Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Proposed Rules 17115

1Section 2(5) of the Home Owners’ Loan Act

defines ‘‘federal savings associations’’ to include

Continued

§ 552.2–1 Procedure for organization of

Federal stock association.

(a) Application for permission to

organize. Applicants may file an

application for permission to organize a

Federal stock association in accordance

with this section. Recommendations by

employees of the OTS regarding

applications for permission to organize

are privileged, confidential, and subject

to § 510.5 (b) and (c) of this chapter. The

processing of an application under this

section shall be subject to the following

procedures:

(1) Publication. (i) The applicant shall

publish a public notice of the

application no earlier than three days

before and no later than the date of

filing of the application. The applicant

shall publish the notice in a newspaper

printed in the English language and

having a general circulation in the

community in which the home office of

the new association is to be located. If

the OTS determines that the primary

language of a significant number of

adult residents of either community is a

language other than English, the OTS

may require that notice also be given

simultaneously in the appropriate

language(s).

(ii) Promptly after publication of the

public notice, the applicant shall

transmit copies of the public notice and

publisher’s affidavit of publication to

the OTS in the same manner as the

original filing.

(iii) The application and all related

communications may be inspected by

any person at the Regional Office during

regular business hours, unless such

information is exempt from public

disclosure.

(2) Notification to interested parties.

The OTS shall give notice of the

application to the State official who

supervises savings associations in the

State in which the new association is to

be located.

(3) Submission of comments.

Comments on the application shall be

submitted in accordance with the

procedures specified in § 516.5(a) of this

chapter.

(4) Conference procedures. The OTS

may arrange a conference in accordance

with § 516.5(b) of this chapter.

* * * * *

11. Section 552.2–2 is amended by

revising paragraph (a) to read as follows:

§ 552.2–2 Procedures for organization of

interim Federal stock association.

(a) Applications for permission to

organize an interim Federal savings

association are not subject to public

notice and comment procedures, and

conference procedures, and are not

subject to § 552.2–1(b)(3) of this part.

* * * * *

PART 556—STATEMENTS OF POLICY

12. The authority citation for part 556

continues to read as follows:

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

1464, 1701j–3; 15 U.S.C. 1693–1693r.

13. Section 556.5 is amended by

revising paragraph (c)(4) to read as

follows:

§ 556.5 Branching by Federal savings

associations.

* * * * *

(c) * * *

(4) Comment procedures. Comments

on applications for branches must be

submitted in writing and factually

documented. Comment procedures are

set forth in § 516.5 of this chapter, part

563e of this chapter, the OTS

Application Processing Handbook, and

other supervisory guidance issued by

the OTS.

* * * * *

PART 563—OPERATIONS

14. The authority citation for part 563

continues to read as follows:

Authority: 12 U.S.C. 375b, 1462, 1462a,

1463, 1464, 1467a, 1468, 1817, 1820, 1828,

3806; 42 U.S.C. 4106.

15. Section 563.22 is amended by

revising paragraphs (e)(4) and (f)(3) to

read as follows:

§ 563.22 Merger, consolidation, purchase

or sale of assets, or assumption of

liabilities.

* * * * *

(e) * * *

(4) Applications submitted under

paragraph (a) of this section shall be

subject to the comment procedures

specified in § 516.5(a) of this chapter,

except that comments may be submitted

at any time during the period described

in paragraph (e)(2) of this section. The

OTS may arrange a conference in

accordance with § 516.5(b) of this

chapter.

* * * * *

(f) * * *

(3) The OTS has notified the savings

association that it intends to hold a

conference as described in § 516.5(b) of

this chapter;

* * * * *

Dated: March 31, 1997.

By the Office of Thrift Supervision.

Nicolas P. Retsinas,

Director.

[FR Doc. 97–8815 Filed 4–8–97; 8:45 am]

BILLING CODE 6720–01–P

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 543

[No. 97–31]

RIN 1550–AB06

Incorporation, Organization, and

Conversion of Federal Mutual

Associations

AGENCY: Office of Thrift Supervision,

Treasury.

ACTION: Proposed rule with request for

comments.

SUMMARY: The Office of Thrift

Supervision (OTS) proposes to amend

its regulations governing conversions to

federal mutual savings associations to

permit the direct conversion of all types

of mutual depository institutions into

federal mutual savings associations.

This proposal would simplify the

conversion process.

DATES: Comments must be received on

or before June 9, 1997.

ADDRESSES: Send comments to Manager,

Dissemination Branch, Records

Management and Information Policy,

Office of Thrift Supervision, 1700 G

Street, NW., Washington, D.C. 20552,

Attention Docket No, 97–31. These

submissions may be hand-delivered to

1700 G Street, NW., from 9:00 a.m. to

5:00 p.m. on business days; they may be

sent by facsimile transmission to FAX

Number (202) 906–7755; or they may be

sent by e-mail:

public.info@ots.treas.gov. Those

commenting by e-mail should include

their name and telephone number.

Comments will be available for

inspection at 1700 G Street, NW., from

9:00 a.m. until 4:00 p.m. on business

days.

FOR FURTHER INFORMATION CONTACT:

Scott Ciardi, Senior Analyst, Corporate

Activities Division (202/906–6960);

David A. Permut, Counsel (Banking and

Finance) (202/906–7505) or Kevin A.

Corcoran, Assistant Chief Counsel for

Business Transactions (202/906–6962),

Business Transactions Division, Chief

Counsel’s Office, Office of Thrift

Supervision, 1700 G Street, NW.,

Washington, D.C. 20552.

SUPPLEMENTARY INFORMATION:

I. Background

Various types of depository

institutions have expressed interest in

converting to a federal savings

association charter.1 The OTS has
17116 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Proposed Rules

federal savings associations and federal savings

banks. Accordingly, references herein to federal

savings associations include federal savings banks.

2 12 U.S.C. 1461 et seq.

3 12 U.S.C. 1464.

4 12 CFR 552.2–7.

5 12 CFR 552.2–6.

6 12 U.S.C. 1464 (i) and (o).

7 12 CFR 552.2–6.

8The authority for federal mutual and stock

associations to engage in these types of transactions

is set forth at 12 CFR 546.2 and 552.13,

respectively.

9 12 U.S.C. 1464(a).

10See Economic Growth and Regulatory

Paperwork Reduction Act of 1996, Pub. L. 104–208,

section 2303(a)–(e), (g), 110 Stat. 3009 (codified in

portions of 12 U.S.C. 1464(b), (c), 1467a(m)).

11 12 CFR 552.2–6.

12 12 U.S.C. 1464(c).

13See 12 CFR 571.6.

received, for example, inquiries from

credit unions and commercial banks on

the process of converting to a federal

thrift charter. Depository institutions

may determine that because their

businesses focus on housing or

consumer credit needs, these operations

may be conducted most efficiently

through a federal thrift charter. The

Home Owners’ Loan Act (HOLA) 2 sets

forth the purposes of a federal thrift

charter as providing for the deposit of

funds and for the extension of credit for

homes and other goods and services.3

The OTS has long taken the position

that depository institutions should be

free to operate under whatever charter

best suits their business needs,

consistent with safety and soundness.

To that end, the OTS has granted federal

savings associations explicit authority to

convert directly to a bank charter,4 and

has promulgated regulations enabling

stock depository institutions to convert

directly to a federal stock savings

association charter.5 The purpose of

today’s proposed regulation is to permit

mutual depository institutions to

convert directly to a savings association

charter.

II. Current Law

Sections 5(i) and 5(o) of the HOLA

provide for direct conversions of,

respectively, state savings associations

and state-chartered savings banks that

are Bank Insurance Fund members to a

federal charter.6 Separately, pursuant to

Section 5(a) of the HOLA, the OTS has

promulgated a regulation permitting the

direct conversion to a federal stock

savings association charter of any stock

depository institution that is, or is

eligible to become, a member of a

Federal Home Loan Bank.7

Depository institutions in mutual or

stock form also may convert to a federal

association charter indirectly, by

obtaining a new federal savings

association charter, and causing the

existing institution to combine with the

new federal association in a merger or

purchase and assumption transaction.8

This method, however, is more

burdensome to the applicant because it

involves several different regulatory

approvals.

Section 5(a) is a broad grant of

authority to the Director of the OTS,

encompassing (among other things)

approval of direct conversions of mutual

depository institutions to a federal

mutual charter. Section 5(a) authorizes

the Director of the OTS, under such

regulations as the Director may

prescribe, to provide for the

organization, examination, operation

and regulation of federal savings

associations. Section 5(a) of the HOLA

gives the OTS plenary authority to

provide for the organization and

regulation of federal savings

associations, consistent with the ‘‘best

practices’’ of thrift institutions in the

United States and for the purpose of

encouraging such institutions to provide

credit for housing safely and soundly.9

In addition, recent revisions to HOLA

provisions governing permissible

investments (Section 5(c)), and to its

definition of ‘‘qualified thrift

investment’’ (Section 10(m)) reflect a

congressional intent for federal savings

associations and savings banks to have

a significant role in many kinds of

consumer finance, as well as in home

mortgage lending.10 The OTS believes

that non-thrift depository institutions

that conclude that their operations in

providing credit for housing and other

consumer-related purposes make the

federal savings association charter the

optimal charter should be able to

convert to that charter without

encountering unnecessary regulatory

burdens.

The OTS already has amended its

regulations to facilitate the direct

conversion of stock depository

institutions to federal stock savings

associations.11 The OTS has now

determined, pursuant to its Section 5(a)

authority, to amend its regulations to

facilitate direct conversions of mutual

depository institutions to a federal

mutual thrift charter.

III. Proposed Amendments

The proposed rule would revise 12

CFR 543.8 and 543.9 to permit any type

of mutual depository institution to

convert to a federal mutual savings

association. The proposed rule would

apply all existing regulatory

requirements currently applicable to

direct conversions by state mutual

associations and savings banks to this

expanded class of applicants and would

revise Sections 543.8 and 543.9 as

described below. Proposed Section

543.8 would permit conversion subject

to three requirements.

First, the institution must, upon

consummation of the conversion, have

deposits insured by the Federal Deposit

Insurance Corporation (‘‘FDIC’’). See

also § 543.9(c)(3).

Second, the depository institution, in

accomplishing the conversion, must

comply with all applicable state and

federal statutes and regulations, and

OTS policies, and obtain all necessary

regulatory and member approvals. This

provision requires, among other things,

that the converting depository

institution have authority to convert to

a federal association under the statutes

and regulations applicable to the

converting institution, and the

conversion be approved by a vote of its

members pursuant to the laws

applicable to the converting institution.

Third, depository institutions

converting to a federal mutual

association charter must conform with

the investment limitations of Section

5(c) of the HOLA 12 within a time frame

prescribed by the OTS. Section 552.2–

6 of the OTS regulations already

contains this requirement for federal

stock associations.

The proposal also would revise

Section 543.9(a) to set forth the filing

requirements. Section 543.9(c) would be

revised to eliminate the statement that

the OTS will not consider the

application of a converting institution

not insured by the FDIC until the FDIC

completes an eligibility examination.

The OTS does not believe it is necessary

to delay consideration of an application

until the eligibility examination has

been completed. Moreover, the OTS has

the ability to deem a conversion

application incomplete, if processing of

the application hinges on the final

results of the eligibility examination,

under the application processing

procedures at Section 516.2.

In addition, Section 543.9(c) would be

revised to provide explicitly that the

OTS will consider applications to

convert to a federal mutual charter

under the standards set forth at section

5(e) of the HOLA, as well as Section

543.2(g). Moreover the revised

regulation would explicitly state that

converting institutions that have been in

existence as depository institutions for

less than three years will be subject to

all approval criteria and other

requirements applicable to de novo

federal associations.13
Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Proposed Rules 17117

IV. Solicitation of Comments

The OTS invites public comment on

all aspects of the proposal.

V. Executive Order 12866

The Director of the OTS has

determined that this proposed rule does

not constitute a ‘‘significant regulatory

action’’ for the purposes of Executive

Order 12866.

VI. Regulatory Flexibility Act Analysis

Pursuant to Section 605(b) of the

Regulatory Flexibility Act, the OTS

certifies that this proposal, which will

reduce regulatory burdens, will not have

a significant economic impact on a

substantial number of small entities,

because small entities utilizing the

regulation may be able to reduce the

number of applications they must file in

order to convert to a federal charter.

Accordingly, an initial Regulatory

Flexibility Analysis is not required.

VII. Unfunded Mandates Act of 1995

Section 202 of the Unfunded

Mandates Reform Act of 1995, Pub. L.

104–4 (Unfunded Mandates Act),

requires that an agency prepare a

budgetary impact statement before

promulgating a rule that includes a

federal mandate that may result in

expenditures by state, local, and tribal

governments, in the aggregate, or by the

private sector, or $100 million or more

in any one year. If a budgetary impact

statement is required, Section 205 of the

Unfunded Mandates Act also requires

an agency to identify and consider a

reasonable number of regulatory

alternatives before promulgating a rule.

The OTS has determined that the

proposed rule will not result in

expenditures by state, local, or tribal

governments or by the private sector of

$100 million or more. Accordingly, this

rulemaking is not subject to Section 202

of the Unfunded Mandates Act.

List of Subjects in 12 CFR Part 543

Conversions, Reporting and

recordkeeping requirements, Savings

associations.

Accordingly, the Office of Thrift

Supervision proposes to amend chapter

V, title 12, Code of Federal Regulations,

as set forth below.

PART 543—INCORPORATION,

ORGANIZATION, AND CONVERSION

OF FEDERAL MUTUAL

ASSOCIATIONS

1. The authority citation for part 543

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 2901 et seq.

2. Section 543.8 is amended by

revising the heading and paragraph (a)

to read as follows:

§ 543.8 Conversion of depository

institutions to Federal mutual charter.

(a) With the approval of the OTS, any

depository institution, as defined in

§ 552.13 of this chapter, that is in

mutual form may convert into a Federal

mutual savings association, provided

that:

(1) The depository institution, upon

conversion, will have deposits insured

by the Federal Deposit Insurance

Corporation;

(2) The depository institution, in

accomplishing the conversion, complies

with all applicable state and federal

statutes and regulations, and OTS

policies, and obtains all necessary

member approvals; and

(3) The resulting Federal mutual

association conforms within the time

prescribed by the OTS to the

requirements of section 5(c) of the Home

Owners’ Loan Act.

* * * * *

3. Section 543.9 is amended by

revising paragraph (a) and the

introductory text of paragraph (c) to

read as follows:

§ 543.9 Application for conversion to

Federal mutual charter.

(a) Filing. Any depository institution

that proposes to convert to a Federal

mutual association as provided in

§ 543.8 shall, after approval by its board

of directors, file in accordance with

§ 516.1 of this chapter an application on

forms obtained from the OTS. The

applicant shall submit any financial

statements or other information the OTS

may require.

* * * * *

(c) Action on application. The OTS

will consider such application and any

information submitted therewith, and

may approve the application in

accordance with section 5(e) of the

Home Owners’ Loan Act and

§ 543.2(g)(1). Converting depository

institutions that have been in existence

less than three years will be subject to

all approval criteria and other

requirements applicable to de novo

Federal associations. Approval of an

application and issuance by the OTS of

a charter will be subject to:

* * * * *

Dated: April 2, 1997.

By the Office of Thrift Supervision.

Nicolas P. Retsinas,

Director.

[FR Doc. 97–8952 Filed 4–8–97; 8:45 am]

BILLING CODE 6720–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No. NM–139, Notice No. SC–97–2–

NM]

Special Conditions: Ilyushin Aviation

Complex Model Il–96T Airplane

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of proposed special

conditions.

SUMMARY: This notice proposes special

conditions for the Ilyushin Aviation

Complex Model Il–96T airplane. This

airplane will have novel and unusual

design features when compared to the

state of technology envisioned in the

airworthiness standards of part 25 of the

Federal Aviation Regulations (FAR).

This document contains the additional

safety standards that the Administrator

considers necessary to establish a level

of safety equivalent to that provided by

the airworthiness standards of part 25.

DATES: Comments must be received on

or before May 27, 1997.

ADDRESSES: Comments may be mailed

in duplicate to: Federal Aviation

Administration, Office of the Assistant

Chief Counsel, Attn: Rules Docket

(ANM–7), Docket No. NM–139, 1601

Lind Avenue SW., Renton, Washington,

98055–4056; or delivered in duplicate to

the Office of the Assistant Chief Counsel

at the above address. Comments must be

marked: Docket No. NM–139.

Comments may be inspected in the

Rules Docket weekdays, except Federal

holidays, between 7:30 a.m. and 4:00

p.m.

FOR FURTHER INFORMATION CONTACT:

John Hickey, FAA, International

Program Manager, ANM–102, Transport

Airplane Directorate, Aircraft

Certification Service, 1601 Lind Avenue

SW., Renton, WA 98055–4056;

telephone (206) 227–2128.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of these

proposed special conditions by

submitting such written data, views, or

arguments as they may desire.

Communications should identify the

regulatory docket or notice number and

be submitted in duplicate to the address

specified above. All communications

received on or before the closing date

for comments will be considered by the

Administrator before further rulemaking

action on this proposal is taken. The