Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Notices 25869

FEDERAL DEPOSIT INSURANCE

CORPORATION

Investment in Leeway Securities;

Rescission of Statement of Policy

AGENCY: Federal Deposit Insurance

Corporation (FDIC).

ACTION: Rescission of Statement of

Policy.

SUMMARY: As part of the FDIC’s

systematic review of its regulations and

written policies under section 303(a) of

the Riegle Community Development and

Regulatory Improvement Act of 1994

(CDRI), the FDIC is rescinding its policy

statement concerning bank investments

under state leeway laws (Statement).

The Statement indicates that the FDIC

will not criticize investments of a civic

or community nature if they meet

reasonable limits set out in the

Statement. The FDIC is rescinding the

Statement because it is now outmoded.

The rescission does not reflect any

substantive change in the FDIC’s

supervisory attitude toward this type of

investment.

EFFECTIVE DATE: This Statement is

rescinded effective May 23, 1996.

FOR FURTHER INFORMATION CONTACT:

Robert W. Walsh, Manager, Division of

Supervision (202) 898–6911; Gerald J.

Gervino, Senior Attorney, (202) 898–

3723, Legal Division, FDIC, 550 17th

Street, N.W., Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION: The FDIC

is conducting a systematic review of its

regulations and written policies. Section

303(a) of the CDRI (12 U.S.C. 4803(a))

requires each federal banking agency to

streamline and modify its regulations

and written policies in order to improve

efficiency, reduce unnecessary costs,

and eliminate unwarranted constraints

on credit availability. Section 303(a)

also requires each federal banking

agency to remove inconsistencies and

outmoded and duplicative requirements

from its regulations and written

policies.

As part of this review, the FDIC has

determined that the Statement is

outmoded, and that the FDIC’s written

policies can be streamlined by its

elimination.

The Statement was published on

August 4, 1972, 37 FR 16228 and

amended on March 7, 1974, 39 FR 8956.

The Statement was designed to clarify

the FDIC’s position with regard to bank

investments under state leeway laws.

Leeway laws were adopted by many

states to give depository institutions a

way to make direct investments in civic

or community related projects that

would otherwise be prohibited under

the standard bank or thrift charter. It

was felt that financial institutions were

receiving inconsistent messages from

their regulators. While community

beneficial projects were encouraged by

state agencies, the credit quality of the

related investments was being

criticized. The FDIC did not want to

inhibit banks from making investments

that were primarily of a civic or

community nature. Therefore the

Statement indicated that FDIC

examiners would not criticize these

leeway investments provided they were

made within reasonable limits

established by state law and aggregated

no more than 10 percent of capital and

surplus, whichever was less.

Section 24 of the Federal Deposit

Insurance Act, 12 U.S.C. 1831a,

prohibits equity investments by an

insured state bank if the investment is

not of a type and in an amount that is

permissible for a national bank. 12 CFR

part 362 implements this statutory

provision. Both the statute and the

regulation contain exceptions for

investments as a limited partner in a

partnership, the sole purpose of which

is the acquisition, rehabilitation or new

construction of qualified housing

projects. In addition, the National Bank

Act was amended since the last

amendment to the Statement in 1974 to

expressly provide authority for a

national bank to make investments that

are designed to primarily promote the

public welfare. Such investments can be

made up to a maximum of 10 percent

of unimpaired capital and surplus. (12

U.S.C. 24 (Eleventh). Finally,

community welfare investments are

encouraged under the FDIC’s

regulations implementing the

Community Reinvestment Act which

was enacted by Congress subsequent to

the adoption of the agency’s Statement.

Consistent with that Act and the FDIC’s

regulations, the FDIC will generally not

criticize commercially viable

community welfare investment. Thus,

the rescission of the Statement does not

signal any change in the manner in

which the FDIC evaluates investments

which are the subject of the current

Statement. In view of this current

statutory and regulatory direction, the

Statement is no longer necessary.

For the above reasons, the Statement is

hereby rescinded.

By Order of the Board of Directors.

Dated at Washington, D.C., this 14th day of

May, 1996.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 96–12927 Filed 5–22–96; 8:45 am]

BILLING CODE 6714–01–P

Capital Forbearance; Rescission of

Policy Statement

AGENCY: Federal Deposit Insurance

Corporation (FDIC).

ACTION: Rescission of policy statement.

SUMMARY: As part of the FDIC’s

systematic review of its regulations and

written policies under section 303(a) of

the Riegle Community Development and

Regulatory Improvement Act of 1994

(CDRI), the FDIC is rescinding its

Guidelines for Implementing a Policy of

Capital Forbearance (Policy Statement).

The Policy Statement provided

guidelines for certain well-managed

viable banks to apply to the FDIC for

capital forbearance. The FDIC is

rescinding the Policy Statement because

it is now outmoded.

EFFECTIVE DATE: This Policy Statement is

rescinded May 23, 1996.

FOR FURTHER INFORMATION CONTACT:

Robert W. Walsh, Manager, (202) 898–

6911, Division of Supervision; Jamey

Basham, Counsel, (202) 898–7265, Legal

Division, FDIC, 550 17th Street, N.W.,

Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION: The FDIC

is conducting a systematic review of its

regulations and written policies. Section

303(a) of the CDRI (12 U.S.C. 4803(a))

requires each federal banking agency to

streamline and modify its regulations

and written policies in order to improve

efficiency, reduce unnecessary costs,

and eliminate unwarranted constraints

on credit availability. Section 303(a)

also requires each federal banking

agency to remove inconsistencies and

outmoded and duplicative requirements

from its regulations and written

policies.

As part of this review, the FDIC has

determined that the Policy Statement is

outmoded, and that the FDIC’s written

policies can be streamlined by its

elimination.

The FDIC adopted the Policy

Statement on July 7, 1987. 52 FR 26182

(July 13, 1987). The Policy Statement

provided guidelines under which

certain banks, which were wellmanaged, solvent and viable but were

having difficulty raising needed capital

because they served an inadequately

diversified economic sector caught in a

severe downturn, could apply to the

FDIC for capital forbearance. Since all

capital improvement plans established

under the Policy Statement were

required by the Policy Statement’s terms

to assure capital restoration by January

1, 1995, the Policy Statement serves no

further purpose.

Moreover, as part of the Federal

Deposit Insurance Corporation
25870 Federal Register / Vol. 61, No. 101 / Thursday, May 23, 1996 / Notices

Improvement Act of 1991, Pub. L. 102–

242, 105 Stat. 2236, 2253, Congress

adopted the prompt corrective action

provisions codified in section 38 of the

Federal Deposit Insurance Act, 12

U.S.C. 1831o, establishing a statutory

structure for addressing insured

depository institutions with declining

capital. This statutory structure does not

allow capital forbearance as

contemplated in the Policy Statement.

For the above reasons, the Policy

Statement is hereby rescinded.

By Order of the Board of Directors.

Dated at Washington, D.C., this 14th day of

May, 1996.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 96–12926 Filed 5–22–96; 8:45 am]

BILLING CODE 6714–01–P

FEDERAL EMERGENCY

MANAGEMENT AGENCY

[FEMA–1105–DR]

Montana; Amendment to Notice of a

Major Disaster Declaration

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice amends the notice

of a major disaster for the State of

Montana (FEMA–1105–DR), dated

February 23, 1996, and related

determinations.

EFFECTIVE DATE: May 7, 1996.

FOR FURTHER INFORMATION CONTACT:

Pauline C. Campbell, Response and

Recovery Directorate, Federal

Emergency Management Agency,

Washington, DC 20472, (202) 646–3606.

SUPPLEMENTARY INFORMATION: Notice is

hereby given that the incident period for

this disaster is closed effective February

29, 1996.

(Catalog of Federal Domestic Assistance No.

83.516, Disaster Assistance)

Dennis H. Kwiatkowski,

Deputy Associate Director, Response and

Recovery Directorate.

[FR Doc. 96–13038 Filed 5–22–96; 8:45 am]

BILLING CODE 6718–02–P

[FEMA–1112–DR]

Illinois; Major Disaster and Related

Determinations

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Notice.

SUMMARY: This is a notice of the

Presidential declaration of a major

disaster for the State of Illinois (FEMA–

1112–DR), dated May 6, 1996, and

related determinations.

EFFECTIVE DATE: May 6, 1996.

FOR FURTHER INFORMATION CONTACT:

Pauline C. Campbell, Response and

Recovery Directorate, Federal

Emergency Management Agency,

Washington, DC 20472, (202) 646–3606.

SUPPLEMENTARY INFORMATION: Notice is

hereby given that, in a letter dated May

6, 1996, the President declared a major

disaster under the authority of the

Robert T. Stafford Disaster Relief and

Emergency Assistance Act (42 U.S.C.

5121 et seq.), as follows:

I have determined that the damage in

certain areas of the State of Illinois, resulting

from severe storms and flooding on April 28,

1996 and continuing, is of sufficient severity

and magnitude to warrant a major disaster

declaration under the Robert T. Stafford

Disaster Relief and Emergency Assistance Act

(‘‘the Stafford Act’’). I, therefore, declare that

such a major disaster exists in the State of

Illinois.

In order to provide Federal assistance, you

are hereby authorized to allocate from funds

available for these purposes, such amounts as

you find necessary for Federal disaster

assistance and administrative expenses.

You are authorized to provide Individual

Assistance, Public Assistance, and Hazard

Mitigation in the designated areas. Consistent

with the requirement that Federal assistance

be supplemental, any Federal funds provided

under the Stafford Act for Public Assistance

or Hazard Mitigation will be limited to 75

percent of the total eligible costs.

The time period prescribed for the

implementation of section 310(a),

Priority to Certain Applications for

Public Facility and Public Housing

Assistance, 42 U.S.C. 5153, shall be for

a period not to exceed six months after

the date of this declaration.

Notice is hereby given that pursuant

to the authority vested in the Director of

the Federal Emergency Management

Agency under Executive Order 12148, I

hereby appoint Ron Sherman of the

Federal Emergency Management Agency

to act as the Federal Coordinating

Officer for this declared disaster.

I do hereby determine the following

areas of the State of Illinois to have been

affected adversely by this declared

major disaster:

Franklin and St. Clair Counties for

Individual Assistance, Public Assistance, and

Hazard Mitigation.

(Catalog of Federal Domestic Assistance No.

83.516, Disaster Assistance)

James L. Witt,

Director.

[FR Doc. 96–13014 Filed 5–22–96; 8:45 am]

BILLING CODE 6718–02–P

[FEMA–1112–DR]

Illinois; Amendment to Notice of a

Major Disaster Declaration

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice amends the notice

of a major disaster for the State of

Illinois, (FEMA–1112–DR), dated May 6,

1996, and related determinations.

EFFECTIVE DATE: May 10, 1996.

FOR FURTHER INFORMATION CONTACT:

Pauline C. Campbell, Response and

Recovery Directorate, Federal

Emergency Management Agency,

Washington, DC 20472, (202) 646–3606.

SUPPLEMENTARY INFORMATION: The notice

of a major disaster for the State of

Illinois, is hereby amended to include

the following area among those areas

determined to have been adversely

affected by the catastrophe declared a

major disaster by the President in his

declaration of May 6, 1996:

Lawrence County for Individual

Assistance.

(Catalog of Federal Domestic Assistance No.

83.516, Disaster Assistance)

William C. Tidball,

Associate Director, Response and Recovery

Directorate.

[FR Doc. 96–13015 Filed 5–22–96; 8:45 am]

BILLING CODE 6718–02–P

[FEMA–1112–DR]

Illinois; Amendment to Notice of a

Major Disaster Declaration

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice amends the notice

of a major disaster for the State of

Illinois, (FEMA–1112–DR), dated May 6,

1996, and related determinations.

EFFECTIVE DATE: May 9, 1996.

FOR FURTHER INFORMATION CONTACT:

Pauline C. Campbell, Response and

Recovery Directorate, Federal

Emergency Management Agency,

Washington, DC 20472, (202) 646–3606.

SUPPLEMENTARY INFORMATION: The notice

of a major disaster for the State of

Illinois, is hereby amended to include

the following areas among those areas

determined to have been adversely

affected by the catastrophe declared a

major disaster by the President in his

declaration of May 6, 1996:

Madison and Monroe Counties for

Individual Assistance, Public Assistance, and

Hazard Mitigation.