This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

5694 

Vol. 80, No. 22 

Tuesday, February 3, 2015 

1The examples provided in the Policy 

Statement—securitization and asset management or 

administration—are not exhaustive and simply 

highlight off-balance sheet activities that may 

involve substantial risk. Other activities may 

present similar concerns. See also 71 FR 9897, 

9899, fn. 2 (February 28, 2006) (2006 Final Rule). 

FEDERAL RESERVE SYSTEM 

12 CFR Parts 217, 225, and 238 

[Regulations Q, Y, and LL; Docket No. R– 

1509] 

RIN 1700–AE 30 

Small Bank Holding Company Policy 

Statement; Capital Adequacy of BoardRegulated Institutions; Bank Holding 

Companies; Savings and Loan Holding 

Companies; Changes to Reporting 

Requirements 

AGENCY: Board of Governors of the 

Federal Reserve System (Board). 

ACTION: Notice of proposed rulemaking; 

changes to reporting requirements. 

SUMMARY: The Board is proposing to 

raise the asset size threshold for 

determining applicability of the Board’s 

Small Bank Holding Company Policy 

Statement (Regulation Y, Appendix C) 

(Policy Statement) to $1 billion from 

$500 million and to expand the scope of 

the Policy Statement to include savings 

and loan holding companies that also 

meet the Policy Statement’s 

requirements. The Board is also 

proposing to make related and 

conforming revisions to: Regulation Y 

and Regulation LL, the Board’s 

regulations governing the operations 

and activities of bank holding 

companies and savings and loan 

holding companies, respectively; and 

Regulation Q, the Board’s regulatory 

capital regulation. Finally, to reduce 

burden on small non-complex holding 

companies, the Board is proposing to 

change the reporting requirements for 

bank holding companies and savings 

and loan holding companies that meet 

the requirements of the Policy 

Statement (as proposed). 

DATES: Comments on the proposal must 

be received on or before March 5, 2015. 

Comments on the Paperwork Reduction 

Act burden estimates must be received 

on or before April 6, 2015. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1509 and 

RIN No. 7100–AE 30, by any of the 

following methods: 

• Agency Web site: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

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

foia/proposedregs.aspx. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• 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: Robert deV. Frierson, 

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 Web site at 

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

foia/proposedregs.aspx as submitted, 

unless modified for technical reasons. 

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 MP–500 of the Board’s 

Martin Building (20th and C Streets 

NW., Washington, DC 20551) between 

9:00 a.m. and 5:00 p.m. on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Constance M. Horsley, Assistant 

Director, (202) 452–5239, Cynthia 

Ayouch, Manager, (202) 452–2204, 

Thomas Boemio, Manager, (202) 452– 

2982, Douglas Carpenter, Senior 

Supervisory Financial Analyst, (202) 

452–2205, or Page Conkling, 

Supervisory Financial Analyst, (202) 

912–4647, Division of Banking 

Supervision and Regulation; Laurie 

Schaffer, Associate General Counsel, 

(202) 452–2272, or Tate Wilson, 

Counsel, (202) 452–3696, 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 Proposal 

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 Policy 

Statement in 1980 to facilitate the 

transfer of ownership of small 

community-based banks in a manner 

consistent with bank safety and 

soundness. The Board generally has 

discouraged the use of debt by bank 

holding companies to finance the 

acquisition of banks or other companies 

because high levels of debt at a bank 

holding company can impair the ability 

of the bank holding company to serve as 

a source of strength to its subsidiary 

banks. The Board has recognized, 

however, that small bank holding 

companies have less access to equity 

financing than larger bank holding 

companies and that, therefore, the 

transfer of ownership of small banks 

often requires the use of acquisition 

debt. Accordingly, the Board 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 small bank holding 

companies that operate with the higher 

levels of debt permitted by the Policy 

Statement do not present an undue risk 

to the safety and soundness of their 

subsidiary banks. 

Currently, the Policy Statement 

applies to bank holding companies with 

pro forma consolidated assets of less 

than $500 million 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; 1 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). Under the Policy 

Statement, bank holding companies that 


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2To enhance the ability of community financial 

institutions to foster economic growth and serve 

their communities, boost small businesses, increase 

individual savings, and for other purposes, Public 

Law 113–250 (December 18, 2014) (Pub. L. 113– 

250). 3See 2006 Final Rule. 

4See 12 U.S.C. 1841(c)(2)(B), 1841(j), and 

1843(i)(1). 

5See, e.g., Public Law 113–250, sec. 2(b). 

6For purposes of applying the Policy Statement 

to savings and loan holding companies, the term 

‘‘nonbank subsidiary’’ as used in the Policy 

Statement would refer to a subsidiary of a savings 

and loan holding company other than a savings 

association or a subsidiary of a savings association. 

meet the Qualitative Requirements 

(qualifying small bank 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), but are 

subject to a number of ongoing 

requirements. The principal ongoing 

requirements are that a qualifying small 

bank holding company: (i) Reduce its 

parent company debt in such a manner 

that all debt is retired within 25 years 

of 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 specifically 

provides that a qualifying small bank 

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 (12 CFR 225.4(b), 225.14, 

and 225.23) unless the bank holding 

company has a pro forma debt-to-equity 

ratio of 1.0:1 or less. 

II. The Proposal 

New Asset Threshold of $1 Billion 

On December 18, 2014, Public Law 

113–250 (the Act) was enacted and 

became immediately effective.2 The Act 

directs the Board to publish in the 

Federal Register proposed revisions to 

the Policy Statement that provide that 

the Policy Statement shall apply to bank 

holding companies and savings and 

loan holding companies that have pro 

forma consolidated assets of less than 

$1 billion. The Board last raised the 

asset limit in 2006 when it increased it 

from $150 million to $500 million.3 The 

Board is proposing to increase the asset 

threshold consistent with the Act. The 

Board is not proposing any 

modifications to the Qualitative 

Requirements at this time. 

Policy Statement’s Application to 

Savings and Loan Holding Companies 

The Act also directs the Board to 

propose revisions to the Policy 

Statement that would extend its 

application to certain savings and loan 

holding companies. Accordingly, the 

Board is proposing that a savings and 

loan holding company would be subject 

to the Policy Statement if the entity has 

less than $1 billion in total consolidated 

assets and satisfies each of the 

Qualitative Requirements as if the 

savings and loan holding company were 

a bank holding company. 

The Policy Statement currently 

applies only to bank holding companies. 

The Board proposes to apply the Policy 

Statement to savings and loan holding 

companies by adding new section 238.9 

to Subpart A of Regulation LL. The new 

section would apply the Policy 

Statement to a savings and loan holding 

company with less than $1 billion in 

total consolidated assets and that meets 

the Qualitative Requirements as if it 

were a bank holding company. 

This change requires other 

modifications to the Policy Statement to 

take account of the status of savings 

associations under the Bank Holding 

Company Act of 1956, as amended (BHC 

Act). The first Qualitative Requirement 

uses the terms ‘‘nonbanking activities’’ 

and ‘‘nonbank subsidiary’’ to refer to the 

activities of a bank holding company. 

Under the BHC Act, however, control of 

a savings association by a bank holding 

company is considered a nonbanking 

activity.4 Because savings and loan 

holding companies control savings 

associations, all of their activities 

including the control of savings 

associations would be considered 

nonbanking activities under the Policy 

Statement. 

This outcome would be inconsistent 

with Congressional intent to apply the 

Policy Statement to savings and loan 

holding companies.5 The Board 

therefore proposes to treat subsidiary 

savings association of savings and loan 

holding companies as if they were banks 

for purposes of applying the Policy 

Statement. 

As is the case with bank holding 

companies, whether a savings and loan 

holding company engages in 

‘‘significant’’ nonbanking activities will 

depend on the scope of the activities of 

the savings and loan holding company, 

the nature and level of risk of the 

activities, the condition of the savings 

and loan holding company, and other 

criteria as appropriate.6 Consistent with 

the Policy Statement’s provisions for 

bank holding companies, the Board also 

proposes to retain the right to exclude 

any savings and loan holding company, 

regardless of size, from the Policy 

Statement if the Board determines that 

such action is warranted for supervisory 

purposes. 

Regulation Q Change 

The Board proposes to revise 

Regulation Q to conform the language in 

part 217 to reflect the proposed 

additional section to Regulation LL 

(section 238.9). 

Conforming Amendments 

A number of reporting, filing, and 

other provisions in Regulations Y and 

LL are triggered by the consolidated 

asset threshold established by the Policy 

Statement. The Board proposes to make 

technical and conforming amendments 

to these provisions to provide that 

qualifying small bank holding 

companies and savings and loan 

holding companies may take advantage 

of the streamlined informational, notice, 

and other requirements embodied in 

these rules. These technical and 

conforming amendments will provide 

relief to most bank holding companies 

and savings and loan holding 

companies with less than $1 billion of 

consolidated total assets. The proposed 

rule would make the following changes: 

• In section 217.1(c)(1)(iii), revise 

Regulation Q (12 CFR part 217) to 

exclude a savings and loan holding 

company that is subject to the proposed 

revised Policy Statement through 

proposed section 238.9 of the Board 

Regulation LL (12 CFR part 238). 

• In section 225.2(r), footnote 2, 

revise the footnote describing the 

application of the definition of ‘‘wellcapitalized’’ in the Board’s Regulation Y 

(12 CFR part 225) to entities subject to 

the proposed revised Policy Statement 

to reflect the proposed revised total 

assets threshold of less than $1 billion. 

• In section 225.4(b)(2)(iii), increase 

the threshold for the different pro forma 

financial information required of 

smaller bank holding companies 

compared to larger bank holding 

companies under section 225.4(b)(1) of 

the Board’s Regulation Y from total 

assets of less than $500 million to total 

assets of less than $1 billion. 

• In section 225.14(a)(1)(v), increase 

the threshold for the different pro forma 

financial information required of 

smaller bank holding companies 

compared to larger bank holding 

companies under section 225.14 of the 

Board’s Regulation Y from total assets of 

less than $500 million to total assets of 

less than $1 billion. 

• In section 225.17(a)(6), footnote 6, 

increase the total asset threshold for 

application of the footnote related to 

demonstrating that debt incurred will 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
5696 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 

7Pursuant to Paperwork Reduction Act’s 

emergency review process, 44 U.S.C. 3507(j), the 

Board is filing an emergency clearance review to 

change these reporting requirements for bank 

holding companies and savings and loan holding 

companies with $500 million or more but less than 

$1 billion in total consolidated assets to reduce 

burden on small BHCs and SLHCs immediately. 

The change implemented through the emergency 

clearance process would be effective immediately 

for six months. The Board is now proposing to 

make the change permanent and invites public 

comment. 

8See 13 CFR 121.201. Effective July 14, 2014, the 

Small Business Administration revised the size 

standards for banking organizations to $550 million 

in assets from $500 million in assets. 79 FR 33647 

(June 12, 2014). 

not unduly burden the bank holding 

company from total assets of less than 

$500 million to total assets of less than 

$1 billion. 

• In section 225.23(a)(1)(iii), increase 

the threshold for the different pro forma 

financial information required of 

smaller bank holding companies 

compared to larger bank holding 

companies under section 225.23 of the 

Board’s Regulation Y from total assets of 

less than $500 million to total assets of 

less than $1 billion. 

Regulatory Reporting Changes 

In order to assist the Federal Reserve 

in monitoring the financial health and 

operations of bank holding companies, 

the Board requires all bank holding 

companies and savings and loan 

holding companies to file certain reports 

with the Federal Reserve. Those reports 

include the Financial Statements for 

Holding Companies (FR Y–9 series of 

reports; OMB No. 7100–0128). 

Currently, savings and loan holding 

companies with consolidated assets of 

less than $500 million and bank holding 

companies with consolidated assets of 

less than $500 million that also meet 

Qualitative Requirements submit 

limited summary parent-only financial 

data semiannually on the FR Y–9SP. 

Currently, savings and loan holding 

companies with consolidated assets of 

$500 million or more and bank holding 

companies with consolidated assets of 

$500 million or more that are 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 proposes to change the 

filing requirements for bank holding 

companies and savings and loan 

holding companies with $500 million or 

more but less than $1 billion in total 

consolidated assets.7 These institutions 

would not be required to file the FR Y– 

9C and the FR Y–9LP (including 

regulatory capital information) and 

would begin filing the FR Y–9SP if they 

also meet the Qualitative Requirements. 

These changes are proposed to be 

consistent with the changes to law and 

the Policy Statement and also to reduce 

regulatory reporting burden for these 

smaller institutions. Since most bank 

holding companies with less than $1 

billion in total consolidated assets have 

limited activities outside of their banks, 

the Board believes relying on detailed 

quarterly bank data on the Consolidated 

Reports of Condition and Income (FFIEC 

041; OMB No. 7100–0036) is sufficient 

for supervisory purposes. 

Comments 

The Board invites comments on all 

aspects of this proposal. Interested 

parties are encouraged to provide 

comments on the proposed $1 billion 

asset size threshold adjustment, the 

Policy Statement’s application to 

savings and loan holding companies, 

related and conforming amendments to 

Regulations Y and LL, the revision to 

Regulation Q, and the proposed changes 

to regulatory reporting. 

III. Administrative Law Matters 

A. Regulatory Flexibility Act Analysis 

The Board is providing an initial 

regulatory flexibility analysis with 

respect to this proposal. As discussed 

above, the proposal would reduce 

regulatory burden on small entities by 

excluding many bank holding 

companies and savings and loan 

holding companies with total 

consolidated assets of less than $1 

billion that meet the Qualitative 

Requirements from the application of 

the Board’s Regulation Q. In addition, 

the proposal would reduce the burden 

of regulatory reporting for bank holding 

companies and savings and loan 

holding companies with total 

consolidated assets of less than $1 

billion that meet the Qualitative 

Requirements by requiring these entities 

to file the semi-annual FR Y–9SP rather 

than the quarterly FR Y–9C and FR Y– 

9LP. 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq. (RFA), generally 

requires that an agency prepare and 

make available an initial regulatory 

flexibility analysis in connection with a 

notice of proposed rulemaking. Under 

regulations issued by the Small 

Business Administration, a small bank 

holding company, bank, or savings and 

loan holding company is defined as 

having assets of $550 million or less 

(collectively, small banking 

organizations).8 As of June 30, 2014, 

there were approximately 3,719 small 

bank holding companies and 254 small 

savings and loan holding companies. 

The proposed rule would impact 

small bank holding companies with 

total consolidated assets of $500 to $550 

million that meet the Qualitative 

Requirements by providing an exclusion 

from Regulation Q and the requirement 

to file the FR Y–9C and FR Y–9LP. The 

proposed rule would impact all small 

savings and loan holding companies 

(those with $550 million or less in 

assets) that meet the Qualitative 

Requirements, are currently subject to 

Regulation Q, and are required to file 

the FR Y–9C or FR Y–9LP. These small 

bank holding companies and small 

savings and loan holding companies 

would instead be subject to the Policy 

Statement and would be required to file 

the FR Y–9SP, a significant reduction in 

burden. The Board believes that most 

affected small banking organizations 

already hold more capital than required 

under Regulation Q, so the burden 

reduction from the exclusion from 

Regulation Q is primarily related to 

compliance and systems. In addition, 

affected small banking organizations 

would be able to take advantage of the 

applications processing procedures 

provided to qualifying companies under 

the Policy Statement. 

There are no significant alternatives to 

the proposed rule that would have less 

economic impact on small banking 

organizations, and the proposed rule 

would significantly reduce burden on 

nearly all small banking organizations. 

As discussed above, the projected 

reporting, recordkeeping, and other 

compliance requirements of the 

proposed rule are a material reduction 

from existing requirements. The Board 

does not believe that the proposed rule 

duplicates, overlaps, or conflicts with 

any other Federal rules. In light of the 

foregoing, the Board does not believe 

that the proposed rule, if adopted in 

final form, would have a significant 

economic impact on a substantial 

number of small banking organizations. 

Nonetheless, the Board seeks comment 

on whether the proposed rule would 

impose undue burdens on, or have 

unintended consequences for, small 

banking organizations, and whether 

there are ways such potential burdens or 

consequences could be minimized in a 

manner consistent with the purpose of 

the proposed rule. A final regulatory 

flexibility analysis will be conducted 

after consideration of comments 

received during the public comment 

period. 

B. Paperwork Reduction Act 

In accordance with section 3512 of 

the Paperwork Reduction Act of 1995 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 5697 

(44 U.S.C. 3501–3521) (PRA), the Board 

may not conduct or sponsor, and a 

respondent is not required to respond 

to, an information collection unless it 

displays a currently valid Office of 

Management and Budget (OMB) control 

number. The OMB control number is 

7100–0128. The Board reviewed the 

proposed rulemaking under the 

authority delegated to the Board by 

OMB. The proposed rulemaking 

contains requirements subject to the 

PRA. The reporting requirements are 

found in sections 211.26(c)(2)(i)(A), 

217.1(c)(1)(iii), 225.2(r)(footnote 2), 

225.4(b)(2)(iii), 225.14(a)(1)(v), 

225.17(a)(6)(footnote 6), and 

225.23(a)(1)(iii), 238.9. 

Comments are invited on: 

(a) Whether the proposed collections 

of information are necessary for the 

proper performance of the Federal 

Reserve’s functions, including whether 

the information has practical utility; 

(b) The accuracy of the Federal 

Reserve’s estimate of the burden of the 

proposed information collections, 

including the validity of the 

methodology and assumptions used; 

(c) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

(d) Ways to minimize the burden of 

the information collections on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology; 

and 

(e) Estimates of capital or startup costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

All comments will become a matter of 

public record. Comments on aspects of 

this notice that may affect reporting, 

recordkeeping, or disclosure 

requirements and burden estimates 

should be sent to: Secretary, Board of 

Governors of the Federal Reserve 

System, 20th and C Streets NW., 

Washington, DC 20551. A copy of the 

comments may also be submitted to the 

OMB desk officer: By mail to U.S. Office 

of Management and Budget, 725 17th 

Street NW., #10235, Washington, DC 

20503 or by facsimile to 202–395–5806, 

Attention, Agency Desk Officer. 

Proposed Revisions, With Extension, to 

the Following Information Collection 

Title of Information Collection: 

Consolidated Financial Statements for 

Holding Companies; Parent Company 

Only Financial Statements for Large 

Holding Companies; Parent Company 

Only Financial Statements for Small 

Holding Companies; Financial 

Statements for Employee Stock 

Ownership Plan Holding Companies; 

and Supplement to the Consolidated 

Financial Statements for Holding 

Companies. 

Agency Form Number: FR Y–9C; FR 

Y–9LP; FR Y–9SP; FR Y–9ES; and FR 

Y–9CS. 

OMB Control Number: 7100–0128. 

Frequency of Response: Quarterly, 

semiannually, annually, and on 

occasion. 

Affected Public: Businesses or other 

for-profit. 

Respondents: Bank holding 

companies, savings and loan holding 

companies, and securities holding 

companies (collectively, holding 

companies). 

Abstract: On December 18, 2014, 

Public Law 113–250 was signed into 

law and became effective immediately, 

which directs the Board to propose 

revisions to the Policy Statement to 

raise the total consolidated asset limit in 

the Policy Statement from $500 million 

to $1 billion, and expand the scope of 

the Policy Statement to include savings 

and loan holding companies. 

Pursuant to the PRA’s emergency 

review process, 44 U.S.C. 3507(j), the 

Board is filing an emergency clearance 

review to (1) increase the asset size 

threshold for filing the FR Y–9C and FR 

Y–9LP from $500 million to $1 billion 

in total consolidated assets (which also 

effectively exempted holding companies 

with total consolidated assets of less 

than $1 billion from reporting regulatory 

capital on Schedule HC–R, Regulatory 

Capital, Part I) and (2) and increase the 

asset-size threshold for filing the FR Y– 

9SP from under $500 million to under 

$1 billion in total consolidated assets. In 

the emergency submission, the burden 

for the FR Y–9C, FR Y–9LP, and FR Y– 

9SP related to the threshold changes, 

would decrease by 96,619 hours. The 

change implemented through the 

emergency clearance process would be 

effective for six months. The Board is 

now proposing to make the change 

permanent and welcomes public 

comment on any aspect of this 

information collection. The burden 

estimates below reflect the updated 

number from the total emergency 

clearance review. 

Estimated Paperwork Burden 

Estimated Burden per Response: 

FR Y–9C (non-Advanced Approaches 

bank holding companies)—48.84 hours; 

FR Y–9C (Advanced Approaches bank 

holding companies)—50.09 hours; 

FR Y–9LP—5.25 hours; 

FR Y–9SP—5.40 hours; 

FR Y–9ES—0.5 hours; and 

FR Y–9CS—0.5 hours. 

Number of respondents: 

FR Y–9C (non-Advanced Approaches 

bank holding companies)—644; 

FR Y–9C (Advanced Approaches bank 

holding companies)—12; 

FR Y–9LP—818; 

FR Y–9SP—4,390; 

FR Y–9ES—86; and 

FR Y–9CS—236. 

Total estimated annual burden: 

FR Y–9C (non-Advanced Approaches 

bank holding companies)—125,812 

hours; 

FR Y–9C (Advanced Approaches bank 

holding companies)—2,404 hours; 

FR Y–9LP—17,178 hours; 

FR Y–9SP—47,412 hours; 

FR Y–9ES—43 hours; and 

FR Y–9CS—472 hours. (Total burden 

193,321 hours) 

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 proposed 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, Capital, 

Federal Reserve System, Holding 

companies, Reporting and 

recordkeeping requirements, Securities. 

12 CFR Part 225 

Administrative practice and 

procedure, Banks, banking, Federal 

Reserve System, Holding companies, 

Reporting and recordkeeping 

requirements. 

12 CFR Part 238 

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 proposed 

to be 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: 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
5698 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 

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

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

1831o, 1831p–1, 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 has total 

consolidated assets of less than $1 

billion and 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, paragraph (r), revise 

footnote 2 to read as follows: 

§ 225.2 Definitions. 

* * * * * 

(r) * * * 

2 For purposes of this subpart and subparts 

B and C of this part, a bank holding company 

with consolidated assets of less than $1 

billion that is subject to the Small Bank 

Holding Company Policy Statement in 

appendix C of this part will be deemed to be 

‘‘well-capitalized’’ 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 $1 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 

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 $1 

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 $1 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; 

(B) If the bank holding company has 

consolidated assets of less than $1 

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, paragraph (a)(6), revise 

footnote 6 to read as follows: 

§ 225.17 Notice procedure for one-bank 

holding company formations. 

(a) * * * 

(6) * * * 

6 For a banking organization with 

consolidated assets, on a pro forma basis, of 

less than $1 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 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 $1 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 $1 

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; 

(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 part 225, appendix C, before the 

heading ‘‘1. Applicability of Policy 

Statement’’, add a paragraph to read as 

follows: 

Appendix C to Part 225—Small Bank 

Holding Company Policy Statement 

Policy Statement on Assessment of 

Financial and Managerial Factors 

* * * * * 

This policy statement applies only 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; 

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. 

* * * * * 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 5699 

PART 238—SAVINGS AND LOAN 

HOLDING COMPANIES (REGULATION 

LL) 

■ 10. The authority citation for part 238 

continues to read as follows: 

Authority: 5 U.S.C. 552, 559; 12 U.S.C. 

1462, 1462a, 1463, 1464, 1467, 1467a, 1468, 

1813, 1817, 1829e, 1831i, 1972; 15 U.S.C. 78l. 

■ 11. In subpart A, add new § 238.9 to 

read as follows: 

§ 238.9 Small Bank Holding Company 

Policy Statement. 

(a) The Board’s Small Bank Holding 

Company Policy Statement (12 CFR part 

225, appendix C) (Policy Statement) 

applies to savings and loan holding 

companies as if they were bank holding 

companies. To qualify or rely on the 

Policy Statement, savings and loan 

holding companies must meet all 

qualifying requirements in the Policy 

Statement as if they were a bank holding 

company. For purposes of applying the 

Policy Statement, the term ‘‘nonbank 

subsidiary’’ as used in the Policy 

Statement refers to a subsidiary of a 

savings and loan holding company other 

than a savings association or a 

subsidiary of a savings association. 

(b) The Board may exclude any 

savings and loan holding company, 

regardless of asset size, from the Policy 

Statement under paragraph (a) of this 

section if the Board determines that 

such action is warranted for supervisory 

purposes. 

By order of the Board of Governors of the 

Federal Reserve System, January 29, 2015. 

Michael Lewandowski, 

Associate Secretary of the Board. 

[FR Doc. 2015–02040 Filed 1–30–15; 11:15 am] 

BILLING CODE 6210–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

15 CFR Part 922 

Revisions of Boundaries for Flower 

Garden Banks National Marine 

Sanctuary; Intent To Prepare Draft 

Environmental Impact Statement 

AGENCY: Office of National Marine 

Sanctuaries (ONMS), National Ocean 

Service (NOS), National Oceanic and 

Atmospheric Administration (NOAA), 

Department of Commerce (DOC). 

ACTION: Notice of intent to revise 

boundaries; intent to prepare 

environmental impact statement. 

SUMMARY: In accordance with section 

304(e) of the National Marine 

Sanctuaries Act, as amended, (NMSA), 

the Office of National Marine 

Sanctuaries (ONMS) of the National 

Oceanic and Atmospheric 

Administration (NOAA) is initiating a 

review of Flower Garden Banks National 

Marine Sanctuary (FGBNMS or 

Sanctuary) boundaries, based on the 

recommendation contained within the 

Sanctuary Expansion Action Plan of the 

FGBNMS Management Plan (April 

2012). The review process, as required 

by the NMSA, will be conducted 

concurrently with a public process 

under the National Environmental 

Policy Act (NEPA). This document also 

informs the public that NOAA will 

coordinate its responsibilities under 

section 106 of the National Historic 

Preservation Act (NHPA) with its 

ongoing NEPA process, including the 

use of NEPA documents and public and 

stakeholder meetings to also meet the 

requirements of section 106. The public 

scoping process is intended to solicit 

information and comments on the range 

and significance of issues related to the 

expansion of the FGBNMS boundaries. 

The results of this scoping process will 

assist NOAA in formulating alternatives 

for the draft environmental impact 

statement for the proposed revised 

sanctuary boundaries. 

DATES: Comments must be received by 

April 6, 2015. Public hearings will be 

held as detailed below: 

(1) New Orleans, LA 

Date: Tuesday, March 3, 2015 

Location: Hilton New Orleans Airport, 

Cocodrie Room 

Address: 901 Airline Drive, Kenner, LA 

70062 

Time: 6:00–8:00 p.m. 

(2) Houston, TX 

Date: Thursday, March 5, 2015 

Location: Bayland Community Center 

Address: 6400 Bissonnet Street, 

Houston, TX 77074 

Time: 6:00–8:00 p.m. 

(3) Galveston, TX 

Date: Wednesday, March 11, 2015 

Location: Flower Garden Banks NMS 

Office, NOAA Galveston Laboratory 

Address: 4700 Avenue U, Building 216, 

Galveston, TX 77551 

Time: 6:00–8:00 p.m. 

ADDRESSES: Comments may be 

submitted by any one of the following 

methods: 

• Electronic Submissions: Submit all 

electronic public comments via the 

Federal e-Rulemaking Portal. Go to 

www.regulations.gov/

#!docketDetail;D=NOAA-NOS-2014- 

0154, click the ‘‘Comment Now!’’ icon, 

complete the required fields and enter 

or attach your comments. 

• Mail: George Schmahl, Sanctuary 

Superintendent, Flower Garden Banks 

National Marine Sanctuary, 4700 

Avenue U, Bldg. 216, Galveston, TX 

77551. 

Instructions: Comments sent by any 

other method, to any other address or 

individual, or received after the end of 

the comment period, may not be 

considered by NOAA. All comments 

received are a part of the public record 

and will generally be posted for public 

viewing on www.regulations.gov 

without change. All personal identifying 

information (e.g., name, address, etc.), 

confidential business information, or 

otherwise sensitive information 

submitted voluntarily by the sender will 

be publicly accessible. ONMS will 

accept anonymous comments (enter ‘‘N/ 

A’’ in the required fields if you wish to 

remain anonymous). Attachments to 

electronic comments will be accepted in 

Microsoft Word, Excel, or Adobe PDF 

file formats only. 

FOR FURTHER INFORMATION CONTACT: 

Kelly Drinnen, 409–621–5151 Ext. 105, 

fgbexpansion@noaa.gov. 

SUPPLEMENTARY INFORMATION: 

Background Information 

I. Background 

The National Marine Sanctuaries Act 

(NMSA) (16 U.S.C. 1431 et seq.) 

authorizes the Secretary of Commerce 

(Secretary) to designate and protect as a 

national marine sanctuaries areas of the 

marine environment that are of special 

national significance due to their 

conservation, recreational, ecological, 

historical, scientific, cultural, 

archeological, educational, or esthetic 

qualities. Day-to-day management of 

national marine sanctuaries has been 

delegated by the Secretary to the ONMS. 

The primary objective of the NMSA is 

to protect the biological and cultural 

resources of the sanctuary system, such 

as coral reefs, marine animals, historical 

shipwrecks, historic structures, and 

archaeological sites. 

Flower Garden Banks National Marine 

Sanctuary was designated on January 

17, 1992 (Pub. L. 102–251, Title I, Sec. 

101). At that time, the sanctuary 

consisted of two areas known as East 

and West Flower Garden Banks (56 FR 

63634). In 1996, Congress added Stetson 

Bank to the sanctuary (Pub. L. 104–283). 

FGBNMS regulations were first 

published on December 5, 1991 (56 FR 

63634) and became effective on January 

18, 1994 (58 FR 65664). Current 

FGBNMS regulations can be found at 15 

CFR part 922, subpart L. 


rljohnson on DSK3VPTVN1PROD with PROPOSALS