29890 Federal Register / Vol. 66, No. 106 / Friday, June 1, 2001 / Rules and Regulations

1A ‘‘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 § 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.

3The 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.

4The ROCA rating system rates risk management,

operational controls, compliance, and asset quality.

5See 62 FR 64135 (December 4, 1997); 12 CFR

8.2(a)(7); 12 CFR 8.2(b)(5).

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.

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 assetbased 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

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 ‘‘nonlead bank.’’ The amount of assets on a

bank’s balance sheet is, however, the

most significant component of the

current assessment computation.

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.

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.

Federal Register / Vol. 66, No. 106 / Friday, June 1, 2001 / Rules and Regulations 29891

6See Charters, Corporate Manual at 21–22 (1998)

(describing credit card banks).

7See 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.

8This definition also applies for purposes of the

independent trust bank rule. See supra, note 2. 9 12 CFR 8.8(b).

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 offbalance 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.

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.

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 offbalance 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

29892 Federal Register / Vol. 66, No. 106 / Friday, June 1, 2001 / Rules and Regulations

10 66 FR 17821, 17822 (April 4, 2001).

11See 66 FR 21045 (April 26, 2001) (corrected

version of the chart).

12See 12 CFR 8.6(c) (assessments on independent

trust banks).

13The 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.

overall expenses.10 Where the credit

card bank is not affiliated with a fullservice national bank, however, it

typically represents a choice by a nonbank 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.

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 semiannual 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 nonreward 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

If the bank’s total off-balance

sheet receivables attributable

are

The additional semiannual assessment is: Over But not over

Column A

Million

Column B

Million

Column C

$0 $100 $40,000

100 1000 60,000

1000 5000 80,000

5000 100,000

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

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.

We received three comments on this

proposed increase in the surcharge from

banks that supported charging lowerrated institutions a higher assessment. A

banking industry trade association also

commented, noting that while it

supports higher assessments for lowerrated 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 problembank 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

Federal Register / Vol. 66, No. 106 / Friday, June 1, 2001 / Rules and Regulations 29893

14This definition is consistent with the Small

Business Administration’s definition of ‘‘small

entity.’’ See 13 CFR 121.201.

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.

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 § 8.2:

A. Paragraphs (a)(7) and (b)(5) are

removed; and

B. New paragraphs (c) and (d) are

added to read as follows:

§ 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 assetbased assessment an additional amount

determined by its level of receivables

29894 Federal Register / Vol. 66, No. 106 / Friday, June 1, 2001 / Rules and Regulations

attributable. The dollar amount of the

additional assessment will be published

in the ‘‘Notice of Comptroller of the

Currency Notice of Fees,’’ described at

§ 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 fullservice 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 § 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:

§ 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