31186 Federal Register / Vol. 66, No. 112 / Monday, June 11, 2001 / Proposed Rules

Submitted by: Associated Milk

Producers, Inc. et.al., First District

Association, and Lakeshore Federated

Dairy Cooperative

Proposal No. 1

1. Amend § 1030.12 by adding a new

paragraph (b)(5) to read as follows:

§ 1030.12 Producer

* * * * *

(b) * * *

Notice of Hearing—Upper Midwest

Marketing Area—DA–01–03

(5) A dairy farmer whose milk is

pooled on a state order with a

marketwide pool.

Submitted by: Land O’Lakes, Inc.

Proposal No. 2

Proposes that California milk

previously qualified for pooling on the

Upper Midwest Order be

‘‘grandfathered’’ or exempt from any

change in the marketing order that

would provide for its exclusion.

Proposal No. 3

Proposes that quota milk from

California be excluded from being

pooled on the Upper Midwest Order.

Submitted by: Dairy Farmers of

America

Proposal No. 4

1. Amend § 1030.13 by designating

paragraph (d)(3) as (d)(4); adding a new

paragraph (d)(3); and adding a new

paragraph (e) to read as follows:

§ 1030.13 Producer Milk

* * * * *

(d) * * *

(3) The quantity of milk diverted to

nonpool plants by a pool plant operator

as described in § 1030.7(a) or (b) may

not exceed 90 percent of each reporting

unit of the handler’s receipts made

pursuant to § 1030.30(a). This

percentage is subject to adjustments that

may be made pursuant to § 1030.7(g).

(e) Milk from producers physically

located outside of the states of Illinois,

Iowa, Minnesota, North Dakota, South

Dakota, Wisconsin and the Upper

Peninsula portion of Michigan shall be

grouped by individual state units and

each state unit shall be:

(1) Reported on separate report(s)

pursuant to § 1030.30; and

(2) At least 10 percent of each

reporting unit of the handler shall be

delivered to pool plants as described in

§ 1030.7(a) or (b), and such deliveries

shall not be used by the handler in

meeting the minimum shipping

percentages required pursuant to

§ 1030.7(c) or (f) or § 1030.13(d); and

(3) The percentages of § 1030.13(e)(2)

are subject to any adjustments that may

be made pursuant to § 1030.7(g).

Proposal No. 5

Proposes that the rate for advance

payments be set at a percentage of the

prior month’s lowest class price,

expected to be between 103 and 108

percent; or the rate for advance payment

be set between 93 and 96 percent of the

Class I price mover for the month.

Proposed by Dairy Programs,

Agricultural Marketing Service:

Proposal No. 6

Make such changes as may be

necessary to make the entire marketing

agreement and the order conform with

any amendments thereto that may result

from this hearing.

Copies of this notice of hearing and

the order may be procured from the

Market Administrator of the Upper

Midwest Milk Marketing Area, or from

the Hearing Clerk, Room 1083, South

Building, United States Department of

Agriculture, Washington, DC 20250, or

may be inspected there.

Copies of the transcript of testimony

taken at the hearing will not be available

for distribution through the Hearing

Clerk’s Office. If you wish to purchase

a copy, arrangements may be made with

the reporter at the hearing.

From the time that a hearing notice is

issued and until the issuance of a final

decision in a proceeding, Department

employees involved in the decisionmaking process are prohibited from

discussing the merits of the hearing

issues on an ex parte basis with any

person having an interest in the

proceeding. For this particular

proceeding, the prohibition applies to

employees in the following

organizational units:

Office of the Secretary of Agriculture

Office of the Administrator, Agricultural

Marketing Service

Office of the General Counsel

Dairy Programs, Agricultural Marketing

Service (Washington office) and the

Office of the Market Administrator for

the Upper Midwest Milk Marketing

Area.

Procedural matters are not subject to

the above prohibition and may be

discussed at any time.

Dated: June 5, 2001.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 01–14539 Filed 6–8–01; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Chapter V

[No. 2001–41]

RIN 1550–AB50

Request for Comment on Study of

Banking Regulations Regarding the

Online Delivery of Financial Services

AGENCY: Office of Thrift Supervision,

Treasury.

ACTION: Study of regulations; request for

comment.

SUMMARY: Pursuant to section 729 of the

Gramm-Leach-Bliley Act (GLBA), OTS

and the other federal banking agencies

are studying their regulations on the

delivery of financial services. The

purpose of the study is to report

findings and conclusions to Congress,

together with recommendations for

appropriate legislative or regulatory

action to adapt existing requirements to

online banking and lending. To assist in

this review, OTS requests comment on

a variety of issues relating to the

electronic delivery of financial products

and services by savings associations

(federally-chartered or state-chartered).

DATES: Comments must be received by

August 10, 2001.

ADDRESSES: Mail: Send comments to

Regulation Comments, Chief Counsel’s

Office, Office of Thrift Supervision,

1700 G Street, NW., Washington, DC

20552, Attention Docket No. 2001–41.

Delivery: Hand deliver comments to

the Guard’s Desk, East Lobby Entrance,

1700 G Street, NW., from 9 a.m. to 4

p.m. on business days, Attention

Regulation Comments, Chief Counsel’s

Office, Docket No. 2001–41.

Facsimiles: Send facsimile

transmissions to FAX Number (202)

906–6518, Attention Docket No. 2001–

41.

E-Mail: Send e-mails to

regs.comments@ots.treas.gov, Attention

Docket No. 2001–41, and include your

name and telephone number.

Public Inspection: Comments and the

related index will be posted on the OTS

Internet Site at www.ots.treas.gov. In

addition, you may inspect comments at

the Public Reading Room, 1700 G Street,

NW., by appointment. To make an

appointment for access, call (202) 906–

5922, send an e-mail to

public.info@ots.treas.gov, or send a

facsimile transmission to (202) 906–

7755. (Prior notice identifying the

materials you will be requesting will

assist us in serving you.) Appointments

will be scheduled on business days

Federal Register / Vol. 66, No. 112 / Monday, June 11, 2001 / Proposed Rules 31187

1 12 U.S.C. 4801 note.

2The OCC issued an advance notice of proposed

rulemaking and requested comment on a wide

range of electronic banking issues to determine

whether the OCC’s regulations should be changed

to facilitate national banks’ use of new technologies,

citing section 729. See 65 FR 4895, 4896 n.7

(February 2, 2000).

3See Lending and Investment; Proposed Rule, 61

FR 1162, 1172 (January 17, 1996), and Deposits and

Electronic Banking; Proposed Rule and Advance

Notice of Proposed Rulemaking, 62 FR 15,626,

15,629 (April 2, 1997).

4See Electronic Operations; Final Rule, 63 FR

65673 (November 30, 1998).

5See, e.g., Memorandum from Richard M.

Riccobono, Deputy Director, for Chief Executive

Officers (November 3, 1998) (Policy Statement on

Privacy and Accuracy of Personal Customer

Information); Memorandum from Richard M.

Riccobono, Deputy Director, for Chief Executive

Officers (July 23, 1998) (Interagency Guidance on

Electronic Financial Services and Consumer

Compliance); Memorandum from John Downey,

Executive Director, Supervision, for Chief Executive

Officers (June 23, 1997) (Statement on Retail OnLine Personal Computer Banking); Thrift Activities

Regulatory Handbook, Section 341, Information

Technology (October 1997) (Regulatory Bulletin 32–

6, October 15, 1997); Federal Financial Institutions

Examinations Council (FFIEC) Information Systems

Examination Handbook (1996); OTS Order No. 95–

88 (May 8, 1995) (application approval of Internet

bank); OTS Op. Chief Counsel (October 1, 1998)

(authority of federal savings associations to provide

payroll processing services); OTS Op. Chief Counsel

Continued

between 10:00 a.m. and 4:00 p.m. In

most cases, appointments will be

available the next business day

following the date a request is received.

FOR FURTHER INFORMATION CONTACT:

Mary Jo Johnson, Project Manager,

Supervision Policy, (202) 906–5739;

Richard Bennett, Counsel (Banking and

Finance), (202) 906–7409; or Paul J.

Robin, Assistant Chief Counsel, (202)

906–6648; Office of Thrift Supervision,

1700 G Street, NW., Washington, DC

20552.

SUPPLEMENTARY INFORMATION:

I. Background

Section 729 of GLBA,1 titled ‘‘Study

and Report on Adapting Existing

Legislative Requirements to Online

Banking and Lending,’’ requires OTS,

the Office of the Comptroller of the

Currency (OCC), the Federal Deposit

Insurance Corporation, and the Board of

Governors of the Federal Reserve

System, to conduct a study of banking

regulations regarding the online

delivery of financial services.2 Section

729 further requires these Federal

banking agencies to report their

recommendations on adapting existing

legislative or regulatory requirements to

online banking and lending.

In accordance with section 729, OTS

is reviewing its regulations on the

delivery of financial services to assess

their suitability for transactions

conducted through electronic

technologies such as the Internet. The

purpose of this Request for Comment is

to invite public comment on a variety of

issues regarding savings association

involvement in electronic banking. OTS

will use these comments to help it

determine whether it should revise any

of its regulations to facilitate online

banking and lending. OTS also requests

comment on how particular statutory

provisions affect the online delivery of

financial products or services and

whether OTS should propose any

legislative changes.

II. OTS’s Regulatory Approach to New

Technologies

OTS recognizes that technological

developments are dramatically altering

the ways in which savings associations

conduct their business.

Telecommunication advances offer

savings associations faster and more

efficient communication and data

transmission. Improvements in

computer hardware and software are

opening up new applications. The

Internet has greatly expanded the

market available to financial

institutions. These rapid developments

in technology are causing savings

associations to reevaluate existing

delivery channels and business

practices, develop new products and

services, expand market reach, and

serve existing customers more

efficiently.

The explosive growth of the Internet

also is prompting savings associations to

reconsider business strategies and adopt

alternative distribution and marketing

systems. The rapid establishment of

transactional World Wide Web (web)

sites by savings associations and the

continued operation of some Internetonly savings associations without a

conventional brick-and-mortar physical

presence present new opportunities and

challenges for savings associations.

Recent estimates suggest that more than

2,100 financial institutions in the

United States have established

transactional web sites. To date,

approximately 350 savings associations

have filed notices with OTS indicating

their intent to establish a transactional

web site.

Through the end of the 1990s, OTS

periodically revised its regulations to

better enable savings associations to use

new technologies for electronic banking

and lending. In 1996, OTS revised its

lending and investment regulations to

eliminate obsolete loan documentation

requirements. In 1997, OTS replaced

specific requirements to use written

agreements and receipts for deposit

accounts with a more general

recordkeeping requirement. The

purpose of these changes was to provide

sufficient flexibility for savings

associations to participate in telephone

and electronic banking and take better

advantage of technological and

marketplace advances.3

In 1998, OTS streamlined and

updated its regulations relating to

electronic operations to make it easier

for Federal savings associations to

develop new ways of delivering

products and services through the

prudent and innovative use of emerging

technology.4 The revised rule permits

Federal savings associations to use, or

participate with others to use, electronic

means or facilities to perform any

function, or provide any product or

service, as part of an authorized activity.

The rule also requires each savings

association (federally-chartered or statechartered) to notify OTS thirty days

before it establishes a transactional web

site. It provides that savings associations

that present supervisory or compliance

concerns may be subject to additional

procedural requirements.

In crafting the Electronic Operations

rule, OTS was guided by two broad

principles:

• The public and insured depository

institutions are best served if statutory

and regulatory restrictions are kept to a

minimum. The premature imposition of

restrictive operational standards could

impede the development of improved

financial services.

• Federal savings associations should

be permitted to compete effectively with

other regulated financial institutions

and unregulated firms offering financial

and related services.

In promulgating the rule, OTS

emphasized the importance of enabling

regulations in this area. At the same

time, OTS designed its regulations to

help ensure that it would have sufficient

information to understand developing

technologies, to provide appropriate

guidance on these technologies, and to

supervise electronic operations

effectively. OTS designed the final rule

to provide both the industry and the

agency with the appropriate amount of

flexibility to adapt to changing

conditions.

The preamble to the final rule noted

that the agency had issued, and would

continue to issue, guidance as electronic

operations evolve. This guidance has

taken the form of letters to chief

executive officers of savings

associations, interagency examiner

guidelines, revisions to the Thrift

Activities Handbook, conditions on the

approval of applications, and responses

to requests for legal interpretations.5

31188 Federal Register / Vol. 66, No. 112 / Monday, June 11, 2001 / Proposed Rules

(July 1, 1998) (preemption of state ATM

restrictions); OTS Op. Chief Counsel (September 19,

1997) (establishment of automated loan machines).

6See, e.g., Memorandum from Richard M.

Riccobono, Deputy Director, for Chief Executive

Officers (June 10, 1999) (Transactional Web Sites);

OTS Op. Chief Counsel (December 7, 1999) (San

Francisco ATM fee ordinance); OTS Op. Chief

Counsel (November 22, 1999) (preemption of local

ATM fee restrictions); OTS Op. Chief Counsel

(January 15, 1999) (New York State ATM Safety

Act); OTS Mem. Chief Counsel (December 22, 1998)

(Massachusetts Electronic Branch Restrictions).

7See 66 FR 8616 (February 1, 2001) (to be

codified at 12 CFR part 570, Appendix B).

Since the publication of the final rule,

OTS has continued to provide

additional guidance in this area and

post it on its web site at

www.ots.treas.gov.6

III. Issues for Comment

OTS recognizes that using electronic

technology to deliver financial products

and services poses distinct challenges to

financial institutions and their

customers. Much of the legislative and

regulatory framework that governs

banking was developed based on social,

cultural, and technological practices

that existed before the advent of

widespread computer-based

communications. The prospect of

conducting banking transactions over

the Internet forces the federal banking

agencies to reconsider the existing

legislative and regulatory framework

that governs banking businesses.

OTS invites comment on how

particular statutes, regulations, or

supervisory policies specifically affect

financial institutions and their

customers’ uses of new technologies.

The following discussion identifies

topics that OTS believes are appropriate

for the design of the study and report

required under section 729. OTS invites

commenters to respond to the questions

presented and to offer comments or

suggestions on any other issues related

to financial products or services

delivered through electronic

technologies that we do not specifically

mention here.

A. How May OTS Facilitate the Use of

Technology in Financial Operations

Consistent With Safety and Soundness?

1. Mitigating Burdens

Savings associations have evolved in

their use of technology, not only to

provide financial services more

efficiently, but also to offer new

financial services and reach nationwide

markets. Are there any specific OTS

regulations that unreasonably interfere

with the use of online technologies? Are

there any supervisory policies that

impose unreasonable burdens on a

financial institution’s design or

adaptation of online technologies?

2. Addressing Risks

Electronic banking activities expose

savings associations to new

combinations of risks from different

sources. OTS’s Electronic Operations

rule addresses some of those risks by

requiring savings associations to inform

OTS before establishing transactional

web sites and follow any additional

procedures the OTS regional office may

impose in writing. Further, through the

issuance of supervisory guidelines such

as the interagency Standards for

Safeguarding Customer Information,7

OTS is working to identify and educate

savings associations about the risks

electronic banking presents and to

ensure that its policies appropriately

address these risks.

Do OTS regulations adequately

address the risks presented by current or

anticipated electronic banking

activities? Do any OTS regulations

impose unnecessary burdens? Are there

any regulations or other supervisory

policies regarding risk management that

OTS should clarify or amend to address

any particular risks associated with

methods of online banking?

3. Consumer Acceptance and Protection

Electronic banking provides

consumers with convenient access to a

wide variety of financial services.

Studies indicate that a significant

percentage of households in the United

States will do their banking online as a

growing number of consumers conduct

their banking and other financial

transactions through automated teller

machines and over the Internet. Are

there specific areas in which regulatory

changes are needed to enhance

consumer acceptance of, confidence in,

access to, or protections in using

electronic banking?

B. How May OTS Enhance the

Electronic Operational Flexibility of

Savings Associations, Consistent With

Safety and Soundness?

1. Internet Link Arrangements

The rapid growth of electronic

commerce has resulted in many

marketing arrangements that provide

customers with access to providers of

both financial and non-financial retail

products or services through a hypertext

link on the savings association’s web

site. The link transfers the customer to

another entity’s web site. Under some

marketing arrangements, the savings

association’s name remains apparent on

the linked site even though the products

or services are sold by a non-thrift third

party. In other situations, once this

transfer occurs, the non-thrift’s name is

the dominant brand. The non-thrift web

site may include a link back to the

savings association’s web site to provide

its customers with access to savings

association services while minimizing

the savings association’s brand on its

site.

Does the current situation create

customer confusion as to which

products savings associations actually

offer (and which are FDIC-insured) that

impairs the development of electronic

banking? Should OTS create a

regulation or other supervisory guidance

setting forth standards for savings

association identification in connection

with the use of hypertext links? Are

there technology solutions that can be

used to address these issues?

2. Transactions

Savings associations may receive

deposits, pay withdrawals, and lend in

a variety of ways that are not subject to

geographical restrictions (or the need to

file branch applications). For example,

savings associations may arrange to

have their customers use ATMs

established by third parties in order to

conduct transactions with the savings

association. OTS regulations permit

savings associations to transact business

with their customers through electronic

and other means not involving face-toface contact.

Are OTS regulations flexible enough

to permit savings associations operating

on the Internet to serve the transaction

related needs of their retail, as well as

their commercial, customers? For

example, do any OTS regulations

impede the development or use of

technologies that would enable

customers efficiently and expeditiously

to deposit cash or checks in, or borrow

money from, savings associations

operating on the Internet?

3. Location Considerations

Internet banking raises legal issues

with respect to how OTS should

construe references in existing laws and

regulations, including those related to

filing requirements and management

interlocks, to the ‘‘location’’ of a savings

association. Should OTS address how

‘‘location’’ applies in the context of

activities conducted via the Internet?

Specifically, is the determination of

‘‘location’’ for purposes of any statute or

regulation an impediment to savings

associations conducting all or part of

their operations on the Internet? If so,

should we further clarify our regulations

or suggest statutory changes on this

issue?

Federal Register / Vol. 66, No. 112 / Monday, June 11, 2001 / Proposed Rules 31189

8 12 CFR part 564.

9 15 U.S.C. 7001 et seq.

4. Appraisals

Written appraisals must support

certain loans.8 Does the requirement for

written appraisals impair or impede

online lending operations? If so, what

modifications to the existing regulation

would facilitate the use of appraisals in

electronic form? What types of controls

would be appropriate to assure record

authenticity and integrity in connection

with the filing of electronic appraisals

(e.g., authentication of an electronic

appraisal, certification of the appraiser)?

5. Electronic Signatures

The Electronic Signatures in Global

and National Commerce Act (E-Sign

Act) 9 provides that certain contracts

and signatures may not be denied

validity solely because they are in

electronic form. The E-Sign Act also

provides that certain records may be

maintained in electronic form, subject to

certain requirements. OTS recognizes

that the enactment of the E-Sign Act has

resolved several important legal and

regulatory issues regarding the uses of

electronic media in commercial

transactions. Nevertheless, the E-Sign

Act has left some legal issues

unresolved and, indeed, may have

created new ones, particularly for online

banking.

What issues are savings associations

facing as a result of the E-Sign Act?

Would it facilitate implementation of

the E-Sign Act if OTS were to issue

regulations or other supervisory

guidance? If so, which aspects of the ESign Act should OTS address? Are there

any written forms or notices required by

OTS’s regulations or other supervisory

policies that could be obtained or

transmitted over the Internet in a

manner that would facilitate the online

delivery of financial products or

services? How do particular provisions

of the E-Sign Act, or any other law,

affect financial institutions and their

customers’ ability to use (or ease of

using) new technologies?

6. Differing Legal Requirements

OTS recognizes that a variety of

federal, state, and foreign laws regulate

the use of electronic technologies. Are

there areas where conducting electronic

banking activities could particularly

benefit from a single set of standards

that can be applied uniformly on a

nationwide basis? Are there any

inconsistencies between Federal and

State laws or regulations that impede

the electronic provision or use of

financial products or services? Do

certain provisions of Federal law that

apply to online banking and lending

practices make compliance with

provisions of State law (or laws

enforced by foreign states) more costly?

Dated: June 4, 2001.

By the Office of Thrift Supervision.

Ellen Seidman,

Director.

[FR Doc. 01–14562 Filed 6–8–01; 8:45 am]

BILLING CODE 6720–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 99–SW–34–AD]

RIN 2120–AA64

Airworthiness Directives; Eurocopter

France Model SA–365N1, AS–365N2,

and SA–366G1 Helicopters

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document proposes

revising an existing airworthiness

directive (AD) for Eurocopter France

(ECF) Model SA–365N1, AS–365N2,

and SA–366G1 helicopters. That AD

currently requires inspecting each tail

rotor blade for bonding separation,

measuring the clearance between the tip

of each tail rotor blade and the

circumference of the air duct, and

replacing the blade if necessary. This

action would contain the same

requirements but would allow the pilot

to perform the daily visual check and

would contain a damage allowance for

certain blades. This proposal is

prompted by FAA determination that

the pilot can check for a cracked,

blistered, or wrinkled blade and that

some debonding of the blade is

acceptable. The actions specified by the

proposed AD are intended to allow a

pilot check, to prevent unacceptable

damage to a tail rotor blade, and to

prevent loss of tail rotor control and

subsequent loss of control of the

helicopter.

DATES: Comments must be received by

August 10. 2001.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Office of the

Regional Counsel, Southwest Region,

Attention: Rules Docket No. 99–SW–34–

AD, 2601 Meacham Blvd., Room 663,

Fort Worth, Texas 76137. You may also

send comments electronically to the

Rules Docket at the following address:

9-asw-adcomments@faa.gov. Comments

may be inspected at the Office of the

Regional Counsel between 9 a.m. and 3

p.m., Monday through Friday, except

Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Sharon Miles, Aviation Safety Engineer,

FAA, Rotorcraft Directorate, Regulations

Group, Fort Worth, Texas 76193–0111,

telephone (817) 222–5122, fax (817)

222–5961.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of the

proposed rule by submitting such

written data, views, or arguments as

they may desire. Communications

should identify the Rules Docket

number and be submitted in triplicate to

the address specified above. All

communications received on or before

the closing date for comments will be

considered before taking action on the

proposed rule. The proposals contained

in this document may be changed in

light of the comments received.

Comments are specifically invited on

the overall regulatory, economic,

environmental, and energy aspects of

the proposed rule. All comments

submitted will be available in the Rules

Docket for examination by interested

persons. A report summarizing each

FAA-public contact concerned with the

substance of this document will be filed

in the Rules Docket.

Commenters wishing the FAA to

acknowledge receipt of their mailed

comments submitted in response to this

proposal must submit a self-addressed,

stamped postcard on which the

following statement is made:

‘‘Comments to Docket No. 99–SW–34–

AD.’’ The postcard will be date stamped

and returned to the commenter.

Availability of NPRMs

Any person may obtain a copy of this

NPRM by submitting a request to the

FAA, Office of the Regional Counsel,

Southwest Region, Attention: Rules

Docket No. 99–SW–34–AD, 2601

Meacham Blvd., Room 663, Fort Worth,

Texas 76137.

Discussion

On May 9, 2000, the FAA issued AD

2000–10–08, Amendment No. 39–11732

(65 FR 31256) to require inspecting each

tail rotor blade for bonding separation,

measuring the clearance between the tip

of each tail rotor blade and the

circumference of the air duct, and

replacing a blade if necessary. That

action was prompted by an inflight

incident in which the tail rotor blades

were significantly damaged due to

bonding separation. That condition, if