67100 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

6. In Supplement I to Part 202,

Section 202.13—Information for

Monitoring purposes, would be

amended as follows:

a. Under 13(a) Information to be

requested., paragraph 6. would be

revised; and

b. Under 13(b) Obtaining of

information., paragraphs 4. and 5.

would be redesignated as paragraphs 6.

and 7. respectively, and new paragraphs

4. and 5. would be added.

The revisions and additions would

read as follows:

* * * * *

Section 202.13 Information for Monitoring

purposes

13(a) Information to be requested.

* * * * *

6. Refinancings. fl A refinancing occurs

when an existing obligation is satisfied and

replaced by a new obligation undertaken by

the same borrower. fi A creditor that

receives an application to [change the terms

and conditions of] flrefinancefi an existing

extension of credit made by that creditor for

the purchase of the applicant’s dwelling may

request the monitoring information again but

is not required to do so if it was obtained in

the earlier transaction.

* * * * *

13(b) Obtaining of information.

* * * * *

fl4. Applications through electronic

media. If an applicant applies through an

electronic medium (for example, via the

Internet or by facsimile) without any face-toface interactive video capability, the creditor

should treat the application as if it were

accepted by mail or telephone.fi

fl5. Applications through interactive

video. If a creditor takes an application

through an interactive application process

with video capabilities, and the creditor can

see the applicant, the creditor should treat

these applications as taken in person and

collect the monitoring information.fi

* * * * *

By order of the Secretary of the Board,

acting pursuant to delegated authority for the

Board of Governors of the Federal Reserve

System, December 21, 1995.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 95–31363 Filed 12–27–95; 8:45 am]

BILLING CODE 6210–01–P

12 CFR Part 211

[Regulation K; Docket No. R–0911]

International Banking Operations

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Proposed rule.

SUMMARY: The Board of Governors of the

Federal Reserve System (Board) is

proposing to amend its Regulation K

regarding interstate banking operations

of foreign banking organizations. The

Riegle-Neal Interstate Banking and

Branching Efficiency Act of 1994

(Interstate Act) removed geographic

restrictions on interstate banking by

foreign banks effective September 29,

1995, and requires certain foreign banks

without U.S. deposit-taking offices to

select a home state for the first time. The

proposed amendments to Regulation K

would require these foreign banks to

select a home state by March 31, 1996,

and would immediately remove

outdated restrictions on certain mergers

by U.S. bank subsidiaries of foreign

banks outside the home state of the

foreign bank. Obsolete and superseded

provisions of Regulation K concerning

home state selection would be deleted.

The Board is also requesting comment

on other aspects of the Interstate Act as

it applies to foreign banks.

DATES: Comments must be received by

February 5, 1996.

ADDRESSES: Comments should refer to

Docket No. R–0911 and may be mailed

to William W. Wiles, Secretary, Board of

Governors of the Federal Reserve

System, 20th Street and Constitution

Avenue, N.W., Washington D.C. 20551.

Comments also may be delivered to

Room B–2222 of the Eccles Building

between 8:45 a.m. and 5:15 p.m.

weekdays, or to the guard station in the

Eccles building courtyard on 20th

Street, N.W. (between Constitution

Avenue and C Street, N.W.) at any time.

Comments may be inspected in Room

MP–500 of the Martin Building between

9:00 a.m. and 5:00 p.m. weekdays,

except as provided in § 261.8 of the

Board’s rules regarding availability of

information, 12 CFR 261.8.

FOR FURTHER INFORMATION CONTACT:

Kathleen M. O’Day, Associate General

Counsel (202/452–3786), Ann E.

Misback, Managing Senior Counsel

(202/452–3788), Douglas M. Ely, Senior

Attorney (202/452–5289), Legal

Division; Michael G. Martinson,

Assistant Director (202/452–3640),

Division of Banking Supervision and

Regulation, Board of Governors of the

Federal Reserve System. For users of

Telecommunication Device for the Deaf

[TDD] only, please contact Dorothea

Thompson (202/452–3544), Board of

Governors of the Federal Reserve

System, 20th and C Streets, N.W.,

Washington, D.C. 20551.

SUPPLEMENTARY INFORMATION: The

Interstate Act amended section 5 of the

International Banking Act of 1978 (IBA),

which governs interstate banking and

branching operations of foreign banks.

The Interstate Act also amended the

Bank Holding Company Act of 1956

(BHC Act), the Federal Deposit

Insurance Act and several other statutes

regarding interstate banking operations

of bank holding companies, national

banks and state banks. In light of these

amendments, the Board proposes to

amend the provisions of its Regulation

K regarding interstate banking

operations of foreign banking

organizations (12 CFR 211.22) as

discussed below.

Determination of Home State

Section 104(d) of the Interstate Act

modifies the existing definition of a

foreign bank’s home state under section

5(c) of the IBA. Section 104(d) retains

the provision of the IBA stating that the

home state of a foreign bank that has

any combination of branches, agencies,

subsidiary commercial lending

companies and subsidiary banks (U.S.

banking operations) in more than one

state is whichever of these states is

selected by the foreign bank, or by the

Board if the foreign bank fails to choose.

Section 104(d) also provides, for the

first time, that if a foreign bank has U.S.

banking operations, including agencies

or subsidiary commercial lending

companies, in one state only, that state

is the foreign bank’s home state for

purposes of interstate branching. The

Board proposes the following

amendments to 12 CFR 211.22(a) in

order to reflect and implement these

changes to the definition of a foreign

bank’s home state.

Abolition of Distinction Between

Deposit-Taking Offices and NondepositTaking Offices

Prior to the Interstate Act, the Board

interpreted the IBA to require a foreign

bank to have a home state only if the

foreign bank had deposit-taking offices,

i.e., branches or subsidiary banks. 44 FR

62903 (November 1, 1979). This

interpretation is set forth in

§ 211.22(a)(2) of Regulation K. Section

104(d) of the Interstate Act superseded

this interpretation by providing for the

first time that foreign banks with only

agencies or subsidiary commercial

lending companies have a home state.

Accordingly, the Board proposes that

§ 211.22(a)(2) be deleted.

The Board also proposes that

§ 211.22(a)(5) be deleted. This provision

follows the Board’s interpretation of the

IBA in § 211.22(a)(2) by requiring

foreign banks to select as their home

state the state where their first U.S.

deposit-taking office is located. Since

the Interstate Act has superseded that

interpretation, § 211.22(a)(5) is proposed

to be removed.
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 67101

Initial Home State Selection Under the

Interstate Act

As noted, the Interstate Act for the

first time requires foreign banks with

only subsidiary commercial lending

companies or agencies in the United

States to have a home state. In order to

implement this requirement, the Board

proposes that any foreign bank required

for the first time to have a home state

because it has subsidiary commercial

lending companies or agencies in more

than one state, and no other U.S.

banking operations, be permitted to

select its home state. (Foreign banks

with domestic agencies and subsidiary

commercial lending companies in one

state only are assigned that state as their

home state by section 5(c)(2) of the IBA,

as amended by section 104(d) of the

Interstate Act.) Each foreign bank

covered by the rule would be required

to select its home state from those states

in which the foreign bank established

U.S. agencies and subsidiary

commercial lending companies before

September 29, 1994 (the date of

enactment of the Interstate Act), and has

continuously operated such offices. A

foreign bank covered by the rule shall

select its home state by filing with the

Board a declaration of home state by

March 31, 1996.

In the event a foreign bank required

to select a home state fails to do so, the

Board would exercise its authority, as

contemplated by section 104(d) of the

Interstate Act, to determine a foreign

bank’s home state. In such cases, the

Board proposes to designate as a foreign

bank’s home state the state in which the

total assets of all its offices, net of

claims on affiliates or other offices of

the foreign bank, is the largest, as

reflected in the foreign bank’s most

recent report of condition.

The Board also proposes to state in its

new rule that, as is provided in section

5(c)(2) of the IBA as amended by section

104(d) of the Interstate Act, a foreign

bank with branches, agencies,

subsidiary commercial lending

companies or subsidiary banks in one

state only shall have that state as its

home state. A foreign bank that has

already chosen a home state would not

be affected by the proposed rule.

The Board intends to review other

issues raised by the Interstate Act

relating to the interstate operations of

foreign banks in a future rule-making

proceeding. The Board accordingly

invites comment concerning all aspects

of the application of the Interstate Act

to foreign banks.

Deletions of Other Obsolete Sections

The Board proposes that current

§§ 211.22(a)(1),(3) and (4) be deleted.

These sections governed initial selection

of home states for foreign banks under

the IBA as enacted in 1978 and the

Board’s implementing regulations,

which were adopted in 1980. The

foreign banks affected by these

provisions selected a home state, or had

one selected for them by the Board or

through operation of Regulation K,

several years ago. Accordingly, the

Board proposes that these provisions be

deleted.

Bank Mergers Outside Home State

Section 211.22(c) of Regulation K

provides that a foreign bank with one or

more domestic banking subsidiaries

outside its home state shall notify the

Board if it proposes to acquire through

a subsidiary bank all or substantially all

of the assets of a U.S. bank which is

larger than the subsidiary bank and is

located outside of the foreign bank’s

home state under the IBA. The Board

may direct the foreign bank to

redesignate as its home state the state in

which its subsidiary bank is located if

the Board finds the proposed

acquisition would be inconsistent with

the foreign bank’s home state selection

under the IBA.

The Board adopted this rule in 1980

due to a concern that allowing a foreign

bank to expand its deposit-taking

capabilities both by branching in its IBA

home state and through major

acquisitions by merger outside its home

state might permit evasion of the

interstate restrictions then in place

under the IBA and the BHC Act. At that

time, a foreign bank with a subsidiary

bank in one state (State X) and a branch

in another state (State Y) which

declared State Y as its home state under

the IBA generally could not acquire

more than 5 per cent of the shares of an

additional bank in State Y, because such

acquisitions were subject to the

geographic restrictions of section 3(d) of

the BHC Act. These restricted purchases

of banks outside a foreign bank’s home

state for purposes of the BHC Act, in

this case State X. In addition, such a

foreign bank generally could not acquire

more than 5 per cent of the shares of an

additional bank in State X as a result of

section 5(a)(5) of the IBA, which also

applied the limits of section 3(d) of the

BHC Act to interstate bank acquisitions

by foreign banks outside their home

state as determined under the IBA (in

this case, State Y). The Board concluded

that a foreign bank might circumvent

these restrictions on interstate banking

by engaging, through a subsidiary bank,

in a large merger outside its IBA home

state (in this case, State X), and framed

its interstate bank merger rule to allow

the Board to redesignate the foreign

bank’s home state to prevent this

circumvention.

The concerns underlying the rule no

longer apply due to the changes made

by the Interstate Act. The geographic

limits on interstate bank purchases by

foreign banks outside their IBA home

state under section 5(a)(5) of the IBA

have been abolished. In addition,

section 3(d) of the BHC Act was

amended as of September 29, 1995 to

phase out the principal geographic

restrictions on interstate banking

acquisitions applicable to domestic and

foreign acquirors under the BHC Act. As

of that date, there is no need to prevent

foreign banks from circumventing

geographic limits that no longer apply.

Accordingly, the Board proposes that

the bank merger rule of § 211.22(c) be

deleted effective immediately.

Retained Provisions

The Board proposes that §§ 211.22(b)

and (d) of Regulation K be retained with

no change at this time. Section

211.22(b), which allows foreign banks to

change their home states once, will be

reviewed in the Board’s future rulemaking process discussed above. Until

such time, foreign banks which have not

previously changed their home states

may change their home state in

accordance with § 211.22(b). Section

211.22(d), which concerns attribution of

home states to foreign banking

organizations controlled by other

foreign banking organizations, also is

proposed to be retained pending future

review.

Request for Comment

The Board requests comment on all

aspects of the proposed changes to

Regulation K, and on all other aspects

of the application of the Interstate Act

to foreign banks which may be dealt

with appropriately through rulemaking.

Paperwork Reduction Act

In accordance with section 3506 of

the Paperwork Reduction Act of 1995

(44 U.S.C. Ch. 35; 5 CFR 1320 Appendix

A.1), the Board reviewed the proposed

rule under the authority delegated to the

Board by the Office of Management and

Budget. No collections of information

pursuant to the Paperwork Reduction

Act are contained in the proposed rule.

Regulatory Flexibility Act Analysis

Pursuant to section 605(b) of the

Regulatory Flexibility Act (Pub. L. 96–

354, 5 U.S.C. 601 et seq.), the Board

certifies that the proposed revisions to
67102 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

1The Rule was amended on May 20, 1983, 48 FR

22733 (1983).

2The commenters included cleaners; consumers;

public interest-related groups; fiber, textile, or

apparel manufacturers or sellers (or conglomerates);

federal government entities; fiber, textile, or apparel

manufacturers or retailers trade associations; two

label manufacturers; one cleaning products

manufacturer; one association representing the

leather apparel industry; one Committee formed by

industry members from the countries signatory to

NAFTA; one appliance technician; one appliance

manufacturers trade association; two standardssetting organizations; and two representatives from

foreign nations. The comments are on the public

record and are available for public inspection in

accordance with the Freedom of Information Act, 5

U.S.C. 552, and the Commission’s Rules of Practice,

16 CFR 4.11, during normal business days from 8:30

a.m. to 5 p.m., at the Public Reference Room, Room

130, Federal Trade Commission, 6th and

Pennsylvania Avenue, NW, Washington, D.C. The

comments are referred to within this Advance

Notice of Proposed Rulemaking (‘‘ANPR’’) by their

name and the number assigned to each submitted

comment.

Regulation K would not have a

significant economic impact on a

substantial number of small entities that

are subject to its regulation.

List of Subjects in 12 CFR Part 211

Exports, Federal Reserve System,

Foreign banking, Holding companies,

Investments, Reporting and

recordkeeping requirements.

For the reasons set out in the

preamble, the Board proposes to amend

12 CFR Part 211 as set forth below:

PART 211—INTERNATIONAL

BANKING OPERATIONS

(REGULATION K)

1. The authority citation for Part 211

continues to read as follows:

Authority: 12 U.S.C. 221 et seq., 1818,

1841 et seq., 3101 et seq., 3901 et seq.

2. In § 211.22, paragraph (a) is revised;

paragraph (c) is removed; and paragraph

(d) is redesignated as paragraph (c) to

read as follows:

§ 211.22 Interstate banking operations of

foreign banking organizations.

(a) Determination of home state. (1) A

foreign bank (except a foreign bank to

which paragraph (a)(2) of this section

applies) that has any combination of

domestic agencies or subsidiary

commercial lending companies that

were established before September 29,

1994, in more than one state and have

been continuously operated shall select

its home state from those states in

which such offices or subsidiaries are

located. A foreign bank shall do so by

filing with the Board a declaration of

home state by March 31, 1996. In the

absence of such selection, the Board

shall designate the home state for such

foreign banks.

(2) A foreign bank that, as of

September 29, 1994, had declared a

home state or had a home state

determined pursuant to the law and

regulations in effect prior to that date

shall have that state as its home state.

(3) A foreign bank that has any

branches, agencies, subsidiary

commercial lending companies, or

subsidiary banks in one state, and has

no such offices or subsidiaries in any

other states, shall have as its home state

the state in which such offices or

subsidiaries are located.

* * * * *

By order of the Board of Governors of the

Federal Reserve System, December 21, 1995.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 95–31364 Filed 12–27–95; 8:45 am]

BILLING CODE 6210–01–P

FEDERAL TRADE COMMISSION

16 CFR Part 423

Trade Regulation Rule on Care

Labeling of Textile Wearing Apparel

and Certain Piece Goods

AGENCY: Federal Trade Commission.

ACTION: Advance Notice of Proposed

Rulemaking.

SUMMARY: The Federal Trade

Commission (the ‘‘Commission’’)

proposes to commence a rulemaking

proceeding to amend its Trade

Regulation Rule on Care Labeling of

Textile Wearing Apparel and Certain

Piece Goods, 16 CFR Part 423 (‘‘the Care

Labeling Rule’’ or ‘‘the Rule’’). The

Commission seeks comment on whether

the definitions of water temperatures in

the Appendix of the Rule should be

amended. In addition, the Commission

seeks comment on possible alternatives

for amending the Rule’s current

requirement that either a washing

instruction or a dry cleaning instruction

may be used. Finally, the Commission

seeks comment on whether the

reasonable basis portion of the Rule

should be amended.

DATE: Written comments must be

submitted on or before March 13, 1996.

ADDRESSES: Written comments should

be identified as ‘‘16 CFR Part 423’’ and

sent to Secretary, Federal Trade

Commission, Room 159, Sixth Street

and Pennsylvania Ave., NW.,

Washington D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Constance M. Vecellio or Laura Koss,

Attorneys, Federal Trade Commission,

Division of Enforcement, Bureau of

Consumer Protection, Sixth Street and

Pennsylvania, Ave., NW., S–4302,

Washington, DC 20580, (202) 326–2966

or (202) 326–2890.

SUPPLEMENTARY INFORMATION:

Part A—General Background

Information

This notice is being published

pursuant to Section 18 of the Federal

Trade Commission (‘‘FTC’’) Act, 15

U.S.C. 57a et seq., the provisions of Part

1, Subpart B of the Commission’s Rules

of Practice, 16 CFR 1.7, and 5 U.S.C. 551

et seq. This authority permits the

Commission to promulgate, modify, and

repeal trade regulation rules that define

with specificity acts or practices that are

unfair or deceptive in or affecting

commerce within the meaning of

Section 5(a)(1) of the FTC Act, 15 U.S.C.

45(a)(1).

The Care Labeling Rule was

promulgated by the Commission on

December 16, 1971, 36 FR 23883 (1971).

In 1983, the Commission amended the

Rule to clarify its requirements by

identifying in greater detail the washing

or dry cleaning information to be

included on care labels.1 The Care

Labeling Rule, as amended, requires

manufacturers and importers of textile

wearing apparel and certain piece goods

to attach care labels to these items

stating ‘‘what regular care is needed for

the ordinary use of the product.’’ (16

CFR 423.6(a) and (b)). The Rule also

requires that the manufacturer or

importer possess, prior to sale, a

reasonable basis for the care

instructions. (16 CFR 423.6(c)).

As part of its continuing review of its

trade regulation rules to determine their

current effectiveness and impact, the

Commission published a Federal

Register notice (‘‘FRN’’) on June 15,

1994. This FRN sought comment on the

standard regulatory review questions,

such as what changes in the Rule would

increase the benefits of the Rule to

purchasers and how those changes

would affect the costs the Rule imposes

on firms subject to its requirements.

The FRN elicited 81 comments.2 The

comments generally expressed

continuing support for the Rule, stating

that correct care instructions benefit

consumers by extending the useful life

of the garment, by helping the consumer

maximize the appearance of the

garment, and/or by allowing the

consumer to take the ease and cost of

care into consideration when making a

purchase. Most comments said that the

costs imposed on consumers because of

the Rule were minimal when compared

to the benefits. Based on this review, the

Commission has determined to retain

the Rule, but to seek additional