66260 Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Rules and Regulations

1Corporate Governance, 61 FR 64007 (December

3, 1996). Subsidiaries and Equity Investments, 61

FR 66561 (December 18, 1996).

2 12 U.S.C. 4803(a)(1).

less, as of the preceding year end. The

statutory amendment increased the

asset-size exemption threshold by

requiring a one-time adjustment of the

$10 million figure based on the

percentage by which the Consumer

Price Index for Urban Wage Earners and

Clerical Workers (CPIW) for 1996

exceeded the CPIW for 1975, and annual

adjustments thereafter based on the

annual percentage increase in the CPIW.

The one-time adjustment increased the

exemption threshold to $28 million for

1997 data collection.

To implement the statutory

amendment, the Board published an

interim rule in January 1997. (62 FR

3603, Jan. 24, 1997). The interim rule

was made final in May. (62 FR 28620,

May 27, 1997; correction at 62 FR

62339, June 19, 1997). Section

203.3(a)(1)(ii) provides that the Board

will adjust the threshold based on the

year-to-year change in the average of the

CPIW, not seasonally adjusted, for each

twelve-month period ending in

November, rounded to the nearest

million. During the period ending in

November 1997, the Consumer Price

Index for Urban Wage Earners and

Clerical Workers increased by 2.4%. As

a result, the new threshold is $29

million. Thus, depository institutions

with assets of $29 million or less as of

December 31, 1997 are exempt from

data collection in 1998. An institution’s

exemption from collecting data in 1998

does not affect its responsibility to

report the 1997 data if it was required

to collect it.

The Board is adopting this

amendment to the staff commentary to

implement the annual change in the

exemption threshold. The

Administrative Procedure Act provides

that notice and opportunity for public

comment are not required if an agency

finds that notice and public comment

are unnecessary or would be contrary to

the public interest. 5 U.S.C. 553(b)(B).

Regulation C establishes a formula

(adopted by the Board after notice and

comment) for determining the annual

adjustment, if any, to the exemption

threshold. The Board’s amendment to

the staff commentary, which merely

applies the formula, is technical and not

subject to interpretation. For these

reasons, the Board has determined that

publishing a notice of proposed

rulemaking for public comment for the

following amendment is unnecessary.

Therefore, the Board has adopted this

amendment, establishing a new

threshold, in final form. This rule is

effective as of January 1, 1998, so that

institutions that are no longer covered

can avoid collecting data unnecessarily.

II. Section Analysis

Section 203.3—Exempt Institutions

Comments 3(a)–2 and 3(a)–3 have

been redesignated as comments 3(a)–3

and 3(a)–4, respectively, and a new

comment 3(a)–2 has been added to

specify the exemption threshold, which

is adjusted annually each December.

Depository institutions with assets that

are at or below the threshold as of

December 31, 1997, need not collect the

HMDA data for 1998.

List of Subjects in 12 CFR Part 203

Banks, banking, Consumer protection,

Federal Reserve System, Mortgages,

Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, the Board amends 12 CFR

part 203 as follows:

PART 203—HOME MORTGAGE

DISCLOSURE (REGULATION C)

1. The authority citation for Part 203

continues to read as follows:

Authority: 12 U.S.C. 2801–2810.

2. In Supplement I to part 203, under

Section 203.3—Exempt Institutions,

under 3(a) Exemption based on location,

asset size, or number of home-purchase

loans, paragraphs 2 and 3 are

redesignated as paragraphs 3 and 4,

respectively; and a new paragraph 2 is

added to read as follows:

Supplement I to Part 203—Staff

Commentary

* * * * *

Section 203.3—Exempt Institutions

3(a) Exemption based on location, asset

size, or number of home-purchase loans.

* * * * *

2. Adjustment of exemption threshold for

depository institutions. For data collection in

1998, the asset-size exemption threshold is

$29 million. Depository institutions with

assets at or below $29 million are exempt

from collecting data for 1998.

* * * * *

By order of the Board of Governors of the

Federal Reserve System, December 12, 1997.

William W. Wiles,

Secretary of the Board.

[FR Doc. 97–33036 Filed 12–17–97; 8:45 am]

BILLING CODE 6210–01–P

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 506, 544, 545, 552, 559,

560, 561, 563, 565, 567, 575

[No. 97–126]

Technical Amendments

AGENCY: Office of Thrift Supervision,

Treasury.

ACTION: Final rule.

SUMMARY: The Office of Thrift

Supervision (OTS) is amending its

regulations to incorporate a number of

technical and conforming amendments.

The OTS is amending its capital rules to

remove transition periods that are

outdated, making technical revisions to

final rules issued during December,

1996 pursuant to the regulatory

reinvention initiative, and making other

miscellaneous technical changes to

existing regulations.

EFFECTIVE DATE: December 18, 1998.

FOR FURTHER INFORMATION CONTACT:

Mary H. Gottlieb, Senior Paralegal

(Regulations), (202) 906–7135, or Karen

A. Osterloh, Assistant Chief Counsel,

(202) 906–6639, Regulations and

Legislation Division, Chief Counsel’s

Office, Office of Thrift Supervision,

1700 G Street, NW., Washington, DC

20552.

SUPPLEMENTARY INFORMATION:

Capital

OTS is today adopting several

technical amendments to its capital

regulations to remove references to

transition periods that have elapsed and

to streamline its definitions relating to

capital.

Regulatory Burden Reduction

Regulations

OTS is also making a number of

technical corrections to its charter and

bylaw, conversion, and subordinate

organization regulations 1 that were

substantially revised during December,

1996, 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 1994.2

In particular, § 552.10, regarding the

mailing of annual reports to

stockholders, is being amended. Section

552.10 currently requires Federal stock

associations that are not wholly-owned
Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Rules and Regulations 66261

3 61 FR 64007 (December 3, 1996).

4See 17 CFR 240.14a–3(b), which requires that

proxy statements sent to shareholders must be

accompanied or preceded by the annual report to

shareholders.

5 12 CFR 552.6(b).

6 5 U.S.C. 553.

7Pub. L. 103–325, 12 U.S.C. 4802.

8 Pub. L. 96–354, 5 U.S.C. 601.

to send out annual reports to their

shareholders within 90 days of the end

of the association’s fiscal year.

OTS’s regulation regarding Corporate

Governance 3 extended the time frame

within which an association must hold

its annual meeting from 120 days to 150

days after the close of its fiscal year.

OTS inadvertently did not extend the

time frame for mailing annual reports to

stockholders.

Section 552.10 is, therefore, being

amended to provide a 130-day mailing

requirement for annual reports to enable

federal savings associations that are

subject to the Securities Exchange Act of

1934 to take advantage of the full time

period permitted for delivery of an

annual report under the SEC’s Proxy

Rules, 4 and to conform to the changes

to the regulations under Corporate

Governance. The extension to 130 days

also ensures that the mailing

requirement in section 552.10 is

consistent with the OTS rule that a

notice for an annual meeting be sent 20

to 50 days before the meeting.5

In addition, section 545.71, which

restates federal savings associations’

statutory authority to invest in liquid

assets, is being removed. The substance

of the provision was added to the

lending and investment powers chart

found at 12 CFR 560.30 as part of the

final rule on Subsidiaries and Equity

Investments.

Miscellaneous

Finally, OTS is making the following

technical revisions:

—OTS’s subordinated debt securities

regulation is amended to remove

references to the Resolution Trust

Corporation.

—Erroneous cross-references are

corrected throughout OTS’s

regulations.

—The definition of service corporation

in § 561.45 is revised to correct a

cross-reference to OTS’s subordinate

organizations regulations.

—Part 506 is amended to include

language mandated by the Paperwork

Reduction Act of 1995, 44 U.S.C. 3501

et seq., and to update the display table

of OMB control numbers.

Administrative Procedure Act; Riegle

Community Development and

Regulatory Improvement Act of 1994

The OTS has found good cause to

dispense with both prior notice and

comment on this final rule and a 30-day

delay of its effective date mandated by

the Administrative Procedure Act.6 OTS

believes that it is contrary to public

interest to delay the effective date of the

rule, as it eliminates provisions that

have caused confusion. Because the

amendments in the rule are not

substantive, they will not detrimentally

affect savings associations by becoming

effective immediately.

In addition, this document is exempt

from the requirement found in section

302 of the Riegle Community

Development and Regulatory

Improvement Act of 1994 7 that

regulations must not take effect before

the first day of the quarter following

publication, as it imposes no new

requirements.

Regulatory Flexibility Act

Pursuant to section 605(b) of the

Regulatory Flexibility Act, 8 it is

certified that this technical corrections

regulation will not have a significant

economic impact on a substantial

number of small entities.

Executive Order 12866

OTS has determined that this rule is

not a ‘‘significant regulatory action’’ for

purposes of Executive Order 12866.

Unfunded Mandates Reform Act of

1995

OTS has determined that the

requirements of this 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, a

budgetary impact statement is not

required under section 202 of the

Unfunded Mandates Reform Act of

1995.

List of Subjects

12 CFR Part 506

Reporting and recordkeeping

requirements.

12 CFR Part 544

Reporting and recordkeeping

requirements, Savings associations.

12 CFR Part 545

Accounting, Consumer protection,

Credit, Electronic funds transfers,

Investments, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR Part 552

Reporting and recordkeeping

requirements, Savings associations,

Securities.

12 CFR Part 559

Savings associations, Subsidiaries.

12 CFR Part 560

Consumer protection, Investments,

Manufactured homes, Mortgages,

Reporting and recordkeeping

requirements, Savings associations,

Securities.

12 CFR Part 561

Savings associations.

12 CFR Part 563

Accounting, Advertising, Crime,

Currency, Investments, Reporting and

recordkeeping requirements, Savings

associations, Securities, Surety bonds.

12 CFR Part 565

Administrative practice and

procedure, Capital, Savings

associations.

12 CFR Part 567

Capital, Savings associations.

12 CFR Part 575

Administrative practice and

procedure, Capital, Holding companies,

Reporting and recordkeeping

requirements, Savings associations,

Securities.

Accordingly, the Office of Thrift

Supervision hereby amends title 12,

chapter V, of the Code of Federal

Regulations as set forth below:

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:

a. In paragraph (a) by adding a

sentence at the end of the paragraph;

b. In paragraph (b) by adding two

entries to the table in numerical order,

and revising the entry for Part 575.

The additions and revisions read as

follows:

§ 506.1 OMB control numbers assigned

pursuant to the Paperwork Reduction Act.

(a) * * * Respondents/recordkeepers

are not required to comply with any

collection of information unless it

displays a currently valid OMB control

number.

(b) * * *
66262 Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Rules and Regulations

12 CFR part or section

where identified and described

Current OMB control No.

* * * * *

Part 516 .......................... 1550–0005,

1550–0006,

1550–0016

* * * * *

550.3 ............................... 1550–0037

* * * * *

Part 575 .......................... 1550–0072

* * * * *

PART 544—CHARTER AND BYLAWS

3. The authority for part 544

continues to read as follows:

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

1464, 1467a, 2901 et seq.

§ 544.5 [Amended]

4. Section 544.5 is amended, in

paragraph (a), by removing the word

‘‘shall’’ from the last sentence, and by

adding in lieu thereof the word ‘‘may’’.

PART 545—OPERATIONS

5. The authority citation for part 545

continues to read as follows:

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

1828.

§ 545.71 [Removed]

6. Section 545.71 is removed.

PART 552—INCORPORATION,

ORGANIZATION, AND CONVERSION

OF FEDERAL STOCK ASSOCIATIONS

7. The authority citation for part 552

continues to read as follows:

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

1464, 1467a.

§ 552.4 [Amended]

8. Section 552.4 is amended in

paragraph (b)(4), Section 5 of the

charter, by removing the word

‘‘section’’, and by adding in lieu thereof

the word ‘‘Section’’, where it appears in:

a. The second sentence of the first

paragraph;

b. The first sentence of the third

paragraph;

c. The first sentence of paragraph (iii);

and

d. The first sentence of paragraph A.

§ 552.6–1 [Amended]

9. Section 552.6–1 is amended by

removing, in the last sentence of

paragraph (c), the word ‘‘such’’, and by

adding in lieu thereof the word

‘‘regular’’.

§ 552.10 [Amended]

10. Section 552.10 is amended by

removing the word ‘‘ninety’’ in the first

sentence, and by adding in lieu thereof

the number ‘‘130’’.

PART 559—SUBORDINATE

ORGANIZATIONS

11. The authority citation for part 559

continues to read as follows:

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

1464, 1828.

§ 559.3 [Amended]

12. Section 559.3(g)(2) is amended by

removing the phrase ‘‘entities be

aggregated’’, and by adding in lieu

thereof the phrase ‘‘entities must be

aggregated’’.

PART 560—LENDING AND

INVESTMENT

13. The authority citation for part 560

continues to read as follows:

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

1464, 1467a, 1701j–3, 1828, 3803, 3806; 42

U.S.C. 4106.

14. Section 560.93 is amended by

removing and reserving paragraph

(b)(6), and revising paragraph (d)(3)(ii)

to read as follows:

§ 560.93 Lending limitations.

* * * * *

(d) * * *

(3) * * *

(ii) The savings association is, and

continues to be, in compliance with its

capital requirements under part 567 of

this chapter;

* * * * *

§ 560.100 [Amended]

15. Section 560.100 is amended by

removing the phrase ‘‘12 CFR 567.1(l)’’,

and by adding in lieu thereof the phrase

‘‘12 CFR 567.1’’.

PART 561—DEFINITIONS

16. The authority citation for part 561

continues to read as follows:

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

1464, 1467a.

§ 561.45 [Amended]

17. Section 561.45 is amended by

removing the phrase ‘‘§ 545.74 of this

chapter’’, and by adding in lieu thereof

the phrase ‘‘part 559 of this chapter’’.

PART 563—OPERATIONS

18. 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.

§ 563.41 [Amended]

19. Section 563.41(b)(11) is amended

by removing the phrase ‘‘§ 563.93(b)(11)

of this part’’, and by adding in lieu

thereof the phrase ‘‘§ 560.93(b)(11) of

this chapter’’.

20. Section 563.81 is amended by

revising paragraphs (A) and (B) of the

certificate statement contained in

paragraph (d)(1)(vi), and by removing

the phrase ‘‘or RTC’’ where it appears in

paragraph (d)(3), to read as follows:

§ 563.81 Issuance of subordinated debt

securities and mandatorily redeemable

preferred stock.

* * * * *

(d) * * *

(1) * * *

(vi) * * *

* * * (A) if the FDIC shall be appointed

receiver for the issuer of this certificate (the

‘‘issuer’’) and in its capacity as such shall

cause the issuer to merge with or into another

financial institution, or in such capacity shall

sell or otherwise convey part or all of the

assets of the issuer to another financial

institution or shall arrange for the

assumption of less than all of the liabilities

of the issuer by one or more other financial

institutions, the FDIC shall have no

obligation, either in its capacity as receiver

or in its corporate capacity, to contract for or

to otherwise arrange for the assumption of

the obligation represented by this certificate

in whole or in part by any financial

institution or institutions which results from

any such merger or which has purchased or

otherwise acquired from the FDIC as receiver

for the issuer, any of the assets of the issuer,

or which, pursuant to any arrangement with

the FDIC, has assumed less than all of the

liabilities of the issuer. To the extent that

obligations represented by this certificate

have not been assumed in full by a financial

institution with or into which the issuer may

have been merged, as described in this

paragraph (A), and/or by one or more

financial institutions which have succeeded

to all or a portion of the assets of the issuer,

or which have assumed a portion but not all

of the liabilities of the issuer as a result of

one or more transactions entered into by the

FDIC as receiver for the issuer, then the

holder of this certificate shall be entitled to

payments on this obligation in accordance

with the procedures and priorities set forth

in any applicable receivership regulations or

in orders of the FDIC relating to such

receivership.

(B) In the event that the obligation

represented by this certificate is assumed in

full by another financial institution, which

shall succeed by merger or otherwise to

substantially all of the assets and the

business of the issuer, or which shall by

arrangement with the FDIC assume all or

portion of the liabilities of the issuer, and

payment or provision for payment shall have

been made in respect of all matured

installments of interests upon the certificates

together with all matured installments of

principal on such certificates which shall

have become due otherwise than by
Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Rules and Regulations 66263

acceleration, then any default caused by the

appointment of a receiver for the issuer shall

be deemed to have been cured, and any

declaration consequent upon such default

declaring the principal and interest on the

certificate to be immediately due and payable

shall be deemed to have been rescinded.

* * * * *

21. Section 563.134 is amended by:

a. Revising paragraph (a)(3); and

b. By removing, in paragraphs (a)(7),

(a)(8), and (a)(9), the phrase ‘‘fully

phased-in capital requirement’’, and by

adding in lieu thereof the phrase

‘‘capital requirement’.

The revisions read as follows:

§ 563.134 Capital distributions.

(a) * * *

(3) Capital requirement means an

association’s capital requirement under

part 567 of this chapter.

* * * * *

PART 565—PROMPT CORRECTIVE

ACTION

22. The authority citation for part 565

continues to read as follows:

Authority: 12 U.S.C. 1831o.

§ 565.2 [Amended]

23. Section 565.2 is amended, in

paragraph (f), by removing the phrase

‘‘§ 567.1(m)’’, and by adding in lieu

thereof the phrase ‘‘§ 567.1’’.

PART 567—CAPITAL

24. The authority citation for part 567

continues to read as follows:

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

1464, 1467a, 1828 (note).

25. Section 567.1 is amended by:

a. removing paragraph (ll) and the

alphabetic paragraph designations for

the remaining definitions, and placing

the definitions in alphabetical order;

b. in the definition of adjusted total

assets, removing paragraph (2)(ii),

adding the word ‘‘and’’ at the end of

paragraph (2)(i), redesignating

paragraph (2)(iii) as paragraph (2)(ii)

and revising it, and revising paragraphs

(1), (3)(i), and (3)(iii);

c. in the definition of equity

investments, redesignating paragraph (2)

introductory text and paragraphs (2)(i)

through (2)(vii) as paragraph (2)(i)

introductory text and paragraphs

(2)(i)(A) through (2)(i)(G), respectively,

designating the concluding text of

paragraph (2) as paragraph (2)(ii) and

revising it, and adding a colon at the

end of newly redesignated paragraph

(2)(i) introductory text;

d. in the definition of Qualifying

multifamily mortgage loan, revising

paragraph (3) and paragraph (4)

introductory text;

e. in the definition of Qualifying

residential construction loan, revising

paragraph (2); and

f. in the definition of Qualifying

supervisory goodwill, revising

paragraphs (2)(i), (2)(ii)(A), (2)(ii)(B),

and (2)(ii)(C) introductory text.

The revisions read as follows:

§ 567.1 Definitions.

* * * * *

Adjusted total assets. * * *

* * * * *

(1) A savings association’s total assets

as that term is defined in this section;

* * * * *

(2) * * *

(ii) The remaining goodwill (FSLIC

Capital Contributions) resulting from

prior regulatory accounting practices as

provided in the definition of qualifying

supervisory goodwill in this section;

(3) * * *

(i) Assets not included in the

applicable capital standard except for

those subject to paragraphs (3)(ii) and

(3)(iii) of this definition; * * *

(iii) Investments in any subsidiary

subject to consolidation under

paragraph (2)(ii) of this definition; and

* * * * *

Equity investments. * * *

* * * * *

(2) * * *

(ii) The term equity securities does not

include investments in a subsidiary as

that term is defined in this section,

equity investments that are permissible

for national banks, ownership interests

in pools of assets that are risk-weighted

in accordance with § 567.6(a)(1)(vi) of

this part, or the stock of Federal Home

Loan Banks or Federal Reserve Banks.

* * * * *

Qualifying multifamily mortgage loan.

* * *

* * * * *

(3) For purposes of paragraphs (1) (vi)

and (vii) of this definition, the term

value of the property means, at

origination of a loan to purchase a

multifamily property: the lower of the

purchase price or the amount of the

initial appraisal, or if appropriate, the

initial evaluation. In cases not involving

purchase of a multifamily loan, the

value of the property is determined by

the most current appraisal, or if

appropriate, the most current

evaluation.

(4) In cases where a borrower

refinances a loan on an existing

property, as an alternative to paragraphs

(1)(iii), (vi), and (vii) of this definition:

* * * * *

Qualifying residential construction

loan. * * *

* * * * *

(2) The documentation for each loan

and home sale must be sufficient to

demonstrate compliance with the

criteria in paragraph (1) of this

definition. The OTS retains the

discretion to determine that any loans

not meeting sound lending principles

must be placed in a higher risk-weight

category. The OTS also reserves the

discretion to modify these criteria on a

case-by-case basis provided that any

such modifications are not inconsistent

with the safety and soundness

objectives of this definition.

Qualifying supervisory goodwill.

* * *

* * * * *

(2) * * *

(i) Supervisory goodwill as defined in

this section that is included in goodwill

that is reflected in the current reporting

period under generally accepted

accounting principles (‘‘GAAP’’); or

(ii)(A) Supervisory goodwill as

defined in this section that is included

in goodwill that is reflected in the

current reporting period under GAAP;

(B) Plus any amortization of the

goodwill in paragraph (2)(ii)(A) of this

definition that occurred subsequent to

April 12, 1989 for GAAP reporting

purposes;

(C) Minus the amortization of the

goodwill in paragraph (2)(ii)(A) of this

definition through the current reporting

period that results when the goodwill is

amortized subsequent to April 12, 1989

on a straightline basis over the shorter

of—

* * * * *

§ 567.2 [Amended]

26. Section 567.2 is amended by

removing and reserving paragraph (b).

27. Section 567.5 is amended by:

a. revising paragraphs (a)(1)(v),

(a)(2)(i), (a)(2)(v), and (c);

b. in paragraph (a)(2)(vi), removing

the word ‘‘subsidi.ary’’, and by adding

in lieu thereof the word ‘‘subsidiary’’,

and removing the phrase ‘‘§ 567.1(l)’’,

and by adding in lieu thereof the phrase

‘‘§ 567.1’’; and

c. in paragraph (b)(4), removing the

last two sentences.

The revisions read as follows:

§ 567.5 Components of capital.

(a) * * * (1) * * *

(v) The remaining goodwill (FSLIC

Capital Contributions) resulting from

prior regulatory accounting practices as

provided in paragraph (1) of the

definition for qualifying supervisory

goodwill in § 567.1 of this part.

(2) Deductions from core capital. (i)

Intangible assets, as defined in § 567.1

of this part, are deducted from assets

and capital in computing core capital,
66264 Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Rules and Regulations

except as otherwise provided by

§ 567.12 of this part.

* * * * *

(v) If a savings association has any

investments (both debt and equity) in

one or more subsidiaries engaged as of

April 12, 1989 and continuing to be

engaged in any activity that would not

fall within the scope of activities in

which includable subsidiaries may

engage, it must deduct such investments

from assets and, thus, core capital in

accordance with this paragraph (a)(2)(v).

The savings association must first

deduct from assets and, thus, core

capital the amount by which any

investments in such subsidiary(ies)

exceed the amount of such investments

held by the savings association as of

April 12, 1989. Next the savings

association must deduct from assets

and, thus, core capital the lesser of:

(A) The savings association’s

investments in and extensions of credit

to the subsidiary as of April 12, 1989;

or

(B) The savings association’s

investments in and extensions of credit

to the subsidiary on the date as of which

the savings association’s capital is being

determined.

* * * * *

(c) Total capital. (1) A savings

association’s total capital equals the

sum of its core capital and

supplementary capital (to the extent that

such supplementary capital does not

exceed 100% of its core capital).

(2) The following assets, in addition

to assets required to be deducted

elsewhere in calculating core capital,

are deducted from assets for purposes of

determining total capital:

(i) Reciprocal holdings of depository

institution capital instruments;

(ii) All equity investments; and

(iii) That portion of land loans and

nonresidential construction loans in

excess of 80 percent loan-to-value ratio.

(3) For the purposes of any risk-based

capital requirement under this part, a

savings association’s total capital equals

the amount calculated pursuant to

paragraphs (c)(1) and (c)(2) of this

section, minus the amount of its IRR

component as calculated pursuant to

§ 567.7 of this part.

28. Section 567.6 is amended by

revising paragraph (a)(1)(iii)(D) to read

as follows:

§ 567.6 Risk-based capital credit riskweight categories.

(a) * * *

(1) * * *

(iii) * * *

(D) Qualifying residential

construction loans as defined in § 567.1

of this part.

* * * * *

29. Section 567.9 is amended by:

a. in paragraph (c)(1), removing the

phrase ‘‘§ 567.1(m)’’, and by adding in

lieu thereof the phrase ‘‘§ 567.1’’;

b. revising paragraph (c)(3); and

c. in paragraph (c)(4), removing the

phrase ‘‘§ 567.1(1)’’, and by adding in

lieu thereof the phrase ‘‘§ 567.1’’.

The revisions read as follows:

§ 567.9 Tangible capital requirement.

* * * * *

(c) * * *

(3) If a savings association has any

investments (both debt and equity) in

one or more subsidiary(ies) engaged as

of April 12, 1989 and continuing to be

engaged in any activity that would not

fall within the scope of activities in

which includable subsidiaries may

engage, it must deduct such investments

from assets and, thus, tangible capital in

accordance with this paragraph (c)(3).

The savings association must first

deduct from assets and, thus, capital the

amount by which any investments in

such a subsidiary(ies) exceed the

amount of such investments held by the

savings association as of April 12, 1989.

Next, the savings association must

deduct from assets and, thus, tangible

capital the lesser of:

(i) The savings association’s

investments in and extensions of credit

to the subsidiary as of April 12, 1989;

or

(ii) The savings association’s

investments in and extensions of credit

to the subsidiary on the date as of which

the savings association’s capital is being

determined.

* * * * *

30. Section 567.12 is amended by

revising paragraph (a) and the last

sentence of paragraph (b) to read as

follows:

§ 567.12 Qualifying intangible assets and

mortgage servicing rights.

(a) Scope. This section prescribes the

maximum amount of qualifying

intangible assets, as defined in § 567.1

of this part, and mortgage servicing

rights that savings associations may

include in calculating tangible and core

capital.

(b) * * * Intangible assets, as defined

in § 567.1 of this part, other than

purchased credit card relationships and

core deposit intangibles grandfathered

by paragraph (g)(3) of this section, must

be deducted in computing tangible and

core capital.

* * * * *

PART 575—MUTUAL HOLDING

COMPANIES

31. The authority citation for part 575

continues to read as follows:

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

1464, 1467a, 1828, 2901.

§ 575.9 [Amended]

32. Section 575.9 is amended, in the

last sentence of paragraph (a)(4), by

removing the phrase ‘‘remaining

paragraphs of section 11’’, and by

adding in lieu thereof the phrase

‘‘remaining paragraphs of section 12’’.

Dated: December 11, 1997.

By the Office of Thrift Supervision.

Ellen Seidman,

Director.

[FR Doc. 97–32829 Filed 12–17–97; 8:45 am]

BILLING CODE 6720–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–NM–222–AD; Amendment

39–10248; AD 97–26–05]

RIN 2120–AA64

Airworthiness Directives; British

Aerospace (Jetstream) Model HS 748

Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to all British Aerospace

(Jetstream) Model HS 748 series

airplanes. This action requires

inspections of the inspection holes in all

engine ‘W’ frame socket fittings to

determine if certain fasteners have been

installed, or if the inspection holes have

been reworked; and corrective action, if

necessary. This amendment is prompted

by issuance of mandatory continuing

airworthiness information by a foreign

civil airworthiness authority. The

actions specified in this AD are

intended to prevent fatigue cracking at

the inspection hole locations, due to the

installation of certain fasteners or hole

enlargement, which could result in

failure of the engine mount structure

and consequent separation of the engine

from the airplane.

DATES: Effective January 2, 1998.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director