75872 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Proposed Rules

1OCC Interpretive Letter No. 872 (Oct. 28, 1999)

(IL 872); OCC Interpretive Letter No. 866 (Oct. 8,

1999) (IL 866); and OCC Interpretive Letter No. 695

(Dec. 8, 1995), reprinted in [1995–1996 Transfer

Binder] Fed. Banking L. Rep. (CCH) ¶ 81.010 (IL

695).

notice procedures for national banks

engaging in activities through an

operating subsidiary. The procedures in

this section do not apply to financial

subsidiaries authorized under § 5.39.

This section applies to a Federal branch

or agency that establishes or maintains

any subsidiary that a national bank is

authorized to establish or control under

this section.

(d) * * *

(2) Well capitalized means the capital

level described in 12 CFR 6.4(b)(1) or,

in the case of a Federal branch or

agency, the capital level required by 12

CFR 4.7(b)(1)(iii).

(3) Well managed means, unless

otherwise determined in writing by the

OCC:

(i) In the case of a national bank:

(A) The national bank has received a

composite rating of 1 or 2 under the

Uniform Financial Institutions Rating

System in connection with its most

recent examination; or

(B) In the case of any national bank

that has not been examined, the

existence and use of managerial

resources that the OCC determines are

satisfactory.

(ii) In the case of a Federal branch or

agency:

(A) The Federal branch or agency has

received a composite ROCA supervisory

rating (which rates risk management,

operational controls, compliance, and

asset quality) of 1 or 2 at its most recent

examination; or

(B) In the case of a Federal branch or

agency that has not been examined, the

existence and use of managerial

resources that the OCC determines are

satisfactory.

* * * * *

Dated: November 28, 2000.

John D. Hawke, Jr.,

Comptroller of the Currency.

[FR Doc. 00–30885 Filed 12–4–00; 8:45 am]

BILLING CODE 4810–33–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Parts 5 and 9

[Docket No. 00–30]

RIN 1557–AB79

Fiduciary Activities of National Banks

AGENCY: Office of the Comptroller of the

Currency.

ACTION: Notice of proposed rulemaking;

advance notice of proposed rulemaking.

SUMMARY: The Office of the Comptroller

of the Currency (OCC), through a Notice

of Proposed Rulemaking (NPRM), is

proposing to amend its regulations to

codify OCC interpretations on national

bank multi-state trust operations. The

purpose of these changes is to provide

enhanced guidance to national banks

engaging in fiduciary activities. The

OCC also is inviting comment, through

an advance notice of proposed

rulemaking (ANPR), on whether

uniform standards of care generally

applicable to national bank trustees’

administration of private trusts and

investment of private trust property

should be established. The purpose of

the ANPR is to determine the extent to

which national banks that engage in

fiduciary activities in more than one

state experience problems in their

administration as a result of complying

with more than one state’s laws and, if

problems exist, to invite comment on

ways in which the OCC could address

these problems.

DATES: Comments must be received by

February 5, 2001.

ADDRESSES: Send your comments to:

Office of the Comptroller of the

Currency, Public Information Room, 250

E Street, SW, Mail Stop 1–5,

Washington, DC 20219, Attention:

Docket No. 00–30. Comments will be

available for public inspection and

photocopying at the same location. In

addition, you may send comments by

fax to (202) 874–5274, or by electronic

mail to regs.comments@occ.treas.gov.

FOR FURTHER INFORMATION CONTACT: For

questions concerning the NPRM, contact

Lisa Lintecum, Director, or Joel Miller,

Senior Advisor, Asset Management,

(202) 874–4447; Richard Cleva, Senior

Counsel, Bank Activities and Structure,

(202) 874–5300; Michele Meyer, Senior

Attorney, Legislative and Regulatory

Activities Division, (202) 874–5090; or

William Dehnke, Assistant Director,

Securities and Corporate Practices

Division, (202) 874–5210.

SUPPLEMENTARY INFORMATION: This

rulemaking consists of two parts. First,

the OCC, through an NPRM, proposes to

codify recent OCC interpretations in

which we analyzed the extent to which

a national bank may, in states other than

its home state, (a) have trust offices or

trust representative offices, (b) engage in

fiduciary activities, and (c) market its

fiduciary services to customers. Second,

we invite comments, through an ANPR,

on whether the OCC should propose to

add a new section to part 9 that would

establish national standards for the

conduct of fiduciary activities by

national banks. These ideas are

explained more fully below.

NPRM: Codification of OCC

Interpretations

The OCC has issued three interpretive

letters 1 addressing multi-state fiduciary

activities. In IL 695, we concluded that

a national bank with its main office in

one state may act in a fiduciary capacity

in any other state that permits its own

in-state fiduciaries to act in that

capacity, including at trust offices in

other states. In IL 866 and IL 872, we

further clarified that a national bank

that acts in a fiduciary capacity in one

state may market its fiduciary services

to customers in other states, solicit

business from them, and act as fiduciary

for customers located in other states.

The proposal codifies these

interpretations, which affect several

sections in part 9, as explained in the

following discussion.

Definitions (Revised § 9.2)

The second sentence in current

§ 9.2(g) provides that the extent of

fiduciary powers is the same for out-ofstate national banks as in-state national

banks. This sentence is unnecessary in

light of proposed new § 9.7, which sets

forth the rules concerning multi-state

fiduciary operations, and the proposal

removes it.

Proposed §§ 9.2(j) and (k) define

‘‘trust office’’ and ‘‘trust representative

office,’’ respectively. These terms are

used in proposed new § 9.7. A ‘‘trust

office’’ is defined as an office of a

national bank, other than a main office

or a branch, at which the bank acts in

a fiduciary capacity. A trust

representative office is an office of a

national bank, other than a main office,

branch, or trust office, at which the bank

performs activities ancillary to its

fiduciary business, but does not act in

a fiduciary capacity. These ancillary

activities might include, for instance,

advertising, marketing, and soliciting for

fiduciary business; contacting existing

or potential customers, answering

questions, and providing information

about matters related to their accounts;

acting as a liaison between the trust

office and the customer (e.g., forwarding

requests for distribution or changes in

investment objectives, or forwarding

forms and funds received from the

customer); or simply inspecting or

maintaining custody of fiduciary assets.

Neither a trust office nor trust

representative office is a branch for

purposes of the McFadden Act, 12

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Proposed Rules 75873

2This approach is consistent with that taken by

the Office of Thrift Supervision, as summarized in

its letter dated August 8, 1996, from Carolyn J.

Buck, Chief Counsel, reprinted in [1995–1996

Transfer Binder] Fed. Banking L. Rep. (CCH) § 83–

102 (in which the OST concluded (1) that, for trust

pruposes, a savings associaiton will not be deemed

located in a state where its only trust-related

activities are marketing its trust services and

performing incidental duties pursuant to its

appointment as testamentary trustee holding read

estate (2) federal law would prreempt state laws

that prohibit or restrict an out-of-state federal shift

engaging in the state.

U.S.C. 36, which governs the location of

national bank branches. In order to be

considered a branch under the

McFadden Act, a bank facility must

perform at least one of the core banking

functions of receiving deposits, paying

checks, or lending money. 12 U.S.C.

36(j). The locational limitations of 12

U.S.C. 36 are not intended to reach all

activities in which national banks are

authorized to engage, but only core

banking functions. See Clarke v.

Securities Industry Association, 479

U.S. 388 (1987) (considering securities

brokerage powers). Proposed §§ 9.2(j)

and (k) therefore state that a trust office

or a trust representative office is not a

branch unless it is also an office at

which deposits are received, or checks

paid, or money lent.

Approval Requirements (Revised § 9.3)

Current § 9.3(a) provides that ‘‘a

national bank may not exercise

fiduciary powers unless it obtains prior

approval from the OCC to the extent

required under 12 CFR 5.26.’’ Section

5.26(e)(5) currently provides that a

national bank that has obtained the

OCC’s approval to exercise fiduciary

powers does not need to obtain further

approval to ‘‘commence fiduciary

activities’’ in a state in addition to the

state(s) described in the application for

which it received OCC approval to

exercise fiduciary powers. Instead, the

bank is required only to provide written

notice to the OCC within ten days after

commencing expanded fiduciary

activities.

As discussed in greater detail in the

next section, proposed new § 9.7

codifies recent OCC interpretations

clarifying national banks’ authority to

engage in multi-state fiduciary

operations. Among other things, those

interpretations, and new § 9.7,

distinguish between acting in a

fiduciary capacity and conducting other

activities ancillary to the bank’s

fiduciary business. The proposal adds a

new paragraph (b) to § 9.3 to clarify that

a bank that has received OCC approval

to exercise fiduciary powers does not

need prior OCC approval each time it

seeks to act in a fiduciary capacity in a

new state or to conduct, in a new state,

activities that are ancillary to its

fiduciary business. Instead, paragraph

(b) directs the bank to follow the notice

procedures in § 5.26(e)(5). Current

paragraph (b), which addresses the

procedures for organizing a limited

purpose trust bank, is redesignated as

paragraph (c).

Multi-State Fiduciary Operations (New

§ 9.7)

The statutory authority for national

banks to exercise fiduciary power is

contained in 12 U.S.C. §§ 92a(a) and (b).

Under section 92a(a), the Comptroller

may permit national banks, when not in

contravention of State or local law, to

exercise eight expressly identified

fiduciary powers and to act in any other

fiduciary capacity in which State banks,

trust companies, or other corporations

that come into competition with

national banks are permitted to act

under the laws of the State in which the

national bank is located. Under section

92a(b), whenever state law permits state

institutions that compete with national

banks to exercise any of the fiduciary

powers listed in section 92a(a), a

national bank’s exercise of those powers

is deemed not to be in contravention of

State or local law under section 92a.

Sections 92a(a) and (b) do not

expressly address the extent to which a

national bank may conduct a multi-state

fiduciary business. The OCC, however,

has issued several interpretive letters

that address multi-state fiduciary

activities. In IL 695, we concluded that

a national bank with its main office in

one state may have trust offices in

another state. We also concluded that

the bank may engage in (a) any of the

eight fiduciary capacities listed in 12

U.S.C. 92a(a), unless the state prohibits

its own state banks, trust companies,

and other corporations that compete

with national banks in that state from

acting in that capacity; and (b) any other

fiduciary capacity the state permits for

its own state banks, trust companies, or

other corporations that compete with

national banks in that state. This

conclusion applies even in a state that

has laws prohibiting or restricting outof-state fiduciaries from providing

fiduciary services or having trust offices

within their state. As explained in the

interpretive letter, section 92a(b) makes

it clear that, if a state permits its own

state institutions to exercise certain

fiduciary powers, then national banks

are authorized to exercise those

fiduciary powers in that state.

Proposed § 9.7(a) codifies this

interpretation. Pursuant to that section,

a national bank may act in any of the

eight fiduciary capacities listed in the

statute in any state in which a national

bank ‘‘is located,’’ which we have

interpreted for purposes of section 92a

as the state in which a national bank

acts in a fiduciary capacity. It may also

act in any other fiduciary capacity that

the state permits for its own state

institutions, ‘‘when not in contravention

of State or local law.’’ Thus, a national

bank may act in any of the eight

capacities listed in the statute unless the

state affirmatively prohibits that activity

for national banks and for its own

institutions. If state law is silent on any

of these eight capacities, it is permitted

for a national bank by virtue of the

direct grant of authority in section

92a(a). Further, if a state permits its own

state institutions to exercise additional

fiduciary powers, then national banks

are authorized to exercise those

fiduciary powers in that state. The state

may not limit them, because the terms

of section 92a(b) expressly deem the

fiduciary powers that a state permits to

its own institutions not to be in

contravention of state law. Thus, under

proposed § 9.7(a)(2), a national bank

acting in a fiduciary capacity in a

particular state may act in each of the

eight fiduciary capacities listed in

section 92a(a) (unless the state expressly

prohibits the capacity for its own state

institutions) and in any other fiduciary

capacities permitted for state banks,

trust companies, or other corporations

that compete with national banks.

In IL 866 and IL 872, the OCC

clarified that a national bank that acts in

a fiduciary capacity in a given state

under the authority of section 92a is

authorized to market its services to

customers in other states, to solicit

business from them, and to act as

fiduciary for customers located in other

states.2 A state may not prohibit or

restrict out-of-state national banks from

marketing to, or performing fiduciary

functions for, customers in that state.

Therefore, proposed § 9.7(b) provides

that a national bank may market its

fiduciary services to, and act as

fiduciary for, customers located in any

state and provides that the bank may

use a trust representative office for these

purposes. Proposed § 9.7(c) expressly

authorizes a national bank with

fiduciary powers to establish a trust

office or trust representative office in

any state. IL 866 and IL 872 also

addressed where a national bank is

deemed to be ‘‘acting in a fiduciary

capacity’’ for purposes of section 92a.

As explained in those letters, in order to

determine in which state a bank ‘‘acts in

75874 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Proposed Rules

3This is to be contrasted with the laws governing

the trust itself, which are determined by the trust

instrument and, in some instances, by choice-of-law

rules. For example, if a national bank is acting in

a fiduciary capacity in State A and is a trustee for

a trust for which the trust instrument says the laws

of State B govern, then the laws governing the

administration of the trust (for example, the

standard of care to be applied) will be those of State

B. 4 12 U.S.C. 92(a).

5 12 U.S.C. 92a(j). See also id. at 93a.

Section 92a(j) states ‘‘The Comptroller of the

Currency is authorized and empowered to

promulgate such regulations as he may deem

necessary to enforce compliance with the

provisions of this section and the proper exercise

of the powers granted therein.’’ (Emphasis added.)

6The view that fiduciary rules applicable to a

national bank fiduciary may be affected by Federal

law is supported by the legislative history of section

92a. When Congress enacted the precursor to

section 92a in 1913, it authorized the Federal

Reserve Board (which regulated national bank

fiduciary activities until 1962, when Congress

transferred that authority to the OCC) to grant

national banks that right to act in a fiduciary

capacity ‘‘under such rules and regulations as the

board may prescribe.’’ Pub. L. 63–43 11(k), 30 Stat.

251 (1913).

a fiduciary capacity’’ for section 92a

purposes, one looks to the state in

which the bank performs key fiduciary

functions. These key activities include

executing the documents that create the

fiduciary relationship, accepting the

fiduciary appointment, and making

decisions regarding the investment or

distribution of fiduciary assets.

Proposed § 9.7(d) codifies this position

and further provides that if these key

fiduciary activities take place in more

than one state, then the state in which

the bank acts in a fiduciary capacity for

section 92a purposes will be the state

that the bank and customer designate

from among those states. We invite

comment on ways to simplify the

determination of where a bank with

multi-state operations is acting in a

fiduciary capacity.

The state in which the bank acts in a

fiduciary capacity for an account, in

turn, determines—with respect to that

account—which state laws apply in the

provisions of section 92a that refer to

state law.3 Thus, if a national bank acts

in a fiduciary capacity in State A for a

customer located in State B, the bank

looks to the laws of State A in applying

the provisions of section 92a that refer

to state law. These include not only

state laws affecting permissible

fiduciary capacities (referred to in

sections 92a(a) and (b)) but also state

laws used in setting operational

requirements for national banks as

corporate fiduciaries (referred to in

sections 92a(f), (g) & (i)) and those that

grant state banking authorities limited

access to OCC examination reports

relating to national bank trust

departments (referred to in section

92a(c)). Therefore, proposed § 9.7(e)

clarifies that the references in section

92a to state law mean the law of the

state in which the bank acts in a

fiduciary capacity. The laws of other

states where the bank is not acting in a

fiduciary capacity, including states in

which the bank’s customers may reside

or in which trust assets may be located,

are not made applicable to national

banks by section 92a.

Deposit of Securities With State

Authorities (Revised § 9.14)

Under section 92a(f) of the statute and

current § 9.14 of our regulations, a

national bank must comply with state

laws that require corporations that act in

a fiduciary capacity to deposit securities

with state authorities for the protection

of private or court trusts. The proposal

makes a technical amendment to § 9.14

to conform to the terminology used in

proposed § 9.7. Instead of saying that a

bank ‘‘administers trust assets’’ in

paragraph (b) of that section, the

proposed language states that a bank

‘‘acts in a fiduciary capacity.’’ No

substantive change is intended by this

amendment.

The proposal also adds a second

sentence to § 9.14(b) to clarify how a

bank, which conducts fiduciary

operations on a multi-state basis

pursuant to proposed § 9.7, should

compute the amount of deposit required

by a state law that requires a deposit of

securities on a basis other than assets

(such as an amount equal to a

percentage of capital). In such a state,

the bank may compute the amount of

deposit required on a pro-rated basis,

according to the proportion of fiduciary

assets for which the bank is acting in a

fiduciary capacity at offices located in

that state.

Fiduciary Powers (Revised § 5.26)

Consistent with the proposed changes

discussed above, the proposal also

would amend 12 CFR 5.26(e) to clarify

that a national bank that plans to act in

a fiduciary capacity in a state in

addition to the state described in the

application for fiduciary powers that the

OCC has approved need only give afterthe-fact notice of having commenced

acting in a fiduciary capacity in a new

state. The proposal revises current

§ 5.26(e)(5) so that it reflects the

distinction between acting in a fiduciary

capacity and conducting activities

ancillary to the bank’s fiduciary

business. The ten-day, after the fact

notice requirement would apply only to

acting in a fiduciary capacity.

ANPR: Uniform Standards Governing

Fiduciary Activities

Twelve U.S.C. 92a, which authorizes

national banks to act as fiduciaries, also

governs the exercise of their fiduciary

powers in certain respects. For example,

the statute requires national banks to

segregate the assets they hold in a

fiduciary capacity from the ‘‘general

assets’’ of the bank and to keep separate

records of the transactions they engage

in as fiduciary.4 The statute does not set

out general standards of care that apply

to national banks acting in a fiduciary

capacity; however, it expressly

authorizes the OCC to issue regulations

to enforce compliance with section 92a

and ‘‘the proper exercise of the powers’’

that the statute grants.5 Thus, the

statutory scheme governing national

bank fiduciary powers specifically

permits the Comptroller to promulgate

regulations necessary to the proper

exercise of national bank fiduciary

powers and to address any areas unique

to national banks.6

Trustees are responsible for

performing a core set of fundamental

duties when exercising the powers

permitted under section 92a. These

include the duty to administer the trust

according to its terms; the duty of

loyalty; the duty to be impartial where

there is more than one beneficiary of a

trust; the duty to be prudent with trust

assets; and so on. These duties are

embodied in most state trust codes, but

the precise formulation and the

elements of the applicable standards

vary from state to state, causing a

national bank that conducts an

interstate fiduciary business to

continually monitor the differing state

laws and to develop different plans for

compliance in each state where it

operates.

One example of where state laws may

differ is the investment management

standard that applies to trustees.

Trustees have always had the duty to

manage trust assets prudently. In the

first half of the twentieth century, most

states enacted lists of specific types of

investments that trustees were

permitted to make, and trustees were

required to assess the prudence of each

individual investment in isolation. More

recently, however, many states have

applied a ‘‘prudent investor’’ rule,

which focuses on the need to manage

risk in the portfolio by balancing the

role of a single asset or group of assets

against that of the overall portfolio.

Examples of other areas where the

applicable standards might vary from

one jurisdiction to another include the

laws governing reasonableness of

compensation of trustees; duties

regarding trust accounting; the

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Proposed Rules 75875

termination, modification, or reform of

a trust; records retention; and purchases

by a bank, in its capacity as trustee, of

shares of proprietary mutual funds.

The lack of uniformity in applicable

fiduciary standards may become more

burdensome in light of the increase in

national banks’ interstate fiduciary

operations following the enactment of

the Riegle-Neal Interstate Banking and

Branching Efficiency Act of 1994 and in

light of new technologies that greatly

facilitate the marketing and delivery of

fiduciary services to customers

nationwide. National banks not only

have trust customers and conduct

fiduciary activities in many different

states, but they also act as trustee for

trusts governed by the laws of many

different states.

For these reasons, in addition to

inviting comments on the proposed

amendments to part 9 as discussed in

the previous portion of this notice, the

OCC invites comments on whether we

should adopt uniform standards of care

governing fiduciary activities of national

banks. The OCC is not proposing

specific standards at this point; rather,

we seek the views of interested persons

on the need for such standards and, if

there is a need, on what the standards

should contain.

The OCC contemplates that any

uniform standards would apply only to

private trusts. As under current law, we

envision that the uniform federal

standard could be modified by the terms

of the trust, but not by contrary or

inconsistent state law.

The OCC invites comments on

whether uniform, national standards in

the areas noted (or other areas) would

promote the efficient exercise of a

national bank’s fiduciary powers,

consistent with the fulfillment of its

fiduciary obligations. Specifically, the

OCC seeks comments on the following:

• Does compliance with multiple

state laws that establish separate

fiduciary standards of care present a

significant burden? If so, please identify

the principal sources of that burden.

• How would a bank’s administration

of trusts or estates differ if there were a

federal law creating a uniform standard

of care?

• If the OCC were to adopt uniform

standards, should those standards be

modeled after the Uniform Trust Act

prepared by the National Conference of

Commissioners on Uniform State Laws?

If so, which sections should we adopt?

• What other sources should the OCC

rely upon in developing uniform,

nationwide standards of care?

• Do most states already have

substantially similar laws governing

trust administration and investment of

trust assets? Is adoption of the model

uniform laws by additional states likely?

• What effect have the OCC’s recent

opinions on the applicability of state

law to interstate fiduciary activities had

on national banks’ interstate fiduciary

business?

• How could a federal standard work

when there are specific state statutes

(such as those governing the investment

by trustees in proprietary mutual funds)

that make investment explicitly subject

to state laws?

• How should the OCC resolve issues

that arise about the meaning or

applicability of any uniform standards it

issues? What would be the effect of a

uniform standard on the common law

that has developed over time in

connection with state fiduciary

standards?

• If uniform standards are adopted,

how should the OCC manage the

transition from the existing regulatory

structure? Should new standards be

applied only to fiduciary relationships

formed after a date certain?

• Could uniform standards impose

unanticipated burdens on national

banks? If so, what would those burdens

be? What could the OCC do to reduce

the burden?

• Even if a uniform national approach

to fiduciary standards proves beneficial

over time, a change in applicable

fiduciary standards may create nearterm uncertainty about what rules

govern national banks’ fiduciary

activities. What could the OCC do to

reduce uncertainty, and any

accompanying litigation risk, that may

result from our adoption of uniform

standards?

• Should the OCC adopt a uniform

federal choice of law rule for

determining what law governs the

fiduciary relationship in the absence of

a provision in the trust instrument

specifying the governing law? This

would address questions of applicable

law that are not resolved by operation

of section 92a.

This ANPR reflects our ongoing

commitment to review and reevaluate

our regulations periodically to ensure

that they encourage national banks’

efficiency and competitiveness,

consistent with safety and soundness

and fair treatment of bank customers.

Based on the comments we receive, we

may propose specific revisions to our

rules for comment in a later rulemaking.

Regulatory Flexibility Act

Pursuant to section 605(b) of the

Regulatory Flexibility Act, 5 U.S.C.

605(b) (RFA), the regulatory flexibility

analysis otherwise required under

section 604 of the RFA is not required

if the agency certifies that the rule will

not have a significant economic impact

on a substantial number of small entities

and publishes its certification and a

short, explanatory statement in the

Federal Register along with its rule.

Pursuant to section 605(b) of the RFA,

the OCC hereby certifies that this

rulemaking will not have a significant

economic impact on a substantial

number of small entities. The NPRM

codifies caselaw and OCC

interpretations, but adds no new

requirements. Similarly, the ANPR

merely invites comments on whether

uniform federal standards would be

appropriate. Accordingly, a regulatory

flexibility analysis is not needed.

Executive Order 12866

The OCC has determined that this

rulemaking is not a significant

regulatory action under Executive Order

12866.

Unfunded Mandates Act of 1995

Section 202 of the Unfunded

Mandates Reform act of 1995, 2 U.S.C.

1532 (Unfunded Mandates Act),

requires that the agency prepare a

budgetary impact statement before

promulgating any rule likely to result in

a Federal mandate that may result in the

expenditure by state, local, and tribal

governments, in the aggregate or by the

private sector, of $100 million or more

in any one year. If a budgetary impact

statement is required, section 205 of the

Unfunded Mandates Act also requires

the agency to identify and consider a

reasonable number of regulatory

alternatives before promulgating the

rule. For the reasons outlined above, the

OCC has determined that this

rulemaking 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, the OCC has not prepared

a budgetary impact statement or

specifically addressed any regulatory

alternatives.

Executive Order 13132

Executive Order 13132 requires

Federal agencies, including the OCC, to

certify their compliance with that Order

when they transmit to the Office of

Management and Budget any draft final

regulation that has Federalism

implications. Under the Order, a

regulation has Federalism implications

if it has ‘‘substantial direct effects on the

States, on the relationship between the

national government and the States, or

on the distribution of power and

responsibilities among the various

levels of government.’’ In the case of a

regulation that has Federalism

75876 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Proposed Rules

implications and that preempts State

law, the Order imposes certain

consultation requirements with State

and local officials; requires publication

in the preamble of a federalism

summary impact statement; and

requires the OCC to make available to

the Director of the Office of

Management and Budget any written

communications submitted to us by

State and local officials. By the terms of

the Order, these requirements apply to

the extent that they are practicable and

permitted by law and, to that extent,

must be satisfied before the OCC

promulgates a final regulation.

Certain provisions of this proposal

and advance notice, including uniform

federal standards if they were to be

adopted, may have Federalism

implications, as that term is used in the

Order, or may be found by a Federal

court to preempt state law. Therefore,

before promulgating a final regulation

based on this proposal, the OCC will, to

the extent practicable and permitted by

law, seek consultation with State and

local officials, include a Federalism

summary impact statement in the

preamble to the final rule, and make

available to the Director of OMB any

written communications we receive

from State or local officials.

List of Subjects in 12 CFR

Parts 5 and 9

Banks, banking, Insurance, National

banks, Trusts and trustees.

Authority and Issuance

For the reasons set forth in the

preamble, part 5 and part 9 of chapter

I of title 12 of the Code of Federal

Regulations are proposed to be amended

as follows:

PART 5—RULES, POLICIES, AND

PROCEDURES FOR CORPORATE

ACTIVITIES

1. The authority citation for part 5

continues to read as follows:

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

section 5136A of the Revised Statutes (12

U.S.C. 24a).

Subpart B—Initial Activities

2. Paragraph (e)(5) of § 5.26 is revised

to read as follows:

§ 5.26 Fiduciary powers.

* * * * *

(e) * * *

(5) Notice of fiduciary activities in

additional states. No further application

under this section is required when a

national bank with existing OCC

approval to exercise fiduciary powers

plans to act in a fiduciary capacity, or

to conduct activities ancillary to its

fiduciary business, in a state in addition

to the state described in the application

for fiduciary powers that the OCC has

approved. Instead, unless the bank

provides notice through other means

(such as a merger application), the bank

shall provide written notice to the OCC

no later than ten days after it begins to

act in a fiduciary capacity in the new

state. The written notice must identify

the new state or states involved, identify

the fiduciary activities to be conducted,

and describe the extent to which the

activities differ materially from the

fiduciary activities that the bank was

previously authorized to conduct.

* * * * *

PART 9—FIDUCIARY ACTIVITIES OF

NATIONAL BANKS

1. The authority citation for part 9

continues to read as follows:

Authority: 12 U.S.C. 24(Seventh), 92a, and

93a; 15 U.S.C. 78q, 78q–1, and 78w.

2. Section 9.2 is revised by removing

the second sentence in paragraph (g)

and adding new paragraphs (j) and (k)

as follows:

§ 9.2 Definitions.

* * * * *

(j) Trust office means an office of a

national bank, other than a main office

or a branch, at which the bank acts in

a fiduciary capacity. Pursuant to 12

U.S.C. 36(j), a trust office is not a

‘‘branch’’ for purposes of 12 U.S.C. 36,

unless it is also an office at which

deposits are received, or checks paid, or

money lent.

(k) Trust representative office means

an office of a national bank, other than

a main office, branch, or trust office, at

which the bank performs activities

ancillary to its fiduciary business, but

does not act in a fiduciary capacity.

Examples of ancillary activities include

advertising, marketing, and soliciting for

fiduciary business; contacting existing

or potential customers, answering

questions, and providing information

about matters related to their accounts;

acting as a liaison between the trust

office and the customer (e.g., forwarding

requests for distribution or changes in

investment objectives, or forwarding

forms and funds received from the

customer); or inspecting or maintaining

custody of fiduciary assets. Pursuant to

12 U.S.C. 36(j), a trust representative

office is not a ‘‘branch’’ for purposes of

12 U.S.C. 36, unless it is also an office

at which deposits are received, or

checks paid, or money lent.

3. Section 9.3 is amended by revising

paragraph (b) and adding paragraph (c)

to read as follows:

§ 9.3 Approval requirements.

(b) A national bank that has obtained

the OCC’s approval to exercise fiduciary

powers is not required to obtain the

OCC’s prior approval to act in a

fiduciary capacity in a new state or to

conduct, in a new state, activities that

are ancillary to its fiduciary business.

Instead, the national bank must follow

the notice procedures prescribed by 12

CFR 5.26(e).

(c) A person seeking approval to

organize a special-purpose national

bank limited to fiduciary powers shall

file an application with the OCC

pursuant to 12 CFR 5.20.

4. A new § 9.7 is added to read as

follows:

§ 9.7 Multi-state fiduciary operations.

(a) Acting in a fiduciary capacity in

more than one state. A national bank

with fiduciary powers may act in a

fiduciary capacity in different states. In

each state in which a national bank acts

in a fiduciary capacity, the bank may act

in:

(1) Any of the eight fiduciary

capacities listed in 12 U.S.C. 92a(a),

unless the state prohibits its own state

banks, trust companies, and other

corporations that compete with national

banks in that state from acting in that

capacity; and

(2) Any other fiduciary capacity the

state permits for its own state banks,

trust companies, or other corporations

that compete with national banks in that

state.

(b) Serving customers in more than

one state. While acting in a fiduciary

capacity in one state, a national bank

may market its fiduciary services to, and

act as fiduciary for, customers located in

any state. The bank may use a trust

representative office for this purpose.

(c) Offices in more than one state. A

national bank with fiduciary powers

may establish trust offices or trust

representative offices in any state.

(d) Acting in a fiduciary capacity. For

each fiduciary relationship, a national

bank acts in a fiduciary capacity in a

state in which it accepts the fiduciary

appointment, executes the documents

that create the fiduciary relationship, or

makes discretionary decisions regarding

the investment or distribution of

fiduciary assets. If these activities take

place in more than one state, then the

state in which the bank acts in a

fiduciary capacity for section 92a

purposes will be the state that the bank

and customer designate from among

those states.

(e) Application of state law. (1) State

laws used in section 92a. The state trust

laws that apply to a national bank’s

fiduciary activities by operation of the

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Proposed Rules 75877

provisions of 12 U.S.C. 92a that refer to

state law are the laws of the state in

which the bank acts in a fiduciary

capacity.

(2) Other state laws. Section 92a

specifically identifies which state laws

regulating the operations of bank trust

departments, trust companies, or other

corporate fiduciaries are applicable to

national banks. Other state laws

regulating such operations are not

applicable to national banks.

5. Section 9.14(b) is revised to read as

follows:

§ 9.14 Deposit of securities with state

authorities

* * * * *

(b) Acting in a fiduciary capacity in

more than one state. If a national bank

acts in a fiduciary capacity in more than

one state, the bank may compute the

amount of securities that are required to

be deposited for each state on the basis

of the amount of assets for which the

bank is acting in a fiduciary capacity at

offices located in that state. If state law

requires a deposit of securities on a

basis other than assets (e.g., a

requirement to deposit a fixed amount

or an amount equal to a percentage of

capital), the bank may compute the

amount of deposit required in that state

on a pro-rated basis, according to the

proportion of fiduciary assets for which

the bank is acting in a fiduciary capacity

at offices located in that state.

Dated: October 31, 2000.

John D. Hawke, Jr.,

Comptroller of the Currency.

[FR Doc. 00–30844 Filed 12–4–00; 8:45 am]

BILLING CODE 4810–33–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–NM–118–AD]

RIN 2120–AA64

Airworthiness Directives; Airbus Model

A330 and A340 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

adoption of a new airworthiness

directive (AD) that is applicable to

certain Airbus Model A330 and A340

series airplanes. This proposal would

require identifying the part and serial

numbers of the pressure reducing valve

on each air pressurization unit, testing

pressure reducing valves and air

pressurization units having affected

serial numbers, and replacing faulty

valves or units with new parts. This

action is necessary to prevent the

simultaneous failure of two air

pressurization units, which could result

in loss of three hydraulic circuits and

consequent reduced controllability of

the airplane. This action is intended to

address the identified unsafe condition.

DATES: Comments must be received by

January 4, 2001.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–114,

Attention: Rules Docket No. 2000–NM–

118–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

Comments may be inspected at this

location between 9:00 a.m. and 3:00

p.m., Monday through Friday, except

Federal holidays. Comments may be

submitted via fax to (425) 227–1232.

Comments may also be sent via the

Internet using the following address: 9-

anm-nprmcomment@faa.gov. Comments

sent via fax or the Internet must contain

‘‘Docket No. 2000–NM–118–AD’’ in the

subject line and need not be submitted

in triplicate. Comments sent via the

Internet as attached electronic files must

be formatted in Microsoft Word 97 for

Windows or ASCII text.

The service information referenced in

the proposed rule may be obtained from

Airbus Industrie, 1 Rond Point Maurice

Bellonte, 31707 Blagnac Cedex, France.

This information may be examined at

the FAA, Transport Airplane

Directorate, 1601 Lind Avenue, SW.,

Renton, Washington.

FOR FURTHER INFORMATION CONTACT:

Norman B. Martenson, Manager,

International Branch, ANM–116, FAA,

1601 Lind Avenue, SW., Renton,

Washington 98055–4056; telephone

(425) 227–2110; fax (425) 227–1149.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of the

proposed rule by submitting such

written data, views, or arguments as

they may desire. Communications shall

identify the Rules Docket number and

be submitted in triplicate to the address

specified above. All communications

received on or before the closing date

for comments, specified above, will be

considered before taking action on the

proposed rule. The proposals contained

in this action may be changed in light

of the comments received.

Submit comments using the following

format:

• Organize comments issue-by-issue.

For example, discuss a request to

change the compliance time and a

request to change the service bulletin

reference as two separate issues.

• For each issue, state what specific

change to the proposed AD is being

requested.

• Include justification (e.g., reasons or

data) for each request.

Comments are specifically invited on

the overall regulatory, economic,

environmental, and energy aspects of

the proposed rule. All comments

submitted will be available, both before

and after the closing date for comments,

in the Rules Docket for examination by

interested persons. A report

summarizing each FAA-public contact

concerned with the substance of this

proposal will be filed in the Rules

Docket.

Commenters wishing the FAA to

acknowledge receipt of their comments

submitted in response to this notice

must submit a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket No. 2000–NM–118–AD.’’ The

postcard will be date stamped and

returned to the commenter.

Availability of NPRMs

Any person may obtain a copy of this

NPRM by submitting a request to the

FAA, Transport Airplane Directorate,

ANM–114, Attention: Rules Docket No.

2000–NM–118–AD, 1601 Lind Avenue,

SW., Renton, Washington 98055–4056.

Discussion

The Direction Ge ́ne ́rale de l’Aviation

Civile (DGAC), which is the

airworthiness authority for France,

notified the FAA that an unsafe

condition may exist on certain Airbus

Model A330 and A340 series airplanes.

The DGAC advises that air

pressurization units (‘‘Pressurization

Units, Air’’ or ‘‘PUA’’) have failed on

three Model A330 series airplanes. Two

potential failure modes, linked to

defects in the seal quality of the internal

pressure reducing valve, have been

identified on these air pressurization

units. The simultaneous failure of two

units could result in the loss of three

hydraulic circuits and consequent

reduced controllability of the airplane.

Similar Model

The same air pressurization units are

installed on Model A330 and A340

series airplanes. Therefore, Model A340

series airplanes are also subject to the

unsafe condition identified by this

proposed AD.