55706 Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Rules and Regulations 

5 U.S.C. 601(2), does not apply to this 

interim final rule. 

Paperwork Reduction Act 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. 3506), we have reviewed the 

interim final rule to assess any 

information collections. There are no 

collections of information as defined by 

the Paperwork Reduction Act in the 

interim final rule. 

Unfunded Mandates Reform Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, Pub. L. 

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. The OCC has 

determined that there is no Federal 

mandate imposed by this rulemaking. 

Accordingly, the interim final rule is not 

subject to section 202 of the Unfunded 

Mandates Act. 

List of Subjects in 12 CFR Part 3 

Administrative practices and 

procedure, Capital, National banks, 

Reporting and recordkeeping 

requirements, Risk. 

Authority and Issuance 

■ For the reasons stated in the preamble, 

the Office of the Comptroller of the 

Currency amends Part 3 of chapter I of 

Title 12, Code of Federal Regulations as 

follows: 

PART 3—MINIMUM CAPITAL RATIOS; 

ISSUANCE OF DIRECTIVES 

■ 1. The authority citation for part 3 

continues to read as follows: 

Authority: 12 U.S.C. 93a, 161, 1818, 

1828(n), 1828 note, 1831n note, 1835, 3907, 

and 3909. 

■ 2. In Appendix A to part 3, section 

3(a)(1) is amended to add new 

paragraph (ix) to read as follows: 

PART 3—MINIMUM CAPTIAL RATIOS; 

ISSUANCE OF DIRECTIVES 

Appendix A to Part 3—Risk-Based 

Capital Guidelines 

* * * * * 

Section 3. Risk Categories/Weights for OnBalance Sheet Assets and Off-Balance Sheet 

Items 

(a) * * * 

(1) Zero percent risk weight. * * * 

(ix) Asset-backed commercial paper 

(ABCP) that is: 

(A) Purchased by the bank between 

September 19, 2008, and January 30, 2009 

(unless further extended by the OCC), from 

an Securities and Exchange Commission 

(SEC)-registered open-end investment 

company that holds itself out as a money 

market mutual fund under SEC Rule 2a–7 (17 

CFR 270.2a–7); and 

(B) Pledged by the bank to a Federal 

Reserve Bank to secure financing from the 

ABCP lending facility established by the 

Federal Reserve Board on September 19, 

2008. 

* * * * * 

Dated: September 20, 2008. 

John C. Dugan, 

Comptroller of the Currency. 

[FR Doc. E8–22720 Filed 9–25–08; 8:45 am] 

BILLING CODE 4810–33–P 

FEDERAL RESERVE SYSTEM 

12 CFR Parts 208 and 225 

[Regulations H and Y; Docket No. 1332] 

Risk-Based Capital Guidelines; 

Leverage Capital Guidelines 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Interim final rule with request 

for public comment. 

SUMMARY: To reduce liquidity and other 

strains being experienced by money 

market mutual funds, the Federal 

Reserve System adopted on September 

19, 2008, a special lending facility 

(ABCP Lending Facility) that enables 

depository institutions and bank 

holding companies to borrow from the 

Federal Reserve Bank of Boston on a 

nonrecourse basis if they use the 

proceeds of the loan to purchase certain 

types of asset-backed commercial paper 

(ABCP) from money market mutual 

funds. To facilitate this Federal Reserve 

lending program, the Board of 

Governors of the Federal Reserve 

System (Board) also has adopted, on an 

interim final basis, an exemption from 

its leverage and risk-based capital rules 

for ABCP held by a state member bank 

or bank holding company as a result of 

its participation in this program. 

DATES: The interim final rule became 

effective on September 19, 2008. 

Comments must be received on or 

before October 31, 2008. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1332, by any 

of the following methods: 

• Agency Web site: http:// 

www.federalreserve.gov Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: regs.comments@

federalreserve.gov. Include docket 

number in the subject line of the 

message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• 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, 

unless modified 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 form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Street, NW) between 9 a.m. and 5 p.m. 

on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Mark E. Van Der Weide, Assistant 

General Counsel, (202) 452–2263, or 

Andrea R. Tokheim, Counsel, (202) 452– 

2300, Legal Division; Barbara J. 

Bouchard, Associate Director, (202) 

452–3072, or Juan C. Climent, Senior 

Supervisory Financial Analyst, (202) 

872–7526, Division of Banking 

Supervision and Regulation. For the 

hearing impaired only, 

Telecommunication Device for the Deaf 

(TDD), (202) 263–4869. 

SUPPLEMENTARY INFORMATION: In light of 

the ongoing dislocations in the financial 

markets, and the impact of such 

dislocations on the functioning of the 

markets for ABCP and on the operations 

of money market mutual funds, the 

Board adopted the ABCP Lending 

Facility on September 19, 2008. Under 

the ABCP Lending Facility, depository 

institutions and bank holding 

companies (banking organizations) are 

able to borrow from the Federal Reserve 

Bank of Boston on a nonrecourse basis 

on condition that the organizations use 

the proceeds of the Federal Reserve 

credit to purchase, at amortized cost, 

certain highly rated U.S. dollardenominated ABCP from money market 

mutual funds. The ABCP purchased 

must be used to secure the borrowing 

from the Reserve Bank. The purpose of 

the ABCP Lending Facility is to assist 

money market mutual funds to obtain 

liquidity by enabling them to sell some 

of their high-credit-quality secured 

assets at amortized cost. The ABCP 

Lending Facility will expire on January 


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Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Rules and Regulations 55707 

30, 2009 (unless further extended by the 

Board). 

Banking organizations that participate 

in the ABCP Lending Facility must 

acquire and hold ABCP on their balance 

sheet. These ABCP holdings attract 

leverage and risk-based capital charges 

under the Board’s regulatory capital 

rules for state member banks and bank 

holding companies. To facilitate the 

ABCP Lending Facility, and for the 

reasons discussed below, the Board has 

adopted, on an interim final basis, an 

exemption from its leverage and riskbased capital rules for ABCP purchased 

by a state member bank or bank holding 

company as a result of its participation 

in the facility. Specifically, the interim 

final rule (i) amends the Board’s riskbased capital rules for state member 

banks and bank holding companies to 

assign a zero percent risk weight to 

ABCP purchased by the banking 

organization as a result of its 

participation in the facility; and (ii) 

amends the Board’s leverage capital 

rules for state member banks and bank 

holding companies to permit banking 

organizations to exclude from average 

total consolidated assets—the 

denominator of the leverage ratio— 

ABCP purchased by the banking 

organization as a result of its 

participation in the facility. 

The Board has determined that the 

current leverage and risk-based capital 

requirements for ABCP acquired by a 

banking organization pursuant to the 

ABCP Lending Facility do not reflect the 

substantial protections provided to the 

organization by the Federal Reserve in 

connection with the facility. Because of 

the non-recourse nature of the Federal 

Reserve’s credit extension to the 

banking organization, the organization 

is not exposed to the credit or market 

risk of the ABCP purchased by the 

organization and pledged to the Federal 

Reserve. Therefore, the Board believes 

that it would be appropriate—and 

consistent with the economic substance 

of the transactions—not to impose 

regulatory capital requirements on the 

ABCP purchased by a banking 

organization in connection with its 

service as an intermediary in the ABCP 

Lending Facility. 

Consistent with its purpose to 

mitigate temporary stresses faced by 

U.S. money market mutual funds, the 

interim final rule will expire on January 

30, 2009, unless extended by the Board. 

Administrative Procedure Act 

Pursuant to sections 553(b) and (d) of 

the Administrative Procedure Act (5 

U.S.C. 553(b) and (d)), the Board finds 

that there is good cause for making the 

rule effective immediately on September 

19, 2008, and that it is impracticable, 

unnecessary, or contrary to the public 

interest to issue a notice of proposed 

rulemaking and provide an opportunity 

to comment before the effective date. 

The Board has adopted the rule in light 

of, and to help address, the continuing 

unusual and exigent circumstances in 

the financial markets. The rule will 

provide immediate regulatory capital 

relief to state member banks and bank 

holding companies that elect to 

participate in the Federal Reserve’s 

ABCP lending program. The Board is 

soliciting comment on all aspects of the 

rule and will make such changes that 

they consider to be appropriate or 

necessary after review of any comments 

received. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

requires an agency that is issuing a final 

rule to prepare and make available a 

regulatory flexibility analysis that 

describes the impact of the final rule on 

small entities. 5 U.S.C. 603(a). The 

Regulatory Flexibility Act provides that 

an agency is not required to prepare and 

publish a regulatory flexibility analysis 

if the agency certifies that the final rule 

will not have a significant economic 

impact on a substantial number of small 

entities. 5 U.S.C. 605(b). 

Pursuant to section 605(b), the Board 

certifies that this interim final rule will 

not have a significant economic impact 

on a substantial number of small 

entities. The rule reduces regulatory 

burden on large and small state member 

banks and bank holding companies by 

granting an exemption from the leverage 

and risk-based capital rules for state 

member banks and bank holding 

companies that purchase ABCP from 

money market mutual funds pursuant to 

the Federal Reserve’s ABCP lending 

program. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (44 U.S.C. 3506; 5 CFR 

Part 1320 Appendix A.1), the Board has 

reviewed the interim final rule under 

authority delegated to the Board by the 

Office of Management and Budget. The 

rule contains no collections of 

information pursuant to the Paperwork 

Reduction Act. 

Plain Language 

Section 722 of the Gramm-LeachBliley Act requires the Board to use 

‘‘plain language’’ in all proposed and 

final rules. In light of this requirement, 

the Board has sought to present the 

interim final rule in a simple and 

straightforward manner. The Board 

invites comment on whether it could 

take additional steps to make the rule 

easier to understand. 

List of Subjects 

12 CFR Part 208 

Confidential business information, 

Crime, Currency, Federal Reserve 

System, Mortgages, Reporting and 

recordkeeping requirements, Securities. 

12 CFR Part 225 

Administrative practice and 

procedure, Banks, banking, Federal 

Reserve System, Holding companies, 

Reporting and recordkeeping 

requirements, Securities. 

Authority and Issuance 

■ For the reasons stated in the preamble, 

the Board of Governors of the Federal 

Reserve System amends parts 208 and 

225 of chapter II of title 12 of the Code 

of Federal Regulations as follows: 

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. 24, 36, 92a, 93a, 

248(a), 248(c), 321–338a, 371d, 461, 481–486, 

601, 611, 1814, 1816, 1818, 1820(d)(9), 

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

1831r–1, 1835a, 1882, 2901–2907, 3105, 

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

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

78q–1, and 78w, 6801, and 6805; 31 U.S.C. 

5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106, 

and 4128. 

■ 2. In Appendix A to part 208, amend 

section III.C.1. by adding a new third 

paragraph to read as follows: 

Appendix A to Part 208—Capital 

Adequacy Guidelines for State Member 

Banks: Risk-Based Measure 

* * * * * 

III. * * * 

C. * * * 

1. * * * 

* * * * * 

This category also includes ABCP (i) 

purchased by a bank between September 19, 

2008, and January 30, 2009 (unless extended 

by the Board), from an SEC-registered openend investment company that holds itself out 

as a money market mutual fund under SEC 

Rule 2a–7 (17 CFR 270.2a–7) and (ii) pledged 

by the bank to a Federal Reserve Bank to 

secure financing from the ABCP lending 

facility established by the Board on 

September 19, 2008. 

* * * * * 

■ 3. In Appendix B to part 208, amend 

section II by adding a new paragraph h 

to read as follows: 


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55708 Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Rules and Regulations 

Appendix B to Part 208—Capital 

Adequacy Guidelines for State Member 

Banks: Tier 1 Leverage Measure 

* * * * * 

II. * * * 

h. Notwithstanding anything in this 

appendix to the contrary, a bank may deduct 

from its average total consolidated assets the 

amount of any asset-backed commercial 

paper (i) purchased by the bank between 

September 19, 2008, and January 30, 2009 

(unless extended by the Board), from an SECregistered open-end investment company 

that holds itself out as a money market 

mutual fund under SEC Rule 2a–7 (17 CFR 

270.2a–7) and (ii) pledged by the bank to a 

Federal Reserve Bank to secure financing 

from the ABCP lending facility established by 

the Board on September 19, 2008. 

PART 225—BANK HOLDING 

COMPANIES AND CHANGE IN BANK 

CONTROL (REGULATION Y) 

■ 1. The authority citation for part 225 

continues to read as follows: 

Authority: 12 U.S.C. 1817(j)(13), 1818, 

1828(o), 1831i, 1831p–1, 1843(c)(8), 1844(b), 

1972(1), 3106, 3108, 3310, 3331–3351, 3907, 

and 3909; 15 U.S.C. 6801 and 6805. 

■ 2. In Appendix A to part 225, amend 

section III.C.1. by adding a new third 

paragraph to read as follows: 

Appendix A to Part 225—Capital 

Adequacy Guidelines for Bank Holding 

Companies: Risk-Based Measure 

* * * * * 

III. * * * 

C. * * * 

1. * * * 

* * * * * 

This category also includes ABCP (i) 

purchased by a bank holding company 

between September 19, 2008, and January 30, 

2009 (unless extended by the Board), from an 

SEC-registered open-end investment 

company that holds itself out as a money 

market mutual fund under SEC Rule 2a–7 (17 

CFR 270.2a–7) and (ii) pledged by the bank 

holding company to a Federal Reserve Bank 

to secure financing from the ABCP lending 

facility established by the Board on 

September 19, 2008. 

* * * * * 

■ 3. In Appendix D to part 225, amend 

section II by adding new paragraph d to 

read as follows: 

Appendix D to Part 225—Capital 

Adequacy Guidelines for Bank Holding 

Companies: Tier 1 Leverage Measure 

* * * * * 

II. * * * 

d. Notwithstanding anything in this 

appendix to the contrary, a bank holding 

company may deduct from its average total 

consolidated assets the amount of any assetbacked commercial paper (i) purchased by 

the bank holding company between 

September 19, 2008, and January 30, 2009 

(unless extended by the Board), from an SECregistered open-end investment company 

that holds itself out as a money market 

mutual fund under SEC Rule 2a–7 (17 CFR 

270.2a–7) and (ii) pledged by the bank 

holding company to a Federal Reserve Bank 

to secure financing from the ABCP lending 

facility established by the Board on 

September 19, 2008. 

By order of the Board of Governors of the 

Federal Reserve System, September 19, 2008. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. E8–22702 Filed 9–25–08; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 223 

[Regulation W; Docket No. R–1331] 

Transactions Between Member Banks 

and Their Affiliates: Exemption for 

Certain Purchases of Asset-Backed 

Commercial Paper by a Member Bank 

From an Affiliate 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Interim final rule with request 

for public comment. 

SUMMARY: To reduce liquidity and other 

strains being experienced by money 

market mutual funds, the Federal 

Reserve System adopted on September 

19, 2008, a special lending facility that 

enables depository institutions and bank 

holding companies to borrow from the 

Federal Reserve Bank of Boston on a 

non-recourse basis if they use the 

proceeds of the loan to purchase certain 

types of asset-backed commercial paper 

(ABCP) from money market mutual 

funds (ABCP Lending Facility). To 

facilitate use of the ABCP Lending 

Facility by member banks, the Board of 

Governors of the Federal Reserve 

System (Board) also has adopted, on an 

interim final basis, regulatory 

exemptions for member banks from 

certain provisions of sections 23A and 

23B of the Federal Reserve Act and the 

Board’s Regulation W. The exemptions 

would increase the capacity of a 

member bank to purchase ABCP from 

affiliated money market mutual funds in 

connection with the ABCP Lending 

Facility. 

DATES: The exemption became effective 

on September 19, 2008. Comments must 

be received on or before October 31, 

2008. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1331, by any 

of the following methods: 

• Agency Web Site: http:// 

www.federalreserve.gov Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• 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, 

unless modified 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 form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Street, NW) between 9 a.m. and 5 p.m. 

on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Mark E. Van Der Weide, Assistant 

General Counsel, (202) 452–2263, or 

Andrea R. Tokheim, Counsel, (202) 452– 

2300, Legal Division; or Norah M. 

Barger, Deputy Director, (202) 452– 

2402, Division of Banking Supervision 

and Regulation. For the hearing 

impaired only, Telecommunication 

Device for the Deaf (TDD), (202) 263– 

4869. 

SUPPLEMENTARY INFORMATION: In light of 

the ongoing dislocations in the financial 

markets, and the impact of such 

dislocations on the functioning of the 

ABCP markets and on the operations of 

money market mutual funds, the Board 

adopted the ABCP Lending Facility on 

September 19, 2008. Under the facility, 

depository institutions and bank 

holding companies (banking 

organizations) are able to borrow from 

the Federal Reserve Bank of Boston on 

a non-recourse basis on condition that 

the organizations use the proceeds of 

the Federal Reserve credit to purchase, 

at amortized cost, certain highly rated 

U.S. dollar-denominated ABCP from 

money market mutual funds. The ABCP 

purchased must be used to secure the 

borrowing from the Reserve Bank. The 

purpose of the ABCP Lending Facility is 

to assist money market mutual funds to 

obtain liquidity by enabling them to sell 

some of their high-credit-quality 

secured assets at amortized cost. The 


sroberts on PROD1PC70 with RULES