Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Rules and Regulations 44451 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 50 

[Docket ID OCC–2018–0013] 

RIN 1557–AE36 

FEDERAL RESERVE SYSTEM 

12 CFR Part 249 

[Docket No. R–1616] 

RIN 7100–AF10 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 329 

RIN 3064–AE77 

Liquidity Coverage Ratio Rule: 

Treatment of Certain Municipal 

Obligations as High-Quality Liquid 

Assets 

AGENCY: Office of the Comptroller of the 

Currency (OCC), Treasury; Board of 

Governors of the Federal Reserve 

System (Board); and Federal Deposit 

Insurance Corporation (FDIC). 

ACTION: Interim final rule with request 

for comment. 

SUMMARY: The OCC, the Board, and the 

FDIC (collectively, the agencies) are 

jointly issuing and inviting comment on 

an interim final rule that amends the 

agencies’ liquidity coverage ratio (LCR) 

rule to treat liquid and readilymarketable, investment grade municipal 

obligations as high-quality liquid assets 

(HQLA). Section 403 of the Economic 

Growth, Regulatory Relief, and 

Consumer Protection Act amends 

section 18 of the Federal Deposit 

Insurance Act and requires the agencies, 

for purposes of their LCR rule and any 

other regulation that incorporates a 

definition of the term ‘‘high-quality 

liquid asset’’ or another substantially 

similar term, to treat a municipal 

obligation as HQLA (that is a level 2B 

liquid asset) if that obligation is, as of 

the LCR calculation date, ‘‘liquid and 

readily-marketable’’ and ‘‘investment 

grade.’’ 

DATES: The interim final rule is effective 

on August 31, 2018. Comments on the 

interim final rule must be received by 

October 1, 2018. 

ADDRESSES: Comments should be 

directed to: 

OCC: Commenters are encouraged to 

submit comments through the Federal 

eRulemaking Portal or email, if possible. 

Please use the title ‘‘Liquidity Coverage 

Ratio Rule: Treatment of Certain 

Municipal Obligations as High-Quality 

Liquid Assets’’ to facilitate the 

organization and distribution of the 

comments. You may submit comments 

by any of the following methods: 

• Federal eRulemaking Portal— 

‘‘Regulations.gov’’: Go to 

www.regulations.gov. Enter ‘‘Docket ID 

OCC–2018–0013’’ in the Search box and 

click ‘‘Search.’’ Click on ‘‘Comment 

Now’’ to submit public comments. Click 

on the ‘‘Help’’ tab on the 

Regulations.gov home page to get 

information on using Regulations.gov, 

including instructions for submitting 

public comments. 

• Email: regs.comments@

occ.treas.gov. 

• Mail: Legislative and Regulatory 

Activities Division, Office of the 

Comptroller of the Currency, 400 7th 

Street SW, Suite 3E–218, Washington, 

DC 20219. 

• Hand Delivery/Courier: 400 7th 

Street SW, suite 3E–218, Washington, 

DC 20219. 

• Fax: (571) 465–4326. 

Instructions: You must include 

‘‘OCC’’ as the agency name and ‘‘Docket 

ID OCC–2018–0013’’ in your comment. 

In general, OCC will enter all comments 

received into the docket and publish the 

comments on the Regulations.gov 

website without change, including any 

business or personal information that 

you provide such as name and address 

information, email addresses, or phone 

numbers. Comments received, including 

attachments and other supporting 

materials, are part of the public record 

and subject to public disclosure. Do not 

include any information in your 

comment or supporting materials that 

you consider confidential or 

inappropriate for public disclosure. 

You may review comments and other 

related materials that pertain to this 

rulemaking action by any of the 

following methods: 

• Viewing Comments Electronically: 

Go to www.regulations.gov. Enter 

‘‘Docket ID OCC–2018–0013’’ in the 

Search box and click ‘‘Search.’’ Click on 

‘‘Open Docket Folder’’ on the right side 

of the screen. Comments and supporting 

materials can be viewed and filtered by 

clicking on ‘‘View all documents and 

comments in this docket’’ and then 

using the filtering tools on the left side 

of the screen. Click on the ‘‘Help’’ tab 

on the Regulations.gov home page to get 

information on using Regulations.gov. 

The docket may be viewed after the 

close of the comment period in the same 

manner as during the comment period. 

• Viewing Comments Personally: You 

may personally inspect comments at the 

OCC, 400 7th Street SW, Washington, 

DC 20219. For security reasons, the OCC 

requires that visitors make an 

appointment to inspect comments. You 

may do so by calling (202) 649–6700 or, 

for persons who are deaf or hearingimpaired, TTY, (202) 649–5597. Upon 

arrival, visitors will be required to 

present valid government-issued photo 

identification and submit to security 

screening in order to inspect comments. 

Board: When submitting comments, 

please consider submitting your 

comments by email or fax because paper 

mail in the Washington, DC area and at 

the Board may be subject to delay. You 

may submit comments, identified by 

Docket No. R–1616 and RIN 7100–AF10, 

by any of the following methods: 

• Agency website: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Email: regs.comments@

federalreserve.gov. Include docket and 

RIN numbers in the subject line of the 

message. 

• FAX: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Ann E. Misback, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. 

Instructions: All public comments 

will be made available on the Board’s 

website at http://

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons or 

to remove personally identifiable 

information at the commenter’s request. 

Accordingly, comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper in Room 3515, 1801 K Street NW 

(between 18th and 19th Streets NW), 

Washington, DC 20006 between 9:00 

a.m. and 5:00 p.m. on weekdays. For 

security reasons, the Board requires that 

visitors make an appointment to inspect 

comments. You may do so by calling 

(202) 452–3684. Upon arrival, visitors 

will be required to present valid 

government-issued photo identification 

and to submit to security screening in 

order to inspect and photocopy 

comments. 

FDIC: You may submit comments, 

identified by FDIC RIN 3064–AE77, by 

any of the following methods: 

• Agency website: http://

www.FDIC.gov/regulations/laws/ 

federal/. 

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments/Legal 

ESS, Federal Deposit Insurance 


daltland on DSKBBV9HB2PROD with RULES
44452 Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Rules and Regulations 

1 79 FR 61440 (October 10, 2014), codified at 12 

CFR part 50 (OCC), 12 CFR part 249 (Board), and 

12 CFR part 329 (FDIC). 

2 Id. 

3See section 1 of the LCR rule. 

4The Board separately adopted a modified LCR 

requirement for bank holding companies and 

certain savings and loan holding companies that, in 

each case, (A) have $50 billion or more in total 

consolidated assets and (B) are not internationally 

active (each, a modified LCR holding company). 

Under the Board’s LCR rule, modified LCR holding 

companies must maintain an amount of HQLA 

equal to or greater than 70 percent of their projected 

total net cash outflows on the last business day of 

the applicable calendar month. 12 CFR 249 subpart 

G. This interim final rule’s changes to the Board’s 

LCR rule also apply to modified LCR holding 

companies. 

5 81 FR 21223 (April 11, 2016), codified at 12 CFR 

part 249 (Board). 

6 12 CFR 249.20(c)(2). 

7 12 CFR 249.3. 

8This is demonstrated by (A) the market price of 

the security or equivalent securities of the issuer 

declining by no more than 20 percent during a 30 

calendar-day period of significant stress or (B) the 

market haircut demanded by counterparties to 

secured lending and secured funding transactions 

that are collateralized by the security or equivalent 

securities of the issuer increasing by no more than 

20 percentage points during a 30 calendar-day 

period of significant stress. 12 CFR 249.20(c)(2). 

9 Id. 

10 12 CFR 249.21. 

11 12 CFR 249.22(c). 

12Public Law 115–174, 132 Stat. 1296–1368 

(2018). 

13 12 U.S.C. 1828(aa). 

Corporation, 550 17th Street NW, 

Washington, DC 20429. 

• Hand Delivery: Comments may be 

hand-delivered to the guard station at 

the rear of the 550 17th Street NW 

building (located on F Street), on 

business days between 7:00 a.m. and 

5:00 p.m. 

• Email: comments@FDIC.gov. 

Instructions: Comments submitted 

must include ‘‘FDIC’’ and ‘‘RIN 3064– 

AE77.’’ Comments received will be 

posted without change to http://

www.FDIC.gov/regulations/laws/ 

federal/, including any personal 

information provided. 

FOR FURTHER INFORMATION CONTACT: 

OCC: Christopher McBride, Director, 

James Weinberger, Technical Expert, or 

Ang Middleton, Bank Examiner (Risk 

Specialist), (202) 649–6360, Treasury & 

Market Risk Policy; David Stankiewicz, 

Special Counsel, Securities and 

Corporate Practices Division, (202) 649– 

5510; Henry Barkhausen, Counsel, or 

Daniel Perez, Attorney, Legislative and 

Regulatory Activities Division, (202) 

649–5490; for persons who are deaf or 

hearing-impaired, TTY, (202) 649–5597, 

Office of the Comptroller of the 

Currency, 400 7th Street SW, 

Washington, DC 20219. 

Board: Constance Horsley, Deputy 

Associate Director, (202) 452–5239, 

Peter Clifford, Manager, (202) 785–6057, 

J. Kevin Littler, Senior Supervisory 

Financial Analyst, (202) 475–6677, or 

Christopher Powell, Supervisory 

Financial Analyst, (202) 452–3442, 

Division of Banking Supervision and 

Regulation; Laurie Schaffer, Associate 

General Counsel, (202) 452–2272, 

Benjamin W. McDonough, Assistant 

General Counsel, (202) 452–2036, Steve 

Bowne, Senior Attorney, (202) 452– 

3900, or Laura Bain, Senior Attorney, 

(202) 736–5546, Legal Division, Board of 

Governors of the Federal Reserve 

System, 20th and C Streets NW, 

Washington, DC 20551. For the hearing 

impaired only, Telecommunication 

Device for the Deaf (TDD), (202) 263– 

4869, Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. 

FDIC: Bobby R. Bean, Associate 

Director, (202) 898–6705, Michael E. 

Spencer, Chief, (202) 898–7041, Eric W. 

Schatten, Senior Policy Analyst, (202) 

898–7063, Andrew D. Carayiannis, 

Senior Policy Analyst, (202) 898–6692, 

or Nana Ofori-Ansah, Capital Markets 

Policy Analyst, (202) 898–3572, Capital 

Markets Branch, Division of Risk 

Management Supervision; Suzanne J. 

Dawley, Counsel, (202) 898–6509 

(sudawley@fdic.gov), Andrew B. 

Williams, II, Counsel, (202) 898–3591, 

or Alexander S. Bonander, Attorney 

(202) 898–3621, Supervision and 

Corporate Operations Branch, Legal 

Division, Federal Deposit Insurance 

Corporation, 550 17th Street NW, 

Washington, DC 20429. For the hearing 

impaired only, Telecommunication 

Device for the Deaf (TDD), (800) 925– 

4618. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Office of the Comptroller of the 

Currency (OCC), the Board of Governors 

of the Federal Reserve System (Board), 

and the Federal Deposit Insurance 

Corporation (FDIC) (collectively, the 

agencies) adopted the liquidity coverage 

ratio (LCR) rule 1 in 2014. The LCR rule 

established a quantitative liquidity 

requirement that is designed to promote 

the short-term resilience of the liquidity 

risk profile of large and internationally 

active banking organizations. The intent 

of the agencies in issuing the LCR rule 

was to improve the banking sector’s 

ability to absorb shocks arising from 

financial and economic stress and the 

measurement and management of 

liquidity risk.2 The LCR rule generally 

applies to a bank holding company, 

savings and loan holding company, or 

depository institution if: (1) It has total 

consolidated assets equal to $250 billion 

or more; (2) it has total consolidated onbalance sheet foreign exposure equal to 

$10 billion or more; or (3) it is a 

depository institution with total 

consolidated assets equal to $10 billion 

or more and is a consolidated subsidiary 

of a firm that is subject to the LCR rule 

(each, a covered company).3 Covered 

companies generally must maintain an 

amount of high-quality liquid assets 

(HQLA) equal to or greater than their 

projected total net cash outflows over a 

prospective 30 calendar-day period.4

The LCR rule defines three categories of 

HQLA—level 1, level 2A, and level 2B 

liquid assets—and sets forth qualifying 

criteria for HQLA and limitations for an 

asset’s inclusion in the HQLA amount. 

In 2016, the Board amended its LCR 

rule to include certain U.S. municipal 

securities as HQLA, subject to certain 

limitations (2016 Amendments).5 To 

qualify as level 2B liquid assets under 

the 2016 Amendments, the U.S. 

municipal securities must be general 

obligation securities of public sector 

entities (i.e., a state, local authority, or 

other governmental subdivision below 

the U.S. sovereign entity level).6 Under 

the 2016 Amendments, a general 

obligation is defined as a bond or 

similar obligation that is backed by the 

full faith and credit of a public sector 

entity.7 To be treated as HQLA, the 

general obligation securities also must: 

(1) Be investment grade under 12 CFR 

part 1 as of the calculation date; (2) be 

issued or guaranteed by a public sector 

entity whose obligations have a proven 

record as a reliable source of liquidity 

in repurchase or sales markets during 

stressed market conditions; 8 and (3) not 

be an obligation of a financial sector 

entity or a financial sector entity’s 

consolidated subsidiary, unless it is 

only guaranteed by a financial sector 

entity or its consolidated subsidiary and 

otherwise eligible.9 The 2016 

Amendments limited the inclusion of 

general obligation securities in the 

HQLA amount to 5 percent of the 

covered company’s total HQLA 

amount.10 The 2016 Amendments also 

limited the inclusion of general 

obligation securities of any single public 

sector entity to two times the average 

daily trading volume during the 

previous four quarters of all general 

obligation securities issued by that 

public sector entity.11

The Economic Growth, Regulatory 

Relief, and Consumer Protection Act 

(EGRRCPA) was enacted on May 24, 

2018.12 Section 403 of the EGRRCPA 

amends section 18 of the Federal 

Deposit Insurance Act 13 and requires 

the agencies, for purposes of the LCR 


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Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Rules and Regulations 44453 

14 12 CFR part 50 (OCC), 12 CFR part 249 (Board), 

and 12 CFR part 329 (FDIC). 

15 12 CFR 50.20 (OCC), 12 CFR 249.20 (FRB), and 

12 CFR 329.20 (FDIC). 

16 12 CFR 1.2. 

17 12 CFR 249.3. 

18Corresponding changes will be made to the 

Complex Institution Liquidity Monitoring Report 

(FR 2052a). These changes will be described in a 

separate Federal Register notice. 

19Additionally, to count as HQLA, municipal 

obligations will not (1) be required to be issued or 

guaranteed by a public sector entity whose 

obligations have a proven record as a reliable source 

of liquidity in repurchase or sales markets during 

stressed market conditions, as demonstrated by the 

quantitative metrics included in the 2016 

Amendments; or (2) be prohibited from being an 

obligation of a financial sector entity or a financial 

sector entity’s consolidated subsidiary. In addition, 

the amount of municipal obligations that can be 

included in Board-regulated institutions’ HQLA 

amount will no longer be limited to 5 percent of the 

total HQLA amount. The limit on the amount of 

municipal obligations of a single issuer that may be 

included as eligible HQLA will also no longer apply 

to Board-regulated institutions. 

20This interim final rule does not affect other 

requirements under the LCR rule that serve to 

restrict HQLA, such as the 50 percent haircut for 

level 2B liquid assets under section 21(b) and the 

restriction that level 2B assets cannot exceed more 

than 15 percent of the total HQLA amount. In 

addition, this interim final rule does not affect the 

section 22 requirements, which address the 

operational and generally applicable criteria for 

eligible HQLA. With regard to net cash outflows, 

the interim final rule does not affect the 

requirements under sections 32 and 33, which 

address the calculation of outflow and inflow 

amounts, respectively. 

21 5 U.S.C. 553. 

22 5 U.S.C. 553(b)(B). 

rule and any other regulation that 

incorporates a definition of the term 

‘‘high-quality liquid asset’’ or another 

substantially similar term, to treat a 

municipal obligation as HQLA that is a 

level 2B liquid asset if that obligation is, 

as of the calculation date, (A) liquid and 

readily-marketable and (B) investment 

grade. Section 403 defines ‘‘investment 

grade’’ as having the meaning given the 

term in § 1.2 of title 12, Code of Federal 

Regulations, or any successor thereto. 

Section 403 defines ‘‘liquid and readilymarketable’’ as having the meaning 

given the term in § 249.3 of title 12, 

Code of Federal Regulations, or any 

successor thereto. Section 403 defines 

‘‘municipal obligation’’ as ‘‘an 

obligation of—(i) a State or any political 

subdivision thereof; or (ii) any agency or 

instrumentality of a State or any 

political subdivision thereof.’’ 

II. Description of the Interim Final Rule 

This interim final rule amends the 

agencies’ LCR rule to implement section 

403 of the EGRRCPA. Section 403 

requires the agencies to treat a 

municipal obligation as a level 2B liquid 

asset if the obligation, as of the 

calculation date, is liquid and readilymarketable and investment grade.14 To 

effect this change, the interim final rule 

makes certain amendments to each 

agency’s LCR rule that incorporate the 

provisions of section 403 of the 

EGRRCPA. 

The interim final rule adds a 

definition to the agencies’ rule for the 

term ‘‘municipal obligations,’’ which, 

consistent with the EGRRCPA, means an 

obligation of (1) a state or any political 

subdivision thereof or (2) any agency or 

instrumentality of a state or any 

political subdivision thereof. 

The interim final rule amends the 

HQLA criteria with respect to level 2B 

liquid assets by adding municipal 

obligations that, as of the calculation 

date, are both (1) liquid and readilymarketable and (2) investment grade 

(under 12 CFR part 1) to the list of assets 

that are eligible for treatment as level 2B 

liquid assets.15 The OCC’s definition of 

‘‘investment grade’’ under 12 CFR 1.2 

provides that ‘‘[i]nvestment grade means 

the issuer of a security has an adequate 

capacity to meet financial commitments 

under the security for the projected life 

of the asset or exposure. An issuer has 

an adequate capacity to meet financial 

commitments if the risk of default by 

the obligor is low and the full and 

timely repayment of principal and 

interest is expected.’’ 16 A municipal 

obligation is required to meet this 

definition of ‘‘investment grade’’ as of 

the calculation date to be treated as a 

level 2B liquid asset under the interim 

final rule. 

Consistent with section 403, the 

interim final rule also amends the 

definition of ‘‘liquid and readilymarketable’’ in the FDIC’s and OCC’s 

rules so that the term has the same 

meaning given to it under the Board’s 

rules. Under this provision of the 

Board’s rules, a ‘‘liquid and readilymarketable’’ security is a security that is 

traded in an active secondary market 

with: (1) More than two committed 

market makers; (2) a large number of 

non-market maker participants on both 

the buying and selling sides of 

transactions; (3) timely and observable 

market prices; and (4) a high trading 

volume.17 As described above, a 

municipal obligation is required to be 

liquid and readily-marketable as of the 

date of calculation to be treated as a 

level 2B liquid asset under the interim 

final rule. 

As part of the interim final rule, the 

Board is rescinding the 2016 

Amendments so that municipal 

obligations under the Board’s LCR rule 

will be treated consistently with section 

403 of the EGRRCPA. As a result of the 

above changes, covered companies will 

be able to count municipal obligations 

as HQLA that qualify as level 2B liquid 

assets, provided the municipal 

obligations meet the HQLA criteria 

under the LCR rule.18 Accordingly, 

covered companies will have greater 

flexibility in meeting the minimum 

requirements under the LCR rule as 

more types of assets will be eligible as 

HQLA. For FDIC- and OCC-regulated 

institutions, these changes will mark the 

first time that such institutions may 

treat any municipal obligations as 

HQLA. For Board-regulated institutions, 

these changes are expected to broaden 

the number of municipal obligations 

that can be counted as HQLA. In 

particular, for purposes of the types of 

assets eligible for treatment as HQLA, 

municipal obligations will no longer be 

required to be general obligation 

securities.19 As a result, many issuances 

of revenue bonds will now qualify as 

municipal obligations. 

Only municipal obligations that meet 

the LCR rule’s definition for liquid and 

readily-marketable and that are 

investment grade under 12 CFR part 1 

will qualify for treatment as HQLA 

under this interim final rule.20 The 

interim final rule does not otherwise 

affect covered companies’ obligations 

under the LCR rule. 

III. Request for Comment 

The definition of ‘‘municipal 

obligation’’ and the criteria for treating 

municipal obligations as level 2B liquid 

assets were established by section 403 of 

the EGRRCPA. Consistent with section 

403, in what ways, if any, could the 

agencies clarify aspects of these 

provisions (e.g., by clarifying the terms 

‘‘state’’ or ‘‘political subdivision’’)? The 

agencies invite comment on this 

question and all other aspects of this 

interim final rule. 

IV. Regulatory Analysis 

A. Administrative Procedure Act and 

Effective Date 

The agencies are issuing the interim 

final rule without prior notice and the 

opportunity for public comment and the 

30 day delayed effective date ordinarily 

prescribed by the Administrative 

Procedure Act (APA).21 Pursuant to 

section 553(b)(B) of the APA, general 

notice and the opportunity for public 

comment are not required prior to the 

issuance of a final rule if an agency, for 

good cause, finds (and incorporates the 

finding and a brief statement of reasons 

therefor in the rules issued) that ‘‘notice 

and public procedure thereon are 

impracticable, unnecessary, or contrary 

to the public interest.’’ 22


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44454 Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Rules and Regulations 

23 5 U.S.C. 553(d). 

24 12 U.S.C. 4802(a). 

25 12 U.S.C. 4802(b). 

26Under regulations issued by the Small Business 

Administration, a small entity includes a depository 

institution, bank holding company, or savings and 

loan holding company with total assets of $550 

million or less and trust companies with total assets 

of $38.5 million or less. 

As discussed above, this interim final 

rule implements the provisions of 

section 403 of the EGRRCPA, which 

became effective on May 24, 2018, and 

directs the agencies to make certain 

changes to the criteria for HQLA. The 

interim final rule adopts without change 

the statutory definition for ‘‘municipal 

obligations’’ and the requirement that 

municipal obligations be treated as level 

2B liquid assets if the obligations are 

liquid and readily-marketable and 

investment grade. Because these 

changes to the LCR rule are mandated 

by the EGRRCPA, the agencies have 

determined that publishing a notice of 

proposed rulemaking is unnecessary. In 

addition, the agencies believe that the 

public interest is best served by 

implementing Congress’s legislative 

directive as soon as possible because 

immediate implementation would 

provide clarity to the public regarding 

the liquidity rules and would be 

consistent with Congress’s directive to 

the agencies under section 403(b) of the 

EGRRCPA to amend the LCR rule within 

90 days after enactment of the 

EGRRCPA. 

The effective date of this interim final 

rule is August 31, 2018. Pursuant to 

section 553(d)(3) of the APA, the 

required publication or service of a 

substantive rule shall be made not less 

than 30 days before its effective date, 

except as otherwise provided by the 

agency for good cause found and 

published with the rule.23 For the 

reasons described above in connection 

with APA section 553(b)(B), the 

agencies find good cause to publish the 

rule with an immediate effective date. 

B. Riegle Community Development and 

Regulatory Improvement Act 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act 

(RCDRIA),24 in determining the effective 

date and administrative compliance 

requirements for a new regulation that 

imposes additional reporting, 

disclosure, or other requirements on 

insured depository institutions, each 

federal banking agency must consider 

any administrative burdens that such 

regulation would place on depository 

institutions and the benefits of such 

regulation. In addition, section 302(b) of 

the RCDRIA 25 requires such new 

regulation to take effect on the first day 

of a calendar quarter that begins on or 

after the date on which the regulations 

are published in final form, with certain 

exceptions, including for good cause. 

For the reasons described above in 

connection with the APA section 

553(b)(B) requirement, the agencies find 

good cause exists under section 302 of 

RCDRIA to publish this interim final 

rule with an immediate effective date. 

While the agencies believe there is 

good cause to issue the rules without 

advance notice and comment and with 

an immediate effective date, the 

agencies are interested in the views of 

the public and request comment on all 

aspects of the interim final rule. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking when a 

general notice of proposed rulemaking 

is not required. 5 U.S.C. 603 and 604. 

As noted previously, the agencies have 

determined that it is unnecessary to 

publish a general notice of proposed 

rulemaking for this interim final rule. 

Accordingly, the RFA’s requirements 

relating to an initial and final regulatory 

flexibility analysis do not apply. 

Nonetheless, the agencies observe that 

in light of the way the interim final rule 

operates, they believe that, with respect 

to the entities subject to the interim 

final rule and within each agency’s 

respective jurisdiction, the interim final 

rule would not have a significant 

economic impact on a substantial 

number of small entities.26

D. Paperwork Reduction Act of 1995 

The Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3521) states that no 

agency may conduct or sponsor, nor is 

the respondent required to respond to, 

an information collection unless it 

displays a currently valid Office of 

Management and Budget control 

number. The agencies have determined 

that this interim final rule does not 

create any new, or revise any existing, 

collections of information pursuant to 

the Paperwork Reduction Act. 

E. Unfunded Mandates Reform Act of 

1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 

(Unfunded Mandates Act), 2 U.S.C. 

1532, requires the OCC to prepare a 

budgetary impact statement before 

promulgating any final rule for which a 

general notice of proposed rulemaking 

was published. As discussed above, the 

OCC has determined that the 

publication of a general notice of 

proposed rulemaking is unnecessary. 

Accordingly, this interim final rule is 

not subject to section 202 of the 

Unfunded Mandates Act. 

List of Subjects 

12 CFR Part 50 

Administrative practice and 

procedure, Banks, Banking, Liquidity, 

Reporting and recordkeeping 

requirements, Savings associations. 

12 CFR Part 249 

Administrative practice and 

procedure, Banks, Banking, Federal 

Reserve System, Holding companies, 

Liquidity, Reporting and recordkeeping 

requirements. 

12 CFR Part 329 

Administrative practice and 

procedure, Banks, Banking, Federal 

Deposit Insurance Corporation, FDIC, 

Liquidity, Reporting and recordkeeping 

requirements. 

Authority and Issuance 

For the reasons stated in the 

preamble, the OCC amends 12 CFR part 

50, the Board amends 12 CFR part 249, 

and the FDIC amends 12 CFR part 329 

as follows: 

Department of the Treasury 

Office of the Comptroller of the 

Currency 

PART 50—LIQUIDITY RISK 

MEASUREMENT STANDARDS 

■ 1. The authority citation for part 50 is 

revised to read as follows: 

Authority: 12 U.S.C. 1 et seq., 93a, 481, 

1818, 1828, and 1462 et seq. 

■ 2. Section 50.3 is amended by revising 

the definition for ‘‘Liquid and readilymarketable’’ and adding the definition 

for ‘‘Municipal obligation’’ in 

alphabetical order to read as follows: 

§ 50.3 Definitions. 

* * * * * 

Liquid and readily-marketable has the 

meaning given the term in 12 CFR 

249.3. 

* * * * * 

Municipal obligation means an 

obligation of: 

(1) A state or any political subdivision 

thereof; or 

(2) Any agency or instrumentality of 

a state or any political subdivision 

thereof. 

* * * * * 

■ 3. Section 50.20 is amended by: 

■ a. Republishing paragraph (c) 

introductory text; 

■ b. Removing the ‘‘or’’ at the end of 

paragraph (c)(1)(iii); 


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Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Rules and Regulations 44455 

■ c. Removing the period at the end of 

paragraph (c)(2)(vi) and adding ‘‘; or’’ in 

its place; and 

■ d. Adding paragraph (c)(3). 

The republication and addition read 

as follows: 

§ 50.20 High-quality liquid asset criteria. 

* * * * * 

(c) Level 2B liquid assets. An asset is 

a level 2B liquid asset if the asset is 

liquid and readily-marketable and is one 

of the following types of assets: 

* * * * * 

(3) A municipal obligation that is 

investment grade under 12 CFR part 1 

as of the calculation date. 

Federal Reserve System 

PART 249—LIQUIDITY RISK 

MEASUREMENT STANDARDS 

(REGULATION WW) 

■ 4. The authority citation for part 249 

continues to read as follows: 

Authority: 12 U.S.C. 248(a), 321–338a, 

481–486, 1467a(g)(1), 1818, 1828, 1831p–1, 

1831o–1, 1844(b), 5365, 5366, 5368. 

■ 5. Amend § 249.3 by removing the 

definition for ‘‘General obligation’’ and 

adding the definition for ‘‘Municipal 

obligation’’ in alphabetical order to read 

as follows: 

§ 249.3 Definitions. 

* * * * * 

Municipal obligation means an 

obligation of: 

(1) A state or any political subdivision 

thereof; or 

(2) Any agency or instrumentality of 

a state or any political subdivision 

thereof. 

* * * * * 

■ 6. Amend § 249.20 by republishing 

paragraph (c) introductory text, 

removing the ‘‘or’’ at the end of 

paragraph (c)(1)(iii), removing 

paragraph (c)(2), redesignating 

paragraph (c)(3) as (c)(2), removing the 

period at the end of newly redesignated 

paragraph (c)(2)(vi) and adding ‘‘; or’’ in 

its place, and adding a new paragraph 

(c)(3) to read as follows: 

§ 249.20 High-quality liquid asset criteria. 

* * * * * 

(c) Level 2B liquid assets. An asset is 

a level 2B liquid asset if the asset is 

liquid and readily-marketable and is one 

of the following types of assets: 

* * * * * 

(3) A municipal obligation that is 

investment grade under 12 CFR part 1 

as of the calculation date. 

§ 249.21 [Amended] 

■ 7. Amend § 249.21 by: 

■ a. Removing paragraph (b)(4); 

■ b. Removing ‘‘; plus’’ at the end of 

paragraph (c)(2) and adding in its place 

a period; 

■ c. Removing paragraphs (c)(3), (f), and 

(g)(4); 

■ d. Removing ‘‘; plus’’ at the end of 

paragraph (h)(2) and adding in its place 

a period; 

■ e. Removing paragraphs (h)(3) and (k); 

and 

■ f. Redesignating paragraphs (g) 

through (j) as paragraphs (f) through (i), 

respectively. 

§ 249.22 [Amended] 

■ 8. Amend § 249.22 by removing 

paragraph (c) and redesignating 

paragraph (d) as paragraph (c). 

Federal Deposit Insurance Corporation 

PART 329—LIQUIDITY RISK 

MEASUREMENT STANDARDS 

■ 9. The authority citation for part 329 

continues to read as follows: 

Authority: 12 U.S.C. 1815, 1816, 1818, 

1819, 1828, 1831p–1, 5412. 

■ 10. Section 329.3 is amended by 

revising the definition for ‘‘Liquid and 

readily-marketable’’ and adding the 

definition for ‘‘Municipal obligation’’ in 

alphabetical order to read as follows: 

§ 329.3 Definitions. 

* * * * * 

Liquid and readily-marketable has the 

meaning given the term in 12 CFR 

249.3. 

* * * * * 

Municipal obligation means an 

obligation of: 

(1) A state or any political subdivision 

thereof; or 

(2) Any agency or instrumentality of 

a state or any political subdivision 

thereof. 

* * * * * 

■ 11. Section 329.20 is amended by: 

■ a. Republishing paragraph (c) 

introductory text; 

■ b. Removing the ‘‘or’’ at the end of 

paragraph (c)(1)(iii); 

■ c. Removing the period at the end of 

paragraph (c)(2)(vi) and adding ‘‘; or’’ in 

its place; and 

■ d. Adding paragraph (c)(3). 

The republication and addition read 

as follows: 

§ 329.20 High-quality liquid asset criteria. 

* * * * * 

(c) Level 2B liquid assets. An asset is 

a level 2B liquid asset if the asset is 

liquid and readily-marketable and is one 

of the following types of assets: 

* * * * * 

(3) A municipal obligation that is 

investment grade under 12 CFR part 1 

as of the calculation date. 

Dated: August 20, 2018. 

Joseph M. Otting, 

Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, August 21, 2018. 

Ann E. Misback, 

Secretary of the Board. 

Dated at Washington, DC, on August 22, 

2018. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Valerie Jean Best, 

Assistant Executive Secretary. 

[FR Doc. 2018–18610 Filed 8–30–18; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 31 

[Docket No. FAA–2018–0566; Notice No. 31– 

002–SC] 

Special Conditions: Ultramagic S.A., 

Model M–56, M–56C, M–65, M–65C, M– 

77, M–77C, M–90, M–105, M–120, M– 

130, M–145, M–160, N–180, N–210, N– 

250, N–300, N–355, N–425, S–70, S–90, 

S–105, S–130, S–160, T–150, T–180, T– 

210, V–56, V–65, V–77, V–90, and V– 

105 Balloons; Balloon Passenger 

Basket, Model CV–08, Seat Installation 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final special conditions. 

SUMMARY: These special conditions are 

issued for Ultramagic S.A. Models M– 

56, M–56C, M–65, M–65C, M–77, M– 

77C, M–90, M–105, M–120, M–130, M– 

145, M–160, N–180, N–210, N–250, N– 

300, N–355, N–425, S–70, S–90, S–105, 

S–130, S–160, T–150, T–180, T–210, V– 

56, V–65, V–77, V–90, and V–105 

balloons. These balloons will have 

novel or unusual design features 

associated with a standard construction 

basket with a singular distribution that 

includes four occupant seats and a 

lower sidewall. The applicable 

airworthiness regulations do not contain 

adequate or appropriate safety standards 

for these design features. These special 

conditions contain the additional safety 

standards the Administrator considers 

necessary to establish a level of safety 

equivalent to that established by the 

existing airworthiness standards. 

DATES: These special conditions are 

effective August 31, 2018. 


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