This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

12993

Vol. 66, No. 42

Friday, March 2, 2001

1See 65 FR 66118 (Nov. 2, 2000).

2 In 1997, OTS added three new subparts to part

516. 62 FR 64138 (Dec. 4, 1997). These new

subparts were drafted using plain language drafting

techniques. OTS has redrafted the remainder of part

516 consistent with section 722 of Gramm-LeachBliley Act (the G–L–B Act or Act), which requires

OTS to use ‘‘plain language’’ in all proposed and

final rules published after January 1, 2000.

3This commenter noted that FDIC does not

require a pre-filing meeting for any applications,

and that OCC requires consultations only for certain

types of applications. See 12 CFR 5.24(d)(2)(i) and

12 CFR 303.161.

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 516, 517, 543, 544, 545,

550, 552, 555, 559, 560, 562, 563, 563b,

563f, 565, 567, 574, 575, 584

[No. 2001–11]

RIN 1550–AB14

Application Processing

AGENCY: Office of Thrift Supervision,

Treasury.

ACTION: Final rule.

SUMMARY: The Office of Thrift

Supervision (OTS) is revising its

application processing guidelines and

procedures. These changes update OTS

rules to reflect existing practices; to

provide more predictable procedures for

applicants; and to provide greater

flexibility to OTS and applicants in the

processing of applications. OTS has also

rewritten the rules in ‘‘plain language’’

to make them easier to understand.

EFFECTIVE DATE: April 1, 2001, except 12

CFR 516.290, which is effective July 1,

2001.

FOR FURTHER INFORMATION CONTACT:

Lane Langford, Regulatory Analyst,

Examination Policy, (202) 906–7027;

Celeste Anderson, Program Analyst,

Compliance Policy & Specialty

Examinations, (202) 906–7990; Robyn

Dennis, Manager, (202) 906–5751 and

Josephine Battle, Program Analyst

Trainee, (202) 906–6870, Supervision

Policy Division; John P. Harootunian,

Senior Counsel for Special Transactions,

Business Transactions Division, (202)

906–6415, and Koko Ives, Counsel

(Banking and Finance) Regulations and

Legislation Division, Office of Chief

Counsel, (202) 906–6661, Office of

Thrift Supervision, 1700 G Street NW.,

Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

I. Background

On November 2, 2000, OTS proposed

to revise its OTS application processing

guidelines and procedures at 12 CFR

part 516.1 The proposed rule was

intended to make the processing of

applications more efficient, more

expeditious, and easier to understand.2

Most of the proposed changes

clarified existing procedures. The

proposed rules, for example, presented

current information in user-friendly

charts; explained how OTS computes

time periods; and explained how an

applicant may determine whether an

application should be filed with the

Regional Office and OTS headquarters.

OTS also proposed to add a new

provision codifying OTS’s policy

protecting confidential information.

In addition, OTS proposed to remove

some technical requirements from the

existing regulations and to incorporate

this information into individual

application forms. OTS has revised its

forms and application-processing

handbook to reflect these changes.

These forms and the handbook will be

available on the effective date of today’s

final rule.

OTS proposed only a few substantive

changes to the existing rules. These

included new provisions that address

pre-filing procedures for certain

complex applications, permit OTS to

extend certain processing time frames,

and allow OTS to deem certain longpending applications to be withdrawn.

The comment period on the proposed

rule closed on January 2, 2001. OTS

received five comments from two

community organizations, one law firm

representing financial institutions, one

federal savings bank, and one trade

association. Generally, the commenters

supported the proposed rule, but

objected to certain provisions. These

issues are summarized in the following

analysis.

II. Analysis of the Comments

A. Pre-Filing Procedures

As noted above, the proposed rule

included new pre-filing procedures.

Proposed § 516.15 would have required

applicants to meet with OTS and submit

a draft business plan before filing

certain complex applications. These

applications included:

• An application for permission to

organize a de novo savings association.

• An application to convert an

existing financial institution or credit

union (other than a state-chartered

savings association regulated by OTS or

a state-chartered savings bank that is

regulated by the FDIC) to a federal

savings association.

• An application to acquire control of

a savings association filed by an

insurance company, an investment

company, a securities firm, a

commodities firms or a pension fund.

Several commenters addressed these

pre-filing procedures. One commenter

agreed that pre-filing meetings could be

useful in expediting application

processing under certain conditions.

The commenter, however, argued that a

pre-filing meeting might not always be

necessary. Instead, the commenter

suggested that OTS should require prefiling meetings on a case-by-case basis at

the discretion of the Regional Offices or

upon the request of the applicant.3 One

commenter supported discussing, but

not submitting, a business plan with

OTS at the pre-filing stage.

OTS has reconsidered whether it

should require a pre-filing meeting and

draft business plan for all applications

that fall within the three categories

described in the proposed rule. Based

on the types of issues that are

commonly presented by these

applications, OTS has revised the final

rule to impose different requirements

for each category of applications.

OTS believes that a pre-filing meeting

and draft business plan are essential for

an application for permission to

organize a de novo federal savings

association. These applications involve

the creation of a new organization that

has not previously operated as an

insured depository institution. As a

12994 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

4The proposed rule would have required a prefiling meeting whenever an insurance company, an

investment company, a securities firm, a

commodities firm or a pension firm sought to

acquire control of a savings association. Upon

reconsideration, OTS has concluded that all

acquisition applications, regardless of the nature of

the acquiror, potentially may raise significant

issues. Accordingly, the final rule requires all

companies or individuals who intend to file a

holding company application or a change in control

notice to contact OTS and discuss whether OTS

will require a pre-filing meeting.

5The proposed rule required the applicant to

submit the business plan seven calendar days

before the pre-filing meeting. The final rule has

been revised to permit the Regional Office to set an

appropriate schedule for the submission of required

information. See § 516.15(b).

result, these applications often involve

operational, compliance and other

issues that could benefit from the

additional pre-filing review. For these

reasons, OTS will require de novo

applicants to meet with OTS and to file

a draft business plan. This process will

permit applicants to identify legal or

policy issues before the application is

filed and enable them to address these

issues early in the process.

Conversion applications filed by a

commercial bank or credit union may

involve significant changes to the way

the institution conducts business. A

credit union, for example, is not FDICinsured, will probably have a different

asset mix than a typical savings

association, may not be familiar with

savings associations’ asset limitations,

Qualified Thrift Lender (QTL)

requirements and Community

Reinvestment Act (CRA) requirements,

will not have previously paid taxes, and

will have focused on serving a

particular group or community, rather

than the general public. Similarly,

commercial banks typically may not be

familiar with QTL requirements, asset

limitations applicable to savings

associations, and other restrictions that

apply to savings associations. For these

reasons, OTS believes that it is

appropriate to require credit unions and

commercial banks to meet with the

Regional Office before they may file a

conversion application. On the other

hand, these applications involve

existing entities that have conducted

banking operations, are generally

familiar with safe and sound banking

practices, and have previously been

supervised by another banking

regulator. Accordingly, OTS does not

believe that a draft business plan must

always be required for these

applications. The final rule provides the

Regional Office with discretion to

determine whether a conversion

applicant must submit a draft business

plan or other relevant information

before the pre-filing meeting.

Change of control applications may or

may not involve significant

modifications to the way the institution

conducts business, and may or may not

raise other major issues.4 Accordingly,

the final rule provides the Regional

Office with discretion to determine

whether a change of control applicant

must meet with OTS before it files its

application and whether an applicant

must submit a draft business plan or

other relevant information before this

meeting. In exercising this discretion,

the Regional Offices will review each

proposal on a case-by-case basis and

will consider a number of factors. These

factors will include the complexity of

the legal and policy issues presented by

the proposal and the level of assistance

required by a particular applicant. For

example, it may be beneficial for OTS to

meet with an applicant the first time

that it applies to control an association.

However, it may not be necessary to

hold a pre-filing meeting when that

applicant seeks to acquire control of a

second association with similar

operating characteristics. Similarly, a

pre-filing meeting and draft business

plan may not be necessary, for example,

where an application involves a simple

reorganization of a holding company’s

corporate structure.

The proposed rule would have

permitted a Regional Office to require,

or an applicant to request, a pre-filing

meeting for any type of application if

doing so would help resolve issues or

expedite the process. The final rule

continues to encourage all applicants to

contact the Regional Office before filing

an application. This process will allow

the Regional Office and the applicant to

determine whether a meeting and the

submission of information will help

expedite the application review process.

Even where no pre-filing meeting is

conducted or information submitted,

these contacts will serve to expedite

processing by providing an opportunity

to discuss the application before it is

filed.

1. Contacting Regional Office. Final

§ 516.15(b) requires applicants within

the three categories to contact the

Regional Office to ascertain how OTS

will exercise its discretion regarding the

pre-filing meeting and the submission of

other relevant information. This rule

also addresses scheduling.

The proposed rule indicated that the

applicant must meet with OTS at least

30 days before it files an application.

Several commenters asserted that the

proposed 30-day time frame was too

inflexible. These commenters noted that

30 days may be sufficient in some

instances, but that a shorter or longer

time period may be appropriate for

other transactions.

Rather than establish a fixed time

period for the meeting, the final rule

provides the Regional Office with

discretion regarding scheduling. OTS

anticipates that the Regional Office will

consider such factors as the nature of

the application, the parties’ schedules,

expected review time, and staff

resources. OTS notes that it is up to the

applicant to contact the Regional Office

a reasonable period in advance of the

filing. If the applicant fails to do so, the

filing of the application may be

delayed.5

2. Contents of the business plan.

Under proposed § 516.20(a), the draft

business plan, at a minimum, would

have been required to: (1) Identify the

projected operations and activities; (2)

include financial projections for at least

three years; (3) describe the risks

associated with the transaction and the

impact of the transaction on any

existing activities; (4) identify all

proposed directors and senior executive

officers of the savings association and

demonstrating that these individuals

have the expertise to prudently manage

the operations and activities described

in the plan; and (5) demonstrate how

applicable requirements regarding

serving the credit and lending needs of

the savings association’s market areas

will be met.

Two commenters considered the

business plan requirements too detailed.

They argued that it is unrealistic to

expect applicants to submit much of

this information at the pre-filing stage.

Specifically, the commenters noted that

a description of the projected operations

of the savings association, including

financial projections for a minimum of

three years, may not be available for

some transactions at the pre-filing stage.

One of the two commenters would

require financial projections and capital

matters only when a complete

application is filed. One commenter

argued that the draft business plan

should address only the proposed

management and the board, the

applicant’s proposed operating strategy,

and its compliance with relevant laws.

Another commenter urged OTS to

develop a description of the draft

business plan that is more flexible. Such

a business plan might include an

overview of the general areas such as

operations, risks, management, and

service to community.

OTS has not significantly revised the

content requirements for the draft

business plan in the final rule. For

example, the final rule continues to

require an applicant to provide financial

projections for a minimum of three

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 12995

6This commenter expressed concern that the prefiling meeting could lead to abuses. Specifically, the

commenter was concerned that OTS and applicants

would discuss ‘‘how to resolve issues so that OTS

can issue speedy approvals rather than how to

submit an application that addresses the significant

legal and policy issues.’’ The pre-filing meeting is

intended to help applicants to submit the most

complete application possible by identifying and

addressing problematic legal and policy issues at

the earliest possible date. While this may result in

the speedier approval of some applications, the

complete consideration and resolution of all legal

and policy issues remains of paramount

importance. 7 12 CFR part 505.

years. These financial projections assist

the Regional Office in determining how

well the applicant has planned and

analyzed its proposed operations and

how well the applicant understands the

underlying statutory and regulatory

requirements. OTS notes that while the

final rule lays out a common structure

and sets out minimum standards for a

draft business plan, it also provides

considerable flexibility in applying

those minimum standards. For example,

while all draft business plans must

clearly and completely describe

projected operations and activities, the

Regional Office may, depending on the

circumstances, merely require an

overview of operations, or may require

more detailed discussions.

OTS has made one minor adjustment

to one of the proposed business plan

requirements. Proposed § 516.20(b)(3)

would have required the applicant to

identify all proposed directors and

senior executive officers of the savings

association and demonstrate that these

individuals have the expertise to

prudently manage the operations and

activities described in the plan. OTS

recognizes that an applicant may not

have identified all of its directors and

senior executive officers before

submitting the proposed business plan.

Accordingly, the final rule requires draft

business plan to include this

information for only a majority of the

proposed directors and for key senior

executive officers.

One commenter mistakenly believed

that OTS approval of the business plan

at a pre-filing meeting is a precondition

of an accepted application and opposed

this concept. As stated in the preamble

to the proposed rule, OTS will review

in certain circumstances, but will not

approve, the business plan at the prefiling stage.

3. Public attendance at pre-filing

meeting. One commenter argued that

the public should be permitted to

witness the pre-filing meeting or that

OTS should make transcripts of the

meeting available to the public. If this

public access is not possible, the

commenter requested that OTS delete

the pre-filing meeting requirement.

OTS does not believe that it is

appropriate to allow the public to attend

or review discussions that take place at

the pre-filing meeting. The purpose of

the pre-filing meeting requirement is to

permit OTS and the applicant to

identify legal or policy issues before the

application is filed, and to enable the

applicant to address these issues early

in the process. For this process to work

effectively, the applicant must be free to

discuss all aspects of the application

with OTS staff, including protected

business information and confidential

information about potential securities

filings.6 Although members of the

public will not be able to attend a prefiling meeting, they can comment on

applications during the comment period

and may request informal and formal

meetings with the applicant and OTS.

See 12 CFR part 516, subparts C and D.

B. Contents of Application

Proposed part 516 did not impose

substantive requirements regarding the

content of applications. Some

commenters urged OTS to codify

application requirements relating to

antitrust matters, CRA issues,

management issues and fair lending

matters in the final rule. Commenters

argued that these requirements would

help the general public to make

informed comments. The commenters

urged OTS to state that an inadequate

CRA plan would result in an OTS

determination that the application is

materially deficient and ineligible for

further review.

OTS has not changed the final rule to

codify requirements relating to these

matters. Specific application

requirements are contained in

substantive regulations and in other

guidance affecting particular notices

and applications, appropriate forms,

and instructions. Applicants may obtain

guidance affecting particular notices

and applications from any OTS Regional

Office or, as of April 1, 2001, the OTS

web site at www.ots.treas.gov. See

§ 516.30. Although OTS will not codify

specific requirements in part 516, the

applicant still must comply with the

applicable underlying substantive

regulation and guidance. An inadequate

discussion of required items could

result in requests for additional

information. In addition, OTS may

deem an application containing an

inadequate discussion of CRA factors or

other required items to be materially

deficient and not process it further. See

§§ 516.210(a)(3) and 516.220(a)(1)(iii).

C. Confidentiality

Proposed § 516.35 is new, but would

restate current OTS policy protecting

confidential information. Under this

proposed section, OTS would make

submissions under part 516 available to

the public. An applicant, however, may

request that OTS keep portions of the

application confidential consistent with

the standards of the Freedom of

Information Act (5 U.S.C. 552 et seq.)

(FOIA) and OTS regulations

implementing FOIA.7 In the proposed

rule, OTS would not grant confidential

treatment for those portions of the

application describing the applicant’s

CRA objectives.

Several commenters agreed that CRA

plans should not be confidential. One

commenter observed that other parts of

the application may address

management issues or antitrust

considerations that may relate to a CRA

plan. The commenter urged OTS to

make all parts of the application

publicly available, ‘‘unless the applicant

can clearly establish any breach of

privacy or competitive harm resulting

from public availability.’’ In contrast,

another commenter asserted that it is

imperative that certain portions of the

applications remain confidential for

competitive reasons and that OTS

should respect an applicant’s judgments

regarding confidentiality.

The FOIA requires OTS to disclose

information to the public, unless the

information falls within certain exempt

categories. While the FOIA does not

prohibit OTS from publicly disclosing

any information, various other laws may

do so. See Trade Secrets Act, 18 U.S.C.

1905; Privacy Act of 1974, 5 U.S.C.

552a. Even when these laws do not

prohibit the disclosure of information,

OTS believes that the policy

considerations that support the

protection of particular information,

including the policy considerations that

underlie the FOIA exemptions, weigh

against OTS routinely disclosing matters

that are exempt under FOIA.

Under the final rules, an applicant

may request confidential treatment for

those portions of the application that

the applicant believes would be exempt

from disclosure if OTS were asked for

the information under FOIA. 5 U.S.C.

552. The FOIA exemptions most likely

to apply to portions of an application

are Exemption (4) and Exemption (6).

Exemption (4) may protect from

disclosure ‘‘privileged or confidential’’

material consisting of ‘‘trade secrets and

commercial or financial information.’’ 5

U.S.C. 552(b)(4). If the applicant

requests confidential treatment of a

portion of the application based on

FOIA Exemption (4), the applicant must

describe how it will suffer competitive

12996 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

8Section 505.1(a) provides: ‘‘This part is issued

by the Office of Thrift Supervision (‘‘OTS’’) as a

supplement to the Freedom of Information Act

regulations of the Department of the Treasury, 31

CFR part 1, subpart A, which apply to the OTS as

a component part of the Department of the

Treasury.’’

9See 12 CFR 5.10(OCC); 12 CFR 262.3(e)(FRB);

and 12 CFR 303.9(FDIC).

harm if the information were released.

Exemption (6) protects against

disclosure of information that if released

‘‘would constitute a clearly unwarranted

invasion of personal privacy.’’ 5 U.S.C.

552(b)(6). If an applicant has requested

confidential treatment for a portion of

the application and OTS does not have

sufficient information to determine

whether confidential treatment is

appropriate, OTS will ask the applicant

for additional information before

determining whether to disclose the

information in response to a FOIA

request.

Under proposed § 516.35(c), OTS

would advise an applicant before

disclosing to the public information for

which the applicant has requested

confidential treatment consistent with

paragraph (b) of this section. One

commenter urged OTS to adopt predisclosure notice requirements that are

consistent with OCC rules governing

confidential commercial information.

See 12 CFR 4.16. Specifically, the

commenter urged OTS to notify an

applicant that it has 10 business days to

object to a request for disclosure of

confidential commercial information

filed with OTS. The commenter would

also require OTS to provide an

applicant with notice of any decision to

disclose confidential commercial

information over the applicant’s

objection. OTS would provide this

notice at least 10 business days before

it intends to disclose the information.

OTS complies with FOIA regulations

issued by the Department of the

Treasury (Treasury) at 31 CFR part 1,

subpart A, and OTS supplemental FOIA

regulations at 12 CFR part 505.8 The

Treasury regulations provide

substantively identical guidance for

advance notice as those contained in

OCC rules. Therefore, it is unnecessary

to make the requested change.

OTS has made a technical change to

the text of 12 CFR 574.6(f)(4), which

addresses the procedural requirements

for disclosure of confidential

information contained in an application

for acquisition of control of a savings

association. Under existing § 574.6(f)(4),

OTS must give the applicant five

business days notice of its intent to

disclose information for which

confidential treatment has been

requested. The technical change will

conform § 574.6(f)(4) to § 516.35. OTS

will comply with the advance notice

required under the FOIA regulations.

Under proposed § 516.35(d), if OTS

issues a public statement with its

decision on the application, the agency

may comment on confidential

submissions in the application without

notifying the applicant. OTS has

decided to delete § 516.35(d) as

unnecessary. It is not OTS practice to

comment on confidential submissions

in the application in a public statement

without first notifying the applicant.

D. Filing Amendments or Supplemental

Information

The final rule adds § 516.47 to clarify

how an applicant may amend or

supplement an application. Under the

final rule, an applicant must file the

amendment or supplemental

information at the appropriate OTS

office(s) along with the number of

copies required under § 516.40. Any

amendment or supplemental

information must also be appropriately

captioned and meet the exhibit

requirements at § 516.30(b).

E. Comment Procedures

OTS proposed only minor revisions to

the publication and comment

procedures at existing subpart B and C.

The proposed rule made two revisions

to existing § 516.130, which governs

where commenters should file their

comments on an application. Proposed

§ 516.130 would require commenters to

file their comments with the appropriate

OTS Regional Office and, where an

application involves a significant issue

of law or policy, with OTS

headquarters. In addition, commenters

would also be required to

simultaneously provide a copy of the

comment directly to the applicant.

OTS has decided that it is too

burdensome to require a commenter to

determine whether an application

involves a significant issue of law or

policy in order to file its comments

properly. Instead, the final rule merely

requires a commenter to file its

comment with the appropriate Regional

Office. The Regional Office will forward

a copy of the comment to OTS

headquarters where appropriate.

Several commenters urged OTS to

delete the proposed requirement that

commenters must send their comments

directly to the applicant. These

commenters noted that the other

banking agencies do not require this

submission.9 The commenters also

asserted that this requirement may

intimidate community groups.

OTS disagrees. All comments are

public information and, in the past, OTS

has forwarded copies of comments to

applicants to permit them to address the

concerns raised. As a result, applicants

know the substance of all comments and

the identity of the commenters.

Requiring commenters to provide

comments directly to the applicant is

therefore unlikely to intimidate

community groups. OTS acknowledges

that providing a copy to the applicant

may impose costs on commenters. If

providing a copy of a comment to an

applicant imposes a significant burden

on the commenter, OTS may on a caseby-case basis waive the requirement and

forward the comment on the

commenter’s behalf.

Under existing § 516.140, commenters

must file comments with OTS within 25

calendar days after the application is

filed. OTS will consider a late-filed

comment, if within the comment period,

the commenter demonstrates good cause

for the untimely comment, and OTS

determines that the comment addresses

a significant regulatory concern and will

assist in the disposition of the

application. OTS is changing § 516.140

to permit OTS greater flexibility in

accepting late-filed comments. The final

rule will allow OTS to consider latefiled comments if the commenter

demonstrates good cause within the

comment period for the untimely

comment or OTS concludes that the

comment addresses a significant

regulatory concern and will assist in the

disposition of the application.

F. Meeting Procedures

OTS did not propose changes to the

formal and informal meeting procedures

in Subpart D, but sought comment on

how these meeting procedures are

operating in practice.

One commenter noted that the

informal and formal meetings are

valuable opportunities to make views

known to OTS and applicants. Another

commenter, however, suggested several

changes to these procedures. This

commenter noted that the existing rules

do not address the timing of the

informal or formal meetings. The

commenter argued that time is of the

essence for many corporate transactions.

Accordingly, this commenter asserted

that the regulation should require all

parties to be available to meet within 10

days after the submission of a comment.

OTS has decided not to impose these

time frames in order to retain maximum

flexibility in scheduling. It is, however,

OTS’s practice to schedule the meetings

as soon as possible taking into account

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 12997

10OTS will not arrange an informal meeting,

however, where a request is clearly frivolous or

clearly lacking a factual basis. With respect to

formal meetings, OTS will conduct a formal

meeting when a request is filed under § 516.170(e).

A request under § 516.170(e) must demonstrate that

material issues or facts have not been adequately

addressed by the informal meeting and that a formal

meeting is necessary to develop a record sufficient

to support a determination on those facts or issues.

11Under § 516.190, processing is suspended only

until OTS determines that a record has been

developed that sufficiently supports a

determination on the merits. By contrast, OTS may

suspend processing indefinitely when it finds

extraordinary circumstances under § 516.280.

12OTS received no comments on OTS review

under expedited treatment.

13Under § 516.220(a)(2)(ii), OTS may deny an

applicant’s request for an extension of time to file

additional information and may decide not to

process the application further. If an applicant’s

request for more time is denied, but the applicant

nonetheless files a timely response to all

information requests, OTS will process the

application under § 516.220(a)(1).

the schedules of the parties and other

factors.

Under § 516.170, OTS will conduct an

informal meeting whenever a

commenter requests such a meeting.10

One commenter argued that not all

comments should result in an informal

meeting. The commenter asserted that

OTS should require that allegations

have some merit before an informal

meeting is arranged. The commenter

also noted that under existing § 516.190,

arranging an informal meeting will

suspend the application processing time

frames. The commenter argued that OTS

should only suspend the time frames if

OTS determines that there are

extraordinary circumstances. Compare

§ 516.260 (OTS may suspend processing

under § 516.260 only for extraordinary

circumstances such as pending

legislation or material litigation).

OTS has not revised the informal

meeting process. This process ensures

that all allegations of harm to

individuals and communities are fully

explored and that OTS may issue an

informed decision on the merits of an

application. While the commenter

feared that some individuals or

community groups may request an

informal meeting solely to suspend the

application processing time periods,

OTS knows of no situation where this

has occurred. In addition, the rules

permit OTS to suspend processing time

frames only for a limited time,11 and

allow OTS to select the type of meeting

that is best suited to the issues raised.

OTS may, for example, prescribe an

informal meeting as simple as a

telephone conference call. Under these

circumstances, OTS does not believe

that the delay caused by the suspension

of processing will be significant.

If a meeting has been arranged, the

application processing time periods will

resume only when OTS determines that

a record has been developed that

sufficiently supports a determination on

the issues raised by the commenters.

See existing § 516.190. One commenter

argued that OTS should establish a

deadline for the completion of the

meeting process. The commenter argued

that OTS should have a fixed time

period following the conclusion of the

meeting (e.g., two weeks) to create a

record supporting the determinations

regarding the issues raised by the

commenters.

OTS believes that a fixed time frame

would limit its ability to develop a

thorough record. In some instances, two

weeks may be insufficient to develop a

record. Accordingly, OTS will resume

the time periods when the record is

developed. It will not impose a rigid

time period that will unnecessarily

inhibit its flexibility.

G. OTS Review

OTS processes applications under

part 516 using two procedures—

expedited treatment and standard

treatment. Like the current rule, the

proposed rule would base the decision

to process an application under

expedited treatment, in part, on the

association’s condition, as reflected in

the composite Uniform Financial

Institutions Rating System, the CRA

performance rating, and the most recent

compliance rating. See proposed

§ 516.5. The preamble noted that OTS

also assesses an association’s condition

using other rating systems including the

Uniform Rating System for Data

Processing Operations and the Uniform

Interagency Trust Rating System. OTS

specifically requested comment on

whether it should incorporate these

ratings in its decision to process

applications under expedited treatment.

One commenter asserted that OTS

should not revise the proposed rule to

incorporate these other ratings because

such a change would be inconsistent

with the other banking agencies’

procedures. The commenter argued that

any proposed changes to the criteria for

expedited treatment of an application

should be based on interagency

consensus.

OTS has decided not to incorporate

other ratings in its decision to process

applications under expedited treatment.

OTS monitors new developments for

each thrift and updates the CAMELS

rating, as needed, so that the rating is a

current indicator of the institution’s

condition. As part of this monitoring,

OTS examiners are authorized to make

off-site changes to the management

score (the M component) of the

CAMELS rating to reflect the scores

received under the other rating systems.

As a result, the CAMELS rating used in

§ 516.5 determinations already reflect

other ratings and considerations.

H. OTS Review Under Standard

Treatment

OTS received the following comments

on OTS review under standard

treatment: 12

1. Review for completeness. Under the

proposed rule governing standard

treatment, OTS will review each

application for completeness within 30

calendar days after its filing date. If OTS

determines that additional information

is necessary to complete the application,

OTS will notify the applicant of this fact

and the applicant will have 30 calendar

days to respond. See proposed

§§ 516.210 and 516.220. Within 15

calendar days after the applicant files

additional information, OTS will

complete its review of the additional

information.13 OTS may, however,

extend this 15-day period by an

additional 15 days, if OTS requires this

additional time to review the response.

One commenter supported the

proposed provision permitting OTS to

extend its review period. Another

commenter, however, argued that the

rules should require OTS to explain

why the extension is necessary. The

final rule adds the requirement that OTS

must briefly explain why the extension

is necessary.

2. Publishing a new public notice.

Under proposed § 516.250, OTS may

require an applicant to publish a new

public notice of the application if an

applicant submits a revision to the

application, the applicant submits new

or additional information, or a major

issue of law or change in circumstance

arose after filing the application.

One commenter argued that OTS

should always grant a new comment

period when it requires the applicant to

submit additional information. OTS

disagrees. The purpose of the new

comment period is to ensure that the

public has adequate notice and

opportunity to comment on applications

that change substantially after the initial

comment period. Not all revisions, new

information, changes in circumstances,

or issues of law are of a sufficient

magnitude to merit the delays, expense,

and burden inherent in the

republication of a notice. Accordingly,

OTS has left this provision unchanged

in order to retain its discretion in

12998 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

determining when a new comment

period is appropriate.

3. Review criteria. The proposed rule

did not describe the standards that OTS

will apply when it reviews applications.

The preamble indicated that approval or

disapproval would be based on the

standards in the underlying regulation

for the particular application.

The current rule, however, includes

one standard governing the review of

applications. See existing § 516.3(b)(2).

That provision requires OTS to deny

applications that are subject to standard

treatment unless the applicant

affirmatively demonstrates how the

application will clearly improve its

financial or managerial condition or

improve its compliance with CRA or

other consumer-related statutes without

affecting its financial or managerial

resources. OTS proposed to delete this

provision.

Two commenters opposed this

deletion, arguing that the change may

lead regulators to discount or limit

consideration of CRA factors. The final

rule follows the proposed rule on this

point. OTS continues to believe that the

review standards in the applicable

substantive statutes and regulations

sufficiently address these matters. OTS

will not limit or discount CRA or other

consumer-related compliance

requirements as a result of the deletion

because an applicant is still subject to

these underlying substantive statutes

and regulations.

III. Miscellaneous Changes

OTS has made miscellaneous

technical changes to the text of several

rules. For example, OTS has revised the

chart at § 516.40 to update the addresses

of the OTS Regional Offices. The chart,

however, does not reflect the new

address of the West Region Office,

which is expected to move later this

year. OTS will update the address in its

end of the year technical amendments.

OTS has also made other minor editorial

changes to §§ 516.5, 516.15, 516.40,

516.45, 516.120, 516.220 and 516.230.

OTS has also made a technical change

to 12 CFR 545.92(d)(2) to make the

publication requirements for a branch

office consistent with the publication

requirements in subpart B of part 516.

In 1997, OTS amended the application

processing rules to consolidate the

publication notice provisions in other

OTS regulations in a single regulation

under part 516. At that time, OTS

intended to include the branching

regulation in the amendment but

inadvertently omitted this change.

IV. Derivation Chart for Revised Part

516

Revised provision Former provision Comments

§ 516.1(a) ...................................................................... ..................................................................................... Added.

§ 516.1(b) ...................................................................... § 516.2(a)(1) ................................................................ Modified.

§ 516.1(c) ...................................................................... § 516.2(a) (2) .............................................................. Modified.

§ 516.5(a) ...................................................................... ..................................................................................... Added.

§ 516.5(b) ...................................................................... ..................................................................................... Added.

§ 516.5(c) ...................................................................... § 516.3(b)(1)(i) ............................................................ Modified.

§ 516.5(d) ...................................................................... § 516.3(b)(1)(ii) ............................................................ Modified.

§ 516.5(e) ...................................................................... § 516.3(B)(1)(iii) .......................................................... Modified.

§ 516.5(f) ....................................................................... § 516.3(b)(1)(iv) ........................................................... Modified.

§ 516.5(g) ...................................................................... § 516.3(b)(1)(v) ........................................................... Modified.

§ 516.5(h) ...................................................................... ..................................................................................... Added.

§ 516.5(i) ....................................................................... ..................................................................................... Added.

§ 516.10 ........................................................................ ..................................................................................... Added.

§ 516.15 ........................................................................ ..................................................................................... Added.

§ 516.20 ........................................................................ ..................................................................................... Added.

§ 516.25(a) .................................................................... § 516.3(a)(2) ................................................................ Modified.

§ 516.25(b) .................................................................... §§ 516.2(b) .................................................................. Modified and Added.

§ 516.30(a) .................................................................... § 516.1.(c) ................................................................... Modified and Added.

§ 516.30(b) .................................................................... § 516.1.(c) ................................................................... Modified.

§ 516.35 ........................................................................ ..................................................................................... Added.

§ 516.40(a)(1) ............................................................... § 516.1(c) .................................................................... Modified and Added.

§ 516.40(a)(2) ............................................................... § 516.1(b) .................................................................... Modified.

§ 516.40(b) .................................................................... § 516.1(a)&(c) ............................................................. Modified.

§ 516.45(a) .................................................................... ..................................................................................... Added.

§ 516.45(b) .................................................................... ..................................................................................... Added.

§ 516.47 ........................................................................ ..................................................................................... Added.

§ 516.55 ........................................................................ ..................................................................................... Added.

§ 516.120 ...................................................................... § 516.120 .................................................................... Modified.

§ 516.130 ...................................................................... § 516.130 .................................................................... Modified.

§ 516.140 ...................................................................... § 516.140 .................................................................... Modified.

§ 516.150 ...................................................................... § 516.150 .................................................................... Modified.

§ 516.185 ...................................................................... ..................................................................................... Added.

§ 516.190 ...................................................................... § 516.190 .................................................................... Modified.

§ 516.200(a) .................................................................. § 516.3(a)(2) ................................................................ Modified and Added.

§ 516.200(b) .................................................................. § 516.3(a)(3) ................................................................ Modified.

§ 516.200(c) .................................................................. ..................................................................................... Added.

§ 516.200(d) .................................................................. ..................................................................................... Added.

§ 516.210(a) .................................................................. § 516.2(c)(1) ................................................................ Modified and Added.

§ 516.210(b) .................................................................. § 516.2(c)(1) ................................................................ Modified.

§ 516.220(a) .................................................................. § 516.2(c)(2)–(5) ......................................................... Modified and Added.

§ 516.220(b) .................................................................. § 516.2(e) .................................................................... Modified.

§ 516.220(c) .................................................................. § 516.2(c)(4) ................................................................ Modified.

§ 516.230 ...................................................................... ..................................................................................... Added.

§ 516.240(a) .................................................................. § 516.2(c)(4)–(5) ......................................................... Modified.

§ 516.240(b) .................................................................. § 516.2(c)(5) ................................................................ Modified and Added.

§ 516.250 ...................................................................... ..................................................................................... Added.

§ 516.260 ...................................................................... § 516.2(c)(7) ................................................................ Modified and Added.

§ 516.270(a) .................................................................. § 516.2(d)(1) ................................................................ Modified.

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 12999

Revised provision Former provision Comments

§ 561.270(b) .................................................................. § 516.2(d)(2) ................................................................ Modified.

§ 516.270(c)(1) ............................................................. § 516.2(e) .................................................................... Modified.

§ 516.270(c)(2) ............................................................. § 516.2(f) ..................................................................... Modified.

§ 516.280(a) .................................................................. ..................................................................................... Added.

§ 516.280(b) .................................................................. § 516.2(d)(1) ................................................................ Modified.

§ 516.290 ...................................................................... ..................................................................................... Added.

V. Executive Order 12866

The Director of OTS has determined

that this final regulation does not

constitute a ‘‘significant regulatory

action’’ for purposes of Executive Order

12866.

VI. Regulatory Flexibility Act

Pursuant to section 605(b) of the

Regulatory Flexibility Act, OTS certifies

that this final regulation will not have

a significant economic impact on a

substantial number of small entities.

The final rule generally restates the

existing rule in plain language and

clarifies existing procedures. These

changes should make it easier for all

applicants to file applications and for

OTS to review applications

expeditiously. These changes should,

therefore, assist all potential applicants,

including small businesses. While the

final rule would make several minor

changes, only two of these changes

would impose additional burden on

certain applicants. Under the final rule,

certain applicants may be subject to a

possible pre-filing meeting requirement

and may be required to provide a draft

business plan or other relevant

information before the meeting. OTS

believes that the pre-filing meeting is

generally consistent with existing

procedures and imposes only a minimal

burden. Moreover, most applicants

should already have drafted business

plans to provide to the agency.

VII. Paperwork Reduction Act of 1995

The information collection

requirements in this final rule have

previously been approved by OMB

under the substantive regulations or

under the application forms; or involve

technical changes that do not affect the

overall burden of compliance. To the

extent that this regulation imposes new

burden, OTS has filed applications to

update the information collection

requirements in the underlying forms.

These have been submitted under 1550–

0005, 1550–00015, and 1550–0037.

VIII. Unfunded Mandates Act of 1995

Section 202 of the Unfunded

Mandates Reform Act of 1995, Pub. L.

104–4 (Unfunded Mandates Act),

requires that an agency prepare a

budgetary impact statement before

promulgating a rule that includes a

federal mandate that may result in

expenditure by state, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million or more

in any one year. If a budgetary impact

statement is required, section 205 of the

Unfunded Mandates Act also requires

an agency to identify and consider a

reasonable number of regulatory

alternatives before promulgating a rule.

The final rule generally restates the

existing application processing

procedures in plain language and

clarifies existing procedures. These

changes should make it easier for all

applicants to file applications and for

OTS to review applications. While the

final rule makes several minor changes,

OTS has determined that the final rule

will not result in expenditures by state,

local, or tribal governments or by the

private sector of $100 million or more.

Accordingly, this final rulemaking is not

subject to section 202 of the Unfunded

Mandates Act.

List of Subjects

12 CFR Part 516

Administrative practice and

procedure, Reporting and recordkeeping

requirements, Savings associations.

12 CFR Part 517

Government contracts, Individuals

with disabilities, Minority businesses,

Women.

12 CFR Part 543

Reporting and recordkeeping

requirements, Savings associations.

12 CFR Part 544

Reporting and recordkeeping

requirements, Savings associations.

12 CFR Part 545

Accounting, Consumer protection,

Credit, Electronic funds transfers,

Investments, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR Part 550

Savings associations, Trusts and

trustees.

12 CFR Part 552

Reporting and recordkeeping

requirements, Savings associations,

Securities.

12 CFR Part 555

Accounting, Consumer protection,

Credit, Electronic funds transfers,

Investments, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR Part 559

Reporting and recordkeeping

requirements, Savings associations,

Subsidiaries.

12 CFR Part 560

Consumer protection, Investments,

Manufactured homes, Mortgages,

Reporting and recordkeeping

requirements, Savings associations,

Securities.

12 CFR Part 562

Accounting, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR Part 563

Accounting, Advertising, Crime,

Currency, Investments, Reporting and

recordkeeping requirements, Savings

associations, Securities, Surety bonds.

12 CFR Part 563b

Reporting and recordkeeping

requirements, Savings associations,

Securities.

12 CFR Part 563f

Antitrust, Holding companies,

Reporting and recordkeeping

requirements, Savings associations.

12 CFR Part 565

Administrative practice and

procedure, Capital, Savings

associations.

12 CFR Part 567

Capital, Savings associations.

12 CFR Part 574

Administrative practice and

procedure, Holding companies,

Reporting and recordkeeping

requirements, Savings associations,

Securities.

13000 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

12 CFR Part 575

Administrative practice and

procedure, Capital, Holding companies

Reporting and recordkeeping

requirements, Savings associations,

Securities.

12 CFR Part 584

Administrative practice and

procedure, Holding companies,

Reporting and recordkeeping

requirements, Savings associations,

Securities.

Accordingly, the Office of Thrift

Supervision amends title 12, chapter V,

of the Code of Federal Regulations as set

forth below:

PART 516—APPLICATION

PROCESSING GUIDELINES AND

PROCEDURES

1. The authority citation for part 516

continues to read as follows:

Authority: 5 U.S.C. 552, 559; 12 U.S.C.

1462a, 1463, 1464, 2901 et seq.

§§ 516.1, 516.2, 516.3 [Removed]

2. Subpart A of part 516 (§§ 516.1,

516.2, 516.3) is removed.

§§ 516.1, 516.5, 516.10 [Added]

Subpart A [Added]

3. Sections 516.1, 516.5, and 516.10,

and new subpart A, consisting of

§§ 516.15 through 516.45, are added to

read as follows:

Sec.

516.1 What does this part do?

516.5 Do the same procedures apply to all

applications under this part?

516.10 How does OTS compute time

periods under this part?

Subpart A—Pre-Filing and Filing

Procedures

Pre-Filing Procedures

516.15 Must I meet with OTS before I file

my application?

516.20 What information must I include in

my draft business plan?

Filing Procedures

516.25 What type of application must I file?

516.30 What information must I provide

with my application?

516.35 May I keep portions of my

application confidential?

516.40 Where do I file my application?

516.45 What is the filing date of my

application?

516.47 How do I amend or supplement my

application?

§ 516.1 What does this part do?

(a) This part explains OTS procedures

for processing applications, notices, or

filings (applications). Except as

provided in paragraph (b) of this

section, subparts A and E of this part

apply whenever an OTS regulation

requires any person (you) to file an

application with OTS. Subparts B, C,

and D, however, only apply when an

OTS regulation incorporates the

procedures in the subpart or where

otherwise required by OTS.

(b) This part does not apply to any of

the following:

(1) An application related to a

transaction under section 13(c) or (k) of

the Federal Deposit Insurance Act, 12

U.S.C. 1823(c) or (k).

(2) A request for reconsideration,

modification, or appeal of a final OTS

action.

(3) A request related to litigation, an

enforcement proceeding, a supervisory

directive or supervisory agreement.

Such requests include a request seeking

approval under, modification of, or

termination of an order issued under

part 508 or 509 of this chapter, a

supervisory agreement, a supervisory

directive, a consent merger agreement or

a document negotiated in settlement of

an enforcement matter or other

litigation, unless an applicable OTS

regulation specifically requires an

application under this part.

(4) An application filed under an OTS

regulation that prescribes other

application processing procedures and

time frames for the approval of

applications.

(c) If an OTS regulation for a specific

type of application prescribes some

application processing procedures, or

time frames, OTS will apply this part to

the extent necessary to process the

application. For example, if an OTS

regulation for a specific type of

application does not identify time

periods for the processing of an

application, the time periods in this part

apply.

§ 516.5 Do the same procedures apply to

all applications under this part?

OTS processes applications under this

part using two procedures, expedited

treatment and standard treatment. To

determine which treatment applies, you

may use the following chart:

If * * * Then OTS will process your

application under * * *

(a) The applicable regulation does not specifically state that expedited treatment is available .......................... Standard treatment.

(b) You are not a savings association ................................................................................................................... Do.

(c) Your composite rating is 3, 4, or 5. The composite rating is the composite numeric rating that OTS or the

other federal banking regulator assigned to you under the Uniform Financial Institutions Rating System 1 or

under a comparable rating system. The composite rating refers to the rating assigned and provided to you,

in writing, as a result of the most recent examination.

Do.

(d) Your Community Reinvestment Act (CRA) rating is Needs to Improve or Substantial Noncompliance. The

CRA rating is the Community Reinvestment Act performance rating that OTS or the other federal banking

regulator assigned and provided to you, in writing, as a result of the most recent compliance examination.

See, for example, § 563e.28 of this chapter.

Do.

(e) Your compliance rating is 3, 4, or 5. The compliance rating is the numeric rating that OTS or the other

federal banking regulator assigned to you under OTS compliance rating system, or a comparable rating

system used by the other federal banking regulator. The compliance rating refers to the rating assigned

and provided to you, in writing, as a result of the most recent compliance examination.

Do.

(f) You fail any one of your capital requirements under part 567 of this chapter ................................................. Do.

(g) OTS has notified you that you are an association in troubled condition ........................................................ Do.

(h) Neither OTS nor any other federal banking regulator has assigned you a composite rating, a CRA rating

or a compliance rating.

Do.

(i) You do not meet any of the criteria listed in paragraphs (a) through (h) of this section ................................. Expedited treatment.

1A savings association may obtain a copy of its composite rating from the appropriate Regional Office.

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 13001

§ 516.10 How does OTS compute time

periods under this part?

In computing time periods under this

part, OTS does not include the day of

the act or event that commences the

time period. When the last day of a time

period is a Saturday, Sunday, or Federal

holiday, the time period runs until the

end of the next day that is not a

Saturday, Sunday, or Federal holiday.

Subpart A—Pre-filing and Filing

Procedures

Pre-Filing Procedures

§ 516.15 Must I meet with OTS before I file

my application?

(a) Chart. To determine whether you

must attend a pre-filing meeting before

you file an application, please consult

the following chart:

If you file * * * Then * * *

(1) An application for permission to organize a de novo federal savings

association.

You must meet with OTS before filing your application. You must submit a draft business plan before this meeting.

(2) An application to convert an existing insured depository institution

(other than a state-chartered savings association or a state-chartered

savings bank) or a credit union to a federal savings association.

You must meet with OTS before filing your application. OTS may require you to submit a draft business plan or other relevant information before this meeting.

(3) An application to acquire control of a savings association ................ OTS may require you to meet with OTS before filing your application

and may require you to submit a draft business plan or other relevant information before this meeting.

(b) Contacting the Regional Office. (1)

You must contact the appropriate

Regional Office a reasonable time before

you file an application described in

paragraph (a) of this section. Unless

paragraph (a) already requires a prefiling meeting or a draft business plan,

the Regional Office will determine

whether it will require a pre-filing

meeting, and whether you must submit

a business plan or other relevant

information before the meeting. The

Regional Office will also establish a

schedule for any meeting and the

submission of any information.

(2) All other applicants are

encouraged to contact the appropriate

Regional Office to determine whether a

pre-filing meeting or the submission of

a draft business plan or other relevant

information would expedite the

application review process.

§ 516.20 What information must I include

in my draft business plan?

If you must submit a draft business

plan under § 516.15, your plan must:

(a) Clearly and completely describe

the savings association’s projected

operations and activities;

(b) Describe the risks associated with

the transaction and the impact of this

transaction on any existing activities

and operations of the savings

association, including financial

projections for a minimum of three

years;

(c) Identify the majority of the

proposed board of directors and the key

senior executive officers (as defined in

§ 563.555 of this chapter) of the savings

association and demonstrate that these

individuals have the expertise to

prudently manage the activities and

operations described in the savings

association’s draft business plan; and

(d) Demonstrate how applicable

requirements regarding serving the

credit and lending needs in the market

areas served by the savings association

will be met.

Filing Procedures

§ 516.25 What type of application must I

file?

(a) Expedited treatment. If you are

eligible for expedited treatment under

§ 516.5, you may file your application in

the form of a notice that includes all

information required by the applicable

substantive regulation. If OTS has

designated a form for your notice, you

must file that form. Your notice is an

application for the purposes of all

statutory and regulatory references to

‘‘applications.’’

(b) Standard treatment. If you are

subject to standard treatment under

§ 516.5, you must file your application

following all applicable substantive

regulations and guidelines governing

the filing of applications. If OTS has a

designated form for your application,

you must file that form.

(c) Waiver requests.Z If you want OTS

to waive a requirement that you provide

certain information with the notice or

application, you must include a written

waiver request:

(1) Describing the requirement to be

waived and

(2) Explaining why the information is

not needed to enable OTS to evaluate

your notice or application under

applicable standards.

§ 516.30 What information must I provide

with my application?

(a) Required information. You may

obtain information about required

certifications, other regulations and

guidelines affecting particular notices

and applications, appropriate forms,

and instructions from any OTS Regional

Office. You may also obtain forms and

instructions on OTS’s web page at

www.ots.treas.gov.

(b) Captions and exhibits. You must

caption the original application and

required copies with the type of filing,

and must include all exhibits and other

pertinent documents with the original

application and all required copies. You

are not required to include original

signatures on copies if you include a

copy of the signed signature page or the

copy otherwise indicates that the

original was signed.

§ 516.35 May I keep portions of my

application confidential?

(a) Confidentiality. OTS makes

submissions under this part available to

the public, but may keep portions of

your application confidential based on

the rules in this section.

(b) Confidentiality request. (1) You

may request OTS to keep portions of

your application confidential. You must

submit your request in writing with

your application and must explain in

detail how your request is consistent

with the standards under the Freedom

of Information Act (5 U.S.C. 552) and

part 505 of this chapter. For example,

you should explain how you will be

substantially harmed by pubic

disclosure of the information. You must

separately bind and mark the portions of

the application you consider

confidential and the portions you

consider non-confidential.

(2) OTS will not treat as confidential

the portion of your application

describing how you plan to meet your

Community Reinvestment Act (CRA)

objectives. OTS will make information

in your CRA plan, including any

information incorporated by reference

13002 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

from other parts of your application,

available to the public upon request.

(c) OTS determination on

confidentiality. OTS will determine

whether information that you designate

as confidential may be withheld from

the public under the Freedom of

Information Act (5 U.S.C. 552) and part

505 of this chapter. OTS will advise you

before it makes information you

designate as confidential available to the

public.

§ 516.40 Where do I file my application?

(a) Regional Office. (1) You must file

the original application and the number

of copies indicated on the applicable

form with the applications filing

division of the appropriate OTS

Regional Office. You should address the

filings to ‘‘Attn: Applications Filing

Room’’ at the Regional address listed in

paragraph (a)(2) of this section. If the

form does not indicate the number of

copies you must file or if OTS has not

prescribed a form for your application,

you must file the original application

and two copies.

(2) The address and the states served

for each Regional Office are:

Region Office address States served

Northeast ................. Office of Thrift Supervision, 10 Exchange Place, 18th Floor,

Jersey City, New Jersey 07303.

Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, West Virginia.

Southeast ................ Office of Thrift Supervision, 1475 Peachtree Street, N.E.,

Atlanta, Georgia 30309.

Alabama, Florida, Georgia, Maryland, North Carolina,

South Carolina, Virginia, District of Columbia, Puerto

Rico, Virgin Islands.

Central ..................... Office of Thrift Supervision, One South Wacker Drive, Suite

2000, Chicago, Illinois 60606.

Illinois, Indiana, Kentucky, Michigan, Ohio, Tennessee,

Wisconsin.

Midwest ................... Office of Thrift Supervision, 225 E. John Carpenter Freeway, Suite 500, Irving, Texas 75062–2731. Mail to: P.O.

Box 619027, Dallas/Ft. Worth, Texas 75261–9027.

Arkansas, Colorado, Iowa, Kansas, Louisiana, Minnesota,

Missouri, Mississippi, North Dakota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas.

West ........................ Office of Thrift Supervision, Pacific Telesis Tower, 1 Montgomery Street, San Francisco, California, 94104–4533.

Mail to: P.O. Box 7165, San Francisco, California 94120–

7165.

Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, Wyoming, Guam,

Northern Mariana Islands.

(b) Additional filings with OTS

Headquarters. (1) In addition to filing in

the Regional Office, if your application

involves a significant issue of law or

policy or if an applicable regulation or

form directs you to file with OTS

Headquarters, you must also file copies

of your application with the

Applications Filing Room at OTS

headquarters, 1700 G Street, NW.,

Washington, DC 20552. You must file

the number of copies indicated on the

applicable form. If the form does not

indicate the number of copies you must

file or if OTS has not prescribed a form

for your application, you must file three

copies.

(2)(i) You may obtain a list of

applications involving significant issues

of law or policy at the OTS website at

www.ots.treas.gov or by contacting a

Regional Office.

(ii) OTS reserves the right to identify

significant issues of law or policy in a

particular application. OTS will advise

you, in writing, if it makes this

determination.

§ 516.45 What is the filing date of my

application?

(a) Your application’s filing date is the

date that you complete all of the

following requirements.

(1) You attend a pre-filing meeting

and submit a draft business plan or

relevant information, if OTS requires

you to do so under § 516.15.

(2) You file your application and all

required copies with OTS, as described

under § 516.40.

(i) If you are required to file with a

Regional Office and with OTS

Headquarters, you have not filed with

OTS until you file with both offices.

(ii) You have not filed with a Regional

Office or OTS Headquarters until you

file the application and the required

number of copies with that office.

(iii) If you file after the close of

business established by a Regional

Office or OTS Headquarters, you have

filed with that office on the next

business day.

(3) You pay the applicable fee. You

have not paid the fee until you submit

the fee to the appropriate Regional

Office, or OTS waives the fee. You may

pay by check, money order, cashier’s

check or wire transfer payable to OTS.

(b) OTS may notify you that it has

adjusted your application filing date if

you fail to meet any applicable

publication requirements.

(c) If, after you properly file your

application with the Regional Office,

OTS determines that a significant issue

of law or policy exists under

§ 516.40(b)(2)(ii), the filing date of your

application is the day you filed with the

Regional Office. The 30-day review

period under §§ 516.200 or 516.210 of

this part will restart in its entirety when

the Regional Office forwards the

appropriate number of copies of your

application to OTS Headquarters.

§ 516.47 How do I amend or supplement

my application?

To amend or supplement your

application, you must file the

amendment or supplemental

information at the appropriate OTS

office(s) along with the number of

copies required under § 516.40. Your

amendment or supplemental

information also must meet the caption

and exhibit requirements at § 516.30(b).

4. Section 516.55 is added to read as

follows:

§ 516.55 What information must I include

in my public notice?

Your public notice must include the

following:

(a) Your name and address.

(b) The type of application.

(c) The name of the depository

institution(s) that is the subject matter of

the application.

(d) A statement indicating that the

public may submit comments to the

appropriate OTS office(s).

(e) The address of the appropriate

OTS offices where the public may

submit comments.

(f) The date that the comment period

closes.

(g) A statement indicating that the

nonconfidential portions of the

application are on file in the Regional

Office, and are available for public

inspection during regular business

hours.

(h) Any other information that OTS

requires you to publish. You may find

the format for various publication

notices in the appendix to OTS

application processing handbook.

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 13003

§ 516.110 [Amended]

5. Section 516.110 is amended by

removing the phrase ‘‘(you)’’.

6. Section 516.120 is revised to read

as follows:

§ 516.120 What information should a

comment include?

(a) A comment should recite relevant

facts, including any demographic,

economic, or financial data, supporting

the commenter’s position. A comment

opposing an application should also:

(1) Address at least one of the reasons

why OTS may deny the application

under the relevant statute or regulation;

(2) Recite any relevant facts and

supporting data addressing these

reasons; and;

(3) Address how the approval of the

application could harm the commenter

or any community.

(b) If a commenter wishes to request

an informal meeting under § 516.170,

the commenter must file a request with

the comment. The commenter should

describe the nature of the issues or facts

to be discussed and the reasons why

written submissions are insufficient to

adequately address these facts or issues.

7. Section 516.130 is revised to read

as follows:

§ 516.130 Where are comments filed?

A commenter must file with the

appropriate OTS Regional Office (See

table at § 516.40(a)(2)). The commenter

must simultaneously send a copy of the

comment to the applicant.

8. Section 516.140 is revised to read

as follows:

§ 516.140 How long is the comment

period?

(a) General. Except as provided in

paragraph (b) of this section, a

commenter must file a written comment

with OTS within 25 calendar days after

the application is filed with OTS.

(b) Late-filed comments. OTS will

consider a late-filed comment if:

(1) Within the comment period, the

commenter demonstrates to OTS good

cause why the commenter could not

submit a timely comment; or

(2) OTS concludes that the comment

addresses a significant regulatory

concern and will assist in the

disposition of the application.

9. Section 516.150 is revised to read

as follows:

§ 516.150 Will there be additional

opportunities to discuss the application?

OTS may provide the commenter with

additional opportunities to discuss the

application in informal or formal

meetings under subpart D of this part.

10. Section 516.185 is added to read

as follows:

§ 516.185 Will OTS approve or disapprove

an application at a meeting?

OTS will not approve or deny an

application at a formal or informal

meeting under this subpart.

11. Section 516.190 is revised to read

as follows:

§ 516.190 Will a meeting affect application

processing time frames?

If OTS has arranged a meeting, it will

suspend applicable application

processing time frames, including the

time frames for deeming an application

complete and the applicable approval

time frames specified in subpart E of

this part. The time period will resume

when OTS determines that a record has

been developed that sufficiently

supports a determination on the issues

raised in the comments.

12. Subpart E, consisting of

§§ 516.200 through 516.280, is added to

read as follows:

Subpart E—OTS Review

Expedited Treatment

Sec.

516.200 If I file a notice under expedited

treatment, when may I engage in the

proposed activities?

Standard Treatment

516.210 What will OTS do after I file my

application?

516.220 If OTS requests additional

information to complete my application,

how will it process my application?

516.230 Will OTS conduct an eligibility

examination?

516.240 What may OTS require me to do

after my application is deemed

complete?

516.250 Will OTS require me to publish a

new public notice?

516.260 May OTS suspend processing of

my application?

516.270 How long is the OTS review

period?

516.280 How will I know if my application

has been approved?

516.290 What will happen if OTS does not

approve or disapprove my application

within two calendar years after the filing

date?

Subpart E—OTS Review

Expedited Treatment

§ 516.200 If I file a notice under expedited

treatment, when may I engage in the

proposed activities?

If you are eligible for expedited

treatment and you have appropriately

filed your notice with OTS, you may

engage in the proposed activities upon

the expiration of 30 days after the filing

date of your notice, unless OTS takes

one of the following actions before the

expiration of that time period:

(a) OTS notifies you in writing that

you must file additional information

supplementing your notice. If you are

required to file additional information,

you may engage in the proposed

activities upon the expiration of 30

calendar days after the date you file the

additional information, unless OTS

takes one of the actions described in

paragraphs (b) through (d) of this

section before the expiration of that time

period;

(b) OTS notifies you in writing that

your notice is subject to standard

treatment under this subpart. OTS will

subject your notice to standard

treatment if it raises a supervisory

concern, raises a significant issue of law

or policy, or requires significant

additional information;

(c) OTS notifies you in writing that it

is suspending the applicable time

frames under § 516.190; or

(d) OTS notifies you that it

disapproves your notice.

Standard Treatment

§ 516.210 What will OTS do after I file my

application?

(a) OTS action. Within 30 calendar

days after the filing date of your

application, OTS will take one of the

following actions:

If OTS * * * Then * * *

(1) Notifies you, in writing, that your application is complete * * * ......... The applicable review period will begin on the date that OTS deems

your application complete.

(2) Notifies you, in writing, that you must submit addition information to

complete your application * * *.

You must submit the required additional information under § 516.220.

(3) Notifies you, in writing, that your application is materially deficient

* * *.

OTS will not process your application.

(4) Takes no action * * * ......................................................................... Your application is deemed complete. The applicable review period will

begin on the day the 30-day time period expires.

13004 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

(b) Waiver requests. If your

application includes a request for

waiver of an information requirement

under § 516.25(b), and OTS has not

notified you that you must submit

additional information under paragraph

(a)(2) of this section, your request for

waiver is granted.

§ 516.220 If OTS requests additional

information to complete my application,

how will it process my application?

(a) You may use the following chart

to determine the procedure that applies

to your submission of additional

information under § 516.210(a)(1):

If, within 30 calendar days after the date of

OTS’s request for additional information * * * Then, OTS may * * *. And * * *.

(1) You file a response to all information requests * * *.(i) Notify you in writing within 15 days after

the filing date of your response that your

applicaiton is complete * * * applicable to

all response that your application is complete * * *.

The applicable review period will begin on the

date tha t OTS deems your application

complete.

(ii) Notify you in writing within 15 calendar

days after the filing date of your response

that you must submit additional information

regarding matters derived from or prompted

by information already furnished or any additional information information necessary to

resolve the issues presented in your application * * *.

You must respond to the additional information request within the time period required

by OTS. OTS will review your response

under the procedures described in this section.

(iii) Notify you in writing within 15 calendar

days after the filing date of your response

that your application is materially deficient

* * *.

OTS will not process your application.

(iv) Take no action within 15 calendar days

after the filing date of your response * * *.

Your application is deemed complete. The applicable review period will begin on the day

that the 15-day time period expires.

(2) You request an extension of time to file additional information * * *.(i) Grant an extension, in writing, specifying

the number of days for the extension * * *.

You must fully respond within the extended

time period specified by OTS. OTS will review your response under the procedures

described under this section.

(ii) Notify you in writing that your extension request is disapproved * * *.OTS will not process your application further.

You may resubmit the application for processing as a new filing under the applicable

regulation.

(3) You fail to respond completely * * * ............ (i) Notify you in writing that your application is

deemed withdrawn * * *.

OTS will not process your to respond application further. You may resubmit the application for processing as a new filing under the

applicable regulation.

(ii) Notify you, in writing, that your response is

incomplete and extend the response period,

specifying the number of days for the respond extension * * *.

You must fully respond within the extended

time period specified by OTS. OTS will review your response under the procedures

described under this section.

(b) OTS may extend the 15-day period

referenced in paragraph (a)(1) of this

section by up to 15 calendar days, if

OTS requires the additional time to

review your response. OTS will notify

you that it has extended the period

before the end of the initial 15-day

period and will briefly explain why the

extension is necessary.

(c) If your response filed under

paragraph (a)(1) of this section includes

a request for a waiver of an

informational requirement, your request

for a waiver is granted if OTS fails to act

on it within 15 calendar days after the

filing of your response, unless OTS

extends the review period under

paragraph (b). If OTS extends the review

period under paragraph (b), your request

is granted if OTS fails to act on it by the

end of the extended review period.

§ 516.230 Will OTS conduct an eligibility

examination?

(a) Eligibility examination. OTS may

notify you at any time before it deems

your application complete that it will

conduct an eligibility examination. If

OTS decides to conduct an eligibility

examination, it will not deem your

application complete until it concludes

the examination.

(b) Additional information. OTS may,

as a result of the eligibility examination,

notify you that you must submit

additional information to complete your

application. If so, you must respond to

the additional information request

within the time period required by OTS.

OTS will review your response under

the procedures described in § 516.220.

§ 516.240 What may OTS require me to do

after my application is deemed complete?

After your application is deemed

complete, but before the end of the

applicable review period,

(a) OTS may require you to provide

additional information if the

information is necessary to resolve or

clarify the issues presented by your

application.

(b) OTS may determine that a major

issue of law or a change in

circumstances arose after you filed your

application, and that the issue or

changed circumstances will

substantially effect your application. If

OTS identifies such an issue or changed

circumstances, it may:

(1) Notify you, in writing, that your

application is now incomplete and

require you to submit additional

information to complete the application

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 13005

under the procedures described at

§ 516.220; and

(2) Require you to publish a new

public notice of your application under

§ 516.250.

§ 516.250 Will OTS require me to publish a

new public notice?

(a) If your application was subject to

a publication requirement, OTS may

require you to publish a new public

notice of your application if:

(1) You submitted a revision to the

application, you submitted new or

additional information, or a major issue

of law or a change in circumstances

arose after the filing of your application;

and

(2) OTS determines that additional

comment on these matters is

appropriate because of the significance

of the new information or

circumstances.

(b) OTS will notify you in writing if

you must publish a new public notice

of your revised application.

(c) If you are required to publish a

new public notice of your revised

application, you must notify OTS after

you publish the new public notice.

§ 516.260 May OTS suspend processing of

my application?

(a) Suspension. OTS may, at any time,

indefinitely suspend processing of your

application if:

(1) OTS, another governmental entity,

or a self-regulatory trade or professional

organization initiates an investigation,

examination, or administrative

proceeding that is relevant to OTS’s

evaluation of your application;

(2) You request the suspension or

there are other extraordinary

circumstances that have a significant

impact on the processing of your

application.

(b) Notice. OTS will promptly notify

you, in writing, if it suspends your

application.

§ 516.270 How long is the OTS review

period?

(a) General. The applicable OTS

review period is 60 calendar days after

the date that your application is deemed

complete, unless an applicable OTS

regulation specifies a different review

period.

(b) Multiple applications. If you

submit more than one application in

connection with a proposed action or if

two or more applicants submit related

applications, the applicable review

period for all applications is the review

period for the application with the

longest review period, subject to

statutory review periods.

(c) Extensions. (1) OTS may extend

the review period for up to 30 calendar

days beyond the period described in

paragraph (a) or (b) of this section. OTS

must notify you in writing of the

extension and the duration of the

extension. OTS must issue the written

extension before the end of the review

period.

(2) OTS may also extend the review

period as needed until it acts on the

application, if the application presents a

significant issue of law or policy that

requires additional time to resolve. OTS

must notify you in writing of the

extension and the general reasons for

the extension. OTS must issue the

written extension before the end of the

review period, including any extension

of that period under paragraph (c)(1) of

this section. This section applies to

applications and notices filed under

§ 575.3(b) and part 574 of this chapter.

§ 516.280 How will I know if my application

has been approved?

(a) OTS approval or denial. (1) OTS

will approve or deny your application

before the expiration of the applicable

review period, including any extensions

of the review period.

(2) OTS will promptly notify you in

writing of its decision to approve or

deny your application.

(b) No OTS action. If OTS fails to act

under paragraph (a)(1) of this section,

your application is approved.

§ 516.290 What will happen if OTS does

not approve or disapprove my application

within two calendar years after the filing

date?

(a) Withdrawal. If OTS has not

approved or denied your pending

application within two calendar years

after the filing date under § 516.45, OTS

will notify you, in writing, that your

application is deemed withdrawn

unless OTS determines that you are

actively pursuing a final OTS

determination on your application. You

are not actively pursuing a final OTS

determination if you have failed to

timely take an action required under

this part, including filing required

additional information, or OTS has

suspended processing of your

application under § 516.260 based on

circumstances that are, in whole or in

part, within your control and you have

failed to take reasonable steps to resolve

these circumstances.

(b) Effective date. This section is

effective July 1, 2001.

PART 517—THE MINORITY, WOMEN,

AND INDIVIDUALS WITH DISABILITIES

OUTREACH PROGRAM:

CONTRACTING FOR GOODS AND

SERVICES

13. The authority citation for part 517

continues to read as follows:

Authority: 12 U.S.C. 1833(e); 42 U.S.C.

12101 et seq.

14. Section 517.6 is amended by

revising paragraph (b) to read as follows:

§ 517.6 Certification.

* * * * *

(b) Self-certify ownership status by

filing with the OTS Outreach Program

Advocate a completed and signed

ABELS Registration/Certification Form,

as prescribed by the U.S. Department of

Commerce’s Minority Business

Development Agency and available from

the Outreach Program Advocate at the

headquarters address of the OTS listed

in § 516.40(b) of this chapter.

* * * * *

PART 543—INCORPORATION,

ORGANIZATION, AND CONVERSION

OF FEDERAL MUTUAL

ASSOCIATIONS

15. The authority citation for part 543

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 2901 et seq.

16. Section 543.9 is amended by

revising paragraph (a) to read as follows:

§ 543.9 Application for conversion to

Federal mutual charter.

(a)(1) Filing. Any depository

institution that proposes to convert to a

Federal mutual association as provided

in § 543.8 must, after approval by its

board of directors, file an application on

forms obtained from OTS. The applicant

must submit any financial statements or

other information OTS may require.

(2) Procedures. An application for

conversion filed under this section is

subject to the procedures for

organization of a federal mutual

association at § 543.2(d) through (f) of

this chapter.

* * * * *

PART 544—CHARTER AND BYLAWS

17. The authority citation for part 544

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 2901 et seq.

18. Section 544.2 is amended by

revising the last sentence of paragraph

(c) to read as follows:

13006 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

§ 544.2 Charter amendments.

* * * * *

(c) * * * Such request for reissuance

should be filed with the Corporate

Secretary at the Washington

Headquarters Office at the address listed

at § 516.40(b) of this chapter and

contain signatures required under

§ 544.1 of this part, together with such

supporting documents as may be

needed to demonstrate that the

amendments were properly adopted.

19. Section 544.5 is amended by

revising paragraph (c)(1)(ii) to read as

follows:

§ 544.5 Federal mutual savings

association bylaws.

* * * * *

(c) * * * (1) * * *

(ii) Applications submitted under

paragraph (c)(1)(i) of this section are

subject to standard treatment processing

procedures at part 516, subparts A and

E of this chapter.

* * * * *

PART 545—OPERATIONS

20. The authority citation for part 545

continues to read as follows:

Authority: 12 U.S.C. 1462a, 1463, 1464,

1828.

21. Section 545.92 is amended by

revising paragraphs (b) and (d)(2), and

by removing the first sentence of

paragraph (f) and adding two new

sentences in its place, to read as follows:

§ 545.92 Branch offices.

* * * * *

(b) Eligibility. Federal savings

associations eligible for expedited

treatment under § 516.5 of this chapter

may establish a branch office subject to

the procedures in paragraph (f) of this

section. A Federal savings association

subject to standard treatment under

§ 516.5 of this chapter must not

establish a branch office without prior

approval subject to the procedures in

paragraph (e) of this section.

* * * * *

(d) * * *

(2) Submission of application or

notice. A Federal savings association

must comply with § 556.5 of this

chapter and must file its application or

notice within the time frame in § 516.60.

* * * * *

(f) Approval of branch notice. A

notice filed by a Federal savings

association that qualifies for expedited

treatment must be deemed to be

approved 30 days after its filing with

OTS, unless OTS takes one of the

actions described at § 516.200 of this

chapter. OTS will apply the review

standards set forth in paragraph (e)(1) of

this section; or OTS determines to

process the filing as an application

under § 516.200(b) of this chapter.

***

* * * * *

PART 550—FIDUCIARY POWERS OF

SAVINGS ASSOCIATIONS

22. The authority citation for part 550

continues to read as follows:

Authority: 12 U.S.C. 1462a, 1463, 1464.

23. Section 550.80 is revised to read

as follows:

§ 550.80 How do I obtain OTS approval?

You must file an application under

part 516, subparts A and E of this

chapter.

24. Section 550.260 is amended by

revising the first sentence of paragraph

(b)(2) to read as follows:

§ 550.260 How may I invest funds of a

fiduciary account?

* * * * *

(b) * * *

(2) If you must file a document with

the Comptroller of the Currency under

12 CFR 9.18, you must also file that

document with the appropriate Regional

Office at § 516.40(a) of this chapter.

***

* * * * *

25. Section 550.530 is amended by

revising the last sentence to read as

follows:

§ 550.530 How do I surrender fiduciary

powers?

* * * You must file the resolution

with the appropriate Regional Office at

the address listed in § 516.40(a) of this

chapter.

PART 552—INCORPORATION,

ORGANIZATION, AND CONVERSION

OF FEDERAL STOCK ASSOCIATIONS

26. The authority citation for part 552

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a.

27. Section 552.2–6 is amended by

adding the following sentence to the

end of the section to read as follows:

§ 552.2–6 Conversion from stock form

depository institution to Federal stock

association.

* * * An application for conversion

filed under this section is subject to the

procedures for organization of a federal

stock organization at § 552.2–1.

28. Section 552.4 is amended by

revising the last sentence of paragraph

(d) to read as follows:

§ 552.4 Charter amendments.

* * * * *

(d) * * * Such requests for reissuance

should be filed with the Corporate

Secretary at Washington Headquarters

Office at the address listed in

§ 516.40(b) of this chapter, and contain

signatures required under § 552.3 of this

part, together with such supporting

documents as needed to demonstrate

that the amendments were properly

adopted.

29. Section 552.5 is amended by

revising paragraph (b)(1)(ii) to read as

follows:

§ 552.5 Bylaws.

* * * * *

(b) * * * (1) * * *

(ii) Applications submitted under

paragraph (b)(1)(i) of this section are

subject to standard treatment processing

procedures at part 516, subparts A and

E of this chapter.

* * * * *

PART 555—ELECTRONIC

OPERATIONS

30. The authority citation for part 555

continues to read as follows:

Authority: 12 U.S.C. 1462a, 1463, 1464.

31. In section 555.310, the first

sentence of the introductory text of

paragraph (a) is revised to read as

follows:

§ 555.310 How do I notify OTS?

(a) Notice requirement. You must file

a written notice with the appropriate

Regional Office listed at § 516.40(a) of

this chapter at least 30 days before you

establish a transactional website. * * *

* * * * *

PART 559—SUBORDINATE

ORGANIZATIONS

32. The authority citation for part 559

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1828.

§ 559.3 [Amended]

33. Section 559.3 is amended by:

a. Removing, in paragraph (e)(2)(i),

the phrases ‘‘§ 516.3(a) of this chapter’’

and ‘‘§ 516.1 of this chapter’’, and by

adding in lieu thereof the phrases

§ 516.5 of this chapter’’ and ‘‘standard

treatment processing procedures at part

516, subparts A and E of this chapter’’;

and

b. Removing, in paragraph (e)(2)(ii),

the phrases ‘‘§ 516.3(b) of this chapter’’

and ‘‘§ 516.1 of this chapter’’, and by

adding in lieu thereof the phrases

§ 516.5 of this chapter’’ and, ‘‘standard

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 13007

treatment processing procedures at part

516, subparts A and E of this chapter’’

respectively.

34. Section 559.4 is amended by

revising the third sentence of the

introductory text to read as follows:

§ 559.4 What activities are preapproved for

service corporations?

* * * You should read these two

sections together to determine whether

you must file a notice with OTS under

§ 559.11 of this part, or whether you

must file an application subject to

standard treatment processing

procedures at part 516, subparts A and

E of this chapter to request prior written

OTS approval in order for your service

corporation to engage in a particular

activity. * * *

* * * * *

35. Section 559.11 is amended by

revising the first sentence and the last

sentence to read as follows:

§ 559.11 What notices are required to

establish or acquire a new subsidiary or

engage in new activities through an existing

subsidiary?

When required by section 18(m) of the

Federal Deposit Insurance Act, a savings

association (‘‘you’’) must file a notice

(‘‘Notice’’) under part 516, subpart A of

this chapter at least 30 days before

establishing or acquiring a subsidiary or

engaging in new activities in a

subsidiary. * * * If OTS notifies you

within 30 days that the Notice presents

supervisory concerns, or raises

significant issues of law or policy, you

must apply for and receive OTS’s prior

written approval under the standard

treatment processing procedures at part

516, subpart A and E of this chapter

before establishing or acquiring the

subsidiary or engaging in new activities

in the subsidiary.

36. Section 559.13 is amended by

revising paragraph (b) to read as follows:

§ 559.13 How may a savings association

exercise its salvage power in connection

with a service corporation or lower-tier

entities?

* * * * *

(b) If OTS notifies you within 30 days

that the Notice presents supervisory

concerns, or raises significant issues of

law or policy, you must apply for and

receive OTS’s prior written approval

under the standard treatment processing

procedures at part 516, subparts A and

E of this chapter before making a salvage

investment.

* * * * *

PART 560—LENDING AND

INVESTMENT

37. The authority citation for part 560

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 1701j–3, 1828, 3803, 3806; 42

U.S.C. 4106.

38. Section 560.32 is amended by

revising the second sentence of

paragraph (c) to read as follows:

§ 560.32 Pass-through investments.

* * * * *

(c) * * * If within that 30-day period

OTS notifies you that an investment

presents supervisory, legal, or safety and

soundness concerns, you must apply for

and receive OTS prior written approval

under the standard treatment processing

procedures at part 516, subparts A and

E of this chapter before making the

investment. * * *

39. Section 560.35 is amended by

revising paragraph (d)(3) to read as

follows:

§ 560.35 Adjustments to home loans.

* * * * *

(d) * * *

(3) A Federal savings association may

use an index not satisfying the

requirements of paragraph (d)(2) of this

section 30 days after filing a notice

unless, within that 30-day period, OTS

has notified the association that the

notice presents supervisory concerns or

raises significant issues of law or policy.

If OTS notifies the association of such

concerns or issues, the Federal savings

association may not use such an index

unless it applies for and receives OTS’s

prior written approval under the

standard treatment processing

procedures at part 516, subparts A and

E of this chapter.

40. Section 560.93 is amended by

revising the second and third sentences

of paragraph (d)(3)(iii) to read as

follows:

§ 560.93 Lending limitations.

* * * * *

(d) * * *

(3) * * *

(iii) * * * A savings association that

meets the requirements of paragraphs

(d)(3)(i), (ii), (iv) and (v) of this section

and that meets the requirements for

‘‘expedited treatment’’ under § 516.5 of

this chapter may use the higher limit set

forth under this paragraph (d)(3) if the

savings association has filed a notice

with OTS that it intends to use the

higher limit at least 30 days prior to the

proposed use. A savings association that

meets the requirements of paragraphs

(d)(3)(i), (ii), (iv), and (v) of this section

and that meets the requirements for

‘‘standard treatment’’ under § 516.5 of

this chapter may use the higher limit set

forth under this paragraph (d)(3) if the

savings association has filed an

application with OTS and OTS has

approved the use the higher limit;

* * * * *

41. Section 560.160 is amended by

revising paragraph (a)(1) to read as

follows:

§ 560.160 Asset classification.

(a)(1) Each savings association must

evaluate and classify its assets on a

regular basis in a manner consistent

with, or reconcilable to, the asset

classification system used by OTS in its

Thrift Activities Handbook (Available at

the address of Washington Headquarters

Office at § 516.40(b) of this chapter).

* * * * *

PART 562—REGULATORY

REPORTING STANDARDS

42. The authority citation for part 562

continues to read as follows:

Authority: 12 U.S.C. 1463.

43. Section 562.4 is amended by

revising paragraph (b)(1) to read as

follows:

§ 562.4 Audit of savings associations and

savings association holding companies.

* * * * *

(b) * * *

(1) If a savings association has

received a composite rating of 3, 4 or 5,

as defined at § 516.5(c) of this chapter;

or

* * * * *

PART 563—OPERATIONS

44. The authority citation for part 563

continues to read as follows:

Authority: 12 U.S.C. 375b, 1462, 1462a,

1463, 1464, 1467a, 1468, 1817, 1820, 1828,

3806; 42 U.S.C. 4106.

45. Section 563.22 is amended by

revising paragraphs (b)(1)(ii), (b)(2),

(d)(4), (f)(1), and (h)(2) to read as

follows:

§ 563.22 Merger, consolidation, purchase

or sale of assets, or assumption of

liabilities.

* * * * *

(b)(1) * * *

(ii) In the case of a savings association

that meets the conditions for expedited

treatment under § 516.5 of this chapter,

convert, directly or indirectly, to a

national or state bank.

(2) A savings association that does not

meet the conditions for expedited

treatment under § 516.5 of this chapter

13008 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

may not, directly or indirectly, convert

to a national or state bank without prior

application to and approval of OTS, as

provided in paragraph (h)(2)(ii) of this

section.

* * * * *

(d) * * *

(4) Applications filed under section

5(d)(3) of the Federal Deposit Insurance

Act (12 U.S.C. 1815(d)(3)) and

paragraph (a) of this section must be

processed in accordance with the time

frames set forth in §§ 516.220 through

516.290 of this chapter, provided that

the period for review may be extended

only if the Office determines that the

applicant has failed to furnish all

requested information or that the

information submitted is substantially

inaccurate, in which case the review

period may be extended for up to 30

days.

* * * * *

(f) * * *

(1) The acquiring savings association

does not meet the criteria for expedited

treatment under § 516.5 of this chapter;

* * * * *

(h) * * *

(2) Other transfer transactions—(i)

Expedited treatment. A notice in

conformity with § 516.25(a) of this

chapter may be submitted to OTS under

§ 516.40 of this chapter for any

transaction under paragraph (c) of this

section, provided all constituent savings

associations meet the conditions for

expedited treatment under § 516.5 of

this chapter. Notices submitted under

this paragraph must be deemed

approved automatically by OTS 30 days

after receipt, unless OTS advises the

applicant in writing prior to the

expiration of such period that the

proposed transaction may not be

consummated without OTS’s approval

of an application under paragraphs

(h)(2)(ii) or (h)(2)(iii) of this section.

(ii) Standard treatment. An

application in conformity with

§ 516.25(b) of this chapter and

paragraph (d) of this section must be

submitted to OTS under § 516.40 by

each savings association participating in

a transaction under paragraph (b)(2) or

(c) of this section, where any constituent

savings association does not meet the

conditions for expedited treatment

under § 516.5 of this chapter, except as

provided in paragraph (h)(2)(iii) of this

section. Applications under this

paragraph must be processed in

accordance with the procedures in part

516, subparts A and E of this chapter.

(iii) Standard treatment for

transactions under section 5(d)(3) of the

Federal Deposit Insurance Act. An

application in conformity with

§ 516.25(b) of this chapter and

paragraph (d) of this section must be

submitted to OTS under § 516.40 by

each savings association which will

survive any transaction under both

section 5(d)(3) of the Federal Deposit

Insurance Act (12 U.S.C. 1815(d)(3)) and

paragraph (c) of this section, where any

constituent savings association does not

meet the conditions for expedited

treatment under § 516.5 of this chapter.

Applications under this paragraph must

be processed in accordance with the

procedures in part 516, subparts A and

E of this chapter, provided that the

period for review may be extended only

if OTS determines that the applicant has

failed to furnish all requested

information or that the information

submitted is substantially inaccurate, in

which case the review period may be

extended for up to 30 days.

46 Section 563.41 is amended by

revising paragraph (e)(2)(ii)(A) to read as

follows:

§ 563.41 Loans and other transactions

with affiliates and subsidiaries.

* * * * *

(e) * * *

(2) * * *

(ii) * * *

(A) Has a composite rating of 4 or 5,

as defined in § 516.5(c) of this chapter;

* * * * *

47. Section 563.81 is amended by

revising the first sentence in paragraphs

(a)(1), (a)(2), and (c) to read as follows:

§ 563.81 Issuance of subordinated debt

securities and mandatorily redeemable

preferred stock.

(a) General—(1) Savings associations

receiving standard treatment. No

savings association subject to standard

treatment of its applications under

§ 516.5 of this chapter may issue

subordinated debt securities or

mandatorily redeemable preferred stock

includable in regulatory capital

pursuant to this section or amend the

terms of such securities unless it has

obtained the written approval of OTS.

***

(2) Savings associations receiving

expedited treatment. No savings

association eligible for expedited

treatment under § 516.5 of this chapter

may issue subordinated debt securities

or mandatorily redeemable preferred

stock pursuant to this section for

inclusion in regulatory capital or amend

the terms of such securities unless it

provides notice to OTS, and such notice

contains a statement of the association’s

intent to include such securities in

regulatory capital. * * *

* * * * *

(c) Form of application or notice;

supporting information. Applications

subject to standard treatment or notices

eligible for expedited treatment under

§ 516.5 of this chapter must be in the

form prescribed by OTS. * * *

* * * * *

48. Section 563.143 is amended by

revising the heading and the first

sentence of paragraph (a)(1) to read as

follows:

§ 563.143 Must I file with OTS?

* * * * *

(a) * * *

(1) You are not eligible for expedited

treatment under § 516.5 of this chapter.

***

* * * * *

49. Section 563.171 is amended by

revising paragraph (b)(4) to read as

follows:

§ 563.171 Frequency of safety and

soundness examination.

* * * * *

(b) * * *

(4) At its most recent examination,

OTS determined that the savings

association was in outstanding or good

condition, that is, it received a

composite rating of 1 or 2, as composite

rating defined in § 516.5(c) of this

chapter;

* * * * *

50. Section 563.180 is amended by

revising paragraph (d)(11) to read as

follows:

§ 563.180 Suspicious Activity Reports and

other reports and statements.

* * * * *

(d) * * *

(11) Obtaining SARs. A savings

association or service corporation may

obtain SARs and the instructions from

the appropriate OTS Regional Office

listed in § 516.40(a) of this chapter.

* * * * *

51. Section 563.183 is amended by

revising paragraph (c)(1) to read as

follows:

§ 563.183 Reports of change in chief

executive officer or director; other reports;

form and filing of such reports.

* * * * *

(c) Form and filing of reports. (1)

Unless otherwise specified by OTS, a

report required by § 563.181 of this part

or this § 563.183 must comply with

§ 516.30 and must be submitted to the

appropriate Regional Office listed in

§ 516.40(a) of this chapter.

* * * * *

52. Section 563.555 is amended by

revising paragraph (1) of the definition

of ‘‘troubled condition’’ to read as

follows:

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 13009

§ 563.555 What definitions apply to this

subpart?

* * * * *

Troubled condition means:

(1) A savings association that has a

composite rating of 4 or 5, as composite

rating is defined in § 516.5(c) of this

chapter.

* * * * *

53. Section 563.565 is revised to read

as follows:

§ 563.565 What procedures govern the

filing of my notice?

The procedures found in part 516,

subpart A of this chapter govern the

filing of your notice under § 563.560.

PART 563b—CONVERSIONS FROM

MUTUAL TO STOCK FORM

54. The authority citation for part

563b continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 2901; 15 U.S.C. 78c, 78l, 78m,

78n, 78w.

§ 563b.27 [Amended]

55. Section 563b.27 is amended in

paragraph (e), footnote 1, by removing

the phrase ‘‘§ 516.1(a) of this chapter’’,

and by adding in lieu thereof

‘‘§ 516.40(b) of this chapter’’.

PART 563f—MANAGEMENT OFFICIAL

INTERLOCKS

56. The authority citation for part 563f

continues to read as follows:

Authority: 12 U.S.C. 3201–3208.

57. Section 563f.6 is amended by

revising the last sentence of paragraph

(a) to read as follows:

§ 563f.6 General exemption.

(a) * * * A depository organization

may apply to OTS for an exemption

under part 516, subpart E, of this

chapter.

* * * * *

PART 565—PROMPT CORRECTIVE

ACTION

58. The authority citation for part 565

continues to read as follows:

Authority: 12 U.S.C. 1831o.

§ 565.4 [Amended]

59. Section 565.4 is amended as

follows:

a. Section 565.4(b)(2)(iii)(B) is

amended by removing the phrase ‘‘as

defined in § 516.3(c)’’ and adding in lieu

thereof ‘‘as composite rating is defined

in § 516.5(c)’’;

b. Section 565.4(b)(3)(iii)(B) is

amended by removing the phrase ‘‘as

defined in § 516.3(c)’’ and adding in lieu

thereof ‘‘as composite rating is defined

in § 516.5(c)’’; and

c. Section 565.4(c)(2), footnote 1, is

amended by removing the phrase

§ 516.1 of this chapter’’, and by adding

in lieu thereof ‘‘§ 516.40 of this

chapter’’.

PART 567—CAPITAL

60. The authority citation for part 567

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1828 (note).

61. Section 567.3 is amended by

revising the third sentence in paragraph

(d)(2)(i) introductory text, to read as

follows:

§ 567.3 Individual minimum capital

requirements.

* * * * *

(d) * * *

(2) * * * (i) * * * Such response

must be filed in accordance with

§§ 516.30 and 516.40 of this chapter.

***

* * * * *

62. Section 567.4 is amended by

revising the fifth sentence of paragraph

(a)(3)(i) to read as follows:

§ 567.4 Capital directives.

(a) * * *

(3) * * * (i) * * * Such responses

must be filed in accordance with

§§ 516.30 and 516.40 of this chapter.

***

* * * * *

63. Section 567.7 is amended by

revising paragraph (f) to read as follows:

§ 567.7 Interest-rate risk component.

* * * * *

(f) OTS will provide, upon request,

manuals describing the OTS Model and

guidance at the address set forth in

§ 516.40(b) of this chapter.

PART 574—ACQUISITION OF

CONTROL OF SAVINGS

ASSOCIATIONS

64. The authority citation for part 574

continues to read as follows:

Authority: 12 U.S.C. 1467a, 1817, 1831i.

65. Section 574.4 is amended by

revising the second sentence of

paragraph (f)(2) to read as follows:

§ 574.4 Control.

* * * * *

(f) * * *

(2) * * * Certifications provided for

in this paragraph must be filed with

OTS in accordance with §§ 516.30 and

516.40 of this chapter.

(ii)(B) is amended by removing the

phrase ‘‘as defined in § 516.3(c)’’ and

adding in lieu thereof ‘‘as composite

rating is defined in § 516.5(c)’’;

b. Section 565.4(b)(3)(iii)(B) is

amended by removing the phrase ‘‘as

defined in § 516.3(c)’’ and adding in lieu

thereof ‘‘as composite rating is defined

in § 516.5(c)’’; and

c. Section 565.4(c)(2), footnote 1, is

amended by removing the phrase

§ 516.1 of this chapter’’, and by adding

in lieu thereof ‘‘§ 516.40 of this

chapter’’.

PART 567—CAPITAL

60. The authority citation for part 567

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1828 (note).

61. Section 567.3 is amended by

revising the third sentence in paragraph

(d)(2)(i) introductory text, to read as

follows:

§ 567.3 Individual minimum capital

requirements.

* * * * *

(d) * * *

(2) * * * (i) * * * Such response

must be filed in accordance with

§§ 516.30 and 516.40 of this chapter.

***

* * * * *

62. Section 567.4 is amended by

revising the fifth sentence of paragraph

(a)(3)(i) to read as follows:

§ 567.4 Capital directives.

(a) * * *

(3) * * * (i) * * * Such responses

must

66. Section 574.6 is amended by

revising the second sentence of

paragraph (f)(4) to read as follows:

§ 574.6 Procedural requirements.

* * * * *

(f) * * *

(4) * * * If the Office receives a

request for the information under the

Freedom of Information Act, OTS will

advise the filing party before it discloses

material for which confidential

treatment has been requested.

* * * * *

PART 575—MUTUAL HOLDING

COMPANIES

67. The authority citation for part 575

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 1828, 2901.

68. Section 575.3 is amended by

revising paragraph (b)(2) introductory

text to read as follows:

13010 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

§ 575.3 Mutual holding company

reorganizations.

* * * * *

(b) * * *

(2) Sixty days have passed since OTS

received the Reorganization Notice and

deemed it complete under § 516.210 or

§ 516.220 of this chapter, and OTS has

not:

* * * * *

69. Section 575.13 is amended by

revising the third sentence of paragraph

(a)(1), paragraph (b), the first sentence of

paragraph (c)(2), and the first and last

sentences of paragraph (e), to read as

follows:

§ 575.13 Procedural requirements.

(a) * * * (1) * * * Proxies and proxy

statements must be filed in accordance

with § 563b.5(e) of this chapter and

must be addressed to the Business

Transactions Division, Chief Counsel’s

Office, Office of Thrift Supervision, at

the address set forth in § 516.40(b) of

this chapter. * * *

* * * * *

(b) Applications under this part.

Except as provided in paragraph (c) of

this section, any application, notice or

certification required to be filed with

OTS under this part must be filed in

accordance with part 516, subpart A of

this chapter.

(c) * * *

(2) Filing instructions. Any

Reorganization Notice submitted under

§ 575.3(b) of this part must be filed in

accordance with part 516, subpart A of

this chapter. * * *

* * * * *

(e) Time-frames. All Reorganization

Notices and applications filed pursuant

to this part must be processed in

accordance with standard treatment

processing procedures at part 516,

subparts A and E. * * * The review by

OTS of proxy solicitation materials,

including forms of proxy and proxy

statements, and of any other materials

used in connection with the issuance of

stock under § 575.7 of this part must not

be subject to the applications processing

time-frames set forth in §§ 516.210

through 516.290 of this chapter.

* * * * *

PART 584—REGULATED ACTIVITIES

70. The authority citation for part 584

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 1468.

71. Section 584.2–2 is amended by

revising the last sentence of paragraph

(b) to read as follows:

§ 584.2–2 Permissible bank holding

company activities of savings and loan

holding companies.

* * * * *

(b) * * * OTS must act upon such

application under the guidelines in part

516, subpart E of this chapter.

* * * * *

Dated: February 23, 2001.

By the Office of Thrift Supervision.

Ellen Seidman,

Director.

[FR Doc. 01–4996 Filed 3–1–01; 8:45 am]

BILLING CODE 6720–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–NE–24–AD; Amendment

39–12129; AD 2001–04–10]

RIN 2120–AA64

Airworthiness Directives; Pratt &

Whitney Canada (PWC) Model PW305

and PW305A Turbofan Engines

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to Pratt & Whitney Canada

(PWC) Models PW305 and PW305A

turbofan engines, that requires removing

stage 4 low pressure turbine (LPT) disks

from service before exceeding new,

lower cyclic life limits. This amendment

is prompted by the results of a spin pit

test analysis which indicate that the

stage 4 LPT disk does not have full

published life. The actions specified by

this AD are intended to prevent LPT

disk failure resulting from premature

cracking of the LPT disks, which could

result in an uncontained engine failure

and damage to the airplane.

DATES: Effective date April 6, 2001.

FOR FURTHER INFORMATION CONTACT:

James Rosa, Aerospace Engineer, Engine

Certification Office, FAA, Engine and

Propeller Directorate, 12 New England

Executive Park, Burlington, MA 01803–

5299; telephone: (781) 238–7152; fax

(781) 238–7199.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to PWC Models

PW305 and PW305A turbofan engines,

was published in the Federal Register

on November 16, 2000 (65 FR 69258).

That action proposed to require

removing stage 4 LPT disks from service

before exceeding new, lower cyclic life

limits.

No Comments Received

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. No

comments were received on the

proposal or the FAA’s determination of

the cost to the public. The FAA has

determined that air safety and the

public interest require the adoption of

the rule as proposed.

Economic Impact

There are currently 358 engines in the

domestic fleet containing the affected

stage 4 LPT disks, part numbers (P/N’s)

30A1457 and 30A1499, and a total of

484 engines in the worldwide fleet. The

total cost to the domestic fleet to remove

and replace these disks at the new life

limit of 4000 cycles-in-service (CIS),

rather than the former life limit of 5000

CIS, is estimated to be $6,331,015.

Regulatory Impact

This proposed rule does not have

federalism implications, as defined in

Executive Order 13132, because it

would not have a substantial direct

effect on the States, on the relationship

between the national government and

the States, or on the distribution of

power and responsibilities among the

various levels of government.

Accordingly, the FAA has not consulted

with state authorities prior to

publication of this proposed rule.

For the reasons discussed above, I

certify that this proposed regulation (1)

is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under the DOT

Regulatory Policies and Procedures (44

FR 11034, February 26, 1979); and (3) if

promulgated, will not have a significant

economic impact, positive or negative,

on a substantial number of small entities

under the criteria of the Regulatory

Flexibility Act. A copy of the draft

regulatory evaluation prepared for this

action is contained in the Rules Docket.

A copy of it may be obtained by

contacting the Rules Docket at the

location provided under the caption

ADDRESSES.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation

safety, Safety.

Adoption of the Amendment

Accordingly, pursuant to the

authority delegated to me by the

Administrator, the Federal Aviation

Administration amends part 39 of the