Regulatory Capital Rule: Emergency Capital Investment Program
| Published date | 22 March 2021 |
| Citation | 86 FR 15076 |
| Record Number | 2021-05443 |
| Section | Rules and Regulations |
| Court | Federal Deposit Insurance Corporation,Treasury Department |
Federal Register, Volume 86 Issue 53 (Monday, March 22, 2021)
[Federal Register Volume 86, Number 53 (Monday, March 22, 2021)]
[Rules and Regulations]
[Pages 15076-15081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05443]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TREASURY
Office of the Comptroller of the Currency
12 CFR Parts 3 and 5
[Docket ID OCC-2021-0002]
RIN 1557-AF09
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q; Docket No. R-1741 ]
RIN 7100-AG11
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 324
RIN 3064-AF73
Regulatory Capital Rule: Emergency Capital Investment Program
AGENCY: Office of the Comptroller of the Currency, Treasury (OCC);
Board of Governors of the Federal Reserve System (Board); and Federal
Deposit Insurance Corporation (FDIC).
ACTION: Interim final rule; request for public comment.
-----------------------------------------------------------------------
SUMMARY: In order to support and facilitate the timely implementation
and acceptance of the Congressionally authorized Emergency Capital
Investment Program (ECIP) for the Department of the Treasury to make
capital investments in low- and moderate-income community financial
institutions, the OCC, Board, and FDIC (together, the agencies) are
issuing an interim final rule that provides that preferred stock issued
under ECIP qualifies as additional tier 1 capital and that subordinated
debt issued under ECIP qualifies as tier 2 capital under the agencies'
capital rule.
DATES: This rule is effective on March 22, 2021. Comments must be
received on or before May 21, 2021.
ADDRESSES:
OCC: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal, if possible. Please use the title
``Amendments to the Capital Rule to Facilitate the Emergency Capital
Investment Program'' to facilitate the organization and distribution of
the comments. You may submit comments by any of the following methods:
Federal eRulemaking Portal: Go to https://www.regulations.gov/.
Enter ``Docket ID OCC-2021-0002'' in the Search Box and click
``Search.'' Public comments can be submitted via the ``Comment'' box
below the displayed document information or by clicking on the document
title and then clicking the ``Comment'' box on the top-left side of the
screen. For help with submitting effective comments please click on
``View Commenter's Checklist.'' For assistance with the Regulations.gov
site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
Friday, 9am-5pm ET or email [email protected].
Mail: Chief Counsel's Office, Attn: Comment Processing, Office of
the Comptroller of the Currency, 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, Washington,
DC 20219.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2021-0002'' in your comment. In general, the OCC will
enter all comments received into the docket and publish the comments on
the Regulations.gov website without change, including any business or
personal information provided such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this action by the following method:
Go to https://www.regulations.gov/. Enter ``Docket ID OCC-2021-
0002'' in the Search box and click ``Search.'' Click on the
``Documents'' tab and then the document's title. After clicking the
document's title, click the ``Browse Comments'' tab. Comments can be
viewed and filtered by clicking on the ``Sort By'' drop-down on the
right side of the screen or the ``Refine Results'' options on the left
side of the screen. Supporting materials can be viewed by clicking on
the ``Documents'' tab and filtered by clicking on the ``Sort By'' drop-
down on the right side of the
[[Page 15077]]
screen or the ``Refine Documents Results'' options on the left side of
the screen. For assistance with the Regulations.gov site, please call
(877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 9 a.m.-5
p.m. ET or email [email protected].
The docket may be viewed after the close of the comment period in
the same manner as during the comment period.
Board: You may submit comments, identified by Docket No. R-1741 and
RIN No. 7100-AG11, by any of the following methods:
Agency Website: http://www.federalreserve.gov. Follow the
instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
Email: [email protected]. Include docket number and
RIN in the subject line of the message.
Fax: (202) 452-3819 or (202) 452-3102.
Mail: Ann E. Misback, Secretary, Board of Governors of the Federal
Reserve System, 20th Street and Constitution Avenue NW, Washington, DC
20551.
All public comments are available from the Board's website at
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical reasons or to remove sensitive
personally identifiable information at the commenter's request. Public
comments may also be viewed electronically or in paper form in Room
3515, 1801 K Street NW, Washington, DC 20006 between 9:00 a.m. and 5:00
p.m. on weekdays.
FDIC: You may submit comments using any of the following methods:
Agency Website: https://www.fdic.gov/regulations/laws/federal.
Follow the instructions for submitting comments on the agency website.
Email: [email protected]. Include RIN 3064-AF73 on the subject line
of the message.
Mail: James P. Sheesley, Assistant Executive Secretary, Attention:
Comments RIN 3064-AF73, Federal Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
Hand Delivery: Comments may be hand delivered to the guard station
at the rear of the 550 17th Street NW building (located on F Street) on
business days between 7 a.m. and 5 p.m.
Public Inspection: All comments received, including any personal
information provided, will be posted generally without change to
https://www.fdic.gov/regulations/laws/federal.
FOR FURTHER INFORMATION CONTACT:
OCC: Margot Schwadron, Director, or Andrew Tschirhart, Risk Expert,
Capital Policy, (202) 649-6370; or Carl Kaminski, Special Counsel, or
Daniel Perez, Counsel, Chief Counsel's Office, (202) 649-5490, Office
of the Comptroller of the Currency, 400 7th Street SW, Washington, DC
20219.
Board: Constance Horsley, Deputy Associate Director, (202) 452-
5239, Naima Jefferson, Lead Financial Institution Policy Analyst, (202)
912-4613, Senait Kahsay, Senior Financial Institution Policy Analyst
II, (202) 245-4209, Eusebius Luk, Senior Financial Institution Policy
Analyst I, (202) 452-2874, Division of Supervision and Regulation;
Benjamin McDonough, Associate General Counsel, (202) 452-2036, Mark
Buresh, Senior Counsel, (202) 452-5270, Mary Watkins, Counsel, (202)
452-3722, Legal Division, Board of Governors of the Federal Reserve
System, 20th and C Streets NW, Washington, DC 20551.
FDIC: Benedetto Bosco, Chief, Capital Policy Section,
[email protected]; Noah Cuttler, Senior Policy Analyst,
[email protected]; [email protected]; Capital Markets Branch,
Division of Risk Management Supervision, (202) 898-6888; Gregory Feder,
Counsel, [email protected]; Suzanne Dawley, Counsel, [email protected];
Francis Kuo, Counsel, [email protected]; Amanda Ledig, Attorney,
[email protected]; Supervision and Legislation Branch, Legal Division,
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington,
DC 20429. For the hearing impaired only, Telecommunication Device for
the Deaf (TDD), (800) 925-4618.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Discussion
III. Request for Comment
IV. Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E. Riegle Community Development and Regulatory Improvement Act
of 1994
F. Unfunded Mandates Reform Act of 1995
G. Use of Plain Language
I. Background
On December 27, 2020, the Consolidated Appropriations Act, 2021,\1\
was signed into law and added a new Section 104A to the Community
Development Banking and Financial Institutions Act of 1994 (the Act).
Section 104A of the Act authorizes the Secretary of the Treasury to
establish the Emergency Capital Investment Program (ECIP or Program)
through which the Department of the Treasury (Treasury) can make
capital investments in certain low- and moderate-income community
financial institutions. The Act states that the purpose of these
capital investments is to support the efforts of low- and moderate-
income community financial institutions to, among other things, provide
loans, grants, and forbearance for small businesses, minority-owned
businesses, and consumers in low-income and underserved communities,
including persistent poverty counties, which may be disproportionately
impacted by the economic effects of the Coronavirus 2019 (COVID-19)
event.\2\ Treasury's authority to make capital investments under ECIP
is time limited. The Program will end six months after the date on
which the national emergency concerning the COVID-19 outbreak
terminates.\3\
---------------------------------------------------------------------------
\1\ Public Law 116-260.
\2\ Id.
\3\ Id.
---------------------------------------------------------------------------
Under ECIP, a financial institution is generally eligible to
receive capital investments from Treasury if it is a low- and moderate-
income community financial institution, which is defined by the Act to
include any financial institution that is (1) a community development
financial institution or minority depository institution,\4\ and (2) an
insured depository institution, bank holding company, savings and loan
holding company, or federally insured credit union (collectively,
eligible banking organizations).
---------------------------------------------------------------------------
\4\ The terms ``Community Development Financial Institution''
and ``Minority Depository Institution'' are defined in section 104A
of the Act.
---------------------------------------------------------------------------
Under ECIP, Treasury can acquire senior preferred stock from
eligible banking organizations (Senior Preferred Stock). Additionally,
if the Secretary of the Treasury determines that an eligible banking
organization cannot feasibly issue preferred stock, such as a bank
organized as an S corporation \5\ or mutual banking organization,
Treasury can acquire subordinated debt instruments (Subordinated Debt)
from such an eligible banking organization.\6\ Under the Act, Treasury
is required to seek to establish the terms of preferred stock issued
under ECIP to enable such instruments to qualify as tier 1 capital
under the respective capital rule of the OCC, Board, and FDIC
(together, the agencies).\7\
---------------------------------------------------------------------------
\5\ An S corporation is corporation that has elected Subchapter
S corporation status under the Internal Revenue Code.
\6\ Section 104A(d)(5)(B) of the Act.
\7\ Section 104A(f) of the Act.
---------------------------------------------------------------------------
On March 4, 2021, Treasury published the terms of the Senior
[[Page 15078]]
Preferred Stock and Subordinated Debt.\8\ As described in the terms
published by Treasury, Senior Preferred Stock issued under ECIP will be
noncumulative, perpetual preferred stock that is senior to the issuer's
common stock and pari passu with (or, in some cases, senior to) the
issuer's most senior class of existing preferred stock. Subordinated
Debt issued under ECIP will be unsecured subordinated debt. The
Subordinated Debt will rank junior to all other debt of the issuer
except that it will rank senior to mutual capital certificates or
similar instruments issued by a mutual banking organization and to any
equity instruments issued by an S corporation.
---------------------------------------------------------------------------
\8\ The term sheets for the Senior Preferred Stock and
Subordinated Debt may be found on Treasury's website. For a complete
description of the terms of the instruments, see https://home.treasury.gov/policy-issues/cares/emergency-capital-investment-program.
---------------------------------------------------------------------------
Under the terms of Senior Preferred Stock, participating eligible
banking organizations will not be required to pay dividends until two
years after issuance of the Senior Preferred Stock, and then will be
subject to a noncumulative dividend with a rate not to exceed 2 percent
that may fluctuate based on certain lending growth criteria applied to
the issuer. A participating eligible banking organization is prohibited
from paying dividends under certain circumstances, including if the
participating eligible banking organization determines that the payment
would be detrimental to the financial health of the institution. Under
the terms of the Subordinated Debt, interest payments on the
Subordinated Debt would be subject to determinants and constraints
similar to those described above, but the interest payments would be
cumulative and deferrable.
The Act requires Treasury to establish restrictions on executive
compensation, share buybacks, and dividend payments for issuers of
capital instruments issued under ECIP, as well as restrictions on
conflicts of interest.\9\ The Act permits Treasury to establish other
terms and conditions for participation in ECIP. On March 4, 2021,
Treasury issued an interim final rule that established restrictions on
executive compensation, capital distributions, and luxury expenditures
for ECIP.\10\
---------------------------------------------------------------------------
\9\ Section 104A(h) of the Act.
\10\ See Emergency Capital Investment Program--Restrictions on
Executive Compensation, Share Buybacks, and Dividends, https://home.treasury.gov/system/files/136/ECIP-interim-final-rule.pdf.
---------------------------------------------------------------------------
II. Discussion
The Senior Preferred Stock and Subordinated Debt will feature
characteristics that are similar to those of instruments that qualify
under the agencies' capital rule as additional tier 1 capital and tier
2 capital, respectively. As discussed above, the Act directs the
Secretary of the Treasury to seek to establish the terms of the Senior
Preferred Stock to enable these instruments to receive ``Tier 1''
capital treatment. Further, the establishment of ECIP and the capital
investments being made thereunder help support the efforts of low- and
moderate-income community financial institutions to provide financial
intermediary services in low-income and underserved communities. To
facilitate implementation of ECIP, the agencies are revising the
capital rule to provide that the Senior Preferred Stock will qualify as
additional tier 1 capital and Subordinated Debt will qualify as tier 2
capital.11 12 These revisions are based on the terms and
conditions of the Senior Preferred Stock and Subordinated Debt provided
in the Senior Preferred Stock term sheet and the Subordinated Debt term
sheet published by the U.S. Department of the Treasury on March 4,
2021. If the terms and conditions for the Senior Preferred Stock or
Subordinated Debt are modified in the future such that they differ
materially from the terms and conditions provided in the term sheets,
the agencies may reevaluate whether such capital treatment remains
appropriate.
---------------------------------------------------------------------------
\11\ See 12 CFR 3.20 (OCC); 12 CFR 217.20 (Board); 12 CFR 324.20
(FDIC).
\12\ Certain small bank holding companies and savings and loan
holdings companies are subject to the Board's Small Bank Holding
Company and Savings and Loan Holding Company Policy Statement (12
CFR part 225, app. C) rather than the Board's capital rule. The
Policy Statement requires subject companies to maintain specified
debt-to-equity ratios and specifies how certain types of debt
instruments and preferred stock instruments are to be included for
purposes of the debt-to-equity ratios. For purposes of the Policy
Statement, Senior Preferred Stock issued under ECIP is redeemable
preferred stock, which is subject to certain limitations under the
Policy Statement, and Subordinated Debt issued under ECIP is debt.
---------------------------------------------------------------------------
In addition, the OCC is adding language to its licensing rule,
which sets forth certain requirements applicable to subordinated debt
issued by a national bank. Paragraph (d)(2) of section 5.47 prohibits a
national bank from including in a subordinated debt note any provision
or covenant that unduly restricts or otherwise acts to unduly limit the
authority of a national bank or interferes with the OCC's supervision
of the national bank. To facilitate the ability of a national bank to
issue subordinated debt through ECIP, the OCC is adding new paragraph
(j) to section 5.47. This new paragraph clarifies that provisions and
covenants added to a subordinated debt document pursuant to
requirements imposed by the Treasury Department for purposes of ECIP
will not be considered, under paragraph (d)(2) of section 5.47, to
unduly restrict or otherwise act to unduly limit the authority of a
national bank or interfere with the OCC's supervision of the national
bank.
III. Request for Comment
The agencies seek comment on all aspects of this interim final
rule. In particular, the agencies seek comment on the regulatory
capital treatment of the Senior Preferred Stock and Subordinated Debt
issued under ECIP and on the following specific question:
Question: For banking organizations subject to the Board's Small
Bank Holding Company and Savings and Loan Holding Company Policy
Statement, what are the advantages and disadvantages of including
Senior Preferred Stock as equity and Subordinated Debt as debt for
purposes of meeting the debt-to-equity ratio? What are the advantages
and disadvantages of including Senior Preferred Stock subject to the
limits described in the Policy Statement as redeemable preferred stock?
What are the advantages and disadvantages of excluding Subordinated
Debt from debt for purposes of the debt-to-equity ratio?
IV. Administrative Law Matters
A. Administrative Procedure Act
The agencies are issuing the interim final rule without prior
notice and the opportunity for public comment and the 30-day delayed
effective date ordinarily prescribed by the Administrative Procedure
Act (APA).\13\ Pursuant to section 553(b)(B) of the APA, general notice
and the opportunity for public comment are not required with respect to
a rulemaking when an ``agency for good cause finds (and incorporates
the finding and a brief statement of reasons therefore in the rules
issued) that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.'' \14\
---------------------------------------------------------------------------
\13\ 5 U.S.C. 553.
\14\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------
As discussed above, the purpose of capital investments made under
ECIP is to support the efforts of low- and moderate-income community
financial institutions and the communities they serve, which may be
disproportionately impacted by the economic effects of the COVID-19
event. The Act also requires Treasury to seek to establish the terms of
senior preferred stock instruments issued under the Program such that
these instruments would be considered
[[Page 15079]]
additional tier 1 capital under the agencies' capital rule.
The agencies believe that the public interest is best served by
implementing the interim final rule immediately upon publication in the
Federal Register. The interim final rule will facilitate implementation
of ECIP by providing certainty that the Senior Preferred Stock may be
included in additional tier 1 capital and Subordinated Debt may be
included in tier 2 capital under the capital rule. As noted above,
Treasury's authority to make new capital investments in ECIP will end
six months after the date on which the national emergency concerning
the COVID-19 outbreak declared by the President on March 13, 2020,
under the National Emergencies Act terminates.\15\ For these reasons,
the agencies find that there is good cause consistent with the public
interest to issue the rule without advance notice and comment.\16\
---------------------------------------------------------------------------
\15\ Public Law 116-260.
\16\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------
The APA also requires a 30-day delayed effective date, except for
(1) substantive rules that grant or recognize an exemption or relieve a
restriction; (2) interpretative rules and statements of policy; or (3)
as otherwise provided by the agency for good cause.\17\ Because the
interim final rule relieves a restriction, the interim final rule is
exempt from the APA's delayed effective date requirement.\18\
---------------------------------------------------------------------------
\17\ 5 U.S.C. 553(d).
\18\ 5 U.S.C. 553(d)(1).
---------------------------------------------------------------------------
In addition, the agencies find good cause to publish the interim
final rule with an immediate effective date for the same reasons set
forth above under the discussion of section 553(b)(B) of the APA. While
the agencies believe that there is good cause to issue the interim
final rule without advance notice and comment and with an immediate
effective date, as noted, the agencies are interested in the views of
the public on all aspects of the interim final rule.
B. Congressional Review Act
For purposes of Congressional Review Act (CRA), the Office of
Management and Budget (OMB) makes a determination as to whether a final
rule constitutes a ``major'' rule.\19\ If a rule is deemed a ``major
rule'' by the OMB, the CRA generally provides that the rule may not
take effect until at least 60 days following its publication.\20\
---------------------------------------------------------------------------
\19\ 5 U.S.C. 801 et seq.
\20\ 5 U.S.C. 801(a)(3).
---------------------------------------------------------------------------
The CRA defines a ``major rule'' as any rule that the Administrator
of the Office of Information and Regulatory Affairs of the OMB finds
has resulted in or is likely to result in (A) an annual effect on the
economy of $100,000,000 or more; (B) a major increase in costs or
prices for consumers, individual industries, Federal, State, or local
government agencies or geographic regions; or (C) significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export markets.
For the same reasons set forth above, the agencies are adopting the
interim final rule without the delayed effective date generally
prescribed under the CRA. The delayed effective date required by the
CRA does not apply to any rule for which an agency for good cause finds
(and incorporates the finding and a brief statement of reasons therefor
in the rule issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest.\21\
---------------------------------------------------------------------------
\21\ 5 U.S.C. 808.
---------------------------------------------------------------------------
As required by the CRA, the agencies will submit the interim final
rule and other appropriate reports to Congress and the Government
Accountability Office for review.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) states that no agency may
conduct or sponsor, nor is the respondent required to respond to, an
information collection unless it displays a currently valid OMB control
number.\22\ The agencies have reviewed this interim final rule and have
determined that this interim final rule does not introduce any new
information collections or revise any existing information collections
pursuant to the PRA for the agencies. In addition, the Board has
reviewed this interim final rule pursuant to authority delegated by
OMB. Therefore, no submissions will be made by the agencies to OMB for
review.
---------------------------------------------------------------------------
\22\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \23\ requires an agency to
consider whether the rules it proposes will have a significant economic
impact on a substantial number of small entities.\24\ The RFA applies
only to rules for which an agency publishes a general notice of
proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed
previously, consistent with section 553(b)(B) of the APA, the agencies
have determined for good cause that general notice and opportunity for
public comment is unnecessary, and therefore the agencies are not
issuing a notice of proposed rulemaking. Accordingly, the agencies have
concluded that the RFA's requirements relating to initial and final
regulatory flexibility analysis do not apply.
---------------------------------------------------------------------------
\23\ 5 U.S.C. 601 et seq.
\24\ Under regulations issued by the Small Business
Administration, a small entity includes a depository institution,
bank holding company, or savings and loan holding company with total
assets of $600 million or less and trust companies with total assets
of $41.5 million or less. See 13 CFR 121.201.
---------------------------------------------------------------------------
Nevertheless, the agencies seek comment on whether, and the extent
to which, the interim final rule would affect a significant number of
small entities.
E. Riegle Community Development and Regulatory Improvement Act of 1994
Section 302(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (RCDRIA) \25\ requires that each federal
banking agency, in determining the effective date and administrative
compliance requirements for new regulations that impose additional
reporting, disclosure, or other requirements on insured depository
institutions, each federal banking agency must consider, consistent
with principles of safety and soundness and the public interest, any
administrative burdens that regulations would place on depository
institutions, including small depository institutions, and customers of
depository institutions, as well as the benefits of such regulations.
---------------------------------------------------------------------------
\25\ 12 U.S.C. 4802(a).
---------------------------------------------------------------------------
In addition, section 302(b) of RCDRIA requires new regulations and
amendments to regulations that impose additional reporting,
disclosures, or other new requirements on insured depository
institutions generally to take effect on the first day of a calendar
quarter that begins on or after the date on which the regulations are
published in final form.\26\ The agencies have determined that the
final rule would not impose additional reporting, disclosure, or other
requirements; therefore, the requirements of the RCDRIA do not apply.
---------------------------------------------------------------------------
\26\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
F. Unfunded Mandates Reform Act of 1995
The OCC analyzes proposed rules for the factors listed in Section
202 of the Unfunded Mandates Reform Act of 1995 before promulgating a
final rule for which a general notice of proposed rulemaking was
published.\27\ As
[[Page 15080]]
discussed above, the OCC has determined that publication of a general
notice of proposed rulemaking is not in the public interest.
---------------------------------------------------------------------------
\27\ 2 U.S.C. 1532.
---------------------------------------------------------------------------
G. Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act \28\ requires the Federal
banking agencies to use plain language in all proposed and final rules
published after January 1, 2000. In light of this requirement, the
agencies have sought to present the interim final rule in a simple and
straightforward manner and invite comment on the use of plain language.
For example:
---------------------------------------------------------------------------
\28\ Public Law 106-102, 113 Stat. 1338, 1471, 12 U.S.C. 4809.
---------------------------------------------------------------------------
Is the material organized to suit your needs? If not, how
could the agencies present the interim final rule more clearly?
Are the requirements in the interim final rule clearly
stated? If not, how could the interim final rule be more clearly
stated?
Does the interim final rule contain technical language or
jargon that is not clear? If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the interim final rule easier to
understand? If so, what changes would achieve that?
Is this section format adequate? If not, which of the
sections should be changed and how?
What other changes can the agencies incorporate to make
the interim final rule easier to understand?
List of Subjects
12 CFR Part 3
Administrative practice and procedure, Capital, National banks,
Risk.
12 CFR Part 5
Administrative practice and procedure, Federal savings
associations, National banks, Reporting and recordkeeping requirements,
Securities.
12 CFR Part 217
Administrative practice and procedure, Banks, Banking, Capital,
Federal Reserve System, Holding companies.
12 CFR Part 324
Administrative practice and procedure, Banks, Banking, Confidential
business information, Investments, Reporting and recordkeeping
requirements, Savings associations.
Department of the Treasury
Office of the Comptroller of the Currency
Authority and Issuance
For the reasons stated in the joint preamble, the Office of the
Comptroller of the Currency amends chapter I of Title 12 of the Code of
Federal Regulations as follows:
PART 3--CAPITAL ADEQUACY STANDARDS
0
1. The authority citation for part 3 continues to read as follows:
Authority: 12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818,
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and
Pub. L. 116-136, 134 Stat. 281.
0
2. Section 3.20 is amended by:
0
a. Redesignating footnotes 11 through 15 as footnotes 1 through 5,
footnote 16 as footnote 7, and footnotes 17 through 20 as footnotes 8
through 11, respectively;
0
b. Redesignating paragraph (c)(3) as paragraph (c)(3)(i);
0
c. Adding paragraph (c)(3)(ii);
0
d. Redesignating paragraph (d)(4) as paragraph (d)(4)(i); and
0
e. Adding paragraph (d)(4)(ii).
The additions and revisions read as follows:
Sec. 3.20 Capital components and eligibility criteria for regulatory
capital instruments.
* * * * *
(c) * * *
(3) * * *
(ii) Any preferred stock instruments issued under the U.S.
Department of the Treasury's Emergency Capital Investment Program
pursuant to section 104A of the Community Development Banking and
Financial Institutions Act of 1994, added by the Consolidated
Appropriations Act, 2021.\6\
---------------------------------------------------------------------------
\6\ Public Law 116-260.
---------------------------------------------------------------------------
* * * * *
(d) * * *
(4) * * *
(ii) Any debt instruments issued under the U.S. Department of the
Treasury's Emergency Capital Investment Program pursuant to section
104A of the Community Development Banking and Financial Institutions
Act of 1994, added by the Consolidated Appropriations Act, 2021.\12\
---------------------------------------------------------------------------
\12\ Public Law 116-260.
---------------------------------------------------------------------------
* * * * *
PART 5--RULES, POLICIES, AND PROCEDURES FOR CORPORATE ACTIVITIES
0
3. The authority citation for part 5 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 24a, 35, 93a, 214a, 215, 215a,
215a-1, 215a-2, 215a-3, 215c, 371d, 481, 1462a, 1463, 1464, 1817(j),
1831i, 1831u, 2901 et seq., 3101 et seq., 3907, and 5412(b)(2)(B).
0
4. Section 5.47 is amended by adding paragraph (j):
Sec. 5.47 Subordinated debt issued by a national bank.
* * * * *
(j) Subordinated debt issued under the Emergency Capital Investment
Program. A provision or covenant included in a subordinated debt
document does not unduly restrict or otherwise act to unduly limit the
authority of a national bank or interfere with the OCC's supervision of
the national bank, for purposes of paragraph (d)(2) of this section, if
the provision or covenant is included pursuant to requirements imposed
by the U.S. Department of the Treasury and the subordinated debt is
issued under the U.S. Department of the Treasury's Emergency Capital
Investment Program pursuant to section 104A of the Community
Development Banking and Financial Institutions Act of 1994, added by
the Consolidated Appropriations Act, 2021.
Board of Governors of the Federal Reserve System
12 CFR Chapter II
Authority and Issuance
For the reasons stated in the preamble, the Board of Governors of
the Federal Reserve System amends 12 CFR chapter II as follows:
PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)
0
5. The authority citation for part 217 continues to read as follows:
Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a,
1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904,
3906-3909, 4808, 5365, 5368, 5371, 5371 note, and sec. 4012, Pub. L.
116-136, 134 Stat. 281.
0
6. Section 217.20 is amended by:
0
a. Redesignating paragraph (c)(3) as paragraph (c)(3)(i);
0
b. Adding paragraph (c)(3)(ii);
0
c. Redesignating paragraph (d)(4) as paragraph (d)(4)(i); and
0
d. Adding paragraph (d)(4)(ii).
The additions and revisions read as follows:
Sec. 217.20 Capital components and eligibility criteria for
regulatory capital instruments.
* * * * *
(c) * * *
[[Page 15081]]
(3) * * *
(ii) Any preferred stock instrument issued under the U.S.
Department of the Treasury's Emergency Capital Investment Program
pursuant to section 104A of the Community Development Banking and
Financial Institutions Act of 1994, added by the Consolidated
Appropriations Act, 2021.\16\
---------------------------------------------------------------------------
\16\ Public Law 116-260.
---------------------------------------------------------------------------
* * * * *
(d) * * *
(4) * * *
(ii) Any debt instrument issued under the U.S. Department of the
Treasury's Emergency Capital Investment Program pursuant to section
104A of the Community Development Banking and Financial Institutions
Act of 1994, added by the Consolidated Appropriations Act, 2021.\21\
---------------------------------------------------------------------------
\21\ Public Law 116-260.
---------------------------------------------------------------------------
* * * * *
Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends chapter III of Title 12 of the Code of
Federal Regulations as follows:
PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
0
7. The authority citation for part 324 continues to read as follows:
Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b),
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n),
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233,
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242,
105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160,
2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386,
as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828
note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note);
Pub. L. 115-174; section 4014 Sec. 201, Pub. L. 116-136, 134 Stat.
281 (15 U.S.C. 9052).
0
8. Amend Sec. 324.20 by:
0
a. Redesignating footnotes 17 through 21 as footnotes 18 through 22;
0
b. Redesignating paragraph (c)(3) as paragraph (c)(3)(i);
0
c. Adding paragraph (c)(3)(ii);
0
d. Redesignating paragraph (d)(4) as paragraph (d)(4)(i); and
0
e. Adding paragraph (d)(4)(ii).
The additions and revisions read as follows:
Sec. 324.20 Capital components and eligibility criteria for
regulatory capital instruments.
* * * * *
(c) * * *
(3) * * *
(ii) Any preferred stock instruments issued under the U.S.
Department of the Treasury's Emergency Capital Investment Program
pursuant to section 104A of the Community Development Banking and
Financial Institutions Act of 1994, added by the Consolidated
Appropriations Act, 2021.\17\
---------------------------------------------------------------------------
\17\ Public Law 116-260.
---------------------------------------------------------------------------
* * * * *
(d) * * *
(4) * * *
(ii) Any debt instruments issued under the U.S. Department of the
Treasury's Emergency Capital Investment Program pursuant to section
104A of the Community Development Banking and Financial Institutions
Act of 1994, added by the Consolidated Appropriations Act, 2021.\23\
---------------------------------------------------------------------------
\23\ Public Law 116-260.
---------------------------------------------------------------------------
* * * * *
Blake J. Paulson,
Acting Comptroller of the Currency.
By order of the Board of Governors of the Federal Reserve
System.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about March 5, 2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021-05443 Filed 3-19-21; 8:45 am]
BILLING CODE 4810-33-P; 6714-01-P; 6210-01-P
