[Federal Register Volume 73, Number 155 (Monday, August 11, 2008)]
[Rules and Regulations]
[Pages 46532-46539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18410]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 24
[Docket ID OCC-2008-0010]
RIN 1557-AD12
Community and Economic Development Entities, Community
Development Projects, and Other Public Welfare Investments
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Interim final rule with request for comment.
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SUMMARY: On July 30, 2008, the President signed into law the Housing
and Economic Recovery Act of 2008 (HERA). Section 2503 of the HERA
revises the community development investment authority in 12 U.S.C.
24(Eleventh) to permit a national bank to make a broader range of
investments designed primarily to promote the public welfare. This
interim final rule implements the changes made to section 24(Eleventh)
by the HERA.
DATES: Effective Date: This rule is effective on August 11, 2008.
Comment Date: Comments must be received by September 10, 2008.
ADDRESSES: Because paper mail in the Washington, DC area and at the OCC
is subject to delay, commenters are encouraged to submit comments by e-
mail, if possible. Please use the title ``Community Development
Investments'' to facilitate the organization and distribution of the
comments. You may submit comments by any of the following methods:
Federal eRulemaking Portal--``Regulations.gov'': Go to
http://www.regulations.gov, under the ``More Search Options'' tab click
next to the ``Advanced Docket Search'' option where indicated, select
``Comptroller of the Currency'' from the agency drop-down menu, then
click ``Submit.'' In the ``Docket ID'' column, select ``OCC-2008-0010''
to submit or view public comments and to view supporting and related
materials for this interim final rule. The ``How to Use This Site''
link on the Regulations.gov home page provides information on using
Regulations.gov, including instructions for submitting or viewing
public comments, viewing other supporting and related materials, and
viewing the docket after the close of the comment period.
E-mail: [email protected].
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Mail: Office of the Comptroller of the Currency, 250 E
Street, SW., Mail Stop 1-5, Washington, DC 20219.
Fax: (202) 874-4448.
Hand Delivery/Courier: 250 E Street, SW., Attn: Public
Information Room, Mail Stop 1-5, Washington, DC 20219.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2008-0010'' in your comment. In general, OCC will enter
all comments received into the docket and publish them on the
Regulations.gov Web site without change, including any business or
personal information that you provide such as name and address
information, e-mail 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 enclose 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 interim final rule by any of the following methods:
Viewing Comments Electronically: Go to http://www.regulations.gov, under the ``More Search Options'' tab click next
to the ``Advanced Docket Search'' option where indicated, select
``Comptroller of the Currency'' from the agency drop-down menu, then
click ``Submit.'' In the ``Docket ID'' column, select ``OCC-2008-0010''
to view public comments for this rulemaking action.
Viewing Comments Personally: You may personally inspect
and photocopy comments at the OCC's Public Information Room, 250 E
Street, SW., Washington, DC. For security reasons, the OCC requires
that visitors make an appointment to inspect comments. You may do so by
calling (202) 874-5043. Upon arrival, visitors will be required to
present valid government-issued photo identification and submit to
security screening in order to inspect and photocopy comments.
Docket: You may also view or request available background
documents and project summaries using the methods described above.
FOR FURTHER INFORMATION CONTACT: Steven VanMeter, Assistant Director,
Community and Consumer Law Division, (202) 874-5750; Stuart E.
Feldstein, Assistant Director, Legislative and Regulatory Activities,
(202) 874-5090; or Patrick T. Tierney, Senior Attorney, Legislative and
Regulatory Activities, (202) 874-5090, Office of the Comptroller of the
Currency, 250 E Street SW., Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
Introduction
The Financial Services Regulatory Relief Act of 2006 (FSRRA) \1\
made a number of changes to 12 U.S.C. 24(Eleventh), the authorizing
statute for the Office of the Comptroller of the Currency's (OCC)
community development regulations.\2\ Prior to its amendment by the
FSRRA, 12 U.S.C. 24(Eleventh) authorized a national bank ``[t]o make
investments designed primarily to promote the public welfare, including
the welfare of low- and moderate-income communities or families (such
as by providing housing, services, or jobs)'' (the public welfare
test). The FSRRA, among other things, narrowed the grant of authority
in section 24(Eleventh) by providing that a national bank may ``make
investments directly or indirectly, each of which promotes the public
welfare by benefiting primarily low- and moderate-income communities or
families (such as by providing housing, services, or jobs).'' (emphasis
added) \3\
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\1\ Pub. L. 109-351, 120 Stat. 1966 (Oct. 13, 2006).
\2\ 12 CFR part 24 (2008).
\3\ Pub. L. 109-351, 120 Stat. 1966 (Oct. 13, 2006).
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On April 24, 2008, the OCC issued a final rule that implemented the
FSRRA's narrowing of the public welfare test. In the Notice of Proposed
Rulemaking that preceded that final rule, the OCC noted that Congress
was considering a bill that would change the language of the public
welfare test back to the way it existed prior to the FSRRA changes.\4\
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\4\ 72 FR 36559 (July 3, 2007).
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On July 30, 2008, the President signed into law the Housing and
Economic Recovery Act of 2008 (HERA), which, in part, reinstated the
pre-FSRRA wording of the public welfare test.\5\ Specifically, section
2503 of the HERA revised section 24(Eleventh) to provide that a
national bank may ``* * * make investments directly or indirectly, each
of which is designed primarily to promote the public welfare, including
the welfare of low- and moderate-income communities or families (such
as by providing housing, services, or jobs)'' (emphasis added).\6\
Under section 2503 of the HERA and the revisions made by this interim
final rule, national banks and their subsidiaries will now be able to
make a broader range of investments.
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\5\ Pub. L. 110-289, 122 Stat. 2654 (July 30, 2008).
\6\ Id.
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Description of the Interim Final Rule
This interim final rule makes the following specific revisions to
part 24 in order to implement the statutory changes to the public
welfare test.
Definition of ``Community and Economic Development Entity'' (CEDE)
(Sec. 24.2(c))
The interim final rule amends the definition of a CEDE in Sec.
24.2(c) to implement the HERA change to the public welfare test. The
revised paragraph (c) defines a CEDE as ``an entity that makes
investments or conducts activities that primarily benefit low- and
moderate-income individuals, low- and moderate-income areas, or other
areas targeted by a governmental entity for redevelopment, or would
receive consideration as ``qualified investments'' under 12 CFR
25.23.''
Removing the Definition of ``Benefiting Primarily Low- and Moderate-
Income Areas or Individuals'' (Sec. 24.2(g))
As indicated above, the FSRRA authorized a national bank and its
subsidiaries to make investments that promote the public welfare by
``benefiting primarily'' low- and moderate-income areas or individuals.
OCC's rule implementing the FSRRA added a definition for ``benefiting
primarily low and moderate-income areas or individuals.'' The HERA
revision removed the ``benefiting primarily'' language, thus, this
definition is no longer needed and is removed by the interim final
rule.
Public Welfare Investments (Sec. 24.3)
The interim final rule revises Sec. 24.3, which contains the
authorization to make investments pursuant to section 24(Eleventh), to
conform to the changes made by the HERA.
Examples of Qualifying Public Welfare Investments (Sec. 24.6)
Section 24.6 contains examples of qualifying public welfare
investments. The interim final rule revises the introductory language
in Sec. 24.6 to reflect the changes made by section 2503 of the HERA.
The interim final rule also adds back, where appropriate, references to
investments in ``targeted redevelopment areas.'' These references had
been removed by the FSRRA implementing regulation.
Revision to Appendix 1 to Part 24, the CD-1 National Bank Community
Development (Part 24) Investments Form
The interim final rule also revises Appendix 1 to part 24, the CD-1
National Bank Community Development (Part 24) Investments Form, to
reflect the changes to the regulation.
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Effective Date; Solicitation of Comments
This interim final rule will become effective immediately upon
publication in the Federal Register. Pursuant to the Administrative
Procedure Act (APA), 5 U.S.C. 553(b)(B), general notice and an
opportunity for public comment are not required prior to the issuance
of a final rule when an agency, for good cause, finds that notice and
public procedure are ``impracticable, unnecessary, or contrary to the
public interest.'' \7\ Similarly, an agency may publish a final rule
with an immediate effective date if the agency finds good cause and
publishes such with the rule. 5 U.S.C. 553(d)(3).
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\7\ 5 U.S.C. 553(b)(B).
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Consistent with section 553(b)(B) of the APA, the OCC finds that
good cause exists for a finding that notice and comment are
impracticable and contrary to the public interest. In enacting the
Foreclosure Prevention Act of 2008 (part of the HERA), which includes
these changes to 12 U.S.C. 24(Eleventh), Congress stated that all
provisions of that Act are designated as ``emergency requirements and
necessary to meet emergency needs.'' \8\ An interim final rule will
allow national banks and their subsidiaries immediately to make a
broader range of investments to promote the public welfare, including
investments in distressed communities affected by rising foreclosures.
Immediate issuance of this interim final rule furthers the public
interest because it will provide national banks and their subsidiaries
with additional flexibility to make public welfare investments in low-
and moderate-income individuals or areas or targeted redevelopment
areas, or that would receive consideration under the Community
Reinvestment Act (12 U.S.C. 2901 et seq.) as ``qualified investments.''
For these same reasons, the OCC finds good cause to publish this rule
with an immediate effective date. See 5 U.S.C. 553(d)(3).
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\8\ See section 2002 of the HERA, Pub. L. 110-289, 122 Stat.
2654 (July 30, 2008).
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Although notice and comment are not required prior to the effective
date of this rule, the OCC invites comment on all aspects of this
interim final rule, and intends to revise the interim final rule if
necessary or appropriate in light of the comments received.
Regulatory Analysis
Regulatory Flexibility Act
The Regulatory Flexibility Act (Pub. L. 96-354, Sept. 19, 1980)
(RFA) applies only to rules for which an agency publishes a general
notice of proposed rulemaking pursuant to 5 U.S.C. 553(b).\9\ Pursuant
to the Administrative Procedure Act (APA) at 5 U.S.C. 553(b)(B),
general notice and an opportunity for public comment are not required
prior to the issuance of a final rule when an agency, for good cause,
finds that ``notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.'' \10\
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\9\ 5 U.S.C. 601(2).
\10\ 5 U.S.C. 553(b)(B).
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As discussed above, the OCC has determined for good cause that the
APA does not require general notice and public comment on this interim
final rule and, therefore, we are not publishing a general notice of
proposed rulemaking. Thus, the RFA, pursuant to 5 U.S.C. 601(2), does
not apply to this interim final rule.
Executive Order 12866
The OCC has determined that this interim final rule is not a
significant regulatory action under Executive Order 12866. We have
concluded that the changes made by this interim final rule will not
have an annual effect on the economy of $100 million or more within the
meaning of Executive Order 12866. The OCC further concludes that this
interim final rule does not meet any of the other standards for a
significant regulatory action set forth in Executive Order 12866.
Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3506), we have reviewed the interim final rule to
assess any information collections. There are no collections of
information as defined by the Paperwork Reduction Act in the interim
final rule.
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law
104-4 (2 U.S.C. 1532) (Unfunded Mandates Act), requires that an agency
prepare a budgetary impact statement before promulgating any rule
likely to result in a Federal mandate that may result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year. 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 OCC has determined that this interim final rule will not
result in expenditures by State, local, and tribal governments, or by
the private sector, of $100 million or more in any one year.
Accordingly, the interim final rule is not subject to section 202 of
the Unfunded Mandates Act.
List of Subjects in 12 CFR Part 24
Community development, Credit, Investments, Low and moderate income
housing, National banks, Reporting and recordkeeping requirements,
Rural areas, Small businesses.
Authority and Issuance
0
For the reasons set forth in the preamble, part 24 of chapter I of
title 12 of the Code of Federal Regulations is amended as follows:
PART 24--COMMUNITY AND ECONOMIC DEVELOPMENT ENTITIES, COMMUNITY
DEVELOPMENT PROJECTS, AND OTHER PUBLIC WELFARE INVESTMENTS
0
1. The authority citation for part 24 continues to read as follows:
Authority: 12 U.S.C. 24(Eleventh), 93a, 481, and 1818.
0
2. Amend Sec. 24.2 by:
0
a. Revising the first sentence of paragraph (c);
0
b. Removing paragraph (g); and
0
c. Redesignating paragraphs (h) through (j) as paragraphs (g) through
(i), respectively.
The revision reads as follows:
Sec. 24.2 Definitions.
* * * * *
(c) Community and economic development entity (CEDE) means an
entity that makes investments or conducts activities that primarily
benefit low- and moderate-income individuals, low- and moderate-income
areas, or other areas targeted by a governmental entity for
redevelopment, or would receive consideration as ``qualified
investments'' under 12 CFR 25.23. * * *
* * * * *
0
3. Revise Sec. 24.3 to read as follows:
Sec. 24.3 Public welfare investments.
A national bank or national bank subsidiary may make an investment
directly or indirectly under this part if the investment primarily
benefits low- and moderate income individuals, low- and moderate income
areas, or other areas targeted by a governmental entity for
redevelopment, or the investment would receive consideration under 12
CFR 25.23 as a ``qualified investment.''
0
4. Amend Sec. 24.6 by:
0
a. Revising the introductory text; and
0
b. Revising paragraphs (b)(1) through (4), (d)(1), and (d)(4).
[[Page 46535]]
The revisions read as follows:
Sec. 24.6 Examples of qualifying public welfare investments.
Investments that primarily support the following types of
activities are examples of investments that meet the requirements of
Sec. 24.3:
* * * * *
(b) * * *
(1) Investments that finance small businesses (including equity or
debt financing and investments in an entity that provides loan
guarantees) that are located in low- and moderate-income areas or other
targeted redevelopment areas or that produce or retain permanent jobs,
the majority of which are held by low- and moderate-income individuals;
(2) Investments that finance small businesses or small farms,
including minority- and women-owned small businesses or small farms,
that, although not located in low- and moderate-income areas or
targeted redevelopment areas, create a significant number of permanent
jobs for low- and moderate-income individuals;
(3) Investments in an entity that acquires, develops,
rehabilitates, manages, sells, or rents commercial or industrial
property that is located in a low- and moderate-income area or targeted
redevelopment area and occupied primarily by small businesses, or that
is occupied primarily by small businesses that produce or retain
permanent jobs, the majority of which are held by low- and moderate-
income individuals; and
(4) Investments in low- and moderate-income areas or targeted
redevelopment areas that produce or retain permanent jobs, the majority
of which are held by low- and moderate-income individuals;
* * * * *
(d) * * *
(1) Investments that provide credit counseling, financial literacy,
job training, community development research, and similar technical
assistance for non-profit community development organizations, low- and
moderate-income individuals or areas or targeted redevelopment areas,
or small businesses, including minority- and women-owned small
businesses, located in low- and moderate-income areas or that produce
or retain permanent jobs, the majority of which are held by low- and
moderate-income individuals;
* * * * *
(4) Investments in minority- and women-owned depository
institutions that serve primarily low- and moderate-income individuals
or low- and moderate-income areas or targeted redevelopment areas.
0
5. Revise appendix 1 to part 24 to read as follows:
APPENDIX 1 TO PART 24--CD-1--NATIONAL BANK COMMUNITY DEVELOPMENT (PART
24) INVESTMENTS
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Dated: August 5, 2008.
John C. Dugan,
Comptroller of the Currency.
[FR Doc. E8-18410 Filed 8-8-08; 8:45 am]
BILLING CODE 4810-33-C