33570 Federal Register / Vol. 86, No. 120 / Friday, June 25, 2021 / Proposed Rules 

Authority: 7 U.S.C. 2131–2159; 7 CFR 

2.22, 2.80, and 371.7. 

■ 2. Amend § 2.38: 

■ a. By lifting the stay on paragraph (l); 

■ b. In paragraph (l)(2): 

■ i. In the first sentence by removing the 

date ‘‘July 29, 2013’’ and adding 

‘‘[DATE 180 DAYS AFTER EFFECTIVE 

DATE OF FINAL RULE]’’ in its place; 

■ ii. In the next to last sentence by 

removing the words ‘‘and training 

records’’; and 

■ ii. By revising the last sentence; and 

■ c. By revising paragraph (l)(3). 

The revisions read as follows: 

§ 2.38 Miscellaneous. 

* * * * * 

(l) * * * 

(2) * * * The APHIS Contingency 

Plan form may be used to keep and 

maintain the information required by 

paragraph (l)(1) of this section and this 

paragraph (l)(2). 

(3) The facility must provide training 

for its personnel regarding their roles 

and responsibilities as outlined in the 

plan. For current registrants, training of 

facility personnel must be completed 

within 60 days of the research facility 

putting their plan in place; for research 

facilities registered after [DATE 180 

DAYS AFTER EFFECTIVE DATE OF 

FINAL RULE] training of facility 

personnel must be completed within 60 

days of the facility putting its 

contingency plan in place. To fulfill this 

training requirement, employees hired 

30 days or more before the contingency 

plan is put in place must be trained by 

the date the facility puts its contingency 

plan in place. For employees hired less 

than 30 days before that date or after 

that date, training must be conducted 

within 30 days of their start date. Any 

changes to the plan as a result of the 

annual review must be communicated 

to employees through training which 

must be conducted within 30 days of 

making the changes. 

■ 3. Amend § 2.134: 

■ a. By lifting the stay on the section; 

■ b. In paragraph (b): 

■ i. In the first sentence by removing the 

date ‘‘July 29, 2013’’ and adding 

‘‘[DATE 180 DAYS AFTER EFFECTIVE 

DATE OF FINAL RULE]’’ in its place; 

■ ii. In the fifth sentence by removing 

the words ‘‘and training records’’; and 

■ iii. By revising the last sentence; and 

■ c. By revising paragraph (c). 

The revisions read as follows: 

§ 2.134 Contingency planning. 

* * * * * 

(b) * * * The APHIS Contingency 

Plan form may be used to keep and 

maintain the information required by 

§ 2.38(l)(1) and (2). 

(c) Dealers, exhibitors, intermediate 

handlers, and carriers must provide 

training for their personnel regarding 

their roles and responsibilities as 

outlined in the plan. For current 

licensees and registrants, training of 

dealer, exhibitor, intermediate handler, 

and carrier personnel must be 

completed within 60 days of the 

licensee and registrant putting their 

contingency plan in place; for new 

dealers, exhibitors, intermediate 

handlers, or carriers licensed or 

registered after [DATE 180 DAYS 

AFTER EFFECTIVE DATE OF FINAL 

RULE], training of personnel must be 

completed within 60 days of the dealer, 

exhibitor, intermediate handler, or 

carrier putting their contingency plan in 

place. To fulfill this requirement, 

employees hired 30 days or more before 

the contingency plan is put in place 

must be trained by the date the licensee 

or registrant puts their contingency plan 

in place. For employees hired less than 

30 days before that date or after that 

date, training must be conducted within 

30 days of their start date. Any changes 

to the plan as a result of the annual 

review must be communicated to 

employees through training which must 

be conducted within 30 days of making 

the changes. 

Done in Washington, DC, this 16th day of 

June 2021. 

Mae Wu, 

Deputy Under Secretary for Marketing and 

Regulatory Programs. 

[FR Doc. 2021–13152 Filed 6–24–21; 8:45 am] 

BILLING CODE 3410–34–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 365 

RIN 3064–AF72 

Real Estate Lending Standards 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Notice of proposed rulemaking 

and request for comment. 

SUMMARY: The FDIC is inviting comment 

on a proposed rule to amend 

Interagency Guidelines for Real Estate 

Lending Policies (Real Estate Lending 

Standards). The purpose of the 

proposed rule is to align the Real Estate 

Lending Standards with the community 

bank leverage ratio (CBLR) rule, which 

does not require electing institutions to 

calculate tier 2 capital or total capital. 

The proposed rule would allow a 

consistent approach for calculating the 

ratio of loans in excess of the 

supervisory loan-to-value limits (LTV 

Limits) at all FDIC-supervised 

institutions, using a methodology that 

approximates the historical 

methodology the FDIC has followed for 

calculating this measurement without 

requiring institutions to calculate tier 2 

capital. The proposed rule would also 

avoid any regulatory burden that could 

arise if an FDIC-supervised institution 

subsequently decides to switch between 

different capital frameworks. 

DATES: Comments must be received by 

July 26, 2021. 

ADDRESSES: Interested parties are 

encouraged to submit written 

comments. Commenters should use the 

title ‘‘Real Estate Lending Standards 

(RIN 3064–AF72)’’ to facilitate the 

organization of comments. Interested 

parties are invited to submit written 

comments, identified by RIN 3064– 

AF72, by any of the following methods: 

• FDIC website: https://www.fdic.gov/ 

resources/regulations/federal-registerpublications/. 

• Mail: James P. Sheesley, Assistant 

Executive Secretary, Attention: 

Comments/Legal ESS (RIN 3064–AF72), 

Federal Deposit Insurance Corporation, 

550 17th Street NW, Washington, DC 

20429. 

• Hand Delivery/Courier: The guard 

station at the rear of the 550 17th Street 

NW, building (located on F Street) on 

business days between 7:00 a.m. and 

5:00 p.m. 

• Email: Comments@FDIC.gov. 

Comments submitted must include 

‘‘RIN 3064–AF72.’’ 

Please include your name, affiliation, 

address, email address, and telephone 

number(s) in your comment. All 

statements received, including 

attachments and other supporting 

materials, are part of the public record 

and are subject to public disclosure. 

You should submit only information 

that you wish to make publicly 

available. 

Please note: All comments received 

will be posted generally without change 

to https://www.fdic.gov/resources/ 

regulations/federal-registerpublications/, including any personal 

information provided. 

FOR FURTHER INFORMATION CONTACT:

Alicia R. Marks, Examination 

Specialist, Division of Risk Management 

and Supervision, (202) 898–6660, 

AMarks@FDIC.gov; Navid K. 

Choudhury, Counsel, (202) 898–6526, or 

Catherine S. Wood, Counsel, (202) 898– 

3788, Federal Deposit Insurance 

Corporation, 550 17th Street NW, 

Washington, DC 20429. For the hearing 

impaired only, TDD users may contact 

(202) 925–4618. 


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1 85 FR 64003 (Oct. 9, 2020). 

2The FDIC’s CBLR rule defines qualifying 

community banking organizations as ‘‘an FDICsupervised institution that is not an advanced 

approaches FDIC-supervised institution’’ with less 

than $10 billion in total consolidated assets that 

meet other qualifying criteria, including a leverage 

ratio (equal to tier 1 capital divided by average total 

consolidated assets) of greater than 9 percent. 12 

CFR 324.12(a)(2). 

3Total capital is defined as the sum of tier 1 

capital and tier 2 capital. See 12 CFR 324.2. 

4See the Joint Statement on Adjustment to the 

Calculation for Credit Concentration Ratios (FIL– 

31–2020). 

5Banking organizations that have not adopted the 

current expected credit losses (CECL) methodology 

will use tier 1 capital plus the allowance for loan 

and lease losses (ALLL) as the denominator. 

Banking organizations that have adopted the CECL 

methodology will use tier 1 capital plus the portion 

of the allowance for credit losses (ACL) attributable 

to loans and leases. 

6The proposed amendment approximates the 

historical methodology in the sense that both the 

proposed and historical approach for calculating 

the ratio of loans in excess of the LTV Limits 

involve adding a measure of loss absorbing capacity 

to tier 1 capital, and an institution’s ALLL (or ACL) 

is a component of tier 2 capital. Under the agencies’ 

capital rules an institution’s entire amount of ALLL 

or ACL could be included in its tier 2 capital, 

depending on the amount of its risk-weighted assets 

base. Based on December 31, 2019, Call Report 

data—the last Call Report date prior to the 

introduction of the CBLR framework—96.0 percent 

of FDIC-supervised institutions reported that their 

entire ALLL or ACL was included in their tier 2 

capital, and 50.5 percent reported that their tier 2 

capital was entirely composed of their ALLL. 

SUPPLEMENTARY INFORMATION: 

I. Policy Objectives 

The policy objective of the proposed 

rule is to provide consistent calculations 

of the ratios of loans in excess of the 

supervisory LTV Limits between 

banking organizations that elect, and 

those that do not elect, to adopt the 

CBLR framework, while not including 

capital ratios that some institutions are 

not required to compute or report. The 

proposed rule would amend the Real 

Estate Lending Standards set forth in 

Appendix A of 12 CFR part 365. 

Section 201 of the Economic Growth, 

Regulatory Relief, and Consumer 

Protection Act (EGRRCPA) directs the 

FDIC, the Board of Governors of the 

Federal Reserve System (FRB), and the 

Office of the Comptroller of the 

Currency (OCC) (collectively, the 

agencies) to develop a community bank 

leverage ratio for qualifying community 

banking organizations. The CBLR 

framework is intended to simplify 

regulatory capital requirements and 

provide material regulatory compliance 

burden relief to the qualifying 

community banking organizations that 

opt into it. In particular, banking 

organizations that opt into the CBLR 

framework do not have to calculate the 

metrics associated with the applicable 

risk-based capital requirements in the 

agencies’ capital rules (generally 

applicable rule), including total capital. 

The Real Estate Lending Standards set 

forth in Appendix A of 12 CFR part 365, 

as they apply to FDIC-supervised banks, 

contain a tier 1 capital threshold for 

institutions electing to adopt the CBLR 

and a total capital threshold for other 

banks. The proposed rule would 

provide a consistent treatment for all 

FDIC-supervised banks without 

requiring the computation of total 

capital. The proposed amendment is 

described in more detail in Section III, 

below. 

II. Background 

The Real Estate Lending Standards, 

which were issued pursuant to section 

304 of the Federal Deposit Insurance 

Corporation Improvement Act of 1991, 

12 U.S.C. 1828(o), prescribe standards 

for real estate lending to be used by 

FDIC-supervised institutions in 

adopting internal real estate lending 

policies. Section 201 of the EGRRCPA 

amended provisions in the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act relative to the capital 

rules administered by the agencies. The 

CBLR rule was issued by the agencies to 

implement section 201 of the EGRRCPA, 

and it provides a simple measure of 

capital adequacy for community 

banking organizations that meet certain 

qualifying criteria.1 The FDIC is issuing 

this proposal to amend part 365 in 

response to changes in the type of 

capital information available after the 

implementation of the CBLR rule. 

Qualifying community banking 

organizations 2 that elect to use the 

CBLR framework (Electing CBOs) may 

calculate their CBLR without calculating 

tier 2 capital, and are therefore not 

required to calculate or report tier 2 

capital or total capital.3 The proposed 

revision to the Real Estate Lending 

Standards would allow a consistent 

approach for calculating loans in excess 

of the supervisory LTV Limits without 

having to calculate tier 2 or total capital 

as currently included in part 365 and its 

Appendix. 

The proposal would also ensure that 

the FDIC’s regulation regarding 

supervisory LTV Limits is consistent 

with how examiners are calculating 

credit concentrations, as provided by a 

statement issued by the agencies on 

March 30, 2020. The statement provided 

that the agencies’ examiners will use 

tier 1 capital plus the appropriate 

allowance for credit losses as the 

denominator when calculating credit 

concentrations.4

III. Revisions to the Real Estate Lending 

Standards 

The FDIC is proposing to amend the 

Real Estate Lending Standards so all 

FDIC-supervised institutions, both 

Electing CBOs and other insured 

financial institutions, would calculate 

the ratio of loans in excess of the 

supervisory LTV Limits using tier 1 

capital plus the appropriate allowance 

for credit losses 5 in the denominator. 

The proposed amendment would 

provide a consistent approach for 

calculating the ratio of loans in excess 

of the supervisory LTV Limits for all 

FDIC-supervised institutions. The 

proposed amendment would also 

approximate the historical methodology 

specified in the Real Estate Lending 

Standards for calculating the loans in 

excess of the supervisory LTV Limits 

without creating any regulatory burden 

for Electing CBOs and other banking 

organizations.6 Further, the FDIC is 

proposing this approach to provide 

regulatory clarity and avoid any 

regulatory burden that could arise if 

Electing CBOs subsequently decide to 

switch between the CBLR framework 

and the generally applicable capital 

rules. The FDIC is proposing to amend 

the Real Estate Lending Standards only 

relative to the calculation of loans in 

excess of the supervisory LTV Limits 

due to the change in the type of capital 

information that will be available, and 

is not considering any revisions to other 

sections of the Real Estate Lending 

Standards. Additionally, due to a 

publishing error which excluded the 

third paragraph in this section in the 

Code of Federal Regulations in prior 

versions, the FDIC is including the 

complete text of the section on loans in 

excess of the supervisory loan-to-value 

limits. 

IV. Expected Effects 

As of September 30, 2020, the FDIC 

supervises 3,245 insured depository 

institutions. The proposed revision to 

the Real Estate Lending Standards, if 

adopted, would apply to all FDICsupervised institutions. The effect of the 

proposed revisions at an individual 

bank would depend on whether the 

amount of its current or future real 

estate loans with loan-to-value ratios 

that exceed the supervisory LTV 

thresholds is greater than, or less than, 

the sum of its tier 1 capital and 

allowance (or credit reserve in the case 

of CECL adopters) for loan and lease 

losses. Allowance levels, credit reserves, 

and the volume of real estate loans and 

their loan to value ratios can vary 

considerably over time. Moreover, the 

FDIC does not have comprehensive 

information about the distribution of 

current loan to value ratios. For these 


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33572 Federal Register / Vol. 86, No. 120 / Friday, June 25, 2021 / Proposed Rules 

7September 30, 2020, Call Report data. 

8September 30, 2020, Call Report data. 9 5 U.S.C. 553(d)(3). 

10 5 U.S.C. 601 et seq. 11The SBA defines a small banking organization 

as having $600 million or less in assets, where ‘‘a 

financial institution’s assets are determined by 

averaging the assets reported on its four quarterly 

financial statements for the preceding year.’’ 13 CFR 

121.201 n.8 (2019). ‘‘SBA counts the receipts, 

employees, or other measure of size of the concern 

whose size is at issue and all of its domestic and 

foreign affiliates. . . .’’ 13 CFR 121.103(a)(6) 

(2019). Following these regulations, the FDIC uses 

a covered entity’s affiliated and acquired assets, 

averaged over the preceding four quarters, to 

determine whether the covered entity is ‘‘small’’ for 

the purposes of RFA. 

12September 30, 2020, Call Report data. 

reasons, it is not possible to identify 

how many institutions have real estate 

loans that exceed the supervisory LTV 

thresholds that would be directly 

implicated by either the current Real 

Estate Lending Standards or the 

proposed revisions. 

Currently, 3,080 FDIC supervised 

institutions have total real estate loans 

that exceed the tier 1 capital plus 

allowance or reserve benchmark in the 

proposed revision and are thus 

potentially affected by the proposed 

revisions depending on the distribution 

of their loan to value ratios. In 

comparison, 3,088 FDIC supervised 

institutions have total real estate loans 

exceeding the current total capital 

benchmark and are thus potentially 

affected by the current Real Estate 

Lending Standards. As described in 

more detail below, the population of 

banks potentially subject to the Real 

Estate Lending Standards is therefore 

almost unchanged by these proposed 

revisions, and their substantive effects 

are likely to be minimal.7

The FDIC believes that a threshold of 

‘‘tier 1 capital plus an allowance for 

credit losses’’ is consistent with the way 

the FDIC and institutions historically 

have applied the Real Estate Lending 

Standards. Also, the typical (or median) 

FDIC-supervised institution that had not 

elected the CBLR framework reported 

no difference between the amount of its 

allowance for credit losses and its tier 

2 capital.8 Consequently, although the 

FDIC does not have information about 

the amount of real estate loans at each 

institution that currently exceeds, or 

could exceed, the supervisory LTV 

limits, the FDIC does not expect the 

proposed rule to have material effects 

on the safety-and-soundness of, or 

compliance costs incurred by, FDICsupervised institutions. 

V. Alternatives 

The FDIC considered two alternatives, 

however it believes that none are 

preferable to the proposal. The 

alternatives are discussed below. 

First, the FDIC considered making no 

change to its Real Estate Lending 

Standards. The FDIC is not in favor of 

this approach because the FDIC does not 

favor an approach in which some banks 

use a tier 1 capital threshold and other 

banks use a total capital threshold, and 

because the existing provision could be 

confusing for institutions. 

Second, the FDIC considered revising 

its Real Estate Lending Standards so that 

both Electing CBOs and other 

institutions would use tier 1 capital in 

place of total capital for the purpose of 

calculating the supervisory LTV Limits. 

While this would subject both Electing 

CBOs and other institutions to the same 

approach, because the amount of tier 1 

capital at an institution is typically less 

than the amount of total capital, this 

alternative would result in a relative 

tightening of the supervisory standards 

with respect to loans made in excess of 

the supervisory LTV Limits. The FDIC 

believes that the general level of the 

current supervisory LTV Limits, which 

would be retained by this proposed rule, 

is appropriately reflective of the safety 

and soundness risk of depository 

institutions, and therefore the FDIC does 

not consider this alternative preferable 

to the proposed rule. 

VI. Request for Comments 

The FDIC invites comment on all 

aspects of the proposed rule. In 

particular, the FDIC invites comment on 

the use of tier 1 capital plus the 

appropriate allowance for credit losses 

in the denominator to calculate the level 

of loans in excess of the supervisory 

LTV Limits. Additionally, what 

alternative capital metric for the 

denominator when calculating loans in 

excess of the supervisory LTV Limits 

should the FDIC consider? 

IV. Regulatory Analysis 

A. Proposed Waiver of Delayed Effective 

Date 

The FDIC proposes to make all 

provisions of the rule effective upon 

publication of the final rule in the 

Federal Register. The Administrative 

Procedure Act (APA) allows for an 

effective date of less than 30 days after 

publication ‘‘as otherwise provided by 

the agency for good cause found and 

published with the rule.’’ 9 The purpose 

of the 30-day waiting period prescribed 

in APA section 553(d)(3) is to give 

affected parties a reasonable time to 

adjust their behavior and prepare before 

the final rule takes effect. The FDIC 

believes that this waiting period would 

be unnecessary as the proposed rule, if 

codified, would likely lift burdens on 

FDIC-supervised institutions by 

allowing them to calculate the ratio of 

loans in excess of the supervisory LTV 

Limits without calculating tier 2 capital, 

and would also ensure that the 

approach is consistent, regardless of the 

institutions’ CBLR election status. 

Consequently, the FDIC believes it 

would have good cause for the final rule 

to become effective upon publication. 

The FDIC invites comment on 

whether good cause exists to waive the 

delayed effective date of the rule once 

finalized. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires that, in connection 

with a proposed rule, an agency prepare 

and make available for public comment 

an initial regulatory flexibility analysis 

that describes the impact of the 

proposed rule on small entities.10

However, a regulatory flexibility 

analysis is not required if the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities, 

and publishes its certification and a 

short explanatory statement in the 

Federal Register together with the rule. 

The Small Business Administration 

(SBA) has defined ‘‘small entities’’ to 

include banking organizations with total 

assets of less than or equal to $600 

million.11 Generally, the FDIC considers 

a significant effect to be a quantified 

effect in excess of 5 percent of total 

annual salaries and benefits per 

institution, or 2.5 percent of total 

noninterest expenses. The FDIC believes 

that effects in excess of these thresholds 

typically represent significant effects for 

FDIC-supervised institutions. For the 

reasons provided below, the FDIC 

certifies that the proposed rule will not 

have a significant economic impact on 

a substantial number of small banking 

organizations. Accordingly, a regulatory 

flexibility analysis is not required. 

As of September 30, 2020, the FDIC 

supervised 3,245 institutions, of which 

2,434 were ‘‘small entities’’ for purposes 

of the RFA.12 The effect of the proposed 

revisions at an individual bank would 

depend on whether the amount of its 

current or future real estate loans with 

loan-to-value ratios that exceed the 

supervisory LTV thresholds is greater 

than, or less than, the sum of its tier 1 

capital and allowance (or credit reserve 

in the case of CECL adopters) for loan 

and lease losses. Allowance levels, 

credit reserves, and the volume of real 

estate loans and their loan to value 

ratios can vary considerably over time. 

Moreover, the FDIC does not have 


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13 Id. 

14 Id. 

15 44 U.S.C. 3501–3521. 

16 12 U.S.C. 4802(a). 

17 Id. at 4802(b). 

18Public Law 106–102, section 722, 113 Stat. 

1338, 1471 (1999). 

comprehensive information about the 

distribution of current loan to value 

ratios. For these reasons, it is not 

possible to identify how many 

institutions have real estate loans that 

exceed the supervisory LTV thresholds 

that would be directly implicated by 

either the current Guidelines or the 

proposed revisions. 

Currently, 2,305 small, FDIC 

supervised institutions have total real 

estate loans that exceed the tier 1 capital 

plus allowance or reserve benchmark in 

the proposed revision and are thus 

potentially affected by the proposed 

revisions depending on the distribution 

of their loan to value ratios. In 

comparison, 2,312 small, FDIC 

supervised institutions have total real 

estate loans exceeding the current total 

capital benchmark and are thus 

potentially affected by the current Real 

Estate Lending Standards. As described 

in more detail below, the population of 

banks potentially subject to the Real 

Estate Lending Standards is therefore 

almost unchanged by these proposed 

revisions, and their substantive effects 

are likely to be minimal.13

The FDIC believes that a threshold of 

‘‘tier 1 capital plus an allowance for 

credit losses’’ is consistent with the way 

the FDIC and institutions historically 

have applied the Real Estate Lending 

Standards. Also, the typical (or median) 

small, FDIC-supervised institution that 

had not elected the CBLR framework 

reported no difference between the 

amount of its allowance for credit losses 

and its tier 2 capital.14 Consequently, 

although the FDIC does not have 

information about the amount of real 

estate loans at each small institution 

that currently exceeds, or could exceed, 

the supervisory LTV limits, the FDIC 

does not expect the proposed rule to 

have material effects on the safety-andsoundness of, or compliance costs 

incurred by, small FDIC-supervised 

institutions. However, small institutions 

may have to incur some costs associated 

with making the necessary changes to 

their systems and processes in order to 

comply with the terms of the proposed 

rule. The FDIC believes that any such 

costs are likely to be minimal given that 

all small institutions already calculate 

tier 1 capital and the allowance for 

credit losses and had been subject to the 

previous thresholds for many years 

before the changes in the capital rules. 

Therefore, and based on the preceding 

discussion, the FDIC certifies that the 

proposed rule, if codified as written, 

would not significantly affect a 

substantial number of small entities. 

The FDIC invites comments on all 

aspects of the supporting information 

provided in this section, and in 

particular, whether the proposed rule 

would have any significant effects on 

small entities that the FDIC has not 

identified. 

C. Paperwork Reduction Act 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995 

(PRA),15 the FDIC may not conduct or 

sponsor, and a respondent is not 

required to respond to, an information 

collection unless it displays a currentlyvalid Office of Management and Budget 

(OMB) control number. The FDIC has 

reviewed this proposed rule and 

determined that it would not introduce 

any new or revise any collection of 

information pursuant to the PRA. 

Therefore, no submissions will be made 

to OMB with respect to this proposed 

rule. 

D. Riegle Community Development and 

Regulatory Improvement Act of 1994 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act 

(RCDRIA),16 in determining the effective 

date and administrative compliance 

requirements for new regulations that 

impose additional reporting, disclosure, 

or other requirements on insured 

depository institution, each Federal 

banking agency must consider, 

consistent with principles of safety and 

soundness and the public interest, any 

administrative burdens that such 

regulations would place on depository 

institutions, including small depository 

institutions, and customers of 

depository institutions, as well as the 

benefits of such regulations. In addition, 

section 302(b) of RCDRIA requires new 

regulations and amendments to 

regulations that impose additional 

reporting, disclosures, or other new 

requirements on insured depository 

institutions generally to take effect on 

the first day of a calendar quarter that 

begins on or after the date on which the 

regulations are published in final 

form.17

The FDIC believes that this proposed 

rule, if implemented, would not impose 

new reporting, disclosure, or other 

requirements, and would likely instead 

reduce such burdens by allowing 

Electing CBOs to avoid calculating and 

reporting tier 2 capital, as would be 

required under the current Real Estate 

Lending Standards. Additionally, even 

if this proposed rule could be 

considered subject to the requirements 

of section 302(b) of RCDRIA, the FDIC 

believes that there is good cause under 

section 302(b)(1)(A) to have the rule 

become effective upon publication in 

the Federal Register for the same 

reasons that it believes good cause exists 

under the APA (see Proposed Waiver of 

Delayed Effective Date, supra). The 

FDIC invites comment on the 

applicability of section 302(b) of 

RCDRIA to the proposed rule and, if it 

is applicable, whether good cause exists 

to waive the delayed effective date of 

the rule once finalized. 

E. Solicitation of Comments on Use of 

Plain Language 

Section 722 of the Gramm-LeachBliley Act 18 requires the Federal 

banking agencies to use plain language 

in all proposed and final rules 

published after January 1, 2000. The 

FDIC has sought to present the proposed 

rule in a simple and straightforward 

manner and invites comment on the use 

of plain language. 

List of Subjects in 12 CFR Part 365 

Banks, Banking, Mortgages, Savings 

associations. 

PART 365—REAL ESTATE LENDING 

STANDARDS 

Authority and Issuance 

For the reasons stated in the 

preamble, the Federal Deposit Insurance 

Corporation proposes to amend part 365 

of chapter III of title 12 of the Code of 

Federal Regulations as follows: 

■ 1. The authority citation for part 365 

continues to read as follows: 

Authority: 12 U.S.C. 1828(o) and 5101 et 

seq. 

■ 2. Amend Appendix A to Subpart A 

by revising the section titled ‘‘Loans in 

Excess of the Supervisory Loan-to-Value 

Limits’’ to read as follows: 

Appendix A to Subpart A of Part 365— 

Interagency Guidelines for Real Estate 

Lending Policies 

* * * * * 

Loans in Excess of the Supervisory Loan-toValue Limits 

The agencies recognize that appropriate 

loan-to-value limits vary not only among 

categories of real estate loans but also among 

individual loans. Therefore, it may be 

appropriate in individual cases to originate 

or purchase loans with loan-to-value ratios in 

excess of the supervisory loan-to-value 

limits, based on the support provided by 

other credit factors. Such loans should be 

identified in the institution’s records, and 


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4For the purposes of these Guidelines, for state 

non-member banks and state savings associations, 

‘‘total capital’’ refers to the FDIC-supervised 

institution’s tier 1 capital, as defined in § 324.2 of 

this chapter, plus the allowance for loan and leases 

losses or the allowance for credit losses attributable 

to loans and leases, as applicable. The allowance for 

credit losses attributable to loans and leases is 

applicable for institutions that have adopted the 

Current Expected Credit Losses methodology. 

their aggregate amount reported at least 

quarterly to the institution’s board of 

directors. (See additional reporting 

requirements described under ‘‘Exceptions to 

the General Policy.’’) 

The aggregate amount of all loans in excess 

of the supervisory loan-to-value limits should 

not exceed 100 percent of total capital.4

Moreover, within the aggregate limit, total 

loans for all commercial, agricultural, 

multifamily or other non-1-to-4 family 

residential properties should not exceed 30 

percent of total capital. An institution will 

come under increased supervisory scrutiny 

as the total of such loans approaches these 

levels. 

In determining the aggregate amount of 

such loans, institutions should: (a) Include 

all loans secured by the same property if any 

one of those loans exceeds the supervisory 

loan-to-value limits; and (b) include the 

recourse obligation of any such loan sold 

with recourse. Conversely, a loan should no 

longer be reported to the directors as part of 

aggregate totals when reduction in principal 

or senior liens, or additional contribution of 

collateral or equity (e.g., improvements to the 

real property securing the loan), bring the 

loan-to-value ratio into compliance with 

supervisory limits. 

* * * * * 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on June 15, 2021. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2021–12973 Filed 6–24–21; 8:45 am] 

BILLING CODE 6714–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0451; Project 

Identifier AD–2021–00007–T] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to 

supersede Airworthiness Directive (AD) 

2019–01–08, which applies to certain 

The Boeing Company Model 777–200, 

–200LR, –300, and –300ER series 

airplanes. AD 2019–01–08 requires 

modifications for galley mounted 

attendant seat fittings. Since the FAA 

issued AD 2019–01–08, the FAA 

determined that additional airplanes are 

subject to the unsafe condition. This 

proposed AD would retain the 

requirements of AD 2019–01–18 and 

expand the applicability to include 

additional airplanes. The FAA is 

proposing this AD to address the unsafe 

condition on these products. 

DATES: The FAA must receive comments 

on this proposed AD August 9, 2021. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE, Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For service information identified in 

this NPRM, contact Boeing Commercial 

Airplanes, Attention: Contractual & Data 

Services (C&DS), 2600 Westminster 

Blvd., MC 110–SK57, Seal Beach, CA 

90740–5600; telephone 562–797–1717; 

internet https://

www.myboeingfleet.com. You may view 

this service information at the FAA, 

Airworthiness Products Section, 

Operational Safety Branch, 2200 South 

216th St., Des Moines, WA. For 

information on the availability of this 

material at the FAA, call 206–231–3195. 

It is also available at https://

www.regulations.gov by searching for 

and locating Docket No. FAA–2021– 

0451. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2021–0451; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

NPRM, any comments received, and 

other information. The street address for 

Docket Operations is listed above. 

FOR FURTHER INFORMATION CONTACT: 

Brandon Lucero, Aerospace Engineer, 

Cabin Safety and Environmental 

Systems Section, FAA, Seattle ACO 

Branch, 2200 South 216th St., Des 

Moines, WA 98198; phone and fax: 206– 

231–3569; email: brandon.lucero@

faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

The FAA invites you to send any 

written relevant data, views, or 

arguments about this proposal. Send 

your comments to an address listed 

under ADDRESSES. Include ‘‘Docket No. 

FAA–2021–0451; Project Identifier AD– 

2021–00007–T’’ at the beginning of your 

comments. The most helpful comments 

reference a specific portion of the 

proposal, explain the reason for any 

recommended change, and include 

supporting data. The FAA will consider 

all comments received by the closing 

date and may amend the proposal 

because of those comments. 

Except for Confidential Business 

Information (CBI) as described in the 

following paragraph, and other 

information as described in 14 CFR 

11.35, the FAA will post all comments 

received, without change, to https://

www.regulations.gov, including any 

personal information you provide. The 

agency will also post a report 

summarizing each substantive verbal 

contact received about this proposed 

AD. 

Confidential Business Information 

CBI is commercial or financial 

information that is both customarily and 

actually treated as private by its owner. 

Under the Freedom of Information Act 

(FOIA) (5 U.S.C. 552), CBI is exempt 

from public disclosure. If your 

comments responsive to this NPRM 

contain commercial or financial 

information that is customarily treated 

as private, that you actually treat as 

private, and that is relevant or 

responsive to this NPRM, it is important 

that you clearly designate the submitted 

comments as CBI. Please mark each 

page of your submission containing CBI 

as ‘‘PROPIN.’’ The FAA will treat such 

marked submissions as confidential 

under the FOIA, and they will not be 

placed in the public docket of this 

NPRM. Submissions containing CBI 

should be sent to Brandon Lucero, 

Aerospace Engineer, Cabin Safety and 

Environmental Systems Section, FAA, 

Seattle ACO Branch, 2200 South 216th 

St., Des Moines, WA 98198; phone and 

fax: 206–231–3569; email: 

brandon.lucero@faa.gov. Any 

commentary that the FAA receives 

which is not specifically designated as 

CBI will be placed in the public docket 

for this rulemaking. 

Background 

The FAA issued AD 2019–01–08, 

Amendment 39–19547 (84 FR 4318, 


lotter on DSK11XQN23PROD with PROPOSALS1