[Federal Register: March 20, 2008 (Volume 73, Number 55)]
[Rules and Regulations]
[Page 14922-14924]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr08-3]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 32
[Docket No. OCC-2008-0005]
RIN 1557-AD08
Lending Limits
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Interim final rule with request for comment.
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SUMMARY: The Office of the Comptroller of the Currency (OCC) is issuing
an interim final rule to add a provision to its part 32 lending limits
regulation that will address temporary funding arrangements in
emergency situations. The interim final rule will enable the OCC to
establish a special lending limit for loans and extensions of credit
that the OCC determines are essential to address an emergency situation
(such as critical financial markets stability), will be of short
duration, will be reduced in amount in a timeframe and manner
acceptable to the OCC, and do not present unacceptable risk to the
lending national bank. In granting approval for a special temporary
lending limit, the OCC would impose supervisory oversight and reporting
measures that it determines are appropriate.
DATES: Effective Date: This rule is effective on March 20, 2008.
Comment Date: Comments must be received by April 21, 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 ``Lending Limits'' 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-2008-0005''
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: regs.comments@occ.treas.gov.
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 Number OCC-2008-0005'' 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 Document 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-2008-0005''
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: Patrick T. Tierney, Senior Attorney,
Legislative and Regulatory Activities Division, (202) 874-5090; Stuart
Feldstein, Assistant Director, Legislative and Regulatory Activities
Division, (202) 874-5090; or Steven V. Key, Special Counsel, Bank
Activities and Structure Division, (202) 874-5300, Office of the
Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
Background
The percentage of capital and surplus that a national bank may loan
to any one borrower is limited by 12 U.S.C. 84. Generally, section 84
and the OCC's implementing regulations, 12 CFR part 32, permit a
national bank to make loans in an amount up to 15 percent of its
unimpaired capital and surplus to a single borrower. A national bank
also may extend credit up to an additional 10 percent of unimpaired
capital and surplus to the same borrower if the amount of the loan that
exceeds the 15 percent limit is secured by specified types of
collateral. Part 32 refers to these lending limits as the ``combined
general limit.'' The statute and regulation also provide exceptions to
the combined general limit for various types of loans and extensions of
credit.
12 CFR 32.3(c)(7) of the OCC's current regulations include an
exemption from the combined general limit for loans and extensions of
credit approved by the OCC to a ``financial institution'' when an
emergency situation exists. For purposes of this exception, a
``financial institution'' is defined as a commercial bank, savings
bank, trust company, savings association, or credit union.
Recent market conditions have highlighted that emergency situations
may exist where temporary exemptions from the lending limits may be
appropriate for loans and extensions of credit to other types of
parties. National banks, in their established role as lenders and
financial intermediaries, can be a crucial source of liquidity in such
situations, provided the emergency funding is of limited duration, does
not present unacceptable risk, and is subject to appropriate
safeguards. 12 U.S.C. 84(d)(1) provides the OCC with rulemaking
authority ``to administer and carry out the purposes'' of the lending
limit statute, including authority ``to
[[Page 14923]]
establish limits other than those specified in this section for
particular classes or categories of loans or extensions of credit.''
\1\ Accordingly, the OCC is amending part 32 to add a provision that
creates a special lending limit for temporary funding arrangements for
loans and extensions of credit that the OCC determines are essential to
address emergency situations, which would include critical financial
markets stability, subject to certain conditions, described below.
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\1\ This authority is in addition to OCC's general rulemaking
authority found at 12 U.S.C. 93a, upon which the OCC also relies for
purposes of issuing the 12 CFR part 32 lending limits regulations.
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This additional lending limit category is based upon, but more
limited than, the OCC's existing authority under Sec. 32.3(c)(7) to
approve and exempt from the general lending limit loans or extensions
of credit by a national bank to a ``financial institution'' when an
emergency situation exists.
Description of the Interim Final Rule
The interim final rule adds a new Sec. 32.8 that permits an
eligible bank,\2\ with the written approval of the OCC, to make loans
and extensions of credit to one borrower subject to a special temporary
lending limit established by the OCC, where the OCC determines that
such loans and extensions of credit are essential to address an
emergency situation (such as critical financial markets stability),
will be of short duration, will be reduced in amount in a timeframe and
manner acceptable to the OCC, and do not present unacceptable risk. In
granting approval for such a special temporary lending limit, the OCC
will impose supervisory oversight and reporting measures that it
determines are appropriate to monitor compliance with the standards
contained in new Sec. 32.8. The Sec. 32.8 special temporary lending
limit is in addition to the amount a national bank may lend to one
borrower under Sec. 32.3, i.e., the combined general lending limit and
applicable exceptions.
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\2\ For purposes of part 32, ``eligible bank'' means a national
bank that (1) is ``well capitalized'' as defined in 12 CFR
6.4(b)(1); and (2) has a composite rating of 1 or 2 under the
Uniform Financial Institutions Rating System in connection with the
bank's most recent examination or subsequent review, with at least a
rating of 2 for asset quality and for management. See 12 CFR
32.2(i).
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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), at 5 U.S.C. 553(b)(B), notice and an opportunity
for public comment are not required prior to the issuance of a final
rule if an agency, for good cause, finds that ``notice and public
procedure thereon are impracticable, unnecessary, or contrary to the
public interest.'' \3\ Similarly, a final rule may be published with an
immediate effective date if an agency finds good cause and publishes
such with the rule. 5 U.S.C. 553(d)(3).
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\3\ 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 is
impracticable and contrary to the public interest. As previously
described, temporary funding arrangements in emergency situations are
critical to maintain the orderly functioning of markets and provide
market liquidity. Completion of notice and comment rulemaking
procedures prior to issuing this interim final rule would require
delaying implementation of the final rule. In the current market
environment, such a delay is impracticable and inconsistent with the
public interest since it may result in undue constraint on the national
banks' ability to perform critical lending and financial intermediary
roles which are critical to the orderly functioning and liquidity of
markets. Issuance of this interim final rule furthers the public
interest because it will provide the OCC with an additional tool that
will help ensure the safety and soundness of national banks and
liquidity to the credit markets. For the same reasons, the OCC finds
good cause to publish this rule with an immediate effective date. See 5
U.S.C. 553(d)(3).
Although notice and comment are not required prior to the effective
date of this rule, the OCC invites comments 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.
Solicitation of Comments on Use of Plain Language
The OCC also requests comment on whether the interim final rule is
written clearly and is easy to understand. On June 1, 1998, the
President issued a memorandum directing each agency in the Executive
branch to write its rules in plain language. This directive applies to
all new proposed and interim rulemaking documents issued on or after
January 1, 1999. In addition, Public Law 106-102 requires each Federal
agency to use plain language in all proposed and interim final rules
published after January 1, 2000. The OCC invites comments on how to
make this rule clearer. For example, you may wish to discuss:
(1) Whether we have organized the material to suit your needs;
(2) Whether the requirements of the rule are clear; or
(3) Whether there is something else we could do to make the rule
easier to understand.
Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (Pub. L. 96-354, Sept. 19, 1980)
(RFA) applies only to rule making actions for which an agency publishes
a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b).\4\
Because the OCC has determined for good cause that the Administrative
Procedure Act does not require public notice and comment on this
interim final rule, we are not publishing a general notice of proposed
rulemaking. Thus, the RFA does not apply to this interim final rule.
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\4\ 5 U.S.C. 601(2).
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Executive Order 12866
The OCC has determined that this interim final rule is not a
significant regulatory action under Executive Order 12866.
Unfunded Mandates Reform Act of 1995 Determinations
Section 202 of the Unfunded Mandates Reform Act of 1995 \5\
(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 the
agency to identify and consider a reasonable number of regulatory
alternatives before promulgating the rule. The OCC has determined that
this interim final rule will not result in a Federal mandate that would
result in expenditures by state, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year. Accordingly, the OCC has not prepared a budgetary impact
statement or specifically addressed the regulatory alternatives
considered.
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\5\ 2 U.S.C. 1532.
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506; 5 CFR part 1320 Appendix A.1), we have reviewed the interim final
rule to assess any information collections. There are no collections of
information
[[Page 14924]]
as defined by the Paperwork Reduction Act in the interim final rule.
Lists of Subjects in 12 CFR Part 32
Lending limits.
Authority and Issuance
0
For the reasons set forth in the preamble, part 32 of chapter I of
title 12 of the Code of Federal Regulations is amended as follows:
PART 32--LENDING LIMITS
0
1. The authority citation for part 32 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 84, and 93a.
0
2. Add Sec. 32.8 to read as follows:
Sec. 32.8 Temporary funding arrangements in emergency situations.
In addition to the amount that a national bank may lend to one
borrower under Sec. 32.3 of this part, an eligible bank with the
written approval of the OCC may make loans and extensions of credit to
one borrower subject to a special temporary lending limit established
by the OCC, where the OCC determines that such loans and extensions of
credit are essential to address an emergency situation, such as
critical financial markets stability, will be of short duration, will
be reduced in amount in a timeframe and manner acceptable to the OCC,
and do not present unacceptable risk. In granting approval for such a
special temporary lending limit, the OCC will impose supervisory
oversight and reporting measures that it determines are appropriate to
monitor compliance with the foregoing standards as set forth in this
paragraph.
Dated: March 17, 2008.
John C. Dugan,
Comptroller of the Currency.
[FR Doc. E8-5724 Filed 3-19-08; 8:45 am]
BILLING CODE 4810-33-P