Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rules 6139

1Although currently the range of risk-based

assessments for BIF-assessable and SAIF-assessable

deposits is the same, a higher assessment payable

to the Financing Corporation must be paid on SAIFassessable deposits. Thus, the overall assessment is

higher for SAIF-assessable deposits than for BIFassessable deposits.

regulation is reopened until March 13,

1997.

DATES: Comments must be received by

March 13, 1997.

ADDRESSES: Interested persons are

invited to submit written comments

concerning this proposal. Comments

must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Division,

AMS, USDA, room 2525–S, P.O. Box

96456, Washington, DC 20090–6456,

Fax Number (202) 720–5698. All

comments should reference the docket

number and the date and page number

of this issue of the Federal Register and

will be available for public inspection in

the Office of the Docket Clerk during

regular business hours.

FOR FURTHER INFORMATION CONTACT: Tom

Tichenor, Marketing Order

Administration Branch, F&V, AMS,

USDA, room 2525–S, P.O. Box 96456,

Washington, DC 20090–6456: telephone:

(202) 720–6862. Small businesses may

request information on compliance with

this proposed regulation by contacting:

Jay Guerber, Marketing Order

Information Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456,

room 2525–S, Washington, DC 20090–

6456; telephone: (202) 720–2491; Fax

number: (202) 720–5698.

SUPPLEMENTARY INFORMATION: A

proposed rule was issued on December

23, 1996, and published in the Federal

Register (61 FR 67499). The proposed

rule would: (1) Remove banana/

fingerling potatoes from provisions of

the potato import regulation (import

regulation) and; (2) reclassify potatoes

used to make fresh potato salad as

potatoes for processing. The comment

period ended January 22, 1997.

The National Potato Council (Council)

requested that additional time be

provided for interested persons to

analyze the proposed rule. The Council

stated that members of the industry

need additional time to review all

available information before making

final comments on the proposed rule.

Reopening the comment period to

March 13, 1997, would allow the

Council and other interested persons

more time to review the proposed rule,

perform a more complete analysis, and

submit any written comments.

This delay should not substantially

add to the time required to complete

this rulemaking action. Accordingly, the

period in which to file written

comments is reopened until March 13,

1997. This notice is issued pursuant to

the Agricultural Marketing Agreement

Act of 1937.

Authority: 7 U.S.C. 601–674.

Dated: February 5, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97–3285 Filed 2–10–97; 8:45 am]

BILLING CODE 3410–02–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 312

RIN 3064–AC01

Prevention of Deposit Shifting

AGENCY: Federal Deposit Insurance

Corporation (FDIC).

ACTION: Proposed rule.

SUMMARY: The proposed rule would

implement a new statute to prevent the

shifting of deposits insured under the

Savings Association Insurance Fund

(SAIF) to deposits insured under the

Bank Insurance Fund (BIF) for the

purpose of evading the assessment rates

applicable to SAIF deposits.

DATES: Written comments must be

received by the FDIC on or before April

14, 1997.

ADDRESSES: Written comments are to be

addressed to the Office of the Executive

Secretary, Federal Deposit Insurance

Corporation, 550 17th Street, NW.,

Washington, DC 20429. Comments may

be hand-delivered to Room F–402, 1776

F Street, NW., Washington, DC 20429,

on business days between 8:30 a.m. and

5 p.m. (FAX number: (202) 898–3838;

Internet address: comments@FDIC.gov).

Comments will be available for

inspection in the FDIC Public

Information Center, room 100, 801 17th

Street, NW., Washington, DC, between

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

days.

FOR FURTHER INFORMATION CONTACT:

Joseph A. DiNuzzo, Counsel, (202) 898–

7349; Richard J. Osterman, Senior

Counsel, (202) 898–3523, Legal

Division; or George Hanc, Associate

Director, Division of Research and

Statistics, (202) 898-8719, Federal

Deposit Insurance Corporation,

Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. The Proposed Rule

A. The Funds Act and the Deposit

Shifting Statute

The Deposit Insurance Funds Act of

1996 (Funds Act) was enacted as part of

the Economic Growth and Regulatory

Paperwork Reduction Act of 1996,

Public Law 104–208, 110 Stat. 3009 et

seq., sections 2701–2711, and became

effective September 30, 1996. The

Funds Act provides for the

capitalization of the SAIF through a

special assessment on all depository

institutions that hold SAIF-assessable

deposits. Pursuant to this requirement,

the FDIC recently issued a final rule

imposing a special assessment on

institutions holding SAIF-assessable

deposits in an amount sufficient to

increase the SAIF reserve ratio (SAIF

reserve ratio) to the designated reserve

ratio (DRR) of 1.25 percent as of October

1, 1996. 61 FR 53834 (Oct. 16, 1996), to

be codified at 12 CFR 327.41.

Another provision of the Funds Act,

entitled ‘‘Prohibition on Deposit

Shifting’’ (deposit shifting statute),

requires the Comptroller of the

Currency, the Board of Directors of the

FDIC, the Board of Governors of the

Federal Reserve System, and the

Director of the Office of Thrift

Supervision (federal banking agencies)

to take ‘‘appropriate actions’’ to prevent

insured depository institutions and

holding companies from ‘‘facilitating or

encouraging’’ the shifting of deposits

from SAIF-assessable deposits to BIFassessable deposits for the purpose of

evading the assessments applicable to

SAIF-assessable deposits.1 Funds Act,

section 2703(d). The ‘‘appropriate

actions’’ suggested in the deposit

shifting statute are: denial of

applications, enforcement actions and

the imposition of entrance and exit fees.

The statute also specifies that its

provisions shall not be construed to

prohibit conduct or activity by any

insured depository institution that is

undertaken in the ‘‘ordinary course of

business’’ and is not directed towards

depositors of an insured depository

institution affiliate of the insured

institution.

The statute authorizes the FDIC to

issue regulations, including regulations

defining terms used in the statute, to

prevent the shifting of deposits. The

deposit shifting statute terminates on

the earlier of December 31, 1999, or the

date on which the last savings

association ceases to exist.

B. Need for a Regulation on Deposit

Shifting

The issuance of a regulation would

provide guidance to the industry on the

meaning and impact of the deposit

shifting statute. This is particularly

important in light of the relationship of

the deposit shifting statute to section
6140 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rules

2To determine whether a holding company

should be subject to further scrutiny under the

proposed rule, the FDIC would compute an average

ratio of BIF-insured deposits to total deposits for all

non-Oakar affiliates of the holding company as of

the fourth quarter of 1994. This value would be

computed as the average ratio of BIF-insured

deposits for the period from the third quarter of

1989 to the fourth quarter of 1994, or the average

ratio of BIF-insured deposits from the last quarter

that the holding company acquired or sold a nonOakar affiliate through the fourth quarter of 1994.

The average ratio would then be subtracted from the

ratio of BIF-insured deposits to total deposits in

each quarter of 1995 and subsequent years to yield

an adjusted BIF-insured deposit ratio. The adjusted

ratio for each holding company would be divided

by the standard deviation of adjusted ratios of BIFinsured deposits for all holding companies for the

entire period beginning with the first quarter of

1995. The resulting value is compared with the

value 1.65. If it exceeds 1.65, and assuming that the

adjusted ratio is a normal random variable, there

would be less than a 5 percent chance that the

change in the BIF-insured deposit ratio is a random

event. Holding companies for which the adjusted

ratio of BIF-insured deposits divided by the

standard deviation of adjusted ratios for all holding

companies after 1994 exceeded 1.65 would be

subject to further scrutiny under the proposed rule.

5(d)(2) of the FDI Act (12 U.S.C.

1815(d))(section 5(d)(2)).

Section 5(d)(2) applies to conversions

of depository institutions from one

deposit insurance fund to the other. In

relevant part, it provides that: (1)

Institutions may not engage in a

‘‘conversion transaction’’ without the

FDIC’s prior approval; and (2)

institutions that engage in an insurancefund conversion must pay prescribed

entrance and exit fees. Until recently,

with certain specified exceptions,

depository institutions were prohibited

by section 5(d)(2) from engaging in

conversion transactions. 12 U.S.C.

1815(d)(2)(A)(ii). The statute specified,

however, that the ‘‘conversion

moratorium’’ would expire when SAIF

reached or exceeded its DRR. Because

SAIF recently reached its DRR, the

conversion moratorium no longer

applies; therefore, an institution may

convert from one fund to another as

long as the FDIC approves the

conversion and the institution pays the

prescribed entrance and exit fees.

The requirement in section 5(d)(2)

that converting institutions pay entrance

and exit fees underscores the need to

impose entrance and exit fees under the

deposit migration statute: If insured

depository institutions were permitted

to shift deposits from a SAIF-insured

institution to a BIF-insured institution

outside the scope of section 5(d)(2),

then—but for the existence of the

deposit shifting statute—they would be

able to evade the entrance and exit fees

imposed by section 5(d)(2) for such fund

conversions. The FDIC interprets the

deposit shifting statute, therefore, in

part, to be intended to preserve the

integrity of the fee-payment

requirements in section 5(d)(2). Indeed,

as indicated above, the deposit shifting

statue specifies that one of the

‘‘appropriate actions’’ the agencies may

take to prevent deposit shifting is the

‘‘imposition of entrance and exit fees as

if such transaction qualified as a

conversion transaction pursuant to

section 5(d).’’

C. Explanation of the Proposed Rule

The proposed rule is intended to

interpret and implement the deposit

shifting statute. The proposed rule

consists of two basic provisions. The

first would reiterate the requirement in

the deposit shifting statute that the

federal banking agencies deny

applications and object to notices filed

with them by depository institutions or

depository institution holding

companies if the agency determines that

the transaction for which the

application or notice is filed is for the

purpose of evading assessments

imposed on insured depository

institutions with respect to SAIFassessable deposits. The second

provision of the proposed rule would

establish a presumption under which

entrance and exit fees would be

imposed upon depository institutions

for deposits that are shifted from SAIFassessable deposits to BIF-assessable

deposits within the contemplation of

the deposit shifting statute.

1. Applications

As noted, the proposed rule reiterates

the statutory requirement that the

federal banking agencies deny

applications or object to notices if the

transaction for which the application or

notice is filed is for the purpose of

evading SAIF assessments. The

proposed regulation is drafted to

encompass any type of application or

notice that might involve deposit

shifting. It is anticipated that the

respective agency would determine the

purpose of the application or notice

from the materials submitted by the

depository institution or holding

company. For example, certain types of

applications require the filing of a

business plan which describes the

corporate strategy for and objective of

the proposed transaction. If the agency’s

review of the business plan indicates

that the purpose of a proposed

transaction is to shift deposits in order

to evade SAIF assessments, then the

agency would deny the application. If a

business plan is not required to be filed

with an application that might raise a

concern about deposit shifting, then the

reviewing agency would otherwise

determine, based on a review of the

materials provided with the application

and other available information,

whether the underlying purpose of the

application is to shift deposits within

the contemplation of the deposit

shifting statute. All such application

determinations would be made on a

case-by-case basis within the agency’s

discretion. It is also likely that the

agencies would condition application

approvals on compliance with the

requirements of the deposit shifting

statute.

2. Entrance and Exit Fees for Deposit

Shifting

The proposed rule would establish a

presumption under which entrance and

exit fees would be imposed upon

depository institutions that engage in

deposit shifting for the purpose of

evading SAIF assessments. The amounts

of the entrance and exit fees would be

those prescribed in part 312 of the

FDIC’s regulations (12 CFR part 312).

Under the proposed rule the FDIC

would use a rebuttable-presumption

approach to determine whether

depository institutions have engaged in

deposit shifting and, therefore, must pay

entrance and exit fees. To implement

this approach the FDIC would identify

all bank holding companies and savings

and loan holding companies with both

BIF- and SAIF-member subsidiaries and

determine each holding company’s

aggregate average percentage of BIF and

SAIF deposits for a period of time prior

to the enactment of the deposit shifting

statute on September 30, 1996. The

FDIC would then compare that average

to the percentage of each such holding

company’s BIF and SAIF deposits for

each quarter subsequent to the

enactment of the deposit shifting

statute. The FDIC would determine

whether any increase in the holding

company’s percentage of BIF deposits

and decrease in its percentage of SAIF

deposits exceeded a normal range

relative to the holding company’s

historical average and industry averages.

If the FDIC determines, on a holdingcompany-by-holding-company basis,

that a BIF-insured institution’s increase

in BIF-assessable deposits and decrease

in SAIF-assessable deposits is above the

normal range and is not attributable to

factors other than deposit shifting, then,

after consulting with each institution’s

primary federal regulator (where the

FDIC is not the institution’s primary

federal regulator) the FDIC would apply

the rebuttable presumption that the

increase in BIF-assessable deposits

resulted from deposit shifting

encouraged or facilitated by the

applicable depository institutions or

their holding company for the purpose

of evading SAIF assessments.2
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rules 6141

3The definition of ‘‘small business entity’’ derives

from the definition of a ‘‘small business concern.’’

Part 121 of the Small Business Administration’s

rules and regulations (13 CFR part 121) provides

that any national bank or commercial bank, savings

association, or credit union with assets of $100

million or less qualifies as a small business

concern.

The FDIC would have 90 days after

the report date (currently the end of a

calendar quarter) as of which the

applicable quarterly Consolidated

Report of Condition and Income or

Thrift Financial Report (financial

reports) of affiliated BIF-member and

SAIF-member depository institutions

must be filed in which to notify the

institutions of the FDIC’s determination

and the intended imposition of the

entrance and exit fees. The depository

institutions would then have 30 days

from the date of the FDIC’s notification

to provide to the FDIC information and

materials to demonstrate that the

increase in BIF-assessable deposits was

attributable to factors other than deposit

shifting encouraged or facilitated by the

depository institutions or their holding

company. Mergers, acquisitions and

changes in market conditions would be

among the types of factors that may be

sufficient to rebut the presumption of

intentional deposit shifting.

The FDIC would review the materials

and information submitted, consult with

the institutions’ primary federal

regulator(s) (if other than the FDIC),

determine whether the entrance and exit

fees should be imposed and, within 60

days of receiving the institutions’

materials and information, notify the

institutions of the FDIC’s determination.

If the determination is that fees must be

paid, then the institutions would be

required to remit payment to the FDIC

within 15 days of the notice. The

institutions then would have 30 days

after such payment is made to appeal

the determination to the FDIC.

The details of the procedures for

submitting materials and information to

attempt to rebut the presumption of

deposit shifting would be provided in

writing to depository institutions when

they are informed of the FDIC’s

intention to impose such fees.

D. Effective Date

The FDIC’s review of financial reports

for purposes of the possible imposition

of entrance and exit fees under the

proposed rule would begin with the

reports filed as of the end of the first full

quarter following the effective date of

the final rule on deposit shifting.

Concurrent with this rulemaking effort,

the FDIC is considering what, if any,

action it should take to impose the

deposit shifting statute for the period

between the enactment date of the

deposit shifting statute (i.e., September

30, 1996) and the effective date of the

final rule on deposit shifting. Any such

action would be on a case-by-case basis

in consultation with the institutions’

primary federal regulator(s), if other

than the FDIC.

E. Rationale for the Proposed Rule

The FDIC believes, preliminarily, that

the proposed rule is the most effective

means of enforcing the requirements of

the deposit shifting statute without

imposing an undue burden on

depository institutions. A regulation

attempting to restrict and control

depository institutions’ conduct and

activities, including advertising, would

be difficult to design, implement and

enforce. Moreover, such restrictions and

controls might impose a significant

regulatory burden on the industry. In

addition, FDIC efforts to control and

restrict advertising by depository

institutions might raise First

Amendment commercial free speech

issues.

The FDIC believes, preliminarily, that

the approach used in the proposed rule

strikes the proper balance of enforcing

the law and limiting the regulatory

burden on depository institutions.

II. Request for Public Comment

The FDIC is hereby requesting

comment during a 60-day comment

period on all aspects of this proposed

rule. Specifically, comments are

requested on alternate means of

implementing and enforcing the deposit

shifting statute. For example, could and

should the statute be applied on a caseby-case basis without an implementing

regulation? And, if applied on a case-bycase basis, what factors should be

considered in determining whether

prohibited deposit shifting has

occurred? More specifically, what

depository institution conduct and

activities should the FDIC interpret as

encouraging or facilitating deposit

shifting?

Comments also are specifically

requested on the meaning of the rule of

construction provided in the deposit

shifting statute that the statute shall not

be construed as prohibiting conduct or

activity ‘‘undertaken in the ordinary

course of business * * * and * * * not

directed towards the depositors of an

insured depository institution affiliate

* * *.’’ The FDIC would have to

interpret that rule of construction in

considering whether to impose entrance

and exit fees upon depository

institutions.

III. Paperwork Reduction Act

No collections of information

pursuant to section 3504(h) of the

Paperwork Reduction Act of 1980 (44

U.S.C. 3501 et seq.) are contained in this

proposed rule. Consequently, no

information has been submitted to the

Office of Management and Budget for

review.

IV. Regulatory Flexibility Act

The FDIC estimates that, currently,

there are 135 bank holding companies

and savings and loan holding

companies that own both BIF-member

and SAIF-member affiliates. Those

holding companies, in turn, own

approximately 870 banks and thrifts, of

which about 250 have assets of $100

million or less. Based on the FDIC’s

calculations and projections, an

insubstantial number of those 250

institutions would be subject to the

rebuttable presumption and other

provisions of this proposed rule. Thus,

the Board hereby certifies that the

proposed rule would not have a

significant economic impact on a

substantial number of small entities 3

within the meaning of the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.).

Therefore, the provisions of that Act

regarding an initial and final regulatory

flexibility analysis (Id. at 603 & 604) do

not apply here.

List of Subjects in 12 CFR Part 312

Bank deposit insurance, Savings

associations.

The Board of Directors of the Federal

Deposit Insurance Corporation hereby

proposes to amend part 312 of title 12

of the Code of Federal Regulations as

follows:

PART 312—ASSESSMENT OF FEES

UPON ENTRANCE TO OR EXIT FROM

THE BANK INSURANCE FUND OR THE

SAVINGS ASSOCIATION INSURANCE

FUND AND TREATMENT OF

APPLICATIONS AND NOTICES AND

THE IMPOSITION OF ENTRANCE AND

EXIT FEES IN CONNECTION WITH

DEPOSIT SHIFTING

1. The part heading of Part 312 is

revised to read as set forth above.

2. The authority citation for Part 312

is revised to read as follows:

Authority: 12 U.S.C. 1815(d), 1819.

3. Section 312.11 is added to read as

follows:

§ 312.11 Deposit shifting.

(a) Purpose and scope. The purpose of

this section is to implement section

2703(d) of Public Law 104–208 which

became effective on September 30, 1996

(110 Stat. 3009 et seq.). This section

applies to all insured depository
6142 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rules

institutions and depository institution

holding companies.

(b) Applications and notices.

Applications and notices filed by an

insured depository institution, a

proposed or newly organized insured

depository institution or a depository

institution holding company shall be

denied or objected to, respectively, by

the appropriate federal banking agency

if the agency determines, in its

discretion, that the proposed transaction

for which the application or notice is

filed is for the purpose of evading

assessments imposed on the applicable

insured depository institutions with

respect to SAIF-assessable deposits

under section 7(b) of the Act and section

21(f)(2) of the Federal Home Loan Bank

Act (12 U.S.C. 1441(f)(2)).

(c) Imposition of entrance and exit

fees. (1) A depository institution that

encourages or facilitates the shifting of

deposits from SAIF-assessable deposits

to BIF-assessable deposits (as defined in

section 21(k) of the Federal Home Loan

Bank Act (12 U.S.C. 1441(k)) for the

purpose of evading SAIF assessments

shall pay entrance and exit fees, as

provided for in §§ 312.1 through 312.10,

as if such deposit shifting constituted a

‘‘conversion transaction’’ under section

5(d) of the Act (12 U.S.C. 1815(d)).

(2) Subject to the FDIC’s

determination based on the

methodology indicated in paragraph

(c)(3) of this section, an abnormal

increase in a depository institution’s

BIF-assessable deposits and a

commensurate decrease in SAIFassessable deposits of an affiliate of that

depository institution within the same

calendar quarter shall be presumed to be

the result of deposit shifting for the

purpose of evading SAIF assessments.

The entrance and exit fees to be

imposed under paragraph (c)(1) of this

section shall apply to the dollar amount

of the deposits shifted unless, pursuant

to paragraph (c)(5) of this section, the

affiliated depository institutions rebut

the presumption that the increase in

BIF-assessable deposits and the

commensurate decrease in SAIFassessable deposits resulted from

deposit shifting between the affiliated

institutions.

(3) For purposes of this section, the

FDIC shall obtain deposit data from

quarterly Consolidated Reports of

Condition and Income filed by insured

depository institutions with the FDIC

and from Thrift Financial Reports filed

by insured savings associations with the

Office of Thrift Supervision, starting

with the reports filed for the period

ending [on the last day of the first full

calendar quarter after the effective date

of the final rule on deposit shifting].

(4) The FDIC, in its discretion, will

determine whether to presume that the

increase in an institution’s BIFassessable deposits and the

commensurate decrease in the affiliated

institution’s SAIF-assessable deposits

resulted from deposit shifting intended

to evade SAIF assessments by using

statistical averages and trends for the

applicable affiliated depository

institutions and industry averages and

trends, and other information available

to the FDIC. In determining whether to

apply the rebuttable presumption, the

FDIC will consult with the appropriate

federal banking agency(ies) in cases

where the FDIC is not the appropriate

federal banking agency.

(5) A depository institution will be

deemed to have rebutted the

presumption of deposit shifting if it

provides to the FDIC information and

materials that the FDIC, in its discretion,

determines demonstrate that the

increase in BIF-assessable deposits and

the commensurate decrease in SAIFassessable deposits resulted from factors

other than efforts by the depository

institutions or their holding company to

encourage or facilitate the shifting of

deposits for the purpose of evading

SAIF assessments.

(6) The FDIC shall notify, in writing,

the applicable depository institutions of

the intended imposition of entrance and

exit fees within 90 days after the report

date of the Consolidated Reports of

Condition and Thrift Financial Reports

from which the FDIC determines to

apply the rebuttable presumption under

paragraph (c)(4) of this section. The

depository institutions shall have 30

days from the date of issuance of such

notification to provide materials and

information to the FDIC to rebut the

aforementioned presumption. The FDIC

shall within 60 days of the receipt of the

materials and information consult with

the appropriate federal banking

agency(ies), if the FDIC is not the

appropriate federal banking agency, and

determine and notify the depository

institutions whether they must pay

entrance and exit fees for deposit

shifting. If the FDIC indicates in such

notice that the depository institutions

must pay entrance and exit fees, those

fees shall be paid within 15 days of the

receipt of such notice. Within 30 days

of the payment of the fees to the FDIC,

the depository institution(s) may request

a review of the determination by the

FDIC. The details of the procedures for

submitting materials and information to

attempt to rebut the presumption of

deposit shifting will be provided in

writing to the depository institutions as

part of the initial notice of the intended

imposition of entrance and exit fees.

(d) Termination date. The provisions

of this section shall terminate on the

earlier of December 31, 1999 or the date

as of which the last savings association

ceases to exist.

By the order of the Board of Directors.

Dated at Washington, D.C., this 4th day of

February, 1997.

Federal Deposit Insurance Corporation.

Jerry L. Langley,

Executive Secretary.

[FR Doc. 97–3306 Filed 2–10–97; 8:45 am]

BILLING CODE 6714–01–P

12 CFR Part 328

RIN 3064–AB99

Advertisement of Membership

AGENCY: Federal Deposit Insurance

Corporation.

ACTION: Notice of proposed rulemaking;

request for comment.

SUMMARY: The Federal Deposit

Insurance Corporation (FDIC) is

proposing to amend its regulation

entitled ‘‘Advertisement of

Membership’’. The proposed rule

would: Consolidate the provisions that

require insured institutions to display

official signs; extend the official

advertising statement that is currently

required for insured banks to all insured

depository institutions; streamline the

exceptions to the required use of the

official advertising statement; prohibit

the use of the official advertising

statement in advertisements concerning

nondeposit investment products or

similar nondeposit products; and

specifically delegate authority to

approve the translation of the official

advertising statement to certain FDIC

officials. The FDIC is inviting comment

on all aspects of its proposal as well as

certain alternatives to its proposal as

discussed herein. In addition, the FDIC

is soliciting comment with respect to

issues raised regarding the applicability

of this regulation to insured depository

institutions that are transmitting

information to, or conducting business

with, existing or potential customers,

over a computer network, such as the

Internet.

DATES: Written comments must be

received by the FDIC on or before April

14, 1997.

ADDRESSES: Written comments shall be

addressed to Office of the Executive

Secretary, Federal Deposit Insurance

Corporation, 550 17th Street, N.W.,

Washington, D.C. 20429. Comments

may be hand delivered to Room F–402,

1776 F Street, N.W., Washington, D.C.,

20429, on business days between 8:30