[Federal Register Volume 66, Number 106 (Friday, June 1, 2001)]
[Rules and Regulations]
[Pages 29890-29894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13723]



[[Page 29889]]

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Part II





Department of the Treasury





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Office of the Comptroller of the Currency



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12 CFR Part 8



Assessement of Fees; Final Rule

Federal Register / Vol. 66 , No. 106 / Friday, June 1, 2001 / Rules 
and Regulations

[[Page 29890]]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 8

[Docket No. 01-11]
RIN 1557-AB96


Assessment of Fees

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is making 
two changes to our assessment rule. First, we are changing the way we 
assess ``independent credit card banks.'' A national bank is considered 
independent for purposes of this final rule if it engages primarily in 
credit card operations and is not affiliated with a full-service 
national bank. Under the revised assessment structure, all credit card 
banks will continue to be assessed based on balance sheet assets. 
Independent credit card banks will pay an additional assessment 
component based on off-balance sheet credit receivables that are 
attributable to credit card accounts owned by the banks. This 
additional assessment will result in payment by these banks of a more 
appropriate share of the OCC's expenses than under the current on-
balance sheet assessment structure.
    We also are raising the surcharge for all institutions with 
composite ratings of 3, 4, or 5 under the Uniform Financial 
Institutions Rating System (UFIRS) (also referred to as the CAMELS 
rating, which rates capital, assets, management, earnings, liquidity, 
and sensitivity to market risk) and for Federal branches and agencies 
of foreign banks that receive a composite rating of 3, 4, or 5 under 
the ROCA rating system. This amendment will enable us to allocate more 
equitably the expenses the OCC incurs in supervising institutions that 
are experiencing significant problems. The surcharge will apply to the 
asset-based assessment as well as the independent credit card bank and 
independent trust bank assessments.

EFFECTIVE DATE: July 1, 2001.

FOR FURTHER INFORMATION CONTACT: Mitchell E. Plave, Counsel, 
Legislative and Regulatory Activities Division, (202) 874-5090; or 
Daniel L. Pearson, National Bank Examiner, Credit Risk, (202) 874-5170.

SUPPLEMENTARY INFORMATION:

Background

    The OCC charters, regulates, and supervises approximately 2,200 
national banks and 58 Federal branches and agencies of foreign banks in 
the United States, accounting for nearly 60 percent of the nation's 
banking assets. Our mission is to ensure a safe, sound, and competitive 
national banking system that supports the citizens, communities, and 
economy of the United States.
    The OCC funds the activities it undertakes to carry out this 
mission through assessments on institutions regulated by the OCC. The 
National Bank Act authorizes the OCC to collect assessments, fees, or 
other charges as necessary or appropriate to carry out the 
responsibilities of the Office. 12 U.S.C. 482 (Supp. 1999). The statute 
requires that our charges be set to meet the Comptroller's expenses in 
carrying out authorized activities. Id. The OCC, under 12 CFR part 8, 
currently assesses national banks and Federal branches and agencies 
according to a formula based on factors such as a bank's size and 
condition and whether it is the ``lead'' bank or ``non-lead'' bank 
among national banks in a holding company.\1\ The OCC also imposes an 
additional assessment on independent trust banks based on the amount of 
trust assets under management.\2\
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    \1\ A ``lead bank'' is the largest national bank controlled by a 
company, based on a comparison of the total assets held by each 
national bank controlled by that company as reported in each bank's 
most recent Consolidated Report of Condition (Including Domestic and 
Foreign Subsidiaries) (Call Report). 12 CFR 8.2(a)(6)(ii)(A).
    \2\ 65 FR 75859 (December 5, 2000), to be codified at 12 CFR 
8.6(c). An ``independent trust bank'' for purposes of Sec. 8.6 is a 
national bank that (a) has trust powers, (b) does not primarily 
offer full-service banking, and (c) is not affiliated with a full-
service national bank. A bank will be considered as not primarily 
offering full-service banking if it derives more than 50 percent of 
its interest and non-interest income from credit card operations or 
trust activities, or the terms of the bank's charter restrict its 
ability to engage in a full range of permissible banking activities.
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    Independent credit card banks. The OCC's current assessment 
regulations do not distinguish independent credit card banks from other 
national banks. As a result, independent credit card banks pay 
assessments according to the same formula that applies to full-service 
national banks. That formula is comprised of a fixed component based 
solely on a bank's asset size plus a variable component derived by 
multiplying asset amounts in excess of certain thresholds by a series 
of declining marginal rates.\3\ The assessment amount that results from 
this computation may then be adjusted based on a bank's condition and 
on whether it is a ``lead bank'' or a ``non-lead bank.'' The amount of 
assets on a bank's balance sheet is, however, the most significant 
component of the current assessment computation.
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    \3\ The assessment formula is set out at 12 CFR 8.2. The 
elements of the formula, including the marginal rates, may change 
from year to year and are announced in the OCC's annual ``Notice of 
Comptroller of the Currency Fees'' (Notice of Fees). See 12 CFR 8.8.
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    The magnitude and complexity of the business of independent credit 
card banks is not fully reflected by the volume of assets reported on 
those banks' balance sheets as of a particular date. For example, in 
order to comply with restrictions governing affiliate transactions, 
most private label credit card banks sell their receivables within 
twenty-four hours of their production. Other independent credit card 
banks regularly securitize substantial amounts of their receivables. A 
credit card bank's balance sheet, therefore, is not, by itself, 
generally a meaningful measure of the resources the OCC must expend to 
supervise this type of bank, nor is it a fair measure of the value of 
the national bank charter to the enterprise. As a result, the 
assessments the OCC currently applies to these banks do not represent 
the banks' fair share of the OCC's overall expenses.
    Institutions with composite ratings of 3, 4, or 5. The OCC adds a 
surcharge to the asset-based assessment for national banks and Federal 
branches and agencies that have composite UFIRS or ROCA \4\ ratings, as 
appropriate, of 3, 4, or 5. This surcharge reflects the greater 
supervisory resources demanded by the circumstances of these lower-
rated institutions. The OCC's experience since 1997, when we introduced 
the surcharge,\5\ has shown that the current surcharge for these 
institutions does not adequately compensate the OCC for the additional 
demands on its resources given the substantial level of supervision 
warranted.
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    \4\ The ROCA rating system rates risk management, operational 
controls, compliance, and asset quality.
    \5\ See 62 FR 64135 (December 4, 1997); 12 CFR 8.2(a)(7); 12 CFR 
8.2(b)(5).
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    On April 4, 2001, we published a notice of proposed rulemaking in 
the Federal Register (66 FR 17821) to amend the OCC's assessment 
regulation by adding a new assessment component to the existing balance 
sheet assessments for independent credit card banks. The proposal also 
increased the surcharge for lower-rated national banks. For the reasons 
discussed below, the OCC is adopting the rule as proposed.

[[Page 29891]]

Proposed Rule and Comments Received

    Independent credit card bank assessment. We proposed to amend 12 
CFR 8.2 by adding a new paragraph (c) to increase assessments on 
independent credit card banks by adding an off-balance sheet 
``receivables attributable'' component to the assessment structure. For 
purposes of the proposal, we defined ``independent credit card banks'' 
as banks that primarily engage in credit card operations and are not 
affiliated with a full-service national bank.\6\ Under the proposed 
rule, a bank is considered ``primarily engaged in credit card 
operations'' if it is a bank described in section 2(c)(2)(F) of the 
Bank Holding Company Act (a so-called ``CEBA credit card bank''),\7\ or 
if the ratio of (a) its total gross receivables attributable to (b) the 
bank's balance sheet assets exceeds 50%. A bank is a ``full-service 
national bank'' for purposes of the proposed rule if more than 50% of 
its interest and non-interest income is generated by activities other 
than credit card operations or trust activities and the bank's charter 
permits it to conduct all authorized banking activities.\8\ The 
proposal used the same test for affiliation (i.e., the definition of 
``affiliate'' appearing in the Federal Reserve Act at 12 U.S.C. 
221a(b)) that we used in the OCC's recently adopted rule affecting 
independent trust banks.
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    \6\ See Charters, Corporate Manual at 21-22 (1998) (describing 
credit card banks).
    \7\ See 12 U.S.C. 1841(c)(2)(F) (excluding from the definition 
of the term ``bank'' in the Bank Holding Company Act (BHCA) an 
institution that engages only in credit card operations and 
satisfies certain other conditions). This provision was added to the 
BHCA by the Competitive Equality Banking Act of 1987.
    \8\ This definition also applies for purposes of the independent 
trust bank rule. See supra, note 2.
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    The proposal defined ``receivables attributable'' as the total 
amount of outstanding balances due on credit card accounts owned by an 
independent credit card bank (the receivables attributable to those 
accounts) on the last day of the assessment period. We described 
receivables attributable as the measure of the volume of a credit card 
bank's business. Given that some credit card banks retain receivables 
on balance sheet, the proposal allowed the banks to deduct on-book 
receivables from total gross receivables attributable to determine 
``receivables attributable.'' This provision avoids assessing the same 
asset twice. Under the proposal, independent credit card banks would 
report receivables attributable data to the OCC on a semiannual basis.
    The proposed rule provided that an independent credit card bank's 
assessment would be determined by adding to its book asset-based 
assessment an additional amount determined by its level of receivables 
attributable. We noted that the dollar amount of the additional 
assessment would be published each year in the Notice of Fees,\9\ and 
that the amounts of the additional assessment would be adjusted to 
reflect changes in the OCC's expenses.
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    \9\ 12 CFR 8.8(b).
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    We received comments on the proposal from eight independent credit 
card banks and two banking trade associations. Three of the commenters 
acknowledged that balance sheet asset assessments do not capture an 
independent credit card bank's business, but suggested that relative 
risk to the deposit insurance fund, rather than receivables 
attributable, would be a better measure for additional assessments. 
They said that the off-balance sheet and limited purpose nature of 
credit card banking reduce risk to the national banking system, as well 
as the OCC's supervisory responsibilities. The commenters also argued 
that the assessments should be based on the quality of bank management 
and reflect a bank's composite UFIRS rating.
    One of the banking trade associations commented that it believed a 
special assessment for independent credit card banks might be 
appropriate to defray supervisory costs if demands on agency resources 
and the risk profiles of the banks supported an additional assessment. 
This commenter suggested that a special assessment should be tied to 
whether receivables are securitized.
    The tenor of these comments is that the OCC's assessments should be 
tied to all independent credit card banks' level of risk. In view of 
the purpose of assessments, as set forth in 12 U.S.C. 482, however, the 
risk-based approach suggested by the commenters is too narrow. Rather, 
our assessments should reflect the resources the OCC dedicates to 
supervision of national banks (which is, in itself, an indirect measure 
of risk) and the value of the national charter to these banks. While 
independent credit card banks do not engage in the full range of 
banking activities, they nonetheless require substantial supervision. 
The OCC examines credit card banks in the areas of credit risk 
management, which includes underwriting, account management, 
collections, and fraud controls; securitizations; marketing practices; 
credit scoring models; daily settlement practices for VISA, MasterCard, 
and retailer stores; affiliate transactions; internal audits; vendor 
management; compliance operations concerning credit card disclosure 
(fees, rates, and terms) and fair lending; and information technology. 
We also examine the relationship between the credit card bank and the 
banks' affiliates and parent companies. Thus, although some types of 
independent credit card banks may not represent the same level of 
direct risk to the Federal Deposit Insurance Corporation insurance fund 
as banks that hold a significant amount of insured deposits, the 
current level of assessments for this population of banks does not 
correlate with the resources we devote to evaluating the various types 
of risks they present.
    In general, the need for sophisticated regulation and supervision 
in the credit card industry is increasing. With the increase in 
information technology, Internet banking, and outsourcing of services, 
the OCC is spending more time in the banks reviewing transaction risk, 
data security, vendor management, and customer privacy issues. The 
volume of credit card transactions that flow through the national 
banking system on a daily basis is significant. The volume of credit 
card direct mail solicitations, telephone solicitations, retail store 
promotions, and Internet advertisements continues to increase, as do 
consumer disclosures, add-on insurance-related products, third-party 
marketing vendors, and consumer complaints and litigation. The 
variation of credit card products, fees, interest rates, and 
disclosures is substantial. The consumer population expects regulators 
to oversee these activities, as is evidenced by the fact that consumer 
inquiries concerning credit card banks represent the highest volume of 
inquiries received by the OCC's Customer Assistance Group. The OCC has 
increased the levels of its oversight to match the level of compliance 
and reputation risk in this group of banks.
    Several of the commenters questioned why the proposal focused on 
independent credit card banks rather than the whole universe of credit 
card banks. Where a full-service national bank elects to conduct its 
credit card business through a separately chartered entity, rather than 
in the bank itself, it has essentially made a decision about the 
organizational format that best suits its needs. As we stated in the 
proposal, where such a corporate format has been chosen, it is our 
experience that the aggregate assessments received from the national 
bank and its credit card affiliate generally are sufficient to pay the 
institution's fair share of the OCC's

[[Page 29892]]

overall expenses.\10\ Where the credit card bank is not affiliated with 
a full-service national bank, however, it typically represents a choice 
by a non-bank or state-chartered affiliate to use the national bank 
charter for the distinct benefits it affords for the operation of a 
credit card business under circumstances where the affiliate is not 
sharing equitably in defraying the OCC's costs of operation.
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    \10\ 66 FR 17821, 17822 (April 4, 2001).
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    Moreover, where a credit card bank is affiliated with a full-
service national bank, the OCC achieves efficiencies from the 
coordinated supervision of the affiliated banks that are not present in 
the supervision of independent credit card banks. Our cost of 
supervision, therefore, is not only that of on-site examination, but 
includes other supervisory costs, such as handling consumer complaints 
concerning these institutions.
    In the proposal, we invited comment on whether we should use 
``transaction flow'' instead of receivables attributable to measure an 
independent credit card bank's business. ``Transaction flow'' is the 
total net amounts charged to cards issued by the bank during each semi-
annual assessment period. Three commenters addressed the transaction 
flow alternative. The first, an independent credit card bank, found 
this alternate unacceptable because it would penalize rewards-based 
credit cards that have significantly higher transactions per account 
than non-reward cards. The commenter added that the value of the 
charter and the costs to supervise are more closely aligned with 
average balances than transaction volume.
    The second and third commenters, banking trade associations, 
strongly endorsed the receivables attributable methodology rather than 
transaction flow. One trade association focused on the availability of 
data and stated that, while receivables attributable data are readily 
available, transaction flow is not. The commenter also inquired about 
the possibility of gathering receivables attributable data from the 
information reported in the Consolidated Report of Condition (Including 
Domestic and Foreign Subsidiaries) (Call Report). In response to this 
point, we note that the OCC can extract receivables attributable 
information from only a portion of the relevant independent credit card 
bank population; therefore, the suggestion is not feasible. The other 
trade association endorsed receivables attributable over transaction 
flow, suggesting that seasonal changes in transaction volume could skew 
the assessment.
    For these reasons, the final rule adopts the receivables-
attributable methodology for independent credit card banks as proposed. 
We note that this methodology will result in no additional assessment 
for an independent credit card bank that keeps all of its receivables 
on its balance sheet. In such a situation, the asset-based component of 
the assessment rule will produce the assessment measure for the 
institution.
    In the proposal, we stated that the initial semiannual charge to be 
paid in July, 2001, would be in the range of the following:\11\
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    \11\ See 66 FR 21045 (April 26, 2001) (corrected version of the 
chart).

 
------------------------------------------------------------------------
      If the bank's total off-balance sheet
          receivables attributable are                The additional
-------------------------------------------------  semiannual assessment
          Over                 But not over                 is:
Column A                           Column B                Column C
Million                             Million
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                $0                     $100                 $40,000
               100                     1000                  60,000
              1000                     5000                  80,000
              5000                                          100,000
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We intend to charge these amounts beginning with the July, 2001, 
semiannual assessment period. Adjustments to these amounts thereafter 
may be made in our Notice of Fees.
    Assessment surcharge for institutions with composite UFIRS or ROCA 
ratings of 3, 4, or 5. As we stated in the proposal, OCC data show that 
there is a significant increase in the supervisory demands on the OCC 
once a bank's or Federal branch's or agency's composite UFIRS or ROCA 
rating moves from 1 or 2 to 3, 4, or 5. Since introducing the surcharge 
in 1997, we have found that the demands placed on the OCC by these 
lower-rated institutions is greater than was anticipated in 1997. Not 
only have the demands on supervisory resources increased for 
institutions with a 3 rating, we have found they are even greater when 
institutions are rated 4 or 5. Accordingly, we proposed to increase the 
surcharge for all lower-rated institutions.
    The surcharge we proposed would apply to all components of an 
institution's assessment, not only the asset-based assessment. Thus, 
for instance, an independent credit card bank would calculate its 
asset-based component and receivables attributable component, add those 
two together, and multiply the sum by the amount of the ratings-based 
surcharge. An independent trust bank would follow the same method, 
using the managed assets component.\12\
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    \12\ See 12 CFR 8.6(c) (assessments on independent trust banks).
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    Under the proposal, banks with composite UFIRS or ROCA ratings of 3 
would be assessed a surcharge of 50%; banks with composite ratings of 4 
or 5 would be assessed a 100% surcharge. By linking assessments with 
the condition of the banks, the elevated supervisory cost of lower-
rated institutions would be borne by the lower-rated institutions, 
rather than by the national banking system as a whole.\13\ This 
proposed approach would enable the OCC's assessment revenue to expand 
or contract in a way that responds to the changing demands on the OCC.
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    \13\ The regulation permits the OCC to limit the amount of the 
surcharge. We currently contemplate, for example, that lower-rated 
full-service national banks would pay a surcharge only on the first 
$20 billion in book assets. The OCC will publish this limit and any 
similar limit that may apply to surcharges on lower-rated 
independent credit card or independent trust banks in the Notice of 
Fees.
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    We received three comments on this proposed increase in the 
surcharge from banks that supported charging lower-rated institutions a 
higher assessment. A banking industry trade association also commented, 
noting that while it supports higher assessments for lower-rated 
institutions, it is concerned that the proposed surcharges might hasten 
the demise of some banks. Our experience using the surcharges in the 
current rule indicates that this result has not occurred. In addition, 
we believe it is fairer to charge the higher costs of supervising 
lower-rated banks to those banks, rather than to all national banks. 
Lower-rated banks create a significantly greater demand for the 
allocation of the OCC's supervisory time and resources than do better 
rated banks of comparable size. Well-run banks should not have to bear 
the burden of these additional costs. Moreover, the prospect of higher 
assessments should add an element of market discipline by providing an 
additional incentive for a bank to maintain a higher rating.
    The trade association also questioned whether the magnitude of the 
proposed increase was warranted. Our analysis shows that, on average, 
OCC workdays devoted to institutions rated 3, 4, or 5 increase by a 
percentage that exceeds the percentage increases in the problem-bank 
surcharge. Accordingly, we believe it is appropriate to adopt the 
increase in the surcharge for lower-rated institutions as proposed.

Regulatory Flexibility Act

    An agency must prepare a Regulatory Flexibility Analysis if a rule 
it proposes

[[Page 29893]]

will have a ``significant economic impact'' on a ``substantial number 
of small entities.'' 5 U.S.C. 603, 605. If, after an analysis of a 
rule, an agency determines that the rule is not expected to have a 
significant economic impact on a substantial number of small entities, 
section 605(b) provides that the head of the agency may so certify.
    The OCC has reviewed the impact this final rule will have on small 
independent credit card banks. Based on that review, the OCC certifies 
that the final rule will not have a significant economic impact on a 
substantial number of small entities. This rule will apply to a small 
number of national banks. For purposes of this review, the OCC defines 
``small independent credit card banks'' to be those banks with less 
than $100 million in total assets.\14\ Using this definition, the final 
rule will affect only nineteen small independent credit card banks, 
representing less than 1% of all national banks. The OCC does not 
believe this to be a substantial number of small entities.
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    \14\ This definition is consistent with the Small Business 
Administration's definition of ``small entity.'' See 13 CFR 121.201.
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    The proposed rule contained an Initial Regulatory Flexibility 
Analysis (IRFA) that addressed the increase in the lower-rated bank 
surcharge and invited the public's comments on the impact of the 
proposed rule on small entities. As noted above, we received only three 
comments from independent credit card banks on the surcharge increase, 
all in support of the increase. We also received a comment from a bank 
trade association, which supported higher assessments for lower-rated 
institutions but suggested that the surcharge might hasten the demise 
of some institutions. As previously discussed, our experience using the 
surcharges in the current rule indicates that this result has not 
occurred. Given the generally positive comments on the surcharge, and 
that the rule currently would affect only approximately 4% of small 
entities, the OCC certifies that the final rule will not have a 
significant economic impact on a substantial number of small entities.
    We note that we considered alternatives to the increase in the 
surcharge for lower-rated institutions when preparing this rule. At 
present, there is an imbalance in the surcharge between the level of 
our supervision of lower-rated banks and their contributions to the 
overall assessment pool. As a result, the current surcharge passes the 
burden of supervision from lower-rated institutions to higher-rated 
banks that consume far fewer OCC resources. We concluded that a 
surcharge increase on lower-rated institutions was the most equitable 
way to correct this imbalance and the least burdensome solution when 
viewed from the perspective of the national banking system as a whole.

Paperwork Reduction Act

    The OCC may not conduct or sponsor, and an organization is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
OMB has reviewed and approved the collection of information 
requirements contained in this rule under emergency processing 
procedures under control number 1557-0223, in accordance with the 
Paperwork Reduction of 1995 (44 U.S.C. 3501 et seq.). OMB clearance 
will expire on October 31, 2001. The OCC is currently seeking an 
extension of OMB approval under ordinary OMB clearance procedures. The 
OCC sought comment on all aspects of the burden estimates for the 
information collection contained in the proposed rule. The OCC received 
no comments.
    The information collection requirements contained in 12 CFR part 8 
are contained in section 8.2(c). Under this section, the final 
regulation would require national banks to provide the OCC with 
``receivables-attributable'' data from independent credit card banks, 
that is national banks that primarily engage in credit card operations 
and are not affiliated with a full service national bank. ``Receivables 
attributable'' are the total amount of outstanding balances due on 
credit card accounts owned by an independent credit card bank (the 
receivables attributable to those accounts) on the last day of the 
assessment period, minus receivables retained on the bank's balance 
sheet as of that day. The respondents are national banks.
    Estimated number of respondents: 35.
    Estimated number of responses: 70.
    Frequency of response: Semiannually.
    Estimated burden hours per response: 1 hour.
    Estimated total annual burden: 70 hours.
    The OCC has a continuing interest in the public's opinion regarding 
collections of information. Members of the public may submit comments 
at any time regarding any aspects of these collections of information. 
Comments may be sent to Jessie Dunaway, Clearance Officer, Office of 
the Comptroller of the Currency, 250 E Street, SW, Mailstop 8-4, 
Washington, DC 20219.

Executive Order 12866

    The OCC has determined that this final rule is not a significant 
regulatory action under Executive Order 12866.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4 (2 U.S.C. 1532) (Unfunded Mandates Act), requires that an agency 
prepare a budgetary impact statement before promulgating any rule 
likely to result in a federal mandate that may result in the 
expenditure by state, local, and tribal governments, in the aggregate, 
or by the private sector of $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 OCC has determined that the final rule will not result in 
expenditures by state, local, and tribal governments, or by the private 
sector, of $100 million or more in any one year. Accordingly, this 
rulemaking requires no further analysis under the Unfunded Mandates 
Act.

List of Subjects in 12 CFR Part 8

    National banks, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons set forth in the preamble, the OCC amends part 8 of 
chapter I of title 12 of the Code of Federal Regulations as follows:

PART 8--ASSESSMENT OF FEES

    1. The authority citation for part 8 continues to read as follows:

    Authority: 12 U.S.C. 93a, 481, 482, 1867, 3102, and 3108; 15 
U.S.C. 78c and 781; and 26 D.C. Code 102.

    2. In Sec. 8.2:
    A. Paragraphs (a)(7) and (b)(5) are removed; and
    B. New paragraphs (c) and (d) are added to read as follows:


Sec. 8.2  Semiannual assessment.

* * * * *
    (c) Additional assessment for independent credit card banks--(1) 
General rule. In addition to the assessment calculated according to 
paragraph (a) of this section, each independent credit card bank will 
pay an assessment based on receivables attributable to credit card 
accounts owned by the bank. This assessment will be computed by adding 
to its asset-based assessment an additional amount determined by its 
level of receivables

[[Page 29894]]

attributable. The dollar amount of the additional assessment will be 
published in the ``Notice of Comptroller of the Currency Notice of 
Fees,'' described at Sec. 8.8.
    (2) Credit card banks affiliated with full-service national banks. 
The OCC will assess an independent credit card bank in accordance with 
paragraph (c)(1) of this section, notwithstanding that the bank is 
affiliated with a full-service national bank, if the OCC concludes that 
the affiliation is intended to evade this part.
    (3) Definitions. For purposes of this paragraph (c), the following 
definitions apply:
    (i) Affiliate has the same meaning as this term has in 12 U.S.C. 
221a(b).
    (ii) Engaged primarily in card operations means a bank described in 
section 2(c)(2)(F) of the Bank Holding Company Act (12 U.S.C. 
1841(c)(2)(F)) or whose ratio of total gross receivables attributable 
to the bank's balance sheet assets exceeds 50%.
    (iii) Full-service national bank is a national bank that generates 
more than 50% of its interest and non-interest income from activities 
other than credit card operations or trust activities and is authorized 
according to its charter to engage in all types of permissible banking 
activities.
    (iv) Independent credit card bank is a national bank that engages 
primarily in credit card operations and is not affiliated with a full-
service national bank.
    (v) Receivables attributable is the total amount of outstanding 
balances due on credit card accounts owned by an independent credit 
card bank (the receivables attributable to those accounts) on the last 
day of the assessment period, minus receivables retained on the bank's 
balance sheet as of that day.
    (4) Reports of receivables attributable. Independent credit card 
banks will report receivables attributable data to the OCC semiannually 
at a time specified by the OCC.
    (d) Surcharge based on the condition of the bank. Subject to any 
limit that the OCC prescribes in the Notice of the Comptroller of the 
Currency Fees, the OCC shall apply a surcharge to the semiannual 
assessment computed in accordance with paragraphs (a) through (c) of 
this section. This surcharge will be determined by multiplying the 
semiannual assessment computed in accordance with paragraphs (a) 
through (c) of this section by--
    (1) 1.5, in the case of any bank that receives a composite rating 
of 3 under the Uniform Financial Institutions Rating System (UFIRS) and 
any Federal branch or agency that receives a composite rating of 3 
under the ROCA rating system (which rates risk management, operational 
controls, compliance, and asset quality) at its most recent 
examination; and
    (2) 2.0, in the case of any bank that receives a composite UFIRS 
rating of 4 or 5 and any Federal branch or agency that receives a 
composite rating of 4 or 5 under the ROCA rating system at its most 
recent examination.

    3. In Sec. 8.6:
    A. A new paragraph (c)(1)(iii) is added; and
    B. Paragraphs (c)(3)(ii) and (c)(3)(iii) are redesignated as 
paragraphs (c)(3)(iii) and (c)(3)(iv), and a new paragraph (c)(3)(ii) 
is added to read as follows:


Sec. 8.6  Fees for special examinations and investigations.

* * * * *
    (c) * * *
    (1) * * *
    (iii) Surcharge based on the condition of the bank. Subject to any 
limit that the OCC prescribes in the Notice of the Comptroller of the 
Currency Fees, the OCC shall adjust the semiannual assessment computed 
in accordance with paragraphs (c)(1)(i) and (ii) of this section by 
multiplying that figure by 1.5 for each independent trust bank that 
receives a composite rating of 3 under the Uniform Financial 
Institutions Rating System (UFIRS) at its most recent examination and 
by 2.0 for each bank that receives a composite UFIRS rating of 4 or 5 
at such examination.
* * * * *
    (3) * * *
    (ii) Full-service national bank is a national bank that generates 
more than 50% of its interest and non-interest income from activities 
other than credit card operations or trust activities and is authorized 
according to its charter to engage in all types of permissible banking 
activities.
* * * * *

    Dated: May 24, 2001.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 01-13723 filed 5-31-01; 8:45am]
BILLING CODE 4810-33-P