Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 63585 

1 12 U.S.C. 5390(a)(1)(A). 

By Order of the Board of Directors, Federal 

Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 2014–25337 Filed 10–23–14; 8:45 am] 

BILLING CODE 6714–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 380 

RIN 3064–AE25 

Record Retention Requirements 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Federal Deposit 

Insurance Corporation (‘‘FDIC’’) is 

proposing a rule with request for 

comments that would implement 

section 210(a)(16)(D) of the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act). This 

statutory provision requires the 

promulgation of a regulation 

establishing schedules for the retention 

by the FDIC of the records of a covered 

financial company (i.e., a financial 

company for which the FDIC has been 

appointed receiver pursuant to title II of 

the Dodd-Frank Act) as well as the 

records generated by the FDIC in the 

exercise of its title II orderly liquidation 

authority (title II) with respect to such 

covered financial company. 

DATES: Written comments on the 

proposed rule must be received by the 

FDIC no later than December 23, 2014. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Agency Web site: http://

www.fdic.gov/regulations/laws/federal. 

Follow instructions for Submitting 

comments on the Agency Web site. 

• E-Mail: Comments@FDIC.gov. 

Include ‘‘RIN 3064–AE25 ’’ in the 

subject line of the message. 

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments, Federal 

Deposit Insurance Corporation, 550 17th 

Street NW., Washington, DC 20429 

• Hand Delivery/Courier: 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. 

(EST). 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Public Inspection: All comments 

received will be posted without change 

to http://www.fdic.gov/regulations/laws/ 

federal including any personal 

information provided. Comments may 

be inspected and photocopied in the 

FDIC Public Information Center, 3501 

North Fairfax Drive, Room E–I002, 

Arlington, VA 22226, between 9 a.m. 

and 5 p.m. (EST) on business days. 

Paper copies of public comments may 

be ordered from the Public Information 

Center by telephone at (877) 275–3342 

or (703) 562–2200. 

FOR FURTHER INFORMATION CONTACT: 

Legal Division: Elizabeth Falloon, (703) 

562–6148; Jerilyn Rogin, (703) 562– 

2409. Division of Resolutions and 

Receiverships: Teresa J. Franks, (202) 

898–7007; Manuel Ramilo, (202) 898– 

3781. Federal Deposit Insurance 

Corporation, 550 17th Street NW., 

Washington, DC 20429. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Title II of the Dodd-Frank Act 

provides for the appointment of the 

FDIC as receiver for a financial company 

to conduct an orderly liquidation of the 

company if, among other things, 

resolution of the company under 

bankruptcy (or other applicable 

insolvency regime) would have serious 

adverse effects on U.S. financial 

stability. Once appointed, Title II 

confers upon the FDIC as receiver for 

the company (the ‘‘covered financial 

company’’) certain powers and 

authorities to effectuate an orderly 

liquidation of the covered financial 

company in a manner that is consistent 

with the statutory objectives. For 

example, upon appointment of the FDIC 

as receiver for a covered financial 

company, the FDIC succeeds to all 

rights, titles, powers and privileges of 

the covered financial company 

including title to the books and records 

of the covered financial company.1

In addition, the FDIC necessarily will 

generate its own records in exercising 

the authorities conferred upon it by 

Title II. Section 210(a)(16)(D) of the 

Dodd-Frank Act (12 U.S.C. 

5390(a)(16)(D), hereafter ‘‘section 

210(a)(16)(D)’’) sets forth the outlines of 

the FDIC’s responsibilities regarding the 

retention of both of these categories of 

records—the records of a financial 

company in existence at the time the 

FDIC is appointed receiver, as well as 

those generated by the FDIC in 

connection with its appointment as 

receiver and the exercise of its orderly 

liquidation authority as receiver. 

Section 210(a)(16)(D) provides guidance 

as to types of records that must be 

retained, and requires the FDIC to 

prescribe such regulations and establish 

such retention schedules as are 

necessary. Specifically, section 

210(a)(16)(D)(i) requires that the FDIC 

prescribe the regulations and establish 

schedules for retention of these records 

with due regard for the avoidance of 

duplicative record retention and for the 

evidentiary needs of the FDIC as 

receiver and for the public. Once such 

regulations and retention schedules are 

prescribed, section 210(a)(16)(D)(ii) 

prohibits the destruction of records to 

the extent that they must be retained in 

accordance with the promulgated 

regulations and retention schedules. 

The proposed rule provides separate 

rules and retention schedules for 

inherited records of the covered 

financial company and for the records 

generated or maintained by the FDIC in 

connection with its receivership 

function. ‘‘Generated or maintained’’ 

refers in this context to records the FDIC 

creates, as well as records the FDIC 

receives and retains in connection with 

its Title II responsibilities. 

Section 210(a)(16)(D)(iii), entitled 

‘‘Records Defined,’’ describes the forms 

of documentary material to be addressed 

in the regulations and schedules, 

specifying that any document, book, 

paper, map, photograph, microfiche, 

microfilm, computer or electronicallycreated record is included. In addition, 

that section specifies that the records 

inherited from the failed company are 

those that were generated or maintained 

by the covered financial company in the 

course of and necessary to its 

transaction of business. The proposed 

rule clarifies the definition of ‘‘records’’ 

by including factors to be considered in 

determining whether documentary 

material was generated by the company 

in the course of and necessary to its 

transaction of business, as well as by 

providing examples such as general 

ledger and financial reports and 

qualified financial contracts. 

In addressing records generated by the 

FDIC, the proposed rule uses the same 

broadly inclusive description of 

documentary material provided in the 

statute and includes those records that 

the FDIC created or received in 

exercising the authorities of title II as 

required by section 210(a)(16)(D). This 

definition is also clarified in the 

proposed rule by including factors to be 

considered in determining whether 

documentary material was generated or 

maintained by the FDIC in the exercise 

of its title II authorities as well as by 

providing examples such as 

documentary material relating to the 

appointment of the FDIC as receiver and 

documentary material relating to the 

administration, determination and 

payment of claims against the FDIC as 

receiver. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
63586 Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 

2 12 CFR 360.11, 78 FR 54373 (September 4, 

2013). 

3 12 U.S.C. 1821(d)(15)(D). 

4A ‘‘covered financial company’’ is a financial 

company (other than an insured depository 

institution) for which the necessary determinations 

have been made for the appointment of the FDIC 

as receiver. 12 U.S.C. 5381(8). ‘‘Financial company’’ 

is defined in the Dodd-Frank Act at 12 U.S.C. 

5381(11) and the regulations promulgated 

thereunder. 

Exclusions from both categories of 

records addressed in the proposed rule 

include items such as duplicate copies, 

drafts superseded by later revisions, and 

non-publicly available confidential 

supervisory information. 

In keeping with the statutory 

mandate, retention schedules are 

created for both receivership and 

inherited records. The retention 

schedule for inherited records of the 

financial company that existed at the 

time of appointment of the receiver was 

modeled after the treatment of such 

records upon the appointment of the 

FDIC as receiver for a failed insured 

depository institution. That regulation, 

entitled ‘‘Records of Failed Depository 

Institutions’’ 2 (hereafter the ‘‘FDIA final 

rule’’), addressed the retention of 

records of failed insured depository 

institutions pursuant to section 

11(d)(15)(D) 3 of the Federal Deposit 

Insurance Act (hereafter the ‘‘FDIA 

provision’’). Although certain aspects of 

the FDIA final rule provided guidance 

for this proposed rule, there are 

significant differences because the 

respective statutory underpinnings are 

different; in contrast to section 

210(a)(16)(D), the FDIA provision 

contains neither a definition of records 

nor factors for the identification of 

records. In addition, the FDIA provision 

addresses only the retention of records 

of a failed insured depository institution 

and does not address the retention of 

the records generated or maintained by 

the FDIC in connection with its 

receivership functions. Accordingly, the 

FDIA final rule and this proposed rule 

promulgated under the Dodd-Frank Act 

each should be viewed and interpreted 

independently of each other. 

II. Proposed Rule 

Authority and Purpose 

Title II of the Dodd-Frank Act sets 

forth the orderly liquidation authority 

over covered financial companies. 

Section 210(a)(16)(D) specifically 

requires the FDIC to prescribe such 

regulations and establish such retention 

schedules as are necessary to maintain 

the records of the FDIC generated in 

exercising the authorities of title II and 

the records of a covered financial 

company for which the FDIC is 

appointed receiver. 

The purpose of this proposed rule is 

to fulfill the statutory mandate 

contained in section 210(a)(16)(D) by 

providing the factors necessary to 

identify such records and to establish 

retention schedules for those records in 

order to enable the FDIC to properly 

manage the records of that covered 

financial company 4 as well as the 

records generated or maintained by the 

FDIC in the course of its function as the 

receiver for that covered financial 

company. 

Section-by-Section Analysis 

Scope and Definition 

Paragraph (a)(1) sets forth the scope of 

the proposed rule. It makes clear that 

the proposed rule would apply to those 

records that are addressed by section 

210(a)(16)(D), i.e., those records of a 

financial company that are inherited by 

the FDIC upon its appointment as 

receiver, as well as those generated by 

the FDIC in connection with its 

appointment as receiver and the 

exercise of its orderly liquidation 

authority. 

Paragraph (a)(2) sets forth the 

definition of ‘‘documentary material.’’ 

This definition is taken directly from 

text of section 210(a)(16)(D)(iii) and 

describes the universe of forms and 

formats in which ‘‘records’’ (determined 

pursuant to the proposed rule’s criteria) 

may appear, including books, paper, 

maps, photographs, microfiche, and 

electronically-created records, 

regardless of medium or business value 

and regardless of whether they are usercreated or system-generated. 

The definition in the proposed 

regulation clarifies that only those 

documentary materials that are 

‘‘reasonably accessible’’ are included in 

the scope of the rule in order to 

incorporate the policy behind Federal 

Rule of Civil Procedure 26(b)(2)(B), 

which provides that a party from whom 

discovery is sought need not provide 

electronically-stored information from 

sources that are not reasonably 

accessible because of undue cost or 

burden. For example, a party may be 

excused from restoring electronicallystored information from aging back-up 

tapes in order to produce it in response 

to a discovery request. Thus, the use of 

the phrase ‘‘reasonably accessible’’ 

would align the concept of ‘‘records’’ in 

the proposed rule with the discovery 

standard and would protect the FDIC as 

receiver from incurring expenses 

associated with restoring or maintaining 

the legacy system of a covered financial 

company in order to extract 

documentary material from those 

systems that is not otherwise needed by 

the FDIC to carry out its receivership 

functions. 

Part 380 of the Code of Federal 

Regulations concerns the FDIC’s orderly 

liquidation authority conferred by title 

II of the Dodd-Frank Act. Section 380.1 

contains the definition of the term 

‘‘covered financial company’’ which is 

defined as a ‘‘financial company’’ for 

which the FDIC has been appointed 

receiver. Accordingly, it is not necessary 

to repeat the definitions of the terms 

‘‘covered financial company’’ and 

‘‘financial company’’ in this proposed 

regulation. 

Records of a Covered Financial 

Company for Which the FDIC Is 

Appointed Receiver 

Paragraph (b) of the proposed rule 

addresses the records of the failed 

company that are inherited by the FDIC 

upon its appointment as receiver. The 

statute specifies that these records must 

be those that were generated or 

maintained by the financial company in 

the course of and necessary to its 

business. The proposed regulation 

provides additional guidance with 

respect to determining what 

documentary material constitutes a 

record that must be retained. It sets forth 

four factors which the FDIC will 

consider in determining whether 

documentary material, as defined in 

paragraph (a)(2), was generated or 

maintained in the course of and 

necessary to its business as a financial 

company. 

The first of these factors is the extent 

to which the documentary material 

related to the business of the financial 

company prior to the appointment of 

the FDIC as receiver. In making its 

determination, the FDIC would consider 

the extent to which the particular 

documentary material relates to the 

business purpose of the financial 

company. 

The second factor is whether the 

documentary material was generated or 

maintained in accordance with a 

financial company’s recordkeeping 

practices and procedures or pursuant to 

standards established by the financial 

company’s regulators. In general, a 

company’s own recordkeeping policies 

and procedures will reflect the 

significance of its records to its business 

and regulatory requirements and the 

importance of documentary material 

created or maintained by a financial 

company. Thus, the FDIC will consider 

whether documentary material was 

retained pursuant to the financial 

company’s recordkeeping practices 

when determining whether specific 

documentary material is a record for the 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 63587 

5A litigation hold (also known as a ‘‘preservation 

order’’, a ‘‘legal hold’’ or a ‘‘hold order’’) is a 

stipulation requiring a party to preserve all data that 

may relate to a legal action involving that party. 

When in place, it requires that parties preserve 

records when they learn of pending or imminent 

litigation, or when litigation is reasonably 

anticipated. This requirement ensures that 

documentary material will be available for the 

litigation’s discovery process. 

purposes of section 210(a)(16)(D) and 

the proposed rule. Likewise, the FDIC 

will consider whether documentary 

material was retained pursuant to 

standards imposed by the financial 

company’s regulators when determining 

whether specific documentary material 

is a record for the purposes of section 

210(a)(16)(D) and the proposed rule. 

The third factor is whether the 

documentary material is needed by the 

FDIC to carry out its functions as 

receiver. This inquiry would permit the 

classification of documentary material 

as a record if it would be used by the 

FDIC in carrying out its functions as 

receiver in, for example, transferring the 

financial company’s assets or liabilities, 

assuming or repudiating the financial 

company’s contracts, determining 

claims, or collecting obligations owed to 

the financial company. 

The fourth factor used to determine 

whether documentary material should 

be classified as records is the expected 

evidentiary needs of the FDIC and the 

public. Some records generated or 

maintained by the financial company 

may be used to support enforcement 

actions and litigation. Certain 

information may be necessary for 

reports to Congress and the public that 

are required under the Dodd-Frank Act. 

This factor reflects the statutory text of 

section 210(a)(16)(D)(i)(II), which 

requires the FDIC to prescribe a records 

retention regulation with due regard for 

the expected evidentiary needs of the 

FDIC as receiver for a covered financial 

company and the public regarding the 

records of covered financial companies. 

Paragraph (b)(2) of the proposed rule 

establishes the record retention 

schedule for the records of a covered 

financial company described in 

paragraph (b)(1). The retention and 

disposition schedule set forth in the 

proposed rule is modeled after that 

contained in the FDIA provision and the 

FDIA final rule: After the end of the sixyear period beginning on the date of its 

appointment as receiver, the FDIC may 

destroy any records of a failed covered 

financial company that the FDIC 

determines to be unnecessary to 

maintain unless otherwise required by 

applicable law. In addition, the FDIC 

may at any time destroy any records that 

are at least 10 years old as of the date 

of its appointment as receiver. Also, 

similar to the FDIA final rule, paragraph 

(b)(2) of the proposed rule expressly 

provides that the FDIC will not destroy 

records subject to a litigation hold 5

imposed by the FDIC in order to ensure 

retention of documentary material that 

is relevant to ongoing litigation matters. 

By including litigation holds, the 

proposed rule implements the policy of 

the FDIC to preserve information (both 

electronically-stored information and 

paper) that the FDIC may be required to 

produce in litigation or when otherwise 

subject to a legal requirement to 

produce information. 

Paragraph (b)(3) provides a nonexclusive list of examples of material 

that would constitute records of 

financial companies to provide 

additional guidance and clarity with 

respect to the sorts of documentary 

material that are subject to the retention 

requirements of the rule. Included 

examples are correspondence, tax and 

accounting forms and work papers, 

internal audits, inventories, board of 

directors or committee meeting minutes, 

personnel files and employee benefits 

information, general ledger and 

financial reports or data, memoranda, 

litigation files, loan documents 

including records relating to 

intercompany debt, contracts and 

agreements to which the financial 

company was a party, customer 

accounts and transactions, qualified 

financial contracts and related 

information, and reports or other 

records of subsidiaries or affiliates of the 

financial company that were provided 

to the financial company. 

Transfer of Records 

Paragraph (b)(4) addresses the transfer 

of the records of a financial company to 

a third party acquirer (including a 

bridge financial company) and is also 

modeled on a similar provision in the 

FDIA final rule. In a resolution of a 

covered financial company, the FDIC 

may transfer the records of a covered 

financial company to the custody of a 

third party including a bridge financial 

company in connection with a 

transaction involving the purchase and 

assumption of the assets and liabilities 

of the covered financial company. 

Paragraph (b)(4) of the proposed rule 

provides that such a transfer will satisfy 

the records retention obligations under 

paragraph (b)(2) and section 

210(a)(16)(D) so long as the transfer is 

made pursuant to a purchase and 

assumption agreement under which the 

transferee agrees that it will not destroy 

the transferred records for at least six 

years from the date of the appointment 

of the FDIC as receiver for a covered 

financial company, unless otherwise 

notified in writing by the FDIC. 

Records of the FDIC as Receiver for a 

Covered Financial Company 

In fulfilling its duties and 

responsibilities as receiver for a covered 

financial company pursuant to title II of 

the Dodd-Frank Act, the FDIC itself 

would generate, receive and maintain 

documentary material in connection 

with and after its appointment as 

receiver that would be separate and 

apart from the records that it inherited 

from the failed company. Section 

210(a)(16)(D) requires retention of 

records generated by the FDIC in 

exercising the authorities of title II. 

Paragraph (c) of the proposed rule 

provides guidance with respect to the 

evaluation of whether documentary 

materials generated or maintained by 

the FDIC are subject to the retention 

requirement. 

Paragraph (c)(1) sets forth three 

factors that will be considered by the 

FDIC to evaluate if documentary 

material was generated or maintained by 

the FDIC in the course of and necessary 

to the exercise of its title II authorities. 

The first factor is the extent to which 

the documentary material related to 

duties and functions of the FDIC as 

receiver in exercising its authorities 

under title II of the Dodd-Frank Act. 

These would include documentary 

material generated or maintained by the 

FDIC as receiver with respect to its 

appointment under section 202 of the 

Dodd-Frank Act, as well as 

documentary material generated or 

maintained by the FDIC as receiver for 

a covered financial company in 

connection with the exercise of its 

orderly liquidation authority. In making 

its determination, the FDIC would judge 

the degree to which particular 

documentary material is related to the 

duties and functions of the FDIC 

receiver and the exercise of its orderly 

liquidation authority. 

The second factor is whether the 

documentary material was generated or 

maintained in accordance with the 

record retention policies and procedures 

of the FDIC. The FDIC will look to its 

internal procedures for maintaining its 

own corporate records and use them as 

a guideline to determine whether 

documentary material generated or 

maintained as receiver for a covered 

financial company comports with these 

procedures for retention and, thus, 

should constitute records. Like private 

companies and other governmental 

organizations, the FDIC has established 

protocols for the efficient and effective 

maintenance of files, records and nonVerDate Sep<11>2014 16:28 Oct 23, 2014 Jkt 235001 PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 E:\FR\FM\24OCP1.SGM 24OCP1

asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
63588 Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 

6The FDIC has been required to retain records 

inherited from failed insured depository 

institutions for six years since the enactment of the 

FDIA provision which was added to the Federal 

Deposit Insurance Act by section 212(a) of the 

Financial Institutions Reform, Recovery, and 

Enforcement Act (FIRREA) in 1989 (Pub. L. No. 

101–73). 

record documentary materials. These 

protocols reflect the importance of these 

materials to the work of the FDIC. 

The third factor used to determine 

whether documentary material should 

be classified as records of the FDIC as 

receiver is the expected evidentiary 

needs of the FDIC and the public. 

Records generated or maintained by the 

FDIC as receiver may be needed to 

support enforcement actions and 

litigation. In addition, records of the 

FDIC as receiver may be needed to 

provide required reports to Congress 

and the public. This factor is based on 

section 210(a)(16)(D)(i)(II) which 

requires the FDIC to prescribe a records 

retention regulation with due regard for 

the expected evidentiary needs of the 

FDIC as receiver for a covered financial 

company and the public regarding the 

records of covered financial companies. 

Paragraph (c)(2) of the proposed rule 

sets forth the record retention schedule 

for the records described in paragraph 

(c)(1). The requirement that these 

records be maintained for at least six 

years following the termination of the 

receivership reflects the time periods 

contained in the FDIA final rule with 

respect to records of a failed insured 

depository institution and is also similar 

to the proposed rule’s retention 

schedule time period regarding the 

inherited records of a covered financial 

company. The FDIA provision and final 

rule promulgated thereunder measure 

the six-year period from the 

appointment of the receiver which 

marks the legal termination of a failed 

insured depository institution. In 

keeping with the FDIC’s long experience 

with this six-year retention period,6 the 

final rule includes a six-year retention 

period for the records of the FDIC as 

receiver of a covered financial company 

measured from the termination of the 

receivership, which is the comparable 

date after which no new records will be 

created. As in the case of the retention 

of records inherited from covered 

financial companies, this minimum 

retention period is intended to ensure 

that these records are available for a 

long enough period to satisfy the 

evidentiary needs of the FDIC and the 

public in the aftermath of the 

receivership of a covered financial 

company. 

Paragraph (c)(3) of the proposed rule 

sets forth a non-exclusive list of 

examples of documentary material that 

would constitute records of the FDIC in 

order to provide additional guidance 

and clarity with respect to the sorts of 

documentary material that are subject to 

the retention requirements of the rule. 

Included examples are: Correspondence; 

tax and accounting forms and work 

papers; inventories; contracts and other 

information relating to the management 

and disposition of the assets of the 

covered financial company; 

documentary material relating to the 

appointment of the FDIC as receiver; 

administrative records and other 

information relating to administrative 

proceedings; pleadings and similar 

documents in civil litigation, criminal 

restitution and forfeiture litigation 

matters and all other litigation matters 

in which the FDIC as receiver is a party; 

the charter and formation documents of 

a bridge financial company and 

contracts and other documents and 

information relating to the role of the 

FDIC as receiver in overseeing the 

operations of the bridge financial 

company; and reports or other records 

of the bridge financial company and its 

subsidiaries or affiliates that were 

provided to the FDIC as receiver; and 

documentary material relating to the 

administration, determination and 

payment of claims against the FDIC as 

receiver. 

Paragraph (c)(4) of the proposed rule 

makes clear that the records either 

generated or maintained by the FDIC as 

receiver do not include the inherited 

records that existed prior to the date of 

the appointment of the receiver by the 

covered financial company itself. The 

records of the covered financial 

company and the rules for their 

retention are addressed separately in 

paragraph (b). 

Records Subject to the Record Retention 

Requirements of Section 210(a)(16)(D) of 

the Dodd-Frank Act and the Proposed 

Regulation 

Paragraph (d) of the proposed rule 

applies to all records that fall within the 

scope of the retention requirements of 

the rule as that scope is described in 

paragraphs (b) and (c). Paragraph (d)(1) 

of the proposed rule makes clear that 

the FDIC’s designation of documentary 

material as records pursuant to 

paragraph (b) or (c) is solely for the 

purpose of identifying documentary 

material subject to the retention 

requirements of section 210(a)(16)(D) 

and the proposed rule should have no 

effect on whether the documentary 

material is discoverable or admissible in 

any court, tribunal or other adjudicative 

proceeding, nor on whether such 

material is subject to the Freedom of 

Information Act, the Privacy Act or 

other law or court order. Thus, whether 

specific documentary material is a 

record pursuant to the proposed rule 

does not alter its status under 

evidentiary rules such as the Federal 

Rules of Evidence (‘‘FRE’’). For 

example, FRE 803(1) provides that 

‘‘records of regularly conducted 

activity’’ (‘‘business records’’) are not 

excluded from evidence by the rule 

against hearsay, regardless of whether 

the declarant is available as a witness. 

If certain documentary material meets 

the requirements of a business record 

pursuant to FRE 803(1), then whether or 

not the FDIC determines that specific 

documentary material constitutes 

‘‘records of a covered financial 

company’’ or ‘‘records of the FDIC as 

receiver for a covered financial 

company’’ pursuant to the proposed 

rule will not affect the determination of 

whether the documentary material is a 

business record under FRE 803(1). In 

addition, whether specific material is or 

is not designated as a record for 

purposes of section 210(a)(16)(D) and 

the proposed rule is not intended to 

affect whether it may be subject to a 

litigation hold or a request under the 

Freedom of Information Act, the Privacy 

Act or other law. 

Paragraph (d)(1) also clarifies that any 

record designation made by the FDIC 

will not prevent full compliance with 

any applicable legal or regulatory 

requirement or court order that 

establishes particular requirements with 

respect to certain records, such as a 

requirement that specific records be 

preserved, maintained, destroyed or 

kept under seal. 

Exclusions 

Paragraph (d)(2) of the proposed rule 

lists three categories of documentary 

material that will not qualify as records 

and thus will not be subject to the 

record retention requirements of section 

210(a)(16)(D) and the proposed rule. 

The first category includes duplicate 

copies, as required by the mandate in 

section 210(a)(16)(D)(I) to accord due 

regard to the avoidance of duplicative 

record retention. Also in the first 

category is documentary material such 

as reference materials, drafts of 

documents that are superseded by later 

drafts or revisions, documentary 

material provided to the FDIC by other 

parties in concluded litigation for which 

all appeals have expired, and transitory 

information including personal notes, 

out-of-office replies, routine system 

messages or system-generated log files 

or other documentary material not 

routinely maintained under the 

standard record retention policies and 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 63589 

7For example, the Texas Administrative Code, 

Title 13, Chapter 6, Section 6.91 (2005) defines 

‘‘transitory information’’ in the context of the state’s 

electronic record as ‘‘[r]ecords of temporary 

usefulness that are not an integral part of a records 

series of an agency, that are not regularly filed 

within an agency’s recordkeeping system, and that 

are required only for a limited period of time for 

the completion of an action by an official or 

employee of the agency or in the preparation of an 

on-going records series. Transitory records are not 

essential to the fulfillment of statutory obligations 

or to the documentation of agency functions.’’ The 

National Archives and Records Administration 

(NARA) Bulletin 2013–02 (August 29, 2013), 

‘‘Guidance on a New Approach to Managing Email 

Records’’ provides that agencies must determine 

whether end users may delete ‘‘. . . non-record, 

transitory, or personal email from their accounts.’’ 

The Sedona Conference Commentary on 

Information Governance (December 2013) refers to 

the ‘‘. . . defensible deletion of transitory, nonsubstantive or non-record content.’’ A World Health 

Organisation publication refers to the need to 

differentiate between records of ‘‘. . . substantive, 

fixed-term and transitory value.’’ Deserno, Ineke 

and Kynaston, Donna, A Records Management 

Program that Works for Archives, The Information 

Management Journal, May/June 2005. 

8This term is defined in 12 U.S.C. 5381(a)(3) and 

12 CFR 380.1. 

procedures of the FDIC. The term 

‘‘transitory information’’ or ‘‘transitory 

record’’ is commonly used in record 

retention systems to describe records of 

temporary usefulness required only for 

a limited period of time for the 

completion of an action by an employee 

or official and that are not essential to 

the fulfillment of statutory obligations 

or the documentation of government or 

business functions.7

The second category of exclusions 

from record designation entails the 

documentary material generated or 

maintained by a bridge financial 

company 8 or by a subsidiary or affiliate 

of a covered financial company. The 

exclusion of this documentary material 

emphasizes the separate legal status of 

the covered financial company and its 

subsidiaries and of the FDIC receiver 

and any bridge financial company the 

FDIC may organize for the purpose of 

resolving a covered financial company. 

The proposed rule addresses only the 

records of a covered financial company 

and of the FDIC as receiver for a covered 

financial company. Information 

provided to the FDIC in connection with 

the formation or oversight of the bridge 

financial company or its subsidiaries 

would be within the scope of the 

regulation; however, documentary 

material generated or maintained by a 

bridge financial company or its 

subsidiaries or affiliates in the ordinary 

course of business that is not provided 

to the FDIC would fall outside the scope 

of the retention requirements of the 

proposed rule. 

The third category of exclusions from 

the purview of the proposed rule and 

section 210(a)(16)(D) is non-publicly 

available supervisory information, 

operating or condition reports that were 

prepared by, on behalf of or at the 

requirement of any agency that may 

regulate financial companies or their 

subsidiaries. This is consistent with the 

FDIC’s long-standing policy that reports 

of examination or other confidential 

supervisory correspondence or 

information prepared by FDIC 

examiners or for the use of the FDIC and 

other regulatory agencies with respect to 

a financial company or an insured 

depository institution or other regulated 

subsidiary of a financial company 

belong exclusively to such regulators 

and not to the institution, even though 

institutions may retain copies. 

Policies and Procedures 

Paragraph (d)(3) of the proposed rule 

provides that the FDIC may establish 

policies and procedures with respect to 

the retention and destruction of records 

that are consistent with the proposed 

rule. It is expected that these policies 

and procedures will address specific 

matters related to the capture, 

processing, and storage of the records of 

covered financial companies such as 

collecting computer hard drives, email 

databases, and backup and disaster 

recovery tapes, as well as establishing 

standard policies with respect to the 

retention of information generated by 

the FDIC on its own files, information 

systems, and databases. 

III. Request for Comments 

The FDIC seeks comments on all 

aspects of the proposed rule. Comments 

will be considered by the FDIC and 

appropriate revisions will be made to 

the proposed rule, if necessary, before a 

final rule is issued. All comments must 

be received by the FDIC not later than 

December 23, 2014. 

IV. Regulatory Analysis and Procedure 

A. Paperwork Reduction Act 

No collections of information 

pursuant to the Paperwork Reduction 

Act, 44 U.S.C. 3501, et seq., are 

contained in the proposed rule. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

5 U.S.C. 601, et seq., requires that each 

Federal agency either certify that a 

proposed rule would not, if adopted in 

final form, have a significant economic 

impact on a substantial number of small 

entities or prepare an initial regulatory 

flexibility analysis of the rule and 

publish the analysis for comment. For 

purposes of the RFA analysis or 

certification, financial institutions with 

total assets of $550 million or less are 

considered to be ‘‘small entities.’’ The 

FDIC hereby certifies pursuant to 5 

U.S.C. 605(b) that the proposed rule, if 

adopted, will not have a significant 

economic impact on a substantial 

number of small entities. The proposed 

rule refines the definition of the term 

‘‘records’’ under section 210(a)(16)(D) 

and establishes retention schedules that 

the FDIC must use in connection with 

its retention of these records. 

Accordingly, there will be no significant 

economic impact on a substantial 

number of small entities as a result of 

this rulemaking. 

C. The Treasury and General 

Government Appropriations Act, 1999— 

Assessment of Federal Regulations and 

Policies on Families 

The FDIC has determined that the 

proposed rule will not affect family 

well-being within the meaning of 

section 654 of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681). 

D. Plain Language 

Section 722 of the Gramm-LeachBliley Act (Pub. L. 106–102, 113 Stat. 

1338, 1471), requires the Federal 

banking agencies to use plain language 

in all proposed and final rules 

published after January 1, 2000. The 

FDIC has sought to present the proposed 

rule in a simple and straightforward 

manner. 

List of Subjects in 12 CFR Part 380 

Holding companies, Insurance 

companies, Records and records 

retention. 

Authority and Issuance 

For the reasons set forth in the 

common preamble, the Federal Deposit 

Insurance Corporation proposes to 

amend chapter III of title 12 of the Code 

of Federal Regulations as follows: 

PART 380—ORDERLY LIQUIDATION 

AUTHORITY 

■ 1. The authority citation for part 380 

is revised to read as follows: 

Authority: 12 U.S.C. 5389; 12 U.S.C. 

5390(s)(3); 12 U.S.C. 5390(b)(1)(C); 12 U.S.C. 

5390(a)(7)(D); 5390(a)(16)(D); 12 U.S.C. 

5381(b), 12 U.S.C. 5390(r). 

■ 2. Add § 380.14 to read as follows: 

§ 380.14 Record retention requirements. 

(a) Scope and definition. (1) Section 

210(a)(16)(D) of the Dodd-Frank Act 

requires retention of records of a 

financial company for which the 

Corporation has been appointed receiver 


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63590 Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 

and of records of the Corporation 

generated in connection with its 

appointment and function as receiver 

for that covered financial company in 

exercising its orderly liquidation 

authorities under title II of the DoddFrank Act. This section addresses 

retention of those records. 

(2) As used in this section, 

documentary material means any 

reasonably accessible document, book, 

paper, map, photograph, microfiche, 

microfilm, computer or electronicallycreated writing, data or file. 

(b) Records of a covered financial 

company for which the Corporation is 

appointed receiver—(1) Determination. 

In determining whether particular 

documentary material existing as of the 

date of the appointment of the 

Corporation as receiver was generated or 

maintained by a financial company in 

the course of and necessary to its 

transaction of business and thus 

constitutes records of a covered 

financial company, the Corporation will 

consider the following factors: 

(i) The extent to which the 

documentary material related to the 

business of the financial company; 

(ii) Whether the documentary material 

was generated or maintained by the 

financial company as records in the 

regular course of the business of the 

financial company in accordance with 

its own record retention practices and 

procedures or pursuant to standards 

established by the financial company’s 

regulators; 

(iii) Whether the documentary 

material is needed by the Corporation to 

carry out its receivership function; and 

(iv) The expected evidentiary needs of 

the Corporation and the public. 

(2) Record retention and disposition 

schedule for financial company records. 

(i) Except as provided in paragraph 

(b)(2)(ii) of this section, after the end of 

the six-year period beginning on the 

date of the appointment of the 

Corporation as receiver, the Corporation 

may destroy any records of the financial 

company that the Corporation 

determines to be unnecessary unless 

subject to a litigation hold imposed by 

the Corporation. 

(ii) Notwithstanding paragraph 

(b)(2)(i) of this section, the Corporation 

may at any time after appointment of 

the Corporation as receiver for a covered 

financial company destroy any records 

of the financial company that are at least 

10 years old as of the date of 

appointment unless subject to a 

litigation hold imposed by the 

Corporation. 

(3) Examples. Examples of financial 

company records include, without 

limitation, correspondence, tax and 

accounting forms and work papers, 

internal audits, inventories, board of 

directors or committee meeting minutes, 

personnel files and employee benefits 

information, general ledger and 

financial reports or data, memoranda, 

litigation files, loan documents 

including records relating to 

intercompany debt, contracts and 

agreements to which the financial 

company was a party, customer 

accounts and transactions, qualified 

financial contracts and related 

information, and reports or other 

records of subsidiaries or affiliates of the 

financial company that were provided 

to the financial company. 

(4) Transfer of covered financial 

company records to acquirer. If the 

Corporation transfers records of a 

covered financial company to a third 

party including a bridge financial 

company in connection with a 

transaction involving the purchase and 

assumption of assets and liabilities of a 

covered financial company, the record 

retention requirements of section 

210(a)(16)(D) of the Dodd-Frank Act and 

paragraph (b)(2) of this section shall be 

satisfied if the transferee agrees that it 

will not destroy such records for at least 

six years beginning on the date of the 

appointment of the Corporation as 

receiver for the covered financial 

company unless otherwise notified in 

writing by the Corporation. 

(c) Records of the Corporation as 

receiver for a covered financial 

company—(1) Determination. In 

determining whether particular 

documentary material constitutes 

records that were generated or 

maintained by the Corporation in 

connection with its appointment and 

function as receiver for a covered 

financial company and in exercising its 

orderly liquidation authorities under 

title II of the Dodd-Frank Act, the 

Corporation will consider the following 

factors: 

(i) The extent to which the 

documentary material related to the 

duties and functions of the Corporation 

as receiver in exercising its orderly 

liquidation authorities under title II of 

the Dodd-Frank Act; 

(ii) Whether the documentary material 

was generated or maintained by the 

Corporation in accordance with the 

record retention policies and procedures 

of the Corporation; and 

(iii) The expected evidentiary needs 

of the Corporation and the public. 

(2) Record retention and disposition 

schedule for receivership records. 

Records generated or maintained by the 

Corporation as receiver for a covered 

financial company subject to the record 

retention requirements of this section 

shall be maintained for not less than six 

years after the date of the termination of 

the receivership. 

(3) Examples. Examples of records 

generated or maintained by the 

Corporation as receiver for a covered 

financial company include, without 

limitation, correspondence; tax and 

accounting forms and work papers; 

inventories; contracts and other 

information relating to the management 

and disposition of the assets of the 

covered financial company; 

documentary material relating to the 

appointment of the FDIC as receiver; 

administrative records and other 

information relating to administrative 

proceedings; pleadings and similar 

documents in civil litigation, criminal 

restitution and forfeiture litigation 

matters and all other litigation matters 

in which the Corporation as receiver is 

a party; the charter and formation 

documents of a bridge financial 

company and contracts and other 

documents and information relating to 

the role of the Corporation as receiver in 

overseeing the operations of the bridge 

financial company; and reports or other 

records of the bridge financial company 

and its subsidiaries or affiliates that 

were provided to the Corporation as 

receiver; and documentary material 

relating to the administration, 

determination and payment of claims 

against the Corporation as receiver. 

(4) Records generated or maintained 

by the Corporation as receiver for a 

covered financial company do not 

include records of a financial company 

described in paragraph (b) of this 

section. 

(d) Records subject to the record 

retention requirements of section 

210(a)(16)(D) of the Dodd-Frank Act and 

this section. With respect to all records 

described in paragraphs (b) and (c) of 

this section, the following applies: 

(1) Impact on discoverability, 

admissibility or release; compliance 

with court orders. The Corporation’s 

determination that documentary 

material must be maintained pursuant 

to section 210(a)(16)(D) of the DoddFrank Act and this section shall not bear 

on the discoverability or admissibility of 

such documentary material in any court, 

tribunal or other adjudicative 

proceeding nor on whether such 

documentary material is subject to 

release under the Freedom of 

Information Act, the Privacy Act or 

other law. The Corporation will comply 

with any applicable court order 

concerning mandatory retention or 

destruction of any records subject to this 

section. 

(2) Exclusions. Documentary material 

not subject to the record requirements of 


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Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Proposed Rules 63591 

section 210(a)(16)(D) of the Dodd-Frank 

Act and this section includes, without 

limitation: 

(i) Duplicate copies, reference 

materials, drafts of documents that are 

superseded by later drafts or revisions, 

documentary material provided to the 

Corporation by other parties in 

concluded litigation for which all 

appeals have expired, and transitory 

information including personal notes, 

routine system messages or systemgenerated log files or other documentary 

material not routinely maintained under 

the standard record retention policies 

and procedures of the Corporation; 

(ii) Documentary material generated 

or maintained by a bridge financial 

company, or by a subsidiary or affiliate 

of a covered financial company that was 

not provided to the financial company 

or to the Corporation as receiver; and 

(iii) Non-publicly available 

confidential supervisory information, 

operating, or condition reports prepared 

by, on behalf of, or at the requirement 

of any agency responsible for the 

regulation or supervision of financial 

companies or their subsidiaries. 

(3) Policies and procedures. The 

Corporation may establish policies and 

procedures with respect to the retention 

and destruction of records that are 

consistent with this section. 

Dated at Washington, DC, this 21st day of 

October, 2014. 

By Order of the Board of Directors, Federal 

Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 2014–25338 Filed 10–23–14; 8:45 am] 

BILLING CODE 6714–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R01–OAR–2013–0818; A–1–FRL– 

9916–17–Region–1] 

Approval and Promulgation of Air 

Quality Implementation Plans; Rhode 

Island; Decommissioning of Stage II 

Vapor Recovery Systems 

AGENCY: Environmental Protection 

Agency. 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to approve a 

State Implementation Plan (SIP) 

revision submitted by the State of Rhode 

Island Department of Environmental 

Management. This revision includes 

regulatory amendments that allow 

gasoline dispensing facilities (GDFs) to 

decommission their Stage II vapor 

recovery systems as of December 25, 

2013, and a demonstration that such 

removal is consistent with the Clean Air 

Act and EPA guidance. This revision 

also includes regulatory amendments 

that strengthen Rhode Island’s 

requirements for Stage I vapor recovery 

systems at GDFs. The intended effect of 

this action is to propose approval of 

Rhode Island’s revised vapor recovery 

regulations. 

DATES: Written comments must be 

received on or before November 24, 

2014. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R01–OAR–2013–0818 by one of the 

following methods: 

1. www.regulations.gov: Follow the 

on-line instructions for submitting 

comments. 

2. E-Mail: arnold.anne@epa.gov. 

3. Fax: (617) 918–0047. 

4. Mail: ‘‘Docket Identification 

Number EPA–R01–OAR–2013–0818,’’ 

Anne Arnold, U.S. Environmental 

Protection Agency, EPA New England 

Regional Office, Office of Ecosystem 

Protection, Air Quality Planning Unit, 5 

Post Office Square—Suite 100, (Mail 

code OEP05–2), Boston, MA 02109– 

3912. 

5. Hand Delivery or Courier. Deliver 

your comments to: Anne Arnold, 

Manager, Air Quality Planning Unit, 

U.S. Environmental Protection Agency, 

EPA New England Regional Office, 

Office of Ecosystem Protection, Air 

Quality Planning Unit, 5 Post Office 

Square—Suite 100, (Mail code OEP05– 

2), Boston, MA 02109–3912. Such 

deliveries are only accepted during the 

Regional Office’s normal hours of 

operation. The Regional Office’s official 

hours of business are Monday through 

Friday, 8:30 a.m. to 4:30 p.m., excluding 

legal holidays. 

Instructions: Direct your comments to 

Docket ID No. EPA–R01–OAR–2013– 

0818. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit through 

www.regulations.gov, or email, 

information that you consider to be CBI 

or otherwise protected. The 

www.regulations.gov Web site is an 

‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an email comment directly 

to EPA without going through 

www.regulations.gov your email address 

will be automatically captured and 

included as part of the comment that is 

placed in the public docket and made 

available on the Internet. If you submit 

an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: All documents in the 

electronic docket are listed in the 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, i.e., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

is not placed on the Internet and will be 

publicly available only in hard copy 

form. Publicly available docket 

materials are available either 

electronically in www.regulations.gov or 

in hard copy at Office of Ecosystem 

Protection, U.S. Environmental 

Protection Agency, EPA New England 

Regional Office, Office of Ecosystem 

Protection, Air Quality Planning Unit, 5 

Post Office Square—Suite 100, Boston, 

MA. EPA requests that if at all possible, 

you contact the contact listed in the FOR

FURTHER INFORMATION CONTACT section to 

schedule your inspection. The Regional 

Office’s official hours of business are 

Monday through Friday, 8:30 a.m. to 

4:30 p.m., excluding legal holidays. 

In addition, copies of the state 

submittal are also available for public 

inspection during normal business 

hours, by appointment at the State Air 

Agency: Office of Air Resources, 

Department of Environmental 

Management, 235 Promenade Street, 

Providence, RI 02908–5767. 

FOR FURTHER INFORMATION CONTACT: 

Ariel Garcia, Air Quality Planning Unit, 

U.S. Environmental Protection Agency, 

EPA New England Regional Office, 5 

Post Office Square, Suite 100 (Mail 

code: OEP05–2), Boston, MA 02109– 

3912, telephone number (617) 918– 

1660, fax number (617) 918–0660, email 

garcia.ariel@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

EPA. 


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