54744 Federal Register / Vol. 62, No. 203 / Tuesday, October 21, 1997 / Rules and Regulations

1Elsewhere in this issue of the Federal Register

the OCC is soliciting comments on, among other

things, a proposed change to part 8 that would

impose a 25 percent surcharge on national banks

that receive a rating of 3, 4, or 5 under the Uniform

Financial Institutions Rating System (the CAMELS

rating) and on Federal branches and agencies of

foreign banks that receive a rating of 3, 4, or 5 under

the ROCA rating system (which rates risk

management, operational controls, compliance, and

asset quality).

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Part 8

[Docket No. 97–21]

RIN 1557–AB60

Assessment of Fees; National Banks;

District of Columbia Banks

AGENCY: Office of the Comptroller of the

Currency, Treasury.

ACTION: Final rule.

SUMMARY: The OCC is finalizing, with

slight modifications, changes made by

two previous interim rules with request

for comments. The first interim rule

removed the specific calculation of fees

for examinations of fiduciary activities,

special examinations and investigations,

examinations of affiliates, and

examinations and investigations of

corporate activities (collectively, trust

and other examinations and

investigations). The second interim rule

authorized the OCC to reduce

assessments on national banks that are

not the largest national bank in a bank

holding company (referred to as nonlead banks). These changes have

resulted in assessment revenue that

more accurately reflects the expenses

incurred by the OCC as it supervises

banks according to the OCC’s

Supervision by Risk Program.

EFFECTIVE DATE: October 21, 1997.

FOR FURTHER INFORMATION CONTACT: Roy

Madsen, Deputy Chief Financial Officer,

Financial Review, Policy and Analysis,

(202) 874–5130; or Mark Tenhundfeld,

Assistant Director, Legislative and

Regulatory Activities Division, (202)

874–5090, Office of the Comptroller of

the Currency, Washington, D.C. 20219.

SUPPLEMENTARY INFORMATION:

Interim Rules and Comments Received 1

1994 Interim Rule Regarding Fees for

Trust and Other Examinations and

Investigations

The OCC issued an interim rule on

November 18, 1994 (59 FR 59640) (1994

Interim Rule) that removed specific fees

for trust and other examinations and

investigations. That rule was adopted in

response to changes to 12 U.S.C. 482

made by the Federal Deposit Insurance

Corporation Improvement Act of 1991

(FDICIA) which, among other things,

removed the specific requirement for a

fee adequate to recover expenses of

examinations of fiduciary activities. In

place of that requirement, FDICIA

authorized the OCC to impose and

collect assessments, fees, and other

charges as necessary or appropriate to

carry out its responsibilities, and gave

the agency increased flexibility to set

the assessments, fees, and charges to

meet its expenses.

The OCC exercised this flexibility by

removing the specific formula for

calculating fees that formerly appeared

in 12 CFR 8.6. As noted in the preamble

to the 1994 Interim Rule, the specific fee

structure reflected an outdated view of

fiduciary activities as special and

separate from other bank operations.

The OCC stated in revised § 8.6 that it

would assess a fee for examining

fiduciary activities and for conducting

special examinations and investigations,

and that it would publish a fee schedule

for these examinations and

investigations in the Notice of

Comptroller of the Currency Fees

described in § 8.8. These changes were

immediately effective, but the OCC also

sought the views of interested parties.

The OCC received two comments in

response to this request for comments.

Both commenters supported the interim

rule, noting that the changes will result

in substantial savings for national

banks. One of the commenters requested

that the OCC seek additional comments

when and if the agency intends to

increase fees for fiduciary examinations

and investigations or intends to impose

a separate trust assessment.

In light of the comments received, the

OCC is issuing this final rule that adopts

the changes set out in the 1994 Interim

Rule. In response to the commenter

concerned about the possibility of future

increases or separate assessments for

trust examinations, the OCC notes that

it will seek comment before it changes

the manner in which it imposes fees for

fiduciary examinations and

investigations. While the specific

amount of assessments may change from

one assessment to the next as reflected

in the Notice of Comptroller of the

Currency Fees, the OCC will continue to

calculate the assessment according to

the method provided in part 8.

1996 Interim Rule Regarding Discounts

for Non-Lead Banks

On December 2, 1996, the OCC

published another interim rule with

request for comments (61 FR 64000)

(1996 Interim Rule). The 1996 Interim

Rule amended part 8 by adding

§ 8.2(a)(6), which provides that the OCC

will reduce the assessments for non-lead

banks by a percentage that is to be

specified in the Notice of Comptroller of

the Currency Fees. In that rule, the OCC

defined a ‘‘non-lead bank’’ as a national

bank that is not the lead bank in a bank

holding company that owns more than

one national bank, and defined ‘‘lead

bank’’ as the largest national bank

controlled by a bank holding company,

based on a comparison of total assets

held by each national bank as reported

in each bank’s Consolidated Report of

Condition and Income filed for the

quarter immediately preceding the

payment of a semiannual assessment.

The OCC defined ‘‘bank holding

company’’ by adopting the definition of

that term used in section 2 of the Bank

Holding Company Act of 1956 (BHC

Act) (12 U.S.C. 1841(a)(1)).

The 1996 Interim Rule also removed

the provisions in part 8 prohibiting the

proration of assessments. Prior to

adoption of that rule, part 8 provided

that each bank and Federal branch or

agency subject to the OCC’s jurisdiction

must pay the full amount of its

assessment for the next six-month

period, ‘‘without proration for any

reason.’’ See former 12 CFR 8.2 (a)(5)

and (b). This prohibition is inconsistent

with a reduction in non-lead banks’

assessments, because the reduction is

effectively a proration of these banks’

assessments. Accordingly, the OCC

removed the prohibition against

prorations.

The OCC received two comments in

response to the 1996 Interim Rule, both

of which supported the changes.

However, one commenter expressed its

concern that the discount could unfairly

benefit larger banks, which, in the

commenter’s view, tend to be structured

in multi-bank holding companies more

often than are smaller banks. The OCC

notes that the discount applies equally

to all banks, regardless of size, that are

non-lead banks in a bank holding

company, and, in fact, many community

banks have benefitted from the Interim

Rule.

The other commenter, which owns

several national banks that are credit

card banks, suggested that the rule be

further amended to cover institutions

that are chartered and supervised by the

OCC as national banks but that are

excluded from the definition of ‘‘bank’’

under section 2(c)(2)(F) of the BHC Act

(12 U.S.C. 1841(c)(2)(F)). This

commenter noted that the 1996 Interim

Rule, by adopting the definition of

‘‘bank holding company’’ used in the

BHC Act, technically precludes non-
Federal Register / Vol. 62, No. 203 / Tuesday, October 21, 1997 / Rules and Regulations 54745

2The OCC received a similar request in

connection with Federal branches and agencies of

foreign banks, although the request was not

submitted in a comment to the 1996 interim rule.

lead banks from receiving an assessment

reduction if the institutions are not

‘‘banks’’ under the BHC Act, because

their holding companies then are not

‘‘bank holding companies’’ under the

BHC Act. The commenter opined that

the same economies of scale are realized

when supervising non-lead credit card

banks, and requested that the OCC

clarify that the assessment reduction

applies to all non-lead national banks,

regardless of whether the parent is a

‘‘bank holding company’’ under the

BHC Act. 2

The OCC agrees with this commenter.

The same economies realized when

supervising non-lead banks owned by

bank holding companies are available

when supervising non-lead banks that

would qualify for the reduction but for

the fact that the parent is not a ‘‘bank

holding company’’ under the BHC Act.

This conclusion also applies to non-lead

Federal branches and agencies of foreign

banks, whose level of supervision,

enforcement, and licensing are

increasingly tied to the condition of the

foreign bank. Consistent with this

conclusion, the OCC has issued letters

in which the OCC applied the

assessment reduction to (a) non-lead

banks owned by a company that is not

a ‘‘bank holding company’’ under the

BHC Act and (b) non-lead Federal

branches and agencies of a foreign bank.

In light of the comments received, the

OCC is adopting in final form the

changes contained in the 1996 Interim

Rule, as amended to reflect the

interpretations noted above. Consistent

with these interpretations, the OCC is

amending § 8.2(a)(6)(ii) (A)–(C) so that

‘‘non-lead bank’’ includes a national

bank that is not the largest national bank

controlled by a company (as opposed to

a bank holding company) and is

adopting a new § 8.2(b)(4) to apply the

assessment reduction to non-lead

Federal branches and agencies of foreign

banks. Finally, the OCC also has

adopted a technical change to § 8.2(b)(3)

to use the term ‘‘Call Report’’ (in lieu of

‘‘Report of Condition’’) that is used

elsewhere in part 8.

Immediately Effective Rule

This final rule is effective upon

publication in the Federal Register. The

OCC has determined that the rule may

be immediately effective pursuant to 5

U.S.C. 553(d) (1) and (3). By enabling

the OCC to reduce assessments, the

rulemaking will have the effect of

granting a partial exemption from the

assessment obligations that otherwise

would apply to non-lead entities.

Accordingly, the rule may be

immediately effective under 5 U.S.C.

553(d)(1). There also is good cause to

dispense with a delayed effective date

under 5 U.S.C. 553(d)(3), namely, that

the rule needs to be effective in time to

ensure that reductions will be reflected

in the Notice of Comptroller of the

Currency Fees that will be mailed in

early December to all national banks

and Federal branches and agencies. The

OCC will continue to provide a

semiannual Assessment Notice to each

institution, and each national bank and

Federal branch or agency will continue

to have at least 30 days following

receipt of a semiannual assessment

notice in which to pay the assessment.

Regulatory Flexibility Act

Pursuant to section 605(b) of the

Regulatory Flexibility Act (RFA) (5

U.S.C. 605(b)), the regulatory flexibility

analysis otherwise required under

section 604 of the RFA (5 U.S.C. 604) 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 along

with its rule.

Pursuant to section 605(b) of the RFA,

the OCC hereby certifies that this final

rule will not have a significant

economic impact on a substantial

number of small entities. The final rule

does not impose any new reporting or

recordkeeping requirement. Moreover,

to the extent that it has any impact on

national banks, the impact will be to

lower assessments for non-lead national

banks and non-lead Federal branches

and agencies of foreign banks and to

eliminate a separate assessment for trust

and other examinations and

investigations. Accordingly, a regulatory

flexibility analysis under section 604 of

the RFA is not required.

Executive Order 12866

The OCC has determined that this

final rule is not a significant regulatory

action under Executive Order 12866.

Unfunded Mandates Reform Act of

1995

Section 202 of the Unfunded

Mandates Reform Act of 1995, Pub. L.

104–4 (2 U.S.C. 1532) (Unfunded

Mandates Act), requires that an agency

prepare a budgetary impact statement

before promulgating any rule likely to

result in a Federal mandate that may

result in the expenditure by State, local,

and tribal governments, in the aggregate,

or by the private sector of $100 million

or more in any one year. If a budgetary

impact statement is required, section

205 of the Unfunded Mandates Act also

requires an agency to identify and

consider a reasonable number of

regulatory alternatives before

promulgating a rule. The OCC has

determined that the final rule will not

result in expenditures by State, local,

and tribal governments, or by the

private sector, of $100 million or more

in any one year. Accordingly, the OCC

has not prepared a budgetary impact

statement or specifically addressed any

regulatory alternatives. As discussed in

the preamble, the final rule has the

effect of reducing the assessments and

fees paid by national banks.

List of Subjects in 12 CFR Part 8

Assessments, Fees, National banks.

Authority and Issuance

For the reasons set forth in the

preamble, part 8 of chapter I of title 12

of the Code of Federal Regulations is

amended as follows:

PART 8—ASSESSMENT OF FEES;

NATIONAL BANKS; DISTRICT OF

COLUMBIA BANKS

1. The authority citation for part 8 is

revised to read as follows:

Authority: 12 U.S.C. 93a, 481, 482, 3102,

and 3108; 15 U.S.C. 78c and 78l; and 26 D.C.

Code 102.

2. The interim rule amending 12 CFR

part 8 that was published at 59 FR

59640 on November 18, 1994 is adopted

as a final rule without change.

3. Section 8.2 is amended by revising

paragraphs (a)(6) and (b)(3) and adding

paragraph (b)(4) to read as follows:

§ 8.2 Semiannual assessment.

(a) * * *

(6)(i) Notwithstanding any other

provision of this part, the OCC may

reduce the semiannual assessment for

each non-lead bank by a percentage that

it will specify in the Notice of

Comptroller of the Currency Fees

described in § 8.8.

(ii) For purposes of this paragraph

(a)(6):

(A) Lead bank means the largest

national bank controlled by a company,

based on a comparison of the total assets

held by each national bank controlled

by that company as reported in each

bank’s Call Report filed for the quarter

immediately preceding the payment of a

semiannual assessment.

(B) Non-lead bank means a national

bank that is not the lead bank controlled

by a company that controls two or more

national banks.

(C) Control and company have the

same meanings as these terms have in
54746 Federal Register / Vol. 62, No. 203 / Tuesday, October 21, 1997 / Rules and Regulations

sections 2(a)(2) and 2(b), respectively, of

the Bank Holding Company Act of 1956

(12 U.S.C. 1841 (a)(2) and (b)).

(b) * * *

(3) Each semiannual assessment of

each Federal branch or Federal agency

is based upon the total assets shown in

the Call Report most recently preceding

the payment date. The assessment shall

be computed in the manner and on the

form provided by the OCC. Each Federal

branch or Federal agency subject to the

jurisdiction of the OCC on the date of

the second and fourth Call Reports is

subject to the full assessment for the

next six month period.

(4)(i) Notwithstanding any other

provision of this part, the OCC may

reduce the semiannual assessment for

each non-lead Federal branch or agency

by an amount that it will specify in the

Notice of Comptroller of the Currency

Fees described in § 8.8.

(ii) For purposes of this paragraph

(b)(4):

(A) Lead Federal branch or agency

means the largest Federal branch or

agency of a foreign bank, based on a

comparison of the total assets held by

each Federal branch or agency of that

foreign bank as reported in each Federal

branch’s or agency’s Call Report filed for

the quarter immediately preceding the

payment of a semiannual assessment.

(B) Non-lead Federal branch or

agency means a Federal branch or

Federal agency that is not the lead

Federal branch or agency of a foreign

bank that controls two or more Federal

branches or agencies.

Dated: October 15, 1997.

Eugene A. Ludwig,

Comptroller of the Currency.

[FR Doc. 97–27828 Filed 10–20–97; 8:45 am]

BILLING CODE 4810–33–P