[Federal Register Volume 70, Number 22 (Thursday, February 3, 2005)]
[Proposed Rules]
[Pages 5571-5577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2079]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 70, No. 22 / Thursday, February 3, 2005 / 
Proposed Rules

[[Page 5571]]



DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Chap. I

[Docket No. 05-01]

FEDERAL RESERVE SYSTEM

12 CFR Chap. II

[Docket No. OP-1220]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Chap. III

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Chap. V

[No. 2005-02]


Request for Burden Reduction Recommendations; Money Laundering, 
Safety and Soundness, and Securities Rules; Economic Growth and 
Regulatory Paperwork Reduction Act of 1996 Review

AGENCIES: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC); and Office of Thrift Supervision 
(OTS), Treasury.

ACTION: Notice of regulatory review; request for comments.

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SUMMARY: The OCC, Board, FDIC, and OTS (``we'' or ``the Agencies'') are 
reviewing our regulations to identify outdated, unnecessary, or unduly 
burdensome regulatory requirements pursuant to the Economic Growth and 
Regulatory Paperwork Reduction Act of 1996 (EGRPRA). Today, we request 
your comments and suggestions on ways to reduce burden in rules we have 
categorized as Money Laundering, Safety and Soundness, and Securities. 
All comments are welcome. We specifically invite comment on the 
following issues: Whether statutory changes are needed; whether the 
regulations contain requirements that are not needed to serve the 
purposes of the statutes they implement; the extent to which the 
regulations may adversely affect competition; whether the cost of 
compliance associated with reporting, recordkeeping, and disclosure 
requirements, particularly on small institutions, is justified; whether 
any regulatory requirements are inconsistent or redundant; and whether 
any regulations are unclear.
    We will analyze the comments received and propose burden-reducing 
changes to our regulations where appropriate. Some of your suggestions 
for burden reduction might require legislative changes. Where 
legislative changes would be required, we will consider your 
suggestions in recommending appropriate changes to Congress.

DATES: Written comments must be received no later than May 4, 2005.

ADDRESSES: You may submit comments by any of the following methods:
    EGRPRA Web site: http://www.EGRPRA.gov.
    <bullet> Comments submitted at the Agencies' joint Web site will 
automatically be distributed to all the Agencies. Comments received at 
the EGRPRA Web site and by other means will be posted on the Web site 
to the extent possible.
    Individual agency addresses: You are also welcome to submit 
comments to the Agencies at the following contact points (due to delays 
in paper mail delivery in the Washington area, commenters may prefer to 
submit their comments by alternative means):
    OCC: You may submit comments, identified by [docket 05-01], by any 
of the following methods:
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#b8cadddfcb96dbd7d5d5ddd6cccbf8d7dbdb96cccaddd9cb96dfd7ce"><span class="__cf_email__" data-cfemail="a0d2c5c7d38ec3cfcdcdc5ced4d3e0cfc3c38ed4d2c5c1d38ec7cfd6">[email protected]</span></a>. Include [docket 05-
01] in the subject line of the message.
    <bullet> Fax: (202) 874-4448.
    <bullet> Mail: Public Information Room, Office of the Comptroller 
of the Currency, 250 E Street, SW., Mailstop 1-5, Washington, DC 20219; 
Attention: Docket <greek-i><greek-i>.
    Public Inspection: You may inspect and photocopy comments at the 
Public Information Room. You can make an appointment to inspect the 
comments by calling (202) 874-5043.
    Board: You may submit comments, identified by Docket Number OP-
1220, by any of the following methods:
    <bullet> Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#b9cbdcdeca97dad6d4d4dcd7cdcaf9dfdcdddccbd8d5cbdccadccbcfdc97ded6cf"><span class="__cf_email__" data-cfemail="addfc8cade83cec2c0c0c8c3d9deedcbc8c9c8dfccc1dfc8dec8dfdbc883cac2db">[email protected]</span></a>. Include docket 
number in the subject line of the message.
    <bullet> Fax: (202) 452-3819 or (202) 452-3102.
    <bullet> Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.
    All public comments are available from the Board's Web site at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm, as 
submitted, except as necessary for technical reasons. Accordingly, your 
comments will not be edited to remove any identifying or contact 
information. Public comments may also be viewed electronically or in 
paper in Room MP-500 of the Board's Martin Building (20th and C 
Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.
    FDIC: You may submit comments, identified as EGRPRA burden 
reduction comments, by any of the following methods:
    <bullet> http://www.fdic.gov/regulations/laws/federal/propose.html.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#71121e1c1c141f050231171518125f161e07"><span class="__cf_email__" data-cfemail="23404c4e4e464d57506345474a400d444c55">[email protected]</span></a>. Include ``EGRPRA burden 
reduction comment'' in the subject line of the message.
    <bullet> Mail: Robert E. Feldman, Executive Secretary, Federal 
Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 
20429.
    <bullet> Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7 a.m. and 5 p.m.
    Public Inspection: You may inspect comments at the FDIC Public 
Information Center, Room 100, 801 17th Street, NW., between 9 a.m. and 
4:30 p.m. on business days.

[[Page 5572]]

    OTS: You may submit comments, identified by ``No. 2005-02.'' by any 
of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-Mail: <a href="/cdn-cgi/l/email-protection#aad8cfcdd984c9c5c7c7cfc4ded9eac5ded984ded8cfcbd984cdc5dc"><span class="__cf_email__" data-cfemail="e092858793ce838f8d8d858e9493a08f9493ce9492858193ce878f96">[email protected]</span></a>. Include ``No. 2005-
02'' in the subject line of the message, and provide your name and 
telephone number.
    <bullet> Fax: (202) 906-6518.
    <bullet> Mail: Regulation Comments, Chief Counsel's Office, Office 
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
    <bullet> Hand Delivery: Comments may be hand delivered 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.
    Public Inspection: OTS will post comments and the related index on 
the OTS Internet site at http://www.ots.treas.gov/pagehtml.cfm?catNumber=67&an=1. 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 
<a href="/cdn-cgi/l/email-protection#c2fea3e2aab0a7a4ff" http: public.info">public.info</a>@ots.treas.gov">public.info@ots.treas.gov</a>, or send a fax to (202) 906-7755. (Please 
identify the material you would like to inspect to assist us in serving 
you.) OTS schedules appointments on business days between 10 a.m. and 4 
p.m. In most cases, appointments will be available the next business 
day following the date OTS receives a request.

FOR FURTHER INFORMATION CONTACT:
OCC:
    <bullet> Stuart Feldstein, Assistant Director, Legislative and 
Regulatory Activities Division, (202) 874-5090.
    <bullet> Heidi Thomas, Special Counsel, Legislative and Regulatory 
Activities Division, (202) 874-5090.
    <bullet> Lee Walzer, Counsel, Legislative and Regulatory Activities 
Division, (202) 874-5090.

Board:
    <bullet> Patricia A. Robinson, Managing Senior Counsel, Legal 
Division, (202) 452-3005.
    <bullet> Michael J. O'Rourke, Counsel, Legal Division, (202) 452-
3288.
    <bullet> John C. Wood, Counsel, Division of Consumer and Community 
Affairs, (202) 452-2412.
    <bullet> Kevin H. Wilson, Supervisory Financial Analyst, Division 
of Banking Supervision and Regulation, (202) 452-2362.
    <bullet> For users of Telecommunications Device for the Deaf (TDD) 
only, contact (202) 263-4869.

FDIC:
    <bullet> Claude A. Rollin, Special Assistant to the Vice Chairman, 
(202) 898-8741.
    <bullet> Steven D. Fritts, Associate Director, Division of 
Supervision and Consumer Protection, (202) 898-3723.
    <bullet> Ruth R. Amberg, Senior Counsel, Legal Division, (202) 898-
3736.
    <bullet> Thomas Nixon, Counsel, Legal Division, (202) 898-8766.

OTS:
    <bullet> Glenn Gimble, Senior Project Manager, Thrift Policy, 
Supervision Policy, (202) 906-7158.
    <bullet> Josephine Battle, Program Analyst, Thrift Policy, 
Supervision Policy, (202) 906-6870.
    <bullet> Karen Osterloh, Special Counsel, Regulations and 
Legislation Division, Chief Counsel's Office, (202) 906-6639.

SUPPLEMENTARY INFORMATION:

I. Overview of the EGRPRA Review and the Steps Taken so Far

    The Agencies \1\ are asking for your comments and suggestions on 
ways in which we can reduce regulatory burdens consistent with our 
statutory obligations. Today, we request your input to help us identify 
which regulatory requirements in three categories--Money Laundering, 
Safety and Soundness, and Securities--are outdated, unnecessary, or 
unduly burdensome. We list the rules in these categories in a chart at 
the end of this notice. Please send us your recommendations at our Web 
site, http://www.EGRPRA.gov, or to one of the listed addresses.
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    \1\ The National Credit Union Administration has participated in 
planning the EGRPRA review but has issued, and will issue, requests 
for comment separately.
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    Today's request for comment is the fourth notice in our multi-year 
review of regulations for burden reduction required by section 2222 of 
EGRPRA.\2\ We described the EGRPRA review's requirements in our first 
EGRPRA notice. In summary, EGRPRA requires us to:
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    \2\ Public Law 104-208, Sept. 30, 1996, 12 U.S.C. 3311. We 
published our first notice in the Federal Register on June 16, 2003, 
at 68 FR 35589; our second notice on January 21, 2004, at 69 FR 
2852; and our third notice on July 20, 2004, at 69 FR 43347. You may 
view the notices at our Web site, http://www.EGRPRA.gov.
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    <bullet> Categorize our regulations by type.
    <bullet> Publish the regulations by category to request comments on 
which regulations contain requirements that are: outdated, unnecessary, 
or unduly burdensome.
    <bullet> Publish a summary of those comments.
    <bullet> Eliminate unnecessary regulations to the extent 
appropriate.
    <bullet> Report to Congress: summarizing the significant issues 
raised and their relative merits, and analyzing whether legislative 
change is required to reduce burden.
    The first publication cycle must be complete by September 2006.
    We have identified 13 categories of rules to implement our EGRPRA 
review. The categories are: Applications and Reporting; Banking 
Operations; Capital; Community Reinvestment Act; Consumer Protection: 
Lending Related Rules; Consumer Protection: Account/Deposit 
Relationships and Miscellaneous Consumer Rules; Directors, Officers and 
Employees; International Operations; Money Laundering; Powers and 
Activities; Rules of Procedure; Safety and Soundness; and Securities. 
You may see the categories and the rules placed within them at our Web 
site, http://www.EGRPRA.gov.
    We previously requested public comment about possible burden 
reduction in five categories of rules. Our June 16, 2003, notice 
requested comment on three categories: Applications and Reporting, 
Powers and Activities, and International Operations. Our January 21, 
2004, notice requested comment on Consumer Protection: Lending Related 
Rules. Our July 20, 2004, notice requested comment on Consumer 
Protection: Account/Deposit Relationships and Miscellaneous Consumer 
Rules. Today, we request comment on rules related to Money Laundering, 
Safety and Soundness, and Securities.
    We plan to continue to publish one or more categories of rules 
approximately every six months between 2003 and 2006 and provide a 90-
day comment period for each publication. As noted earlier, we must 
publish all our covered categories of rules for comment and review them 
by the end of September 2006.
    In addition to soliciting written comments, we held banker outreach 
meetings in Orlando, St. Louis, Denver, San Francisco, New York City, 
Nashville, Seattle, and Chicago to hear directly from the industry 
about ways the Agencies could reduce regulatory burden. More than 400 
representatives from the industry have attended the outreach meetings. 
The Agencies have also held three outreach meetings with over 100 
participants for representatives of consumer and community groups to 
obtain their input on regulatory burden reduction. The consumer 
meetings were held in Arlington, Virginia; San Francisco; and Chicago. 
These meetings have helped focus our regulatory burden reduction 
efforts. We anticipate holding

[[Page 5573]]

additional outreach events this year. You may learn more about the 
meetings and related recommendations at our EGRPRA Web site, http://www.EGRPRA.gov.
    We received 19 comments in response to the first notice, about 560 
to the second notice, and over 100 to the third notice. The Agencies 
appreciate the response to our notices and the outreach meetings. The 
written comments and remarks at the meetings came from individuals, 
banks, savings associations, holding companies, industry trade groups, 
and consumer and community groups. You may view the comments at our 
EGRPRA Web site, http://www.EGRPRA. We are actively reviewing the 
feedback received about specific ways to reduce regulatory burden, as 
well as conducting our own analyses.
    In addition, Congress considered various legislative proposals to 
reduce burden on the financial services industry in 2004. 
Representatives of the Agencies and industry leaders testified before 
congressional committees about these legislative reform proposals and 
other ideas for reducing burden on the financial services industry.\3\ 
We will continue to post information about legislative and regulatory 
reform efforts on our Web site.
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    \3\ On May 12, 2004, FDIC Vice Chairman John M. Reich testified 
about burden reduction before the Subcommittee on Financial 
Institutions and Consumer Credit of the House Committee on Financial 
Services. On June 22, agency and industry leaders testified about 
regulatory reform before the Senate Committee on Banking, Housing 
and Urban Affairs. Agency leaders included: Federal Reserve Board 
Governor Donald Kohn, FDIC Vice Chairman John M. Reich, NCUA 
Chairman JoAnn Johnson, OCC First Senior Deputy Comptroller and 
Chief Counsel Julie L. Williams, and OTS Chief Counsel John E. 
Bowman. On August 27, Senator Mike Crapo, who is leading a financial 
services regulatory reform effort for the Senate Banking Committee, 
released a matrix detailing more than 130 burden reduction proposals 
that were made in the June 2004 hearing.
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II. Request for Comment on Money Laundering, Safety and Soundness, and 
Securities Rules

    Today, we are asking the public to identify ways in which the rules 
related to Money Laundering, Safety and Soundness, and Securities may 
be outdated, unnecessary, or unduly burdensome. As shown on the chart 
at the end of this notice, there are 28 regulations in these 
categories. The Agencies note that other non-banking agencies, such as 
the Department of Treasury under the Bank Secrecy Act, have issued 
rules within these three categories that apply to our regulated 
institutions. Some of the rules of these other agencies are beyond our 
jurisdiction. However, to the extent that we receive comments raising 
significant issues about these related rules, we will identify the 
issues in our Report to Congress and make those comments available to 
the appropriate agencies.
    We encourage comments that address not only individual rules or 
requirements but also pertain to certain product lines. For example, in 
the case of an institution's securities activities, are any of the 
reporting, recordkeeping or other requirements of one regulation 
inconsistent with or duplicative of the requirements under another 
regulation? A product line approach is consistent with EGRPRA's focus 
on how rules interact, and may be especially helpful in exposing 
redundant or potentially inconsistent regulatory requirements. We 
recognize that commenters using a product line approach may want to 
make recommendations about rules that are not in our current request 
for comment. They should do so since we designed the EGRPRA categories 
to stimulate creative approaches rather than limiting them.
    Specific issues to consider. While all comments are welcome, we 
specifically invite comment on the following issues:
    A. Need for Statutory Change. (1) Do any statutory requirements 
underlying the rules impose unnecessary, redundant, conflicting or 
unduly burdensome requirements? (2) Are there less burdensome 
alternatives?
    B. Need and Purpose of the Regulations. (1) Are the regulations 
consistent with the purposes of the statutes that they implement? (2) 
Have circumstances changed so that a rule is no longer necessary? (3) 
Do changes in the financial products and services offered to consumers 
suggest a need to revise certain regulations (or statutes)? (4) Do any 
of the regulations impose compliance burdens not required by the 
statutes they implement?
    C. General Approach/Flexibility. (1) Would a different general 
approach to regulating achieve statutory goals with less burden? (2) Do 
any of these rules impose unnecessarily inflexible requirements?
    D. Effect of the Regulations on Competition. Do any of the 
regulations or statutes create competitive disadvantages for insured 
depository institutions compared to the rest of the financial services 
industry or competitive disadvantages for one type of insured 
depository institution over another?
    E. Reporting, Recordkeeping, and Disclosure Requirements. (1) Which 
reporting, recordkeeping, or disclosure requirements impose the most 
compliance burdens? (2) Are any of the reporting or recordkeeping 
requirements unnecessary to demonstrate compliance with the law?
    F. Consistency and Redundancy. (1) Are any of the requirements 
under one regulation inconsistent with or duplicative of requirements 
under another regulation? (2) If so, are the inconsistencies not 
warranted by the purposes of the regulations?
    G. Clarity. Are any of the regulations drafted unclearly?
    H. Burden on Small Insured Institutions. We have particular 
interest in minimizing burden on small insured institutions (those with 
assets of $150 million or less). Are there appropriate ways to amend 
these rules to minimize adverse economic impact on small insured 
institutions?
    The Agencies appreciate the efforts of all interested parties to 
help us eliminate outdated, unnecessary, or unduly burdensome 
regulatory requirements.
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P; 6720-01-P

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    Dated: January 13, 2005.
Julie L. Williams,
Acting Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve System 
on January 26, 2005.
Jennifer J. Johnson,
Secretary of the Board.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, this 18th day of January, 2005.
Robert E. Feldman,
Executive Secretary.
    Dated: January 25, 2005.
James E. Gilleran,
Director, Office of Thrift Supervision.
[FR Doc. 05-2079 Filed 2-2-05; 8:45 am]
BILLING CODE 4810-33-C; 6210-01-C; 6714-01-C; 6720-01-C


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