insured subsidiary or affiliate, exceeds $10 activities; the asset size of any parent
depository institution, and every entity billion in assets, will qualify for the companies; and the type of assets held
that controls it, are equal to or less than conformance period described in the by the community banking
five percent of the insured depository Volcker Rule and the Board’s organization.24
institution’s total consolidated assets.18 implementing regulations.21 This
The agencies have determined that it interpretation covers any company that
22 With respect to the exemption for small issuers
is not necessary to amend the Volcker crossed the $10 billion asset threshold
from the Board’s rules regarding debit card
Rule regulations in order to provide interchange fees and routing, the reservation of
after the enactment of EGRRCPA on authority will concern a determination related to
temporary regulatory burden relief to a May 24, 2018, including a company that the issuer’s asset profile, rather than its risk profile,
bank or any of its subsidiaries or crossed the threshold after December 31, due to differences in the relevant statutory
affiliates that become a ‘‘banking entity’’ framework.
2019. 23 The interim final rule does not include a new
for purposes of the Volcker Rule
reservation of authority in connection with the
because the assets of the bank or any A. Reservation of Authority temporary relief provided with respect to the $3
entity that controls it increase above the The temporary regulatory burden billion threshold in the agencies’ rules that
$10 billion asset threshold. Under relief described above is generally determines, in part, a depository institution’s
section 13 of the BHC Act and the eligibility for an 18-month examination cycle,
available to community banking because the rules already contain a reservation of
Board’s rule implementing the organizations that meet the authority pursuant to which each agency may
conformance period in the Volcker requirements described above. However, examine any depository institution that it
Rule,19 an entity that newly becomes a there may be limited instances in which
supervises as frequently as the agency deems
‘‘banking entity’’ for purposes of the necessary. 12 CFR 4.6(c) and 4.7(c) (OCC); 12 CFR
such regulatory burden relief would be 208.64(c) (Board); 12 CFR 337.12(c) and 12 CFR
Volcker Rule has two years to come into
inappropriate. In order to address 347.211(c) (FDIC). Amendments to the agencies’
compliance with the requirements of the capital regulations governing eligibility for use of
certain such situations, the agencies
Volcker Rule, and may seek an the community bank leverage ratio framework and
may use existing reservations of regulations affecting the prohibition on certain
extension of the conformance period
authority in their respective regulations management official interlocks each include a
from the Board.20 A banking entity that
to require a community banking reservation of authority. The agencies may exercise
ceases to be a banking entity during that this reservation of authority to determine that such
organization to comply with a given
period—for example by virtue of relief provisions shall not apply to a supervised
regulatory requirement that would institution if the relevant agency determines that
reducing its asset size—would no longer
otherwise not be applicable to the such relief would not be commensurate with the
be subject to the Volcker Rule. risk posed by the institution. Amendments to the
The regulation implementing the organization pursuant to the relief
regulations governing eligibility to use the FFIEC
statutory Volcker Rule conformance provided by this interim final rule. 051 do not include new reservations of authority
period have not yet been updated to Additionally, with respect to each of the because the existing reservations of authority would
asset-based regulatory thresholds that continue to apply. The existing Call Reports rules
did not previously include a reservation reserve the authority of each agency to require a
17 12 CFR 44.2(c) (OCC); 12 CFR 248.2(c) (Board);
depository intuition otherwise eligible for reduced
12 CFR 324.12(c) (FDIC). of authority, the interim final rule reporting to file the FFIEC 041 version of the report
18 12 CFR 44.2(r) (OCC); 12 CFR 248.2(r)(2) creates a new reservation of authority of condition. 12 CFR 52.4 (OCC); 12 CFR 304.14
(Board); 12 CFR 351.2(r)(2) (FDIC). The Economic pursuant to which an agency may (FDIC).
Growth, Regulatory Relief, and Consumer 24 The temporary regulatory burden relief
Protection Act (EGRRCPA), enacted on May 24,
determine that a community banking
provided by this interim final rule does not
2018, amended section 13 of the BHC Act by organization is not eligible to use the eliminate any existing authority of the Board to
modifying the definition of ‘‘banking entity,’’ to apply a regulatory standard, such as a standard
exclude certain small firms from section 13’s 21 Although the conformance regulation refers to
related to application processing, to a community
restrictions. EGRRCPA, Public Law 115–174, a requirement that a company was not a banking banking organization that, due to its asset size,
section 203 (May 24, 2018). This amendment was entity as of July 21, 2010, EGRRCPA’s change to the would otherwise not qualify for the standard. For
effective upon EGRRCPA’s enactment. definition of ‘‘banking entity’’ means that a firm example, a bank holding company that meets
19 Pursuant to sections (c)(2) and (c)(6) of the
that was below the asset threshold as of July 21, certain characteristics, including asset-size limits,
Volcker Rule (12 U.S.C. 1851(c)(2) and (c)(6)), the 2010, regardless of whether it was subject to the may be eligible for streamlined application
Board has sole authority to issue rules to implement Volcker Rule at the time, is eligible for the processing. However, the Board or its delegatee may
the Volcker Rule conformance period. conformance period if it becomes a banking entity in its discretion notify such organizations that a full
20 See 12 CFR 225.181(a)(2), (3). due to exceeding the asset threshold. application is required in order to permit a closer
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77351
In particular, in determining that the risk profile, or complexity of the As with regard to asset-based
community banking organization is not community banking organization. regulatory thresholds, and for the same
eligible to use a regulatory burden relief reasons, the Board will retain a
B. Regulatory Reporting Changes
provision, the relevant agency will reservation of authority with regard to
consider whether a community banking Similar to the Board’s regulations, a each of the affected reports, pursuant to
organization crossed an asset-based number of the Board’s regulatory reports which the Board would retain the
contain asset-based thresholds that authority to require a banking
regulatory threshold due to a merger or
determine whether a banking organization to use an asset
acquisition that significantly increases
organization is required to report certain measurement date other than December
the community banking organization’s information. For the same reason that
asset size. Asset growth that occurs as 31, 2019, to determine compliance with
the Board is providing the regulatory a reporting threshold. The Board will
a result of a merger or acquisition is burden relief discussed above with
planned, unlike the growth that many use the same factors in determining
regard to determining the applicability whether to exercise its reservation of
community banking organizations have of asset-based thresholds contained in authority with regard to reporting
experienced since the beginning of the the Board’s regulations, the Board is thresholds as with regard to regulatory
COVID event. Community banking temporarily revising certain of its thresholds.
organizations crossing a regulatory regulatory reports that contain asset-
threshold as a result of a merger or The regulatory burden relief
based reporting thresholds set at $10
billion or less pursuant to the Board’s discussed above applies to the following
acquisition therefore have had the
authority to temporarily revise a information collections:
opportunity to prepare for the change in
regulatory requirements. Additionally, collection of information without • Financial Statements for Holding
asset growth caused by a merger or providing the opportunity for public Companies (FR Y–9 Reports; OMB No.
acquisition is generally expected to be comment. This regulatory burden relief 7100–0128);
permanent and therefore not impose applies to reports with as-of dates up to • Statements of U.S. Nonbank
transition costs for a requirement and including December 31, 2021. Subsidiaries of U.S. Holding Companies
expected to be temporary. The Specifically, with regard to each of the (FR Y–11 and FR Y–11S; 7100–0244);
reservations of authority included in regulatory reports discussed below, • Reports of Foreign Banking
through December 31, 2021, a banking Organizations (FR Y–7N, FR Y–7NS,
this interim final rule are not limited to
organization will be permitted to and FR Y–7Q; 7100–0125); and
situations in which there has been a
determine the applicability of asset-
merger or acquisition because, even in • Statements of Foreign Subsidiaries
based reporting thresholds set at $10
the absence of a merger or acquisition of U.S. Banks (FR 2314 and FR 2314S;
billion or less using asset data as of
transaction, significant asset growth at a OMB No. 7100–0073).
December 31, 2019, if the organization’s
community banking organization may assets as of that date were less than its The agencies plan to publish a
reflect a material change in the business assets on the date as of which the separate Federal Register notice that
model, risk profile, or complexity of the applicability of a given threshold would will address corresponding changes to
community banking organization. normally be determined. The revisions the Call Reports.
Nonetheless, the agencies expect to to the affected reports do not affect the The following chart summarizes the
apply the reservation of authority only substantive reporting instructions for manner in which banking organizations
in limited circumstances, such as when any item, schedule, or report. Rather, will be required to determine the
there is significant growth due to a they merely affect which banking applicability of various reporting
merger or acquisition or when there is organizations are required to report thresholds through the end of 2021 and
a material change in the business model, certain items, schedules, or reports. afterwards.
TABLE 1—REPORTING REQUIREMENTS FOR AFFECTED FEDERAL RESERVE REPORTS UNDER THE INTERIM FINAL RULE AND
AFTER REGULATORY BURDEN RELIEF ENDS 1
Filers use assets as of these dates to
Information collection Reporting applicability for 2020–2021 determine reporting requirement for 2022 2
FR Y–9C (quarterly)—Consolidated Financial Report filing not required for holding company Use 06/30/2021 total assets to determine re-
Statements for Holding Companies. below the $3 billion asset threshold using porting applicability for reports with 2022 as-
the lesser of most current filing applicable of dates.
date or 12/31/2019 as-of-date.
FR Y–9LP (quarterly)—Parent Company Only Report filing not required for holding company Use 06/30/2021 total assets to determine re-
Financial Statements for Large Holding below the $3 billion asset threshold using porting applicability for reports with 2022 as-
Companies. the lesser of most current filing applicable of dates.
date or 12/31/2019 as-of-date.
review of the proposal. Nothing in this interim final Certain provisions of the Board’s Regulation Y company involved in a business combination had
rule affects the Board’s authority to exercise such include asset-based thresholds of $10 billion or as of December 31, 2019. However, the calculation
discretion, to request information that is needed to below that are based on the pro forma consolidated of pro forma or combined assets must also include
analyze the relevant statutory factors for an assets of a bank holding company or the the December 31, 2019, assets of any company with
application or notice, or to consider the ability of consolidated risk-weighted assets of a bank holding
which any company that is party to a proposed
a community banking organization that files a company immediately following consummation of
notice or application with the Board to comply with a proposed transaction. With regard to these business combination has itself combined with
statutory or regulatory requirements that may be thresholds, the interim final rule permits bank since December 31, 2019.
applicable to the organization upon expiration of holding companies, through 2021, to calculate pro
the relief provided by this interim final rule. forma assets by adding together the assets that each
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77352 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
TABLE 1—REPORTING REQUIREMENTS FOR AFFECTED FEDERAL RESERVE REPORTS UNDER THE INTERIM FINAL RULE AND
AFTER REGULATORY BURDEN RELIEF ENDS 1—Continued
Filers use assets as of these dates to
Information collection Reporting applicability for 2020–2021 determine reporting requirement for 2022 2
FR Y–11 (quarterly)—Financial Statements of Quarterly report filing not required if nonbank Use 06/30/2021 total assets to determine eli-
U.S. Nonbank Subsidiaries of U.S. Bank subsidiary had assets of at least $500 mil- gibility for reports with 2022 as-of dates.
Holding Companies. lion but less than $1 billion using the lesser
of most current filing applicable date or 12/
31/2019 as-of-date and does not meet any
the other criteria to file quarterly.
FR Y–11 (annual)—Financial Statements of Annual report filing not required if nonbank Use total assets as of the reporting as-of date
U.S. Nonbank Subsidiaries of U.S. Bank subsidiary has assets of less than $500 mil- (12/31/2022) to determine reporting applica-
Holding Companies. lion using the lesser of most current filing bility.
applicable date or 12/31/2019 as-of-date.
FR Y–11S (annual)—Abbreviated Financial Report filing not required if nonbank sub- Use total assets as of the reporting as-of date
Statements of U.S. Nonbank Subsidiaries of sidiary was not greater than $250 million (12/31/2022) to determine reporting applica-
U.S. Holding Co. and less than $500 million using the lesser bility.
of most current filing applicable date or 12/
31/2019 as-of-date and does not meet the
other filing criteria.
FR Y–7N (quarterly)—Financial Statements of Quarterly report filing not required if nonbank Use total assets as of the reporting as-of date
U.S. Nonbank Subsidiaries Held by Foreign subsidiary was below the $1 billion asset to determine reporting applicability.
Banking Organizations. threshold using the lesser of most current
filing applicable date or 12/31/2019 as-of-
date and does not meet any other filing cri-
teria.
FR Y–7N (annual)—Financial Statements of Report filing not required if nonbank sub- Use total assets as of the reporting as-of date
U.S. Nonbank Subsidiaries Held by Foreign sidiary was not greater than $500 million (12/31/2022) to determine reporting applica-
Banking Organizations. and less than $1 billion using lesser of most bility.
current filing applicable date or 12/31/2019
as-of-date and does not meet any other fil-
ing criteria.
FR Y–7NS (annual)—Abbreviated Financial Report filing not required if nonbank sub- Use total assets as of the reporting as-of date
Statements of U.S. Nonbank Subsidiaries sidiary was not greater than $250 million (12/31/2022) to determine reporting applica-
Held by Foreign Banking Organizations. and less than $500 million using the lesser bility.
of most current filing applicable date or 12/
31/2019 as-of-date and does not meet the
other filing criteria.
FR 2314 (quarterly)—Financial Statements of Quarterly report filing not required if nonbank Use 06/30/2021 total assets to determine eli-
Foreign Subsidiaries of U.S. Banking Organi- subsidiary has assets less than $1 billion gibility for reports with 2022 as-of dates.
zations. using the lesser of most current filing appli-
cable date or 12/31/2019 as-of-date and
does not meet any of other criteria to file
quarterly.
FR 2314 (annual)—Financial Statements of Report filing not required if nonbank was not Use total assets as of the reporting as-of date
Foreign Subsidiaries of U.S. Banking Organi- greater than $500 million and less than $1 (12/31/2022) to determine reporting applica-
zations. billion in total assets using lesser of most bility.
current filing applicable date or 12/31/2019
as-of-date.
FR 2314S (annual)—Abbreviated Financial Report filing not required if nonbank was not Use total assets as of the reporting as-of date
Statements of Foreign Subsidiaries of U.S. greater than $250 million and less than (12/31/2022) to determine reporting applica-
Banking Org. $500 million in total asset using the lesser bility.
of most current filing applicable date or 12/
31/2019 as-of-date.
1 During 2020–2021, applicability of new reporting requirements would be based on the December 31, 2019 data. For example, a holding com-
pany that does not currently file the FR Y–9C will not use its June 2020 total consolidated assets (TCA) to determine the March 31, 2021, filing
requirement, and would not be required to file the FR Y–9C report until March 21, 2022. After the regulatory burden relief ends, the institution
would use June 30, 2021, TCA to determine initial filing for the March 31, 2022, reporting period.
2 Beginning January 1, 2022, asset measurement for applicability of reporting will revert-back to how institutions determined applicability prior
to the reporting relief.
II. Request for Comment interim final rule to determine other dates and the advantages and
The agencies seek comment on all compliance with regulatory thresholds disadvantages of any such dates.
aspects of this interim final rule. In using the lesser of an organization’s III. Administrative Law Matters
particular, the agencies seek comment assets as of December 31, 2019, and its
on the duration of the temporary assets on the date as of which the A. Administrative Procedure Act
regulatory burden relief and on the applicability of a given threshold would The agencies are issuing the interim
following specific question: normally be determined? What would final rule without prior notice and the
(1): What are the advantages and be the advantages and disadvantages of opportunity for public comment and
disadvantages of requiring community an alternative measurement date? without the 30-day delayed effective
banking organizations subject to this Commenters are invited to describe date ordinarily prescribed by the
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77353
Administrative Procedure Act (APA).25 and comment period prior to issuance of required by the CRA does not apply to
Pursuant to section 553(b)(B) of the the interim final rule is impracticable, any rule for which an agency for good
APA, general notice and the opportunity as community banking organizations cause finds (and incorporates the
for public comment are not required may start incurring transition costs prior finding and a brief statement of reasons
with respect to a rulemaking when an to the end of 2020 in anticipation of therefor in the rule issued) that notice
‘‘agency for good cause finds (and needing to comply with additional and public procedure thereon are
incorporates the finding and a brief requirements starting as early as impracticable, unnecessary, or contrary
statement of reasons therefor in the December 31, 2020. For these reasons, to the public interest. In light of current
rules issued) that notice and public the agencies find there is good cause market uncertainty and because
procedure thereon are impracticable, consistent with the public interest to community banking organizations may
unnecessary, or contrary to the public issue the interim final rule without start incurring transition costs prior to
interest.’’ 26 advance notice and comment. the end of 2020 in anticipation of
As discussed above, the interim final The APA also requires a 30-day needing to comply with additional
rule provides temporary regulatory delayed effective date, except for (1) requirements starting as early as
burden relief to community banking substantive rules which grant or December 31, 2020, the agencies believe
organizations crossing regulatory and recognize an exemption or relieve a that delaying the effective date of the
reporting asset thresholds in 2020 and restriction; (2) interpretative rules and rule would be contrary to the public
2021. Many community banking statements of policy; or (3) as otherwise interest.
organizations have experienced provided by the agency for good As required by the CRA, the agencies
dramatic and unexpected increases in cause.27 The agencies find good cause to will submit the final rule and other
their assets as a result of their efforts to publish the interim final rule with an appropriate reports to Congress and the
support the economy during the immediate effective date for the same Government Accountability Office for
ongoing COVID event. As noted, a reasons set forth above under the review.
significant portion of this asset growth discussion of section 553(b)(B) of the C. Paperwork Reduction Act
can be traced to participation by APA.
community banking organizations in While the agencies believe there is The Paperwork Reduction Act of 1995
emergency lending programs sponsored good cause to issue the interim final (PRA) states that no agency may
by the U.S. government, other lending rule without advance notice and conduct or sponsor, nor is a respondent
related to the COVID event, and an comment and with an immediate required to respond to, an information
unexpected surge in deposits. The effective date, the agencies are collection unless it displays a currently
interim final rule facilitates the ability requesting comment on all aspects of valid OMB control number.31 The
of community banking organizations to the interim final rule. interim final rule affects the agencies’
temporarily defer the implementation of current information collections for the
regulatory and reporting thresholds that B. Congressional Review Act Call Reports (FFIEC 031, FFIEC 041, and
would not have been applicable had For purposes of Congressional Review FFIEC 051). The OMB control numbers
they not experienced this growth in Act (CRA), OMB makes a determination for the Call Reports of the agencies are:
assets. Therefore, the interim final rule as to whether a final rule constitutes a OCC OMB No. 1557–0081; Board OMB
benefits community banking ‘‘major’’ rule.28 If a rule is deemed a No. 7100–0036; and FDIC OMB No.
organizations from the above referenced ‘‘major rule’’ by the OMB, the CRA 3064–0052.
regulations and reports by providing generally provides that the rule may not For purposes of the Call Reports, any
temporary regulatory burden relief. The take effect until at least 60 days change resulting from the relief
interim final rule does not impose any following its publication.29 provided by this interim final rule
requirements on any covered The CRA defines a ‘‘major rule’’ as should be minimal and result in a zero
community banking organizations. any rule that the Administrator of the net change in hourly burden under the
The agencies believe that the public Office of Information and Regulatory agencies’ information collections.
interest is best served by making the Affairs of the OMB finds has resulted in Submissions will, however, be made by
interim final rule effective immediately or is likely to result in (1) an annual the agencies to OMB. The changes to the
upon publication in the Federal effect on the economy of $100,000,000 instructions of the Call Reports will be
Register. The agencies believe that or more; (2) a major increase in costs or addressed in a separate Federal Register
issuing the interim final rule will ensure prices for consumers, individual notice.
that community banking organizations industries, Federal, State, or local In addition, this interim final rule
will not be unnecessarily required to government agencies or geographic does not introduce any new information
comply with threshold-based regulatory regions, or (3) significant adverse effects collections. It does, however,
standards that may not be appropriate on competition, employment, temporarily impact the following
given the organizations’ likely long-term investment, productivity, innovation, or information collections: FR Y–9
risk profile and activities after the on the ability of United States-based Reports; FR Y–11; FR Y–11S; FR Y–7N;
reversal of any temporary growth. The enterprises to compete with foreign- FR Y–7NS; FR 2314; and FR 2314S. The
interim final rule also will allow based enterprises in domestic and Board has reviewed this interim final
community banking organizations to export markets.30 rule pursuant to authority delegated by
avoid the costs of temporarily For the same reasons set forth above, the OMB. The Board has temporarily
complying with regulatory the agencies are adopting the interim revised the instructions for these
requirements, allowing the banking final rule without the delayed effective information collections to reflect
organizations to continue to focus on date generally prescribed under the changes made in the interim final rule.
the provision of credit during this time CRA. The delayed effective date On June 15, 1984, OMB delegated to
of economic stress. In addition, the the Board authority under the PRA to
agencies believe that providing a notice 27 5 U.S.C. 553(d). approve a temporary revision to a
28 5 U.S.C. 801 et seq. collection of information without
25 5 U.S.C. 553. 29 5 U.S.C. 801(a)(3).
26 5 U.S.C. 553(b)(B). 30 5 U.S.C. 804(2). 31 44 U.S.C. 3501–3521.
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77354 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
providing opportunity for public Respondents: Bank holding inspection analysis, to monitor and
comment if the Board determines that a companies, savings and loan holding evaluate capital adequacy, to evaluate
change in an existing collection must be companies, securities holding holding company mergers and
instituted quickly and that public companies, and U.S. intermediate acquisitions, and to analyze a holding
participation in the approval process holding companies (collectively, company’s overall financial condition to
would defeat the purpose of the holding companies). ensure the safety and soundness of its
collection or substantially interfere with Estimated number of respondents: FR operations. The FR Y–9C, FR Y–9LP,
the Board’s ability to perform its Y–9C (non-advanced approaches and FR Y–9SP serve as standardized
statutory obligation. community bank leverage ratio holding financial statements for the consolidated
The Board’s delegated authority companies with less than $5 billion in holding company. The Board requires
requires that the Board, after total assets): 71; FR Y–9C (non- holding companies to provide
temporarily approving a collection, advanced approaches community bank standardized financial statements to
solicit public comment on a proposal to leverage ratio holding companies with fulfill the Board’s statutory obligation to
extend the temporary collection for a $5 billion or more in total assets): 35; FR supervise these organizations. The FR
period not to exceed three years. Y–9C (non-advanced approaches, non- Y–9ES is a financial statement for
Therefore, the Board is inviting community bank leverage ratio, holding holding companies that are Employee
comment on a proposal to extend these companies with less than $5 billion in Stock Ownership Plans. The Board uses
information collections for three years total assets): 84; FR Y–9C (non- the voluntary FR Y–9CS (a free-form
with such revisions. The Board invites advanced approaches, non-community supplement) to collect additional
public comment on the information bank leverage ratio holding companies, information deemed to be critical and
collections, which are being reviewed with $5 billion or more in total assets): needed in an expedited manner.
under authority delegated by the OMB 154; FR Y–9C (advanced approaches Holding companies file the FR Y–9C
under the PRA. Comments are invited holding companies): 19; FR Y–9LP: 434; quarterly, the FR Y–9LP quarterly, the
on the following: FR Y–9SP: 3,960; FR Y–9ES: 83; FR Y– FR Y–9SP semiannually, the FR Y–9ES
a. Whether the collections of 9CS: 236. annually, and the FR Y–9CS on a
information are necessary for the proper Estimated annual burden hours: schedule that is determined when this
performance of the Board’s functions, Reporting supplement is used.
including whether the information has Legal authorization and
FR Y–9C (non-advanced approaches confidentiality: The Board has the
practical utility;
community bank leverage ratio holding authority to impose the reporting and
b. The accuracy of the Board’s
companies with less than $5 billion in recordkeeping requirements associated
estimate of the burden of the proposed
total assets): 8,284 hours; FR Y–9C (non- with the FR Y–9 family of reports on
information collections, including the
advanced approaches community bank bank holding companies pursuant to
validity of the methodology and
leverage ratio holding companies with section 5 of the BHC Act, (12 U.S.C.
assumptions used;
$5 billion or more in total assets): 4,920; 1844); on savings and loan holding
c. Ways to enhance the quality,
FR Y–9C (non-advanced approaches companies pursuant to section 10(b)(2)
utility, and clarity of the information to
non community bank leverage ratio and (3) of the Home Owners’ Loan Act,
be collected;
holding companies with less than $5 (12 U.S.C. 1467a(b)(2) and (3)); on U.S.
d. Ways to minimize the burden of
billion in total assets): 13,779; FR Y–9C intermediate holding companies
information collection on respondents,
(non-advanced approaches non- pursuant to section 5 of the BHC Act,
including through the use of automated
community bank leverage ratio holding (12 U.S.C 1844), as well as pursuant to
collection techniques or other forms of
companies with $5 billion or more in sections 102(a)(1) and 165 of the Dodd-
information technology; and
total assets): 28,940 hours; FR Y–9C Frank Wall Street Reform and Consumer
e. Estimates of capital or startup costs
(advanced approaches holding Protection Act (Dodd-Frank Act), (12
and costs of operation, maintenance,
companies): 3,747 hours; FR Y–9LP: U.S.C. 511(a)(1) and 5365); and on
and purchase of services to provide
9,149 hours; FR Y–9SP: 42,768 hours; securities holding companies pursuant
information.
FR Y–9ES: 42 hours; FR Y–9CS: 472 to section 618 of the Dodd-Frank Act,
Comments must be submitted on or
hours. (12 U.S.C. 1850a(c)(1)(A)). The FR Y–9
before February 1, 2021. At the end of
series of reports, and the recordkeeping
the comment period, the comments and Recordkeeping
requirements set forth in the respective
recommendations received will be FR Y–9C (non-advanced approaches instructions to each report, are
analyzed to determine the extent to holding companies with less than $5 mandatory, except for the FR Y–9CS,
which the Board should modify the billion in total assets): 620 hours; FR Y– which is voluntary.
information collection. 9C (non-advanced approaches holding With respect to the FR Y–9C,
Approval Under OMB Delegated companies with $5 billion or more in Schedule HI Memoranda item 7.g,
Authority of the Temporary Revision of, total assets): 756 hours; FR Y–9C Schedule HC–P item 7.a, and Schedule
and Proposal To Extend for Three Years, (advanced approaches holding HC–P item 7.b are considered
With Revision, the Following companies): 76 hours; FR Y–9LP: 1,736 confidential commercial and financial
Information Collections hours; FR Y–9SP: 3,960 hours; FR Y– information under exemption 4 of the
9ES: 42 hours; FR Y–9CS: 472 hours. Freedom of Information Act (FOIA), (5
1. Report Title: Financial Statements for General description of report: The FR U.S.C. 552(b)(4)), as is Schedule HC
Holding Companies Y–9 family of reporting forms continues Memoranda item 2.b for both the FR Y–
Agency form number: FR Y–9C, FR Y– to be the primary source of financial 9C and FR Y–9SP reports. Such
9LP, FR Y–9SP, FR Y–9ES, and FR Y– data on holding companies that treatment is appropriate under
9CS. examiners rely on in the intervals exemption 4 of the FOIA (5 U.S.C.
OMB control number: 7100–0128. between on-site inspections. Financial 552(b)(4)) because these data items
Effective date: December 2, 2020. data from these reporting forms are used reflect commercial and financial
Frequency: Quarterly, semiannually, to detect emerging financial problems, information that is both customarily and
and annually. to review performance and conduct pre- actually treated as private by the
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77355
submitter, and which the Board has of Information (12 CFR part 261), savings and loan holding companies
previously assured submitters will be however, a respondent may request and any subsidiary thereof, and
treated as confidential. It also appears confidential treatment for any data securities holding companies and any
that disclosing these data items may items the respondent believes should be affiliate thereof to file the FR Y–11
reveal confidential examination and withheld pursuant to a FOIA pursuant to, respectively, section 5(c) of
supervisory information, and in such exemption. The Board will review any the BHC Act (12 U.S.C. 1844(c)), section
instances, this information would also such request to determine if confidential 10(b) of the Homeowners’ Loan Act (12
be withheld pursuant to exemption 8 of treatment is appropriate, and will U.S.C. 1467a(b)), and section 618 of the
the FOIA (5 U.S.C. 552(b)(8)), which inform the respondent if the request for Dodd-Frank Act (12 U.S.C. 1850a).
protects information related to the confidential treatment has been denied. Information collected in these reports
supervision or examination of a To the extent that the instructions to generally is not considered confidential.
regulated financial institution. the FR Y–9C, FR Y–9LP, FR Y–9SP, and However, because the information is
In addition, for both the FR Y–9C FR Y–9ES reports each respectively collected as part of the Board’s
report and the FR Y–9SP report, direct a financial institution to retain supervisory process, certain information
Schedule HC Memoranda item 2.b, the the workpapers and related materials may be afforded confidential treatment
name and email address of the external used in preparation of each report, such pursuant to exemption 8 of the FOIA (5
auditing firm’s engagement partner, is material would only be obtained by the U.S.C. 552(b)(8)). Individual
considered confidential commercial Board as part of the examination or respondents may request that certain
information and protected by exemption supervision of the financial institution. data be afforded confidential treatment
4 of the FOIA (5 U.S.C. 552(b)(4)) if the Accordingly, such information may be pursuant to exemption 4 of the FOIA if
identity of the engagement partner is considered confidential pursuant to the data has not previously been
treated as private information by exemption 8 of the FOIA (5 U.S.C. publically disclosed and the release of
holding companies. The Board has 552(b)(8)). In addition, the financial the data would likely cause substantial
assured respondents that this institution’s workpapers and related harm to the competitive position of the
information will be treated as materials may also be protected by respondent (5 U.S.C. 552(b)(4)).
confidential since the collection of this exemption 4 of the FOIA, to the extent Additionally, individual respondents
data item was proposed in 2004. such financial information is treated as may request that personally identifiable
Additionally, items on the FR Y–9C, confidential by the respondent (5 U.S.C. information be afforded confidential
Schedule HC–C regarding loans 552(b)(4)). treatment pursuant to exemption 6 of
modified under Section 4013 the FOIA if the release of the
(Memoranda item 16.a, ‘‘Number of 2. Report Title: Financial Statements of
information would constitute a clearly
Section 4013 loans outstanding’’, and U.S. Nonbank Subsidiaries of U.S.
unwarranted invasion of personal
Memoranda item 16.b, ‘‘Outstanding Holding Companies and Abbreviated
privacy (5 U.S.C. 552(b)(6)). The
balance of Section 4013 loans’’) are Financial Statements of U.S Nonbank
applicability of the FOIA exemptions 4
considered confidential. While the Subsidiaries of U.S. Holding Companies
and 6 would be determined on a case-
Board generally makes institution-level Agency form number: FR Y–11 and by-case basis.
FR Y–9C report data publicly available, FR Y–11S.
the Board believes the disclosure of OMB control number: 7100–0244. 3. Report Title: The Financial
these items at the holding company Effective date: December 2, 2020. Statements of U.S. Nonbank
level would not be in the public Frequency: Quarterly and annually. Subsidiaries Held by Foreign Banking
interest.32 Such information is Respondents: Domestic bank holding Organizations, Abbreviated Financial
permitted to be collected on a companies, savings and loan holding Statements of U.S. Nonbank
confidential basis, consistent with 5 companies, securities holding Subsidiaries Held by Foreign Banking
U.S.C. 552(b)(8).33 Holding companies companies, and intermediate holding Organizations, and the Capital and
may be reluctant to offer modifications companies. Asset Report of Foreign Banking
under Section 4013 if information on Estimated number of respondents: FR Organizations
these modifications is publicly Y–11 (quarterly): 445; FR Y–11 Agency form number: FR Y–7N, FR
available, as analysts, investors, and (annually): 189; FR Y–11S: 273. Y–7NS, and FR Y–7Q.
other users of public FR Y–9C report Estimated annual burden hours: FR OMB control number: 7100–0125.
information may penalize an institution Y–11 (quarterly): 13,528 hours; FR Y–11 Effective date: December 2, 2020.
for using the relief provided by the (annually): 1,436 hours; FR Y–11S: 273 Frequency: Quarterly and annually.
CARES Act. hours. Respondents: Foreign banking
Aside from the data items described General description of report: The FR organizations.
above, the remaining data items on the Y–11 family of reports collects financial Estimated number of respondents: FR
FR Y–9 report and the FR Y–9SP report information for individual U.S. nonbank Y–7N (quarterly): 35; FR Y–7N
are generally not accorded confidential subsidiaries of domestic holding (annually): 19; FR Y–7NS: 22; FR Y–7Q
treatment. The data items collected on companies, which is essential for (quarterly): 130; FR Y–7Q (annually):
FR Y–9LP, FR Y–9ES, and FR Y–9CS monitoring the subsidiaries’ potential 29.
reports, are also generally not accorded impact on the condition of the holding Estimated annual burden hours: FR
confidential treatment. As provided in company or its subsidiary banks. Y–7N (quarterly): 1,064 hours; FR Y–7N
the Board’s Rules Regarding Availability Holding companies file the FR Y–11 on (annually): 144 hours; FR Y–7NS: 22
a quarterly or annual basis or the FR Y– hours; FR Y–7Q (quarterly): 1,560 hours;
32 See 12 U.S.C. 1464(v)(2). 11S on an annual basis, predominantly FR Y–7Q (annually): 44 hours.
33 Exemption 8 of the Freedom of Information Act based on whether the organization General description of report: The FR
(FOIA) specifically exempts from disclosure meets certain asset size thresholds. Y–7N and the FR Y–7NS are used to
information ‘‘contained in or related to Legal authorization and assess a foreign banking organization’s
examination, operating, or condition reports
prepared by, on behalf of, or for the use of an
confidentiality: The Board has the ability to be a continuing source of
agency responsible for the regulation or supervision authority to require bank holding strength to its U.S. nonbank operations
of financial institutions.’’ companies and any subsidiary thereof, and to determine compliance with U.S.
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77356 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
laws and regulations. Foreign banking and loan holding companies, U.S.C. 552(b)(8)). Individual
organizations file the FR Y–7N quarterly intermediate holding companies, and respondents may request that certain
or annually, or the FR Y–7NS annually, Edge or agreement corporations. data be afforded confidential treatment
predominantly based on asset size Estimated number of respondents: FR pursuant to exemption 4 of the FOIA if
thresholds. The FR Y–7Q is used to 2314 (quarterly): 439; FR 2314 the data has not previously been
assess consolidated regulatory capital (annually): 239; FR 2314S: 300. publically disclosed and the release of
and asset information from all foreign Estimated annual burden hours: FR the data would likely cause substantial
banking organizations. The FR Y–7Q is 2314 (quarterly): 12,643 hours; FR 2314 harm to the competitive position of the
filed quarterly by foreign banking (annually): 1,768 hours; FR 2314S: 300 respondent (5 U.S.C. 552(b)(4)).
organizations that have effectively hours. Additionally, individual respondents
elected to become or be treated as a U.S. General description of report: The FR may request that personally identifiable
financial holding company and by 2314 family of reports is the only source information be afforded confidential
foreign banking organizations that have of comprehensive and systematic data treatment pursuant to exemption 6 of
total consolidated assets of $50 billion on the assets, liabilities, and earnings of the FOIA if the release of the
or more, regardless of financial holding the foreign nonbank subsidiaries of U.S. information would constitute a clearly
company status. All other foreign banking organizations, and the data are unwarranted invasion of personal
banking organizations file the FR Y–7Q used to monitor the growth, privacy (5 U.S.C. 552(b)(6)). The
annually. profitability, and activities of these applicability of the FOIA exemptions 4
Legal authorization and foreign companies. The data help the and 6 would be determined on a case-
confidentiality: With respect to foreign Board identify present and potential by-case basis.
banking organizations and their problems of these companies, monitor Current actions: The interim final rule
subsidiary intermediate holding their activities in specific countries, and adjusts for community banking
companies, section 5(c) of the BHC Act, develop a better understanding of organizations the measurement dates for
in conjunction with section 8 of the activities within the industry and certain total asset thresholds that would
International Banking Act (12 U.S.C. within specific institutions. Parent otherwise trigger additional information
3106), authorizes the board to require organizations (state member banks, Edge collection requirements for the
foreign banking organizations and any and agreement corporations, or holding remainder of calendar years 2020
subsidiary thereof to file the FR Y–7N companies) file the FR 2314 on a through the end of 2021. The temporary
reports, and the FR Y–7Q. Information quarterly or annual basis, or the FR relief applies only to filing requirements
collected in these reports generally is 2314S on an annual basis, associated with asset-based reporting
not considered confidential. However, predominantly based on whether the thresholds of $10 billion or less. Table
because the information is collected as organization meets certain asset size 1 of the interim final rule contains a
part of the Board’s supervisory process, thresholds. summary of affected reports, reporting
certain information may be afforded Legal authorization and applicability for 2020–2021, and the
confidential treatment pursuant to confidentiality: The Board has the dates for determining reporting
exemption 8 of the FOIA (5 U.S.C. authority to require bank holding requirements for 2022.
552(b)(8)). Individual respondents may companies and any subsidiary thereof, To implement the interim final rule,
request that certain data be afforded savings and loan holding companies the Board is temporarily revising the
confidential treatment pursuant to and any subsidiary thereof, and instructions for the following reports:
exemption 4 of the FOIA if the data has securities holding companies and any FR Y–9C, FR Y–9LP, FR Y–11, FR Y–
not previously been publicly disclosed affiliate thereof to file the FR 2314 11S, FR Y–7N, FR Y–7NS, FR 2314, and
and the release of the data would likely pursuant to, respectively, section 5(c) of FR 2314S. The revised instructions
cause substantial harm to the the BHC Act (12 U.S.C. 1844(c)), section instruct community banking
competitive position of the respondent 10(b) of the Homeowners’ Loan Act (12 organizations to use the lesser of total
(5 U.S.C. 552(b)(4)). Additionally, U.S.C. 1467a(b)), and section 618 of the assets as of December 31, 2019, or the
individual respondents may request that Dodd-Frank Act (12 U.S.C. 1850a). The most recent applicable measurement
personally identifiable information be Board has the authority to require state period to determine the applicability of
afforded confidential treatment member banks, agreement corporations, asset-based filing thresholds for the
pursuant to exemption 6 of the FOIA if and Edge corporations to file the FR remainder of calendar years 2020
the release of the information would 2314 pursuant to, respectively, sections through the end of 2021. All reporting
constitute a clearly unwarranted 9(6), 25(7), and 25A(17) of the Federal eligibility criteria for these information
invasion of personal privacy (5 U.S.C. Reserve Act (12 U.S.C. 324, 602, and collections, besides the temporarily
552(b)(6)). The applicability of the FOIA 625). With respect to foreign banking revised total assets measurement date,
exemptions 4 and 6 would be organizations and their subsidiary continue to apply. Financial institutions
determined on a case-by-case basis. intermediate holding companies, must revert back to normal rules for
section 5(c) of the BHC Act, in determining applicability of the
4. Report Title: Financial Statements of conjunction with section 8 of the reporting requirements in calendar year
Foreign Subsidiaries of U.S. Banking International Banking Act (12 U.S.C. 2022, as summarized in Table 1.
Organizations and the Abbreviated 3106), authorizes the board to require The Board believes the changes to the
Financial Statements of Foreign foreign banking organizations and any measurement dates for the total asset
Subsidiaries of U.S. Banking subsidiary thereof to file the FR 2314 thresholds used to determine additional
Organizations reports. These reports are mandatory. reporting requirements will not result in
Agency form number: FR 2314 and FR Information collected in these reports a change in the burden estimates
2314S. generally is not considered confidential. currently approved by OMB. Therefore,
OMB control number: 7100–0073. However, because the information is the burden estimates for these reports
Effective date: December 2, 2020. collected as part of the Board’s remain unchanged by the interim final
Frequency: Quarterly and annually. supervisory process, certain information rule.
Respondents: U.S. state member may be afforded confidential treatment The FR Y–9C instructions currently
banks, bank holding companies, savings pursuant to exemption 8 of the FOIA (5 contain filing thresholds of $5 billion
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77357
and $10 billion that trigger the reporting in earnings on assets and liabilities that agreements with the Federal Deposit
of additional schedules and the are reported at fair value under a fair Insurance Corporation; Schedule HC–N,
reporting of certain data items at a value option; Schedule HI Memoranda items 8.a and 8.b, columns A, B, and C;
higher frequently. These thresholds item 15, stock-based employee Schedule HC–N items 12.a.(1)(a)
would be impacted by the changes in compensation expense; Schedule HI–B, through 12.f, pertaining to loans and
the interim final rule. Whether Part I, items 4.a and 4.b, columns A and leases which are covered by loss-sharing
additional FR Y–9C requirements apply B, commercial and industrial loans; agreements with the Federal Deposit
would normally be based on total Schedule HI–B, Part I, item 6, columns Insurance Corporation; Schedule HC–N
consolidated assets as of June 30 of the A and B, loans to foreign governments Memoranda items 1.e.(1) and 1.e.(2),
prior year. With the revisions in the and official institutions; Schedule HI–B, columns A, B, and C, commercial and
interim final rule, community banking Part I, items 8.a and 8.b, lease finance industrial loans; and Schedule HC–N
organizations may instead use the lesser receivables; Schedule HI–B, Part I, Memoranda item 6, fair value of
of total consolidated assets as of Memoranda item 2, columns A and B, derivative contract amounts carried as
December 31, 2019, or June 30, 2020, to loans secured by real estate to non-U.S. assets.
determine whether additional filing addressees; Schedule HI–B, Part I, • The $5 billion threshold requires
requirements are applicable. Memoranda item 3, uncollectible retail these holding companies to report
Specifically, the additional filing credit card fees and finance charges quarterly rather than annual Schedule
requirements for the FR Y–9C that reversed against income; Schedule HI– HI Memoranda items 6.a through 6.j,
would otherwise be triggered by the $5 B, Part II, Memoranda item 1, allocated other noninterest income; Schedule HI
billion and $10 billion threshold are as Memoranda items 7.a through 7.p, other
transfer risk reserve; Schedule HI–B,
follows: noninterest expense; and Schedule HI
Part II, Memoranda item 2, separate
• The $5 billion threshold requires Memoranda 16, noncash income from
these holding companies to report valuation allowance for uncollectible
negative amortization on closed-end
Schedule HI–C, Part I, Disaggregated retail credit card fees and finance
loans secured by 1–4 family residential
Data on the Allowance for Loan and charges; Schedule HI–B, Part II,
properties; and quarterly rather than
Lease Losses; Schedule HC–D, Trading Memoranda item 3, allowance for loan
semi-annual, Schedule HI Memoranda
Assets and Liabilities; Schedule HC–P, and lease losses attributable to retail
item 17, other-than-temporary
1–4 Family Residential Mortgage credit card fees and finance charges;
impairment losses on held-to-maturity
Banking Activities in Domestic Offices; Schedule HI–B, Part II, Memoranda item and available-for-sale debt securities
Schedule HC–Q, Assets and Liabilities 4, allowance for post-acquisition credit recognized in earnings; Schedule HI–C,
Measured at Fair Value; Schedule HC– losses on purchased credit-impaired Part II, items 7 through 11,
S, Servicing, Securitization, and Asset loans; Schedule HC–B, items 4.a.(1) disaggregated data on the allowance for
Sale Activities; and Schedule HC–V, through 4.a.(3), residential pass-through credit losses; Schedule HC–C
Variable Interest Entities. securities; Schedule HC–C, items 4.a Memoranda items 1.a.(1) through
• The $5 billion threshold requires and 4.b, commercial and industrial 1.f.(3)(c), pertaining to loans
these holding companies to report loans; Schedule HC–C, items 9.b.(1) restructured in troubled debt
Schedule HI item 1.e, interest income through 9.b.(2), column A and B, loans restructurings that are in compliance
from trading assets; Schedule HI item for purchasing or carrying securities and with their modified terms; Schedule
2.c, interest on trading liabilities and all other loans; Schedule HC–C, items HC–N Memoranda items 1.a.(1) through
other borrowed money; Schedule HI 10.a and 10.b, column A, lease financing 1.d.(2) and 1.e.(3) through 1.f.(3)(c),
item 2.d, interest on subordinated notes receivables; Schedule HC–C Memoranda related to loans restructured in troubled
and debentures and on mandatory items 1.e.(1) and 1.e.(2), commercial and debt restructurings that are in
convertible securities; Schedule HI item industrial loans; Schedule HC–C compliance with their modified terms;
5.c, trading revenue; Schedule HI items Memoranda item 3, loans secured by Schedule HC–R, Part II, items 1 through
5.d.(1) through 5.d.(5), related to various real estate to non-U.S. addressees; 25, columns A through U, risk-weighted
fees and commissions on securities Schedule HC–C Memoranda item 4, assets; Schedule HC–R, Part II
brokerage investments, investment outstanding credit card fees and finance Memoranda item 1, current credit
banking, and insurance; Schedule HI charges; Schedule HC–C Memoranda exposure across all derivative contracts;
item 5.e, venture capital revenue; items 12.a through 12.d, loans and Schedule HC–R, Part II Memoranda item
Schedule HI item 5.g, net securitization leases held for investment (not subject 2, columns A, B, and C, notional
income; Schedule HI Memoranda item to the requirements of FASB ASC 310– principal amounts of over-the-counter
1, net interest income on a fully taxable 30) that are acquired in business derivative contracts; and Schedule HC–
equivalent basis; Schedule HI combinations with acquisition dates in R, Part II, Memoranda item 3, columns
Memoranda item 2, net income before the current calendar year; Schedule HC– A, B, and C, notional principal amounts
applicable income taxes, and K, item 4.a, trading assets; Schedule of centrally cleared derivatives
discontinued operations; Schedule HI HC–L item 1.b.(1), unused consumer contracts.
Memoranda items 8.a.(1) through credit card lines; Schedule HC–L 1.b.(2), • The $10 billion threshold requires
8.b.(2), discontinued operations and other unused credit card lines; Schedule these holding companies to report
applicable income tax effect; Schedule HC–L item 1.d, securities underwriting; Schedule HI Memoranda items 10.a and
HI Memoranda items 9.a through 9.e, Schedule HC–L items 2.a and 3.a, 10.b, related to net gains/losses on
related to trading revenue; Schedule HI financial and performance standby credit derivatives; Schedule HC–B
Memoranda item 11, credit losses on letters of credit conveyed to others; Memoranda items 5.a through 5.f,
derivatives; Schedule HI Memoranda Schedule HC–L items 7.a through related to asset-backed securities;
items 12.a through 12.c, detail 7.d.(2)(b), related to credit derivatives; Schedule HC–B Memoranda items 6.a
pertaining to income from the sale and Schedule HC–L items 11.a through through 6.g, related to structured
servicing of mutual funds and annuities 14.b.(2), pertaining to derivatives financial products by underlying
(in domestic offices); Schedule HI positions; Schedule HC–M items collateral or reference assets; Schedule
Memoranda items 14.a. through 14.b.(1), 6.a.(1)(a)(1) through 6.d, pertaining to HC–L item 15, pertaining to the
related to net gains (losses) recognized assets covered by loss-sharing additional information on over-the-
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77358 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
counter derivatives; and Schedule HC– regulations that impose additional • Are the requirements in the interim
S items 6 and 10, and Schedule HC–S reporting, disclosure, or other final rule clearly stated? If not, how
Memoranda item 3, related to requirements on insured depository could the interim final rule be more
securitization activity. Holding institutions, each federal banking clearly stated?
companies that cross the $10 billion agency must consider, consistent with • Does the interim final rule contain
threshold would be ineligible to opt-in principles of safety and soundness and technical language or jargon that is not
into the community bank leverage ratio the public interest, any administrative clear? If so, which language requires
framework and would be required to file burdens that regulations would place on clarification?
the additional Schedule HC–R, Part I depository institutions, including small • Would a different format (grouping
and HC–R, Part II line items. depository institutions, and customers and order of sections, use of headings,
The Board has determined that the of depository institutions, as well as the paragraphing) make the interim final
temporary revisions to these collections benefits of such regulations. rule easier to understand? If so, what
of information must be instituted In addition, section 302(b) of RCDRIA changes would achieve that?
quickly and that public participation in requires new regulations and • Is this section format adequate? If
the approval process would defeat the amendments to regulations that impose not, which of the sections should be
purpose of the collections. Delaying the additional reporting, disclosures, or changed and how?
revisions would cause public harm if other new requirements on insured • What other changes can the
firms were adversely affected due to depository institutions generally to take agencies incorporate to make the
participating in the PPP or had to bear effect on the first day of a calendar interim final rule easier to understand?
temporary compliance costs. quarter that begins on or after the date List of Subjects
In addition, the Board proposes to on which the regulations are published
extend the collections of information for in final form.37 The agencies have 12 CFR Part 3
three years with the revisions discussed determined that the final rule would not Administrative practice and
above. impose additional reporting, disclosure, procedure, Capital, Federal savings
or other requirements; therefore, the associations, National banks, Risk.
D. Regulatory Flexibility Act
requirements of the RCDRIA do not 12 CFR Part 4
The Regulatory Flexibility Act apply.
(RFA) 34 requires an agency to consider Administrative practice and
whether the rules it proposes will have F. Unfunded Mandates Reform Act of procedure, Freedom of information,
a significant economic impact on a 1995 Individuals with disabilities, Minority
substantial number of small entities.35 As a general matter, the Unfunded businesses, Organization and functions
The RFA applies only to rules for which Mandates Reform Act of 1995 (UMRA), (Government agencies), Reporting and
an agency publishes a general notice of 2 U.S.C. 1531 et seq., requires the recordkeeping requirements, Women.
proposed rulemaking pursuant to 5 preparation of a budgetary impact 12 CFR Part 52
U.S.C. 553(b). As discussed previously, statement before promulgating a rule
consistent with section 553(b)(B) of the that includes a Federal mandate that Banks, Banking, Reporting and
APA, the agencies have determined for may result in the expenditure by State, recordkeeping requirements.
good cause that general notice and local, and tribal governments, in the 12 CFR Part 208
opportunity for public comment is aggregate, or by the private sector, of Accounting, Agriculture Banks,
unnecessary, and therefore the agencies $100 million or more in any one year. Banking, Confidential business
are not issuing a notice of proposed However, the UMRA does not apply to information, Consumer protection,
rulemaking. Accordingly, the agencies final rules for which a general notice of Crime Currency, Federal Reserve
have concluded that the RFA’s proposed rulemaking was not System, Flood insurance, Insurance,
requirements relating to initial and final published. See 2 U.S.C. 1532(a). Investments, Mortgages, Reporting and
regulatory flexibility analysis do not Therefore, because the OCC has found recordkeeping requirements, Securities.
apply. good cause to dispense with notice and
Nevertheless, the agencies seek comment for this interim final rule, the 12 CFR Part 211
comment on whether, and the extent to OCC has not prepared an economic Exports, Federal Reserve System,
which, the interim final rule would analysis of the rule under the UMRA. Foreign banking, Holding companies,
affect a significant number of small Investments.
entities. G. Use of Plain Language
Section 722 of the Gramm-Leach- 12 CFR Part 212
E. Riegle Community Development and
Bliley Act 38 requires the Federal Antitrust, Banks, Banking, Holding
Regulatory Improvement Act of 1994
banking agencies to use plain language companies.
Pursuant to section 302(a) of the in all proposed and final rules
Riegle Community Development and 12 CFR Part 217
published after January 1, 2000. In light
Regulatory Improvement Act of 1994 of this requirement, the agencies have Administrative practice and
(RCDRIA) 36 requires that each Federal sought to present the interim final rule procedure, Banks, Banking, Federal
banking agency, in determining the in a simple and straightforward manner Reserve System, Holding companies,
effective date and administrative and invite comment on the use of plain Investments, National banks, Reporting
compliance requirements for new language. For example: and recordkeeping requirements,
• Is the material organized to suit Securities.
34 5 U.S.C. 601 et seq.
your needs? If not, how could the 12 CFR Part 225
35 Under regulations issued by the Small Business
agencies present the interim final rule
Administration, a small entity includes a depository
more clearly? Administrative practice and
institution, bank holding company, or savings and procedure, Banks, Banking, Capital
loan holding company with total assets of $600
million or less and trust companies with total assets 37 12 U.S.C. 4802. planning, Holding companies, Reporting
of $41.5 million or less. See 13 CFR 121.201. 38 Public Law 106–102, 113 Stat. 1338, 1471, 12 and recordkeeping requirements,
36 12 U.S.C. 4802(a). U.S.C. 4809. Securities, Stress testing.
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77359
12 CFR Part 235 (a)(4)(ii) of this section, the total 1464 1817(a), 1818, 1820, 1821, 1831m,
Accounting, Banks, Banking. consolidated assets of a national bank or 1831p–1, 1831o, 1833e, 1867, 1951 et
Federal savings association for purposes seq., 2601 et seq., 2801 et seq., 2901 et
12 CFR Part 238 of paragraph (a)(2)(ii) of this section seq., 3101 et seq., 3401 et seq., 5321,
Administrative practice and shall be the lesser of: 5412, 5414; 15 U.S.C. 77uu(b), 78q(c)(3);
procedure, Banks, Banking, Federal (A) The total consolidated assets 18 U.S.C. 641, 1905, 1906; 29 U.S.C.
Reserve System, Reporting and reported by the national bank or Federal 1204; 31 U.S.C. 5318(g)(2), 9701; 42
recordkeeping requirements, Securities. savings association in its Call Report as U.S.C. 3601; 44 U.S.C. 3506, 3510; E.O.
of December 31, 2019; and 12600 (3 CFR, 1987 Comp., p. 235).
12 CFR Part 304 (B) The total consolidated assets of
■ 4. Section 4.6 is amended by adding
Bank deposit insurance, Banks, the national bank or Federal savings
association calculated in accordance paragraph (d) to read as follows:
Banking, Freedom of information,
Reporting and recordkeeping with the reporting instructions to the § 4.6 Frequency of examination of national
requirements. Call Report as of the end of the most banks and Federal savings associations.
recent calendar quarter. * * * * *
12 CFR Part 324 (ii) Reservation of authority. The
temporary relief provided under (d) Through December 31, 2021, for
Administrative practice and purposes of determining eligibility for
procedure, Banks, Banking, Capital, paragraph (a)(4)(i) of this section does
not apply to a national bank or Federal the 18-month rule described in
Capital adequacy, Reporting and paragraph (b) of this section, the OCC
recordkeeping requirements, State non- savings association if the OCC
determines that permitting the may determine the total assets of a
member banks, Savings associations. national bank or Federal savings
institution to determine its assets in
12 CFR Part 337 accordance with that paragraph would association by reference to the total
not be commensurate with the risk assets of the national bank or Federal
Banks, Banking, Reporting and
posed by the institution. When making savings association as reported by the
recordkeeping requirements, Savings
this determination, the OCC will national bank or Federal savings
associations.
consider all relevant factors, including association in its Call Report as of
12 CFR Part 347 the extent of asset growth of the national December 31, 2019.
Authority delegations (Government bank or Federal savings association ■ 5. Section 4.7 is amended by adding
agencies), Bank deposit insurance, since December 31, 2019; the causes of paragraph (d) to read as follows:
Banks, Banking, Credit, Foreign this growth, including whether this
banking, Investments, Reporting and § 4.7 Frequency of examination of Federal
growth occurred as a result of a merger
agencies and branches.
recordkeeping requirements, U.S. or acquisition; whether such growth is
investments abroad. likely to be temporary or permanent; * * * * *
whether the national bank or Federal (d) Through December 31, 2021, for
12 CFR Part 348 purposes of determining eligibility for
savings association has become
Antitrust, Banks, Banking, Holding involved in any additional activities the 18-month rule described in
companies, Savings associations. since December 31, 2019; and the type paragraph (b) of this section, the OCC
of assets held by the national bank or may determine total assets of a Federal
DEPARTMENT OF THE TREASURY
Federal savings association. The OCC branch or agency by reference to the
Office of the Comptroller of the will notify a national bank or Federal total assets of the Federal branch or
Currency savings association of a determination agency as reported by the Federal
12 CFR Chapter I under this paragraph. A national bank branch or agency as of December 31,
or Federal savings association may, not 2019.
Authority and Issuance
later than 30 days after the date of a
For the reasons stated in the joint determination by the OCC, inform the PART 52—REGULATORY REPORTING
preamble, the Office of the Comptroller OCC, in writing, of why the national
of the Currency amends chapter I of bank or Federal savings association ■ 6. The authority citation for part 52
Title 12 of the Code of Federal should be eligible for the temporary continues to read as follows:
Regulations as follows: relief. The OCC will make a final Authority: 12 U.S.C. 93a, 161, 1463(a),
determination after reviewing any 1464(v), and 1817(a)(12).
PART 3—CAPITAL ADEQUACY response.
STANDARDS ■ 7. Add § 52.5 to read as follows:
* * * * *
■ 1. The authority citation for part 3
§ 52.5 Temporary relief.
PART 4—ORGANIZATION AND
continues to read as follows: In determining whether it meets the
FUNCTIONS, AVAILABILITY AND
Authority: 12 U.S.C. 93a, 161, 1462, asset threshold in paragraph (1) of the
RELEASE OF INFORMATION,
1462a, 1463, 1464, 1818, 1828(n), 1828 note, definition of ‘‘covered depository
CONTRACTING OUTREACH
1831n note, 1835, 3907, 3909, 5412(b)(2)(B), institution’’ in § 52.5 of this part, for
PROGRAM, POST-EMPLOYMENT
and Pub. L. 116–136, 134 Stat. 281. purposes of a report required to be
RESTRICTIONS FOR SENIOR
■ 2. Section 3.12 is amended by adding
submitted for calendar year 2021, a
EXAMINERS
paragraph (a)(4) to read as follows: national bank, Federal savings
SUBPART A—Organization and association, or insured Federal branch
§ 3.12 Community bank leverage ratio Functions may refer to the lesser of its total
framework. consolidated assets as reported in its
(a) * * * ■ 3. The authority citation for part 4 report of condition as of December 31,
(4)(i) Temporary relief. From continues to read as follows: Authority: 2019, and its total consolidated assets as
December 2, 2020 through December 31, 5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161, reported in its report of condition for
2021, except as provided in paragraph 481, 482, 484(a), 1442, 1462a, 1463, the second calendar quarter of 2020.
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77360 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
Board of Governors of the Federal of any parent companies; and the type Board determines that permitting the
Reserve System of assets held by the member bank. In state member bank to determine its
12 CFR Chapter I making a determination pursuant to this assets in accordance with that paragraph
paragraph (b)(3), the Board will apply would not be commensurate with the
Authority and Issuance notice and response procedures in the risk profile of the state member bank.
For the reasons stated in the joint same manner and to the same extent as When making this determination, the
preamble, chapter II of title 12 of the the notice and response procedures in Board will consider all relevant factors,
Code of Federal Regulations is amended 12 CFR 263.202. including the extent of asset growth of
as follows: * * * * * the state member bank since December
31, 2019; the causes of such growth,
PART 208—MEMBERSHIP OF STATE Subpart D—Miscellaneous including whether growth occurred as a
BANKING INSTITUTIONS IN THE Requirements result of mergers or acquisitions;
FEDERAL RESERVE SYSTEM whether such growth is likely to be
(REGULATION H) ■ 10. Amend § 208.64 by adding temporary or permanent; whether the
paragraph (d) to read as follows: state member bank has become involved
■ 8. The authority citation for part 208 in any additional activities since
continues to read as follows: § 208.64 Frequency of examination.
December 31, 2019; the asset size of any
* * * * * parent companies; and the type of assets
Authority: 12 U.S.C. 24, 36, 92a, 93a,
248(a), 248(c), 321–338a, 371d, 461, 481–486, (d)(1) Except as provided in paragraph held by the state member bank. In
601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12), (c) of this section, from December 2, making a determination pursuant to this
1818, 1820(d)(9), 1833(j), 1828(o), 1831, 2020, through December 31, 2021, for paragraph (1), the Board will apply
1831o, 1831p-1, 1831r-1, 1831w, 1831x, purposes of determining eligibility for notice and response procedures in the
1835a, 1882, 2901–2907, 3105, 3310, 3331– the extended examination cycle same manner and to the same extent as
3351, 3905–3909, 5371, and 5371 note; 15 described in paragraph (b) of this
U.S.C. 78b, 78I(b), 78l(i), 780–4(c)(5), 78q, the notice and response procedures in
section, the total assets of a member 12 CFR 263.202.
78q-1, 78w, 1681s, 1681w, 6801, and 6805; bank shall be determined based on the
31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, (2) Has no foreign offices, as defined
lesser of: in this section;
4104b, 4106, and 4128.
(i) The assets of the member bank as (3) Is not required to or has not
Subpart C—Bank Securities and of December 31, 2019; and elected to use 12 CFR part 217, subpart
Securities-Related Activities (ii) The assets of the member bank as E, to calculate its risk-based capital
of the end of the most recent calendar requirements; and
■ 9. Amend § 208.36 by adding quarter. (4) Is not a large institution or highly
paragraph (b)(3) to read as follows: (2) Nothing in paragraph (d)(1) of this complex institution, as such terms are
section limits the authority of the defined in 12 CFR 327.8, or treated as
§ 208.37 Reporting requirements for State Federal Reserve to examine any member
member banks subject to the Securities a large institution, as requested under
Exchange Act of 1934.
bank as frequently as the agency deems 12 CFR 327.16(f).
necessary pursuant to paragraph (c) of
* * * * * this section. * * * * *
(b) * * *
(3) Notwithstanding paragraph (b)(1) * * * * * PART 211—INTERNATIONAL
of this section, a member bank may, BANKING OPERATIONS
Subpart K—Forms, Instructions and (REGULATION K)
from December 2, 2020, through Reports
December 31, 2021, make the election
described in paragraph (b)(1) of this ■ 12. The authority citation for part 211
■ 11. Amend § 208.121 by revising the
section if it has no foreign offices and continues to read as follows:
definition of ‘‘Covered depository
had total assets of $150 million or less, institution’’ to read as follows: Authority: 12 U.S.C. 221 et seq., 1818,
determined based on the lesser of total 1835a, 1841 et seq., 3101 et seq., 3901 et seq.,
assets as of December 31, 2019, and total § 208.121 Definitions. and 5101 et seq.; 15 U.S.C. 1681s, 1681w,
assets as of the end of the bank’s most * * * * * 6801 and 6805.
recent fiscal year. The relief provided Covered depository institution means
Subpart B—Foreign Banking
under this paragraph (b)(3) of this a state member bank that meets all of
Organizations
section does not apply to a member the following criteria:
bank if the Board determines that (1) Has less than $5 billion in total ■ 13. Amend § 211.26 by adding
permitting the member bank to consolidated assets as reported in its paragraph (c)(2)(iii) to read as follows:
determine its assets in accordance with report of condition for the second
that paragraph would not be calendar quarter of the preceding year, § 211.26 Examination of offices and
commensurate with the risk profile of except that, during the calendar year affiliates of foreign banks.
the member bank. When making this 2021, a state member bank shall * * * * *
determination, the Board will consider determine whether it meets the (c) * * *
all relevant factors, including the extent requirement in paragraph (1) of this (2) * * *
of asset growth of the member bank section by using the lesser of its total (iii)(A) Except as provided in
since December 31, 2019; the causes of consolidated assets as reported in its paragraph (c)(2)(iii)(B) of this section,
such growth, including whether growth report of condition as of December 31, from December 2, 2020 through
occurred as a result of mergers or 2019, and its total consolidated assets as December 31, 2021, for purposes of
acquisitions; whether such growth is reported in its report of condition for determining eligibility for the extended
likely to be temporary or permanent; the second calendar quarter of 2020. examination cycle described in
whether the member bank has become The relief provided under this paragraph (c)(2) of this section, the total
involved in any additional activities paragraph (1) of this section does not assets of a branch or agency shall be
since December 31, 2019; the asset size apply to a state member bank if the determined based on the lesser of:
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77361
(1) The total assets of the branch or commensurate with the risk profile of of the end of the most recent calendar
agency as of December 31, 2019; and the depository organization. When quarter.
(2) The total assets of the branch or making this determination, the Board (ii) The relief provided under this
agency as of the end of the most recent will consider all relevant factors, paragraph (a)(4)(i) does not apply to a
calendar quarter. including the extent of asset growth of Board-regulated institution if the Board
(B) The relief provided under the depository organization since determines that permitting the Board-
paragraph (c)(2)(iii)(A) of this section December 31, 2019; the causes of such regulated institution to determine its
does not apply to a branch or agency if growth, including whether growth assets in accordance with that paragraph
the Board determines that permitting occurred as a result of mergers or would not be commensurate with the
the branch or agency to determine its acquisitions; whether such growth is risk profile of the Board-regulated
assets in accordance with that paragraph likely to be temporary or permanent; institution. When making this
would not be commensurate with the whether the depository organization has determination, the Board will consider
risk profile of the branch or agency. become involved in any additional all relevant factors, including the extent
When making this determination, the activities since December 31, 2019; the of asset growth of the Board-regulated
Board will consider all relevant factors, asset size of any parent companies; and institution since December 31, 2019; the
including the extent of asset growth of the type of assets held by the depository causes of such growth, including
the branch or agency since December organization. In making a determination whether growth occurred as a result of
31, 2019; the causes of such growth, pursuant to this paragraph (o)(3)(ii), the mergers or acquisitions; whether such
including whether growth occurred as a Board will apply notice and response growth is likely to be temporary or
result of mergers or acquisitions; procedures in the same manner and to permanent; whether the Board-regulated
whether such growth is likely to be the same extent as the notice and institution has become involved in any
temporary or permanent; whether the response procedures in 12 CFR 263.202. additional activities since December 31,
branch or agency has become involved * * * * * 2019; the asset size of any parent
in any additional activities since companies; and the type of assets held
December 31, 2019; the asset size of any PART 217—CAPITAL ADEQUACY OF by the Board-regulated institution. In
parent companies; and the type of assets BANK HOLDING COMPANIES, making a determination pursuant to this
held by the branch or agency. In making SAVINGS AND LOAN HOLDING paragraph (a)(4)(ii), the Board will apply
a determination pursuant to this COMPANIES, AND STATE MEMBER notice and response procedures in the
paragraph (c)(2)(iii)(B), the Board will BANKS (REGULATION Q) same manner and to the same extent as
apply notice and response procedures in the notice and response procedures in
the same manner and to the same extent ■ 16. The authority citation for part 217 12 CFR 263.202.
as the notice and response procedures continues to read as follows: * * * * *
in 12 CFR 263.202. Authority: 12 U.S.C. 248(a), 321–338a,
* * * * * 481–486, 1462a, 1467a, 1818, 1828, 1831n, PART 225—BANK HOLDING
1831o, 1831p–1, 1831w, 1835, 1844(b), 1851, COMPANIES AND CHANGE IN BANK
PART 212—MANAGEMENT OFFICIAL 3904, 3906–3909, 4808, 5365, 5368, 5371, CONTROL (REGULATION Y)
INTERLOCKS 5371 note, and sec. 4012, Pub. L. 116–136,
134 Stat. 281. ■ 18. The authority citation for part 225
■ 14. The authority citation for part 212 continues to read as follows:
continues to read as follows: Subpart B—Capital Ratio
Requirements and Buffers Authority: 12 U.S.C. 1817(j)(13), 1818,
Authority: 12 U.S.C. 3201–3208; 15 U.S.C. 1828(o), 1831i, 1831p–1, 1843(c)(8), 1844(b),
19. ■ 17. Amend § 217.12 by adding 1972(1), 3106, 3108, 3310, 3331–3351, 3906,
paragraph (a)(4) to read as follows: 3907, and 3909; 15 U.S.C. 1681s, 1681w,
■ 15. Amend § 212.2 by adding
6801 and 6805.
paragraph (o)(3) to read as follows:
§ 217.12 Community bank leverage ratio
§ 212.2 Definitions. framework. Subpart A—General Provisions
* * * * * (a) * * * ■ 19. Add § 225.10 to subpart A to read
(o) * * * (4) Temporary relief for 2020 and as follows:
(3)(i) Notwithstanding paragraph 2021. (i) Except as provided in
(o)(1) of this section, and except as paragraph (a)(4)(ii) of this section, from § 225.10 Temporary relief for 2020 and
provided in paragraph (o)(3)(ii) of this December 2, 2020, through December 2021.
section, from December 2, 2020, through 31, 2021, for purposes of determining (a) Except as provided in paragraph
December 31, 2021, the term total whether a Board-regulated institution (c) of this section and subject to the
assets, with respect to a depository satisfies the criterion in paragraph provisions of paragraph (d) of this
organization, means the lesser of assets (a)(2)(ii) of this section, the total section, from December 2, 2020, through
of the depository organization reported consolidated assets of a Board-regulated December 31, 2021, the consolidated
on a consolidated basis as of December institution for purposes of paragraph assets, consolidated risk-weighted
31, 2019, and assets reported as of the (a)(2)(ii) of this section shall be assets, total consolidated assets, and
end of the depository organization’s determined based on the lesser of: total assets of a bank holding company
most recent fiscal year on a consolidated (A) The total consolidated assets for purposes of §§ 225.4(b)(2)(iii)(A) and
basis as of December 31, 2020. reported by the institution in the Call (B), 225.14(a)(1)(v)(A)(1) and (2),
(ii) The relief provided under Report, FR Y–9C, or FR Y–9SP, as 225.14(a)(1)(vi), 225.23(a)(1)(iii)(A)(1)
paragraph (o)(3)(i) of this section does applicable, as of December 31, 2019; and (2), 225.24(a)(2)(iv) and (v), and
not apply to a depository organization if and 225.28(b)(11)(vi) shall be determined
the Board determines that permitting (B) The total consolidated assets based on the lesser of each such amount
the depository organization to calculated in accordance with the as of December 31, 2019, and as of the
determine its assets in accordance with reporting instructions to the Call Report otherwise applicable asset measurement
that paragraph would not be or to Form FR Y–9C, as applicable, as date of the relevant paragraph.
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77362 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
(b) Except as provided in paragraph upon expiration of the relief provided 5365; 1813, 1817, 1829e, 1831i, 1972, 15
(c) of this section and subject to the by this section. U.S.C. 78l.
provisions of paragraph (d) of this
section, from December 2, 2020, through PART 235—DEBIT CARD Subpart A—General Provisions
December 31, 2021, for purposes of INTERCHANGE FEES AND ROUTING
determining the applicability of (REGULATION II) ■ 24. Amend § 238.5 by revising
§§ 224.14(c)(6)(ii), 225.17(a)(6), and paragraph (b) to read as follows:
■ 20. The authority citation for part 235
225.23(c)(5)(ii) of this part and appendix § 238.5 Audit of savings association
continues to read as follows:
C to this part, the pro forma holding companies.
consolidated assets of a bank holding Authority: 15 U.S.C. 1693o–2.
* * * * *
company and the consolidated risk- ■ 21. The heading for part 235 is revised
weighted assets of a bank holding to read as set forth above. (b) Audits required for safety and
company immediately following ■ 22. Amend § 235.5 by adding
soundness purposes. (1) The Board
consummation of a transaction each paragraph (a)(4) to read as follows: requires an independent audit for safety
shall be calculated as the lesser of: and soundness purposes if, as of the
(1) Such amount calculated as the § 235.5 Exemptions. beginning of its fiscal year, a savings
sum of the assets of each company * * * * * and loan holding company controls
involved in the proposed business (a) * * * savings association subsidiary(ies) with
combination, as well as any company (4)(i) Temporary relief for 2020 and aggregate consolidated assets of $500
with which any such company has 2021. Except as provided in paragraph million or more.
combined since December 31, 2019, as (a)(4)(ii) of this section, for purposes of (2) Except as provided in paragraph
of December 31, 2019; and determining eligibility for the (b)(3) of this section, with regard to a
(2) Such amount calculated as the exemption for small issuers described in savings and loan holding company’s
sum of the assets of each company paragraph (a)(1) of this section, issuer fiscal year beginning in the calendar
involved in the proposed business asset size that is calculated as of the end years 2020 or 2021, the applicability of
combination as of the end of the most of the calendar year 2020 shall be the requirement in paragraph (b)(1) of
recent calendar quarter. determined based on the lesser of: this section shall be determined based
(A) The assets of the issuer, together
(c) The relief provided under on the lesser of:
with its affiliates, as of the end of the
paragraphs (a) and (b) of this section calendar year 2019; and (i) The aggregate consolidated assets
does not apply to a bank holding (B) The assets of the issuer, together of the savings and loan holding
company if the Board determines that with its affiliates, as of the end of the company as of December 31, 2019; and
permitting the bank holding company to calendar year 2020. (ii) The aggregate consolidated assets
determine its assets in accordance with (ii) The relief provided under this of the savings and loan holding
that paragraph would not be paragraph (a)(4) does not apply to an company as of the end of its fiscal year
commensurate with the risk profile of issuer if the Board determines that ending in calendar year 2020.
the bank holding company. When permitting the issuer to determine its
making this determination, the Board assets in accordance with that paragraph (3) The relief provided under
will consider all relevant factors, would not be commensurate with the paragraph (b)(2) of this section does not
including the extent of asset growth of asset profile of the issuer. When making apply to a savings and loan holding
the bank holding company since this determination, the Board will company if the Board determines that
December 31, 2019; the causes of such consider all relevant factors, including permitting the savings and loan holding
growth, including whether growth the extent of asset growth of the issuer company to determine its assets in
occurred as a result of mergers or since December 31, 2019; the causes of accordance with that paragraph would
acquisitions; whether such growth is such growth, including whether growth not be commensurate with the risk
likely to be temporary or permanent; occurred as a result of mergers or profile of the savings and loan holding
whether the bank holding company has acquisitions; whether such growth is company. When making this
become involved in any additional likely to be temporary or permanent; determination, the Board will consider
activities since December 31, 2019; the whether the issuer has become involved all relevant factors, including the extent
asset size of any parent companies; and in any additional activities since of asset growth of the savings and loan
the type of assets held by the bank December 31, 2019; the asset size of any holding company since December 31,
holding company. In making a parent companies; and the type of assets 2019; the causes of such growth,
determination pursuant to this section, held by the issuer. In making a including whether growth occurred as a
the Board will apply notice and determination pursuant to this result of mergers or acquisitions;
response procedures in the same paragraph (a)(4)(ii), the Board will apply whether such growth is likely to be
manner and to the same extent as the notice and response procedures in the temporary or permanent; whether the
notice and response procedures in 12 same manner and to the same extent as savings and loan holding company has
CFR 263.202. the notice and response procedures in become involved in any additional
(d) Nothing in this section limits the 12 CFR 263.202. activities since December 31, 2019; the
discretion of the Board or its delegatee asset size of any parent companies; and
* * * * *
to disallow the use of any expedited the type of assets held by the savings
action process, require the submission PART 238—SAVINGS AND LOAN and loan holding company. In making a
of additional information in connection HOLDING COMPANIES (REGULATION determination pursuant to this
with a notice or application, or consider LL) paragraph (b)(3), the Board will apply
the ability of a bank holding company notice and response procedures in the
filing a notice or application under this ■ 23. The authority citation for part 238 same manner and to the same extent as
part to comply with any statutory or continues to read as follows: the notice and response procedures in
regulatory requirements that may be Authority: 5 U.S.C. 552, 559; 12 U.S.C. 12 CFR 263.202.
applicable to the bank holding company 1462, 1462a, 1463, 1464, 1467, 1467a, 1468, * * * * *
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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77363
Subpart F—Savings and Loan Holding of this section, from December 2, 2020, required to be submitted for calendar
Company Activities and Acquisitions through December 31, 2021, for year 2021, an insured depository
purposes of this subpart J, the term total institution may refer to the lesser of its
■ 25. Amend § 238.53 by adding assets, with respect to a depository total consolidated assets as reported in
paragraph (c)(3) to read as follows: organization, means the lesser of assets its report of condition as of December
§ 238.53 Prescribed services and activities
of the depository organization reported 31, 2019, and its total consolidated
of savings and loan holding companies. on a consolidated basis as of December assets as reported in its report of
31, 2019, and assets reported on a condition for the second calendar
* * * * *
consolidated basis as of the end of the quarter of 2020.
(c) * * *
(3)(i) Except as provided in paragraph most recent fiscal year. The relief
provided under this paragraph (p)(3) PART 324—CAPITAL ADEQUACY OF
(c)(3)(ii) of this section, from December
does not apply to a depository FDIC-SUPERVISED INSTITUTIONS
2, 2020, until December 31, 2021, the
determination of whether a savings and organization if the Board determines
that permitting the depository ■ 29. The authority citation for part 324
loan holding company must comply is revised to read as follows:
with the filing requirements in organization to determine its assets in
paragraph (c)(2)(iii) or (iv) of this accordance with that paragraph would Authority: 12 U.S.C. 1815(a), 1815(b),
not be commensurate with the risk 1816, 1818(a), 1818(b), 1818(c), 1818(t),
section shall be made based on the
profile of the depository organization. 1819(Tenth), 1828(c), 1828(d), 1828(i),
lesser of: 1828(n), 1828(o), 1831o, 1835, 3907, 3909,
(A) The consolidated assets of the When making this determination, the
Board will consider all relevant factors, 4808; 5371; 5412; Pub. L. 102–233, 105 Stat.
savings and loan holding company as of 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.
December 31, 2019; and including the extent of asset growth of L. 102–242, 105 Stat. 2236, 2355, as amended
(B) The consolidated assets of the the depository organization since by Pub. L. 103–325, 108 Stat. 2160, 2233 (12
savings and loan holding company as of December 31, 2019; the causes of such U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.
the end of the most recent calendar growth, including whether growth 2236, 2386, as amended by Pub. L. 102–550,
quarter. occurred as a result of mergers or 106 Stat. 3672, 4089 (12 U.S.C. 1828 note);
(ii) The relief provided under acquisitions; whether such growth is Pub. L. 111–203, 124 Stat. 1376, 1887 (15
paragraph (c)(3)(i) of this section does likely to be temporary or permanent; U.S.C. 78o–7 note), Pub. L. 115–174; section
not apply to a savings and loan holding whether the depository organization has 4014 § 201, Pub. L. 116–136, 134 Stat. 281
become involved in any additional (15 U.S.C. 9052).
company if the Board determines that
permitting the savings and loan holding activities since December 31, 2019; the ■ 30. Amend § 324.12 by adding
company to determine its assets in asset size of any parent companies; and paragraph (a)(4) to read as follows:
accordance with that paragraph would the type of assets held by the depository § 324.12 Community bank leverage ratio
not be commensurate with the risk organization. In making a determination framework.
profile of the savings and loan holding pursuant to this paragraph (p)(3), the
(a) * * *
company. When making this Board will apply notice and response (4)(i) Temporary relief—From
determination, the Board will consider procedures in the same manner and to December 2, 2020 through December 31,
all relevant factors, including the extent the same extent as the notice and 2021, for purposes of determining
of asset growth of the savings and loan response procedures in 12 CFR 263.202. whether an FDIC-supervised institution
holding company since December 31, * * * * * satisfies the criterion in paragraph
2019; the causes of such growth, (a)(2)(ii) of this section, except as
including whether growth occurred as a FEDERAL DEPOSIT INSURANCE
CORPORATION provided in paragraph (a)(4)(ii) of this
result of mergers or acquisitions; section, the total consolidated assets of
whether such growth is likely to be 12 CFR Chapter III an FDIC-supervised institution for
temporary or permanent; whether the Authority and Issuance purposes of paragraph (a)(2)(ii) of this
savings and loan holding company has section shall be determined based on
become involved in any additional For the reasons stated in the
preamble, the Federal Deposit Insurance the lesser of:
activities since December 31, 2019; the (A) The total consolidated assets
asset size of any parent companies; and Corporation amends chapter III of Title
12, Code of Federal Regulations as reported by the institution in the Call
the type of assets held by the savings Report as of December 31, 2019; and
and loan holding company. In making a follows:
(B) The total consolidated assets
determination pursuant to this calculated in accordance with the
PART 304—FORMS, INSTRUCTIONS,
paragraph (c)(3)(ii), the Board will apply reporting instructions to the Call Report
AND REPORTS
notice and response procedures in the as of the end of the most recent calendar
same manner and to the same extent as ■ 27. The authority citation for part 304 quarter.
the notice and response procedures in continues to read as follows: (ii) Reservation of authority—The
12 CFR 263.202. temporary relief provided under this
Authority: 12 U.S.C. 1464(v), 1817(a), and
* * * * * 1819 Tenth. paragraph (a)(4)(i) of this section does
■ 28. Amend § 304.12 by adding
not apply to an FDIC-supervised
Subpart J—Management Official institution if the FDIC determines that
Interlocks paragraph (a)(6) to read as follows:
permitting the FDIC-supervised
■ 26. Amend § 238.92 by adding
§ 304.12 Definitions. institution to determine its assets in
paragraph (p)(3) to read as follows: (a) * * * accordance with that paragraph would
(6) In determining whether an insured not be commensurate with the risk
§ 238.92 Definitions. depository institution meets the asset posed by the institution. When making
* * * * * threshold in paragraph (1) of the this determination, the FDIC will
(p) * * * definition of ‘‘covered depository consider all relevant factors, including
(3) Temporary relief for 2020 and institution’’ in paragraph (a)(1) of this the extent of asset growth of the FDIC-
2021. Notwithstanding paragraph (p)(1) section, for purposes of a report supervised institution since December
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77364 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations
31, 2019; the causes of such growth, paragraph (b) of this section, the total By order of the Board of Directors.
including whether growth occurred as a assets of an insured branch shall be Dated at Washington, DC, on or about
result of mergers or acquisitions; determined based on the lesser of: November 17, 2020.
whether such growth is likely to be (1) The assets of the insured branch as James P. Sheesley,
temporary or permanent; whether the of December 31, 2019; and Assistant Executive Secretary.
FDIC-supervised institution has become (2) The assets of the insured branch as [FR Doc. 2020–26138 Filed 12–1–20; 8:45 am]
involved in any additional activities of the end of the most recent calendar BILLING CODE 6210–01–P
since December 31, 2019; and the type quarter.
of assets held by the FDIC-supervised
institution. The FDIC will notify an PART 348—MANAGEMENT OFFICIAL
FDIC-supervised institution of a INTERLOCKS
FARM CREDIT ADMINISTRATION
determination under this paragraph. An
■ 35. The authority citation for part 348
FDIC-supervised institution may, not 12 CFR Part 614
continues to read as follows:
later than 30 days after the date of a
determination by the FDIC, inform the Authority: 12 U.S.C. 1823(k), 3207.
RIN 3052–AC92
FDIC, in writing, of why the FDIC- ■ 36. Amend § 348.2 by adding
supervised institution should be eligible paragraph (q)(3) to read as follows: Amortization Limits; Correction
for the temporary relief. The FDIC will
make a final determination after § 348.2 Other definitions and rules of AGENCY: Farm Credit Administration.
reviewing any response. construction.
ACTION: Final rule; correction.
* * * * * * * * * *
(q) * * * SUMMARY: On September 28, 2020, the
PART 337—UNSAFE AND UNSOUND (3)(i) Temporary relief for 2020 and Farm Credit Administration (FCA)
BANK PRACTICES 2021. Notwithstanding paragraph (q)(1) published a final rule that repealed the
of this section, from December 2, 2020, regulatory requirement that production
■ 31. The authority citation for part 337 through December 31, 2021, except as credit associations (PCAs) amortize their
continues to read as follows: provided in paragraph (q)(3)(ii) of this loans in 15 years or less, while requiring
Authority: 12 U.S.C. 375a(4), 375b, 1463, section, the term total assets, with all Farm Credit System (FCS or System)
1464, 1468, 1816, 1818(a), 1818(b), 1819, respect to a depository organization, associations to address amortization
1820(d), 1821(f), 1828(j)(2), 1831, 1831f, means the lesser of assets of the through their credit underwriting
1831g, 5412. depository organization reported on a standards and internal controls. In that
■ 32. Amend § 337.12 by adding
consolidated basis as of December 31, publication, FCA inadvertently omitted
paragraph (d) to read as follows: 2019, and assets reported on a a statement that the Office of
consolidated basis as of December 31, Management and Budget’s Office of
§ 337.12 Frequency of examination. 2020. Information and Regulatory Affairs
* * * * * (ii) Reservation of authority. The determined that the final rule is not a
(d) From December 2, 2020, through temporary relief provided under this major rule under the applicable
December 31, 2021, for purposes of paragraph (q)(3)(i) of this section does provisions of the Congressional Review
determining eligibility for the extended not apply to an FDIC-supervised Act. This document corrects that error.
examination cycle described in institution if the FDIC determines that
permitting the FDIC-supervised DATES: This correction is effective
paragraph (b) of this section, the total
assets of an institution shall be institution to determine its assets in December 2, 2020.
determined based on the lesser of: accordance with that paragraph would FOR FURTHER INFORMATION CONTACT:
(1) The assets of the institution as of not be commensurate with the risk Richard A. Katz, Senior Counsel, Office
December 31, 2019; and posed by the institution. When making of General Counsel, (703) 883–4020,
(2) The assets of the institution as of this determination, the FDIC will TTY (703) 883–4056, Farm Credit
the end of the most recent calendar consider all relevant factors, including Administration, 1501 Farm Credit Drive,
quarter. the extent of asset growth of the FDIC- McLean, VA 22102–5090.
supervised institution since December
PART 347—INTERNATIONAL SUPPLEMENTARY INFORMATION: In FR Doc.
31, 2019; the causes of such growth,
BANKING 2020–18552, entitled ‘‘Amortization
including whether growth occurred as a
Limits,’’ beginning on page 60691 in the
result of mergers or acquisitions;
■ 33. The authority citation for part 347 Federal Register of Monday, September
whether such growth is likely to be
continues to read as follows: 28, 2020, make the following
temporary or permanent; whether the
Authority: 12 U.S.C. 1813, 1815, 1817,
corrections;
FDIC-supervised institution has become
1819, 1820, 1828, 3103, 3104, 3105, 3108, involved in any additional activities 1. On page 60693, in the second
3109; Pub. L. 111–203, section 939A, 124 since December 31, 2019; and the type column, the heading for section V is
Stat. 1376, 1887 (July 21, 2010) (codified 15 of assets held by the FDIC-supervised corrected to read ‘‘Regulatory Flexibility
U.S.C. 78o–7 note). Act and Major Rule Conclusion.’’
institution.
■ 34. Amend § 347.211 by adding * * * * * 2. On page 60693, in the second
paragraph (d) to read as follows: column, add paragraph at the end of
Brian P. Brooks, section V to read as follows:
§ 347.21 Examination of branches of Acting Comptroller of the Currency.
foreign banks. Under the provisions of the Congressional
By order of the Board of Governors of the Review Act (5 U.S.C. 801 et seq.), the Office
* * * * * of Management and Budget’s Office of
Federal Reserve System.
(d) From December 2, 2020, through Information and Regulatory Affairs has
Ann Misback,
December 31, 2021, for purposes of determined that this final rule is not a ‘‘major
determining eligibility for the extended Secretary of the Board. rule,’’ as the term is defined at 5 U.S.C.
examination cycle described in Federal Deposit Insurance Corporation. 804(2).
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