20186 Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Rules and Regulations

standards for protection against

radiation in effect prior to January 1,

1994; and

(2) Records of the results of

measurements and calculations used to

determine individual intakes of

radioactive material and used in the

assessment of internal dose. This

includes those records of the results of

measurements and calculations used to

determine individual intakes of

radioactive material and used in the

assessment of internal dose required

under the standards for protection

against radiation in effect prior to

January 1, 1994; and

(3) Records showing the results of air

sampling, surveys, and bioassays

required pursuant to § 20.1703(a)(3) (i)

and (ii). This includes those records

showing the results of air sampling,

surveys, and bioassays required under

the standards for protection against

radiation in effect prior to January 1,

1994; and

(4) Records of the results of

measurements and calculations used to

evaluate the release of radioactive

effluents to the environment. This

includes those records of the results of

measurements and calculations used to

evaluate the release of radioactive

effluents to the environment required

under the standards for protection

against radiation in effect prior to

January 1, 1994.

17. In § 20.2104, paragraph (f) is

revised to read as follows:

§ 20.2104 Determination of prior

occupational dose.

* * * * *

(f) The licensee shall retain the

records on NRC Form 4 or equivalent

until the Commission terminates each

pertinent license requiring this record.

The licensee shall retain records used in

preparing NRC Form 4 for 3 years after

the record is made. This includes

records required under the standards for

protection against radiation in effect

prior to January 1, 1994.

18. In § 20.2106, paragraph (f) is

revised to read as follows:

§ 20.2106 Records of individual monitoring

results.

* * * * *

(f) The licensee shall retain the

required form or record until the

Commission terminates each pertinent

license requiring this record. This

includes records required under the

standards for protection against

radiation in effect prior to January 1,

1994.

19. In § 20.2108, paragraph (b) is

revised to read as follows:

§ 20.2108 Records of waste disposal.

* * * * *

(b) The licensee shall retain the

records required by paragraph (a) of this

section until the Commission terminates

each pertinent license requiring this

record. This includes records required

under the standards for protection

against radiation in effect prior to

January 1, 1994.

§ 20.2201 [Amended]

20. In § 20.2201, paragraphs (a)(1) (i)

and (ii), are amended by correcting the

reference to ‘‘Appendix C to §§ 20.1001–

20.2401’’ to read ‘‘Appendix C to Part

20,’’ and paragraph (b)(2)(ii) is amended

by correcting the reference to

‘‘Appendix D to §§ 20.1001–20.2401’’ to

read ‘‘Appendix D to Part 20.’’

§ 20.2203 [Amended]

21. In § 20.2203, paragraph (d) is

amended by correcting the reference to

‘‘Appendix D to §§ 20.1001–20.2401’’ to

read ‘‘Appendix D to Part 20.’’

§ 20.2204 [Amended]

22. Section 20.2204 is amended by

correcting the reference to ‘‘Appendix D

to §§ 20.1001–20.2401’’ to read

‘‘Appendix D to Part 20.’’

23. In Appendix C, the quantity for

Carbon-14 is revised to read as follows:

Appendix C to Part 20—Quantities of

Licensed Material Requiring Labeling

* * * * *

APPENDIX C TO PART 20—QUANTITIES

OF LICENSED MATERIAL REQUIRING

LABELING

Radionuclide Quantity

(μCi)

Carbon-14 ................................. 100

* * * * *

Appendix F to part 20 [Amended]

24. In Appendix F, paragraph I,

Manifest is amended by deleting the

word ‘‘practicable’’ and replacing it

with the word ‘‘practical,’’ and

paragraphs III(A)(7), (B)(5), (C)(8), and

(D)(2) are revised to read as follows:

III. Control and Tracking

(A) * * *

(7) Retain a copy of the manifest and

documentation of acknowledgement of

receipt as the record of transfer of

licensed material as required by parts

30, 40, and 70 of this chapter. This

includes those manifests and documents

required under the standards for

protection against radiation in effect

prior to January 1, 1994; and

* * * * *

(B) * * *

(5) Retain a copy of the manifest and

documentation of acknowledgement of

receipt as the record of transfer of

licensed material as required by parts

30, 40, and 70 of this chapter, and retain

information from generator manifest

until the license is terminated. This

includes those manifests and documents

of acknowledgement of receipt required

under the standards for protection

against radiation in effect prior to

January 1, 1994; and

* * * * *

(C) * * *

(8) Retain copies of original manifests

and new manifests and documentation

of acknowledgement of receipt as the

record of transfer of licensed material as

required by parts 30, 40, and 70 of this

chapter. This includes those manifests

and documents of acknowledgement of

receipt required under the standards for

protection against radiation in effect

prior to January 1, 1994; and

* * * * *

(D) * * *

(2) Maintain copies of all completed

manifests or equivalent documentation

until the license is terminated. This

includes those manifests or equivalent

documents required under the standards

for protection against radiation in effect

prior to January 1, 1994; and

* * * * *

Dated at Rockville, Maryland, this 11th day

of April 1995.

For the Nuclear Regulatory Commission.

James L. Milhoan,

Acting Executive Director for Operations.

[FR Doc. 95–10123 Filed 4–24–95; 8:45 am]

BILLING CODE 7590–01–P

FEDERAL RESERVE SYSTEM

12 CFR Part 225

[Regulation Y; Docket No. R–0851]

Revisions Regarding Tying

Restrictions

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Final rule.

SUMMARY: The Board is adopting a

regulatory ‘‘safe harbor’’ from the antitying restrictions of section 106 of the

Bank Holding Company Act

Amendments of 1970 and the Board’s

Regulation Y. The safe harbor permits

any bank or nonbank subsidiary of a

bank holding company to offer a

‘‘combined-balance discount’’—that is, a

discount based on a customer

maintaining a combined minimum
Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Rules and Regulations 20187

1Although section 106 applies only when a bank

offers the tying product, the Board in 1971 extended

the same restrictions to bank holding companies

and their nonbank subsidiaries. See 12 CFR

225.7(a).

2See 12 CFR 225.7(b)(2).

3The Board also noted that, under the statutory

and regulatory traditional bank product exceptions,

a bank already could offer a combined-balance

discount where all products in an arrangement were

traditional bank products. The proposed safe harbor

would simply permit a bank to increase customer

choice by adding a customer’s securities brokerage

account or other non-traditional products to the

menu of traditional bank products that count

toward the minimum balance.

4One commenter continued to oppose blanket

exceptions to section 106, recommending that the

Board act on exemption requests on a case-by-case

basis. As noted below, the Board believes that a safe

harbor can be designed narrowly enough to prevent

anti-competitive effects.

5Under the Board’s Rules, a nonbank subsidiary

of a bank holding company could offer a combinedbalance discount involving products offered by the

company and its nonbank affiliates so long as no

bank was involved in the arrangement. See 12 CFR

225.7(b)(3). Because combined-balance discount

arrangements under this proposal include products

and services offered by banks and nonbanks, a

further exception is required.

balance in products specified by the

company offering the discount.

EFFECTIVE DATE: May 26, 1995.

FOR FURTHER INFORMATION CONTACT:

Gregory A. Baer, Managing Senior

Counsel (202/452–3236), or David S.

Simon, Attorney (202/452–3611), Legal

Division; or Anthony Cyrnak,

Economist, (202/452–2917), Division of

Research and Statistics, Board of

Governors of the Federal Reserve

System. For the hearing impaired only,

Telecommunication Device for the Deaf

(TDD), Dorothea Thompson (202/452–

3544).

SUPPLEMENTARY INFORMATION:

Background

Section 106(b) of the Bank Holding

Company Act Amendments of 1970 (12

U.S.C. 1972) generally prohibits a bank

from tying a product or service to

another product or service offered by

the bank or by any of its affiliates.1 A

bank engages in a tie for purposes of

section 106 by conditioning the

availability of, or offering a discount on,

one product or service (the ‘‘tying

product’’) on the condition that the

customer obtain some additional

product or service (the ‘‘tied product’’)

from the bank or from any of its

affiliates. Violations of section 106 can

be addressed by the Board through an

enforcement action, by the Department

of Justice through a request for an

injunction, or by a customer or other

party through an action for damages. 12

U.S.C. 1972, 1973, and 1975.

Section 106 contains an explicit

exception (the ‘‘statutory traditional

bank product exception’’) that permits a

bank to tie a product or service to a

loan, discount, deposit, or trust service

offered by that bank. The Board has

extended this exception by providing

that a bank or any of its affiliates also

may vary the consideration for a

traditional bank product on condition

that the customer obtain another

traditional bank product from an

affiliate (the ‘‘regulatory traditional bank

product exception’’).2

Section 106 authorizes the Board to

grant exceptions to its restrictions by

regulation or order. On October 19,

1994, the Board issued an order

permitting the subsidiary banks of Fleet

Financial Group, Inc., Providence,

Rhode Island (Fleet) to offer a discount

on the monthly service fee charged for

its ‘‘Fleet One Account’’ to customers

who maintain a combined minimum

balance of at least $10,000 in one or

more products selected from a menu of

eligible Fleet products. All products

offered as part of this arrangement were

separately available to customers at

competitive prices. In granting Fleet’s

request, the Board determined that, to

the extent that Fleet’s combined-balance

discount was prohibited by section 106,

an exemption was warranted given the

public benefits and absence of anticompetitive concerns generated by the

arrangement.

Final Rule

On October 21, 1994, the Board

proposed a regulatory safe harbor from

section 106 for combined-balance

discounts similar to that offered by Fleet

(59 FR 53761, October 26, 1994). The

proposal would have permitted any

bank to offer a combined-balance

discount provided that (1) the bank

offered deposits, (2) all such deposits

were considered in the arrangement,

and (3) all balances in products eligible

to be contributed to the minimum

balance counted equally towards the

minimum balance. In addition, all

products involved in the arrangement

were required to be separately available

for purchase. The Board proposed the

safe harbor to provide certainty as to the

general permissibility of combinedbalance discounts similar to that

proposed by Fleet, and because it

believed that such discounts are proconsumer and not anti-competitive.

As noted above, the proposal

included a requirement that all deposits

count toward the minimum balance.

The Board was concerned that absent

such a requirement, combined-balance

discount plans could be constructed so

that a non-traditional bank product,

such as securities brokerage services,

represented the only viable option for a

customer to reach the minimum

balance. Under the Board’s proposal, a

customer could have qualified for the

discount based solely on deposit

balances. Therefore, there would be no

incentive for a customer to establish a

securities brokerage account, or any

other non-traditional bank product, that

the customer did not want in order to

obtain the discount.3

Summary of Comments

The Board received 58 comments on

its proposal. Those commenting

included 42 banking organizations,

seven trade associations representing

the banking industry, six Reserve Banks,

two thrifts, and one law firm

representing numerous insurance trade

associations. Commenters

overwhelmingly supported the Board’s

proposal because they believed that it

would provide benefits to both

consumers and banks.4 Commenters

stated that the proposal would provide

customers increased opportunities to

obtain services from a bank at

discounted prices based on the

customer’s overall relationship with the

bank by allowing customers to meet

combined-balance requirements through

non-traditional products as well as

traditional bank products.

Commenters also supported the

proposed safe harbor because it would

permit banks to market products more

efficiently and compete more effectively

with their nonbanking competitors who

currently offer combined-balance

discount arrangements. In addition,

commenters commended the Board for

recognizing that the financial services

industry is evolving as banks provide

customers a broader range of financial

services. The proposed safe harbor

would permit banks to package these

products and therefore attract and retain

more customers.

A few commenters suggested

modifications to the Board’s proposal

and recommended that the safe harbor

be enlarged. First, six commenters

objected to the requirement that the

bank offering the discount also offer

deposits because this would prevent a

nonbank subsidiary of a bank holding

company—for example, a trust

company—from offering the type of

combined-balance discount proposed by

the Board.5 Commenters believed that

customers could be protected from any

anti-competitive effects so long as an

affiliated bank offered deposits and

those deposits count towards the

minimum balance.
20188 Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Rules and Regulations

6One commenter representing the insurance

industry indicated that the inclusion of certain

insurance products in a combined-balance discount

arrangement may undermine or perhaps contradict

state insurance laws which generally prohibit

insurance agents from varying the consideration

charged for insurance products. The Board’s

regulation is not intended to, and does not, exempt

any arrangements from state or federal law.

Companies offering combined-balance discount

arrangements are responsible for ensuring that these

arrangements comply with all applicable state and

federal restrictions.

7The Board also is retaining the requirement that

all products involved in a combined-balance

discount arrangement are separately available for

purchase.

8For example, a bank could count toward the

minimum balance 100 percent of demand deposits,

80 percent of certificates of deposit, 70 percent of

mutual fund shares, and 60 percent of stock held

in a brokerage account. So long as the percentages

assigned to all deposits are higher than the

percentages assigned to the non-deposits, the safe

harbor would apply.

Second, thirteen commenters sought

modification to the requirement that all

deposits be eligible products (that is,

count toward the combined minimum

balance). Commenters argued that

deposits should not be distinguished

from other traditional bank products

and that therefore the safe harbor should

include plans where, for example, loans

are among the eligible products but

deposits are not. Commenters also

argued that requiring all deposits at a

bank to be counted as eligible products

was unnecessary and burdensome, and

that a requirement that a ‘‘substantial

majority’’ or ‘‘all types’’ of deposits

would serve to prevent anti-competitive

arrangements.

Finally, eight commenters objected to

the requirement that all eligible

products count equally toward the

minimum balance, arguing that different

products impose different costs on

banks and that a company should be

able to weight the products in an

economically rational way.6

Consideration of Comments

The Board agrees with the

commenters that customers should be

able to count deposits at an affiliated

bank toward a minimum balance, and

thus that a trust company, for example,

should be able to offer a combinedbalance discount arrangement that

includes deposits at its affiliated bank.

Accordingly, the final rule has been

modified so that a combined-balance

discount arrangement involving

products from banks and nonbanks also

may be offered by a nonbank subsidiary

of a bank holding company so long as

a customer may use deposit balances at

an affiliated bank to reach the minimum

balance required to obtain the discount.

This modification assumes that the

affiliated bank offering the eligible

deposits is reasonably accessible to the

customer.

As noted above, the Board proposed

the requirement that a bank include

deposits among the eligible products in

order to ensure that any exempt

combined-balance discount would offer

customers meaningful choices and

therefore could not have an anticompetitive effect. Loans, discounts, or

trust services—the other ‘‘traditional

bank products’’ that commenters

suggested should be able to replace

deposits in a combined-balance

arrangement—may not be so viable a

choice for many customers. While the

Board believes that deposits should in

almost every case be an attractive

option, a large trust account or mortgage

loan may be a realistic option for only

a small percentage of customers.

Without deposits as eligible products,

customers who are not eligible for a

large trust account or mortgage loan may

effectively be required to elect another,

non-traditional, product in order to

obtain the combined-balance discount.

Thus, the Board is maintaining a deposit

requirement for combined-discount

plans that fall under this safe harbor.7

For similar reasons, the Board is not

adopting the suggestion by commenters

that only some deposits be required to

count toward the minimum balance,

simply because it is impossible to

predict the effect of this more malleable

standard.

The Board recognizes, however, that

discount arrangements other than those

within the safe harbor may also be

consistent with the purposes of section

106. The Board will continue to

consider such plans on a case-by-case

basis and is delegating authority to

approve such plans to the General

Counsel. The Board will also, in

appropriate cases, expand the safe

harbor by rule.

The Board shares commenters’

concerns that the proposal would

prevent banks from assigning products

different weights in counting them

toward the minimum balance, and

thereby could force banks to price their

products irrationally. Commenters

stressed that some products are more

profitable than others, and that different

weights should be assigned accordingly.

Although there is a concern that

weighting could be used to require

purchase of certain non-traditional

products, the Board believes this

concern can be addressed by the

narrower requirement that any deposit

included in a combined-balance

discount arrangement count at least as

much toward the minimum balance as

any non-deposit. This approach, which

was suggested by several commenters,

will allow companies to assign different

weights among deposits and nondeposits.8

One commenter argued that

combined-balance discounts do not

violate section 106 when a multiplicity

of options that includes traditional bank

products means that there is no

‘‘condition or requirement’’ that the

customer purchase a non-traditional

bank product. However, the commenter

acknowledged that a bank could

effectively tie through differential

pricing. In order to address this

possibility, the commenter favored

general language providing that

combined-balance discounts generally

are not covered by section 106 so long

as all eligible products are ‘‘meaningful

alternatives.’’ The commenter urged the

Board to adopt this reading as an

interpretation, in lieu of a safe harbor.

As discussed in the preamble to the

proposed rule, section 106 covers any

condition or requirement that a

customer purchase ‘‘some additional

product,’’ which would appear to

include combined-balance discounts.

The statutory and regulatory traditional

bank product exceptions would clearly

exempt combined-balance discounts

where all eligible products are

traditional bank products. However, the

question is whether, when both

traditional and non-traditional bank

products are included in the list of

eligible products: (1) The transaction

continues to be covered, does not

qualify for the traditional bank product

exceptions, and therefore requires an

exemption, or (2) the transaction is not

covered by section 106 because it is

possible for a customer to meet the

minimum balance through traditional

products. The commenter urges the

Board to adopt the second interpretation

with the added requirement that the

choice of traditional products be

‘‘meaningful.’’

The Board sees no need to resolve this

issue in prescribing the final rule, as any

interpretation would not be binding and

the need for the safe harbor would be

the same in either case. Even under the

second interpretation, there would

remain confusion about what

constitutes sufficiently ‘‘meaningful’’

choice among traditional bank products

so that a combined-balance discount is

not covered by section 106.

Related Issue

As in past rulemakings in the tying

area, the Board has received numerous

comments recommending that the Board

repeal its extension of section 106 to

bank holding companies and their
Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Rules and Regulations 20189

nonbank subsidiaries. These comments

argue that section 106, by its terms, only

applies to banks and the Board’s

extension of these restrictions places

bank holding companies and their

nonbank subsidiaries at a competitive

disadvantage. These commenters

emphasize that, even without these

restrictions, bank holding companies

and their nonbank subsidiaries remain

subject to the antitrust laws. The Board

has this matter under consideration and

has asked staff to analyze whether

additional steps should be taken.

Paperwork Reduction Act

No collections of information

pursuant to section 3504(h) of the

Paperwork Reduction Act (44 U.S.C.

3501 et seq.) are contained in the final

rule.

Regulatory Flexibility Act

It is hereby certified that this final

rule will not have a significant

economic impact on a substantial

number of small entities.

List of Subjects in 12 CFR Part 225

Administrative practice and

procedure, Banks, banking, Federal

Reserve System, Holding companies,

Reporting and recordkeeping

requirements, Securities.

For the reasons set forth in the

preamble, the Board amends 12 CFR

Part 225 as set forth below:

PART 225—BANK HOLDING

COMPANIES AND CHANGE IN BANK

CONTROL (REGULATION Y)

1. The authority citation for 12 CFR

part 225 continues to read as follows:

Authority: 12 U.S.C. 1817(j)(13), 1818,

1831i, 1831p–1, 1843(c)(8), 1844(b), 1972(1),

3106, 3108, 3310, 3331–3351, 3907, and

3909.

2. In section 225.7, a new paragraph

(b)(4) is added to read as follows:

§ 225.7 Tying restrictions.

* * * * *

(b) * * *

(4) Safe harbor for combined-balance

discounts. A bank holding company or

any bank or nonbank subsidiary thereof

may vary the consideration for any

product or package of products based on

a customer’s maintaining a combined

minimum balance in certain products

specified by the company varying the

consideration (eligible products), if:

(i) That company (if it is a bank) or

a bank affiliate of that company (if it is

not a bank ) offers deposits, and all such

deposits are eligible products; and

(ii) Balances in deposits count at least

as much as non-deposit products toward

the minimum balance.

* * * * *

By order of the Board of Governors of

the Federal Reserve System, April 19,

1995.

William W. Wiles,

Secretary of the Board.

[FR Doc. 95–10120 Filed 4–24–95; 8:45am]

BILLING CODE 6210–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 94–ANE–38; Amendment 39–

9206, AD 95–09–02]

Airworthiness Directives; AlliedSignal

Engines (Formerly Textron Lycoming)

LTS101 Series Turboshaft and LTP101

Series Turboprop Engines

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment adopts a

new airworthiness directive (AD) that is

applicable to AlliedSignal Engines

(formerly Textron Lycoming) LTS101

series turboshaft and LTP101 series

turboprop engines. This action

supersedes priority letter AD 94–19–01

that currently requires initial and

repetitive inspections for wear of the

engine fuel pump internal drive splines,

and replacement of engine fuel pumps

that exhibit wear beyond specified

limits. This action clarifies the original

requirements of the current AD by

providing additional information to

emphasize that the AD only applies to

engines installed on single-engine

aircraft and to emphasize that removed

fuel pumps must be returned to the

manufacturer for inspection. In

addition, this action defines a

serviceable part. This amendment is

prompted by requests to clarify

interpretations of the current priority

letter AD. The actions specified by this

AD are intended to prevent engine fuel

pump failure, which can result in total

engine power loss and possible loss of

the aircraft.

DATES: Effective May 10, 1995.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of May 10,

1995.

Comments for inclusion in the Rules

Docket must be received on or before

June 26, 1995.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), New England

Region, Office of the Assistant Chief

Counsel, Attention: Rules Docket No.

94–ANE–38, 12 New England Executive

Park, Burlington, MA 01803–5299.

The service information referenced in

this AD may be obtained from

AlliedSignal Engines, 550 Main Street,

Stratford, CT 06497; telephone (203)

385–2000. This information may be

examined at the FAA, New England

Region, Office of the Assistant Chief

Counsel, 12 New England Executive

Park, Burlington, MA; or at the Office of

the Federal Register, 800 North Capitol

Street NW, suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Eugene Triozzi, Aerospace Engineer,

Engine Certification Office, FAA, Engine

and Propeller Directorate, 12 New

England Executive Park, Burlington, MA

01803–5299; telephone (617) 238–7148,

fax (617) 238–7199.

SUPPLEMENTARY INFORMATION: On

September 2, 1994, the Federal Aviation

Administration (FAA) issued priority

letter airworthiness directive (AD) 94–

19–01, applicable to Textron Lycoming

LTS101 series turboshaft and LTP101

series turboprop engines, which

requires initial and repetitive

inspections for wear of the engine fuel

pump internal drive splines, and

replacement of engine fuel pumps that

exhibit wear beyond the limits specified

in Textron Lycoming Service Bulletin

(SB) No. LT101–73–20–0165, dated

September 1, 1994, with a serviceable

part. Fuel pumps removed in

accordance with that AD must be

returned to Chandler Evans (CECO) for

disassembly, inspection and repair. That

action was prompted by a report of a

helicopter accident that resulted in a

total loss of engine power and

subsequent autorotation of a helicopter

powered by a Textron Lycoming Model

LTS101–600A–3 turboshaft engine.

Investigation of that accident and other

recent engine failures found that CECO

Model MFP261 engine fuel pump

internal drive spline teeth were worn

away and failed to engage, resulting in

loss of fuel delivery to the engine. The

wear progressed to failure prior to the

specified overhaul interval of 2,400

hours time in service (TIS). The FAA

has determined that the present engine

fuel pump overhaul interval is

insufficient to prevent excessive wear of

internal drive splines during service.

That condition, if not corrected, could

result in engine fuel pump failure,

which can result in total engine power

loss and possible loss of the aircraft.