1950 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

Treasury Borrowing Advisory

Committee

The agenda for the Public Securities

Association Treasury Borrowing

Advisory Committee meeting calls for a

discussion by the members of their

individual views on the appropriate size

of the inflation-indexed security auction

on January 29. The Committee is not

being asked to make a group

recommendation as to the appropriate

size of the auction. Detailed minutes

will be made available on January 21.

The short period of time between the

announcement of the date for the first

auction and the date of the formal

offering announcement of the details of

the first auction, and the need for the

Treasury to hear the views of Committee

members before proceeding with its

offering announcement, require that this

meeting be held without providing the

full fifteen days notice.

Pursuant to the authority placed in

Heads of Departments by section 10(d)

of Public Law 92–463, and vested in me

by Treasury Department Order 101–05,

I hereby determine that this meeting is

concerned with information exempt

from disclosure under section

552b(c)(9)(A) of title 5 of the United

States Code, and that the public interest

requires that such meeting be closed to

the public.

My reasons for this determination are

as follows. The Treasury Department

requires frank and full advice from

representatives of the financial

community prior to making its final

decision on major financing operations.

Historically, this advice has been

offered by debt management advisory

committees established by the several

major segments of the financial

community, which committees have

been utilized by representatives of the

Secretary. When so utilized, such a

committee is recognized to be an

advisory committee under Public Law

92–463.

The nature and content of the

discussion and individual members’

recommendations are such that their

premature disclosure would likely lead

to significant speculation in the

securities market. Thus, the meeting

falls within the exemption covered by

section 552b(c)(9)(A) of title 5 of the

United States Code.

The Office of the Under Secretary

(Domestic Finance) shall be responsible

for maintaining records of debt

management advisory committee

meetings and for providing annual

reports setting forth a summary of

committee activities and such other

matters as may be informative to the

public consistent with the policy of

section 552b of title 5 of the United

States Code.

Dated: January 9, 1997.

John D. Hawke, Jr.,

Under Secretary Domestic Finance.

[FR Doc. 97–867 Filed 1–13–97; 8:45 am]

BILLING CODE 4810–25–M

Office of the Comptroller of the

Currency

[Docket No. 97–01]

Preemption Determination

AGENCY: Office of the Comptroller of the

Currency, Treasury.

ACTION: Notice and request for comment.

SUMMARY: The Office of the Comptroller

of the Currency (OCC) is publishing for

comment a written request for the OCC’s

determination of whether certain

provisions of legislation entitled

‘‘Financial Institution Insurance Sales

Act,’’ recently enacted by the State of

Rhode Island, are preempted by Federal

law. The purpose of this notice and

request for comment is to provide

interested persons with an opportunity

to submit comments prior to the OCC’s

issuance of a final determination

responding to the request.

DATES: Comments should be submitted

on or before February 13, 1997.

ADDRESSES: Comments should be sent to

the Communications Division, 250 E

Street, SW, Third Floor, Washington,

DC 20219. Attention Docket No. 97–01.

Comments will be available for

inspection and photocopying at the

same location. Appointments for

inspection of comments can be made by

calling (202) 874–4700.

FOR FURTHER INFORMATION CONTACT:

Suzette H. Greco, Senior Attorney,

Securities and Corporate Practices

Division, (202) 874–5210.

SUPPLEMENTARY INFORMATION:

Background

The OCC has received a request from

a trade association that represents

financial institutions and insurance

companies (Requester) for a

determination that certain provisions of

legislation entitled ‘‘Financial

Institution Insurance Sales Act,’’ R.I.

Gen. Laws §27–58–1 et seq., (the Rhode

Island law), recently enacted by the

State of Rhode Island, are preempted by

provisions of the National Bank Act.

Section 114 of the Riegle-Neal

Interstate Banking and Branching

Efficiency Act of 1994 (section 114),

Pub. L. 103–328 (12 U.S.C. 43),

generally requires the OCC to publish in

the Federal Register a descriptive notice

of certain requests that the OCC receives

for preemption determinations. Under

section 114, the OCC must publish

notice before it issues any opinion letter

or interpretive rule concluding that

Federal law preempts the application to

a national bank of any State law in four

designated areas: community

reinvestment, consumer protection, fair

lending, or the establishment of

intrastate branches. Pursuant to section

114, interested persons have at least 30

days to submit written comments.

The Requester has offered reasons

why the request should not be subject

to section 114. Whether or not section

114 applies to the request, the OCC has

determined that it is appropriate to use

notice and comment procedures in this

case, given the broad interest in the

issues presented in the request and the

benefit the OCC will derive by receiving

comments from all parties with an

interest in these issues. The OCC will

publish in the Federal Register any final

opinion letter or interpretive rule that

concludes that Federal law preempts

State law.

Specific Request for OCC Preemption

Determination

The OCC has been asked to determine

whether certain provisions of the Rhode

Island law are preempted by section 92

of the National Bank Act (12 U.S.C. 92)

and other specific Federal laws noted

later in this notice and request for

comment.

Section 92 authorizes a national bank

‘‘located and doing business in a place

where the population is less than five

thousand to act as an agent for any fire,

life, or other insurance company,’’ to

‘‘solicit and sell insurance,’’ to ‘‘collec[t]

premiums,’’ and to ‘‘receive for services

so rendered . . . fees or commissions,’’

subject to regulations issued by the

Comptroller of the Currency. 12 U.S.C.

92. State laws that apply generally to

regulated insurance agents and agencies

will apply to national banks provided

the law does not effectively prevent

national banks from conducting

activities authorized under Federal law,

and provided that, if the law interferes

with those authorized activities, the

interference is not significant. See

Barnett Bank of Marion County, N.A. v.

Nelson, 116 S.Ct. 1103 (1996).

The Rhode Island law imposes a

number of requirements upon financial

institutions engaged in the solicitation

and sale of insurance that differ from

the requirements that apply to other

insurance agents and agencies. The

Requester contends these special

requirements prevent or significantly

interfere with the ability of a national
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1951

bank to exercise its authority under

section 92. The special requirements

include a provision prohibiting banks

from requiring or implying that the

purchase of insurance products from a

bank is related to receiving another

banking product or service, a provision

restricting where a bank’s licensed agent

can solicit the sale of insurance, a

provision prohibiting certain bank

employees from soliciting and selling

insurance, a provision requiring

separate applications for loans and

insurance, and a provision limiting the

ability of a bank to use its customer

information to solicit and sell insurance.

Specifically, section 6 of the Rhode

Island law provides that:

(a) No financial institution may offer

a banking product or service, or fix or

vary the conditions of such offer, on a

condition or requirement that the

customer obtain insurance from the

financial institution, or any particular

insurance producer.

(b) No person shall require or imply

that the purchase of an insurance

product from a financial institution by

a customer or prospective customer of

the institution is required as a condition

of, or is any way related to, the lending

of money or extension of credit, the

establishment or maintenance of a trust

account, the establishment or

maintenance of a checking or savings

account or other deposit account, or the

provision of services related to any such

activities.

R.I. Gen. Laws §27–58–6. The

Requester contends that this provision

would prohibit a bank employee from

even mentioning to a customer that

insurance products are available from

the bank. As a result, the Requester

believes that the provision discriminates

against national banks and significantly

interferes with the ability of a national

bank to solicit or sell insurance under

section 92.

Moreover, the Requester contends that

the provision conflicts with the antitying provisions of the Bank Holding

Company Act, 12 U.S.C. 1972, and

Federal regulations enacted pursuant to

that section. Under the Federal antitying laws and regulations, banks are

permitted to inform a customer that

insurance is required in order to obtain

a loan or that loan approval is

contingent on the customer obtaining

acceptable insurance. In such

circumstances, the bank may indicate

that insurance is available from the

bank. Thus, the Requester contends that

under traditional preemption standards

the Rhode Island law is preempted by

Federal law. The Requester further

contends that the Rhode Island law was

enacted for the purpose of regulating

lenders rather than regulating the

business of insurance and thus, is not

protected from preemption by the

McCarran-Ferguson Act, 15 U.S.C. 1011

et seq.

In addition, section 12 of the Rhode

Island law permits financial institutions

to solicit and sell insurance only from

an office physically separated from the

banking activities of the institution.

Specifically, section 12 provides that:

The place of solicitation or sale of

insurance by any financial institution

shall be from an office physically

separated from the banking activities of

the institution. Physical separation shall

not be defined as a separate building.

The commissioner shall have the

authority to promulgate rules to

implement this section pursuant to

§ 27–58–4.

R.I. Gen. Laws §27–58–12. The

Requester contends this provision will

effectively prohibit insurance activities

at small bank or branch offices. As a

result, the Requester believes that the

provision significantly interferes with a

national bank’s ability to solicit and sell

insurance under section 92.

In addition, section 8 of the Rhode

Island law prohibits bank employees

with lending or deposit taking

responsibilities from soliciting and

selling insurance. Specifically, section 8

provides that:

Solicitation for the purchase and sale

of insurance by a financial institution

shall be conducted only by persons

whose responsibilities do not include

loan transactions or other transactions

involving the extension of credit, or the

taking of deposits.

R.I. Gen. Laws § 27–58–8. The

Requester contends that this provision

would prohibit the use of qualified

‘‘platform’’ employees to solicit and sell

insurance, as is permitted for national

banks. Moreover, the Requester believes

that the provision could effectively bar

insurance activities in small banks or

branches where different employees

may not be available to offer insurance

and banking products and services. For

these reasons, the Requester believes the

provision discriminates against national

banks and prevents or significantly

interferes with their authority to solicit

and sell insurance under section 92.

Section 11 of the Rhode Island law

requires that loan and insurance

applications be completed

independently and through separate

documents. Section 11 provides that:

(a) If insurance is required as a

condition of obtaining a loan, the credit

and insurance transactions shall be

completed independently and through

separate documents.

(b) A loan for premiums on required

insurance shall not be included in the

primary credit without the written

consent of the customer.

R.I. Gen. Laws § 27–58–11. The

Requester contends that this provision,

particularly when coupled with other

requirements of the Rhode Island law,

including the provision requiring the

physical separation of insurance and

banking activities and the provision

prohibiting certain bank employees

from soliciting and selling insurance,

will impose an undue burden upon the

bank and its customers by necessitating

that the customer make multiple visits

with different bank employees to

multiple locations in order to purchase

bank and insurance products.

Section 10 of the Rhode Island law

prohibits financial institutions from

using or disclosing certain customer

information for the purpose of selling or

soliciting insurance. Specifically,

section 10 provides that:

(1)(b) ‘‘Nonpublic customer

information’’ means information

regarding a person that has been derived

from a record of a financial institution,

including information concerning the

terms and conditions of insurance

coverage, insurance expirations,

insurance claims, or insurance history

of an individual. ‘‘Nonpublic customer

information’’ does not include customer

names, addresses or telephone numbers.

(2) No financial institution shall use

any nonpublic customer information for

the purpose of selling or soliciting the

purchase of insurance or provide the

nonpublic customer information to a

third party for the purpose of another’s

sale or solicitation of the purchase of

insurance.

R.I. Gen. Laws § 27–58–10. The

Requester contends that this provision

will cripple a bank’s ability to use

customer information to meet customer

needs. The Requester believes that the

limitation on use and disclosure of

customer information would even

prohibit the marketing of insurance

products to bank customers who had

requested such information. Moreover,

like the other provisions cited by the

Requester, the Requester contends that

this provision discriminates against

financial institutions because a

collateral limitation has not been placed

on other insurance agents and agencies

in Rhode Island.

Request for Comments

The OCC requests comments on

whether Federal law preempts the

provisions of the Rhode Island law cited

above.
1952 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

Dated: December 16, 1996.

Eugene A. Ludwig,

Comptroller of the Currency.

[FR Doc. 97–674 Filed 1–13–97; 8:45 am]

BILLING CODE 4810–33–P

UNITED STATES INSTITUTE OF

PEACE

Announcement of the Spring

Unsolicited Grant Program

AGENCY: United States Institute of Peace.

ACTION: Notice.

SUMMARY: The Agency Announces a

Change in Deadline for the Spring

Unsolicited Grant Competition.

Previous Deadline: April 1

New Deadline: March 1

DATES: Application Material Available

Upon Request. Receipt Date for Return

of Applications: March 1, 1997.

Notification of Awards: June, 1997.

ADDRESSES: For Application Package:

United States Institute of Peace, Grant

Program, 1550 M Street, NW, Suite 700,

Washington, DC 20005–1708, (202) 429–

6063 (fax), (202) 457–1719 (TTY), Email:

grantlprogram@usip.org.

FOR FURTHER INFORMATION CONTACT:

The Grant Program, Phone (202)–429–

3842.

Dated: January 8, 1997.

Bernice J. Carney,

Director, Office of Administration.

[FR Doc. 97–822 Filed 1–13–97; 8:45 am]

BILLING CODE BAC–3155–01–M