17436 Federal Register / Vol. 60, No. 66 / Thursday, April 6, 1995 / Rules and Regulations

February 22, 1995 ............1,358,404 pounds

(2) Total Allotment Base

October 6, 1993 ................1,950,843 pounds

June 14, 1994....................1,951,032 pounds

October 5, 1994 ................1,951,032 pounds

February 22, 1995 ............1,951,032 pounds

(3) Allotment Percentage

October 6, 1993 ............................46 percent

June 14, 1994................................56 percent

October 5, 1994 ............................66 percent

February 22, 1995 ........................70 percent

In making this latest recommendation

the Committee considered all available

information on supply and demand.

As of February 22, 1995, the

Committee reports that of the 1994–95

marketing year Scotch and Native

spearmint oil salable quantities of

811,516 pounds and 1,287,680 pounds,

respectively, 154,375 pounds and

70,840 pounds remained available for

handling. Handlers have indicated that

the available supply of Scotch

spearmint oil is adequate to meet

anticipated demand through May 31,

1995. However, handlers have indicated

that demand for Native spearmint oil

may be as high as 100,000 pounds for

the remainder of this marketing year.

This level of demand was not

anticipated by the Committee when it

made its initial recommendation for the

establishment of the Scotch and Native

spearmint oil salable quantities and

allotment percentages for the 1994–95

marketing year, nor was it foreseen

when the Committee made its June 14

and October 5, 1994, recommendations

for increasing the Native spearmint oil

salable quantity and allotment

percentage.

The recommended salable quantity of

1,358,404 pounds of Native spearmint

oil (an increase of 70,724 pounds),

combined with the June 1, 1994, carryin of 19,139 pounds, results in a revised

1994–95 available supply of 1,377,543

pounds. The revised available supply of

Native spearmint oil is approximately

300,000 pounds higher than the annual

average of sales for the past five years.

The Committee anticipates that

foreseeable demand for Native

spearmint oil will be adequately met for

the remainder of the 1994–95 marketing

year.

The Department, based on its analysis

of available information, has determined

that an allotment percentage of 70

percent should be established for Native

spearmint oil for the 1994–95 marketing

year. This percentage will provide an

increased salable quantity of 1,358,404

pounds of Native spearmint oil.

Based on available information, the

Administrator of the AMS has

determined that the issuance of this

interim final rule will not have a

significant economic impact on a

substantial number of small entities.

After consideration of all relevant

matter presented, including that

contained in the prior proposed, final,

and interim final rules in connection

with the establishment of the salable

quantities and allotment percentages for

Scotch and Native spearmint oils for the

1994–95 marketing year, the

Committee’s recommendation and other

available information, it is found that to

revise section 985.213 (60 FR 6392) to

change the salable quantity and

allotment percentage for Native

spearmint oil, as hereinafter set forth,

will tend to effectuate the declared

policy of the Act.

Pursuant to 5 U.S.C. 553, it is also

found and determined upon good cause

that it is impracticable, unnecessary,

and contrary to public interest to give

preliminary notice prior to putting this

rule into effect and that good cause

exists for not postponing the effective

date of this rule until 30 days after

publication in the Federal Register

because: (1) This interim final rule

increases the quantity of Native

spearmint oil that may be marketed

immediately; (2) Handlers and

producers should be apprised as soon as

possible of the salable quantity and

allotment percentage of Native

spearmint oil contained in this interim

final rule; and (3) This rule provides a

30-day comment period and any

comments received will be considered

prior to finalization of this rule.

List of Subjects in 7 CFR Part 985

Marketing agreements, Oils and fats,

Reporting and recordkeeping

requirements, Spearmint oil.

For the reasons set forth in the

preamble, 7 CFR part 985 is amended as

follows:

PART 985—SPEARMINT OIL

PRODUCED IN THE FAR WEST

1. The authority citation for 7 CFR

part 985 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 985.213 is amended by

revising the introductory text and

paragraph (b) to read as follows:

Note: This section will not appear in the

annual Code of Federal Regulations.

§ 985.213 Salable quantities and allotment

percentages—1994–95 marketing year.

The salable quantity and allotment

percentage for each class of spearmint

oil during the marketing year beginning

on June 1, 1994, shall be as follows:

* * * * *

(b) Class 3 (Native) oil—a salable

quantity of 1,358,404 pounds and an

allotment percentage of 70 percent.

Dated: March 31, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95–8426 Filed 4–5–95; 8:45 am]

BILLING CODE 3410–02–P

FEDERAL RESERVE SYSTEM

12 CFR Part 208

[Regulation H; Docket No. R–0873]

Membership of State Banking

Institutions in the Federal Reserve

System

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Final rule; interpretation.

SUMMARY: The Board is issuing an

interpretation of the provisions of its

Regulation H, Membership of State

Banking Institutions in the Federal

Reserve System, concerning the

establishment of loan production offices

and ‘‘back office’’ facilities by state

member banks. The interpretation

provides that a state member bank may

establish a back office facility that is not

accessible to the public without such a

facility being considered to be a branch.

The interpretation also provides that

loans originated by a loan production

office may be approved at a back office

location, rather than at the main office

or a branch of the bank, without the

loan production office being considered

to be a branch, if the proceeds of loans

originated by the loan production office

are received by customers at locations

other than a loan production office or

back office facility. This interpretation

is intended to provide parity between

state member banks and national banks

with respect to the establishment of loan

production offices and back office

facilities.

EFFECTIVE DATE: April 6, 1995.

FOR FURTHER INFORMATION CONTACT:

Lawranne Stewart, Senior Attorney

(202/452–3513), Legal Division. For the

hearing impaired only:,

Telecommunications Device for the Deaf

(‘‘TDD’’), Dorothea Thompson (202/

452–3544).

SUPPLEMENTARY INFORMATION: In

connection with the acquisition of a

mortgage company by a state member

bank, the Board has been asked to

consider two issues with respect to the

types of facilities that a state member

bank may establish to engage in

activities related to lending at locations

that are not approved branches: (1)

Whether a state member bank may

establish a ‘‘back office’’ facility that is

not accessible to the public without
Federal Register / Vol. 60, No. 66 / Thursday, April 6, 1995 / Rules and Regulations 17437

1Federal Reserve Act, section 9, paragraph 3 (12

U.S.C. 321); Regulation H, § 208.9 (12 CFR 208.9).

2 12 U.S.C. 36(c). Under the McFadden Act,

‘‘branch’’ is defined to include ‘‘any branch bank,

branch office, branch agency, additional office, or

any branch place of business . . . at which deposits

are received, or checks are paid, or money lent.’’ 12

U.S.C. 36(f).

3 First National Bank of Plant City v. Dickinson,

396 U.S. 122 (1969).

4E.g., IBAA v. Smith, 534 F.2d 921 (D.C. Cir.

1976); Colorado ex rel. State Bank Brd. v. First Nat’l

Bank, 540 F. 2d 497 (10th Cir. 1976); Illinois v.

Continental Illinois NT&SA, 409 F. Supp. 1167

(N.D. Ill. 1975), aff’d in relevant part, 536 F.2d 176

(7th Cir. 1976), cert. denied, 429 U.S. 871 (1976).

Only one federal district court case stands in which

the court concluded that a loan is made at the time

that the bank and its customer reach agreement on

the terms of the loan, and not at a location where

only the proceeds of the loan are disbursed. See

Oklahoma ex. rel. State Banking Board v. Utica

Nat’l Bank and Trust, 409 F. Supp. 71 (N.D. Okla.

1975). This decision was criticized in each of the

appellate court opinions that have addressed this

issue. 5 12 CFR 250.141

such a facility being considered to be a

branch of the bank; and (2) whether a

loan production office will be

considered to be a branch of the bank

if it takes loan applications and

performs related functions, but the loans

are approved at locations other than an

approved branch or main office of the

bank. Under the Board’s prior

interpretation concerning loan

production offices, published at 12 CFR

250.141, an office that engaged in loan

origination activities was not considered

to be a branch when the loans were

approved and funds disbursed at the

head office or a branch of the bank.

‘‘Back office’’ facilities that are not

accessible to the public were not

addressed in the prior interpretation.

State member banks are subject to the

same limitations on branching as

national banks.1 Under the McFadden

Act, national banks may establish

branches only at locations at which a

state bank would be permitted to

establish a branch.2 Interpreting the

branching restrictions of the McFadden

Act, the Supreme Court has stated that

the purpose of the McFadden Act was

to maintain competitive equality

between national and state banks, and

that the determination as to whether a

facility was a branch must be based on

the convenience of the customer, rather

than on the technical or legal

relationship between the customer and

the bank.3 In later cases addressing

automated teller machines, the courts

generally have rejected arguments that

money is lent at the time and place

where a loan or line of credit is

approved, and instead found that money

is lent for the purposes of the McFadden

Act when the customer actually receives

the funds and interest begins to run on

the loan.4

The Board previously had determined

that an office engaged in preliminary or

servicing functions, such as soliciting

loan applications and assembling credit

information, is not lending money and

therefore is not a ‘‘branch’’ for the

purposes of the McFadden Act if the

loans originated by the office are

approved and the funds disbursed at the

main office or an approved branch of

the bank.5 Whether a loan production

office should be considered to be a

branch if loans originated by the office

are approved at locations other than the

main office or a branch of the bank

therefore depends on whether the

location where loan approval takes

place enhances the convenience to the

customer and therefore provides a

competitive advantage to the bank.

Back office facilities that are not

accessible to the public are not visited

by customers and do not appear to

provide customers of the bank with any

greater level of convenience. From the

point of view of a customer whose loan

has been originated at a loan production

office, there does not appear to be any

difference in the convenience based on

whether the loan is approved at the back

office facility or at a branch of a bank,

as it is unlikely that the customer will

visit either location.

Accordingly, the Board has concluded

that, insofar as federal law is concerned,

a state member bank may establish a

back office facility without such a

facility being considered to be a branch.

The Board also has determined that

loans originated by a loan production

office may be approved at a back office

location, rather than at the main office

or a branch of the bank, without the

loan production office being considered

to be a branch under federal law, if the

proceeds of loans originated by the loan

production office are received by the

customer at locations other than a loan

production office or back office facility.

This interpretation supersedes those

portions of the Board’s prior

interpretation, published at 12 CFR

250.141, that concern loan production

offices.

Administrative Procedures and

Regulatory Flexibility Acts

The provisions of the Administrative

Procedures Act concerning notice and

comment are not applicable to

interpretative rules. 5 U.S.C. 553(b).

Because no notice of proposed

rulemaking is required, a statement

concerning the effects of the rule on

small entities is also not required under

the Regulatory Flexibility Act. 5 U.S.C.

604. The Board notes, however, that the

interpretation provides greater

flexibility to state member banks of all

sizes in structuring their activities.

List of Subjects in 12 CFR Part 208

Accounting, Agriculture, Banks,

Banking, Confidential business

information, Crime, Currency, Federal

Reserve System, Mortgages, Reporting

and recordkeeping requirements,

Securities.

For the reasons set forth in the

preamble, 12 CFR part 208 is amended

as set forth below:

PART 208—MEMBERSHIP OF STATE

BANKING INSTITUTIONS IN THE

FEDERAL RESERVE SYSTEM

(REGULATION H)

1. The authority citation for part 208

continues to read as follows:

Authority: 12 U.S.C. 36, 248(a), 248(c),

321–338a, 371d, 461, 481–486, 601, 611,

1814, 1823(j), 1828(o), 1831o, 1831p–1, 3105,

3310, 3331–3351, and 3906–3909; 15 U.S.C.

78b, 781(b), 781(g), 781(i), 78o–4(c)(5), 78q,

78q–1, and w; 31 U.S.C. 5318.

2. In Subpart E, § 208.123 is added in

numerical order to read as follows:

§ 208.123 Loan production offices and

‘‘back office’’ facilities.

(a) Scope. The Board has considered

two issues:

(1) Whether a state member bank may

establish a ‘‘back office’’ facility that is

not accessible to the public and is not

visited by customers without such a

facility being considered to be a branch

of the bank; and

(2) Whether a loan production office

will be considered to be a branch of the

bank if it takes loan applications and

performs related functions, but the loans

are approved at locations other than an

approved branch or main office of the

bank and funds are not disbursed at the

loan production office.

(b) Authority. State member banks are

subject to the same limitations on

branching as national banks. Federal

Reserve Act, section 9, paragraph 3 (12

U.S.C. 321). Under the McFadden Act

(44 Stat. 1228), national banks may

establish branches within a state only at

locations at which a state bank would be

permitted to establish a branch. 12

U.S.C. 36(c). For the purposes of the

McFadden Act, ‘‘branch’’ is defined to

include ‘‘any branch bank, branch

office, branch agency, additional office,

or any branch place of business * * *

at which deposits are received, or

checks are paid, or money lent.’’ 12

U.S.C. 36(f). Interpreting the branching

restrictions of the McFadden Act, the

Supreme Court has stated that the

purpose of the McFadden Act was to
17438 Federal Register / Vol. 60, No. 66 / Thursday, April 6, 1995 / Rules and Regulations

maintain competitive equality between

national and state banks, and that the

determination as to whether a facility

was a branch must be based on the

convenience of the customer, rather

than on the technical or legal

relationship between the customer and

the bank. In later cases addressing

automated teller machines, the courts

generally have rejected arguments that

money is lent at the time and place

where a loan or line of credit is

approved, and instead found that money

is lent for the purposes of the McFadden

Act when the customer actually receives

the funds and interest begins to run on

the loan. See, e.g., IBAA v. Smith, 534

F.2d 921 (D.C. Cir. 1976).

(c) Interpretation. The Board

previously had determined that an

office engaged in preliminary or

servicing functions is not lending

money and therefore is not a ‘‘branch’’

for the purposes of the McFadden Act

if the loans originated by the office are

approved and the funds disbursed at the

main office or an approved branch of

the bank. See 12 CFR 250.141. Whether

a loan production office should be

considered to be a branch if loans

originated by the office are approved at

locations other than the main office or

a branch of the bank depends on

whether the location where loan

approval takes place enhances the

convenience to the customer and

therefore provides a competitive

advantage to the bank. Back office

facilities that are not accessible to the

public are not visited by customers and

do not appear to provide customers of

the bank with any greater level of

convenience. From the point of view of

a customer whose loan has been

originated at a loan production office,

there does not appear to be any

difference in the convenience based on

whether the loan is approved at the back

office facility or at a branch of a bank,

as it is unlikely that the customer will

visit either location. Based on this

analysis, the Board has concluded that

a state member bank may establish a

back office facility without such a

facility being considered to be a branch

for the purposes of the McFadden Act.

The Board also has determined that

loans originated by a loan production

office may be approved at a back office

location, rather than at the main office

or a branch of the bank, without the

loan production office being considered

to be a branch, provided that the

proceeds of loans originated by the loan

production office are received by the

customer at locations other than a loan

production office or back office facility.

This interpretation supersedes the

Board’s prior interpretation, published

at 12 CFR 250.141, as it applies to loan

production offices.

By order of the Board of Governors of the

Federal Reserve System, March 31, 1995.

Barbara R. Lowrey,

Associate Secretary of the Board.

[FR Doc. 95–8404 Filed 4–5–95; 8:45 am]

BILLING CODE 6210–01–P

SMALL BUSINESS ADMINISTRATION

13 CFR Part 107

Small Business Investment

Companies; Accounting and Financial

Reporting Standards

AGENCY: Small Business Administration.

ACTION: Interim final rule; reopening of

comment period.

SUMMARY: On February 7, 1995, the

Small Business Administration (SBA)

published an interim final rule which

updated the standards for accounting

and financial reporting by Small

Business Investment Companies

(SBICs), as well as the guidelines for

independent public accountants

performing audits of SBIC financial

statements. The interim final rule

established a final date for comments to

be submitted to SBA of March 9, 1995.

SBA is reopening that comment period

until April 30, 1995.

DATES: Written comments must be

received on or before April 30, 1995.

ADDRESSES: Written comments should

be sent to Robert D. Stillman, Associate

Administrator for Investment, Small

Business Administration, Suite 6300,

409 3rd Street SW., 6th floor,

Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT:

Carol Fendler, Office of Program

Support; telephone no. (202) 205–7559.

SUPPLEMENTARY INFORMATION: SBA

published an interim final rule on

February 7, 1995 (60 FR 7392) which

updated and reorganized the accounting

standards for the SBIC program. The

purpose of the revisions was to reflect

recent changes in the SBIC program

mandated by the Small Business

Investment Act of 1958, as amended, as

well as changes in generally accepted

accounting principles.

The publication of the interim final

rule took place at a time when many

SBICs were in the midst of preparing

their audited year end financial

statements. Thus, a number of SBICs

and their independent public

accountants may not have had sufficient

time to review the rule and to prepare

and submit comments to SBA.

Therefore, the comment period is

hereby reopened and SBA will accept

comments on the interim final rule until

April 30, 1995.

Dated: March 31, 1995.

Philip Lader,

Administrator.

[FR Doc. 95–8475 Filed 4–5–95; 8:45 am]

BILLING CODE 8025–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 95–NM–32–AD; Amendment

39–9185; AD 95–06–51]

Airworthiness Directives; Lockheed

Model L–1011–385 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This document publishes in

the Federal Register an amendment

adopting Airworthiness Directive (AD)

T95–06–51 that was sent previously to

all known U.S. owners and operators of

Lockheed Model L–1011–385 series

airplanes by individual telegrams. This

AD requires inspection to detect

corrosion, severed braided strands, or

fuel leakage of the fuel feed line hose

assembly on engine number two; and

subsequent inspection or replacement of

the fuel hose with a serviceable part, if

necessary. This AD also requires

treatment of the ends of the fuel hose

and modification of the heat-shrunk

plastic cover and steel identification

band area. This amendment is prompted

by a report of failure of an aluminumbraided flexible fuel hose on a Model L–

1011–385 series airplane due to

corrosion. The actions specified by this

AD are intended to prevent failure of a

flexible fuel hose, which could result in

failure of an engine, loss of fuel, and a

resultant fire.

DATES: Effective April 21, 1995, to all

persons except those persons to whom

it was made immediately effective by

telegraphic AD T95–06–51, issued

March 9, 1995, which contained the

requirements of this amendment.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of April 21,

1995.

Comments for inclusion in the Rules

Docket must be received on or before

June 6, 1995.