6860 Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / Rules and Regulations

deputy regional director, to act on

disclosure matters under and pursuant

to sections 12, 13, 14 and 16 of the

Securities Exchange Act of 1934 (15

U.S.C. 78) or this part.

(b) Authority to act on disclosure

matters is retained by the FDIC Board of

Directors when such matters involve:

(1) Exemption from disclosure

requirements pursuant to section 12(h)

of the Securities Exchange Act of 1934

(15 U.S.C. 78l(h)); or

(2) Exemption from tender offer

requirements pursuant to section

14(d)(8) of the Securities Exchange Act

of 1934 (15 U.S.C. 78n(d)(8)).

By 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. 97–3596 Filed 2–13–97; 8:45 am]

BILLING CODE 6714–01–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 931

[No. 97–3]

Technical Amendment to Definition of

Deposits in Banks or Trust Companies

AGENCY: Federal Housing Finance

Board.

ACTION: Interim final rule with request

for comments.

SUMMARY: The Federal Housing Finance

Board (Finance Board) is amending the

definition of the term ‘‘deposits in banks

or trust companies’’ to expressly include

a deposit in, or a sale of federal funds

to, a branch or agency of a foreign bank

located in the United States that is

subject to the supervision of the Board

of Governors of the Federal Reserve

System (Board of Governors), as an

investment eligible to fulfill the

liquidity requirement imposed on the

Federal Home Loan Banks (FHLBanks)

by section 11(g) of the Federal Home

Loan Bank Act (Bank Act).

DATES: The interim final rule will

become effective on February 14, 1997.

The Finance Board will accept

comments on the interim final rule in

writing on or before March 17, 1997.

ADDRESSES: Mail comments to Elaine L.

Baker, Executive Secretary, Federal

Housing Finance Board, 1777 F Street,

NW, Washington, DC 20006. Comments

will be available for public inspection at

this address.

FOR FURTHER INFORMATION CONTACT:

Janice A. Kaye, Attorney-Advisor, Office

of General Counsel, 202/408–2505, or

Christine M. Freidel, Assistant Director,

Financial Management Division, Office

of Policy, 202/408–2976, Federal

Housing Finance Board, 1777 F Street,

NW, Washington, DC 20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

Under section 11(e)(1) of the Bank

Act, the FHLBanks have the power to

accept deposits from their members,

other FHLBanks, or instrumentalities of

the United States. See 12 U.S.C.

1431(e)(1). To ensure that each

FHLBank has sufficient liquid assets to

meet deposit withdrawal demands,

section 11(g) of the Bank Act imposes a

liquidity requirement. See id. 1431(g).

The liquidity requirement provides that

each FHLBank must invest, upon such

terms and conditions as the Finance

Board may prescribe, an amount equal

to the current deposits the FHLBank

holds in specified types of assets. Id.

Among the assets specified in the Bank

Act are ‘‘deposits in banks or trust

companies.’’ Id. 1431(g)(2).

In 1978, the Finance Board’s

predecessor, the former Federal Home

Loan Bank Board (FHLBB), defined by

regulation the phrase ‘‘deposits in banks

or trust companies’’ to include a deposit

in another FHLBank, a demand account

with a Federal Reserve Bank, or a

deposit in a depository designated by a

FHLBank’s board of directors that is a

member of either the Federal Reserve

System (FRS) or the Federal Deposit

Insurance Corporation (FDIC). See 43 FR

46835, 46836 (Oct. 11, 1978), codified at

12 CFR 521.5 (superseded). When

Congress abolished the FHLBB in 1989,

see Financial Institutions Reform,

Recovery, and Enforcement Act of 1989,

Pub. L. 101–73, sec. 401, 103 Stat. 183

(Aug. 9, 1989), the Finance Board

transferred the definition, without any

change in substantive or technical

matters, to § 931.5 of its regulations. See

54 FR 36757 (Aug. 28, 1989), codified at

12 CFR 931.5. This definition remained

unchanged until July 3, 1996, when the

Finance Board adopted a final rule

modifying the definition of ‘‘deposits in

banks or trust companies.’’ The final

rule was published in the Federal

Register on August 2, 1996, and became

effective on September 3, 1996. See 61

FR 40311 (Aug. 2, 1996), codified at 12

CFR 931.5. The final rule made clear

that the term ‘‘banks’’ includes savings

associations, and included federal funds

transactions as eligible to fulfill the

liquidity requirement imposed on the

FHLBanks by section 11(g) of the Bank

Act. See 12 U.S.C. 1431(g).

II. Analysis of the Interim Final Rule

In revising the definition of ‘‘deposits

in banks or trust companies,’’ the

Finance Board inadvertently omitted as

an eligible investment deposits in

certain U.S. branches and agencies of

foreign banks. A foreign bank may

establish a U.S. branch or agency only

with the prior approval of the Board of

Governors and an appropriate licensing

authority, i.e., either the Comptroller of

the Currency or a state banking

regulator. U.S. branches and agencies of

foreign banks are subject to the

supervision of the Board of Governors

and must meet many of the rules and

regulations applicable to domestic

commercial banks.

U.S. branches of foreign banks

principally accept wholesale deposits,

that is, deposits greater than the

$100,000 FDIC insurance limit. U.S.

agencies of foreign banks typically do

not accept deposits, although under the

laws of some states an agency may have

authority to do so. Since December 19,

1991, federal banking laws require

foreign banks located in the United

States that accept retail deposits

(generally, deposits of less than

$100,000), to do so only through a

subsidiary bank the deposits of which

are insured by the FDIC. See FDIC

Improvement Act of 1991, Pub. L. 102–

242, Title II, sec. 214(a), 105 Stat. 2303,

codified at 12 U.S.C. 3104(d). Although

U.S. branches of foreign banks are not

subsidiary banks, the statute permits

branches that had FDIC insurance prior

to that date to continue to accept or

maintain retail deposits. See id. Thus,

with the exception of branches whose

deposits were insured by the FDIC prior

to December 19, 1991, U.S. branches

and agencies of foreign banks do not

accept retail deposits.

Under both the current and previous

definitions of the term ‘‘deposits in

banks or trust companies,’’ FHLBank

deposits in the small number of U.S.

branches the deposits of which are

insured by the FDIC, are eligible

investments for purposes of section

11(g) of the Bank Act since the

definitions include deposits in FDICinsured depository institutions. See 12

CFR 931.5 (1995 superseded); 12 CFR

931.5 (1996). FHLBank deposits in the

U.S. branches and agencies whose

deposits are not insured by the FDIC are

not eligible investments. See Id.

Since all U.S. branches and agencies

of foreign banks operate in a similar

manner regardless of their FDICinsurance status, and all are subject to

the same legal requirements and the

supervision of the Board of Governors,

the Finance Board believes that the
Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / Rules and Regulations 6861

inadvertent distinction made in the

definition based on whether the

institution’s deposits are FDIC-insured

is neither required nor appropriate. In

order to eliminate the distinction and

treat all U.S. branches and agencies of

foreign banks equally, the Finance

Board is amending the definition of

‘‘deposits in banks or trusts’’ in § 931.5

to include as eligible investments for

purposes of section 11(g) of the Bank

Act, FHLBank deposits in any U.S.

branch or agency of a foreign bank that

has legal authority to accept deposits or

engage in federal funds transactions. To

achieve this result, the Finance Board

has added a new § 931.5(c)(3) that

includes expressly a deposit in, or

federal funds transactions with, a U.S.

branch or agency of a foreign bank that

is subject to the supervision of the

Board of Governors and is designated by

a FHLBank’s board of directors. The

terms ‘‘branch,’’ ‘‘agency,’’ and ‘‘foreign

bank’’ have the same meaning as in the

International Banking Act of 1978, as

amended. See 12 U.S.C. 3101(1), (3), (7).

The changes made by the interim final

rule also are consistent with the

provisions of federal law that require

the treatment of all U.S. branches and

agencies of foreign banks to be similar

to the treatment of domestic depository

institutions.

III. Notice and Public Participation

The Finance Board finds that the

notice and comment procedure required

by the Administrative Procedure Act is

unnecessary, impracticable, and

contrary to the public interest in this

instance because the change made by

the interim final rule is technical in

nature and applies only to the

FHLBanks. See 5 U.S.C. 553(b)(3)(B). In

addition, as explained above, the

changes made by the interim final rule

are necessary to comply with various

provisions of federal law. Nevertheless,

because the Finance Board believes

public comments aid in effective

rulemaking, it will accept written

comments on the interim final rule on

or before March 17, 1997.

IV. Effective Date

For the reasons stated in part III

above, the Finance Board for good cause

finds that the interim final rule should

become effective on February 14, 1997.

See 5 U.S.C. 553(d)(3).

V. Regulatory Flexibility Act

The Finance Board is adopting the

technical amendment to part 931 in the

form of an interim final rule and not as

a proposed rule. Therefore, the

provisions of the Regulatory Flexibility

Act do not apply. See 5 U.S.C. 601(2),

603(a).

VI. Paperwork Reduction Act

No collections of information

pursuant to the Paperwork Reduction

Act of 1995 are contained in this interim

final rule. See 44 U.S.C. 3501, et seq.

Consequently, the Finance Board has

not submitted any information to the

Office of Management and Budget for

review.

List of Subjects in 12 CFR Part 931

Banks, banking, Federal home loan

banks.

Accordingly, the Federal Housing

Finance Board hereby amends title 12,

chapter IX, part 931 of the Code of

Federal Regulations, as follows:

PART 931—DEFINITIONS

1. The authority citation for part 931

continues to read as follows:

Authority: 12 U.S.C. 1422a, 1422b, 1427,

and 1431(g).

2. Section 931.5 is revised to read as

follows:

§ 931.5 Deposits in banks or trust

companies.

Include:

(a) A deposit in another Bank;

(b) A demand account in a Federal

Reserve Bank; and

(c) A deposit in, or a sale of federal

funds to:

(1) An insured depository institution,

as defined in section 2(12)(A) of the Act,

that is designated by a Bank’s board of

directors;

(2) A trust company that is a member

of the Federal Reserve System or

insured by the Federal Deposit

Insurance Corporation, and is

designated by a Bank’s board of

directors; or

(3) A U.S. branch or agency of a

foreign bank, as defined in the

International Banking Act of 1978, as

amended (12 U.S.C. 3101 et seq.), that

is subject to the supervision of the

Board of Governors of the Federal

Reserve System, and is designated by a

Bank’s board of directors.

By the Board of Directors of the Federal

Housing Finance Board

Bruce A. Morrison,

Chairperson.

[FR Doc. 97–3403 Filed 2–13–97; 8:45 am]

BILLING CODE 6725–01–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 96–NM–153–AD; Amendment

39–9925; AD 97–04–01]

RIN 2120–AA64

Airworthiness Directives; Boeing

Model 737 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to certain Boeing Model 737

series airplanes, that requires

modification of the aileron centering

spring and trim mechanism. This

amendment is prompted by a review of

the design of the flight control systems

on Model 737 series airplanes. The

actions specified by this AD are

intended to prevent jamming of the

aileron control system during flight due

to fracturing of the springs in the aileron

centering units; this condition, if not

corrected, could result in reduced

lateral control of the airplane.

DATES: Effective March 21, 1997.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of March 21,

1997.

ADDRESSES: The service information

referenced in this AD may be obtained

from Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle,

Washington 98124–2207. This

information may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington; or at the Office of

the Federal Register, 800 North Capitol

Street, NW., Suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Don

Kurle, Senior Engineer, Systems and

Equipment Branch, ANM–130S, FAA,

Transport Airplane Directorate, Seattle

Aircraft Certification Office, 1601 Lind

Avenue, SW., Renton, Washington

98055–4056; telephone (206) 227–2798;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to certain Boeing

Model 737 series airplanes was

published in the Federal Register on

August 28, 1996 (61 FR 44247). That

action proposed to require modification