Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Rules and Regulations 44195 

provided to them by the ATP 

Participant. 

(e) An ATP Participant may undertake 

ATP promotional activities directly or 

through a domestic or foreign third 

party. However, the ATP Participant 

shall remain responsible and 

accountable to the CCC for all ATP 

promotional activities and related 

expenditures undertaken by such third 

party and shall be responsible for 

reimbursing CCC for any funds that CCC 

determines should be refunded to the 

CCC in relation to such third party’s 

promotional activities and expenditures. 

§ 1489.29 Property standards. 

The ATP Participant shall insure all 

ATP-funded property and equipment 

acquired in furtherance of program 

activities and safeguard such against 

theft, damage and unauthorized use. 

The Participant shall promptly report 

any loss, theft, or damage of property to 

the insurance company. 

§ 1489.30 Anti-fraud requirements. 

(a) All ATP Participants. (1) All ATP 

Participants shall submit to the CCC for 

approval a detailed fraud prevention 

program. The CCC will notify all new 

and existing ATP Participants in writing 

in each Participant’s approval letter and 

through the FAS website as to 

applicable submission dates for and 

dates for approvals of fraud prevention 

programs. ATP Participants should 

review their fraud prevention programs 

annually. The fraud prevention program 

shall, at a minimum, include an annual 

review of physical controls and 

weaknesses, a standard process for 

investigating and remediation of 

suspected fraud cases, and training in 

risk management and fraud detection for 

all current and future employees. The 

ATP Participant shall not conduct or 

permit any ATP promotion activities to 

occur unless and until the CCC has 

communicated in writing approval of 

the ATP Participant’s fraud prevention 

program. 

(2) The ATP Participant, within five 

business days of receiving an allegation 

or information giving rise to a 

reasonable suspicion of 

misrepresentation or fraud that could 

give rise to a claim by CCC, shall report 

such allegation or information in 

writing to such USDA personnel as 

specified in the Participant’s ATP 

program agreement and/or approval 

letter. The ATP Participant shall 

cooperate fully in any USDA 

investigation of such allegation or 

occurrence of misrepresentation or 

fraud and shall comply with any 

directives given by the CCC or USDA to 

the ATP Participant for the prompt 

investigation of such allegation or 

occurrence. 

(b) ATP Participants with brand 

programs. (1) The ATP Participant may 

charge a fee to brand participants to 

cover the cost of the fraud prevention 

program. 

(2) The ATP Participant shall repay to 

the CCC funds paid to a brand 

participant through the ATP Participant 

on claims that the ATP Participant or 

the CCC subsequently determines are 

unauthorized or otherwise nonreimbursable expenses within 30 days 

of the ATP Participant’s determination 

or CCC’s disallowance. The ATP 

Participant shall repay CCC by 

submitting a check to CCC or by 

offsetting the ATP Participant’s next 

reimbursement claim. The ATP 

Participant shall make such payment in 

U.S. dollars, unless otherwise approved 

in advance by CCC. An ATP Participant 

operating a brand program in strict 

accordance with an approved fraud 

prevention program, however, will not 

be liable to reimburse CCC for ATP 

funds paid on such claims if the claims 

were based on misrepresentations or 

fraud of the brand participant, its 

employees or agents, unless the CCC 

determines that the ATP Participant was 

grossly negligent in the operation of the 

brand program regarding such claims. 

The CCC shall communicate any such 

determination to the ATP Participant in 

writing. 

§ 1489.31 Program income. 

Any revenue or refunds generated 

from an activity, e.g., participation fees, 

proceeds of sales, refunds of value 

added taxes (VAT), the expenditures for 

which have been wholly or partially 

reimbursed with ATP funds, shall be 

used by the ATP Participant in 

furtherance of its approved ATP 

activities in the program period during 

which the ATP funds are available for 

obligation by the ATP Participant. The 

use of such revenue or refunds shall be 

governed by 7 CFR part 1489. Interest 

earned on funds advanced by the CCC 

is not program income. 

§ 1489.32 Amendment. 

A program agreement may be 

amended in writing with the consent of 

the CCC and the ATP Participant. 

§ 1489.33 Noncompliance with an 

agreement. 

If an ATP Participant fails to comply 

with any term in its program agreement 

or approval letter, the CCC may take one 

or more of the enforcement actions in 2 

CFR part 200 and, if, appropriate, 

initiate a claim against the ATP 

Participant, following the procedures set 

forth in this subpart. The CCC may also 

initiate a claim against an ATP 

Participant if program income or CCCprovided funds are lost due to an action 

or omission of the ATP Participant. 

§ 1489.34 Suspension, termination, and 

closeout of agreements. 

A program agreement may be 

suspended or terminated in accordance 

with the suspension and termination 

procedures in 2 CFR part 200. If an 

agreement is terminated, the applicable 

regulations in 2 CFR part 200 will apply 

to the closeout of the agreement. 

§ 1489.35 Paperwork reduction 

requirements. 

The paperwork and record keeping 

requirements imposed by this subpart 

have been submitted for review by OMB 

under the Paperwork Reduction Act of 

1980. OMB has not yet assigned a 

control number for this information 

collection. 

Dated: August 27, 2018. 

Robert Stephenson, 

Executive Vice President, Commodity Credit 

Corporation. 

Dated: August 27, 2018. 

Kenneth Isley, 

Administrator, Foreign Agricultural Service. 

[FR Doc. 2018–18870 Filed 8–28–18; 8:45 am] 

BILLING CODE 3410–10–P 

FEDERAL RESERVE SYSTEM 

12 CFR Parts 217 and 225 

[Regulations Q and Y; Docket No. R–1619] 

RIN 7100–AF 13 

Small Bank Holding Company and 

Savings and Loan Holding Company 

Policy Statement and Related 

Regulations; Changes to Reporting 

Requirements 

AGENCY: Board of Governors of the 

Federal Reserve System (Board). 

ACTION: Interim final rule with request 

for comment; changes to reporting 

requirements. 

SUMMARY: The Board invites comment 

on an interim final rule that raises the 

asset size threshold for determining 

applicability of the Board’s Small Bank 

Holding Company and Savings and 

Loan Holding Company Policy 

Statement (Regulation Y, appendix C) 

(Policy Statement) to $3 billion from $1 

billion of total consolidated assets. The 

interim final rule also makes related and 

conforming revisions to the Board’s 

regulatory capital rule (Regulation Q) 

and requirements for bank holding 

companies (Regulation Y). In 


amozie on DSK3GDR082PROD with RULES
44196 Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Rules and Regulations 

1 12 CFR part 225, app. C. 

2The examples provided in the Policy Statement 

are not exhaustive and simply highlight off-balance 

sheet activities that may involve substantial risk. 

Other activities than securitization and asset 

management or administration may present similar 

concerns. See also 71 FR 9897, 9899, fn. 2 (February 

28, 2006) (2006 Final Rule). 

3 12 CFR 238.9. 

4 12 CFR 225.4(b), 225.14, and 225.23. 

5Public Law 115–174 (May 24, 2018). 

6See 80 FR 20153 (April 15, 2015). In this final 

rule, the Board also applied the Policy Statement 

to small savings and loan holding companies as if 

they were bank holding companies. 80 FR 20153 

(April 15, 2015). 

connection with these changes, the 

Board is modifying the respondent 

panel for certain holding company 

financial reports. 

DATES: The interim final rule is effective 

August 30, 2018. Comments on the 

interim final rule must be received no 

later than October 29, 2018. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1619 and 

RIN No 7100 AF 13, by any of the 

following methods: 

• Agency website: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/apps/ 

foia/proposedregs.aspx. 

• Email: regs.comments@

federalreserve.gov. Include the docket 

number in the subject line of the 

message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Ann Misback, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. 

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), between 9:00 a.m. and 

5:00 p.m. on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Constance M. Horsley, Deputy Associate 

Director, (202) 452–5239, Cynthia 

Ayouch, Manager, (202) 452–2204, 

Douglas Carpenter, Senior Supervisory 

Financial Analyst, (202) 452–2205, 

Vanessa Davis, Supervisory Financial 

Analyst, (202) 475–6647, or Kevin Tran, 

Supervisory Financial Analyst, (202) 

452–2309, Division of Supervision and 

Regulation; Laurie Schaffer, Associate 

General Counsel, (202) 452–2272; 

Benjamin McDonough, Assistant 

General Counsel, (202) 452–2036, or 

Mark Buresh, (202) 452–5270, Senior 

Attorney, Legal Division; Board of 

Governors of the Federal Reserve 

System, 20th and C Streets NW, 

Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. The Interim Final Rule 

III. Administrative Law Matters 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 

C. Solicitation of Comments on Use of 

Plain Language 

I. Background 

The Board issued the Small Bank 

Holding Company and Savings and 

Loan Holding Company Policy 

Statement (Regulation Y, appendix C) 

(Policy Statement) in 1980 to facilitate 

the transfer of ownership of small 

community-based banks in a manner 

consistent with bank safety and 

soundness.1 In general, the Board has 

discouraged the use of debt by bank 

holding companies and savings and 

loan holding companies (collectively, 

depository institution holding 

companies) to finance acquisitions 

because high levels of debt can impair 

the ability of a depository institution 

holding company to serve as a source of 

strength to its subsidiary depository 

institutions. However, the Board has 

recognized that small depository 

institution holding companies have less 

access to equity financing than larger 

depository institution holding 

companies and that, therefore, an 

acquisition by a small depository 

institution holding company often 

requires the use of debt. 

The Board originally adopted the 

Policy Statement to permit the 

formation and expansion of small bank 

holding companies with debt levels that 

are higher than typically permitted for 

larger bank holding companies. The 

Policy Statement contains several 

conditions and restrictions designed to 

ensure that a small depository 

institution holding company that 

operates with the heightened level of 

debt permitted under the Policy 

Statement does not present an undue 

risk to the safety and soundness of its 

subsidiary depository institutions. 

Currently, the Policy Statement 

applies to bank holding companies with 

pro forma consolidated assets of less 

than $1 billion that: (i) Are not engaged 

in significant nonbanking activities 

either directly or through a nonbank 

subsidiary; (ii) do not conduct 

significant off-balance sheet activities 

(including securitization and asset 

management or administration) either 

directly or through a nonbank 

subsidiary; 2 and (iii) do not have a 

material amount of debt or equity 

securities outstanding (other than trust 

preferred securities) that are registered 

with the Securities and Exchange 

Commission (the foregoing enumerated 

items referred to hereafter as qualitative 

requirements). The Policy Statement 

also applies to small savings and loan 

holding companies as if they were bank 

holding companies.3

The Policy Statement provides that 

bank holding companies that meet the 

qualitative requirements (qualifying 

small holding companies) may use debt 

to finance up to 75 percent of the 

purchase price of an acquisition (that is, 

they may have a debt-to-equity ratio of 

up to 3:1). However, a qualifying small 

holding company must satisfy 

additional ongoing requirements, 

including that it: (i) Reduce its debt 

such that all debt is retired within 25 

years of the debt being incurred; (ii) 

reduce its debt-to equity ratio to .30:1 or 

less within 12 years of the debt being 

incurred; (iii) ensure that each of its 

subsidiary insured depository 

institutions is well capitalized; and (iv) 

refrain from paying dividends until 

such time as it reduces its debt-to-equity 

ratio to 1.0:1 or less. The Policy 

Statement also provides that a 

qualifying small holding company may 

not use the expedited applications 

procedures or obtain a waiver of the 

stock redemption filing requirements 

applicable to bank holding companies 

under the Board’s Regulation Y unless 

the bank holding company has a pro 

forma debt-to-equity ratio of 1.0:1 or 

less.4

II. The Interim Final Rule 

New Asset Threshold of $3 Billion 

On May 24, 2018, the Economic 

Growth, Regulatory Relief, and 

Consumer Protection Act (EGRRCPA) 

was enacted.5 Section 207 of EGRRCPA 

directs the Board to revise the Policy 

Statement to raise the consolidated 

assets threshold from $1 billion to $3 

billion within 180 days of the enactment 

of EGRRCPA. The Board last raised the 

asset limit in 2015 when it increased it 

from $500 million to $1 billion.6 The 

Board is issuing this interim final rule 

to increase the asset threshold to $3 

billion consistent with EGRRCPA. The 

Board is not making any additional 

modifications to the Policy Statement at 

this time. The final rule applies to small 

savings and loan holding companies to 


amozie on DSK3GDR082PROD with RULES
Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Rules and Regulations 44197 

7 5 U.S.C. 553(b)(B). 

8Public Law 115–174 (May 24, 2018), section 

207(b). 

the same extent as small bank holding 

companies, by operation of Regulation 

LL. 

The Board believes it is appropriate to 

issue an interim final rule revising the 

Policy Statement and making 

conforming revisions to Regulation Q 

and Regulation Y to apply the 

statutorily mandated threshold of $3 

billion to qualifying holding companies 

consistent with EGRRCPA. Without 

such action, qualifying holding 

companies that cross $1 billion during 

the pendency of the proposal would be 

required to incur costs to implement 

regulatory capital and financial 

reporting systems that would cease to be 

necessary upon issuance of the final 

rule. In addition, the Board believes that 

it is appropriate to allow holding 

companies with total consolidated 

assets of $1 billion or more but less than 

$3 billion to immediately become 

subject to reduced regulatory and 

reporting requirements, consistent with 

the congressionally-mandated increase 

in the threshold, so that such firms are 

not obligated to incur significant 

compliance costs in the interim until 

the traditional rulemaking process is 

completed. 

Conforming Regulation Q Change 

For the reasons described previously, 

the Board is revising Regulation Q to 

conform the language in § 217.1 to 

reflect the heightened threshold of the 

Policy Statement resulting from the 

interim final rule. Specifically, 

§ 217.1(c)(1)(iii) is revised to remove the 

reference to the $1 billion threshold. 

Other Conforming Amendments 

A number of reporting, filing, and 

other provisions in Regulation Y are 

triggered by the consolidated asset 

threshold established by the Policy 

Statement. In connection with revising 

the threshold under the Policy 

Statement, the Board is making 

technical and conforming amendments 

to these provisions to provide that 

qualifying small holding companies 

may take advantage of the streamlined 

informational, notice, and other 

requirements embodied in these rules. 

These technical and conforming 

amendments will provide regulatory 

burden relief to most holding companies 

with less than $3 billion of consolidated 

total assets. The final rule makes the 

following changes: 

• In § 225.2(r), footnote 2, the 

footnote describing the application of 

the definition of ‘‘well-capitalized’’ in 

the Board’s Regulation Y (12 CFR part 

225) to entities subject to the Policy 

Statement is revised to remove the 

reference to the threshold of $1 billion 

under the Policy Statement. 

• In § 225.4(b)(2)(iii), the thresholds 

for the different pro forma financial 

information required of smaller bank 

holding companies compared to larger 

bank holding companies under 

§ 225.4(b)(1) of the Board’s Regulation Y 

is revised to refer to total assets of less 

than $3 billion rather than total assets 

of less than $1 billion. 

• In § 225.14(a)(1)(v), the thresholds 

for the different pro forma financial 

information required of smaller bank 

holding companies compared to larger 

bank holding companies under § 225.14 

of the Board’s Regulation Y is revised to 

refer to total assets of less than $3 

billion rather than total assets of less 

than $1 billion. 

• In § 225.17(a)(6), footnote 6, the 

total asset threshold for application of 

the footnote related to demonstrating 

that debt incurred will not unduly 

burden the bank holding company is 

revised to refer to total assets of less 

than $3 billion rather than total assets 

of less than $1 billion. 

• In § 225.23(a)(1)(iii), the threshold 

for the different pro forma financial 

information required of smaller bank 

holding companies compared to larger 

bank holding companies under § 225.23 

of the Board’s Regulation Y is revised to 

refer to total assets of less than $3 

billion rather than total assets of less 

than $1 billion. 

Regulatory Reporting Changes 

The Board requires all depository 

institution holding companies to file 

certain reports with the Federal Reserve 

to monitor the financial condition and 

operations of depository institution 

holding companies. Those reports 

include the Financial Statements for 

Holding Companies (FR Y–9 series of 

reports; OMB No. 7100–0128). 

Depository institution holding 

companies with consolidated assets of 

less than $1 billion that also meet 

qualitative requirements submit 

summary parent-only financial data 

semiannually on the FR Y–9SP. Bank 

holding companies and savings and 

loan holding companies with 

consolidated assets of $1 billion or 

more—or that are otherwise not subject 

to the Policy Statement—submit 

consolidated financial data on the FR 

Y–9C and parent-only financial data on 

the FR Y–9LP, both quarterly. 

The Board is modifying, effective 

immediately, the respondent panel for 

the FR Y–9SP, FR Y–9C, and FR Y–9LP 

for bank holding companies and savings 

and loan holding companies with $1 

billion or more but less than $3 billion 

in total consolidated assets to align the 

threshold in the Policy Statement. If 

these institutions meet the qualitative 

requirements, they will not be required 

to file the FR Y–9C and the FR Y–9LP 

(including regulatory capital 

information) and would instead file the 

FR Y–9SP. These changes would be 

consistent with the final rule’s changes 

to the Policy Statement and will reduce 

the regulatory reporting burden for these 

smaller institutions. Since most bank 

holding companies and savings and 

loan holding companies with less than 

$3 billion in total consolidated assets 

have limited activities outside of their 

subsidiary banks, the Board believes 

relying on summary parent-only 

financials from the FR Y–9SP and 

detailed depository institution 

financials from the Consolidated 

Reports of Condition and Income (FFIEC 

031, FFIEC 041, FFIEC 051; OMB No. 

7100–0036) is sufficient for supervisory 

purposes. 

Comments 

The Board invites comments on all 

aspects of this interim final rule. 

Interested parties are encouraged to 

provide comments on the $3 billion 

asset size threshold adjustment, the 

revision to Regulation Q, and the related 

and conforming amendments to 

Regulations Y. 

Effective Date/Request for Comments 

The Board is issuing this 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). Pursuant to the 

Administrative Procedure Act (APA), at 

5 U.S.C. 553(b)(B), notice and comment 

are not required prior to the issuance of 

a final rule if an agency, for good cause, 

finds that ‘‘notice and public procedure 

thereon are impracticable, unnecessary, 

or contrary to the public interest.’’ 7 The 

interim final rule implements the 

provisions in section 207 of EGRRCPA, 

which was enacted on May 24, 2018. 

EGRRCPA includes a directive that the 

Board revise appendix C to part 225 of 

title 12 of the Code of Federal 

Regulations within 180 days to raise the 

consolidated asset threshold under that 

appendix from $1 billion to $3 billion.8

This section of EGRRCPA was effective 

upon enactment. 

The Board believes that the public 

interest is best served by implementing 

the statutorily amended thresholds as 

soon as possible. Delaying the revisions 

to the Policy Statement, Regulation Q, 


amozie on DSK3GDR082PROD with RULES
44198 Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Rules and Regulations 

9 5 U.S.C. 553(d). 

10 5 U.S.C. 553(d)(1). 

and Regulation Y to complete a 

traditional notice and comment 

rulemaking process would cause 

holding companies with total 

consolidated assets of $1 billion or more 

and less than $3 billion to expend 

significant resources to continue to 

comply with Regulation Q and would 

subject these firms to heightened 

requirements under Regulation Y for the 

time necessary for the Board to go 

through the notice and comment 

rulemaking process. In addition, any 

holding companies that qualified under 

the Policy Statement and that came to 

have $1 billion or more in total 

consolidated assets while the 

rulemaking process was ongoing would 

be required to expend significant 

resources to comply with Regulation Q. 

The Board believes that providing a 

notice and comment period prior to 

issuance of the interim final rules is 

unnecessary because the Board does not 

expect public objection to the interim 

final rule being promulgated, as the rule 

merely provides the relief that Congress 

intended. 

The APA also requires a 30-day 

delayed effective date, except for (1) 

substantive rules which grant or 

recognize an exemption or relieve a 

restriction; (2) interpretative rules and 

statements of policy; or (3) as otherwise 

provided by the agency for good cause.9

The Board has concluded that, because 

the rule recognizes an exemption, the 

interim final rule is exempt from the 

APA’s delayed effective date 

requirement.10 Additionally, the Board 

finds good cause to publish the interim 

final rule with an immediate effective 

date for the same reasons set forth above 

under the discussion of section 

553(b)(B) of the APA. 

While the Board believes there is good 

cause to issue the rules without advance 

notice and comment and with an 

immediate effective date, the Board is 

interested in the views of the public and 

request comment on all aspects of the 

interim final rule. 

III. Administrative Law Matters 

A. Regulatory Flexibility Act Analysis 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq., applies only to rules 

for which an agency publishes a general 

notice of proposed rulemaking. Because 

the Board has determined for good 

cause that a notice of proposed 

rulemaking for this rule is unnecessary, 

the Regulatory Flexibility Act does not 

apply to this final rule. 

B. Paperwork Reduction Act 

The Board has revised the respondent 

panel for each of the FR Y–9SP, FR Y– 

9C, and FR Y–9LP in connection with 

this final rule. Specifically, the 

minimum total consolidated asset 

threshold for filing the FR Y–9C and FR 

Y–9LP has been increased to $3 billion, 

and the FR Y–9SP has been updated to 

apply to holding companies with less 

than $3 billion in total consolidated 

assets. Though the number of total 

respondents is not affected, the result of 

this modification is to reduce the 

aggregate burden for the FR Y–9C, FR 

Y–9LP, and FR Y–9SP by 75,233 hours 

because more firms will file the less 

complex FR Y–9SP. 

C. Plain Language 

Section 722 of the Gramm-LeachBliley Act requires the Federal banking 

agencies to use ‘‘plain language’’ in all 

proposed and final rules published after 

January 1, 2000. In light of this 

requirement, the Board has sought to 

present the interim final rule in a simple 

and straightforward manner. The Board 

invites comments on whether there are 

additional steps it could take to make 

the rule easier to understand. 

List of Subjects 

12 CFR Part 217 

Administrative practice and 

procedure, Banks, Banking, Federal 

Reserve System, Holding companies, 

Reporting and recordkeeping 

requirements. 

12 CFR Part 225 

Administrative practice and 

procedure, Banks, Banking, Federal 

Reserve System, Holding companies, 

Reporting and recordkeeping 

requirements. 

Federal Reserve System 

12 CFR Chapter II 

Authority and Issuance 

For the reasons set forth in the 

preamble, chapter II of title 12 of the 

Code of Federal Regulations is amended 

as set forth below: 

PART 217—CAPITAL ADEQUACY OF 

BANK HOLDING COMPANIES, 

SAVINGS AND LOAN HOLDING 

COMPANIES, AND STATE MEMBER 

BANKS (REGULATION Q) 

■ 1. The authority citation for part 217 

continues to read as follows: 

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

481–486, 1462a, 1467a, 1818, 1828, 1831n, 

1831o, 1831p–l, 1831w, 1835, 1844(b), 1851, 

3904, 3906–3909, 4808, 5365, 5368, 5371. 

■ 2. In § 217.1, revise paragraph 

(c)(1)(iii) to read as follows: 

§ 217.1 Purpose, applicability, 

reservations of authority, and timing. 

* * * * * 

(c) * * * 

(1) * * * 

(iii) A covered savings and loan 

holding company domiciled in the 

United States, other than a savings and 

loan holding company that meets the 

requirements of 12 CFR part 225, 

appendix C, as if the savings and loan 

holding company were a bank holding 

company and the savings association 

were a bank. For purposes of 

compliance with the capital adequacy 

requirements and calculations in this 

part, savings and loan holding 

companies that do not file the FR Y–9C 

should follow the instructions to the FR 

Y–9C. 

* * * * * 

PART 225—BANK HOLDING 

COMPANIES AND CHANGE IN BANK 

CONTROL (REGULATION Y) 

■ 3. The authority citation for part 225 

continues to read as follows: 

Authority: 12 U.S.C. 1817(j)(13), 1818, 

1828(o), 1831i, 1831p–1, 1843(c)(8), 1844(b), 

1972(1), 3106, 3108, 3310, 3331–3351, 3906, 

3907, and 3909; 15 U.S.C. 1681s, 1681w, 

6801 and 6805. 

■ 4. In § 225.2(r), revise footnote 2 to 

read as follows: 

§ 225.2 Definitions. 

* * * * * 

(r) * * * 

2For purposes of this subpart and 

subparts B and C of this part, a bank 

holding company that is subject to the 

Small Bank Holding Company and 

Savings and Loan Holding Company 

Policy Statement in appendix C of this 

part will be deemed to be ‘‘wellcapitalized’’ if the bank holding 

company meets the requirements for 

expedited/waived processing in 

appendix C. 

* * * * * 

■ 5. In § 225.4, revise paragraph 

(b)(2)(iii) to read as follows: 

§ 225.4 Corporate practices. 

* * * * * 

(b) * * * 

(2) * * * 

(iii)(A) If the bank holding company 

has consolidated assets of $3 billion or 

more, consolidated pro forma risk-based 

capital and leverage ratio calculations 

for the bank holding company as of the 

most recent quarter, and, if the 

redemption is to be debt funded, a 


amozie on DSK3GDR082PROD with RULES
Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Rules and Regulations 44199 

1 [RESERVED]. 

parent-only pro forma balance sheet as 

of the most recent quarter; or 

(B) If the bank holding company has 

consolidated assets of less than $3 

billion, a pro forma parent-only balance 

sheet as of the most recent quarter, and, 

if the redemption is to be debt funded, 

one-year income statement and cash 

flow projections. 

* * * * * 

■ 6. In § 225.14, revise paragraph 

(a)(1)(v) to read as follows: 

§ 225.14 Expedited action for certain bank 

acquisitions by well-run bank holding 

companies. 

(a) * * * 

(1) * * * 

(v)(A) If the bank holding company 

has consolidated assets of $3 billion or 

more, an abbreviated consolidated pro 

forma balance sheet as of the most 

recent quarter showing credit and debit 

adjustments that reflect the proposed 

transaction, consolidated pro forma 

risk-based capital ratios for the 

acquiring bank holding company as of 

the most recent quarter, and a 

description of the purchase price and 

the terms and sources of funding for the 

transaction; or 

(B) If the bank holding company has 

consolidated assets of less than $3 

billion, a pro forma parent-only balance 

sheet as of the most recent quarter 

showing credit and debit adjustments 

that reflect the proposed transaction, 

and a description of the purchase price, 

the terms and sources of funding for the 

transaction, and the sources and 

schedule for retiring any debt incurred 

in the transaction; 

* * * * * 

■ 7. In § 225.17(a)(6), revise footnote 6 

to read as follows: 

§ 225.17 Notice procedure for one-bank 

holding company formations. 

(a) * * * 

(6) * * * 

6For a banking organization with 

consolidated assets, on a pro forma 

basis, of less than $3 billion (other than 

a banking organization that will control 

a de novo bank), this requirement is 

satisfied if the proposal complies with 

the Board’s Small Bank Holding 

Company and Savings and Loan 

Holding Company Policy Statement 

(appendix C of this part). 

* * * * * 

■ 8. In § 225.23, revise paragraph 

(a)(1)(iii) to read as follows: 

§ 225.23 Expedited action for certain 

nonbanking proposals by well-run bank 

holding companies. 

(a) * * * 

(1) * * * 

(iii) If the proposal involves an 

acquisition of a going concern: 

(A) If the bank holding company has 

consolidated assets of $3 billion or 

more, an abbreviated consolidated pro 

forma balance sheet for the acquiring 

bank holding company as of the most 

recent quarter showing credit and debit 

adjustments that reflect the proposed 

transaction, consolidated pro forma 

risk-based capital ratios for the 

acquiring bank holding company as of 

the most recent quarter, a description of 

the purchase price and the terms and 

sources of funding for the transaction, 

and the total revenue and net income of 

the company to be acquired; 

(B) If the bank holding company has 

consolidated assets of less than $3 

billion, a pro forma parent-only balance 

sheet as of the most recent quarter 

showing credit and debit adjustments 

that reflect the proposed transaction, a 

description of the purchase price and 

the terms and sources of funding for the 

transaction and the sources and 

schedule for retiring any debt incurred 

in the transaction, and the total assets, 

off-balance sheet items, revenue and net 

income of the company to be acquired; 

or 

(C) For each insured depository 

institution whose Tier 1 capital, total 

capital, total assets or risk-weighted 

assets change as a result of the 

transaction, the total risk-weighted 

assets, total assets, Tier 1 capital and 

total capital of the institution on a pro 

forma basis; 

* * * * * 

■ 9. In appendix C, under the header ‘‘1. 

Applicability of Policy Statement,’’ 

revise the first undesignated paragraph 

to read as follows: 

Appendix C to Part 225—Small Bank 

Holding Company and Savings and 

Loan Holding Company Policy 

Statement 

* * * * * 

1. Applicability of Policy Statement 

This policy statement applies only to bank 

holding companies with pro forma 

consolidated assets of less than $3 billion 

that (i) are not engaged in significant 

nonbanking activities either directly or 

through a nonbank subsidiary; (ii) do not 

conduct significant off-balance sheet 

activities (including securitization and asset 

management or administration) either 

directly or through a nonbank subsidiary; 

and (iii) do not have a material amount of 

debt or equity securities outstanding (other 

than trust preferred securities) that are 

registered with the Securities and Exchange 

Commission. The Board may in its discretion 

exclude any bank holding company, 

regardless of asset size, from the policy 

statement if such action is warranted for 

supervisory purposes.1 With the exception of 

section 4 (Additional Application 

Requirements for Expedited/Waived 

Processing), the policy statement applies to 

savings and loan holding companies as if 

they were bank holding companies. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, April 24, 2018. 

Ann Misback, 

Secretary of the Board. 

Editorial note: This document was 

received for publication by the Office of the 

Federal Register on August 24, 2018. 

[FR Doc. 2018–18756 Filed 8–29–18; 8:45 am] 

BILLING CODE 6210–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2018–0272; Product 

Identifier 2018–NM–005–AD; Amendment 

39–19377; AD 2018–17–23] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: We are adopting a new 

airworthiness directive (AD) for all The 

Boeing Company Model 737–100, –200, 

–200C, –300, –400, and –500 series 

airplanes. This AD was prompted by a 

report indicating that during a fleet 

survey on a retired Model 737 airplane, 

cracking was found common to the 

number 3 windshield assembly, aft sill 

web. This AD requires, at certain 

locations, repetitive high frequency 

eddy current (HFEC) inspections of the 

number 3 windshield assembly, aft sill 

web; and applicable on-condition 

actions. We are issuing this AD to 

address the unsafe condition on these 

products. 

DATES: This AD is effective October 4, 

2018. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of October 4, 2018. 

ADDRESSES: For service information 

identified in this final rule, contact 

Boeing Commercial Airplanes, 

Attention: Contractual & Data Services 

(C&DS), 2600 Westminster Blvd., MC 

110–SK57, Seal Beach, CA 90740–5600; 

telephone 562–797–1717; internet 

https://www.myboeingfleet.com. You 


amozie on DSK3GDR082PROD with RULES