15480 Federal Register / Vol. 62, No. 62 / Tuesday, April 1, 1997 / Notices

Division, FDIC, 550 17th Street, N.W.,

Washington, DC 20429.

SUPPLEMENTARY INFORMATION: The FDIC

is conducting a systematic review of its

regulations and written policies. Section

303(a) of the CDRI (12 U.S.C. 4803(a))

requires the FDIC, the Office of the

Comptroller of the Currency, the Board

of Governors of the Federal Reserve

System, and the Office of Thrift

Supervision (Federal banking agencies)

to each streamline and modify its

regulations and written policies in order

to improve efficiency, reduce

unnecessary costs, and eliminate

unwarranted constraints on credit

availability. Section 303(a) also requires

each of the Federal banking agencies to

remove inconsistencies and outmoded

and duplicative requirements from its

regulations and written policies.

As a part of this review, the FDIC has

determined that the Statement of Policy

contains a substantial amount of

information that is outmoded, and

duplicated or cross-referenced

elsewhere. The FDIC’s written policies

can be streamlined by eliminating the

Statement of Policy. The relevant

information contained in the Policy

Statement will be condensed and placed

into Statements of Policy regarding

Applications for Deposit Insurance, and

Bank Merger Transactions.

On September 8, 1980, the Statement

of Policy was adopted by the Board of

the FDIC and was published on

September 15, 1980 (45 FR 61025). The

Statement of Policy addresses

unreasonable or excessive fees, insider

fees, and contingency fee arrangements

incidental to applications filed with the

FDIC. Some of the information

contained in the Statement of Policy is

now also in other Statements of Policy

addressing specific applications and, as

a result, it is no longer necessary to have

a Statement of Policy dealing

specifically with legal fees and other

expenses.

Issues formerly dealt with in the

Statement of Policy have now been

condensed and placed into other

application specific ‘‘Statements of

Policy’’. The following specific

statements are now included in relevant

‘‘Statements of Policy’’ published

concurrently herein.

‘‘The commitment to or payment of

unreasonable or excessive fees and other

expenses incident to an application reflects

adversely upon the management of the

applicant institution. Fees and other

organizational expenses incurred or

committed to should be fully supported.

Expenses for professional or other services

rendered by organizers, present or

prospective board members, major

shareholders or executive officers will

receive special review for any indication of

self-dealing to the detriment of the bank and

its other shareholders. As a matter of

practice, the FDIC expects full disclosure to

all directors and shareholders of any material

arrangement with an insider.

In no case will an FDIC application be

approved where the payment of a fee, in

whole or in part, is contingent upon any act

or forbearance by the FDIC or by any other

federal or state agency or official.’’

The rescission does not reflect any

substantive change in the FDIC’s

supervisory attitude toward excessive,

unwarranted, or otherwise

inappropriate fees incident to an

application, and the relevant issues will

continue to be addressed.

For the above reasons, the Statement

of Policy is hereby rescinded.

By order of the Board of Directors.

Dated at Washington, DC, this 25th day of

March, 1997.

Federal Deposit Insurance Corporation

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 97–8171 Filed 3–31–97; 8:45 am]

BILLING CODE 6714–01–P

Statement of Policy Regarding Liability

of Commonly Controlled Depository

Institutions

AGENCY: Federal Deposit Insurance

Corporation (FDIC).

ACTION: Policy statement.

SUMMARY: The FDIC is revising the

statement of policy which sets forth the

procedures and guidelines the FDIC

uses in assessing liability against

commonly controlled depository

institutions under section 5(e) of the

Federal Deposit Insurance Act. The

revised policy statement provides

guidance based on the FDIC’s

experience in administering the

provisions of section 5(e) of the Act and

clarifies the authority granted to the

FDIC to issue assessments of liability or

grant conditional waivers of liability,

the manner in which the FDIC will

assess the amount of loss incurred by

the FDIC, and the manner in which each

liable institution’s share of that loss will

be determined. The revised policy

statement also addresses the potential

liability of depository institutions

acquired by unaffiliated parties prior to

any occurrence establishing liability

under section 5(e) of the Act.

EFFECTIVE DATE: April 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Cheryl Steffen, Special Situations and

Application Section, Division of

Supervision, (202) 898–8768; Michael J.

Fanaroff, Division of Resolution and

Receiverships, (202) 898–7122; or

Grovetta N. Gardineer, Counsel, Legal

Division, (202) 736–0665, Federal

Deposit Insurance Corporation, 550 17th

Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: On May

22, 1990, the Board of Directors of the

FDIC adopted a Statement of Policy

Regarding Liability of Commonly

Controlled Depository Institutions. Such

liability is a consequence of section 5(e)

of the Federal Deposit Insurance Act

(Act), 12 U.S.C. 1815(e), which was

added by the passage of section

206(a)(7) of the Financial Institutions

Reform, Recovery, and Enforcement Act

of 1989. Section 5(e) created liability for

commonly controlled insured

depository institutions for losses

incurred or anticipated by the FDIC in

connection with (i) the default of a

commonly controlled insured

depository institution; or (ii) any

assistance provided by the FDIC to any

commonly controlled insured

depository institution in danger of

default. The purpose of section 5(e) is to

ensure that the assets of healthy

depository institution subsidiaries

within the same holding company

structure, or of a healthy institution

which controls a failing institution, will

be available to the FDIC to help offset

the cost of resolving the failed

subsidiary. While the FDIC seeks to

recover its losses associated with failing

institutions, it also seeks to encourage

the acquisition of troubled institutions

by those capable of rehabilitating them

and to avoid instances in which the

assessment of liability against an

otherwise healthy institution will cause

its failure, thus exposing the FDIC and

the insurance funds to greater loss.

The FDIC has brought a number of

actions since the enactment of section

5(e). While the original statement of

policy provided guidance to the

industry regarding the application of the

statute at the time it was published, the

FDIC had not initiated any actions

under the statute. The revised policy

statement attempts to provide guidance

to the industry based on actual practice

with administering the statute. The

proposed policy statement contains

information regarding the content of

requests for conditional waiver.

Depending on decisions affecting part

303 of the FDIC Rules and Regulations

(Rules), this information may also be

addressed in the revised part 303 of the

FDIC’s Rules regarding applications.

Any changes in part 303 of the FDIC’s

Rules may also necessitate further

revisions to the policy statement.

The policy statement provides for the

issuance of a Notice of Assessment of
Federal Register / Vol. 62, No. 62 / Tuesday, April 1, 1997 / Notices 15481

Liability, Findings of Fact and

Conclusions of Law, an Order to Pay

and a Notice of Hearing, a good faith

estimate of the FDIC’s loss, and the

determination of the method and

schedule of repayment. The liability

under the statute attaches at the time of

default of a commonly controlled

depository institution. The FDIC, in its

discretion, may assess liability for the

losses incurred by the default or for any

assistance provided by the FDIC to a

commonly controlled institution in

danger of default. Generally, liability

will be assessed against an institution

except in instances of the acquisition of

a distressed institution by an

unaffiliated entity prior to the default of

a commonly controlled institution. A

conditional waiver of the liability will

be considered when, as determined

within the sole discretion of the Board

of Directors of the FDIC, the exemption

is in the best interests of either of the

insurance funds administered by the

FDIC or where a waiver facilitates an

alternative that is in the best interests of

the FDIC. Institutions that believe that

an assessment of liability would be

inappropriate are required to submit

supporting documentation.

The text of the revised policy

statement follows:

Federal Deposit Insurance Corporation

Statement of Policy Regarding Liability

of Commonly Controlled Depository

Institutions

Introduction

Section 5(e) of the Federal Deposit

Insurance Act, as added by section

206(a)(7) of the Financial Institutions

Reform, Recovery, and Enforcement Act

of 1989, creates liability for commonly

controlled insured depository

institutions for losses incurred or

anticipated by the Federal Deposit

Insurance Corporation (FDIC) in

connection with (i) the default of a

commonly controlled insured

depository institution; or (ii) any

assistance provided by the FDIC to any

commonly controlled insured

depository institution in danger of

default. In addition to certain statutory

exceptions and exclusions contained in

sections 5(e)(6), (7) and (8), the Act also

permits the FDIC, in its discretion, to

exempt any insured depository

institution from this liability if it

determines that such exemption is in

the ‘‘best interests of the Bank Insurance

Fund or the Savings Association

Insurance Fund’’.

The liability of an insured depository

institution attaches at the time of default

of a commonly controlled institution. It

is completely within the discretion of

the FDIC whether or not to issue a

notice of assessment to the liable

institution for the estimated amount of

the loss incurred by the FDIC.

Guidelines for Conditional Waiver of

Liability

The FDIC may, in its discretion,

choose not to assess liability based upon

analysis of a particular situation, and it

may entertain requests for waivers from

affiliated or unaffiliated parties of an

institution in default or in danger of

default. The determination of whether

an exemption is in the best interests of

either insurance fund rests solely with

the Board of Directors of the FDIC

(Board). Should the Board make such a

determination, a waiver will be issued

setting forth terms and conditions that

must be met in order to receive an

exemption from liability (conditional

waiver of liability). The following

guidelines apply to conditional waivers

of liability under the provisions of this

section:

(1) A conditional waiver of liability

will be considered in those cases where

the waiver facilitates an alternative that

would be in the best interests of the

FDIC; for example, the conditional

waiver may be granted when requisite

additional capital and managerial

resources are being provided which

substantially lessen exposure to the

affected insurance fund. When

conditional waivers are granted to an

otherwise unaffiliated acquirer of a

failing or failed institution they will be

granted for a fixed period, generally not

to exceed a period of time reasonably

required for existing problems to be

identified and resolved.

(2) If one or more institutions in a

commonly controlled relationship is

otherwise solvent, well-managed and

viable, it may be in the best interest of

the FDIC to waive or reduce claims

against such entities. In determining

whether a conditional waiver is

appropriate, consideration will be given

to actions of a holding company which

contribute to or diminish the FDIC’s

losses, as well as proposals to

strengthen other weakened institutions,

if any.

(3) Requests for waivers should be

filed with the appropriate Regional

Director (Supervision).

(4) In the event an application for a

conditional waiver of liability is made,

the applicant should provide the FDIC

information indicating the basis for

requesting a waiver; the existence of any

significant events (e.g., change of

control, capital injection, etc.) that may

have an impact upon the applicant or a

potentially liable institution(s); current

and, if applicable, pro forma financial

information regarding the applicant and

potentially liable institution(s); and the

benefits resulting from the waiver and

any related events. Additional

information may be requested.

(5) In the event a conditional waiver

of liability is issued, failure to comply

with the terms specified therein may

result in the termination of the

conditional waiver of liability. The FDIC

reserves the right to revoke the

conditional waiver of liability after

giving the applicant written notice of

said revocation and a reasonable

opportunity to be heard on the matter.

(6) In cases where an insured

depository institution is sold to an

acquirer with no financial interest,

directly or indirectly, in the institution

prior to the acquisition, it is the general

policy of the FDIC to forego the issuance

of a notice of assessment to the acquirer

and its affiliated institutions in the

event of a default of an insured

depository institution formerly affiliated

with the acquired institution. The FDIC

will review all such transactions prior to

making a final determination to forego

the issuance of the notice of assessment.

Guidelines for Assessment of Liability

Whenever the FDIC determines that

assessment of liability in connection

with a commonly controlled insured

depository institution(s) is appropriate,

a Notice of Assessment of Liability,

Findings of Fact and Conclusions of

Law, Order to Pay, and Notice of

Hearing (Notice of Assessment) will be

served upon the liable institution. In

assessing the amount of the FDIC’s loss

and the liable institution(s) method of

payment, the following guidelines shall

apply:

(1) A good faith estimate of the

amount of loss the FDIC will incur shall

be based upon (a) the actual sale or

calculation of loss from a review by the

FDIC of the assets and liabilities of the

institution prior to default or the

granting of assistance; or (b) any other

cost estimate bases as explained in the

Notice of Assessment.

(2) If there is more than one

commonly controlled depository

institution to be assessed, each such

institution is jointly and severally liable

for all losses; however, the FDIC shall

make a good faith estimate of the

liability of each institution as

determined by (a) first assessing an

initial amount on a pro rata capital basis

that brings about parity in the capital

ratios of the liable institutions and (b)

then apportioning any residual

assessment on a pro-rata size basis

utilizing the most recent Report of

Condition. Any final assessment can be

based on the estimated liability of each
15482 Federal Register / Vol. 62, No. 62 / Tuesday, April 1, 1997 / Notices

institution by the FDIC and/or

negotiations with the liable institutions.

(3) In the event that any liable

institution is closed prior to paying an

assessment, the amount assessed or to

have been assessed against that

institution may be assessed against the

remaining liable institution(s).

(4) The FDIC, after consulting with

the appropriate federal and state

financial institutions regulatory

agencies, shall establish in each case a

schedule for payment which may

include a lump sum reimbursement, as

well as procedures for receipt of such

payment.

(5) Once liability has attached, the

FDIC will consider information similar

to that provided with a request for a

conditional waiver of liability in

determining the amount of the

estimated loss to be assessed. Such

information may also include suggested

payment plans.

By order of the Board of Directors.

Dated at Washington, DC., this 25th day of

March, 1997.

Federal Deposit Insurance Corporation

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 97–8254 Filed 3–31–97; 8:45 am]

BILLING CODE 6714–01–P

FEDERAL ELECTION COMMISSION

[Notice 1997–5]

Filing Dates for the Texas Special

Election

AGENCY: Federal Election Commission.

ACTION: Notice of Filing Dates for

Special Elections.

SUMMARY: Texas has scheduled a Special

Runoff Election on April 12, 1997, to fill

the U.S. House seat in the TwentyEighth Congressional District held by

the late Congressman Frank Tejeda. On

March 15, 1997, a Special General

Election was held, with no candidate

achieving a majority vote. Under Texas

law, a runoff election will now be held

between the top two vote-getters.

Committees required to file reports in

connection with the Special Runoff

Election on April 12 should file a 12-

day Pre-Runoff Election Report on

March 31, 1997; a 30-day Post-Runoff

Report on May 12, 1997; and a Mid-Year

Report on July 31, 1997.

FOR FURTHER INFORMATION CONTACT: Ms.

Bobby Werfel, Information Division, 999

E Street, N.W., Washington, DC 20463,

Telephone: (202) 219–3420; Toll Free

(800) 424–9530.

SUPPLEMENTARY INFORMATION: All

principal campaign committees of

candidates who participate in the Texas

Special Runoff Election and all other

political committees not filing monthly

which support candidates in the Special

Election shall file a 12-day Pre-Runoff

Report on March 31, 1997, with

coverage dates from the close of the last

report filed, or the day of the

committee’s first activity, whichever is

later, through March 23, 1997; a PostRunoff Report on May 12, 1997, with

coverage dates from March 24 through

May 2, 1997; and a Mid-Year Report on

July 31, 1997, with coverage dates from

May 3 through June 30, 1997.

CALENDAR OF REPORTING DATES FOR TEXAS SPECIAL ELECTION FOR COMMITTEES INVOLVED IN THE SPECIAL RUNOFF

Report Close of

books 1

Reg./cert.

mailing

date 2

Filing date

Pre-Runoff ................................................................................................................................................ 03/23/97 02/28/97 03/31/97

Post-Runoff ............................................................................................................................................... 05/02/97 05/12/97 05/12/97

Mid-Year ................................................................................................................................................... 06/30/97 07/31/97 07/31/97

1The period begins with the close of books of the last report filed by the committee. If the committee has filed no previous reports, the period

begins with the date of the committee’s first activity. 2 Reports sent by registered or certified mail must be postmarked by the mailing date; otherwise, they must be received by the filing date.

Dated: March 27, 1997.

John Warren McGarry,

Chairman, Federal Election Commission.

[FR Doc. 97–8208 Filed 3–31–97; 8:45 am]

BILLING CODE 6715–01–M

FEDERAL EMERGENCY

MANAGEMENT AGENCY

The National Board Fiscal Year 1997

Plan for Carrying Out the Emergency

Food and Shelter Program (EFSP)

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice sets out the plan

by which the Emergency Food and

Shelter Program National Board

(National Board) is conducting a

program during FY 1997 to distribute

$100,000,000 to private voluntary

organizations and local governments for

delivering emergency food and shelter

to needy individuals. The distribution

formula for selecting organizations and

localities, and the award amount for

each, follow the Plan text.

DATES: The award to the National Board

was made October 3, 1996.

FOR FURTHER INFORMATION CONTACT:

Carol Coleman, Preparedness, Training

and Exercise Directorate, Federal

Emergency Management Agency, (202)

646–3107, or Kay C. Goss, Chair, EFSP

National Board, (202) 646–3487.

SUPPLEMENTARY INFORMATION: Title III of

the Stewart B. McKinney Homeless

Assistance Act, 42 U.S.C. 11301 et seq.,

authorizes use of funds appropriated by

the Congress to supplement and expand

ongoing efforts to provide shelter, food,

and supportive services to homeless,

needy individuals.

As in past phases, grant awards from

this program are provided to address

emergency needs. This program is not

intended to address or correct structural

poverty or long-standing problems.

Rather, this appropriation is intended

for the purchase of food and shelter to

supplement and expand current

available resources and not to substitute

or reimburse ongoing programs and

services.

This funding should be used to target

special emergency needs. And when we

discuss emergency needs we are

referring to economic, not disasterrelated, emergencies. The funding

should supplement feeding and

sheltering efforts in ways that make a

difference. What that means is: EFSP is

not intended to make up for budget

shortfalls or to be considered just a line

in an annual budget; it is not intended

that the funds must go to the same

agencies for the exact same purposes

every year; and, the funding is open to

all organizations helping hungry and

homeless people and it is not intended

that the funds should go only to Local

Board member agencies or local

government agencies.