Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations 55759

1 62 FR 15626 (April 2, 1997). (Notice of Proposed

Rulemaking on Deposits and Advance Notice of

Proposed Rulemaking on Electronic Banking). OTS

has separately published a proposed rule on

Electronic Banking. 62 FR 51817 (October 3, 1997).

2Regulation D addresses the Reserve

Requirements of Depository Institutions. 12 CFR

part 204 (1997). Regulation DD implements the

Truth in Savings Act (TISA). 12 CFR part 230

(1997).

paragraph (g) heading, the word

‘‘Establishment’’ is corrected to read

‘‘Plant’’.

* * * * *

§ 381.145 [Corrected]

Paragraph 1. On page 45026, in the

third column, the § 381.145 heading is

corrected to read ‘‘Poultry products and

other articles entering or at official

establishments; examination and other

requirements.’’

Paragraph 2. On page 45027, in the

first column, in § 381.145, the paragraph

(g) heading is corrected to read

‘‘Termination of Quality Control

Systems’’.

* * * * *

Dated: October 10, 1997.

Thomas J. Billy,

Administrator.

[FR Doc. 97–27926 Filed 10–21–97; 8:45 am]

BILLING CODE 3410–10–P

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 506, 545, 556, 557, 561,

563, 563g

[No. 97–108]

RIN 1550–AB00

Deposits

AGENCY: Office of Thrift Supervision,

Treasury.

ACTION: Final rule.

SUMMARY: The Office of Thrift

Supervision (OTS) is issuing a final rule

streamlining its deposit-related

regulations. The final rule will eliminate

duplicative, overlapping, and outdated

regulations, and those that micromanage

savings associations. The final rule also

codifies the OTS position on federal

preemption of state laws affecting

deposit-related activities.

EFFECTIVE DATE: January 1, 1998.

FOR FURTHER INFORMATION CONTACT:

Edward J. O’Connell, III, Project

Manager, (202) 906–5694, Supervision

Policy; Robyn H. Dennis, Manager,

Thrift Policy, (202) 906–5751; Christine

Harrington, Counsel (Banking and

Finance), (202) 906–7957; or Karen

Osterloh, Assistant Chief Counsel, (202)

906-6639, Regulations and Legislation

Division, Chief Counsel’s Office, Office

of Thrift Supervision, 1700 G Street,

NW., Washington, D.C. 20552.

SUPPLEMENTARY INFORMATION:

I. Background of the Proposal

OTS published a notice of proposed

rulemaking (NPR) on April 2, 1997

proposing to amend its deposit-related

regulations.1 The NPR proposed to

streamline the regulations by

eliminating duplicative, overlapping,

and outdated regulations, and those that

micromanage savings associations.

Additionally, OTS sought to codify its

long-standing position on federal

preemption of state laws affecting

deposit-related activities. Finally, OTS

proposed to remove regulations that

merely restate existing statutory

authority or universally recognized

incidental deposit-related powers.

With these goals in mind, OTS

proposed to consolidate all remaining

deposit-related regulations in a new part

557. OTS predicted that this change

would make deposit-related regulations

easier to locate and follow. OTS issued

the NPR pursuant to the Regulatory

Reinvention Initiative of the Vice

President’s National Performance

Review and section 303 of the Riegle

Community Development and

Regulatory Improvement Act of 1994.

II. General Discussion of the Comments

Eight commenters responded to the

NPR including five federal thrift

institutions and three trade associations.

The commenters generally supported

the proposal to remove unnecessary,

duplicative, or outdated regulations.

They specifically endorsed the removal

of OTS regulations duplicating areas

covered by the Federal Reserve Board’s

(FRB) Regulation D and Regulation DD.2

Commenters also generally endorsed the

proposed consolidation of the remaining

deposit-related regulations at new part

557. Comments addressing specific

regulations are discussed in the sectionby-section analysis below.

III. Section-by-Section Analysis

A. Disposition of Existing DepositRelated Regulations

The OTS proposed to delete certain

existing regulations, and consolidate the

remaining relevant provisions in a new

part. Sections proposed for deletion

included: § 545.10 (Savings Deposits or

Shares); § 545.11 (Issuance of Accounts);

§ 545.12 (Demand Deposit Accounts);

§ 545.13 (Account Records); § 545.14

(Determination and Distribution of

Earnings); § 556.12 (Deposit Assurance

of Direct Deposit of Social Security

Payments); § 563.2 (Simple Form of

Certificate; Passbooks); § 563.3 (Long

Form of Membership Certificate);

§ 563.6 (Payment of Accounts on

Demand); § 563.7 (Fixed-Term

Accounts); § 563.9 (Eurodollar

Deposits); and § 563.10 (Earnings-Based

Accounts).

OTS received comments supporting

the deletion of most of the cited

sections. These sections are deleted as

proposed. Comments opposing the

deletion of specific sections, however,

are discussed below. Comments

received on existing provisions that

were retained and incorporated into the

new part 557 are discussed in

connection with the relevant section

under that part. A derivation chart has

been provided at the end of this

preamble.

OTS emphasizes that the changes

made in this final rule are not intended

to reduce, in any way, the scope of

federal thrifts’ authority to conduct

deposit activities.

Section 545.12 Demand Deposit

Accounts. Existing § 545.12(b) prohibits

a federal association from paying

interest on demand deposits and

specifically states that finders’ fees, as

defined in § 561.16(b), are not interest.

OTS proposed to delete this paragraph

and to include the finders’ fees

exception in the Thrift Activities

Handbook (‘‘Handbook’’). One

commenter supported retaining the

finders’ fee provisions in OTS

regulations. This commenter argued that

the Handbook would not override the

statutory prohibition on interest on

demand deposits at 12 U.S.C.

1464(b)(1)(B)(i), and feared that the

Handbook may not be issued until after

the effective date of the new deposit

regulation. Another commenter

supported deleting the finders’ fee

provision.

OTS regulations at § 561.16 define

‘‘demand accounts’’ for the purposes of

12 U.S.C. 1464(b) and the implementing

regulations. This definition specifically

states that fees paid by a savings

association to a person who introduces

a depositor to the savings association

shall not be deemed an interest

payment, if the fee meets certain

criteria. OTS believes this definition is

sufficient to qualify for the statutory

prohibition. Accordingly, the final rule

deletes § 545.12(b) as proposed.

Like section 5 of the HOLA, section

11 of the Banking Act of 1933 (12 U.S.C.

371a) and section 18(g) of the Federal

Deposit Insurance Act (12 U.S.C.

1828(g)) prohibit the payment of interest

on demand deposits. The Federal

Reserve Board (FRB) and the Federal

Deposit Insurance Corporation (FDIC)
55760 Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations

3For example, one bank was prevented from

offering incentives to existing demand customers

who signed up for an ATM card because the

incentives did not coincide with opening, adding

to, or renewing an account. Similarly, another bank

was prevented from offering incentives to

encourage deposit customers to use an ATM card

more than three times per month because premiums

from the use of a debit card, which reduce the

amount on deposit, would have been interest on the

deposit under the FRB and FDIC interpretive

guidance.

4 62 FR 26736 (May 15, 1997); 62 FR 40731 (July

30, 1997).

5 12 CFR part 204 (1997).

6 12 CFR 204.2(c)(1) n.1 (1997).

7See 12 CFR 204.2(c)(1) (1997).

8 12 CFR 204.2(c)(1)(i), n.1 (1997). 9 12 U.S.C. 1464(b)(1)(A).

have issued regulations implementing

this prohibition at 12 CFR part 217

(1997) and 12 CFR part 329 (1997), and

have issued interpretive rules describing

when premiums will not be considered

to be interest within the scope of this

prohibition. See 12 CFR 217.101 (1997)

and 12 CFR 329.103 (1997). These

interpretations permit premiums to be

paid, inter alia, if the premium is given

only when the depositor opens a new

account, or adds to, or renews an

existing account. As a result of this

guidance, FRB- and FDIC-regulated

institutions were constrained from

offering incentives to use their products,

including the use of new services such

as automated teller machines (ATM) or

debit cards.3

To address this issue, FRB and the

FDIC recently revised their interpretive

guidance to permit regulated

institutions to pay any premium that is

not, directly or indirectly, related to or

dependent on the balance in a demand

deposit account and the duration of the

account balance.4 While OTS has no

interpretive rule specifically addressing

premiums, OTS agrees that premiums

under such circumstances are not

interest and will generally follow the

FRB and FDIC interpretations on this

point.

Section 556.12 Deposit Assurance of

Direct Deposit of Social Security

Payments. The OTS policy statement at

§ 556.12 states that a federal association

has implied powers to provide deposit

assurance in connection with the Social

Security Administration’s direct deposit

program. This policy statement also

includes advice on safeguards and

controls required to address the risks of

the direct deposit program. OTS

proposed to delete the policy statement.

Two commenters supported this

deletion, but noted that additional

regulatory guidance would be helpful to

address such issues as safeguards and

controls, and compliance with the FRB’s

Regulation E (Electronic Funds

Transfers).5 The OTS Compliance

Handbook addresses Regulation E

matters in section 330, Electronic Funds

Transfer. OTS is reviewing whether the

issuance of additional guidance is

necessary.

Section 563.7 Fixed-Term Accounts

(Term Accounts). Existing § 563.7(d)

states that a certificate account may

prohibit withdrawal prior to maturity,

except under circumstances set forth in

the certificate. This paragraph further

provides that, in case of the

accountholder’s death or incompetence,

a savings association may not prohibit

early withdrawal and may not impose

an early withdrawal penalty. OTS

proposed to delete this paragraph

because it duplicates Regulation D.6

Two commenters specifically

addressed this paragraph. One

supported deletion. The other argued

that the section is not duplicative. This

commenter argued that Regulation D

neither authorizes an institution to

prohibit early withdrawal nor forbids an

institution from prohibiting early

withdrawal. The commenter noted that

§ 563.7(d) correctly allows the matter to

be addressed by the contract between

the savings association and its

depositors.

Unless restricted by statute or

regulation, a federal savings association

needs no specific authorization to enter

into agreements establishing maturity

dates for accounts and prohibiting early

withdrawal under circumstances

specified in those agreements.

Regulation D does, however, limit this

broad authority. For example, to meet

the definition of time deposit under

Regulation D, an institution must limit

the depositor’s right to withdraw his

account unless the deposit is subject to

a specified penalty for early

withdrawal.7

The commenter correctly noted that,

unlike existing § 563.7, Regulation D

does not require a savings association to

permit early withdrawal, subject to

penalties, upon the death or

incompetency of the accountholder.

Rather, Regulation D merely permits the

savings association to take such action

under these and other circumstances.8

However, in the interest of uniformity

with other insured institutions, the OTS

had determined that it is not necessary

to impose this additional requirement

on federal savings associations.

Therefore, OTS concludes that existing

§ 563.7 may be deleted in this final rule.

Section 563.9 Eurodollar Deposits.

Existing § 563.9 addresses the issuance

of Eurodollar deposits. OTS proposed to

delete this provision as unnecessary.

Three commenters supported deleting

this provision. One of these

commenters, however, suggested that

OTS reiterate, either in a regulation or

the preamble, that savings associations

have authority to accept Eurodollar

deposits under their general authority to

accept deposits. OTS has deleted this

regulation as proposed, but notes that

federal savings associations continue to

be permitted to issue Eurodollar

certificates as part of their deposit

activities authorized by the HOLA.9

B. Proposed Part 557

OTS proposed to adopt a new part

557, which would include all of the

agency’s deposit-related regulations.

Although OTS proposed part 557 in a

traditional format, this final rule uses

the plain language drafting techniques

promoted by the Vice President’s

National Performance Review Initiative

and new guidance in the Federal

Register Document Drafting Handbook

(January 1997 edition). The primary goal

of plain language drafting is to make

regulations more readily

understandable. Plain language drafting

emphasizes informative headings (often

written as a question), non-technical

language (including the use of ‘‘you’’),

and sentences in the active voice.

Although commenters did not have an

opportunity to comment on the plain

language format prior to its use in this

final rule, OTS believes that the benefits

of the plain language format justify its

use. The substance of the proposed

regulation did not change as a result of

the plain language drafting. OTS

welcomes comments on the format and

suggestions on how to improve this

format.

Subpart A—General

Section 557.1 What does this part

do? New § 557.1 states that part 557

applies to savings associations’ deposit

activities. Specifically, subpart B

applies to federal savings associations,

while subpart C applies to both federal

and state chartered savings associations.

Subpart B—Deposit Activities of Federal

Savings Associations

Section 557.10 What authorities

govern the issuance of deposit accounts

by a federal savings association?

Proposed § 557.1 stated that a federal

savings association may raise funds

through accounts and may issue

evidence of accounts under section

5(b)(1) of the HOLA, by the terms of its

charter, and by part 557.

OTS received two comments on the

proposed section. One commenter

feared that savings association

personnel may not realize that
Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations 55761

10 12 U.S.C. 1464(b)(1)(A).

11 12 CFR 552.3 and 544.1 (1997).

12For a discussion of general preemption

principles applicable to the operations of federal

thrifts, see 61 FR 50951 at 50965–50967 (September

30, 1996).

13Other commenters made suggestions that

would merely add greater specificity to the

proposed list of preempted laws. Commenters

suggested adding state laws that address particular

special purpose savings services, specific kinds of

service charges or fees, or particular aspects of state

funds availability laws. The OTS believes that its

rule is sufficiently clear, and has not made these

changes.

14To the contrary, the preemption rules are based

on the premise that any state law that affects the

deposit activities of federal thrifts is preempted

unless it clearly falls within the parameters of

§ 557.13.

15See e.g., OTS Op. Chief Counsel. (December 14,

1994) and opinions and case law cited therein.

16OTS Op. Chief Counsel (January 18, 1996) at 3;

FHLBB Op. Dep. Chief Counsel (May 24, 1984).

17OTS Op. Chief Counsel (July 8, 1992).

Regulation D is applicable. This

commenter suggested that the final rule

specifically cite Regulation D. OTS

believes this suggestion is helpful and

has added a reference to Regulation D

and Regulation DD in the new § 557.10.

Another commenter suggested

deleting the reference to authority

granted under the association’s charter.

The reference to the charter was

included to maintain consistency with

section 5(b) of the HOLA which

authorizes a federal savings association

to accept deposits ‘‘[s]ubject to the terms

of its charter and regulations of the

[OTS].’’ 10 To the extent that the

commenter feared that retention of this

reference would require charter

amendments whenever a new deposit

product is offered, the OTS notes that

charters are broad authorizing

documents that typically do not

specifically address unique deposit

products. The model federal stock and

mutual charters, for example, contain no

restrictions on permissible deposit

products.11

Section 557.11 To what extent does

federal law preempt state depositrelated law? Section 557.11 sets forth

OTS’s long-standing position on federal

preemption of state laws purporting to

affect deposit-related activities of

federal savings associations. It explicitly

states our intent to occupy the entire

field of deposit-related regulations for

federal savings associations, and sets

forth the statutory and regulatory bases

for preemption. See proposed § 557.2(a).

One commenter opposed the

preemption provision as an

infringement on the dual banking

system. OTS disagrees. Deposit-taking is

one of the most important functions of

a savings association, and preemption is

essential to OTS regulation of these

activities. Section 557.11 merely restates

long-standing preemption principles

applicable to federal savings

associations’ operations, as developed

in a long line of court cases and legal

opinions issued by OTS and the

FHLBB.12

This final rule should not be

construed as evidencing, in any way, an

intent by OTS to change its longstanding position on preemption.

Moreover, whether OTS continues to

have a specific regulation addressing a

particular deposit activity or chooses to

remove a federal regulation to

streamline its regulations and reduce

regulatory burden, OTS still intends to

occupy the entire field of regulation of

the deposit activities of federal savings

associations.

One commenter argued that all

preemption questions should be

decided on a case-by-case basis, rather

than by regulation. Sections 557.11

through 557.13 of the final rule set forth

only well-settled principles of

preemption and examples of preempted

and non-preempted state laws. These

are derived from statutory and

regulatory authority, as interpreted in

case law and prior FHLBB and OTS

case-by-case determinations. While OTS

will continue to address new questions

by issuing interpretive guidance on a

case-by-case basis, OTS is hopeful that

the increased clarity and specificity of

the final rule will reduce confusion and

the need for frequent preemption

inquiries to OTS.

Section 557.12 What are some

examples of preempted state laws

affecting deposits? Section 557.12

(proposed § 557.2(b)) contains an

illustrative list of preempted state laws.

Various commenters suggested

additions to the list of preempted state

laws. Some would expand the list to

reference new types of preempted state

laws (e.g., state laws addressing

abandoned property, safe deposit boxes,

licensing of deposit operations, and

reporting requirements).13

Except as discussed below, OTS has

not revised § 557.12 to add new items to

the list of preempted state laws. As the

section heading to this final rule

emphasizes, the list of preempted state

laws is not intended to be exhaustive.

Failure to mention a particular state law

that affects deposit-taking should not be

deemed to constitute evidence of any

intent to permit that type of state law to

apply.14 As state laws are addressed in

future case law and agency opinions,

OTS will consider appropriate revisions

to this regulation.

OTS has decided to revise the

regulation to include one suggested

addition. On numerous occasions, the

OTS, FHLBB and the courts, have

concluded that states may not impose

licensing or registration requirements on

federal savings associations.15

Accordingly, state licensing and

registration laws have been added to the

list in § 557.12.

One additional type of state law

merits discussion—state escheat laws.

Some commenters argued that escheat

laws should be added to the list of

preempted state laws. Other

commenters suggested that these laws

should be added to the list of laws that

are not preempted. This agency has

concluded in prior opinions that federal

law does not preempt state laws

requiring a federal savings association to

remit the balance of an abandoned

account to a state at a designated time.

Additionally, the agency has opined

that states may review the records of, or

obtain reports from, a federal savings

association only in very limited

circumstances, including determining

whether the federal savings association

has complied with the escheat law.16 On

the other hand, certain other laws (e.g.,

state laws prohibiting a savings

association from charging any fees for

lack of activity during the designated

escheat period) are subject to

preemption.17 Because some aspects of

state escheat laws are preempted and

other aspects are not, OTS declines to

address these laws in the final

regulation.

Section 557.13 What state laws

affecting deposits are not preempted?

Section 557.13 describes which state

laws are not preempted. Specifically,

this section states that OTS has not

preempted certain types of laws to the

extent that the laws only incidentally

affect the deposit-related activities of

federal savings associations or are

otherwise consistent with the purposes

of § 557.11. State laws that are not

preempted include: Contract and

commercial law, tort law, and criminal

law. In addition, OTS will not preempt

any other state law if OTS, upon review,

finds that the law furthers a vital state

interest and either has only an

incidental effect on deposit-related

activities or is not otherwise contrary to

the purposes of § 557.11.

One commenter suggested that OTS

should clarify that the phrase

‘‘incidental effect on deposit-related

activities’’ requires that the state law

must be directed at businesses in

general, rather than at deposit-related

activities in particular. Certainly, many

state laws directed at businesses in

general will not be preempted.
55762 Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations

18See 61 FR 50951, 50966–50967 (September 30,

1996).

19 12 U.S.C. 1461(b)(1)(A). 20 12 U.S.C. 1464(b)(1)(A).

21 62 FR 51817 (October 3, 1997).

22 51 FR 10810 at 10812 (March 31, 1986).

23See 12 CFR 204.2(d)(2) (1997).

However, the focus of this aspect of the

preemption inquiry is the effect of a

state law on federal associations, not on

how many other businesses or

industries the law may also affect.

Another commenter suggested that

OTS should employ a presumption in

favor of preempting state laws. When

confronted by interpretative questions

under the final rule, OTS will follow the

same analytical format that it described

in the preemption discussion to the

recently issued lending regulation.18 To

determine whether a state law is

preempted, the first step is to ascertain

whether the law in question is of the

type listed in § 557.12 as an example of

preempted law. If it is, the analysis ends

there; the law is preempted. If the law

is not covered by § 557.12, the next

question is whether the law affects

deposit-taking. If so, then, in accordance

with § 557.11, the presumption arises

that the law is preempted. This

presumption can be reversed only if the

law can clearly be shown to fit within

the confines of § 557.13. For these

purposes, § 557.13 is intended to be

interpreted narrowly. Any doubt should

be resolved in favor of preemption.

Section 557.14 What interest rate

may I pay on savings accounts? New

§ 557.14 addresses interest payments on

savings accounts. The proposed rule,

entitled ‘‘interest and earnings,’’ stated

that a savings association may pay

interest on a savings account, whether

in the form of a deposit or share, at any

rate or anticipated rate of return

determined when the account is

accepted and as provided in the

association’s charter and bylaws and the

terms of the account. See proposed

§ 557.3.

One commenter suggested that the

proposed rule should be revised to

delete the outdated term ‘‘share’’ and

that the title of any new section should

not include the term ‘‘earnings.’’ The

term ‘‘share’’ is drawn from the HOLA.19

OTS will continue to use this term in

the final regulation to keep the

regulation consistent with the statute.

OTS dropped the reference to

‘‘earnings’’ since this term is not used in

the regulation text.

One commenter noted that modern

charters and bylaws do not address

interest payments on savings accounts

and suggested the final rule on interest

should delete the references to these

documents. Again, the reference to the

association’s charter is based on the

statute, which authorizes a federal

savings association to accept deposits

subject to the terms of its charter.20 In

order to maintain consistency with this

statutory authority, this reference is

retained. OTS agrees that the reference

to bylaws is unnecessary, and has

deleted it from the final rule.

Another commenter suggested that

the regulation should state that all

interest payments must be consistent

with the TISA and Regulation DD,

which implements TISA. This change is

unnecessary because OTS has included

a citation to Regulation DD in § 557.10,

which addresses the authorities

governing federal savings associations’

issuance of deposit accounts.

One commenter suggested that the

proposed rule should be revised to

delete the outdated term ‘‘anticipated

rate of return.’’ Share type mutual

associations use this term in making

earnings distributions to account

holders. Additionally, as discussed

under § 557.15, rates may vary and may

not be known with certainty when an

account is opened. OTS believes the

term anticipated rate of return is

appropriate, and has retained this term

in the final regulation.

The proposed regulation would have

allowed federal savings associations to

pay fixed rates on savings accounts, or

pay rates that vary according to a

schedule, index, or formula specified

when the account is accepted. See

proposed § 557.3.

One commenter was concerned that

the proposed text would unnecessarily

disallow ‘‘bump-rate’’ certificates of

deposit. Bump-rate accounts provide the

depositor with the option of changing

the rate during the certificate’s term.

OTS did not intend to disallow ‘‘bumprates.’’ Therefore, the final regulation

does not require a federal association to

fix interest rates on savings accounts

when it accepts the accounts. Rather,

the final rule requires that the schedule,

index, or formula be specified in the

account’s terms.

Section 557.15 Who owns a deposit

account? Section 557.15 provides that a

federal association may treat the

account holder of record as the owner,

regardless of contrary notice, until the

account is transferred on the

association’s records. See proposed

§ 557.4(b). OTS received one comment

in support of the proposed rule.

Accordingly, OTS adopts this provision

without substantive change.

Subpart C—Deposit Activities of All

Savings Associations

Section 557.20 What records should

I maintain on deposit activities? Section

557.20 states that federal and state

chartered savings associations should

establish and maintain deposit

documentation practices and records

that demonstrate appropriate

administration and monitoring of its

deposit-related activities. These records

should adequately evidence ownership,

balances, and all transactions for each

account. See proposed § 557.4(a). This

section replaces the more specific

deposit recordkeeping requirements

contained in the existing regulations.

One commenter suggested that the

recordkeeping requirements should

apply only to federal savings

associations. OTS specifically intends

the recordkeeping requirements to apply

to both federal and state chartered

savings associations. To make this

distinction clear, OTS has included this

provision in subpart C which governs

the deposit activities of all associations.

Another commenter suggested that

the regulation should specifically state

that electronic records are acceptable.

OTS has recently issued a proposed

regulation addressing the electronic

operations of federal savings

associations.21 This regulation would

permit federal savings associations to

use electronic means and facilities to

perform any authorized function,

including recordkeeping. To clarify that

electronic recordkeeping is available,

the final rule states that savings

associations may maintain records in

any format consistent with standard

business practices.

C. Related Regulations

Several commenters addressed

regulations that were not covered by the

NPR. For example, one commenter

suggested that OTS delete § 561.28

(a)(2), (a)(3) and (b), which defines

money market deposit accounts. This

commenter argued that § 561.28(a)(2)(i)

which authorizes no more than six

transfers per calendar month or

statement cycle, prohibits thrifts from

offering money market deposit accounts

with debit cards. The commenter

believed that this restriction and the

other restrictions at § 561.28 are

unnecessary and may be deleted.

The cited restrictions were originally

imposed to preserve uniform treatment

of money market accounts between

Federal Reserve System members and

insured institutions, 22 and are based on

the definitions contained in the FRB’s

Regulation D. 23 Even if the restrictions

contained in 12 CFR 561.28 were

removed, savings associations would

still be subject to such restrictions by
Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations 55763

24 12 CFR 561.16, 561.42, 563g.1.

Regulation D. Moreover, OTS notes that

the FRB recently considered and

rejected a proposal to increase the

number of transfers permitted on

corporate money market accounts.

While one of the purposes of this

rulemaking was to remove OTS

regulations that duplicate areas covered

by the FRB’s Regulation D, the

regulatory definitions applicable to

deposits at 12 CFR parts 541 and 561

were not proposed for revision in the

proposed rule. Accordingly, OTS has

left these provisions unchanged. The

future regulatory restructuring

rulemaking may review these

definitions to determine if they should

be modified or removed.

Several existing OTS regulations

contain cross-references to provisions

that are being removed. 24 Consequently,

technical revisions to remove these

cross-references are included in this

rule.

One commenter suggested that OTS

give thrifts parity with national banks in

connection with selling annuities and

insurance. Another commenter

suggested that the equal housing lender

logo should be required only for

advertisements for residential mortgage

loans, rather than in all advertisements.

OTS will review these regulations for

possible revision when they are

scheduled for reconsideration.

IV. Executive Order 12866

The Director of OTS has determined

that this final rule does not constitute a

‘‘significant regulatory action’’ for the

purposes of Executive Order 12866.

V. Unfunded Mandates Act of 1995

Section 202 of the Unfunded

Mandates Reform Act of 1995, Pub. L.

104–4 (Unfunded Mandates Act),

requires that an agency 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. 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.

This final rule simplifies existing

procedures and reduces regulatory

burden. OTS has determined that the

final rule will not result in expenditures

by state, local, or tribal governments or

by the private sector of $100 million or

more. Accordingly, this rulemaking is

not subject to section 202 of the

Unfunded Mandates Act.

VI. Regulatory Flexibility Act Analysis

Pursuant to section 605(b) of the

Regulatory Flexibility Act, OTS certifies

that the final rule does not have a

significant impact on a substantial

number of small entities. As discussed

in the preamble, this final rule does not

impose any additional burdens or

requirements on small entities. Rather,

the final rule reduces several paperwork

and other burdens on all savings

associations.

VII. Paperwork Reduction Act

The reporting and recordkeeping

requirements contained in this final rule

have been submitted to and approved by

the Office of Management and Budget in

accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C.

3507(d)) under OMB control No. 1550–

0092. Comments on all aspects of this

information collection should be sent to

the Office of Management and Budget,

Paperwork Reduction Project (1550),

Washington, D.C. 20503, with copies to

the OTS, 1700 G Street, N.W.,

Washington, D.C. 20552.

The recordkeeping requirements

contained in this final rule are found at

12 CFR 557.20. The reporting

requirements are found in the Federal

Reserve Board’s Regulation DD, 12 CFR

part 230. In part 557, OTS relies on the

disclosure requirements applicable to

savings associations under Regulation

DD. OTS needs the information to

supervise savings associations and to

develop regulatory policy. The likely

respondents/recordkeepers are OTSregulated savings associations.

Records are to be maintained for the

period of time the account is open, plus

three years.

Respondents/recordkeepers are not

required to respond to this collection of

information unless it displays a

currently valid OMB control number.

VIII. Disposition of Existing Rules

Original provision New provision Comment

545.10 ............................................................................ ........................................................................................ Removed.

545.11 (a) & (c) .............................................................. ........................................................................................ Removed.

545.11(b) ........................................................................ 557.10 ............................................................................ Redesignated/modified.

545.12 ............................................................................ ........................................................................................ Removed.

545.13 (a) & (b)(2) ......................................................... 557.20 ............................................................................ Redesignated/modified.

545.13(b)(1) ................................................................... 557.15 ............................................................................ Redesignated/modified.

545.14(a) ........................................................................ 557.14 ............................................................................ Redesignated/modified.

545.14(b) ........................................................................ 557.14 ............................................................................ Redesignated/modified.

545.14(c) ........................................................................ ........................................................................................ Removed.

556.12 ............................................................................ ........................................................................................ Removed.

563.2 .............................................................................. ........................................................................................ Removed.

563.3 .............................................................................. ........................................................................................ Removed.

563.6 .............................................................................. ........................................................................................ Removed.

563.7 (a), (c) & (d) ......................................................... ........................................................................................ Removed.

563.7(b) .......................................................................... 557.14 ............................................................................ Redesignated/modified.

563.9 .............................................................................. ........................................................................................ Removed.

563.10 ............................................................................ ........................................................................................ Removed.

List of Subjects

12 CFR Part 506

Reporting and recordkeeping

requirements.

12 CFR Part 545

Accounting, Consumer protection,

Credit, Electronic funds transfers,

Investments, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR 556 and 561

Savings associations.
55764 Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations

12 CFR Part 557

Consumer protection, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR Part 563

Accounting, Advertising, Crime,

Currency, Investments, Reporting and

recordkeeping requirements, Savings

associations, Securities, Surety bonds.

12 CFR 563g

Reporting and recordkeeping

requirements, Savings associations,

Securities.

Accordingly, the Office of Thrift

Supervision hereby amends chapter V,

title 12, as follows:

PART 506—INFORMATION

COLLECTION REQUIREMENTS UNDER

THE PAPERWORK REDUCTION ACT

1. The authority citation for part 506

continues to read as follows:

Authority: 44 U.S.C. 3501 et seq.

2. Section 506.1 is amended by

adding one entry to the table in

paragraph (b) in numerical order to read

as follows:

§ 506.1 OMB control numbers assigned

pursuant to the Paperwork Reduction Act.

* * * * *

(b) Display.

12 CFR part or section

where identified and described

Current OMB control No.

* * * * *

557.20 ............................. 1550–0092

* * * * *

PART 545—OPERATIONS

3. The authority citation for part 545

continues to read as follows:

Authority: 12 U.S.C. 1462a, 1463, 1464,

1828.

§§ 545.10—545.14 [Removed]

4. Sections 545.10, 545.11, 545.12,

545.13, and 545.14 are removed.

PART 556—STATEMENTS OF POLICY

5. The authority citation for part 556

continues to read as follows:

Authority: 5 U.S.C. 552, 559; 12 U.S.C.

1464, 1701j–3; 15 U.S.C. 1693–1693r.

§ 556.12 [Removed]

6. Section 556.12 is removed.

7. Part 557 is added to read as follows:

PART 557—DEPOSITS

Subpart A—General

Sec.

557.1 What does this part do?

Subpart B—Deposit Activities of Federal

Savings Associations

557.10 What authorities govern the

issuance of deposit accounts by a federal

savings association?

557.11 To what extent does federal law

preempt state deposit-related law?

557.12 What are some examples of

preempted state laws affecting deposits?

557.13 What state laws affecting deposits

are not preempted?

557.14 What interest rate may I pay on

savings accounts?

557.15 Who owns a deposit account?

Subpart C—Deposit Activities of All Savings

Associations

557.20 What records should I maintain on

deposit activities?

Authority: 12 U.S.C. 1462a, 1463, 1464.

Subpart A—General

§ 557.1 What does this part do?

This part applies to the deposit

activities of savings associations. If you

are a federal savings association, subpart

B of this part applies to your deposit

activities. Subpart C of this part applies

to the deposit activities of all federal

and state chartered-savings associations.

Subpart B—Deposit Activities of

Federal Savings Associations

§ 557.10 What authorities govern the

issuance of deposit accounts by a federal

savings association?

A federal savings association (‘‘you’’)

may raise funds through accounts and

may issue evidence of accounts under

section 5(b)(1) of the HOLA (12 U.S.C.

1464(b)(1)), your charter, and this part.

Additionally, 12 CFR parts 204 and 230

apply to your deposit activities.

§ 557.11 To what extent does federal law

preempt state deposit-related law?

(a) Under sections 4(a) and 5(b) of the

HOLA, 12 U.S.C. 1463(a), 1464(b), OTS

is authorized to promulgate regulations

that preempt state laws affecting the

operations of federal savings

associations when appropriate to:

(1) Facilitate the safe and sound

operations of federal savings

associations;

(2) Enable federal savings associations

to operate according to the best thrift

institutions practices in the United

States; or

(3) Further other purposes of HOLA.

(b) To further these purposes without

undue regulatory duplication and

burden, OTS hereby occupies the entire

field of federal savings associations’

deposit-related regulations. OTS intends

to give federal savings associations

maximum flexibility to exercise depositrelated powers according to a uniform

federal scheme of regulation. Federal

savings associations may exercise

deposit-related powers as authorized

under federal law, including this part,

without regard to state laws purporting

to regulate or otherwise effect deposit

activities, except to the extent provided

in § 557.13. State law includes any

statute, regulation, ruling, order, or

judicial decision.

§ 557.12 What are some examples of

preempted state laws affecting deposits?

The OTS preempts state laws that

purport to impose requirements

governing the following:

(a) Abandoned and dormant accounts;

(b) Checking accounts;

(c) Disclosure requirements;

(d) Funds availability;

(e) Savings account orders of

withdrawal;

(f) Service charges and fees;

(g) State licensing or registration

requirements; and

(h) Special purpose savings services.

§ 557.13 What state laws affecting

deposits are not preempted?

(a) The OTS has not preempted the

following types of state law, to the

extent that the law only incidentally

affects your deposit-related activities or

is otherwise consistent with the

purposes of § 557.11:

(1) Contract and commercial law;

(2) Tort law; and

(3) Criminal law.

(b) The OTS will not preempt any

other state law if the OTS, upon review,

finds that the law:

(1) Furthers a vital state interest; and

(2) Either only incidentally affects

your deposit-related activities or is not

otherwise contrary to the purposes

expressed in § 557.11.

§ 557.14 What interest rate may I pay on

savings accounts?

(a) You may pay interest at any rate

or anticipated rate of return on savings

accounts, either in deposit or in share

form, as provided in your charter and

the account’s terms.

(b) You may pay fixed or variable

rates. If you pay a variable rate, you

must base it on a schedule, index, or

formula that you specify in the

account’s terms.

§ 557.15 Who owns a deposit account?

You may treat the holder of record as

the account owner, even if you receive

contrary notice, until you transfer the

account on your records.
Federal Register / Vol. 62, No. 204 / Wednesday, October 22, 1997 / Rules and Regulations 55765

Subpart C—Deposit Activities of All

Savings Associations

§ 557.20 What records should I maintain

on deposit activities?

All federal and state chartered savings

associations (‘‘you’’) should establish

and maintain deposit documentation

practices and records that demonstrate

that you appropriately administer and

monitor deposit-related activities. Your

records should adequately evidence

ownership, balances, and all

transactions involving each account.

You may maintain records on deposit

activities in any format that is consistent

with standard business practices.

PART 561—DEFINITIONS

8. The authority citation for part 561

continues to read as follows:

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

1464, 1467a.

§ 561.16 [Amended]

9. Section 561.16 is amended, in

paragraph (a), by removing the phrase ‘‘,

as provided in § 563.6(b) of this

chapter’’.

§ 561.42 [Amended]

10. Section 561.42 is amended by

removing the phrase ‘‘§§ 563.6 and

561.16’’ and adding in its place

‘‘§ 561.16’’.

PART 563—OPERATIONS

11. The authority citation for part 563

continues to read as follows:

Authority: 12 U.S.C. 375b, 1462, 1462a,

1463, 1464, 1467a, 1468, 1817, 1820, 1828,

3806; 42 U.S.C. 4106.

§§ 563.2, 563.3, 563.6, 563.7, 563.9, 563.10

[Removed]

12. Sections 563.2, 563.3, 563.6,

563.7, 563.9, and 563.10 are removed.

PART 563g—SECURITIES OFFERINGS

13. The authority citation for part

563g continues to read as follows:

Authority: 12 U.S.C. 1462a, 1463, 1464; 15

U.S.C. 78c(b), 78l, 78m, 78n, 78p, 78w.

§ 563g.1 [Amended]

14. Section 563g.1 is amended by

removing the last sentence of paragraph

(a)(13).

Dated: October 15, 1997.

By the Office of Thrift Supervision.

Nicolas P. Retsinas,

Director.

[FR Doc. 97–27842 Filed 10–21–97; 8:45 am]

BILLING CODE 6720–01–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

30 CFR Part 913

[SPATS No. IL–081–FOR]

Illinois Regulatory Program

AGENCY: Office of Surface Mining

Reclamation and Enforcement (OSM),

Interior.

ACTION: Final rule; approval of

amendment.

SUMMARY: OSM is approving a proposed

amendment to the Illinois permanent

regulatory program (hereinafter referred

to as the ‘‘Illinois program’’) pursuant to

the Surface Mining Control and

Reclamation Act of 1977 (SMCRA). This

amendment provides that areas

revegetated following the removal of

temporary structures such as

sedimentation ponds, roads, and small

diversions are not subject to a

revegetation responsibility period and

bond liability period separate from that

of the permit area or increment thereof

served by such facilities. The

amendment is intended to clarify

ambiguities in the State regulations and

to improve operational efficiency.

EFFECTIVE DATE: October 22, 1997.

FOR FURTHER INFORMATION CONTACT:

Andrew R. Gilmore, Director,

Indianapolis Field Office, Office of

Surface Mining Reclamation and

Enforcement, Minton-Capehart Federal

Building, 575 North Pennsylvania

Street, Room 301, Indianapolis, IN

46204–1521, Telephone: (317) 226–

6700.

SUPPLEMENTARY INFORMATION:

I. Background on the Illinois Program

II. Submission of the Proposed Amendment

III. Director’s Findings

IV. Summary and Disposition of Comments

V. Director’s Decision

VI. Procedural Determinations

I. Background on the Illinois Program

On June 1, 1982, the Secretary of the

Interior conditionally approved the

Illinois program. Background

information on the Illinois program,

including the Secretary’s findings, the

disposition of comments, and the

conditions of approval can be found in

the June 1, 1982 Federal Register (47 FR

23883). Subsequent actions concerning

the conditions of approval and program

amendments can be found at 30 CFR

913.15, 913.16, and 913.17.

II. Submission of the Proposed

Amendment

By letter dated June 22, 1992

(Administrative Record No. IL–1192),

Illinois submitted a proposed program

amendment consisting of revisions to a

number of its approved regulations.

OSM announced receipt of the proposed

amendment in the August 18, 1992,

Federal Register (57 FR 37127) and, in

the same notice, opened the public

comment period and provided

opportunity for a public hearing on the

adequacy of the proposed amendment.

The public comment period ended on

September 17, 1992. Since no one

requested an opportunity to testify at a

public hearing, the hearing scheduled

for September 14, 1992, was canceled.

By letter dated April 27, 1993

(Administrative Record No. IL–1207),

Illinois submitted revisions to its

proposed amendment in response to

concerns raised by OSM in letters dated

September 2, 1992, and October 2, 1992

(Administrative Record Nos. IL–1204

and IL–1205, respectively), and in

response to comments received from

other governmental agencies and

individuals. OSM announced receipt of

the revised amendment in the May 17,

1993, Federal Register (58 FR 28804)

and, in the same notice, reopened the

public comment period and again

provided an opportunity for a public

hearing. The public comment period

closed on June 16, 1993. As with the

previous submittal, no one requested an

opportunity to testify at a public

hearing; therefore, the hearing

scheduled for June 11, 1993, was

canceled.

OSM subsequently announced its

decision on most provisions of the

proposed amendment in the September

3, 1993, Federal Register (58 FR 46845).

However, in the same document, OSM

stated at 58 FR 46849–50 (finding 11(c))

and 30 CFR 913.15(o)(4) that it was

deferring a decision on the proposed

revisions to sections 1816.116(a)(2)(C)

and 1817.116(a)(2)(C) of title 62 of the

Illinois Administrative Code (IAC) until

additional opportunity for public

comment was provided in a separate

Federal Register document. That

commitment was fulfilled by the notice

published on September 15, 1993 (58 FR

48333), which reopened the public

comment period until October 15, 1993.

This notice also included similar

proposed revisions to the Kentucky and

Ohio regulations as well as a discussion

of OSM’s proposed policy concerning

restart of the revegetation responsibility

period every time a small portion of the

permit area requires reseeding or

replanting. Subsequently, in the May 29,