6576 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Proposed Rules 

Authority and Issuance 

For the reasons stated in the 

SUPPLEMENTARY INFORMATION, the OCC 

proposes to amend 12 CFR parts 21 and 

163 as follows: 

PART 21—MINIMUM SECURITY 

DEVICES AND PROCEDURES, 

REPORTS OF SUSPICIOUS 

ACTIVITIES, AND BANK SECRECY 

ACT COMPLIANCE PROGRAM 

■ 1. The authority citation for part 21 is 

revised to read as follows: 

Authority: 12 U.S.C. 1, 93a, 161, 1462a, 

1463, 1464, 1818, 1881–1884, and 3401– 

3422. 

■ 2. In § 21.11, add paragraph (m) to 

read as follows: 

§ 21.11 Suspicious Activity Report. 

* * * * * 

(m) Exemptions. (1) The OCC may 

exempt any national bank from the 

requirements of this section. A national 

bank requesting an exemption must 

submit a request in writing to the OCC. 

In reviewing such requests, the OCC 

will consider whether the exemption is 

consistent with safe and sound banking 

and may consider other appropriate 

factors. An exemption shall be 

applicable only as expressly stated in 

the exemption, may be conditional or 

unconditional, may apply to particular 

persons or to classes of persons, and 

may apply to transactions or classes of 

transactions. A national bank requesting 

an exemption that also requires an 

exemption from the requirements of 

FinCEN’s SAR regulation must submit a 

request in writing to both the OCC and 

FinCEN for approval. In reviewing such 

requests, the OCC will consider whether 

the exemption is consistent with the 

purposes of the Bank Secrecy Act, with 

safe and sound banking, and any other 

appropriate factors. 

(2) The OCC will provide a written 

response to the national bank that 

submitted the exemption request. A 

national bank that has received an 

exemption under paragraph (m)(1) of 

this section may rely on the exemption 

for a period of time to be communicated 

by the OCC in its granting of the 

exemption. 

(3) The OCC may extend the period of 

time or may revoke an exemption 

granted under paragraph (m)(1) of this 

section. Exemptions may be revoked at 

the sole discretion of the OCC. The OCC 

will provide written notice to the 

national bank of the OCC’s intention to 

revoke an exemption. Such notice will 

include the basis for the revocation and 

will provide an opportunity for the 

national bank to submit a response to 

the OCC. The OCC will consider the 

response prior to deciding whether to 

revoke an exemption and will notify the 

national bank of the OCC’s decision to 

revoke an exemption in writing. 

(4) With respect to requests for 

exemption that will also require an 

exemption from the requirements of 

FinCEN’s SAR regulation, upon 

receiving approval from both the OCC 

and FinCEN, the requestor shall be 

relieved of its obligations under this 

section to the extent stated in such 

approvals. 

PART 163—SAVINGS 

ASSOCIATIONS—OPERATIONS 

■ 3. The authority citation for part 163 

is revised to read as follows: 

Authority: 12 U.S.C. 161, 1462a, 1463, 

1464, 1467a, 1817, 1820, 1828, 1831o, 3806, 

5101 et seq., 5412(b)(2)(B); 42 U.S.C. 4106. 

■ 2. In § 163.180, add paragraph (f) to 

read as follows: 

§ 163.180 Suspicious Activity Reports and 

other reports and statements. 

* * * * * 

(f) Exemptions. (1) The OCC may 

exempt any savings association or 

service corporation from the 

requirements of this section. A savings 

association or service corporation 

requesting an exemption from the 

provisions of this section, must submit 

a request in writing to the OCC. In 

reviewing such requests, the OCC will 

consider whether the exemption is 

consistent with safe and sound banking, 

and may consider other appropriate 

factors. An exemption shall be 

applicable only as expressly stated in 

the exemption, may be conditional or 

unconditional, may apply to particular 

persons or to classes of persons, and 

may apply to transactions or classes of 

transactions. A federal savings 

association requesting an exemption 

that also requires an exemption from the 

requirements of FinCEN’s SAR 

regulation must submit a request in 

writing to both the OCC and FinCEN for 

approval. In reviewing such requests, 

the OCC will consider whether the 

exemption is consistent with the 

purposes of the Bank Secrecy Act, with 

safe and sound banking, and any other 

appropriate factors. 

(2) The OCC will provide a written 

response to the savings association or 

service corporation that submitted the 

exemption request. A savings 

association or service corporation that 

has received an exemption under 

paragraph (f)(1) of this section may rely 

on the exemption for a period of time 

to be communicated by the OCC in its 

granting of the exemption. 

(3) The OCC may extend the period of 

time or may revoke an exemption 

granted under paragraph (f)(1) of this 

section. Exemptions may be revoked at 

the sole discretion of the OCC. The OCC 

will provide written notice to the 

savings association or service 

corporation of the OCC’s intention to 

revoke an exemption. Such notice will 

include the basis for the revocation and 

will provide an opportunity for the 

savings association or service 

corporation to submit a response to the 

OCC. The OCC will consider the 

response prior to deciding whether to 

revoke an exemption and will notify the 

savings association or service 

corporation of the OCC’s decision to 

revoke an exemption in writing. 

(4) With respect to requests for 

exemption that will also require an 

exemption from the requirements of 

FinCEN’s SAR regulation, upon 

receiving approval from both the OCC 

and FinCEN, the requestor shall be 

relieved of its obligations under this 

section to the extent stated in such 

approvals. 

Brian P. Brooks, 

Acting Comptroller of the Currency. 

[FR Doc. 2021–00034 Filed 1–21–21; 8:45 am] 

BILLING CODE 4810–33–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 208 

[Docket No. R–1738] 

RIN 7100–AG08 

Membership of State Banking 

Institutions in the Federal Reserve 

System; Reports of Suspicious 

Activities Under Bank Secrecy Act 

AGENCY: Board of Governors of the 

Federal Reserve System (Board). 

ACTION: Notice of proposed rulemaking 

with request for public comment. 

SUMMARY: The Board is inviting 

comment on a proposed rule that would 

modify the requirements to file 

Suspicious Activity Reports for state 

member banks, Edge and agreement 

corporations, U.S. offices of foreign 

banking organizations supervised by the 

Federal Reserve, and bank holding 

companies and their nonbank 

subsidiaries. Specifically, the proposed 

rule would amend the Board’s 

Suspicious Activity Report regulations 

to provide for the issuance of 

exemptions from the requirements of 

those regulations, in full or in part. The 

proposed rule is intended, among other 

things, to facilitate supervised 


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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Proposed Rules 6577 

1 12 CFR 208.62; 12 CFR 211.5(k); 12 CFR 

211.24(f); 12 CFR 225.4(f). See Board, Supervision 

& Regulation Letter (SR) 10–8, ‘‘Suspicious Activity 

Report Filing Requirements for Banking 

Organizations Supervised by the Federal Reserve’’ 

(Apr. 27, 2010). 

2See generally 58 FR 47206 (Sept. 3, 1993) 

(codifying the Board’s criminal referral procedures); 

see also SR 88–9, ‘‘New Criminal Referral Form and 

Updated Criminal Referral Procedures’’ (Mar. 18, 

1988). 

3Public Law 102–550, 106 Stat. 3672 (1992). 

4 31 U.S.C. 5318(g)(1). 

5 61 FR 4326 (Feb. 5, 1996). 

6 61 FR 4338 (Feb. 5, 1996). 

7See 31 U.S.C. 5318(a)(7). 

8 31 CFR 1010.970(a). 

institutions in meeting Bank Secrecy 

Act requirements more efficiently and 

effectively, including through 

development of innovative solutions. 

DATES: Comments must be received by 

February 22, 2021. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1738 and 

RIN 7100–AG08, by any of the following 

methods: 

• Agency website: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

https://www.federalreserve.gov/apps/ 

foia/proposedregs.aspx. 

• Email: regs.comments@

federalreserve.gov. Include docket 

number and RIN in the subject line of 

the message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Ann E. Misback, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. 

All public comments are available 

from the Board’s website at http://

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons or 

to remove personally identifiable 

information at the commenter’s request. 

Accordingly, comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper in Room 146, 1709 New York 

Avenue NW, Washington, DC 20006, 

between 9:00 a.m. and 5:00 p.m. on 

weekdays. For security reasons, the 

Board requires that visitors call (202) 

452–3684 to make an appointment to 

inspect comments. 

FOR FURTHER INFORMATION CONTACT: 

Jason Gonzalez, Assistant General 

Counsel, (202) 452–3725, or Bernard 

Kim, Senior Counsel, (202) 452–3083, 

Legal Division; or Suzanne Williams, 

Deputy Associate Director, (202) 452– 

3513, or Koko Ives, Manager, (202) 973– 

6163, Division of Supervision and 

Regulation, Board of Governors of the 

Federal Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. Users of Telecommunication 

Device for Deaf (TDD) only, call (202) 

263–4869. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

Pursuant to the Board’s Regulations 

H, K, and Y, state member banks, Edge 

and agreement corporations, U.S. offices 

of foreign banking organizations 

supervised by the Federal Reserve, and 

bank holding companies and their 

nonbank subsidiaries must file 

Suspicious Activity Reports (SARs) to 

report known or suspected violations of 

U.S. law.1 The proposed rule would 

amend the Board’s SAR regulations to 

expressly provide for exemptions from 

the regulations’ SAR requirements, in 

full or in part and subject to the Board’s 

approval. 

II. Background 

The Board, along with the other 

federal banking agencies, is charged 

with safeguarding the safety and 

soundness of its supervised institutions. 

Pursuant to its safety-and-soundness 

authority and enabling statutes, the 

Board has long required a member bank, 

a bank holding company and its 

nonbank subsidiaries, an Edge Act or 

Agreement corporation, or a U.S. branch 

or agency of a foreign bank to refer 

potential violations of law arising from 

transactions that flow through those 

institutions to relevant law enforcement 

authorities, because financial crimes can 

pose serious threats to a financial 

institution’s continued viability and, if 

unchecked, may undermine the public 

confidence in the financial services 

industry.2

In 1992, Congress passed the 

Annunzio-Wylie Anti-Money 

Laundering Act, which redesigned the 

criminal referral process applicable to 

Board-supervised entities and made the 

reporting of certain suspicious 

transactions a requirement of the Bank 

Secrecy Act (BSA).3 The Act permitted 

the Department of the Treasury to 

require financial institutions to ‘‘report 

any suspicious transaction relevant to a 

possible violation of law or 

regulation.’’ 4 Thereafter, the 

Department of the Treasury, in 

consultation with the federal banking 

agencies and law enforcement, 

developed the modern SAR form and 

reporting process, which standardized 

the reporting forms, eliminated 

duplicate filings, and created a 

centralized database that could be 

accessed by multiple law enforcement 

and regulatory agencies. 

To implement this new reporting 

system, the Financial Crimes 

Enforcement Network (FinCEN), a 

bureau of the Department of the 

Treasury, issued its implementing SAR 

regulations in 1996. The regulations 

require financial institutions subject to 

the requirements of the BSA to, among 

other things, specifically address the 

reporting of money laundering 

transactions and transactions designed 

to evade the reporting requirements of 

the BSA.5

To further implement this new 

reporting process and reduce 

unnecessary reporting burdens, the 

Board and the other federal banking 

agencies contemporaneously amended 

their criminal referral form regulations 

to incorporate the new SAR form and 

reporting database, align their regulatory 

reporting requirements with FinCEN’s 

BSA reporting requirements, and further 

refine the reporting processes.6

As a result of this redesign and 

FinCEN’s implementing regulations, 

relevant institutions supervised by the 

Board are currently required to file 

SARs under both the Board’s and 

FinCEN’s SAR regulations. These 

regulations are not identical but are 

substantially similar with regard to the 

specified BSA reporting obligations 

required by FinCEN, in that they both 

require banks, among other things, to 

file SARs relating to money laundering 

and transactions designed to evade BSA 

reporting requirements, as well as 

maintain the confidentiality of a SAR in 

most circumstances. However, the 

Board’s SAR regulations cover a slightly 

broader range of transactions, for 

example, by requiring SARs to be filed 

for any known or suspected instance of 

insider abuse in any amount, and 

further requiring the prompt notification 

to the institution’s board of directors 

when a SAR has been filed. 

The Secretary of the Treasury has 

statutory authority to grant exemptions 

from the requirements of the BSA, 

which includes FinCEN’s SAR 

requirements.7 The regulation 

implementing this exemption authority 

provides: 8

The Secretary [of the Treasury], in his sole 

discretion, may by written order or 

authorization make exceptions to or grant 

exemptions from the requirements of this 

chapter. Such exceptions or exemptions may 

be conditional or unconditional, may apply 

to particular persons or to classes of persons, 

and may apply to particular transactions or 

classes of transactions. They shall, however, 

be applicable only as expressly stated in the 

order of authorization, and they shall be 

revocable in the sole discretion of the 

Secretary. 


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6578 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Proposed Rules 

9 Joint Statement on Innovative Efforts to Combat 

Money Laundering and Terrorist Financing (Dec. 3, 

2018), available at https://www.federalreserve.gov/

newsevents/pressreleases/files/ 

bcreg20181203a1.pdf. 

The Secretary of the Treasury has 

delegated this exemption authority to 

FinCEN. The purpose of the Board’s 

proposed rule, which would largely 

parallel FinCEN’s general exemptive 

authority, would be to facilitate the 

Board’s granting of relief to a bank 

seeking an exemption from the 

requirements of the Board’s SAR 

regulations. 

The decision to grant or deny such an 

exemption would be made from a 

safety-and-soundness and anti-money 

laundering regulatory perspective. In 

particular, the Board’s view is that these 

exemptions would facilitate supervised 

institutions to meet BSA requirements 

more efficiently and effectively, 

including through development of 

innovative solutions. Financial 

technology and innovation continue to 

develop in the area of monitoring and 

reporting financial crime and terrorist 

financing, and the Board recognizes the 

increasing importance of regulatory 

flexibility to such efforts. Recently, the 

Board, along with the other federal 

banking agencies and FinCEN, issued a 

statement encouraging banks to take 

innovative approaches to meet their 

BSA/anti-money laundering (BSA/AML) 

compliance obligations.9 The statement 

explained that banks are encouraged to 

consider, evaluate, and where 

appropriate, responsibly implement 

innovative approaches in this area. 

Today, innovative approaches and 

technological developments in the area 

of SAR monitoring, investigation, and 

filings may involve, among other things: 

(i) Automated form population using 

natural language processing, transaction 

data, and customer due diligence 

information; (ii) automated or limited 

investigation processes depending on 

the complexity and risk of a particular 

transaction and appropriate safeguards; 

and (iii) enhanced monitoring processes 

using more and better data, optical 

scanning, artificial intelligence, or 

machine learning capabilities. 

Accordingly, exemptive relief may be 

helpful to foster innovation in this area, 

as the Board expects that new 

technologies will continue to prompt 

additional innovative approaches 

related to SAR filing and monitoring. 

It is important to recognize that any 

Board-issued exemptions from its SAR 

regulations would not relieve the 

supervised institution from the 

independent obligation to comply with 

FinCEN’s SAR regulations, if applicable. 

To the extent that the supervised 

institution is subject to requirements 

imposed by both the Board’s and 

FinCEN’s SAR regulations, the 

institution would need to acquire an 

exemption from both the Board and 

FinCEN. The Board expects to 

coordinate with FinCEN when handling 

such parallel exemption requests, and 

accordingly, the Board’s proposed rule 

would require FinCEN’s concurrence 

with regard to such exemptions. As 

explained above, however, the Board’s 

SAR regulation imposes additional 

requirements not included in FinCEN’s 

regulation. To the extent the supervised 

institution is subject to a requirement 

imposed by the Board’s SAR regulations 

alone (and not a parallel FinCEN 

requirement), the proposed rule would 

allow the Board to exempt the 

institution from that requirement 

without FinCEN’s concurrence. 

III. The Proposal 

The proposed rule would provide for 

the issuance of exemptions from the 

requirements, in full or in part, of the 

Board’s SAR regulations. Upon 

receiving a written request from a 

Board-supervised institution, the Board 

would determine whether the 

exemption is consistent with safe and 

sound banking. The Board would also 

seek FinCEN’s determination whether 

the exemption is consistent with the 

purposes of the BSA, as applicable, 

where an exemption request involves an 

exemption from the requirements to file 

a SAR required by FinCEN regulations 

implementing the BSA. 

The proposed rule would require the 

Board to seek FinCEN’s concurrence 

regarding any exemptions that involve 

SAR provisions relating to potential 

money laundering or violations of the 

BSA or other unusual activity covered 

by FinCEN’s SAR regulation. The 

proposed rule would allow the Board to 

consult with FinCEN regarding other 

exemption requests. The Board may also 

consult with the other state and federal 

banking agencies before granting any 

exemption. 

An approved exemption under the 

proposed rule may apply to only certain 

parts of the SAR requirements. It may be 

conditional or unconditional, may apply 

to particular persons or to classes of 

persons, and may apply to transactions 

or classes of transactions. In addition, 

the proposed rule provides that the 

Board may grant an exemption for a 

specified time period or extend the time 

period of a previously granted 

exemption. Finally, the proposed rule 

provides that the Board may, in its sole 

discretion, revoke previously granted 

exemptions. 

The changes made by the proposed 

rule would add a new paragraph (l) to 

§ 208.62 of Regulation H (12 CFR 

208.62), which concerns the SAR filing 

obligations of member banks. Sections 

211.5(k) and 211.24(f) of Regulation K 

(12 CFR 211.5(k) and 211.24(f)) and 

§ 225.4(f) of Regulation Y (12 CFR 

225.4(f)) make § 208.62 of Regulation H 

applicable to Edge and Agreement 

corporations, the U.S. branches and 

agencies of foreign banks (except a 

Federal branch or Federal agency or a 

state branch that is insured by the 

Federal Deposit Insurance Corporation), 

a representative office of a foreign bank, 

and bank holding companies and their 

nonbank subsidiaries, respectively. This 

means that the changes applicable to 

member banks will also be applicable to 

the suspicious activity reporting 

responsibilities of these other domestic 

and foreign banking organizations 

supervised by the Federal Reserve, 

including bank holding companies, 

Edge corporations, and the U.S. 

branches and agencies of foreign banks. 

The Board welcomes comments on 

any aspect of the proposed rule, in 

particular, with regard to whether 

additional or different factors or 

standards should be applied in the 

determination whether to grant an 

exemption request, as well as the form 

and manner of the Board’s response to 

an exemption request. 

IV. Administrative Law Matters 

A. Solicitation of Comments and Use of 

Plain Language 

Section 722 of the Gramm-LeachBliley Act (Pub. L. 106–102, 113 Stat. 

1338, 1471, 12 U.S.C. 4809) requires the 

Federal banking agencies to use plain 

language in all proposed and final rules 

published after January 1, 2000. The 

Board has sought to present the 

proposed rule in a simple and 

straightforward manner, and invites 

comment on the use of plain language. 

B. Paperwork Reduction Act Analysis 

Certain provisions of the proposed 

rule contain ‘‘collections of 

information’’ within the meaning of the 

Paperwork Reduction Act of 1995 (PRA) 

(44 U.S.C. 3501–3521). In accordance 

with the requirements of the PRA, the 

Board may not conduct or sponsor, and 

a 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 Board reviewed the 

proposed rule under the authority 

delegated to the Board by OMB. The 

proposed rule contains reporting 

requirements subject to the PRA. To 


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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Proposed Rules 6579 

10Section 208.62(e) encourages respondents to 

file SARs with state and local law enforcement 

agencies. In practice, these agencies have access to 

SARs through FinCEN’s database, making it 

unnecessary for respondents to file SARs directly 

with these agencies. Therefore, the Board assumes 

de minimus burden for this requirement. 

11 5 U.S.C. 603. 

12See 13 CFR 121.201. 

implement these requirements, the 

Board is revising the Suspicious 

Activity Report (FR 2230; OMB No. 

7100–0212), 

Comments are invited on: 

a. Whether the collections of 

information are necessary for the proper 

performance of the agencies’ functions, 

including whether the information has 

practical utility; 

b. The accuracy or the estimate of the 

burden of the information collections, 

including the validity of the 

methodology and assumptions used; 

c. Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

d. Ways to minimize the burden of the 

information collections on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology; and 

e. Estimates of capital or startup costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

All comments will become a matter of 

public record. Comments on aspects of 

this notice that may affect reporting, 

recordkeeping, or disclosure 

requirements and burden estimates 

should be sent to the addresses listed in 

the ADDRESSES section of this document. 

A copy of the comments may also be 

submitted to the OMB desk officer for 

the agencies by mail to U.S. Office of 

Management and Budget, 725 17th 

Street NW, #10235, Washington, DC 

20503; facsimile to (202) 395–5806; or 

email oira_submission@omb.eop.gov, 

Attention, Federal Reserve Desk Officer. 

Proposed Information Collection 

Title of information collection: 

Suspicious Activity Report. 

Agency form number: FR 2230. 

OMB control number: 7100–0212. 

Frequency: On occasion. 

Affected public: Businesses or other 

for-profit. 

Respondents: State member banks, 

bank holding companies and their 

nonbank subsidiaries, Edge and 

agreement corporations, and the U.S. 

branches and agencies, representative 

offices, and nonbank subsidiaries of 

foreign banks supervised by the Board. 

Description of information collection: 

Certain institutions supervised by the 

Board are required, pursuant to the 

Bank Secrecy Act (BSA) and the Board’s 

regulations, to file a SAR to report 

known or suspected violations of federal 

law or a suspicious transaction related 

to a money laundering activity or a 

violation of the BSA. Institutions file a 

SAR electronically through a secure 

network created and maintained by the 

administrator of the BSA, the 

Department of the Treasury’s Financial 

Crimes Enforcement Network (FinCEN). 

Current actions: The proposed rule 

would provide for the issuance of 

exemptions from the requirements, in 

full or in part, of the Board’s SAR 

regulations. In section 208.62(l), upon 

receiving a written request from a 

Board-supervised institution, the Board 

would determine whether the 

exemption is consistent with safe and 

sound banking. The written request for 

exemption would be a new reporting 

requirement under the PRA. The Board 

estimates that the average hours per 

response would be 8 hours. 

In addition, because FinCEN already 

accounts for the reporting burden for all 

respondents (including Boardsupervised institutions) to file a SAR 

(see OMB Control No. 1506–0065) the 

Board would remove this same 

reporting burden from the FR 2230.10

Legal authorization and 

confidentiality: The FR 2230 is 

authorized pursuant to the Federal 

Reserve Act (12 U.S.C. 248(a)(1), 602, 

and 625), Federal Deposit Insurance Act 

(12 U.S.C. 1818(s)), Bank Holding 

Company Act of 1956 (12 U.S.C. 

1844(c)), and International Banking Act 

of 1978 (12 U.S.C. 3105(c)(2) and 

3106(a)). The FR 2230 is mandatory. 

SARs are confidential and exempt 

from Freedom of Information Act 

(FOIA) disclosure by 31 U.S.C. 5319, 

which specifically provides that SARs 

‘‘are exempt from disclosure under 

section 552 of title 5’’ and FOIA 

exemption 3 (5 U.S.C. 552(b)(3)) 

(matters ‘‘specifically exempted from 

disclosure by statute’’). 

Estimated number of respondents: 

Reporting Section 208.62(l)–3. 

Estimated average hours per response: 

Reporting Section 208.62(l)–8. 

Current estimated annual burden 

hours: 439,520. 

Estimated annual burden hours due 

to proposed revisions: Exemption 

request, 24; removal of SAR filing, 

(439,520). 

Proposed estimated annual burden 

hours: 24. 

C. Regulatory Flexibility Act Analysis 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq., (RFA), generally 

requires an agency, in connection with 

a proposed rule, to prepare an Initial 

Regulatory Flexibility Analysis 

describing the impact of the rule on 

small entities based on size standards of 

the Small Business Administration 

(SBA) or to certify that the proposed 

rule would not have a significant 

economic impact on a substantial 

number of small entities. An initial 

regulatory flexibility analysis must 

contain (1) a description of the reasons 

why action by the agency is being 

considered; (2) a succinct statement of 

the objectives of, and legal basis for, the 

proposed rule; (3) a description of, and, 

where feasible, an estimate of the 

number of small entities to which the 

proposed rule will apply; (4) a 

description of the projected reporting, 

recordkeeping, and other compliance 

requirements of the proposed rule, 

including an estimate of the classes of 

small entities that will be subject to the 

requirement and the type of professional 

skills necessary for preparation of the 

report or record; (5) an identification, to 

the extent practicable, of all relevant 

federal rules which may duplicate, 

overlap with, or conflict with the 

proposed rule; and (6) a description of 

any significant alternatives to the 

proposed rule which accomplish its 

stated objectives. The Board has 

considered the potential impact of the 

proposed rule on small entities in 

accordance with section 603 of the 

RFA.11 Under regulations issued by the 

SBA, a small entity includes a bank, 

bank holding company, or savings and 

loan holding company with assets of 

$600 million or less and trust 

companies with annual receipts of $41.5 

million or less.12 As of March 2020, 

there were approximately 2,925 small 

bank holding companies, 132 small 

savings and loan holding companies, 

and 472 small state member banks. As 

of March 2020, the Board does not 

supervise any small trust companies. 

Based on its analysis and for the 

reasons stated below, the Board believes 

that this proposed rule will not have a 

significant economic impact on a 

substantial number of small entities. 

Nevertheless, the Board is publishing 

and inviting comment on this initial 

regulatory flexibility analysis. A final 

regulatory flexibility analysis may be 

conducted after any comments received 

during the public comment period have 

been considered. The Board welcomes 

comment on all aspects of its analysis. 

In particular, the Board requests that 

commenters describe the nature of any 

impact on small entities and provide 

empirical data to illustrate and support 

the extent of the impact. 

As discussed above, the purpose of 

the Board’s proposed rule is to facilitate 


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6580 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Proposed Rules 

13 12 U.S.C. 4802(a). 14 12 U.S.C. 4802(b). 

the Board’s granting of relief to a bank 

seeking relief from the requirements of 

the Board’s SAR regulations, when such 

relief would be beneficial from a safetyand-soundness and anti-money 

laundering regulatory perspective. The 

proposed rule would be issued pursuant 

to the Board’s safety-and-soundness 

authority over supervised institutions. 

The proposed rule will apply to small 

bank holding companies and their 

nonbank subsidiaries and small state 

member banks as well as Edge and 

agreement corporations, and U.S. offices 

of foreign banking organizations 

supervised by the Federal Reserve. The 

Board does not expect that the proposal 

would impose a significant cost on 

small banking organizations due to 

compliance, recordkeeping, and 

reporting updates from this proposal. 

The Board does not believe that the 

proposal would result in any significant 

economic impact on banking 

organizations as there are no projected 

recordkeeping, reporting, or other 

compliance requirements associated 

with the proposal. Moreover, the 

proposal does not impose any new 

requirements on banking organization, 

as applying for an exemption under the 

proposal would be entirely voluntary. In 

addition, the Board is not aware of any 

federal rules that duplicate, overlap, or 

conflict with the proposed rule. For 

these reasons, the Board believes that 

the proposed rule will not have a 

significant economic impact on a 

substantial number of small entities 

supervised by the Board, and believes 

that there are no significant alternatives 

to the proposed rule that would reduce 

the economic impact on small banking 

organizations supervised by the Board. 

D. Riegle Community Development and 

Regulatory Improvement Act of 1994 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act (RCDRIA), 

in determining the effective date and 

administrative compliance requirements 

for new regulations that impose 

additional reporting, disclosure, or other 

requirements on insured depository 

institutions, 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 insured depository institutions, 

including small depository institutions, 

and customers of depository 

institutions, as well as the benefits of 

such regulations.13 In addition, section 

302(b) of RCDRIA requires new 

regulations and amendments to 

regulations that impose additional 

reporting, disclosures, or other new 

requirements on insured depository 

institutions 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.14 The proposed rule would not 

impose additional reporting, disclosure, 

or other requirements; therefore the 

requirements of the RCDRIA do not 

apply. 

However, the agencies invite 

comments that further will inform the 

agencies’ consideration of RCDRIA. 

List of Subjects in 12 CFR Part 208 

Accounting, Agriculture, Banks, 

Banking, Confidential business 

information, Consumer protection, 

Crime, Currency, Federal Reserve 

System, Flood insurance, Insurance, 

Investments, Mortgages, Reporting and 

recordkeeping requirements, Securities. 

Authority and Issuance 

For the reasons stated in the 

preamble, the Board of Governors of the 

Federal Reserve System proposes to 

amend 12 CFR part 208 as follows: 

PART 208—MEMBERSHIP OF STATE 

BANKING INSTITUTIONS IN THE 

FEDERAL RESERVE SYSTEM 

(REGULATION H) 

■ 1. The authority citation for part 208 

continues to read as follows: 

Authority: 12 U.S.C. 24, 36, 92a, 93a, 

248(a), 248(c), 321–338a, 371d, 461, 481–486, 

601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12), 

1818, 1820(d)(9), 1833(j), 1828(o), 1831, 

1831o, 1831p–1, 1831r–1, 1831w, 1831x, 

1835a, 1882, 2901–2907, 3105, 3310, 3331– 

3351, 3905–3909, 5371, and 5371 note; 15 

U.S.C. 78b, 78I(b), 78l(i), 780–4(c)(5), 78q, 

78q–1, 78w, 1681s, 1681w, 6801, and 6805; 

31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 

4104b, 4106, and 4128. 

■ 2. In § 208.62, add a new paragraph (l) 

to read as follows: 

§ 208.62 Suspicious activity reports. 

* * * * * 

(l) Exemptions. 

(1)(i) The Board may exempt any 

member bank from the requirements of 

this section. Upon receiving a written 

request from a member bank, the Board 

will consider whether the exemption is 

consistent with safe and sound banking 

and may consider other appropriate 

factors. The Board also would seek 

FinCEN’s determination whether the 

exemption is consistent with the 

purposes of the Bank Secrecy Act, if 

applicable. The exemption shall be 

applicable only as expressly stated in 

the exemption, may be conditional or 

unconditional, may apply to particular 

persons or classes of persons, and may 

apply to transactions or classes of 

transactions. 

(ii) The Board will seek FinCEN’s 

concurrence with regard to any 

exemption request that would also 

require an exemption from FinCEN’s 

SAR regulations, and may consult with 

FinCEN regarding other exemption 

requests. The Board also may consult 

with the other state and federal banking 

agencies and consider comments before 

granting any exemption. 

(2) The Board will provide a written 

response to the member bank that 

submitted the exemption request after 

considering whether the exemption is 

consistent with safe and sound banking, 

consulting with the appropriate 

agencies, and seeking concurrence when 

appropriate. A member bank that has 

received an exemption under paragraph 

(1) of this section may rely on the 

exemption for a period of time to be 

communicated by the Board in its 

granting of the exemption, which may 

be indefinite. 

(3) The Board may extend the period 

of time or may revoke an exemption 

granted under paragraph (1) of this 

section. Exemptions may be revoked at 

the sole discretion of the Board. The 

Board will provide written notice to the 

member bank of the Board’s intention to 

revoke an exemption. Such notice will 

include the basis for the revocation and 

will provide an opportunity for the 

member bank to submit a response to 

the Board. The Board will consider the 

response prior to deciding whether to 

revoke an exemption, and will notify 

the member bank of the Board’s final 

decision to revoke an exemption in 

writing. 

By order of Board of Governors of the 

Federal Reserve System. 

Ann Misback, 

Secretary of the Board. 

[FR Doc. 2021–00033 Filed 1–21–21; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 353 

RIN 3064–AF56 

Exemptions to Suspicious Activity 

Report Requirements 

AGENCY: Federal Deposit Insurance 

Corporation. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The FDIC is inviting comment 

on a proposed rule that would modify 


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