Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 8089 

We Do Business in Accordance with 

Federal Fair Lending Laws. 

UNDER THE FEDERAL FAIR 

HOUSING ACT, IT IS ILLEGAL, ON 

THE BASIS OF RACE, COLOR, 

NATIONAL ORIGIN, RELIGION, SEX, 

HANDICAP, OR FAMILIAL STATUS 

(HAVING CHILDREN UNDER THE AGE 

OF 18) TO: 

• Deny a loan for the purpose of 

purchasing, constructing, improving, 

repairing or maintaining a dwelling or 

to deny any loan secured by a dwelling; 

or 

• Discriminate in fixing the amount, 

interest rate, duration, application 

procedures, or other terms or conditions 

of such a loan or in appraising property. 

IF YOU BELIEVE YOU HAVE BEEN 

DISCRIMINATED AGAINST, YOU 

SHOULD SEND A COMPLAINT TO: 

Assistant Secretary for Fair Housing 

and Equal Opportunity, Department of 

Housing and Urban Development, 

Washington, DC 20410. 

For processing under the Federal Fair 

Housing Act 

AND TO: 

Federal Deposit Insurance 

Corporation, Consumer Response 

Center, [Insert address for the Consumer 

Response Center stated on the FDIC’s 

website at www.fdic.gov] 

For processing under the FDIC 

Regulations. 

UNDER THE EQUAL CREDIT 

OPPORTUNITY ACT, IT IS ILLEGAL 

TO DISCRIMINATE IN ANY CREDIT 

TRANSACTION: 

• On the basis of race, color, national 

origin, religion, sex, marital status, or 

age; 

• Because income is from public 

assistance; or 

• Because a right has been exercised 

under the Consumer Credit Protection 

Act. 

IF YOU BELIEVE YOU HAVE BEEN 

DISCRIMINATED AGAINST, YOU 

SHOULD SEND A COMPLAINT TO: 

Federal Deposit Insurance 

Corporation, Consumer Response 

Center, [Insert address for the Consumer 

Response Center stated on the FDIC’s 

website at www.fdic.gov] 

(c) The Equal Housing Lender Poster 

specified in this section was adopted 

under 24 CFR 110.25(b) of the United 

States Department of Housing and 

Urban Development’s rules and 

regulations as an authorized 

substitution for the poster required in 

§ 110.25(a) of those rules and 

regulations. 

Subpart B—Recordkeeping 

§ 338.5 Purpose. 

The purpose of this subpart is twofold. First, this subpart notifies all FDICsupervised institutions of their duty to 

collect and retain certain information 

about a home loan applicant’s personal 

characteristics in accordance with 12 

CFR part 1002 (Regulation B of the 

Bureau of Consumer Financial 

Protection) in order to monitor an 

institution’s compliance with the Equal 

Credit Opportunity Act of 1974 (15 

U.S.C. 1691 et seq.). Second, this 

subpart notifies certain FDIC-supervised 

institutions of their duty to maintain, 

update, and report a register of home 

loan applications in accordance with 12 

CFR part 1003 (Regulation C of the 

Bureau of Consumer Financial 

Protection), which implements the 

Home Mortgage Disclosure Act (12 

U.S.C. 2801 et seq.). 

§ 338.6 Definitions applicable to this 

subpart. 

For purposes of this subpart— 

(a) Bank means an insured State 

nonmember bank as defined in section 

3 of the Federal Deposit Insurance Act, 

12 U.S.C. 1813. 

(b) Controlled entity means a 

corporation, partnership, association, or 

other business entity with respect to 

which a bank possesses, directly or 

indirectly, the power to direct or cause 

the direction of management and 

policies, whether through the 

ownership of voting securities, by 

contract, or otherwise. 

(c) FDIC-supervised institution means 

either a bank or a State savings 

association. 

(d) State savings association has the 

same meaning as in section 3(b)(3) of 

the Federal Deposit Insurance Act, 12 

U.S.C. 1813(b)(3). 

§ 338.7 Recordkeeping requirements. 

All FDIC-supervised institutions that 

receive an application for credit 

primarily for the purchase or 

refinancing of a dwelling occupied or to 

be occupied by the applicant as a 

principal residence where the extension 

of credit will be secured by the dwelling 

shall request and retain the monitoring 

information required by Regulation B of 

the Bureau of Consumer Financial 

Protection (12 CFR part 1002). 

§ 338.8 Compilation of loan data in register 

format. 

FDIC-supervised institutions and 

other lenders required to file a Home 

Mortgage Disclosure Act loan/ 

application register (LAR) with the 

Federal Deposit Insurance Corporation 

shall collect, record and report such 

LAR in accordance with Regulation C of 

the Bureau of Consumer Financial 

Protection (12 CFR part 1003). 

§ 338.9 Mortgage lending of a controlled 

entity. 

Any bank which refers any applicants 

to a controlled entity and which 

purchases any covered loan as defined 

in Regulation C of the Bureau of 

Consumer Financial Protection (12 CFR 

part 1003) originated by the controlled 

entity, as a condition to transacting any 

business with the controlled entity, 

shall require the controlled entity to 

enter into a written agreement with the 

bank. The written agreement shall 

provide that the entity shall: 

(a) Comply with the requirements of 

§§ 338.3, 338.4, and 338.7, and, if 

otherwise subject to Regulation C of the 

Bureau of Consumer Financial 

Protection (12 CFR part 1003), § 338.8; 

(b) Open its books and records to 

examination by the Federal Deposit 

Insurance Corporation; and 

(c) Comply with all instructions and 

orders issued by the Federal Deposit 

Insurance Corporation with respect to 

its home loan practices. 

PART 390—REGULATIONS 

TRANSFERRED FROM THE OFFICE OF 

THRIFT SUPERVISION 

■ 2. The authority citation for part 390 

is revised to read as follows: 

Authority: 12 U.S.C. 1819. 

Subpart Q also issued under 12 U.S.C. 

1462; 1462a; 1463; 1464. 

Subpart W also issued under 12 U.S.C. 

1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m; 

78n; 78p; 78w. 

Subpart G—[Removed and Reserved] 

■ 3. Remove and reserve subpart G, 

consisting of §§ 390.140 through 

390.150. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on December 15, 

2020. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2020–28452 Filed 2–2–21; 8:45 am] 

BILLING CODE 6714–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Parts 303 and 390 

RIN 3064–AF36 

Removal of Transferred OTS 

Regulations Regarding Application 

Processing Procedures of State 

Savings Associations and Conforming 

Amendments to Other Regulations 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 


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8090 Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 

1Public Law 111–203, 124 Stat. 1376 (2010). 

2Codified at 12 U.S.C. 5411. 

3Codified at 12 U.S.C. 5414(b). 

4Codified at 12 U.S.C. 5414(c). 

5 76 FR 39247 (July 6, 2011). 

6Codified at 12 U.S.C. 5412(b)(2)(B)(i)(II). 

7 12 U.S.C. 1811 et seq. 8Codified at 12 U.S.C. 5412(c)(1). 

9 12 U.S.C. 1813(q). 

10 76 FR 47652 (Aug. 5, 2011). 

11See 76 FR 47653. 

12 12 CFR part 390, subpart F. 

13 12 U.S.C. 5414(b)(3). 

ACTION: Final rule. 

SUMMARY: The Federal Deposit 

Insurance Corporation (FDIC) is 

adopting a final rule (final rule) to 

rescind and remove certain regulations 

transferred to the FDIC from the Office 

of Thrift Supervision (OTS) in 2011 

pursuant to the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(Dodd-Frank Act). These regulations 

generally concern the supervision and 

governance of State savings 

associations, including the application 

processing procedures for certain 

applications, notices and filings by State 

savings associations. In addition to the 

removal of our regulations, the FDIC is 

making technical changes to our 

regulations that do not currently apply 

to State savings associations. Following 

the rescission, the filing regulations 

pertaining to State savings associations 

and all other FDIC-supervised 

institutions will be substantially the 

same. 

DATES: The final rule is effective March 

5, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Donald Hamm, Special Advisor, (202) 

898–3528, dhamm@fdic.gov; Shelli 

Coffey, Review Examiner, (312) 382– 

7539, scoffey@fdic.gov, Risk 

Management Supervision; Andrew B. 

Williams II, Counsel, (202) 898–3591, 

and willimas@fdic.gov, Legal Division. 

SUPPLEMENTARY INFORMATION: 

I. Policy Objective 

The policy objective of the final rule 

is to remove unnecessary and 

duplicative regulations in order to 

simplify and improve the public’s 

understanding of the FDIC’s regulations, 

and to promote parity between State 

savings associations and State 

nonmember banks by applying the same 

filing requirements to both classes of 

institutions. Thus, as further detailed in 

this section, the FDIC is rescinding and 

removing, from the Code of Federal 

Regulations (CFR), 12 CFR part 390, 

subpart F (subpart F). 

As discussed below, the FDIC is 

making technical changes to certain 

sections of part 303. The rescission of 

subpart F, with the accompanying 

revisions to 12 CFR part 303, simplifies 

and streamlines the FDIC’s regulations 

by removing unnecessary provisions 

that are adequately provided for in other 

existing statutes and regulations. 

II. Background 

A. The Dodd-Frank Act 

The Dodd-Frank Act, signed into law 

on July 21, 2010, provided for a 

substantial reorganization of the 

regulation of State and Federal savings 

associations and their holding 

companies.1 Beginning July 21, 2011, 

the transfer date established by section 

311 of the Dodd-Frank Act,2 the powers, 

duties, and functions formerly 

performed by the OTS were divided 

among the FDIC, as to State savings 

associations, the Office of the 

Comptroller of the Currency (OCC), as to 

Federal savings associations, and the 

Board of Governors of the Federal 

Reserve System (FRB), as to savings and 

loan holding companies. Section 316(b) 

of the Dodd-Frank Act 3 provides the 

manner of treatment of all orders, 

resolutions, determinations, regulations, 

and advisory materials that had been 

issued, made, prescribed, or allowed to 

become effective by the OTS. The 

section provides that if such materials 

were in effect on the day before the 

transfer date, they continue in effect and 

are enforceable by or against the 

appropriate successor agency until they 

are modified, terminated, set aside, or 

superseded in accordance with 

applicable law by such successor 

agency, by any court of competent 

jurisdiction, or by operation of law. 

Pursuant to section 316(c) of the 

Dodd-Frank Act,4 on June 14, 2011, the 

FDIC’s Board of Directors approved a 

‘‘List of OTS Regulations to be Enforced 

by the OCC and the FDIC Pursuant to 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act.’’ This list was 

published by the FDIC and the OCC as 

a Joint Notice in the Federal Register on 

July 6, 2011.5

Although section 312(b)(2)(B)(i)(II) of 

the Dodd-Frank Act 6 granted the OCC 

rulemaking authority relating to both 

State and Federal savings associations, 

nothing in the Dodd-Frank Act affected 

the FDIC’s existing authority to issue 

regulations under the Federal Deposit 

Insurance Act (FDI Act) 7 and other laws 

as the ‘‘appropriate Federal banking 

agency’’ or under similar statutory 

terminology. Section 312(c) of the DoddFrank Act 8 revised the definition of 

‘‘appropriate Federal banking agency’’ 

contained in section 3(q) of the FDI Act 9

to add State savings associations to the 

list of entities for which the FDIC is 

designated as the ‘‘appropriate Federal 

banking agency.’’ As a result, when the 

FDIC acts as the designated 

‘‘appropriate Federal banking agency’’ 

(or similar terminology) for State 

savings associations, as it does here, the 

FDIC is authorized to issue, modify, and 

rescind regulations involving such 

associations, as well as for State 

nonmember banks and insured Statelicensed branches of foreign banks. 

As noted, on July 14, 2011, operating 

pursuant to this authority, the FDIC’s 

Board of Directors issued a list of 

regulations of the former OTS that the 

FDIC would enforce with respect to 

State savings associations. On that same 

date, the FDIC Board reissued and redesignated certain transferring 

regulations of the former OTS. These 

transferred OTS regulations were 

published as new FDIC regulations in 

the Federal Register on August 5, 

2011.10 When it republished the 

transferred OTS regulations as new 

FDIC regulations, the FDIC specifically 

noted that its staff would evaluate the 

transferred OTS regulations and might 

later recommend incorporating the 

transferred OTS regulations into other 

FDIC regulations, amending them, or 

rescinding them, as appropriate.11

B. 12 CFR Part 516—Application 

Processing Procedures 

A subset of the regulations transferred 

to the FDIC from the OTS concern 

application processing procedures. The 

OTS regulations, formerly found at 12 

CFR part 516, §§ 516.1 through 516.290, 

were transferred to the FDIC with only 

nomenclature changes and now 

comprise part 390, subpart F (subpart 

F). Subpart F governs the FDIC’s 

procedures for processing applications, 

notices or filings under part 390 and, 

prior to its rescission, part 391 for State 

savings associations.12

III. The Proposal 

A. Removal of Part 390, Subpart F— 

Application Processing Procedures 

Section 316(b)(3) of the Dodd-Frank 

Act in pertinent part, provides that the 

regulations of the former OTS, as they 

apply to State savings associations, will 

be enforceable by the FDIC until they 

are modified, terminated, set aside, or 

superseded in accordance with 

applicable law.13 Consistent with the 

FDIC’s stated intention to evaluate 

transferred OTS regulations before 

taking action on them, the FDIC 

conducted a careful review of subpart F 

and related Federal statutes, regulations, 

and statements of policy relevant to 


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Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 8091 

14 85 FR 65270 (Oct. 15, 2020). 

15 Id. 

16 12 U.S.C. 1815. 

17 12 U.S.C. 1813(c)(1). 

18 12 CFR 303.20. 

19 12 CFR 390.111. 

20 12 U.S.C. 1813(a)(2). 

21See 68 FR 7308, February 13, 2003. 

22 12 CFR 303.15(a)(1) through (4). See also, 68 FR 

7308. 

23 12 U.S.C. 1813(b)(3). 

subordinate organizations of State 

savings associations. 

On October 15, 2020, the FDIC 

published a notice of proposed 

rulemaking (NPR or proposal) regarding 

the removal of subpart F, which 

concerns the FDIC’s procedures for 

processing applications, notices or 

filings under part 390 and, prior to its 

rescission, part 391 for State savings 

associations.14 The NPR proposed 

removing subpart F from the Code of 

Federal Regulations (CFR) because, after 

careful review and consideration, the 

FDIC believed the provisions contained 

in subpart F to be unnecessary in light 

of the applicability of other provisions 

of Federal statutes and regulations, 

specifically 12 CFR part 303 (part 303) 

or guidance that produce substantially 

the same supervisory results. The FDIC 

received no comments on those aspects 

of the proposal. 

Rather than restate the rationale for 

rescission and removal of each section 

of subpart F, the reader is referred to the 

explanations for rescission and removal 

provided in the NPR,15 which the FDIC 

references here as the basis for finalizing 

the regulations as proposed. In the NPR 

the FDIC also proposed to amend 

certain sections of part 303, subparts A, 

K, and M, of the FDIC’s regulations. 

Those amendments are discussed 

below. 

B. Revision of Certain Sections of Part 

303, Filing Procedures 

Part 303 of the FDIC Rules and 

Regulations (12 CFR part 303) provides 

a framework for filing requirements for 

various applications, notices, and 

requests (collectively, ‘‘filings’’ as 

defined in § 303.2(s)) (12 CFR 303.2(s)). 

Subpart A of part 303, Rules of General 

Applicability, prescribes the general 

procedures for submitting filings to the 

FDIC that are required by statute or 

regulation. This subpart also prescribes 

the procedures to be followed by the 

FDIC, applicants, and interested parties 

during the process of considering a 

filing, including public notices and 

comment when required. This subpart 

explains the availability of expedited 

processing for eligible depository 

institutions (defined in § 303.2(r)) for 

matters subject to expedited processing. 

Specific filings are detailed in subpart B 

through subpart M of part 303. 

The FDIC is making technical changes 

in certain sections of part 303, subparts 

A, K, and M. The revisions make those 

sections applicable on their terms to 

State savings associations. 

1. Section 303.7—Public Notice 

Requirements 

Section 5 of the FDI Act,16 generally 

and in part, provides that any 

depository institution engaged in the 

business of receiving deposits other 

than trust funds, upon application to 

and examination by the FDIC and 

approval by its Board of Directors, may 

become an insured depository 

institution. The term ‘‘depository 

institution’’ means any bank or savings 

association pursuant to section 3(c)(1) of 

the FDI Act.17 Subpart B—Deposit 

Insurance, of part 303 of the FDIC 

regulations, sets forth the procedures for 

applying for deposit insurance by 

certain applicants, including for a 

proposed depository institution under 

section 5 of the FDI Act, and applies to 

savings associations.18 Section 303.23(a) 

of subpart B states that, in addition to 

other requirements, the applicant ‘‘shall 

publish a notice as prescribed in § 303.7 

in a newspaper of general circulation in 

the community in which the main office 

of the depository institution is or will be 

located.’’ 

Subpart F of part 390 of the FDIC 

regulations addresses public notice 

requirements, stating that §§ 390.111 

through 390.115 apply whenever a FDIC 

regulation requires an applicant to 

follow the public notice procedures.19

The FDIC is rescinding §§ 390.111 

through 390.115 because part 303 

substantively addresses the same 

requirements, including, for deposit 

insurance applications, §§ 303.7, 

subpart A, and 303.23, subpart B. 

Section 303.7 of the FDIC regulations, 

of part 303, subpart A, addresses public 

notice requirements for filings with 

respect to mergers, changes in control, 

and requests for deposit insurance. With 

one exception, § 303.7 makes no 

distinction between banks and savings 

associations. However, § 303.7(c)(1)(i) 

states, in part: ‘‘[i]n the case of an 

application for deposit insurance for a 

de novo bank (emphasis added), include 

the names of all organizers or 

incorporators.’’ The NPR proposed to 

amend § 303.7(c)(1)(i) to replace ‘‘bank’’ 

with ‘‘depository institution,’’ a term 

used elsewhere in the section. The 

revision would clarify that 

§ 303.7(c)(1)(i) is applicable to savings 

associations, consistent with section 5 

of the FDI Act and part 303, including 

subpart B—Deposit Insurance, and 

would make the requirement consistent 

for both types of depository institutions. 

The FDIC received no comments on 

these aspects of the proposal. 

2. Section 303.15—Certain Limited 

Liability Companies Deemed 

Incorporated Under State Law 

Pursuant to section 5 of the FDI Act, 

the FDIC may approve deposit 

insurance for certain depository 

institutions. One of the statutory 

requirements for a State bank to be 

eligible for Federal deposit insurance is 

that it must be ‘‘incorporated under the 

laws of any State.’’ 20 That requirement 

effectively limited the approval of 

deposit insurance to State banks 

chartered under the traditional 

corporate form, despite the creation and 

increased use of limited liability entities 

other than corporations, such as limited 

liability companies (LLCs). Section 

303.15 of the FDIC regulations is found 

in part 303, subpart A. Section 303.15(a) 

was promulgated to provide that a bank 

chartered as an LLC under State law 

would be deemed ‘‘incorporated’’ if it 

met four requirements, thus permitting 

the entity to be eligible to apply and be 

approved for deposit insurance.21 To be 

deemed incorporated, the LLC must 

possesses the four traditional corporate 

characteristics of perpetual succession, 

centralized management, limited 

liability, and free transferability of 

interests.22

Section 303.15(b) further provides 

that, for purposes of the FDI Act and the 

FDIC regulations, the terms 

‘‘stockholder,’’ ‘‘shareholder,’’ 

‘‘director,’’ ‘‘officer,’’ ‘‘voting stock,’’ 

‘‘voting shares,’’ and ‘‘voting securities,’’ 

for banks chartered as LLCs, shall 

encompass or have substantially the 

same meaning as those terms have for 

banks chartered as corporations. The 

definition of ‘‘State savings association’’ 

under the FDI Act, which uses the 

phrase ‘‘organized and operating 

according to the laws of the State’’ 

instead of ‘‘incorporated,’’ does not 

limit State savings associations to the 

corporate charter form (absent a state 

requirement).23 In order to clarify that 

the terms in § 303.15(b) apply to savings 

association chartered as LLCs as they do 

for banks so chartered, the NPR 

proposed to revise references to ‘‘bank’’ 

in § 303.15(b) to ‘‘depository 

institution.’’ The revisions would make 

the terms ‘‘stockholder,’’ ‘‘shareholder,’’ 

‘‘director,’’ ‘‘officer,’’ ‘‘voting stock,’’ 

‘‘voting shares,’’ and ‘‘voting securities,’’ 

with respect to savings associations 


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8092 Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 

24 12 U.S.C. 1831o. 

25See 12 U.S.C. 1831o(e)(4). 

26See 12 U.S.C. 1831o(f)(4). 12 U.S.C. 1831o(f) 

contains additional, discretionary restrictions that 

may be imposed by a financial regulator. 

27 12 CFR part 348. 

28 12 U.S.C. 3201–3208. 

29 12 CFR 348.1(b). 

30 12 U.S.C. 3206, 3207. 

31 12 U.S.C. 1823(k)(1)(A)(v). 

32 12 CFR 390.100(b)(1). 

33 80 FR 79252 (Dec. 21, 2015). 

34 12 CFR 303.249(a). 

chartered as LLCs, encompass or have 

substantially the same meaning with 

respect to savings associations chartered 

as LLCs as for those chartered as 

corporations. 

The FDIC received no comments on 

these aspects of the proposal. 

3. Subpart K—Prompt Corrective 

Action: Section 303.204—Applications 

for Acquisitions, Branching, and New 

Lines of Business; Section 303.205— 

Applications for Bonuses and Increased 

Compensation for Senior Executive 

Officers 

Part 303 of the FDIC’s regulations 

includes procedures to implement the 

filing requirements for certain activities 

or transactions relative to 

undercapitalized or weaker depository 

institutions, and implements certain 

elements of section 38 of the FDI Act.24

Section 38 applies to all insured 

depository institutions. Among other 

things, section 38 generally prohibits an 

insured depository institution, without 

application and approval, from engaging 

in acquisitions, branching, or new lines 

of business, if the institution is 

undercapitalized or weaker, 

significantly undercapitalized, or 

critically undercapitalized.25 It also 

prohibits an insured depository 

institution, without application and 

approval, from payment of bonuses or 

increased compensation to senior 

executive officers, if the institution is 

significantly or critically 

undercapitalized, or is undercapitalized 

and has failed to submit or implement 

an acceptable capital restoration plan.26

Sections 303.204 and 303.205 of the 

FDIC regulations implement the 

provisions of section 38 described 

above. Section 303.204 requires any 

insured State nonmember bank and any 

insured branch of a foreign bank that is 

undercapitalized or significantly 

undercapitalized, and any critically 

undercapitalized insured depository 

institution, to submit an application to 

engage in acquisitions, branching, or 

new lines of business. This section 

clarifies that new lines of business 

include ‘‘any new activity exercised 

which, although it may be permissible, 

has not been exercised by the 

institution.’’ It also specifies the content 

of the filing, including information 

regarding whether the institution’s 

primary Federal regulator has accepted 

the institution’s capital restoration plan, 

and whether the institution has 

implemented that plan. 

Section 303.205 requires any insured 

State nonmember bank or insured 

branch of a foreign bank that is (i) 

significantly undercapitalized or 

critically undercapitalized, or (ii) is 

undercapitalized and has failed to 

submit or implement an acceptable 

capital restoration plan, to submit an 

application to pay a bonus or increase 

compensation to any senior executive 

officer. The section specifies the content 

of the filing, including information 

regarding the acceptance and 

implementation of the institution’s 

capital restoration plan. 

Although section 38 and other 

sections of subpart K of part 303 by their 

terms apply to all insured depository 

institutions, § 303.204, in part, and 

§ 303.205 apply by their terms only to 

insured State nonmember banks and 

insured branches of foreign banks. The 

NPR proposed to revise §§ 303.204 and 

303.205 to make those sections 

expressly apply to State savings 

associations to the same extent as they 

do to insured State nonmember banks. 

The final rule revises those sections to 

add ‘‘insured State savings 

associations.’’ 

The FDIC received no comments on 

these aspects of the proposal. 

4. Section 303.249—Management 

Official Interlocks 

Part 348 27 of the FDIC regulations 

implements the Deposit Insurance 

Management Interlocks Act (Interlocks 

Act).28 The purpose of the Interlocks 

Act and part 348 are to foster 

competition by generally prohibiting a 

management official from serving two 

nonaffiliated depository organizations 

when the management interlock likely 

would have an anti-competitive effect.29

The Interlocks Act is applicable to both 

insured State nonmember banks and 

State savings associations, and part 348 

applies to management officials of FDICsupervised institutions and their 

affiliates. With regard to insured State 

nonmember banks and State savings 

associations, the Interlocks Act provides 

the FDIC with administrative and 

enforcement authority under section 

3206, as well as authority to prescribe 

regulations to carry out the Interlocks 

Act.30

Under section 13(k) of the FDI Act, 

and notwithstanding any provision of 

State law, the FDIC may authorize dual 

service that would otherwise be 

prohibited by the Interlocks Act upon 

determining that severe financial 

conditions threaten the stability of a 

significant number of savings 

associations, or of savings associations 

possessing significant financial 

resources, and that such authorization 

would lessen the risk to the FDIC.31

Subpart F of part 390 does not apply to 

a transaction under section 13(k) of the 

FDI Act.32

As discussed above, the FDIC 

transferred various OTS regulations into 

FDIC regulations. One of the transferred 

OTS regulations governed OTS 

oversight of management official 

interlocks in the context of State savings 

associations. The OTS regulation, 

formerly found at 12 CFR part 563f, was 

transferred to the FDIC with only minor, 

nonsubstantive changes, and was found 

in the FDIC’s regulations at 12 CFR part 

390, subpart V (part 390, subpart V), 

entitled ‘‘Management Official 

Interlocks.’’ Before the transfer of the 

OTS regulations and continuing today 

as noted above, the FDIC’s regulations 

contained part 348. After review and 

comparison of part 390, subpart V, and 

part 348, effective January 20, 2016, the 

FDIC rescinded part 390, subpart V, 

because the FDIC found it to be 

substantially redundant to existing part 

348, considering technical conforming 

edits to part 348.33

However, § 303.249, found in part 

303, subpart M, of the FDIC regulations, 

addresses the ‘‘procedures to be 

followed by an insured State 

nonmember bank (emphasis added) to 

seek the approval of the FDIC to 

establish an interlock pursuant to’’ the 

Interlocks Act, section 13(k) of the FDI 

Act, and part 348 of the FDIC 

regulations.34 The NPR proposed to 

revise § 303.249(a) to insert, following 

‘‘bank’’ in the language quoted 

immediately above, ‘‘or an insured State 

savings association.’’ The revision 

clarifies that State savings associations 

may use the procedures contained in 

§ 303.249 to apply for approval to 

establish interlocks as provided therein. 

The FDIC received no comments on 

these aspects of the proposal. 

IV. The Final Rule 

For the reasons stated herein and in 

the NPR, the FDIC is adopting the 

amendments as proposed. 

V. Expected Effects 

As of June 30, 2020, the FDIC 

supervised 3,270 depository 


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Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 8093 

35Call Report data, June 30 2020. 

36 12 U.S.C. 1831a. 

37 12 CFR 303.1. 

institutions, of which 35 (1.1 percent) 

were State savings associations.35 The 

final rule primarily affects regulations 

that govern State savings associations. 

Therefore, the final rule is expected to 

affect 35 FDIC-supervised institutions. 

As previously discussed, the final rule 

rescinds part 390, subpart F, because 

most of its elements are duplicative of 

substantively similar provisions of FDIC 

regulations, principally part 303. 

Additionally, the final rule amends 

certain elements of part 303 so that the 

provisions are applicable to State 

savings associations. In doing so, the 

final rule makes elements of part 390, 

subpart F, substantively duplicative of 

the amended elements of part 303, and, 

therefore, unnecessary. As such, the 

FDIC does not believe the final rule will 

have substantive effects on State savings 

associations. 

Section 390.100 sets forth application 

processing procedures for State savings 

associations. However, existing 

statutes 36 and regulations already 

‘‘prescribe the general procedures for 

submitting filings to the FDIC and the 

procedures to be followed by the FDIC, 

applicants and interested parties during 

the process of considering a filing’’ 37 for 

FDIC-supervised institutions, including 

State savings associations. Therefore, 

rescinding § 390.100 is not expected to 

have any substantive effects on State 

savings associations. 

Section 390.101 specifies the criteria 

for determining which filings receive 

expedited treatment and which receive 

standard treatment. State savings 

associations are already subject to 

substantively similar requirements in 

§§ 303.2(r) and 303.11(c), as well as the 

substantive subparts of part 303 of the 

FDIC regulations. Therefore, rescinding 

§ 390.101 is not expected to have any 

substantive effects on State savings 

associations. 

Section 390.102 addresses the 

computation of time periods for State 

savings associations. State savings 

associations are subject to regulations 

that address the computation of relevant 

time periods at § 303.4 of the FDIC 

regulations. Therefore, rescinding 

§ 390.102 is not expected to have any 

substantive effects on State savings 

associations. 

Section 390.103 addresses pre-filing 

meetings and FDIC contacts for filings to 

acquire control of State savings 

associations. Pre-filing meetings are not 

addressed in FDIC regulations, but are 

addressed in the Applications 

Procedures Manual (APM), in which a 

substantively similar description of prefiling meetings is given. Additionally, 

the APM states that a Case Manager will 

be assigned by the FDIC to the 

application in order to facilitate 

communication and engagement with 

the applicant. Therefore, the FDIC 

believes that rescinding § 390.103 is 

unlikely to have any substantive effects 

on State savings associations or change 

in control applicants. 

Section 390.104 addresses certain 

requirements for business plans 

submitted by State savings associations 

under subpart F, which permits the 

FDIC to require additional business plan 

information during processing of the 

filing. Under part 303, business plans 

are required for certain filings, though 

the FDIC may request additional 

information for any filing. In this regard, 

the FDIC’s review processes include, as 

appropriate, pre-filing and other 

activities to ensure institutions’ 

understanding of the FDIC’s filing 

requirements and information needs. In 

certain cases, the content for business 

plans is addressed in filing forms or 

other FDIC resources. For example, the 

Inter-agency Charter and Deposit 

Insurance Application Form contains 

detailed instructions for the 

development of the business plan; and 

those instructions may assist 

institutions when submitting business 

plans as part of other filings. The FDIC 

has also provided a Handbook for 

Organizers—Applying for Deposit 

Insurance, which aids all applicants for 

deposit insurance and includes sections 

on developing a business plan and 

business plan content. Generally, the 

FDIC believes it is appropriate to 

provide an institution with flexibility to 

tailor the content of the business plan to 

reflect its unique circumstances, 

strategies, and challenges. Therefore, in 

light of the discussion above, the FDIC 

believes that rescinding § 390.104 is 

unlikely to have any substantive effects 

on State savings associations or change 

in control applicants. 

Section 390.105 addresses expedited 

and standard processing, as well as 

waiver requests for State savings 

associations. Expedited and standard 

processing, as well as waiver 

requirements, are encompassed in FDIC 

regulations applicable to State savings 

associations found throughout various 

subparts and sections of part 303. 

Therefore, the FDIC believes that 

rescinding § 390.105 is unlikely to have 

any substantive effects on State savings 

associations or future applicants. 

Section 390.106 addresses the content 

of filings for State savings associations. 

It directs State savings associations to 

the applicable forms and the content 

requirements. The required content of 

filings is encompassed in FDIC 

regulations applicable to State savings 

associations throughout various 

subparts and sections of part 303. 

Therefore, the FDIC believes that 

rescinding § 390.106 is unlikely to have 

any substantive effects on State savings 

associations or future applicants. 

Section 390.107 addresses application 

confidentiality for State savings 

associations. FDIC regulations found at 

§ 303.8 and applicable to FDICsupervised institutions, including State 

savings associations, includes 

confidential treatment regulations that 

are substantively similar to those in 

§ 390.107. Therefore, the FDIC believes 

that rescinding § 390.107 is unlikely to 

have any substantive effects on State 

savings associations or future 

applicants. 

Section 390.108 addresses where to 

file applications, specifically providing 

regional office addresses. General 

application filing procedures for all 

FDIC-supervised institutions, including 

State savings associations, are 

encompassed in regulations found at 

§ 303.3 of the FDIC regulations. Further, 

although specific regional office 

addresses are not included in the 

regulation, they are available on the 

FDIC’s public website. Therefore, the 

FDIC believes that rescinding § 390.108 

is unlikely to have any substantive 

effects on State savings associations or 

future applicants. 

Section 390.109 explains the 

application filing date. The FDIC does 

not have substantively similar 

regulations governing the filing date of 

an application. However, FDIC 

regulations operate on the basis of the 

date on which a substantially complete 

filing is submitted. Further, the FDIC’s 

APM, which is accessible to all FDICsupervised institutions, including State 

savings associations, addresses the date 

on which an application is considered 

to be substantively complete. Therefore, 

the FDIC believes that rescinding 

§ 390.109 is unlikely to have any 

substantive effects on State savings 

associations or future applicants. 

Section 390.110 discusses amending 

or supplementing an application. The 

FDIC does not have substantively 

similar regulations governing amending 

or supplementing an application. 

However, the FDIC relies on 

determinations as to when an 

application is substantially complete. In 

addition, the FDIC’s APM, which is 

applicable to all FDIC-supervised 

institutions, including State savings 

associations, addresses both 

substantially complete filings and those 

not substantially complete, as well as 


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8094 Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 

38 12 CFR 303.304. 

how to supplement information. 

Further, the APM states that an 

applicant may modify and update an 

application throughout the review 

process until final disposition, and that 

applicants often supplement their 

applications throughout the review 

process. Therefore, the FDIC believes 

that rescinding § 390.110 is unlikely to 

have any substantive effects on State 

savings associations or future 

applicants. 

Sections 390.111 through 390.115 

address public notice requirements. 

FDIC-supervised institutions, including 

State savings associations, are subject to 

substantively similar public notice 

requirements in § 303.7 of the FDIC 

regulations and throughout various 

subparts and sections of part 303. 

Therefore, the FDIC believes that 

rescinding §§ 390.111 through 390.115 

is unlikely to have any substantive 

effects on State savings associations or 

future applicants. 

Sections 390.116 through 390.120 

address procedures for submission of 

public comments. FDIC-supervised 

institutions, including State savings 

associations, are subject to substantively 

similar requirements regarding 

procedures for submission of public 

comments in § 303.9 of the FDIC 

regulations and throughout various 

subparts and sections of part 303. 

Therefore, the FDIC believes that 

rescinding §§ 390.116 through 390.120 

is unlikely to have any substantive 

effects on State savings associations or 

future applicants. 

Sections 390.121 through 390.125 

contain meeting procedures. Meetings 

are addressed generally in FDIC 

regulations found at 12 CFR 303.6 and 

303.10 for FDIC-supervised institutions, 

including State savings associations. 

Although §§ 303.6 and 303.10 of the 

FDIC regulations are generally less 

specific than §§ 390.121 through 

390.125, the FDIC believes the language 

in § 303.6 is generally inclusive of the 

substance of §§ 390.121 through 390.125 

by stating that ‘‘[t]he FDIC may examine 

or investigate and evaluate facts related 

to any filing under this chapter to the 

extent necessary to reach an informed 

decision and take any action necessary 

or appropriate under the 

circumstances.’’ Therefore, the FDIC 

believes that rescinding §§ 390.121 

through 390.125 is unlikely to have any 

substantive effects on State savings 

associations or future applicants. 

Section 390.126 addresses expedited 

treatment, including removal of the 

filing to standard processing, additional 

information requests, suspension of the 

processing period, and when the 

applicant can proceed with the activity 

if the FDIC has not acted. FDICsupervised institutions, including State 

savings associations, are subject to 

substantively similar requirements for 

matters receiving expedited treatment in 

§ 303.11(c) of the FDIC regulations, as 

well as §§ 303.122 and 303.142. 

Sections 303.3 and 303.11(e), as well as 

substantive subparts of part 303, 

provide the FDIC authority to require 

submission of additional information. 

Therefore, the FDIC believes that 

rescinding § 390.126 is unlikely to have 

any substantive effects on State savings 

associations or future applicants. 

Sections 390.127 and 390.128 address 

application completeness. The FDIC 

does not have corresponding regulations 

addressing application completeness. 

Instead, the application processing time 

periods under part 303 are triggered by 

the FDIC’s receipt of a substantially 

complete filing.38 The FDIC believes 

that the substantially complete filing 

step of part 303 permits the procedures 

for processing a filing under part 303, 

while essentially addressing the same 

issues, to be simpler and easier to 

navigate than those of §§ 390.127 and 

390.128. Sections 303.3 and 303.11(e) of 

the FDIC regulations, as well as 

substantive subparts of part 303, 

provide the FDIC authority to require 

submission of additional information. 

The FDIC’s APM, which aids all FDICsupervised institutions, including State 

savings associations, addresses both 

substantially complete filings and those 

not substantially complete. Therefore, 

the FDIC believes that rescinding 

§§ 390.127 and 390.128 is unlikely to 

have any substantive effects on State 

savings associations or future 

applicants. 

Section 390.129 addresses eligibility 

examinations, as well as the authority of 

the FDIC to require such examinations 

and to request additional information. 

Under § 303.6 of the FDIC regulations, 

the FDIC may examine or investigate 

and evaluate facts related to any filing 

to the extent necessary to reach an 

informed decision and take any action 

necessary or appropriate under the 

circumstances. Sections 303.3 and 

303.11(e), as well as substantive 

subparts of part 303, provide the FDIC 

authority to require submission of 

additional information. Therefore, the 

FDIC believes that a separate eligibility 

determination provision is unneeded, 

and rescinding § 390.129 is unlikely to 

have any substantive effects on State 

savings associations or future 

applicants. 

Section 390.130 addresses potential 

FDIC requests for additional information 

or actions from applicants. FDICsupervised institutions, including State 

savings associations, are subject to 

substantively similar requirements 

regarding potential FDIC requests for 

additional information or actions from 

applicants through various subparts and 

sections of part 303. Therefore, the FDIC 

believes that rescinding § 390.130 is 

unlikely to have any substantive effects 

on State savings associations or future 

applicants. 

Section 390.131 explains 

requirements to publish new public 

notices. FDIC-supervised institutions, 

including State savings associations, are 

subject to substantively similar 

requirements regarding publishing new 

public notices in § 303.7(f) of the FDIC 

regulations. Therefore, the FDIC 

believes that rescinding § 390.131 is 

unlikely to have any substantive effects 

on State savings associations or future 

applicants. 

Section 390.132 addresses suspension 

of an application. Part 303 has no such 

provision. However, the FDIC believes 

that situations envisioned by § 390.132 

can be effectively addressed on a caseby-case basis without need of a 

regulation, or that a regulation is not 

needed because the processing period 

under part 303 does not begin until the 

FDIC receives a substantially complete 

filing and, thus, no suspension is 

necessary. Therefore, the FDIC believes 

that rescinding § 390.132 is unlikely to 

have any substantive effects on State 

savings associations or future 

applicants. 

Section 390.133 addresses the 

applicable review period for an 

application. The FDIC’s part 303 

regulations contain provisions that bear 

on the same issues and are similar in 

substantive effect as the § 390.133 

provisions. Thus, while part 303 

addresses review periods in a different 

manner than subpart F, the FDIC 

believes that the substantive effect is 

similar and that rescinding § 390.133 is 

unlikely to have any substantive effects 

on State savings associations or future 

applicants. 

Section 390.134 requires the FDIC to 

approve or deny an application before 

the expiration of the applicable review 

period, including any extensions, and 

notify the applicant, in writing, of its 

decision. If the FDIC does not act under 

paragraph (a)(1) of the section, the 

application is deemed approved. The 

FDIC’s part 303 procedures do not 

contain such a requirement for 

applications (as opposed to some notice 

filings). However, when read in 

conjunction with § 390.133, the FDIC 

has significant, though not complete, 

discretion under subpart F to extend the 


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Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 8095 

39www.fdic.gov/news/financial-institutionletters/2018/fil18081.html. 40 12 U.S.C. 1831o. 

41 5 U.S.C. 601, et seq. 

42The SBA defines a small banking organization 

as having $600 million or less in assets, where an 

organization’s ‘‘assets are determined by averaging 

the assets reported on its four quarterly financial 

statements for the preceding year.’’ See 13 CFR 

121.201 (as amended, by 84 FR 34261, effective 

August 19, 2019). ‘‘SBA counts the receipts, 

employees, or other measure of size of the concern 

whose size is at issue and all of its domestic and 

foreign affiliates.’’ See 13 CFR 121.103. Following 

these regulations, the FDIC uses a covered entity’s 

affiliated and acquired assets, averaged over the 

preceding four quarters, to determine whether the 

covered entity is ‘‘small’’ for the purposes of RFA. 

review period for applications until a 

determination is issued. The substantial 

ability of the FDIC to extend the 

processing period under subpart F, to a 

great extent, renders any difference with 

part 303 immaterial. As such, the 

application review periods and 

notification procedures for State savings 

associations are subject to substantively 

similar requirements under both subpart 

F and part 303. Therefore, the FDIC 

believes that rescinding § 390.134 is 

unlikely to have any substantive effects 

on State savings associations or future 

applicants. 

Section 390.135 addresses withdrawal 

if an application is not acted on within 

two calendar years. The FDIC does not 

have substantively similar regulations 

addressing withdrawal if an application 

is not acted on. However, the FDIC’s 

APM, which aids all FDIC-supervised 

institutions, including State savings 

associations, states that the FDIC’s goal 

is to act on filings as promptly as 

practical, while allowing appropriate 

time for review and evaluation. 

Additionally, the FDIC has established 

timeframes for processing each type of 

filing, which have been published in 

Financial Institution Letter 81–2018.39 It 

is also, generally, the FDIC’s practice to 

provide an applicant with an 

opportunity to withdraw its application 

if FDIC staff propose an unfavorable 

recommendation. Therefore, the FDIC 

believes that rescinding § 390.135 is 

unlikely to have any substantive effects 

on State savings associations or future 

applicants. 

The final rule amends certain 

elements of part 303, specifically 

§§ 303.7(c)(1)(i) and 303.15(b)(1) 

through (4), so that the provisions are 

applicable to State savings associations. 

In so doing, the final rule makes 

elements of part 390, subpart F, 

substantively duplicative of the 

amended elements of part 303, and, 

therefore, unnecessary. 

The final rule amends §§ 303.204 and 

303.205 of part 303’s subpart K (Prompt 

Corrective Action). Section 303.204 

requires any insured State nonmember 

bank and any insured branch of a 

foreign bank that is undercapitalized or 

significantly undercapitalized, and any 

critically undercapitalized insured 

depository institution, to submit an 

application to engage in acquisitions, 

branching, or new lines of business. 

Section 303.205 requires any insured 

State nonmember bank or insured 

branch of a foreign bank that is (i) 

significantly undercapitalized or 

critically undercapitalized, or (ii) is 

undercapitalized and has failed to 

submit or implement an acceptable 

capital restoration plan, to submit an 

application to pay a bonus or increase 

compensation to any senior executive 

officer. The final rule makes these 

sections applicable to State savings 

associations. The provisions of section 

38 of the FDI Act,40 which establishes 

the statutory authority for §§ 303.204 

and 303.205, contain the restrictions at 

issue and are applicable to all insured 

depository institutions. Thus, the final 

rule should not have a material impact 

on State savings associations. 

Section 303.249 of the FDIC 

regulations addresses the ‘‘procedures to 

be followed by an insured State 

nonmember bank to seek the approval of 

the FDIC to establish an interlock 

pursuant to’’ the Interlocks Act, section 

13(k) of the FDI Act, and part 348 of the 

FDIC regulations. The final rule amends 

§ 303.249(a) to apply to State savings 

associations. Although the amendment 

sets forth more explicit requirements for 

State savings associations seeking 

approval for establishing an interlock, 

State savings associations would not 

realize any effects because they are 

already subject to the Interlocks Act, 

and part 348. Therefore, State savings 

associations would currently need to 

undertake similar procedures, and 

provide substantively similar 

information, to those outlined in 

§ 303.249. 

By removing duplicative or 

unnecessary regulations, the FDIC 

believes that the final rule will benefit 

State savings associations by clarifying 

regulations and improving the ease of 

references. 

VI. Alternatives 

The FDIC has considered alternatives 

to the rule, but believes the amendments 

represent the most appropriate option 

for covered institutions. As discussed 

previously, the Dodd-Frank Act 

transferred to the FDIC certain powers, 

duties, and functions formerly 

performed by the OTS. The FDIC’s 

Board reissued and redesignated certain 

transferred regulations from the OTS, 

but noted that it would evaluate and 

might later, as appropriate, rescind, 

amend, or incorporate the regulations 

into other FDIC regulations. 

The FDIC has evaluated the existing 

regulations related to application 

processing procedures. The FDIC 

considered the status quo alternative of 

retaining the current regulations, but 

believes it would be procedurally 

complex and unnecessary for FDICsupervised institutions to continue to 

refer to the separate sets of regulations. 

Therefore, the FDIC is amending the 

specified sections of part 303 and 

rescinding subpart F. 

VII. Regulatory Analysis and Procedure 

A. The Paperwork Reduction Act 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995 

(PRA), the FDIC may not conduct or 

sponsor, and the respondent is not 

required to respond to, an information 

collection unless it displays a currently 

valid Office of Management and Budget 

(OMB) control number. The final rule 

rescinds and removes from FDIC 

regulations subpart F and makes 

technical revisions to certain sections of 

part 303. The final rule will not create 

any new or revise any existing 

collections of information under the 

PRA. Therefore, no information 

collection request will be submitted to 

the OMB for review. 

B. The Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

requires that, in connection with a final 

rule, an agency prepare and make 

available for public comment a final 

regulatory flexibility analysis that 

describes the impact of the final rule on 

small entities.41 However, a regulatory 

flexibility analysis is not required if the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities, 

and publishes its certification and a 

short explanatory statement in the 

Federal Register together with the rule. 

The Small Business Administration 

(SBA) has defined ‘‘small entities’’ to 

include banking organizations with total 

assets of less than or equal to $600 

million.42 Generally, the FDIC considers 

a significant effect to be a quantified 

effect in excess of 5 percent of total 

annual salaries and benefits per 

institution, or 2.5 percent of total noninterest expenses. The FDIC believes 

that effects in excess of these thresholds 

typically represent significant effects for 

FDIC-supervised institutions. For the 

reasons provided below, the FDIC 

certifies that the final rule will not have 


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8096 Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 

43FDIC Call Report, March 31, 2020. 

44 Id. 

45 12 U.S.C. 1831o. 

46 5 U.S.C. 801 et seq. 

47 5 U.S.C. 801(a)(3). 

48 5 U.S.C. 804(2). 

49Public Law 106–102, 113 Stat. 1338, 1471 

(codified at 12 U.S.C. 4809). 

50Public Law 104–208, 110 Stat. 3009 (1996). 

51 12 U.S.C. 4802(a). 

52 12 U.S.C. 4802. 

a significant economic impact on a 

substantial number of small banking 

organizations. Accordingly, a regulatory 

flexibility analysis is not required. 

As of June 2020, the FDIC supervised 

3,270 insured depository institutions, of 

which 2,492 are considered small 

banking organizations for the purposes 

of RFA. The final rule primarily affects 

regulations that govern State savings 

associations.43 There are 33 State 

savings associations considered to be 

small banking organizations for the 

purposes of the RFA.44

As previously discussed, the final rule 

rescinds part 390, subpart F, because 

most of its elements are duplicative of 

substantively similar provisions of FDIC 

regulations, specifically part 303. 

Additionally, the final rule amends 

§§ 303.7(c)(1)(i) and 303.15(b)(1) 

through (4) of part 303 so that the 

provisions are applicable to State 

savings associations. In doing so, the 

final rule makes elements of part 390, 

subpart F, substantively duplicative of 

the amended elements of part 303, and, 

therefore, unnecessary. 

The final rule amends §§ 303.204 and 

303.205 to make the provisions 

applicable to all insured depository 

institutions, including small, State 

savings associations. The revisions to 

§§ 303.204 and 303.205 provide a 

procedure for State savings associations 

to apply to the FDIC for relief from the 

restrictions of section 38 of the FDI 

Act.45

Finally, the final rule amends 

§ 303.249(a) to make the provisions 

applicable to all insured depository 

institutions, including small, State 

savings associations. The FDIC believes 

that the amendment will not have any 

substantive effects on small, State 

savings associations because it will not 

result in any substantive change in the 

procedures for, or content associated 

with seeking approval for establishing 

an interlock. Thus, the FDIC does not 

believe the final rule will substantially 

impact small, FDIC-supervised 

institutions or future applicants. 

The FDIC received no comments on 

the information provided in the 

Regulatory Flexibility Act section of the 

NPR. 

Based on the information above, the 

FDIC certifies that the final rule will not 

have a significant economic impact on 

a substantial number of small entities. 

C. The Congressional Review Act 

For purposes of Congressional Review 

Act, the OMB makes a determination as 

to whether a final rule constitutes a 

‘‘major’’ rule.46 If a rule is deemed a 

major rule by the OMB, the 

Congressional Review Act generally 

provides that the rule may not take 

effect until at least 60 days following its 

publication.47

The Congressional Review Act defines 

a ‘‘major rule’’ as any rule that the 

Administrator of the Office of 

Information and Regulatory Affairs of 

the OMB finds has resulted in or is 

likely to result in—(A) an annual effect 

on the economy of $100,000,000 or 

more; (B) a major increase in costs or 

prices for consumers, individual 

industries, Federal, State, or local 

government agencies or geographic 

regions, or (C) significant adverse effects 

on competition, employment, 

investment, productivity, innovation, or 

on the ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets.48

The OMB has determined that the 

final rule is not a major rule for 

purposes of the Congressional Review 

Act and the FDIC will submit the final 

rule and other appropriate reports to 

Congress and the Government 

Accountability Office for review. 

D. Plain Language 

Section 722 of the Gramm-LeachBliley Act 49 requires each Federal 

banking agency to use plain language in 

all of its proposed and final regulations 

published after January 1, 2000. As a 

Federal banking agency subject to the 

provisions of this section, the FDIC has 

sought to present the final rule to 

rescind subpart F and make technical 

revisions to certain sections of part 303 

in a simple and straightforward manner. 

E. The Economic Growth and Regulatory 

Paperwork Reduction Act 

Under section 2222 of the Economic 

Growth and Regulatory Paperwork 

Reduction Act of 1996 (EGRPRA), the 

FDIC is required to review all of its 

regulations, at least once every 10 years, 

in order to identify any outdated or 

otherwise unnecessary regulations 

imposed on insured institutions.50 The 

FDIC, along with the other Federal 

banking agencies, submitted a Joint 

Report to Congress on March 21, 2017, 

(EGRPRA Report) discussing how the 

review was conducted, what has been 

done to date to address regulatory 

burden, and further measures that will 

be taken to address issues that were 

identified. As noted in the EGRPRA 

Report, the FDIC is continuing to 

streamline and clarify its regulations 

through the OTS rule integration 

process. By removing outdated or 

unnecessary regulations, such as 

subpart F, the final rule complements 

other actions the FDIC has taken, 

separately and with the other Federal 

banking agencies, to further the 

EGRPRA mandate. 

F. Riegle Community Development and 

Regulatory Improvement Act of 1994 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act of 1994 

(RCDRIA),51 in determining the effective 

date and administrative compliance 

requirements for new regulations that 

impose additional reporting, disclosure, 

or other requirements on insured 

depository institutions (IDIs), each 

Federal banking agency must consider, 

consistent with principles of safety and 

soundness and the public interest, any 

administrative burdens that such 

regulations would place on depository 

institutions, including small depository 

institutions, and customers of 

depository institutions, as well as the 

benefits of such regulations. In addition, 

section 302(b) of RCDRIA requires new 

regulations and amendments to 

regulations that impose additional 

reporting, disclosure, or other new 

requirements on IDIs generally to take 

effect on the first day of a calendar 

quarter that begins on or after the date 

on which the regulations are published 

in final form.52

As previously stated, the final rule 

removes subpart F from the Code of 

Federal Regulations because, after 

careful review and consideration, the 

FDIC believes it is largely unnecessary 

in light of the applicability of other 

provisions of Federal statutes and 

regulations, specifically 12 CFR part 303 

(part 303) or guidance that produce 

substantially the same supervisory 

results. In addition, the final rule also 

includes amendments to certain 

sections of part 303, subparts A, K, and 

M, of the FDIC’s regulations make those 

sections applicable by their terms to 

State savings associations. Those 

amendments do not impose any 

additional reporting, disclosure, or other 

requirements on IDIs. Because the final 

rule does not impose additional 

reporting, disclosure, or other new 

requirements on IDIs, section 302 of the 

RCDRIA does not apply. 


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Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 8097 

List of Subjects 

12 CFR Part 303 

Administrative practice and 

procedure, Bank deposit insurance, 

Banks, banking, Reporting and 

recordkeeping requirements, Savings 

associations. 

12 CFR Part 390 

Administrative practice and 

procedure, Advertising, Aged, Civil 

rights, Conflict of interests, Credit, 

Crime, Equal employment opportunity, 

Fair housing, Government employees, 

Individuals with disabilities, Reporting 

and recordkeeping requirements, 

Savings associations. 

Authority and Issuance 

For the reasons stated in the 

preamble, the Federal Deposit Insurance 

Corporation amends 12 CFR parts 303 

and 390 as follows: 

PART 303—FILING PROCEDURES 

■ 1. The authority citation for part 303 

is revised to read as follows: 

Authority: 12 U.S.C. 378, 1463, 1467a, 

1813, 1815, 1817, 1818, 1819(a) (Seventh and 

Tenth), 1820, 1823, 1828, 1831i, 1831e, 

1831o, 1831p–1, 1831w, 1831z, 1835a, 

1843(l), 3104, 3105, 3108, 3207, 5412; 15 

U.S.C. 1601–1607. 

■ 2. Revise § 303.7(c)(1) to read as 

follows: 

§ 303.7 Public notice requirements. 

* * * * * 

(c) * * * 

(1) The public notice referred to in 

paragraph (a) of this section shall 

consist of the following: 

(i) In the case of an application for 

deposit insurance for a de novo 

depository institution, include the 

names of all organizers or incorporators. 

In the case of an application to establish 

a branch, include the location of the 

proposed branch or, in the case of an 

application to relocate a branch or main 

office, include the current and proposed 

address of the office. In the case of a 

merger application, include the names 

of all parties to the transaction. In the 

case of a notice of acquisition of control, 

include the name(s) of the acquiring 

parties. In the case of an application to 

relocate an insured branch of a foreign 

bank, include the current and proposed 

address of the branch. 

(ii) Type of filing being made; 

(iii) Name of the depository 

institution(s) that is the subject matter of 

the filing; 

(iv) That the public may submit 

comments to the appropriate FDIC 

regional director; 

(v) The address of the appropriate 

FDIC office where comments may be 

sent (the same location where the filing 

will be made); 

(vi) The closing date of the public 

comment period as specified in the 

appropriate subpart of this part; and 

(vii) That the nonconfidential 

portions of the application are on file in 

the appropriate FDIC office and are 

available for public inspection during 

regular business hours; photocopies of 

the nonconfidential portion of the 

application file will be made available 

upon request. 

* * * * * 

■ 3. Revise § 303.15(b) to read as 

follows: 

§ 303.15 Certain limited liability companies 

deemed incorporated under State law. 

* * * * * 

(b) For purposes of the Federal 

Deposit Insurance Act and this chapter: 

(1) Each of the terms ‘‘stockholder’’ 

and ‘‘shareholder’’ includes an owner of 

any interest in a depository institution 

chartered as an LLC, including a 

member or participant; 

(2) The term ‘‘director’’ includes a 

manager or director of a depository 

institution chartered as an LLC, or other 

person who has, with respect to such a 

depository institution, authority 

substantially similar to that of a director 

of a corporation; 

(3) The term ‘‘officer’’ includes an 

officer of a depository institution 

chartered as an LLC, or other person 

who has, with respect to such a 

depository institution, authority 

substantially similar to that of an officer 

of a corporation; and 

(4) Each of the terms ‘‘voting stock,’’ 

‘‘voting shares,’’ and ‘‘voting securities’’ 

includes ownership interests in a 

depository institution chartered as an 

LLC, as well as any certificates or other 

evidence of such ownership interests. 

■ 4. Revise § 303.204 to read as follows: 

§ 303.204 Applications for acquisitions, 

branching, and new lines of business. 

(a) Scope. (1) Any insured State 

nonmember bank, any insured State 

savings association, and any insured 

branch of a foreign bank which is 

undercapitalized or significantly 

undercapitalized, and any insured 

depository institution which is critically 

undercapitalized, shall submit an 

application to engage in acquisitions, 

branching or new lines of business. 

(2) A new line of business will 

include any new activity exercised 

which, although it may be permissible, 

has not been exercised by the 

institution. 

(b) Content of filing. Applications 

shall describe the proposal, state the 

date the institution’s capital restoration 

plan was accepted by its primary 

Federal regulator, describe the 

institution’s status in implementing the 

plan, and explain how the proposed 

action is consistent with and will 

further the achievement of the plan or 

otherwise further the purposes of 

section 38 of the FDI Act. If the FDIC is 

not the applicant’s primary Federal 

regulator, the application also should 

state whether approval has been 

requested from the applicant’s primary 

Federal regulator, the date of such 

request and the disposition of the 

request, if any. If the proposed action 

also requires applications pursuant to 

section 18 (c) or (d) of the FDI Act 

(mergers and branches) (12 U.S.C. 1828 

(c) or (d)), such applications should be 

filed concurrently with, or made a part 

of, the application filed pursuant to 

section 38 of the FDI Act (12 U.S.C. 

1831o). 

■ 5. Revise § 303.205(a) to read as 

follows: 

§ 303.205 Applications for bonuses and 

increased compensation for senior 

executive officers. 

(a) Scope. Any insured State 

nonmember bank, insured State savings 

association, or insured branch of a 

foreign bank that is significantly or 

critically undercapitalized, or any 

insured State nonmember bank, any 

insured State savings association, or any 

insured branch of a foreign bank that is 

undercapitalized and which has failed 

to submit or implement in any material 

respect an acceptable capital restoration 

plan, shall submit an application to pay 

a bonus or increase compensation for 

any senior executive officer. 

* * * * * 

■ 6. Revise § 303.249(a) to read as 

follows: 

§ 303.249 Management official interlocks. 

(a) Scope. This section contains the 

procedures to be followed by an insured 

State nonmember bank or an insured 

State savings association to seek the 

approval of FDIC to establish an 

interlock pursuant to the Depository 

Institutions Management Interlocks Act 

(12 U.S.C. 3207), section 13 of the FDI 

Act (12 U.S.C. 1823(k)), and part 348 of 

this chapter. 

* * * * * 

PART 390—REGULATIONS 

TRANSFERRED FROM THE OFFICE OF 

THRIFT SUPERVISION 

■ 7. The authority citation for part 390 

continues to read as follows: 


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8098 Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations 

1 12 CFR part 390, subpart O. 

2 12 CFR 390.250. 

3 12 CFR 390.251. 

4 12 CFR 390.252. 

5 12 CFR 390.253. 

6 12 CFR 390.254. 

7 12 CFR 390.255. 

8 12 U.S.C. 1831e(a); 12 CFR part 362, subparts C 

and D; 12 U.S.C. 1831n(a). 

9 12 U.S.C. 5301 et seq. 

10 12 U.S.C. 5411. 

11 Id. 

12 12 U.S.C. 5414(b). 

13 12 U.S.C. 5414(c). 

14 76 FR 39246 (July 6, 2011). 

15 12 U.S.C. 5412(b)(2)(B)(i)(II). 

16 12 U.S.C. 1811 et seq. 

17 12 U.S.C. 5412(c)(1). 

18 12 U.S.C. 1813(q). 

Authority: 12 U.S.C. 1819. 

Subpart Q also issued under 12 U.S.C. 

1462; 1462a; 1463; 1464. 

Subpart W also issued under 12 U.S.C. 

1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m; 

78n; 78p; 78w. 

Subpart F—[Removed and Reserved] 

■ 8. Remove and reserve subpart F, 

consisting of §§ 390.100 through 

390.135. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on or about 

December 15, 2020. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2020–28453 Filed 2–2–21; 8:45 am] 

BILLING CODE 6714–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Parts 362 and 390 

RIN 3064–AF37 

Removal of Transferred OTS 

Regulations Regarding Certain 

Subordinate Organizations of State 

Savings Associations 

AGENCY: Federal Deposit Insurance 

Corporation. 

ACTION: Final rule. 

SUMMARY: The Federal Deposit 

Insurance Corporation (FDIC) is 

adopting a final rule to rescind and 

remove rules from the Code of Federal 

Regulations (CFR) regulations titled 

Subordinate Organizations that were 

transferred to the FDIC from the Office 

of Thrift Supervision (OTS) on July 21, 

2011, in connection with the 

implementation of Title III of the DoddFrank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) 

regarding subordinate organizations of 

State savings associations because the 

FDIC has determined that the 

requirements for State savings 

association subordinate organizations 

included therein are substantially 

similar to the requirements for State 

savings associations and their 

subsidiaries set forth by certain sections 

of the Federal Deposit Insurance Act 

(FDI Act) and its implementing 

regulations. 

DATES: The final rule is effective on 

March 5, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Donald Hamm, Special Advisor, (202) 

898–3528, dhamm@fdic.gov; or Shelli 

Coffey, Review Examiner, (312) 382– 

7539, scoffey@fdic.gov, Risk 

Management and Applications, Division 

of Risk Management Supervision; 

Suzanne Dawley, Counsel, sudawley@

fdic.gov; or Karlyn J. Hunter, Counsel, 

khunter@fdic.gov, Legal Division. 

SUPPLEMENTARY INFORMATION: 

I. Policy Objective 

The policy objective of the final rule 

is to simplify the FDIC’s regulations by 

removing unnecessary regulations and 

realigning existing regulations in order 

to improve the public’s understanding 

of the rules and to improve the ease of 

the public’s reference to them. Thus, as 

further detailed in this section, the FDIC 

is rescinding and removing from the 

CFR rules entitled Subordinate 

Organizations (12 CFR part 390, subpart 

O) applicable to State savings 

associations.1 Pursuant to subpart O, the 

FDIC may, at any time, limit a State 

savings association’s investment in their 

subordinate organizations, or may limit 

or refuse to permit any activities of any 

of these entities for supervisory, legal, or 

safety and soundness reasons.2

Subpart O includes definitions related 

to State savings association 

subsidiaries,3 a requirement for the 

parent State savings association and its 

subsidiaries to maintain separate 

corporate identities,4 a prior notice 

requirement for a State savings 

association seeking to establish or 

acquire a new subsidiary or engage in 

new activities through an existing 

subsidiary,5 requirements related to the 

issuance of securities by a subsidiary,6

and requirements for the exercise of 

salvage power by a State savings 

association.7

The FDIC has determined that the 

requirements for State savings 

association subordinate organizations 

set forth in subpart O are substantially 

similar to requirements of section 28 of 

the FDI Act and its implementing 

regulations, 12 CFR part 362 of the 

FDIC’s Rules and Regulations; and 

section 37 of the FDI Act.8 Therefore, 

the FDIC is rescinding and removing 

subpart O and will apply part 362, 

subpart C and subpart D, as appropriate, 

to achieve substantially similar 

supervisory results for State savings 

associations and subsidiaries as have 

been obtained through the application 

of subpart O. 

II. Background 

The Dodd-Frank Act,9 signed into law 

on July 21, 2010, provided for a 

substantial reorganization of the 

regulation of State and Federal savings 

associations and their holding 

companies.10 Beginning July 21, 2011, 

the transfer date established by section 

311 of the Dodd-Frank Act,11 the 

powers, duties, and functions formerly 

performed by the OTS were divided 

among the FDIC, as to State savings 

associations; the Office of the 

Comptroller of the Currency (OCC), as to 

Federal savings associations; and the 

Board of Governors of the Federal 

Reserve System (FRB), as to savings and 

loan holding companies. Section 316(b) 

of the Dodd-Frank Act 12 provides the 

manner of treatment of all orders, 

resolutions, determinations, regulations, 

and advisory materials that had been 

issued, made, prescribed, or allowed to 

become effective by the OTS. The 

section provides that if such materials 

were in effect on the day before the 

transfer date, they continue in effect and 

are enforceable by or against the 

appropriate successor agency until they 

are modified, terminated, set aside, or 

superseded in accordance with 

applicable law by such successor 

agency, by any court of competent 

jurisdiction, or by operation of law. 

Pursuant to section 316(c) of the 

Dodd-Frank Act,13 on June 14, 2011, the 

FDIC’s Board of Directors approved a 

‘‘List of OTS Regulations to be Enforced 

by the OCC and the FDIC Pursuant to 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act.’’ This list was 

published by the FDIC and the OCC as 

a joint notice in the Federal Register on 

July 6, 2011.14

Although section 312(b)(2)(B)(i)(II) of 

the Dodd-Frank Act 15 granted the OCC 

rulemaking authority relating to both 

State and Federal savings associations, 

nothing in the Dodd-Frank Act affected 

the FDIC’s existing authority to issue 

regulations under the FDI Act 16 and 

other laws as the ‘‘appropriate Federal 

banking agency’’ or under similar 

statutory terminology. Section 312(c) of 

the Dodd-Frank Act 17 revised the 

definition of ‘‘appropriate Federal 

banking agency’’ contained in section 

3(q) of the FDI Act 18 to add State 


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