14246 Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Proposed Rules 

1 12 U.S.C. 1467a(c)(9). 

2An SLHC generally is any company that directly 

or indirectly controls a savings association, or that 

controls any other company that is a savings and 

loan holding company. See 12 CFR 583.20 and 12 

U.S.C. 1467a(a)(1)(D). 

3 12 U.S.C. 1843(k). 

4 12 U.S.C. 1467a(c)(2). SLHCs that were SLHCs 

on May 4, 1999, and meet certain other 

requirements, are excepted from the activities 

limitations of section 10(c)(9) of the HOLA. See 12 

U.S.C. 1467a(c)(9)(C). The following discussion of 

activities limitations applies only to SLHCs that are 

not excepted from the activities limitations of 

section 10(c)(9). 

5These activities include furnishing or 

performing management services for a savings 

association subsidiary of such company (section 

10(c)(2)(A)); conducting an insurance agency or 

escrow business (section 10(c)(2)(B)); holding, 

managing, or liquidating assets owned or acquired 

from a savings association subsidiary of such 

company (section 10(c)(2)(C)); holding or managing 

properties used or occupied by a savings 

association subsidiary of such company (section 

10(c)(2)(D)); acting as trustee under a deed of trust 

(section 10(c)(2)(E)); and purchasing, holding or 

disposing of stock acquired in a qualified stock 

chattel only secured debt that was 

estimated to be secured but upon final 

liquidation was found to be unsecured, 

and up to 90 days after the date of 

discharge on the portion of real estate 

secured debt that was estimated to be 

secured but was found to be unsecured 

upon final disposition. 

(ii) The Agency will pay the lender 

interest which accrues during and up to 

90 days after the time period the lender 

in unable to dispose of acquired 

property due to state imposed 

redemption rights on any unsecured 

portion of the loan during the 

redemption period, if an estimated loss 

claim was paid by the Agency during 

the liquidation action. 

* * * * * 

(i) Final loss claims. (1) Lenders must 

submit a final loss claim when the 

security has been liquidated and all 

proceeds have been received and 

applied to the account. All proceeds 

shall be applied to principal first and 

then toward accrued interest if the 

interest is still accruing. The application 

of the loss claim payment to the account 

does not automatically release the 

borrower of liability for any portion of 

the borrower’s debt to the lender. The 

lender will continue to be responsible 

for collecting the full amount of the debt 

and sharing these future recoveries with 

the Agency in accordance with 

paragraph (j) of this section. 

* * * * * 

(5) The Agency will notify the lender 

of any discrepancies in the final loss 

claim or, approve or reject the claim 

within 40 days. Failure to do so will 

result in additional interest being paid 

to the lender for the number of days 

over 40 taken to process the claim. 

* * * * * 

Signed at Washington, DC, on March 9, 

2007. 

Teresa C. Lasseter, 

Administrator, Farm Service Agency. 

[FR Doc. E7–5511 Filed 3–26–07; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

12 CFR Part 584 

[OTS–2007–0007] 

RIN 1550–AC10 

Permissible Activities of Savings and 

Loan Holding Companies 

AGENCY: Office of Thrift Supervision, 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Office of Thrift 

Supervision (OTS) is proposing to revise 

its regulations, at 12 CFR 584.2 and 

584.2–2, to expand the permissible 

activities of savings and loan holding 

companies (SLHCs) to the full extent 

permitted under the Home Owners’

Loan Act (HOLA). In addition, OTS 

proposes to amend 12 CFR 584.4 to 

conform the regulation to the statute 

that it is intended to implement by 

replacing the absolute prohibition on 

certain SLHC transactions that is 

currently in the regulation with a prior 

approval requirement. The proposed 

regulation sets forth standards that OTS 

will use to evaluate applications 

submitted pursuant to the application 

requirement. 

DATES: Comments must be received by 

April 26, 2007. 

ADDRESSES: You may submit comments, 

identified by OTS–2007–0007, by any of 

the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. select 

‘‘Office of Thrift Supervision’’ from the 

agency drop-down menu, then click 

submit. Select Docket ID ‘‘OTS–2007–

0007’’ to submit or view public 

comments and to view supporting and 

related materials for this interim rule. 

The ‘‘User Tips’’ link at the top of the 

page provides information on using 

Regulations.gov, including instructions 

for submitting or viewing public 

comments, viewing other supporting 

and related materials, and viewing the 

docket after the close of the comment 

period. 

• Mail: Regulation Comments, Chief 

Counsel’s Office, Office Of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552, Attention: OTS–

2007–0007. 

• Hand Delivery/Courier: Guard’s 

Desk, East Lobby Entrance, 1700 G 

Street, NW., from 9 a.m. to 4 p.m. on 

business days, Attention: Regulation 

Comments, Chief Counsel’s Office, 

OTS–2007–0007. 

Instructions: All submissions received 

must include the agency name and 

docket number for this rulemaking. All 

comments received will be entered into 

the docket and posted on 

Regulations.gov without change, 

including any personal information 

provided. Comments, including 

attachments and other supporting 

materials received are part of the public 

record and subject to public disclosure. 

Do not enclose any information in your 

comment or supporting materials that 

you consider confidential or 

inappropriate for public disclosure. 

Viewing Comments Electronically: Go 

to http://www.regulations.gov, select 

‘‘Office of Thrift Supervision’’ from the 

agency drop-down menu, then click 

‘‘Submit.’’ Select Docket ID ‘‘OTS–

2007–0007’’ to view public comments 

for this notice of proposed rulemaking. 

View Comments On-Site: You may 

inspect comments in the Public Reading 

Room, 1700 G Street, NW., by 

appointment. To make an appointment, 

call (202) 906–5922, send an e-mail to 

public.info@ots.treas.gov, or send a 

facsimile transmission to (202) 906–

6518. (Prior notice identifying the 

materials you will be requesting will 

assist us in serving you.) We schedule 

appointments on business days between 

10 a.m. and 4 p.m. In most cases, 

appointments will be available the next 

business day following the date we 

receive a request. 

FOR FURTHER INFORMATION CONTACT: 

Donald W. Dwyer, Director, 

Applications, Examination and 

Supervision-Operations, (202) 906–

6414; or Kevin A. Corcoran, (202) 906–

6962, Deputy Chief Counsel for 

Business Transactions, Office of Chief 

Counsel; Office of Thrift Supervision, 

1700 G Street, NW., Washington, DC 

20552. 

SUPPLEMENTARY INFORMATION: 

I. Holding Company Activities 

A. Background 

Under section 10(c)(9) of the HOLA,1

SLHCs 2 generally are permitted to 

engage only in activities that are 

permissible for financial holding 

companies under section 4(k) of the 

Bank Holding Company Act,3 or 

activities that are listed in section 

10(c)(2) of the HOLA.4 The activities 

listed in section 10(c)(2) of the HOLA 

include certain specific activities.5 In 


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issuance under section 10(q) of the HOLA (section 

10(c)(2)(G)). 

6 12 U.S.C. 1467a(c)(2)(F)(ii). These activities are 

listed at 12 CFR 584.2–1(2006). 

7 12 U.S.C. 1467a(c)(2)(F)(i). Section 10(c)(2)(F)(i) 

of the HOLA originally was enacted as part of the 

Competitive Equality Banking Act of 1987 (Pub. L. 

100–86, 101 Stat. 552 (Aug. 10, 1987)) and amended 

section 408(c) of the National Housing Act. The 

Financial Institutions Reform, Recovery and 

Enforcement Act of 1989 (Pub. L. 101–73 103 Stat. 

184 (Aug. 9, 1989)) moved section 408 of the NHA 

to section 10 of the HOLA. 

8See 12 CFR 584.2(b)(6)(i) and 584.2–2(a) (2006). 

9 12 U.S.C. 1843(c)(8). When the Federal Home 

Loan Bank Board (FHLBB) originally promulgated 

regulations implementing the section 10(c)(2)(F)(i) 

provision, it limited the activities to those 

permitted under section 4(c)(8). 53 FR 312 (Jan. 6, 

1988). Although the FHLBB did not state why it did 

not authorize SLHCs to engage in activities the FRB 

approved under other subsections of section 4(c), 

the FHLBB stated that, based on its subsequent 

experience, it may ‘‘expand the list of permissible 

nonbanking activities for S&L holding companies to 

include those activities approved by the FRB under 

other provisions of section 4(c) of the BHC Act.’’ 53 

FR 319 (Jan. 6, 1988). 10Activities that the FRB previously approved 

under this section are set forth at 12 CFR 

225.86(a)(2)(2006). 11Section 10(c)(9) of HOLA, which, as described 

above, is a separate source of authority for SLHCs 

to engage in activities, permits SLHCs to engage in 

any activity permissible for financial holding 

companies pursuant to section 4(k) of the BHCA. 

While the financial holding company activities are 

generally broader than the bank holding company 

activities described in section 4(c) of the BHCA, 

section 4(k) does not include all of the activities 

described in the various subsections of section 4(c) 

(such as the foreign activities described in 

subsection 4(c)(9)). However, section 4(k)(4)(F) of 

the BHCA permits financial holding companies to 

engage in section 4(c)(8) activities, and section 

4(k)(4)(G) permits financial holding companies to 

engage, in the United States, in certain activities 

that the FRB has permitted under section 4(c)(13). 

See 12 CFR 225.86(b)(2006). 

12See 12 U.S.C. 1843(c)(1)(A) and (D). 

13See 12 CFR part 211, subpart B (2006). 

14Activities described in certain other 

subsections of section 4(c) of the BHCA are not 

applicable to SLHCs, even if OTS amends the 

Holding Company Regulations as proposed, because 

the provisions relate to shares acquired by a bank 

holding company prior to May 9, 1956 (the date of 

the enactment of the BHCA) (12 U.S.C. 1843(c)(10)) 

and companies that became bank holding 

companies as a result of the Bank Holding Company 

Act Amendments of 1970 (12 U.S.C. 1843(c)(12)). 

15When OTS recodified the former regulations of 

the FHLBB in 1989, OTS did not change the 

provisions of the Holding Company Regulations 

that implemented section 10(c)(2)(F)(i). 54 FR 

49411, 49711 (Nov. 30, 1989). 

16Pub. L. 106–102, 113 Stat. 338, section 401. 

17See section 10(c)(3) of HOLA. The QTL test is 

set forth at section 10(m) of HOLA, 12 U.S.C. 

1467a(m). 

18 Id. 

addition, section 10(c)(2)(F) sets forth 

two lists of activities in which all 

SLHCs may engage. Section 

10(c)(2)(F)(ii) permits SLHCs to engage 

in activities in which multiple savings 

associations were authorized by 

regulation to engage directly on March 

5, 1987.6 Section 10(c)(2)(F)(i) permits 

SLHCs to engage in activities: 

which the Board of Governors of the Federal 

Reserve System, by regulation, has 

determined to be permissible for bank 

holding companies under section 1843(c) of 

this title, unless the Director, by regulation, 

prohibits or limits any such activity for 

savings and loan holding companies.* * * 7

As authorized by the statute, OTS has 

limited the activities permitted for 

SLHCs under section 10(c)(2)(F)(i) of the 

HOLA. Although SLHCs potentially 

could engage in all activities that the 

Board of Governors of the Federal 

Reserve System (FRB) has permitted 

under its regulations for bank holding 

companies under section 4(c) of the 

Bank Holding Company Act (BHCA), 

OTS regulations implementing section 

10(c)(2)(F)(i) limit the activities that are 

permissible under this authority to 

activities that the FRB has permitted for 

bank holding companies under 

regulations implementing section 4(c)(8) 

of the BHCA, specifically 12 CFR 225.24 

and 12 CFR 225.28.8 Section 225.28 is 

a list of non-banking activities that the 

FRB approved pursuant to section 

4(c)(8) of the BHCA.9 Section 225.24 

sets forth a regulatory procedure under 

which the FRB has approved nonbanking activities, under the authority 

of section 4(c)(8) of the BHCA.10

In summary, the OTS Holding 

Company Regulations implementing 

section 10(c)(2)(F)(i) of HOLA provide 

authority for SLHCs to only engage in 

activities that the FRB has permitted 

under section 4(c)(8) of the BHCA, and 

do not provide authority for SLHCs to 

engage in activities listed in other 

subsections of section 4(c) of the 

BHCA.11

Certain activities described in other 

subsections of section 4(c) are already 

permissible for SLHCs under other 

authority. For example, section 4(c)(1) 

of the BHCA permits bank holding 

companies to, among other things, hold 

or operate properties used wholly or 

substantially by any banking subsidiary 

of such bank holding company, and to 

liquidate assets acquired from a bank 

subsidiary.12 SLHCs may engage in 

these activities (with regard to savings 

association subsidiaries) without prior 

OTS approval, under sections 

10(c)(2)(D) and (C) of the HOLA. 

Other activities described in other 

subsections of section 4(c) are generally 

not currently permissible for SLHCs to 

engage in. For example, the foreign 

activities that the FRB has authorized by 

regulation for bank holding companies 

pursuant to section 4(c)(9) of the 

BHCA 13 are not currently permissible 

for SLHCs.14

Current authority for nongrandfathered SLHCs to engage in nonthrift activities is summarized in the 

following table. 

Statutory source 

of authority 

HOLA sec. 10(c)(2)(A)–(E) 

and (G) HOLA sec. 10(c)(2)(F)(i) HOLA sec. 10(c)(2)(F)(ii) HOLA sec. 10(c)(9) 

Description ......................... Specific activities ............... Activities permitted for 

bank holding companies 

under section 4(c)(8) of 

BHCA.

Activities FHLBB permitted 

for multiple SLHCs as of 

March 5, 1987.

Activities permissible for financial holding companies under section 

4(k)(4) of the BHCA. 

OTS Regulation Cite ......... 12 CFR 584.2(b) ............... 12 CFR 584.2–2 ............... 12 CFR 584.2–1 ............... None. 

B. Proposed Regulatory Changes 

OTS believes that it is appropriate to 

consider whether to continue to limit 

the activities that OTS authorizes under 

section 10(c)(2)(F)(i) of HOLA to 

activities that the FRB has authorized 

under section 4(c)(8) of the BHCA. The 

existing regulations have not changed 

substantively since they were first 

promulgated in 1987.15

The regulatory scheme for SLHCs has 

changed significantly since the 

regulations were first promulgated. In 

1987, most SLHCs were excepted from 

activities restrictions. Until the passage 

of the Gramm-Leach-Bliley Act 16 (GLB 

Act) in 1999, SLHCs that controlled 

only one savings association were 

excepted from activities limitations, 

provided that the subsidiary savings 

association met the qualified thrift 

lender test (QTL test).17 In addition, 

SLHCs that controlled more than one 

savings association were excepted from 

activities limitations, provided that the 

SLHC acquired all or all but one of its 

savings association subsidiaries in 

certain types of supervisory 

transactions, and all the subsidiary 

savings associations met the QTL test.18


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19The exceptions include the ‘‘grandfathering’’

exception, at section 10(c)(9)(C), discussed earlier, 

the reorganization exception, set forth at section 

10(c)(9)(D), and the family trust exception, set forth 

at section 10(c)(9)(E). 

20 12 U.S.C. 1467a(e)(1)(A)(iii). The statute 

establishes eight exceptions from the approval 

requirement. See 12 U.S.C. 1467a(e)(1)(A)(iii)(I)- 

(VIII). 

21 54 FR 49411, 49712. 

22Pub. L. 106–569 (Dec. 27, 2000), at section 

1202, 114 Stat. 3032. 

23The AHEO amendments left in place the 

absolute prohibition relating to multiple SLHCs. 

24See also, 12 CFR 225.11(c)(2006). 

25See 12 CFR 225.24 and 12 CFR 

225.28(b)(4)(2006). 

26 12 U.S.C. 1842(c). 

Accordingly, the limitation of 

permissible activities to those the FRB 

had approved under section 4(c)(8) of 

the BHCA was relevant only to a small 

number of SLHCs. 

The GLB Act, however, provided that, 

notwithstanding the previously existing 

exemption at section 10(c)(3), which 

had significantly limited the number of 

SLHCs subject to activities restrictions, 

all new SLHCs would be, with limited 

exceptions,19 subject to activities 

restrictions. Accordingly, for several 

years, all new SLHC structures have 

been subject to activities limitations. 

Rather than affecting only a small 

minority of SLHCs, the regulatory 

limitation in question is now applicable 

to every new SLHC structure. 

In addition, for many years, bank 

holding companies have been permitted 

to engage in the activities described in 

section 4(c) of the BHCA, consistent 

with the regulations of the FRB. OTS is 

not aware of any safety and soundness 

or other reason why SLHCs should not 

be permitted to engage in the same 

activities. 

Finally, in 1987, few SLHCs had 

foreign operations. Since then, however, 

many foreign entities have acquired, or 

have expressed interest in acquiring, a 

savings association. To the extent that 

sections 4(c)(9) and 4(c)(13) of the 

BHCA, and regulations that the FRB has 

promulgated thereunder, authorize bank 

holding companies with foreign 

operations to engage in certain 

activities, it would appear appropriate 

to provide the same authority to SLHCs. 

The regulations limiting the section 

4(c) activities to those authorized under 

section 4(c)(8) are 12 CFR 584.2(b)(6) 

and 584.2–2(a). OTS proposes to revise 

these regulations to replace the 

references to 12 CFR 225.24 and 225.28 

with general references to regulations 

promulgated by the FRB under the 

authority of section 4(c) of the BHCA. 

These changes would enable SLHCs to 

engage in activities that the FRB has 

permitted under any regulation that the 

FRB has promulgated under section 4(c) 

of the BHCA. 

Section 10(c)(4) of the HOLA 

generally requires prior OTS approval 

with respect to the activities described 

in section 10(c)(2)(F)(i) of the HOLA. 

Certain of these activities are already 

permitted under OTS regulations 

without prior OTS approval, or are 

permitted under FRB regulations 

without prior FRB approval. 

Accordingly, in order to avoid imposing 

additional restrictions on currently 

permissible activities, and provide for 

parity between bank holding companies 

and SLHCs to the extent possible, OTS 

proposes to state in the regulation that 

activities that are authorized under 

section 10(c)(2)(F)(i) of HOLA, but are 

also permissible under other provisions 

of section 10(c) of the HOLA or under 

FRB regulations without prior FRB 

approval are preapproved. 

II. Approval Requirement for Certain 

Acquisitions by SLHCs 

Section 10(e)(1)(A)(iii) of HOLA 

includes two different restrictions on 

the activities of SLHCs. First, the statute 

prohibits SLHCs from directly or 

indirectly acquiring, without OTS 

approval, more than five percent of the 

voting shares of a savings association 

that is not a subsidiary of the acquiring 

SLHC, or more than five percent of the 

voting shares of a SLHC that is not a 

subsidiary of the acquiring SLHC.20

Second, the statute prohibits multiple 

SLHCs from acquiring or retaining more 

than five percent of the voting shares of 

any company not a subsidiary that is 

engaged in any business activity other 

than the activities specified in section 

10(c)(2) of HOLA. 

The Holding Company Regulations, at 

12 CFR 584.4, implement these statutory 

requirements. Section 584.4, however, 

has not been amended since OTS 

recodified the FHLBB regulations in 

1989,21 and therefore, no longer 

accurately reflects the provisions of the 

statute. Specifically, the American 

Homeownership and Economic 

Opportunity Act of 200022 (AHEO Act) 

amended section 10(e)(1)(A)(iii) to 

replace the former absolute prohibition 

on SLHCs acquiring more than five 

percent of the voting shares of a savings 

association or SLHC not a subsidiary of 

the acquiring SLHC (subject to the 

exceptions noted above), with a 

regulatory approval requirement.23 The 

regulation continues to contain an 

absolute prohibition, without providing 

for a regulatory approval requirement. 

Accordingly, OTS proposes to amend 

the regulation to make it consistent with 

the statute. 

In addition, although the AHEO Act 

established a regulatory approval 

requirement for the acquisitions in 

question, the statute did not establish 

approval standards for applications 

submitted as a result of the approval 

requirement. OTS proposes to amend 

the regulation to set forth approval 

standards for applications submitted 

under section 10(e)(1)(A)(iii) and 584.4. 

When OTS recommended that 

Congress amend section 10(e)(1)(A)(iii) 

to eliminate the prohibition on SLHCs 

acquiring more than five percent of the 

voting shares of a non-subsidiary 

savings association or SLHC, OTS noted 

that the prohibition was inconsistent 

with the rules applicable to bank 

holding companies. Section 3(a) of the 

BHCA allows bank holding companies 

to acquire more than five percent of the 

voting shares of non-subsidiary banks, 

with FRB approval.24 In addition, bank 

holding companies, including those that 

control savings associations, are 

permitted, with prior FRB approval, to 

acquire voting stock of savings 

associations (including, but not limited 

to, non-controlling investments 

exceeding five percent).25

Given that OTS sought the 

amendment to section 10(e)(1)(A)(iii) to 

provide SLHCs parity with bank holding 

companies, OTS believes that it is 

appropriate to look to the requirements 

applicable to bank holding companies 

in similar situations in establishing 

approval criteria. In this regard, section 

3(c) of the BHCA sets forth the 

standards for bank holding company 

acquisitions under section 3(a). The 

statute requires that the FRB: (i) Not 

approve an acquisition if it has certain 

anticompetitive effects; (ii) consider the 

financial and managerial resources and 

future prospects of the companies and 

banks involved, and the convenience 

and needs of the community to be 

served; (iii) not approve an application 

if the company fails to provide adequate 

assurance that it will make available 

such information as the FRB determines 

appropriate to determine and enforce 

compliance with applicable 

requirements; and (iv) in the case of a 

foreign bank, not approve an application 

if the foreign bank is not subject to 

comprehensive supervision or 

regulation on a consolidated basis in the 

bank’s home country.26

These approval standards are, in all 

material respects, identical to the 

approval standards for acquisitions by 

SLHCs under section 10(e)(2) of the 

HOLA and OTS regulations thereunder 

at 12 CFR 574.7(c). Accordingly, OTS 

proposes to amend section 584.4 to 


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27 12 U.S.C. 2903(a)(2). 

28 12 U.S.C. 2902(3)(E). Although the statutory 

reference is to section 408(e) of the National 

Housing Act, which was repealed in FIRREA, OTS 

has interpreted the provision as referring to the 

successor provision, section 10(e) of the HOLA. 

29See 12 CFR 563e.29(a)(5). 

cross-reference the standards in section 

10(e)(2) of HOLA and 12 CFR 574.7(c). 

In addition, the Community 

Reinvestment Act (CRA) requires that 

OTS take into account a savings 

association’s CRA record in reviewing 

any application for a deposit facility.27

The CRA defines an ‘‘application for a 

deposit facility’’ as including, among 

other things, the ‘‘acquisition of shares 

in, or the assets of, a regulated financial 

institution requiring approval under 

[section 10(e) of the HOLA].’’ 28 The 

OTS regulations implementing the CRA 

include a corresponding requirement.29

Accordingly, OTS believes that it is 

appropriate to consider the CRA record 

of any depository institution subsidiary 

of the acquiring SLHC when considering 

an application under section 

10(e)(1)(A)(iii) and 12 CFR 584.4. 

Given that CRA performance of any 

subsidiary depository institution of the 

acquiring SLHC would be a factor in 

OTS’s consideration of applications 

under 584.4, OTS believes it is 

appropriate to obtain public comment in 

connection with such applications. 

Accordingly, the proposed regulation 

includes a cross-reference to the public 

notice and comment procedures in 12 

CFR part 516. 

Finally, in light of the amendments to 

584.4 proposed above, OTS proposes to 

reorganize 584.4 as set forth herein. The 

additional proposed changes would not 

affect the substance of the regulation. 

III. Findings and Certifications 

A. Paperwork Reduction Act 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995, 

OTS 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. OTS is 

requesting comment on a proposed 

information collection. OTS also gives 

notice that the proposed collection of 

information was submitted to OMB for 

review and approval (44 U.S.C. 

3507(d)). At the end of the comment 

period, the comments and 

recommendations received will be 

analyzed to determine whether the 

information collection should be 

modified. Any material modifications 

will be submitted to OMB for review 

and approval. All comments will 

become a matter of public record. 

Send comments, referring to the 

collection by title of the proposal or by 

‘‘SLHC Activities (1550–NEW),’’ to 

OMB and OTS at these addresses: Office 

of Information and Regulatory Affairs, 

Attention: Desk Officer for OTS, U.S. 

Office of Management and Budget, 725 

- 17th Street, NW., Room 10235, 

Washington, DC 20503, or by fax to 

(202) 395–6974; and Information 

Collection Comments, Chief Counsel’s 

Office, Office of Thrift Supervision, 

1700 G Street, NW., Washington, DC 

20552, by fax to (202) 906–6518, or by 

e-mail to 

infocollection.comments@ots.treas.gov. 

OTS will post comments and the related 

index on the OTS Internet Site at 

http://www.ots.treas.gov. In addition, 

interested persons may inspect 

comments at the Public Reading Room, 

1700 G Street, NW., by appointment. To 

make an appointment, call (202) 906–

5922, send an e-mail to 

public.info@ots.treas.gov, or send a 

facsimile transmission to (202) 906–

7755. To obtain a copy of the 

submission to OMB, contact Marilyn K. 

Burton at marilyn.burton@ots.treas.gov, 

(202) 906–6467, or facsimile number 

(202) 906–6518, Litigation Division, 

Chief Counsel’s Office, Office of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552. 

Comments are invited on: 

(a) Whether the collection of 

information is necessary for the proper 

performance of the Agency’s functions, 

including whether the information has 

practical utility; 

(b) The accuracy of the estimates of 

the burden of the information 

collection, 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 collection on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology; 

and 

(e) Estimates of capital or start-up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

In this proposed rule, OTS is 

soliciting comments concerning the 

following information collection. 

Title: Savings and Loan Holding 

Companies Activities. 

OMB Control Number: 1550–NEW. 

Type of Review: New collection. 

Frequency of Response: On occasion. 

Affected Public: Savings and loan 

holding companies. 

Abstract: The proposed expansion of 

permissible activities for SLHCs under 

section 10(c)(2)(F)(i) of HOLA will 

result in the collection of additional 

information. Section 10(c)(4) of HOLA 

requires SLHCs to obtain OTS approval 

prior to commencing any activity 

described in section 10(c)(2)(F)(i) of 

HOLA. Additionally, the amendment of 

12 CFR 584.4 to conform with the 

statute by including an approval process 

for covered acquisitions is a new 

collection of information. 

Estimated Number of Respondents: 4. 

Estimated Burden Hours per 

Response: 2 hours. 

Estimated Total Burden: 8 hours. 

Rule section Subject Number of 

respondents 

Number of 

responses per 

respondent 

Average 

annual burden 

hours per 

response 

Annual 

disclosure & 

recordkeeping 

burden 

584.2–2 ............. Application to engage in certain activities ........................ 2 1 2 4 

584.4 ................. Application by SLHC to acquire non-controlling interest 

exceeding five percent of non-subsidiary savings association or SLHC.

2 1 2 4 

B. Executive Order 12866 

The Director of OTS has determined 

that this proposed rule does not 

constitute a significant regulatory action 

for the purposes of Executive Order 

12866. 

C. Regulatory Flexibility Act 

In accordance with section 605(b) of 

the Regulatory Flexibility Act (RFA), the 

Director of OTS has certified that this 


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14250 Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Proposed Rules 

proposed rule will not have a significant 

impact on a substantial number of small 

entities within the meaning of the RFA. 

5 U.S.C. 603. 

D. Unfunded Mandates Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

an agency to prepare a budgetary impact 

statement before promulgating a rule 

that includes a Federal mandate that 

may result in expenditure by state, 

local, and tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more in any one year. 

2 U.S.C. 1532. OTS has determined that 

this proposed rule would not have such 

an impact. Rather, the rule would 

provide that nonexempt SLHCs have 

broader authority to engage in activities 

than are specified under current 

regulations. Accordingly, OTS has not 

prepared a budgetary impact statement 

for this rule or specifically addressed 

the regulatory alternatives considered. 

List of Subjects in 12 CFR Part 584 

Administrative practice and 

procedure, Holding companies, 

Reporting and recordkeeping 

requirements, Savings associations, 

Securities. 

For the reasons stated in the 

preamble, the Office of Thrift 

Supervision proposes to amend 12 CFR 

part 584 as follows: 

PART 584—SAVINGS AND LOAN 

HOLDING COMPANIES 

1. Revise the part heading for part 584 

to read as shown above. 

2. The authority citation for part 584 

continues to read as follows: 

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

1464, 1467a, 1468. 

3. Revise § 584.2(b)(6)(i) to read as 

follows: 

584.2 Prohibited activities. 

* * * * * 

(b) * * * 

(6) * * * 

(i) That the Board of Governors of the 

Federal Reserve System has permitted 

for bank holding companies pursuant to 

regulations promulgated under section 

4(c) of the Bank Holding Company Act; 

or 

* * * * * 

4. Amend § 584.2–2(a) by revising the 

first sentence and adding a new 

sentence at the end to read as follows: 

(a) General. For purposes of 

§ 584.2(b)(6)(i) of this part, the services 

and activities permissible for bank 

holding companies pursuant to 

regulations that the Board of Governors 

of the Federal Reserve System has 

promulgated pursuant to section 4(c) of 

the Bank Holding Company Act are 

permissible for savings and loan holding 

companies, or subsidiaries thereof that 

are neither savings associations nor 

service corporation subsidiaries of 

subsidiary savings associations: * * * 

Activities that are permissible under 

other provisions of section 10(c) of the 

HOLA without prior OTS notice or 

approval, and activities that are 

permissible without prior notice or 

approval under regulations that the 

Board of Governors of the Federal 

Reserve System has promulgated 

pursuant to section 4(c) of the Bank 

Holding Company Act are preapproved. 

5. Revise § 584.4 to read as follows: 

§ 584.4 Certain acquisitions by savings 

and loan holding companies. 

(a) Acquisitions by a savings and loan 

holding company of more than five 

percent of a non-subsidiary savings 

association or savings and loan holding 

company. No savings and loan holding 

company, directly or indirectly, or 

through one or more subsidiaries or 

through one or more transactions, shall, 

without prior written OTS approval, 

acquire by purchase or otherwise, or 

retain, more than five percent of the 

voting stock or shares of a savings 

association not a subsidiary, or of a 

savings and loan holding company not 

a subsidiary. A savings and loan holding 

company seeking approval of an 

acquisition under this section must file 

an application under 12 CFR part 516, 

subpart A. Applications filed under this 

section are subject to the publication, 

public comment, and meeting 

provisions of 12 CFR part 516, subparts 

B, C, and D. OTS will review 

applications filed under this section 

under the review standards set forth for 

savings and loan holding company 

applications in section 10(e)(2) of the 

HOLA, § 574.7(c) of this chapter, and 

§ 563e.29(a) of this chapter. 

(b) Certain acquisitions by multiple 

savings and loan holding companies. 

No multiple savings and loan holding 

company (other than a savings and loan 

holding company described in 

§ 584.2a(a)(1)(ii) of this part) may, 

directly or indirectly, or through one or 

more subsidiaries or through one or 

more transactions, acquire or retain 

more than five percent of the voting 

shares of any company that is not a 

subsidiary that is engaged in any 

business activity other than those 

specified in § 584.2(b) of this part. 

(c) Exception for certain acquisitions 

of voting shares of savings associations 

and savings and loan holding 

companies. Paragraphs (a) and (b) of this 

section do not apply to voting shares of 

a savings association or of a savings and 

loan holding company—

(1) Held as a bona fide fiduciary 

(whether with or without the sole 

discretion to vote such shares); 

(2) Held temporarily pursuant to an 

underwriting commitment in the normal 

course of an underwriting business; 

(3) Held in an account solely for 

trading purposes or over which no 

control is held other than control of 

voting rights acquired in the normal 

course of a proxy solicitation; 

(4) Acquired in securing or collecting 

a debt previously contracted in good 

faith, for two years after the date of 

acquisition or for such additional time 

(not exceeding three years) as the Office 

may permit if, in the Office’s judgment, 

such an extension would not be 

detrimental to the public interest; 

(5) Acquired under section 

13(k)(1)(A)(i) of the Federal Deposit 

Insurance Act (or section 408(m) of the 

National Housing Act as in effect 

immediately prior to the enactment of 

the Financial Institutions Reform, 

Recovery and Enforcement Act of 1989); 

(6) Held by any insurance companies 

as defined in section 2(a)(17) of the 

Investment Company Act of 1940: 

Provided, That all shares held by all 

insurance company affiliates of such 

savings association or savings and loan 

holding company may not, in the 

aggregate, exceed five percent of all 

outstanding shares or of the voting 

power of the savings association or 

savings and loan holding company, and 

such shares are not acquired or retained 

with a view to acquiring, exercising, or 

transferring control of the savings 

association or savings and loan holding 

company; and 

(7) Acquired pursuant to a qualified 

stock issuance if such a purchase is 

approved pursuant to § 574.8 of this 

chapter. 

The aggregate amount of shares held 

under this subparagraph (c) (other than 

pursuant to subparagraphs (c)(1), (c)(2), 

(c)(3), (c)(4) and (c)(6)) may not exceed 

15 percent of all outstanding shares or 

the voting power of a savings 

association or savings and loan holding 

company. 

(d) Acquisitions of uninsured 

institutions. No savings and loan 

holding company may, directly or 

indirectly, or through one or more 

subsidiaries or through one or more 

transactions, acquire control of an 

uninsured institution or retain, for more 

than one year after the date any savings 

association subsidiary becomes 

uninsured, control of such association. 

Dated: March 20, 2007. 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Proposed Rules 14251 

By the Office of Thrift Supervision. 

John M. Reich, 

Director. 

[FR Doc. E7–5453 Filed 3–26–07; 8:45 am] 

BILLING CODE 6720–01–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR PARTS 748 and 749 

RIN 3133–AD24 

Records Preservation Program and 

Appendices—Record Retention 

Guidelines; Catastrophic Act 

Preparedness Guidelines 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule. 

SUMMARY: NCUA proposes to amend its 

regulations to address a federallyinsured credit union’s obligation to 

maintain a records preservation 

program. The proposed rule draws from 

existing guidance to clarify 

requirements for preserving vital 

records and to suggest important items 

for consideration in restoring vital 

member services. NCUA believes the 

revised language and new appendix will 

facilitate the recovery of essential 

operations after a catastrophic act 

resulting in continued member 

confidence in the credit union system. 

The agency also proposes to amend its 

regulations to clarify the meaning of 

catastrophic act. 

DATES: Comments must be received on 

or before May 11, 2007. 

ADDRESSES: You may submit comments 

by any of the following methods (Please 

send comments by one method only): 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• NCUA Web Site: http:// 

www.ncua.gov/ 

RegulationsOpinionsLaws/ 

proposed_regs/proposed_regs. html. 

Follow the instructions for submitting 

comments. 

• E-mail: Address to 

regcomments@ncua.gov. Include ‘‘[Your 

name] Comments on Proposed Rule 

Parts 748 and 749,’’ in the e-mail subject 

line. 

• Fax: (703) 518–6319. Use the 

subject line described above for e-mail. 

• Mail: Address to Mary F. Rupp, 

Secretary of the Board, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314–

3428. 

• Hand Delivery/Courier: Same as 

mail address. 

Public inspection: All public 

comments are available on the agency’s 

Web site at http://www.ncua.gov/ 

RegulationsOpinionsLaws/comments as 

submitted, except as may not be 

possible for technical reasons. Public 

comments will not be edited to remove 

any identifying or contact information. 

Paper copies of comments may be 

inspected in NCUA’s law library, at 

1775 Duke Street, Alexandria, Virginia 

22314, by appointment weekdays 

between 9 a.m. and 3 p.m. To make an 

appointment, call (703) 518–6540 or 

send an e-mail to OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Andrew Healey, Program Officer, 

Division of Supervision, Office of 

Examination and Insurance, at (703) 

518–6360 or Linda K. Dent, Staff 

Attorney, Office of General Counsel, at 

(703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

Background 

Lessons learned from previous 

catastrophic acts, including the 

dramatic effects of the Katrina and Rita 

hurricanes, indicate the importance of 

preserving vital records and swiftly 

restoring vital member services. In 

particular, NCUA’s review of events in 

the hurricanes’ aftermath demonstrates 

the need for advance planning and 

preparation in successfully responding 

to a catastrophic act. 

Challenges such as providing 

members with access to funds and 

account information, loss of, or lack of, 

access to facilities, and locating and 

communicating with staff were some of 

the immediate issues credit unions 

faced. Fortunately, affected credit 

unions did not face these challenges 

alone. Help came from NCUA, other 

credit unions, trade organizations, and 

service providers. For example, NCUA 

operated a call center to assist credit 

union members in contacting their 

institutions. Agency field staff checked 

on credit union facilities, helped locate 

staff, assisted credit unions with 

equipment needs, and helped credit 

unions restore share and loan data 

where necessary. Other credit unions 

mobilized to send needed cash, 

provided operating space, made staff 

available, and sent needed equipment to 

affected credit unions. Trade 

organizations served as a clearinghouse 

to match those with resources with 

those in need. Shared branch facilities 

signed on institutions enabling them to 

service displaced members. 

In reviewing these experiences, the 

Board determined credit unions, which 

had considered potential threats and 

identified critical functions necessary 

for the retrieval of vital records, were 

able to address anticipated challenges 

and unforeseen difficulties and restore 

vital member services. These 

institutions were able to provide 

members with access to their funds and 

handle member inquiries in a relatively 

short time period. The proposed 

amendments draw from these 

experiences to identify program 

elements the Board considers essential 

to restoring vital records and member 

services. 

Many of these elements are covered in 

previous NCUA guidance issued to 

federally-insured credit unions (FICUs) 

on disaster recovery planning. Despite 

the existence of this guidance, the Board 

is concerned that some credit unions 

may not be maintaining sufficient plans 

and safeguards to respond to events 

causing the destruction of vital records 

or catastrophic acts. The Board believes 

this proposal is necessary to ensure 

credit unions address these critical 

issues in the paramount interest of 

maintaining services to members and 

confidence in the credit union system if 

a catastrophic act occurs. 

Proposed Changes 

The proposed changes specifically 

address the Board’s concerns regarding 

restoration of vital member records and 

services. The proposed changes 

establish minimum standards for 

preserving vital records and include 

recommendations concerning restoring 

member services considered vital to a 

credit union’s continued operation. 

Part 748 

The Board proposes to revise the 

definition of catastrophic act to clarify 

that any event causing an interruption 

in vital member services for more than 

two business days is a qualifying event. 

Part 749 

Several of the proposed changes 

pertain to format and grammar and are 

made to clarify the rule’s language. For 

example, the Board proposes to 

eliminate the question format currently 

used in the section headings and replace 

these with language simply describing 

each section’s contents. Section 749.1 

includes two changes of note. Changes 

to the vital records definition clarify 

that share, deposit, and loan balances 

for each member’s account should be 

available as of the most recent business 

day, while a financial report of the 

credit union’s asset and liability 

accounts and bank reconcilements 

should be available as of the most recent 

month’s end. All other vital records 

should be updated as changes occur. A 

new paragraph (d) is added requiring 


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