80_FR_95
Page Range | 28153-28536 | |
FR Document |
Page and Subject | |
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80 FR 28306 - Sunshine Act: Notice of Agency Meeting | |
80 FR 28325 - Sunshine Act Meeting | |
80 FR 28272 - Sunshine Act Meeting | |
80 FR 28306 - Sunshine Act Meeting Notice | |
80 FR 28305 - Agency Information Collection Activities: Submission to the Office of Management and Budget (OMB) for Revision to a Currently Approved Information Collection; Comment Request; Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery | |
80 FR 28338 - List of September 20, 2005, of Participating Countries and Entities in the Kimberley Process Certification Scheme, Known as “Participants” for the Purposes of the Clean Diamond Trade Act of 2003 (Pub. L. 108-19) and Section 2 of Executive Order 13312 of July 29, 2003. | |
80 FR 28219 - Notice of Request To Extend a Currently Approved Information Collection: (Requirements for Official Establishments To Notify FSIS of Adulterated or Misbranded Product, Prepare and Maintain Written Recall Procedures, and Document Certain HACCP Plan Reassessments) | |
80 FR 28220 - Notice of Request for a New Information Collection: Certificates of Medical Examination | |
80 FR 28294 - 30-Day Notice of Proposed Information Collection: Consolidated Plan and Annual Performance Report | |
80 FR 28297 - Outer Continental Shelf Official Protraction Diagrams and Supplemental Official Outer Continental Shelf Block Diagrams | |
80 FR 28295 - 30-Day Notice of Proposed Information Collection: Home Mortgage Disclosure Act (HMDA) Loan/Application Register | |
80 FR 28294 - 30-Day Notice of Proposed Information Collection: Production of Material or Provision of Testimony by HUD in Response to Demands in Legal Proceedings Among Private Litigants | |
80 FR 28248 - Applications for New Awards; Predominantly Black Institutions Competitive Grant Program | |
80 FR 28244 - Agency Information Collection Activities: Comment Request | |
80 FR 28224 - Certain Oil Country Tubular Goods From the People's Republic of China: Continuation of the Antidumping Duty Order and Countervailing Duty Order | |
80 FR 28299 - Notice on Outer Continental Shelf Oil and Gas Lease Sales | |
80 FR 28247 - Uniform Formulary Beneficiary Advisory Panel; Notice of Federal Advisory Committee Meeting | |
80 FR 28290 - Final Flood Hazard Determinations | |
80 FR 28284 - Maine; Amendment No. 1 to Notice of a Major Disaster Declaration | |
80 FR 28285 - Kentucky; Major Disaster and Related Determinations | |
80 FR 28288 - Changes in Flood Hazard Determinations | |
80 FR 28246 - Proposed Collection; Comment Request | |
80 FR 28303 - Government-Owned Inventions, Available for Licensing | |
80 FR 28302 - Government-Owned Inventions, Available for Licensing | |
80 FR 28285 - Changes in Flood Hazard Determinations | |
80 FR 28291 - Changes in Flood Hazard Determinations | |
80 FR 28273 - Notice of Intent To Award a Single Source Non-Competing Continuation Cooperative Agreement for Two National Activities Grant Projects Under Section 6 of the Assistive Technology Act of 1998, | |
80 FR 28201 - Trichoderma asperelloides | |
80 FR 28215 - Reconsideration Petition From Dyno Nobel Inc. on the New Source Performance Standards Review for Nitric Acid Plants; Final Action | |
80 FR 28226 - FY 2015 Regional Coastal Resilience Grants Program | |
80 FR 28239 - Western Pacific Fishery Management Council; Public Meetings | |
80 FR 28236 - Mid-Atlantic Fishery Management Council (MAFMC); Public Meeting | |
80 FR 28226 - Fisheries of the Gulf of Mexico; Southeast Data, Assessment, and Review (SEDAR); Public Meeting | |
80 FR 28239 - Fisheries of the South Atlantic; South Atlantic Fishery Management Council; Public Meeting | |
80 FR 28237 - New England Fishery Management Council; Public Meeting | |
80 FR 28238 - New England Fishery Management Council; Public Meeting | |
80 FR 28219 - National Organic Standards Board: Call for Nominations; Extension of Nomination Period | |
80 FR 28239 - Forward Contracts With Embedded Volumetric Optionality | |
80 FR 28271 - Information Collection Approved by the Office of Management and Budget | |
80 FR 28246 - Advisory Committee on Arlington National Cemetery Meeting Notice | |
80 FR 28175 - Eighth Coast Guard District Annual Marine Event; Mayor's Hike, Bike and Paddle; Ohio River 602.0-603.5; Louisville, KY | |
80 FR 28255 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Race to the Top Early Learning Challenge: Descriptive Study of Tiered Quality Ratings and Improvement Systems in Nine Round 1 States | |
80 FR 28207 - Safety Zones; San Juan Island Independence Day Celebration, Friday Harbor, WA | |
80 FR 28205 - Safety Zones; Seattle Seafair 4th of July Fireworks Display, Lake Union, WA | |
80 FR 28186 - Safety Zones; Annual Firework Displays Within the Captain of the Port, Puget Sound Zone | |
80 FR 28269 - Agency Information Collection Activities; Submitted to OMB for Review and Approval; Comment Request; Pesticide Program Public Sector Collections (Renewal) | |
80 FR 28268 - Information Collection Request Submitted to OMB for Review and Approval; Comment Request; TSCA Section 402 and Section 404 Training and Certification, Accreditation and Standards for Lead-Based Paint Activities and Renovation, Repair, and Painting | |
80 FR 28267 - Information Collection Request Submitted to OMB for Review and Approval; Comment Request; Continuous Release Reporting Regulations (CRRR) Under CERCLA 1980 (Renewal) | |
80 FR 28266 - Information Collection Request Submitted to OMB for Review and Approval; Comment Request; Facility Ground-Water Monitoring Requirements (Renewal) | |
80 FR 28184 - Drawbridge Operation Regulations; New River, Fort Lauderdale, FL | |
80 FR 28176 - Special Local Regulations and Safety Zones; Marine Events Held in the Sector Long Island Sound Captain of the Port Zone | |
80 FR 28175 - Eighth Coast Guard District Annual Special Local Regulation; REV3 Triathlon; Tennessee River 646.0-649.0; Knoxville, TN | |
80 FR 28224 - Submission for OMB Review; Comment Request | |
80 FR 28304 - Records Schedules; Availability and Request for Comments | |
80 FR 28256 - Record of Decision and Floodplain Statement of Findings for the Cheniere Marketing, LLC and Corpus Christi Liquefaction, LLC Application To Export Liquefied Natural Gas to Non-Free Trade Agreement Countries | |
80 FR 28263 - Records Governing Off-the-Record Communications; Public Notice | |
80 FR 28262 - Combined Notice of Filings #1 | |
80 FR 28259 - Kern River Gas Transmission Company; Notice of Intent To Prepare an Environmental Assessment for the Proposed Summerlin Pipe Replacement Project and Request for Comments on Environmental Issues | |
80 FR 28265 - Equitrans, L.P.; Notice of Filing | |
80 FR 28262 - Safe Harbor Water Power Corp.; Notice of Technical Conference for Safe Harbor Project | |
80 FR 28264 - Commission Information Collection Activities (FERC-915); Comment Request; Extension | |
80 FR 28261 - Southern Star Central Gas Pipeline, Inc.; Notice of Request Under Blanket Authorization | |
80 FR 28483 - Program Integrity and Improvement | |
80 FR 28153 - Descriptive Designation for Needle- or Blade-Tenderized (Mechanically Tenderized) Beef Products | |
80 FR 28223 - Final Record of Decision for Shoshone National Forest Land Management Plan | |
80 FR 28339 - Petition for Exemption; Summary of Petition Received | |
80 FR 28341 - Petition for Exemption; Summary of Petition Received | |
80 FR 28222 - Assessment of Ecological/Social/Cultural/Economic Sustainability, Conditions, and Trends for the Gila National Forest | |
80 FR 28300 - Polyvinyl Alcohol From China, Japan, and Korea | |
80 FR 28342 - Notice of Final Federal Agency Actions on Proposed Highway in California | |
80 FR 28187 - Subsistence Management Regulations for Public Lands in Alaska-2015-16 and 2016-17 Subsistence Taking of Fish Regulations | |
80 FR 28222 - South Central Idaho Resource Advisory Committee | |
80 FR 28341 - Buy America Waiver Notification | |
80 FR 28342 - Buy America Waiver Notification | |
80 FR 28229 - Takes of Marine Mammals Incidental to Specified Activities; Seabird Monitoring and Research in Glacier Bay National Park, Alaska, 2015 | |
80 FR 28217 - Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Omnibus Amendment To Simplify Vessel Baselines | |
80 FR 28236 - Endangered Species; File No. 19281 | |
80 FR 28293 - Agency Information Collection Activities: USCIS Electronic Payment Processing, Form G-1450; New Collection | |
80 FR 28343 - Enhanced-Use Lease of Department of Veterans Affairs Real Property for the Development of Housing Facilities in Chillicothe, Ohio | |
80 FR 28300 - 1,2-Dibromo-3-Chloropropane (DBCP) Standard; Extension of the Office of Management and Budget's (OMB) Approval of Information Collection (Paperwork) Requirements | |
80 FR 28337 - Privacy Act of 1974, as Amended; Computer Matching Program (SSA/Office of Personnel Management (OPM)-Match Number 1307 | |
80 FR 28282 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
80 FR 28283 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
80 FR 28281 - Agency Information Collection Activities: Submission for OMB Review; Comment Request | |
80 FR 28283 - Center for Substance Abuse Treatment; Notice of Meeting | |
80 FR 28273 - Mine Safety and Health Research Advisory Committee, National Institute for Occupational Safety and Health (MSHRAC, NIOSH) | |
80 FR 28273 - Disease, Disability, and Injury Prevention and Control Special Emphasis Panel (SEP): Initial Review | |
80 FR 28336 - Revocation of License of Small Business Investment Company | |
80 FR 28336 - MARYLAND Disaster # MD-00028 | |
80 FR 28302 - Division of Coal Mine Workers' Compensation; Proposed Extension of Existing Collection; Comment Request | |
80 FR 28337 - Connecticut Disaster Number CT-00034 | |
80 FR 28337 - West Virginia Disaster #WV-00035 | |
80 FR 28340 - Petition for Exemption; Summary of Petition Received; American Airlines, Inc. | |
80 FR 28340 - Aviation Rulemaking Advisory Committee Meeting on Transport Airplane and Engine Issues | |
80 FR 28300 - Notice of Lodging of Proposed Consent Decree Under the Clean Air Act | |
80 FR 28328 - Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc. | |
80 FR 28322 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc. | |
80 FR 28319 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to The Customized Option Pricing Service | |
80 FR 28335 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Change the Name of “ConnectEdge” Product Offering Under Rule 13.9 to “BATS Connect” | |
80 FR 28325 - Self-Regulatory Organizations; NASDAQ OMX BX Inc.; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To Amend and Restate Certain Rules That Govern the NASDAQ OMX BX Equities Market | |
80 FR 28272 - Information Collection Being Reviewed by the Federal Communications Commission | |
80 FR 28308 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NASDAQ Options Market Fees and Rebates | |
80 FR 28315 - Self-Regulatory Organizations; NYSE MKT, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Constituent Documents of Its Intermediate Parent Companies NYSE Holdings, LLC., Intercontinental Exchange, Inc., To Eliminate Certain Provisions That by Their Terms Have Become Void and Are of No Further Force and Effect as a Result of the Sale by ICE of Euronext N.V. in June 2014 and Make Conforming Changes to the Independence Policy of the Board of Directors of ICE | |
80 FR 28311 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Constituent Documents of Its Intermediate Parent Companies NYSE Holdings LLC., Intercontinental Exchange, Inc., to Eliminate Certain Provisions That by Their Terms Have Become Void and Are of No Further Force and Effect as a Result of the Sale by ICE of Euronext N.V. in June 2014 and Make Conforming Changes to the Independence Policy of the Board of Directors of ICE | |
80 FR 28331 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Constituent Documents of Its Intermediate Parent Companies NYSE Holdings LLC., Intercontinental Exchange, Inc., To Eliminate Certain Provisions That by Their Terms Have Become Void and Are of No Further Force and Effect as a Result of the Sale by ICE of Euronext N.V. in June 2014 and Make Conforming Changes to the Independence Policy of the Board of Directors of ICE | |
80 FR 28327 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Tier Size Pilot of FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) | |
80 FR 28325 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Technical Revisions to the DTC Custody Service Guide and the DTC Deposits Service Guide | |
80 FR 28270 - Information Collections Being Reviewed by the Federal Communications Commission Under Delegated Authority | |
80 FR 28238 - National Oceanic and Atmospheric Administration Western Pacific Fishery Management Council; Public Meetings | |
80 FR 28237 - North Pacific Fishery Management Council; Public Meetings | |
80 FR 28296 - Endangered Species; Marine Mammals; Receipt of Applications for Permit | |
80 FR 28297 - Endangered Species; Issuance of Permits | |
80 FR 28307 - New Postal Product | |
80 FR 28248 - Proposed Collection; Comment Request | |
80 FR 28279 - National Institute of Allergy and Infectious Diseases; Notice of Closed Meeting | |
80 FR 28278 - National Institute of Allergy and Infectious Diseases; Notice of Closed Meetings. | |
80 FR 28280 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Meetings | |
80 FR 28274 - Cooperative Agreement to International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use | |
80 FR 28275 - Electronic Study Data Submission; Data Standards; Study Data Standardization Plan Recommendations | |
80 FR 28224 - Reorganization of Foreign-Trade Zone 175 Under Alternative Site Framework, Cedar Rapids, Iowa | |
80 FR 28185 - Drawbridge Operation Regulation; Willamette River, Portland, OR | |
80 FR 28343 - Proposed Collection; Comment Request; Financial Research Fund | |
80 FR 28245 - Proposed Information Collection; Comment Request | |
80 FR 28279 - National Cancer Institute; Amended Notice of Meeting | |
80 FR 28279 - National Cancer Institute Amended Notice of Meeting | |
80 FR 28280 - Office of the Director; Notice of Meeting | |
80 FR 28278 - Agency Information Collection Activities; Announcement of Office of Management and Budget Approval; Infant Formula Requirements | |
80 FR 28276 - Adaptive Designs for Medical Device Clinical Studies; Draft Guidance for Industry and Food and Drug Administration Staff; Availability | |
80 FR 28277 - Patient Preference Information-Submission, Review in Premarket Approval Applications, Humanitarian Device Exemption Applications, and De Novo Requests, and Inclusion in Device Labeling; Draft Guidance for Industry, Food and Drug Administration Staff, and Other Stakeholders; Availability | |
80 FR 28259 - Combined Notice of Filings #1 | |
80 FR 28203 - Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies | |
80 FR 28193 - Approval and Promulgation of Air Quality Implementation Plans; State of Utah; Utah County-Trading of Motor Vehicle Emission Budgets for PM10 | |
80 FR 28215 - Approval and Promulgation of Air Quality Implementation Plans; State of Utah; Utah County-Trading of Motor Vehicle Emission Budgets for PM10 | |
80 FR 28209 - Approval and Promulgation of State Implementation Plans; State of Wyoming; Interstate Transport of Pollution for the 2006 24-Hour PM2.5 | |
80 FR 28172 - Airworthiness Directives; The Enstrom Helicopter Corporation | |
80 FR 28345 - Integration of National Bank and Federal Savings Association Regulations: Licensing Rules |
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Forest Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Army Department
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Community Living Administration
Food and Drug Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
Federal Emergency Management Agency
U.S. Citizenship and Immigration Services
Fish and Wildlife Service
Ocean Energy Management Bureau
Occupational Safety and Health Administration
Workers Compensation Programs Office
Federal Aviation Administration
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Food Safety and Inspection Service, USDA.
Final rule.
The Food Safety and Inspection Service (FSIS) is amending the Federal meat inspection regulations to require the use of the descriptive designation “mechanically tenderized,” “blade tenderized,” or “needle tenderized” on the labels of raw or partially cooked needle- or blade-tenderized beef products, including beef products injected with a marinade or solution, unless the products are to be fully cooked or to receive another full lethality treatment at an official establishment. Under these final regulations, the product names of the affected products will have to include the descriptive designation “mechanically tenderized,” “blade tenderized,” or “needle tenderized” and an accurate description of the beef component. The print for all words in the descriptive designation and the product name will have to be in a single easy-to-read type style and color and must appear on a single-color contrasting background. The print may appear in upper and lower case letters, with the lower case letters not smaller than one-third (
FSIS is amending the regulations because of scientific evidence that mechanically tenderized beef products need to be fully cooked in order to reduce the risk of pathogenic bacteria that may be transferred to the interior of the meat during mechanical tenderization.
FSIS is also announcing the availability of updated guidance for the use of federally inspected establishments in developing validated cooking instructions for mechanically tenderized product.
The effective date is May 17, 2016. As discussed below in the preamble, FSIS has established this effective date based on the potential public health benefits.
Daniel L. Engeljohn, Ph.D., Assistant Administrator, Office of Policy and Program Development, Food Safety and Inspection Service, U.S. Department of Agriculture, 1400 Independence Avenue SW., Washington, DC 20250-3700; Telephone (202) 205-0495; Fax (202) 720-2025.
Mechanically tenderizing beef with a needle or blade has the potential to transfer pathogens that may occur on the exterior of the product into its interior. In such circumstances, it is important that the interior of the beef product be fully cooked. Not all mechanically tenderized products are readily distinguishable from non-tenderized products. Recent outbreak data indicate that consumers and food service facilities sometimes do not cook mechanically tenderized raw beef products to a temperature and for a time sufficient to destroy harmful bacteria that may have been transferred to the tenderized interior of the product. FSIS has, therefore, determined that labeling to state that the beef product is tenderized, along with validated cooking instructions, are necessary to provide consumers and food service workers the essential information to safely prepare the product.
On June 10, 2013, FSIS proposed new labeling requirements for raw or partially cooked needle- or blade-tenderized beef products, including beef products injected with a marinade or solution (78 FR 34589). Having reviewed and considered all comments received on the proposal, FSIS is finalizing all the proposed regulatory requirements with minor changes.
FSIS is requiring the labels of raw or partially cooked needle- or blade-tenderized beef products, including beef products injected with marinade or solution, to bear a descriptive designation that clearly indicates that the product has been mechanically tenderized, unless such product is destined to be fully cooked or to receive another full lethality treatment
In addition, to ensure that the descriptive designation is readily apparent on the label, FSIS is requiring the print for all words in the descriptive designation must appear in a single easy-to-read type style and color and on a single-color contrasting background. The print may appear in upper and lower case letters, with the lower case letters not smaller than
FSIS also is requiring that labels of raw and partially cooked needle- and blade-tenderized beef products destined for household consumers, hotels, restaurants, and similar institutions include cooking instructions that have been validated to ensure that any pathogens that may be on or in the
FSIS proposed to use the January 1, 2016, uniform compliance date as the effective date of this final rule (79 FR 34597). However, according to the uniform compliance date final rule,
Finally, after consideration of the difference between branded (sold in multiple stores) and private labels (sold in only stores with the label name), FSIS reevaluated the label design costs to industry. Based on this analysis, FSIS increased estimated costs associated with the final rule. Even so, FSIS predicts the final rule to have a positive net benefit. In Table 1 (below), FSIS estimates the quantifiable benefits, costs, and net benefits of the final rule.
As explained in the proposed rule, consumers consider product tenderness to be a key factor when purchasing meat products. Thus, the tenderness of a roast or steak is a key selling point for the meat industry (78 FR at 34591). Mechanically tenderized product is product that has been pierced with a set of needles or blades, which breaks up muscle fiber and tough connective tissue, resulting in increased tenderness. As was also explained in the proposed rule, such product may also be injected with a solution or marinade.
In 2009, the Safe Food Coalition sent a petition to the Secretary of Agriculture to request, among other issues, regulatory action to require that the labels of mechanically tenderized beef products disclose the fact that the products have been mechanically tenderized. The petition stated that, (1) consumers and restaurants do not have sufficient information to ensure that these products are cooked safely because FSIS does not provide recommended cooking temperatures for mechanically tenderized products, (2) the recommended cooking temperatures for intact products are not appropriate for non-intact, mechanically tenderized products, and (3) a labeling requirement for mechanically tenderized products is critical for consumers and retail outlets, so that they have the information necessary to safely prepare these products.
In June 2010, the Conference for Food Protection (CFP) petitioned
Published research suggests that pathogens can be translocated from the surface of mechanically tenderized beef products to the interior of the products during processing because of the piercing of the beef by the needle or blade.
Since 2000, the Centers for Disease Control and Prevention (CDC) has received reports of six outbreaks determined to be attributable to needle- or blade-tenderized beef products prepared in restaurants and consumers' homes. These outbreaks included a total of 176
In addition, in 2012, 18 cases of food-borne illness caused by
The Federal Meat Inspection Act (FMIA) gives FSIS broad authority to promulgate rules and regulations necessary to carry out its provisions (21 U.S.C. 621). To prevent meat or meat food products from being misbranded, the meat inspection regulations require that the labels of meat products contain specific information and that such information be displayed as prescribed in the regulations (9 CFR part 317). Under the regulations, the principal display panel on the label of a meat product must include, among other information, the name of the product.
In proposed 9 CFR 317.2(e)(i), FSIS proposed new requirements for raw or partially cooked needle- or blade-tenderized beef products, including beef products injected with a marinade or solution. FSIS proposed that the product name for these beef products include the descriptive designation “mechanically tenderized” and an accurate description of the beef component.
In proposed 9 CFR 317.2(e)(3)(ii), FSIS proposed that the print for all words in the product name be in the same style, color, and size and on a single-color contrasting background.
In proposed 9 CFR 317.2(e)(3)(iii)), FSIS proposed that the labels of raw and partially cooked needle- or blade-tenderized beef products destined for household consumers, hotels, restaurants, or similar institutions include validated cooking instructions. FSIS also proposed that the validated cooking instructions include the cooking method, inform consumers that these products need to be cooked to a specified minimum internal temperature, state whether the product needs to be held for a specified time at that temperature or higher before consumption to ensure destruction of potential pathogens throughout the product, and contain a statement that the internal temperature should be measured by a thermometer.
FSIS explained in the proposed rule that should the rule be implemented, raw or partially cooked beef products subject to this rule whose labels do not include the descriptive designation “mechanically tenderized,” and such products destined for household consumers, hotels, restaurants, or similar institutions whose labels do not include validated cooking instructions, would be misbranded because the product labels would be false or misleading, because the products would be offered for sale under the name of another food, and because the product labels would fail to bear the required handling information necessary to maintain the products' wholesome condition (21 U.S.C. 601(n)(1), 601(n)(2), and 601(n)(12)) (78 FR 34595).
FSIS also announced in the proposal that it had posted on its Web site draft guidance on developing validated cooking instructions for mechanically tenderized product.
FSIS is finalizing the proposed regulations with minor changes to provide additional clarification and flexibility. In response to comments, this final rule requires the descriptive designation “mechanically tenderized” or “needle tenderized” be used on raw or partially cooked needle tenderized beef products and the descriptive designation “mechanically tenderized” or “blade tenderized” be used on raw or partially cooked blade tenderized beef products. By permitting the terms “needle tenderized” and “blade tenderized” to be used as the descriptive designation, FSIS is providing additional flexibility to establishments to use more specific terms regarding the method of mechanical tenderization as part of the product name.
This final rule requires a descriptive designation as part of the product name, not as part of the common or usual name of the product. Thus, for a steak that has been tenderized, the common or usual name would be “steak.” It would not be “mechanically tenderized steak.” However, the descriptive designation needs to be in close proximity to the common or usual name. The descriptive designation may be above, below, or next to the rest of the product name (without intervening text or graphics) on the principal display panel. In response to comments on the proposed rule on mechanically tenderized beef products and on the proposed rule for raw meat and poultry
In response to comments, the final rule also clarifies that validated cooking instructions may appear anywhere on the product label and that a descriptive designation will not be required for mechanically tenderized beef products destined for a full lethality treatment at an official establishment.
FSIS has carefully considered the available information on mechanically tenderized beef and has concluded that, without specific labeling, consumers and industry may be purchasing and preparing raw or partially cooked mechanically tenderized beef products without knowing that these products have been needle- or blade-tenderized. Because illnesses could be reduced if the Agency required more specific labeling, the final rule requires the product name of raw or partially cooked, mechanically tenderized beef products include the name of the beef component and a descriptive designation that the product has been “mechanically tenderized,” “needle tenderized,” or “blade tenderized,” unless the product is destined to be fully cooked or to receive another full lethality treatment in an official establishment. The descriptive designation will provide household consumers, official establishments, restaurants, and retail stores with the information they need to distinguish a cut of beef that is an intact, non-tenderized product, from a non-intact, mechanically tenderized product.
Based on the requirements in 9 CFR 317.2(c)(1), all of this information will need to appear on the principal display panel of the immediate container. FSIS is requiring that the descriptive designation be a part of the product name so that the statement is prominently placed on the label and with such conspicuousness as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use (see 21 U.S.C. 601(n)(6)).
Validated cooking instructions may appear anywhere on the label.
The descriptive designation will only apply to raw or partially cooked beef products that have been needle- tenderized or blade-tenderized, including beef products injected with marinade or solution. Other tenderization methods, such as pounding and cubing, change the appearance of the product, putting consumers on notice that the product is not intact. Moreover, most establishments already label cubed products as such.
FSIS is requiring the terms “mechanically tenderized,” “needle tenderized,” or “blade tenderized” because they accurately and truthfully describe the nature of the product. These terms also clearly differentiate needle- or blade-tenderized beef products from non-tenderized, intact beef products.
As explained in the proposed rule, under current regulations, to prevent raw and partially cooked meat products from being misbranded, the labels of all meat products, including those that have been mechanically tenderized, must bear safe handling instructions as prescribed in 9 CFR 317.2(l). Although the safe handling instructions in the regulations include “cook thoroughly,” the regulations do not require that these instructions specify a dwell time or internal temperature parameters necessary to ensure that the product is fully cooked.
The safe preparation of this product requires that consumers know to handle the mechanically tenderized product differently than product in which there
Some consumers of beef products consider a product to be thoroughly cooked product even if it has been prepared to a degree of doneness that is not sufficient for safety.
.
FSIS is requiring that the validated cooking instructions include, at a minimum: (1) The method of cooking; (2) a validated minimum internal temperature that would destroy pathogens throughout the product; (3) a statement as to whether the product cooked in the manner described also needs to be held for a specified time at the specified temperature or higher before consumption; and (4) instruction that the internal temperature should be measured by use of a thermometer. The cooking instructions included on the label should be practical and easily followed by consumers. In response to comments discussed below, the final rule provides that validated cooking instructions may appear anywhere on the product label.
Consistent with the regulation on Hazard Analysis and Critical Control Point (HACCP) validation (9 CFR 417.4), to validate the cooking instructions, the establishment will be required to obtain scientific or technical support for the judgments made in designing the cooking instructions, and in-plant data to demonstrate that it is, in fact, achieving the critical operational parameters documented in the scientific or technical support. Just as establishments have to validate their HACCP plans' adequacy in controlling food safety hazards identified during the hazard analysis, so too, under this final rule, establishments that produce raw or partially cooked mechanically tenderized beef products will have to validate their recommended cooking instructions. The scientific support would need to demonstrate that the cooking instructions provided can repeatedly achieve the desired minimum internal temperature and time at that temperature and would need to support that the product is fully cooked to destroy pathogens present in the product. The in-plant data would need to demonstrate that the establishment is, in fact, achieving the critical operational parameters documented in the scientific or technical support. For additional information on validation see the
In response to comments, FSIS has revised its guidance for developing validated cooking instructions for mechanically tenderized products. The Agency has posted the revised guidance on its Significant Guidance Documents Web page. This guidance represents current FSIS thinking. Establishments could collect their own scientific data to support the cooking instruction, use a study from an outside source, or use the revised guidance provided by FSIS. An establishment could use the recommended cooking instructions from the revised guidance on its product labels, without having to conduct additional experiments or provide any further scientific support, if the products it is producing are similar to those in the guidance.
If establishments are unable to use the specific examples in the revised guidance (
In the proposal, FSIS requested comment on specific issues: How it defined “mechanically tenderized,” whether the definition should be incorporated into the regulations, whether the term should include products that have been vacuum tumbled or formed, whether the term would be understood by consumers, on how the proposed labeling changes would impact restaurants and other food service operations, and on the cost estimates outlined in the proposal. FSIS received 122 comments in response to these and other issues in the proposed rule. A majority of the comments (approximately 75) were form letters submitted by individuals. The remaining comments were from individuals, consumer advocacy groups, organizations representing the meat industry, meat processors, retail trade associations, and an organization representing food and drug officials.
FSIS did not receive any comments on whether it should require fully cooked needle- or blade-tenderized beef products to have the descriptive designation on their labels, on how food service workers will likely respond to the proposed labeling changes, on the number of cuts per establishment that would require validated cooking instructions, or on estimated costs for developing validated cooking instructions.
FSIS has summarized and responded to the relevant issues raised by commenters below.
In addition, in January, 2014, FSIS sought input from the National Advisory Committee on Meat and Poultry Inspection
Consumer organizations requested that “mechanically tenderized” product include vacuum-tumbled, vacuum-marinated, marinade-injected, and enzyme-formed beef products. An individual and a meat processor requested that mechanically tenderized product include products that are vacuum-tumbled because they stated the potential health risk to consumers is similar to that for needle- or blade-tenderized beef products. One consumer advocacy group remarked that, although enzyme-formed beef is now required to be labeled “formed,” the designation does not inform the consumer on how the meat should be prepared or on the higher risk of exposure to pathogens that these products present.
Several meat processors and trade associations stated that use of the descriptive designation “mechanically tenderized” on the label will be misunderstood by consumers as a negative term and, therefore, may discourage customers from purchasing such beef products, resulting in a negative economic impact to small businesses. In addition, several organizations representing the meat industry requested that FSIS conduct targeted consumer research to determine whether the public perceives the descriptive designation “mechanically tenderized” as negative before finalizing the proposed changes.
As alternatives to “mechanically tenderized,” commenters suggested “tenderized and packaged,” “tenderized,” “marinated,” “injection marinated,” “solution enhanced,” “cubed,” and “blade tenderized.”
Even though vacuum-tumbled or enzyme-formed beef products are processed in a manner that may introduce pathogens (if present) below the product's surface, this final rule will not apply to them. FSIS regulations (9 CFR 317.8(b)(39)) already require labeling for meat products that are formed or re-formed with an enzyme binder as part of the product name,
As stated in the preamble of the proposal, FSIS will conduct a public education campaign to explain the significance of the terms “mechanically tenderized,” “needle tenderized,” and “blade tenderized” to consumers (78 FR at 34593). Thus, FSIS disagrees that additional consumer research is needed before moving forward with a final rule.
Establishments or retail stores will be permitted to add the required information to existing label designs, or they can apply a separate sticker with the required information to existing labels. Regardless, the product name must contain the term “mechanically tenderized,” “needle tenderized,” or “blade tenderized” as an accurate description of the beef component of the product.
The labels of raw and partially cooked mechanically tenderized beef products as required in this final rule will be considered to be generically approved. The labels will not have to be submitted to FSIS for approval prior to their use, provided that they meet the requirements in this rule, display all mandatory features in a prominent manner in compliance with part 317, and are not otherwise false or misleading in any particular manner (9 CFR 412.2).
Food service personnel should contact their local or State health department for information on the rules and regulations governing the preparation of food in restaurant, retail, or institutional settings.
FSIS plans to share issues raised in comments received on restaurant menu labeling in response to the proposed rule with FDA.
In addition, the effective date allows establishments time to use existing labels and will, therefore, result in minimal loss of inventory of labels.
In response to this comment, FSIS has modified the proposed codified language (9 CFR 317.2(e)(3)(i)) to clarify that a descriptive designation will not be required on mechanically tenderized beef products destined to receive a full lethality treatment at an official establishment.
The first draft of the compliance guideline for validating cooking instructions recommended establishments consider, among other factors, the state of the product at the start of cooking (
The FSIS attribution analysis is based on the latest published estimates of illness from the Centers for Disease Control and Prevention and for this pathogen product pair allows an estimate of the current risk of illness. No updates to this dataset became available between the proposed and final rule, and therefore, no corresponding changes to the attribution analysis were necessary. The details of this analysis are included in this final rule.
The final new descriptive designation requirement will apply to all raw or partially cooked needle- or blade-tenderized beef products going to retail stores, restaurants, hotels, or similar institutions or to other official establishments for further processing other than cooking. The final requirements for validated cooking instructions will apply to raw or partially cooked mechanically tenderized beef products destined for household consumers, hotels, restaurants, or similar institutions. If a second establishment repackages the product for household consumers, hotels, restaurants or similar institutions, the second establishment will be responsible for applying the validated cooking instructions to the
Under the final rule, establishments or retail stores may add the required information to existing label designs, or they can apply a separate sticker with the required information to existing labels. Under the provisions for generic approval in 9 CFR 412.2(a)(1), the modifications made to the labels for needle- or blade-tenderized beef products from official establishments are generically approved.
To inform consumers that the nature of needle- or blade-tenderized beef is not the same as that of an intact cut of beef, to make them aware that the consequences of the tenderization process may include the intake of bacteria, and to assure consumers that these products can be prepared safely, FSIS plans to conduct consumer education and awareness efforts as part of its implementation strategy. The Agency will develop webinars and PowerPoint presentations for industry to assist establishments and retail facilities in complying with the new labeling requirements. FSIS staff will also be available to answer questions pertaining to the labeling of mechanically tenderized beef products.
When the rule becomes effective, FSIS inspection program personnel will verify that establishments meet the labeling requirements in this rule. FSIS inspection program personnel review labels and compare them to actual product formulations to verify that, when applicable, the processes used in the production of the product are listed accurately on the label; that the label is not misleading; and that the label is otherwise in compliance with all labeling requirements. If the label does not meet the labeling requirements in this rule, the product will be misbranded (under 21 U.S.C. 601(n)(1), 601(n)(2), 601(n)(6) or 601(n)(12)). FSIS will inform the establishment that it needs to make corrections to its label. In limited circumstances, if the label is particularly problematic (
Note that intact beef products may bear a descriptive designation of “intact,” consistent with 9 CFR 317.2(e). However, such a descriptive designation is not required. If producers want to use such a descriptive designation on labels of intact product to distinguish it from non-intact product, FSIS would allow the designation and would not consider it a special statement requiring label submission to FSIS and FSIS review prior to using the label. Rather, FSIS would generically approve the labels with the statement based on the provisions for generic approval in 9 CFR 412.2(a)(1).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated a “significant regulatory action,” though not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.
FSIS updated the Preliminary Regulatory Impact Analysis to take into account recently updated source data and modified timelines for implementation of the final rule. The changes to the costs and benefits sections incorporate the following factors:
• Information Resources, Inc., (IRI) scanner data was used to calculate the number of raw meat and poultry products in the retail market and the number of private and branded products. IRI gathers data by scanners in supermarkets, drugstores, and mass merchandisers and maintains a panel of consumer households that record purchases at outlets by scanning UPC codes on the products purchased.
• FSIS used the more up-to-date model from the secondary cost analysis in the proposed rule to estimate the cost of label changes for the industry. The label design costs were determined utilizing a March, 2011, FDA report that provides a model for determining label design costs.
• Also, FSIS adjusted the percentage of coordinated and uncoordinated label changes which resulted in greater proportion of labels incurring additional costs.
The Final Report of the Expert Elicitation on the Market Shares for Raw Meat and Poultry Products Containing Added Solutions and Mechanically Tenderized Raw Meat and Poultry Product, February 2012 (February 2012 Report),
Retail establishments would be involved in repackaging products to be sold at retail. FSIS did not estimate the number of retail establishments that would be involved with repackaging raw or partially cooked mechanically tenderized beef products or the number of labels they would require to be in compliance with this rule.
The new descriptive designation requirement will apply to all raw or partially cooked needle- or blade-tenderized beef products going to retail stores, restaurants, hotels, or similar
This final rule requires all official establishments that produce raw or partially cooked mechanically tenderized beef products to modify their product labels to include the term “mechanically tenderized,” “needle tenderized,” or “blade tenderized” as part of the products' descriptive name and to add validated cooking instructions to the labels of all raw or partially cooked needle- or blade-tenderized beef products destined for household consumers, hotels, restaurants, or similar institutions. To incorporate this information, establishments may add the required information to existing label designs with minor changes.
IRI scanner data indicate that there are 4,148
Using the 10.5-percent estimate for the share of beef products that are mechanically tenderized but do not contain added solutions,
There are an additional 15.8 percent (or 1,338 to 2,199) of all beef products that are mechanically tenderized and also contain added solutions. The cost of label changes for these products is included in another FSIS final rule, finalized in December of 2014, which requires label changes for products with added solutions. These costs were overestimated by using a 12 month compliance period, although changes are required in some cases by January 1, 2016, and in other cases by January 1, 2018. For the products required by the added solutions rule to have label changes by January 1, 2016, if such label changes have not already been completed, this rule will delay by a few months the imposition of labeling change costs. For products required by the added solutions rule to have label changes by January 1, 2018, this rule's requirements related to mechanical tenderization would generate non-negligible costs because the shortening of the compliance period (from 36 months as required by the added solutions rule alone to 12 months as required by this rule). However, the added solutions rule's estimates captured the difference in cost from the 12 and 36 month compliance periods by overestimating the cost of labeling changes for these products under a 12 month compliance period.
This final rule will require the product name to include the descriptive designation “mechanically tenderized,” “needle tenderized,” or “blade tenderized.”
The number of labels was not tracked by the FSIS Labeling Submission and Approval System,
This cost analysis uses the mid-point label design modification costs for a minor coordinated label change and a minor uncoordinated label change, as provided in a March 2011 FDA report.
For comparison purposes, in 2011, the Food and Drug Administration estimated that the required labeling costs for its final rule
FSIS anticipates that 11 percent of branded label (a label bearing the “brand” or name of the manufacturer of the product) changes will be coordinated. Five percent of the private label (a label branded by a contract manufacturer for a retailer under the name of the retailer rather than that of the manufacturer) changes will be coordinated and that 95 percent of the private label changes will be uncoordinated with the required changes.
The mid-point label design modification costs for a minor coordinated label change is an estimated $310 per label (with a range of $170 to $440) and $4,380 per label (with a range of $2,417 and $7,330) for a minor uncoordinated change. Using these costs for the number of minor coordinated and uncoordinated changes in branded and private labels, Table 3, FSIS estimates that the one-time total cost of modifying labels for all federally inspected processors is $3,584,257 to $5,892,342 as an upper and lower bound mid-point estimate. Over a ten-year period, the upper and lower bound annualized cost for the industry is $407,946 and $670,643 at a 3-percent discount rate over ten years and $476,932 and $784,053 at a 7-percent discount rate over ten years.
This final rule will require validated cooking instructions on the labels of packages for beef that is only mechanically tenderized and beef that is both mechanically tenderized and contains added solutions. Establishments may also incur costs to validate the required cooking instructions for raw and partially cooked needle- or blade-tenderized beef products. These costs may be incurred to ensure that the cooking instructions are adequate to destroy any potential pathogens that may remain in the beef products after being tenderized. Most cooking instruction validations will be contracted out to universities or conducted by trade associations or large establishments. FSIS estimates that a validation study will cost between $5,000 and $10,000 per product line with one formulation. Most studies will validate cooking instructions for beef products with two formulations: injected with or without solution; therefore, the total cost per validation study will be between $10,000 -$20,000.
Various types of time costs are associated with this rule. For example, there may be costs due to changes in cooking procedures, as kitchen staff may prepare products differently once the product is labeled to indicate that it has been mechanically tenderized and once the labeling includes validated cooking instructions (
There may be additional wait time for consumers in both food service settings and at home before eating their meals due to increased cooking or holding product. In the absence of data with which to reliably estimate the time cost associated with this rule, we have not attempted to quantify this cost.
This final rule will result in no impact on the Agency's operational costs because the Agency will not need to add any staff or incur any non-labor expenditure since inspectors periodically perform tasks to verify the presence of mandatory label features and to ensure that the label is an accurate representation of the product. The Agency's cost to develop guidance material that establishments can use to develop cooking instructions will be minimal because such guidance exists and can be modified and posted on the FSIS Web site in fewer than six staff-hours.
The Agency has determined that the final new labeling requirements will improve public awareness of product identities. The final rule will clearly differentiate non-intact, mechanically tenderized beef products from intact products, thereby providing truthful and accurate labeling of beef products.
As stated earlier, tenderness is a key factor in deciding to purchase a beef product. Yet it is not often easy to distinguish the more tender from the less tender, and especially the blade-tenderized from the non-tenderized beef products. The mandatory descriptive designation “mechanically tenderized,” “needle tenderized,” or “blade tenderized” on the labels of the needle- or blade-tenderized or similar products will inform consumers of the additional product attributes when they are making their purchase decisions.
Although the benefits of having such additional information cannot be quantified, providing better market information to consumers could promote better competition among establishments that produce beef products. In addition, if the new label causes a divergence in price between intact and mechanically tenderized beef, there would be a number of changes in consumer and producer surplus. Consumers who purchase mechanically tenderized beef in the absence of the rule, and would continue doing so in its presence, would gain surplus if the price for mechanically tenderized beef were to decrease, while consumers purchasing intact beef in the absence of the rule would experience a loss of surplus because of the increase in price for intact beef. Some producers of intact beef or other meats will realize a surplus increase if consumers substitute such products for mechanically tenderized beef.
FSIS has concluded that labeling information on needle- or blade-tenderized beef products may help consumers and retail establishments better understand the product they are purchasing. This knowledge is the first step in helping consumers and retail establishments become aware that they need to cook these products differently than intact beef products before the products can be safely consumed. Additionally, by including cooking instructions, the food service industry and household consumers will be made aware that a mechanically tenderized beef product or injected beef product needs to be cooked to a minimum internal temperature and may need to be maintained at this temperature for a specific period of time to sufficiently reduce the presence of potential pathogens in the interior of the beef product.
Additionally, the Food Code for the food service industry, which most states have adopted into State law, recommends cooking mechanically tenderized and injected meats to a minimum temperature of 145 °F for a minimum of 3 minutes. In the absence of readily available information on the label as to how to cook the beef product and whether it is intact or mechanically tenderized, the food service industry likely now spends time determining whether the beef products it purchases have been mechanically tenderized. The final rule will require that raw or partially-cooked mechanically tenderized beef be labeled to indicate that it has been tenderized and to include validated cooking instructions.
In addition, in this final analysis, FSIS did not include benefits associated with reduced illness associated with mechanically tenderized product prepared at food service establishments. First, FSIS recognizes that even when the food service industry can more readily determine whether beef has been mechanically tenderized, consumers may continue to request that the product be served to degree of doneness that is less than fully cooked. In most States, as long as the restaurant has noted on the menu the risk of consuming meat products that are undercooked, the food service establishment may serve the product less than fully cooked and be in compliance with State law. In addition, FSIS does not have data to estimate the percentage of total food service establishments that currently may not have sufficient information concerning whether beef product they serve is mechanically tenderized or currently may not have adequate cooking instructions for such product. Therefore, FSIS cannot effectively estimate the percentage of product that will be routinely prepared differently at food service establishments as a result of this rule.
FSIS generated an estimate of the annual number of illnesses from mechanically (needle- or blade-) tenderized beef steaks and roasts and mechanically tenderized beef steaks and roasts that contain added solutions that could potentially be avoided as a result of this final rule. FSIS evaluated the effect of additional cooking of non-intact product by first determining the implied concentration of organisms prior to cooking given current information, then determining the effect of adding additional cooking. Additional cooking is modeled to a minimum temperature of 160 °F. Current cooking practices as captured in the EcoSure dataset do not specifically include the time from when the final cooking temperature was recorded to when consumption occurred. It is likely that product in this data set encountered a range of dwell times. FSIS recommends in its guidance concerning steaks and roasts a cooking temperature of 145 °F with 3 minutes dwell time for cooking steaks and whole roasts because data support that this would be equivalent to cooking at 160 °F without holding a product at that temperature for any dwell time. FSIS's guidance concerning cooking steaks and whole roasts is located at
The CDC recently completed an analysis attributing foodborne illnesses to their sources. Painter,
Of the 6 outbreaks in tenderized products described in the preamble of the proposed rule (78 FR at 34592), 5 occurred during the time frame analyzed by Painter,
Painter,
1. Whether a person with diarrhea seeks medical care. CDC bases this on unpublished surveys of persons with bloody or non-bloody diarrhea conducted in 2000-2001, 2002-2003, and 2006-2007. CDC estimates that about 35% of persons with bloody diarrhea (about 90% of STEC O157 illnesses) would seek medical care and about 18% of persons with non-bloody diarrhea would seek medical care.
2. Whether a person seeking medical care submits a stool specimen. This is also based on unpublished surveys of persons with bloody or non-bloody diarrhea conducted in 2000-2001, 2002-2003, and 2006-2007. CDC estimates that about 36% of persons with bloody diarrhea seeking medical care and about 19% of persons with non-bloody diarrhea seeking medical care would submit stool specimens.
3. Whether a laboratory receiving a stool specimen would routinely test it for STEC O157. This is based on a published study from the FoodNet Laboratory Survey.
4. How sensitive the testing procedure is. CDC used a laboratory test sensitivity rate of 70% based on studies of
CDC also adjusted the value for geographical coverage of the FoodNet sites and for the changing United States population for the years 2005-2008.
The value was also adjusted down for the following factors:
1. The proportion of illnesses that were acquired outside of the United States. Based on the proportion of FoodNet cases of STEC O157 infection who reported travel outside the United States within 7 days of illness onset (2005-2008), CDC estimated that 96.5% of illnesses were domestically acquired.
2. The proportion of STEC O157 outbreak-associated illnesses that was due to foodborne transmission. Based on reported outbreaks CDC estimated that 68% were foodborne.
CDC's credible interval surrounding this point estimate ranges from 17,587 to 149,631.
An analysis of the NHANES 2005-2006 Dietary Interview, Individual Foods, First Day, and Second Day files estimated approximately 11.7 billion servings annually of steaks and roasts. FSIS contracted with Research Triangle Institute to estimate market shares for mechanically tenderized beef and mechanically tenderized beef with added solutions.
The dose-response function for a pathogen associates an average dose with a corresponding frequency of illness. For
In the case of
From a post-cooking dose of 0.0001, a pre-cooking dose of
Sixty-seven (21%) of the recorded cooking temperatures were below 140 °F and 159 (50%) of the temperatures were below 160 °F. A 2010 USDA Agricultural Research Service (ARS) study by Luchansky,
To evaluate the effect of using a higher minimum cooking temperature, FSIS modified the distribution derived from the EcoSure (2007) data set so that all of the observations that were originally below 160 °F were set to 160 °F. FSIS then calculated a new predicted number of illnesses using this modified cooking temperature distribution with the pre-cooking dose of 0.0432. This changed the post-cooking average dose from 0.0001
The annual estimated number of illnesses averted or prevented is estimated at 1,821 (1,965 illnesses less 144 illnesses), with a range of 507 illnesses (547 illnesses—40 illnesses) to 4,316 illnesses (4,657 illnesses—341 illnesses), if mechanically tenderized and mechanically tenderized beef containing added solution is cooked to a minimum temperature of 160 °F (which is equivalent to cooking to a minimum internal temperature of 145 °F with 3 minutes of dwell time). However, FSIS knows that not all consumers will change their behavior based on reading the labels and, therefore, the Agency has estimated the uncertainty surrounding the number of illnesses that will be averted by obtaining ranges for consumer response rate, as well as using the range for the estimated number of illnesses if all consumers cooked the product at a minimum recommended temperature.
To determine this, FSIS used studies on the impacts of food product labels on consumer behavior. These studies estimated the proportion of consumers changing their behavior in response to the presence of cooking instructions (safe-handling instructions) ranging from 15 to 19 percent.
In addition, the RTI study indicates that the market share for mechanically tenderized beef and beef containing added solution is estimated at 48 percent at retail.
Table 5 shows the estimated reduction in illness numbers based on these assumptions for consumer and food service provider behavior. To derive the estimated number of illnesses averted and focusing first on inputs derived from Scallan,
Using the FSIS estimate for the average cost per case for an
For
These estimates represent a minimal estimate for an average cost of illness because they only include medical costs and loss-of-productivity costs. They do not include pain and suffering costs.
FSIS believes that consumers prefer lower cooking temperatures and therefore they may substitute other meat choices rather than cooking at a higher recommended temperature included in cooking instructions. This welfare loss associated with substituting to less-preferred meats or cooking to temperatures that are higher than ideal (from a taste perspective) was not quantified in the analysis.
The upper and lower bound cost to produce labels for mechanically tenderized beef is a one-time cost of $3,584,257 and $5,892,342. The upper and lower bound annualized cost is $476,932 and $784,053 for 10 years at a 7-percent discount rate or $407,946 and $670,643 over 10 years at a 3-percent discount rate.
The expected number of illnesses prevented would be 210 per year, with a range of 131 to 489, if the predicted percentages of beef steaks and roasts are cooked to an internal temperature of 160 °F (which is equivalent to 145 °F and 3 minutes of dwell time). These prevented illnesses amount to $688,286 per year in benefits with a range of $430,178 to $1,606,000. The expected annualized net benefits, given the lower and upper bound cost estimate are −$95,768 to $211,353 as reflected in Table 6.
Using the lower end of the credible interval from Scallan,
Using the upper end of the credible interval from Scallan,
In addition to the quantified net benefits mentioned above, the rule will generate the unquantifiable benefits of increased consumer information and market efficiency, an unquantified consumer surplus loss and an unquantified cost associated with food service establishments changing their standard operating procedures.
As mentioned above, FSIS is using an estimate of the number of establishments producing needle- or blade-tenderized beef products and the number of labels that will be modified as a result of this final rule.
Additionally, FSIS did not estimate the number of validation studies that will be necessary to develop cooking instructions for raw and partially cooked needle- or blade-tenderized beef products. FSIS requested comments on the number of validation studies; however, no data was received.
FSIS considered several alternatives to the final rule:
The FSIS Administrator certifies that, for the purposes of the Regulatory Flexibility Act (5 U.S.C. 601-602), the final rule will not have a significant impact on a substantial number of small entities in the United States. This determination was made because the rule will affect the labeling of about 10.5% of 24.3 billion pounds of beef products. Over 97 percent of the 555 Federal establishments that produce mechanically tenderized beef products could possibly be affected by this final rule are small or very small according to the FSIS HACCP definition. There are about 251 very small establishments (with fewer than 10 employees) and 291 small establishments (with more than 10 but less than 500 employees). Therefore, a total of 542 small and very small establishments could possibly be affected by this rule. The FSIS HACCP definition assigns a size based on the total number of employees in each official establishment. The Small Business Administration definition of a small business applies to a firm's parent company and all affiliates as a single entity.
These small and very small manufacturers, like the large manufacturers, will incur the costs associated with modifying product labels to add on the labels “mechanically tenderized,” “needle tenderized,” or “blade tenderized,” and validated cooking instructions needed to ensure adequate pathogen destruction.
Based on the upper bound estimated number of labels that will be required by the establishments, the cost will add an average of $0.0038 per package ($5,892,342/951,000,000 packages of needle- or blade-tenderized beef).
The labeling costs discussed above are one-time costs. FSIS believes these one-time costs will not be a financial burden on small entities.
In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Copies of this information collection assessment can be obtained from Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW., Room 6083, South Building, Washington, DC 20250-3700; (202) 690-6510.
This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
FSIS has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under E.O. 13175. If a Tribe requests consultation, FSIS will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under this rule: (1) All State and local laws and regulations that are inconsistent with this rule will be
FSIS and USDA are committed to achieving the purposes of the E-Government Act (44 U.S.C. 3601,
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at
Send your completed complaint form or letter to USDA by mail, fax, or email:
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce it on-line through the FSIS Web page located at:
FSIS also will make copies of this
Food labeling, Food packaging, Meat inspection, Nutrition, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, FSIS amends 9 CFR Chapter III as follows:
21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
(e) * * *
(3)
(i) Unless the product is destined to be fully cooked or to receive another full lethality treatment at an official establishment, the product name for a raw or partially cooked beef product that has been mechanically tenderized, whether by needle or by blade, must contain the term “mechanically tenderized,” “needle tenderized,” or “blade tenderized,” as a descriptive designation and an accurate description of the beef component.
(ii) The product name must appear in a single easy-to-read type style and color and on a single-color contrasting background. The print may appear in upper and lower case letters, with the lower case letters not smaller than
(iii) The labels on raw or partially cooked needle- or blade-tenderized beef products destined for household consumers, hotels, restaurants, or similar institutions must contain validated cooking instructions, including the cooking method, that inform consumers that these products need to be cooked to a specified minimum internal temperature, whether the product needs to be held for a specified time at that temperature or higher before consumption to ensure that potential pathogens are destroyed throughout the product, and a statement that the internal temperature should be measured by a thermometer. These validated cooking instructions may appear anywhere on the label.
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are publishing a new airworthiness directive (AD) for Enstrom Helicopter Corporation (Enstrom) Model F-28A, 280, F-28C, F-28C-2, F-28C-2R, 280C, F-28F, F-28F-R, 280F, 280FX, and 480 helicopters. This AD was sent previously to all known U.S. owners and operators of these helicopters and supersedes Emergency AD (EAD) 2015-04-51, dated February 12, 2015. This AD requires inspecting certain main rotor spindles (spindles) for cracks and reporting the inspection results to the FAA. This AD is prompted by a fatal accident and reports of spindles with cracks. The actions specified in this AD are intended to detect a crack in a spindle and prevent loss of a main rotor blade and subsequent loss of control of the helicopter.
This AD becomes effective June 2, 2015 to all persons except those persons to whom it was made immediately effective by EAD 2015-08-51, issued on April 10, 2015, which contains the requirements of this AD.
We must receive comments on this AD by July 17, 2015.
You may send comments by any of the following methods:
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•
•
•
You may examine the AD docket on the Internet at
For service information identified in this AD, contact Enstrom Helicopter Corporation, 2209 22nd Street, Menominee, MI; telephone (906) 863-1200; fax (906) 863-6821; or at
Gregory J. Michalik, Senior Aerospace Engineer, Chicago Aircraft Certification Office, Small Airplane Directorate, FAA, 2300 East Devon Ave., Des Plaines, IL 60018; (847) 294-7135; email
This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments prior to it becoming effective. However, we invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that resulted from adopting this AD. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit them only one time. We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking during the comment period. We will consider all the comments we receive and may conduct additional rulemaking based on those comments.
On February 12, 2015, we issued EAD 2015-04-51, which was prompted by a fatal accident. Preliminary results of the investigation indicated that the accident was caused by a crack in the spindle, which resulted in the main rotor blade separating from the helicopter. The crack was discovered at the last thread of the spindle retention nut threads. While the investigation could not determine when the crack initiated, it was able to determine that the crack existed, undetected, for a significant amount of time before the separation. EAD 2015-04-51 required, before further flight, conducting a magnetic particle inspection (MPI) in any spindle that had 5,000 or more hours time-in-service (TIS) or where the hours TIS of the spindle is not known. If there was a crack in the spindle, EAD 2015-04-51 required replacing it before further flight. EAD 2015-04-51 also required reporting the inspection results to the FAA within 72 hours.
Since we issued EAD 2015-04-51, inspection reports received by the FAA indicate approximately 20% of the spindles reported with TIS data had evidence of cracks. The FAA also received inspection reports of spindles without TIS data which did not have evidence of cracks. The inspection reports include spindles with cracks at less than 5,000 hours TIS. With analysis of available data, we determined the need to expand the applicability to include spindles with 1,500 or more hours TIS.
On April 10, 2015, we issued EAD 2015-08-51, which supersedes EAD 2015-04-51. EAD 2015-08-51 retains all of the requirements of EAD 2014-04-51 except it reduces the TIS of the spindles to be inspected from 5,000 hours to 1,500 hours. EAD 2015-08-51 was sent previously to all known U.S. owners and operators of these helicopters.
We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of these same type designs.
Enstrom has issued Service Directive Bulletin No. 0119, Revision 1, dated April 1, 2015, for all serial numbered Model F-28A, F-28C, F-28F, 280, 280C, 280F, and 280FX helicopters with a main rotor spindle, part number (P/N) 28-14282-11 and 28-14282-13. Enstrom has also issued Service Directive Bulletin No. T-050, Revision 1, dated April 1, 2015, for Model 480 helicopters, serial numbers 5001 through 5004 and 5006, and with a main rotor spindle, P/N 28-14282-13, except those aircraft modified with tension-torsion straps. Both service directives specify, for any spindle that has been in service more than 3,500 hours, within 5 hours TIS, sending the spindle to Enstrom for an MPI. For any spindle with less than 3,500 hours TIS, the service directives specify sending the spindle to Enstrom for an MPI at or before it reaches 3,500 hours TIS. The service directives also specify repeating the MPI every 300 hours for spindles with over 3,500 hours TIS.
This AD requires conducting an MPI before further flight to determine if a crack exists in any spindle that has 1,500 or more hours TIS or where the hours TIS of the spindle is not known. If there is a crack in the spindle, this AD requires replacing it before further flight. The MPI of the spindle must be conducted by a Level II or Level III inspector qualified in the MPI method in the Aeronautics Sector according to the EN4179 or NAS410 standard or equivalent. This AD also requires reporting certain information to the FAA within 72 hours.
This AD requires that the MPI be conducted by a Level II or Level III inspector or equivalent and that the results of the MPI be reported to the FAA, whereas the service information specifies that the MPI be accomplished by or reported to Enstrom. This AD requires an MPI on spindles with 1,500 or more hours TIS, whereas the service information specifies performing an initial MPI on spindles with 3,500 or more hours TIS. This AD does not require a recurring inspection, whereas the service information specifies to repeat the MPI every 300 hours TIS for spindles with over 3,500 hours TIS. This AD requires the MPI before further
We consider this AD to be an interim action. The inspection reports that are required by this AD will enable us to obtain better insight into the root cause and extent of the cracking, and eventually to develop final action to address the unsafe condition. Once final action has been identified, we might consider further rulemaking.
We estimate that this AD affects 323 helicopters of U.S. Registry and that operators may incur the following costs to comply with this AD. Inspecting the spindles will take about 15 work-hours per helicopter and reporting the required inspection information will take about 0.5 work-hour. We estimate an average labor rate of $85 per work-hour, for a total cost of $1,318 per helicopter and $425,714 for the U.S. fleet. Replacing a spindle will cost $8,164 for parts and no additional work-hours.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting required by this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591. ATTN: Information Collection Clearance Officer, AES-200.
Providing an opportunity for public comments prior to adopting these AD requirements would delay implementing the safety actions needed to correct this known unsafe condition. Therefore, we found and continue to find that the risk to the flying public justifies waiving notice and comment prior to the adoption of this rule because the previously described unsafe condition can adversely affect the controllability of the helicopter and the initial required action must be accomplished before further flight.
Since it was found that immediate corrective action was required, notice and opportunity for prior public comment before issuing this AD were impracticable and contrary to the public interest and good cause existed to make the AD effective immediately by EAD 2015-08-51, issued on April 10, 2015, to all known U.S. owners and operators of these helicopters. These conditions still exist and the AD is hereby published in the
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will 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.
For the reasons discussed, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and
4. 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.
We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by Reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Enstrom Model F-28A, 280, F-28C, F-28C-2, F-28C-2R, 280C, F-28F, F-28F-R, 280F, and 280FX helicopters, all serial numbers; and Enstrom Model 480 helicopters, serial numbers 5001 through 5006; with a main rotor spindle (spindle), part number (P/N) 28-14282-11 or 28-14282-13, installed, certificated in any category. This AD applies to any helicopter that has a spindle with 1,500 or more hours time-in-service (TIS) or where the hours TIS of the spindle is not known.
This AD defines the unsafe condition as a crack in the spindle, which, if not detected, could result in loss of a main rotor blade and subsequent loss of control of the helicopter.
This AD supersedes Emergency AD 2015-04-51, Directorate Identifier 2015-SW-002-AD, dated February 12, 2015.
This AD becomes effective June 2, 2015 to all persons except those persons to whom it was made immediately effective by Emergency AD 2015-08-51, issued on April 10, 2015, which contains the requirements of this AD.
You are responsible for performing each action required by this AD within the specified compliance time unless it has been accomplished on or after February 11, 2015.
(1) Before further flight, conduct a magnetic particle inspection (MPI) of the spindle to determine if a crack exists, paying particular attention to the threaded portion of the spindle. The MPI of the spindle must be conducted by a Level II or Level III inspector qualified in the MPI in the Aeronautics Sector according to the EN4179 or NAS410 standard or equivalent. If there is a crack in the spindle, replace it with an airworthy spindle before further flight.
(2) Within 72 hours after accomplishing the MPI, report the information requested in Appendix 1 to this AD by mail to the Manager, Chicago Aircraft Certification Office, Federal Aviation Administration, ATTN: Gregory J. Michalik, 2300 East Devon Ave., Des Plaines, IL, 60018; by fax to (847) 294-7834; or email to
(1) The Manager, Chicago Aircraft Certification Office, FAA, may approve AMOCs for this AD. Send your proposal to: Gregory J. Michalik, Senior Aerospace Engineer, Chicago Aircraft Certification Office, Small Airplane Directorate, FAA, 2300 East Devon Ave., Des Plaines, IL, 60018; (847) 294-7135; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
(3) Any AMOC approved previously in accordance with EAD 2015-04-51, dated February 12, 2015, is approved as an AMOC for the corresponding requirements in paragraph (f)(1) of this AD.
Enstrom Helicopter Corporation Service Directive Bulletin No. 0119, Revision 1, dated April 1, 2015, and Enstrom Helicopter Corporation Service Directive Bulletin No. T-050, Revision 1, dated April 1, 2015, which are not incorporated by reference, contain additional information about the subject of this AD. For service information identified in this AD, contact Enstrom Helicopter Corporation, 2209 22nd Street, Menominee, MI; telephone (906) 863-1200; fax (906) 863-6821; or at
Joint Aircraft Service Component (JASC) Code: 6220, Main Rotor Head.
Provide the following information by mail to the Manager, Chicago Aircraft Certification Office, Federal Aviation Administration, ATTN: Gregory J. Michalik, 2300 East Devon Ave., Des Plaines, IL, 60018; by fax to (847) 294-7834; or email to
Provide Any Other Comments:
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the Mayor's Hike, Bike and Paddle marine event for all waters of the Ohio River, beginning at mile marker 602.0 and ending at 603.5, Louisville, KY. This rule will be enforced from 9:00 a.m. to 12:30 p.m. on May 25, 2015.
This action is necessary to protect persons, property, and infrastructure from potential damage and safety hazards associated with the Mayor's Hike, Bike and Paddle. During the enforcement period, deviation from the regulations is prohibited unless specifically authorized by the Captain of the Port (COTP) Ohio Valley or a designated representative.
The regulations in 33 CFR 100.801, Table 1, Line 35 will be enforced from 9:00 a.m. to 12:30 p.m. on May 25, 2015.
If you have questions on this document, call or email Petty Officer James C. Robinson, U.S. Coast Guard; telephone 502-779-5347, email
The Coast Guard will enforce the “Mayor's Hike, Bike and Paddle” marine event in 33 CFR 100.801, Table 1, Line 35 from 9:00 a.m. to 12:30 p.m. on May 25, 2015. These regulations can be found in the Code of Federal Regulations, at 33 CFR 100.801.
Under the provisions of 33 CFR 100.801, a vessel may not enter the regulated area, unless it receives permission from the COTP Ohio Valley or a designated representative. Spectator vessels may safely transit outside the regulated area but may not anchor, block, loiter in, or impede the transit of official patrol vessels. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.
This document is issued under authority of 5 U.S.C. 552(a), and 33 U.S.C. 1233. In addition to this document in the
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce a Special Local Regulation for the “REV3 Triathlon” on the Tennessee River mile 646.0 to 649.0 from 7:00 a.m. until 9:30 a.m. on May 17, 2015. This action is necessary for the safeguard of participants and spectators, including all crews, vessels, and persons on navigable waters during the “REV3 Triathlon.” During the enforcement period, entry into, transiting or anchoring in the Regulated Area is prohibited to all vessels not registered with the sponsor as participants or official patrol vessels, unless specifically authorized by the Captain of the Port (COTP) Ohio Valley or his designated representative.
The regulations in 33 CFR 100.801, Table 1 Sector Ohio Valley, No. 4 will be enforced from 7:00 a.m. until 9:30 a.m. on May 17, 2015.
If you have questions on this notice of enforcement, call Petty Officer Chad Phillips, Coast Guard Marine Safety Detachment Nashville at 615-736-5421, or
The Coast Guard will enforce the Special Local Regulation for the annual “REV3 Triathlon” listed in 33 CFR 100.801 Table 1, Sector Ohio Valley, No. 4 on May 17, 2015 from 7:00 a.m. until 9:30 a.m.
Under the provisions of 33 CFR 100.801, entry into the regulated area listed in Table 1, Sector Ohio Valley, No. 4 is prohibited unless authorized by the Captain of the Port or his designated representative. Persons or vessels desiring to enter into or pass through the Special Local Regulation area must request permission from the Captain of the Port or his designated representative. If permission is granted, all persons and vessels shall comply with the instructions of the Captain of the Port or his designated representative.
This notice is issued under authority of 5 U.S.C. 552(a), and 33 U.S.C. 1233. In addition to this notice in the
If the Captain of the Port Ohio Valley or his Patrol Commander determines that the Special Local Regulation need not be enforced for the full duration stated in this notice of enforcement, he or she may use a Broadcast Notice to Mariners to grant permission to enter the regulated area.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing eight special local regulations for eight separate marine events and establishing six safety zones for fireworks displays within the Coast Guard Sector Long Island Sound (LIS) Captain of the Port (COTP) Zone. This temporary final rule is necessary to provide for the safety of life on navigable waters during these events. Entry into, transit through, mooring or anchoring within these regulated areas and safety zones is prohibited unless authorized by COTP Sector Long Island Sound.
This rule is effective without actual notice from 12:01 a.m. on May 18, 2015 until 5:30 p.m. on September 20, 2015. For the purposes of enforcement, actual notice will be used from the date the rule was signed, April 22, 2015, until May 18, 2015.
Documents mentioned in this preamble are part of docket [USCG-2015-0125]. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, contact Petty Officer Ian Fallon, Prevention Department, Coast Guard Sector Long Island Sound, telephone (203) 468-4565, email
This rulemaking establishes eight special local regulations for four regattas, two swim events, one fireworks display and one air show and six safety zones for six fireworks displays. Each event and its corresponding regulatory history is discussed below.
Aquapalooza (regatta): A special local regulation was established in 2014 for the Aquapalooza event when the Coast Guard issued a temporary rule entitled, “Special Local Regulations and Safety Zones; Marine Events in Captain of the Port Long Island Sound Zone”. This rule was published on August 12, 2014 in the
Great Peconic Race (regatta): A special local regulation was established in 2014 for the Great Peconic Race event when the Coast Guard issued a temporary rule entitled, “Special Local Regulation and Safety Zone; Marine Events in Captain of the Port Long Island Sound Zone”. This rule was published on August 29, 2014 in the
Kayak for Camp (regatta): Is a recurring marine event with no regulatory history.
Connecticut River Raft Race (regatta): A special local regulation was established in 2014 for the Connecticut River Raft Race event when the Coast Guard issued temporary rule entitles, “Special Local Regulations and Safety Zones; Marine Events in Captain of the Port Long Island Zone”. This rule was published on August 12, 2014 in the
Fran Schnarr Open Water Championship (Swim): Is a recurring marine event with regulatory history. This event was previously named Huntington Bay Open Water Championships Swim (78 FR 31402, May 24, 2013) and the event is being held in a different location this year.
Riverhead Rocks Triathlon (swim): A special local regulation was established in 2014 for the Riverhead Rocks Triathlon event when the Coast Guard issued a temporary rule entitled, “Safety
Jones Beach State Park (fireworks): Is a reoccurring marine event with regulatory history. This event is in Table 1 to 33 CFR 165.151 (7.19). We will be using a Special Local Regulation this year for this event due to a determination that a safety zone will be insufficient to mitigate the event's extra and unusual hazards.
Jones Beach (Air Show): A special local regulation was established in 2014 for the Jones Beach Air Show event when the Coast Guard issued a final rule entitled, “Special Local Regulation; Jones Beach Air Show; Atlantic Ocean, Sloop Channel Through East Bay, and Zach's Bay; Wantagh, NY”. This rule was published on May 21, 2014 in the
Village of Saltaire (fireworks): A special local regulation was established in 2014 for the Village of Saltaire event when the Coast Guard issued a temporary rule entitled, “Safety Zones; Marine Events in Captain of the Port Long Island Sound Zone”. This rulemaking was published on August 18, 2014 in the
USCG Academy Fireworks Entertainment (fireworks): Is a first time marine event with no regulatory history.
Boys and Girls Club—Beach Ball 2015 (fireworks): Is a first time marine event with no regulatory history.
Marine at American Wharf (fireworks): Is a first time event with no regulatory history.
Cherry Grove Pride Week (fireworks): Is a first time marine event with no regulatory history.
Riverfest (Fireworks): Is a reoccurring marine event with regulatory history. This event is in Table 1 to § 165.151(7.23). This event is in this temporary rule due to deviation from the date and position listed in the § 165.151 regulation.
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable and unnecessary. The Coast Guard did not receive the information about the events early enough to publish a Notice of Proposed Rulemaking before the scheduled event dates. In addition, publishing an NPRM is unnecessary for this rule because most of these events are familiar to the community as recurring annual community events. Thus, waiting for a comment period to run would inhibit the Coast Guard's ability to fulfill its mission to keep the ports and waterways safe.
Under 5 U.S.C. 553(d)(3), and for the same reasons stated in the preceding paragraph, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The legal basis for this temporary rule is 33 U.S.C. 1231, 1233; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6 and 160.5; Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to establish regulatory special local regulations and safety zones.
As discussed in the
The geographic locations of these regulated areas and the specific requirements of this rule are contained in the regulatory text. This regulation prevents vessels from entering, transiting, remaining, or anchoring within the area designated as a “No Entry Area” during the periods of enforcement, unless authorized by the COTP or designated representative. This regulation also partially restricts movement within the “Slow/No Wake Area” and the “No Southbound Traffic Area” unless authorized by the COTP or designated representative.
This rule establishes eight special local regulations for four regattas, two swim events, one fireworks display, and one air show and six safety zones for six fireworks displays. The locations of these special regulated areas and safety zones are described in the regulatory text.
The fireworks displays will launch pyrotechnics from either a barge or a landsite near a waterway. A regulated area, specifically a safety zone, is required for each of these fireworks displays to protect both spectators and participants from the safety hazards created by the burning debris.
The special local regulation established for Aquapalooza includes two measures to reduce the risks to waterways users of Zach's Bay before, during, and after the event. The first measure restricts vessel movement within the regulated area to no wake speed or 6 knots, whichever is slower on July 26, 2015 from 11:30 a.m. to 8 p.m. The second measure restricts all vessel movement within the regulated area to the outbound or northbound direction on July 26, 2015 from 3 p.m. to 5:30 p.m.
Kayak for Camp is a rowing regatta that will take place in Norwalk Harbor near Norwalk, CT. This special local regulation proposes two temporary regulated areas to restrict vessel movement within the regulated areas of Norwalk Harbor to no wake speeds or 6 knots, whichever is slower.
Great Peconic Race regulated area would encompass all navigable waters of the United States of the Peconic River, Shelter Island, NY, inside two areas. This special local regulation proposes two temporary regulated areas in which event non-participants must travel at a no-wake speed and remain vigilant at all times for event participants. Additionally, recreational vessels must yield right-of-way for event participants and event safety craft, and follow directions given by event representatives during the event. Commercial vessels will have right-of-way over event participants and event safety craft.
Riverhead Rocks Triathlon incorporates swim legs that will place many swimmers in the navigable waters of the Peconic River. A regulated area is required to minimize the hazards posed by spectators and other waterway users operating their vessels in close proximity to the event participants. The special local regulation established for this swim event will minimize the risks to the event participants from this type of boat traffic and improve visibility and maneuverability for the safety vessels supporting the swim event.
Fran Schnarr Open Water Championship Swim will place many swimmers in the navigable waters of Huntington Harbor. A regulated area is required to minimize the hazards posed by spectators and other waterway users operating their vessels in close proximity to the event participants. The special local regulation established for this swim event will minimize the risks to the event participants from this type of boat traffic and improve visibility and maneuverability for the safety vessels supporting the swim event.
Jones Beach State Park fireworks display attracts thousands of spectator craft every year to Jones Beach State Park. Three regulated areas will be set to address the safety concerns with high vessel traffic. A “No Entry Area” will be set around the fireworks barge to ensure spectators maintain a safe distance from the barge. A “Slow/No Wake Area” will be set in the navigable waters between Meadow Brook State Parkway and Wantagh State Parkway. All vessels in the area will operate at “No Wake” speed or up to 6 knots, whichever is slower. A “No Southbound Traffic Area” will be set in all waters of Zach's Bay. No southbound vessel traffic will be allowed into or within this area.
Jones Beach Air Show involves numerous aircraft performing various aerial maneuvers which present multiple hazards, including those associated with in-flight accidents. This event attracts thousands of spectators and spectator craft which pose their own hazards. Three regulated areas will be set to address the safety concerns. A “Slow/No Wake Area” will be set in the navigable waters between Meadow Brook State Parkway and Wantagh State Parkway. All vessels in the area will operate at “No Wake” speed or up to 6 knots, whichever is slower. A “No Southbound Traffic Area” will be set in all waters of Zach's Bay. No southbound vessel traffic will be allowed into or within this area.
The special local regulation established for the Connecticut River Raft Race restricts vessel movement within the regulated area of the Connecticut River to no wake speed or 6 knots, whichever is slower, and also stipulates that vessels must not anchor, block, loiter, or impede the transit of event participants or official patrol vessels in the regulated areas unless authorized by COTP or designated representatives.
This rule prevents vessels from entering, transiting, mooring, or anchoring within areas specifically designated as safety zones and establishes additional vessel movement rules within areas specifically under the jurisdiction of the special local regulations during the periods of enforcement unless authorized by the COTP or designated representative.
Public notifications will be made to the local maritime community prior to each event through the Local Notice to Mariners and Broadcast Notice to Mariners.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.
The Coast Guard determined that this rulemaking is not a significant regulatory action for the following reasons: The enforcement of these regulated areas and safety zones will be relatively short in duration. Also, persons or vessels desiring entry into a regulated area or a deviance from the stipulations within a regulated area may be authorized to do so by the COTP Sector Long Island Sound or designated representative. Additionally, persons or vessels desiring to enter a safety zone may do so with permission from the COTP Sector Long Island Sound or designated representative. Furthermore, these special local regulations and safety zones are designed in a way to limit impacts on vessel traffic, permitting vessels to navigate in other portions of the waterways not designated as a regulated area or as a safety zone. Finally, to increase public awareness of these special local regulations and safety zones, the Coast Guard will notify the public of the enforcement of this rule via appropriate means, such as via Local Notice to Mariners and Broadcast Notice to Mariners.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
This temporary final rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to enter, transit, anchor, or moor within a regulated area or a safety zone during the periods of enforcement, from April 25, 2015 to September 20, 2015. However, this temporary final rule will not have a significant economic impact on a substantial number of small entities for the same reasons discussed in the Regulatory Planning and Review section.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of special local regulations and safety zones. This rule is categorically excluded from further review under paragraph 34(g) and (h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR parts 100 and 165 as follows:
33 U.S.C. 1233.
(a)
(b)
(c)
(d) Vessel operators desiring to enter or operate within the regulated areas shall contact the COTP at 203-468-4401 (Sector Long Island Sound command center) or the designated representative via VHF channel 16.
(e) Vessels may not transit the regulated areas without the COTP or designated representative approval. Vessels permitted to transit must operate at a no wake speed or 6 knots, whichever is slower, and operate in a manner which will not endanger event participants or other crafts in the event.
(f) The COTP or designated representative may control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel must come to an immediate stop and comply with the lawful directions issued. Failure to comply with a lawful direction may result in expulsion from the area, citation for failure to comply, or both.
(g) The COTP or designated representative may delay or terminate any marine event in this section at any time it is deemed necessary to ensure the safety of life or property.
(h) The additional stipulations listed in Table to § 100.35T01-0125 also apply for the event in which they are listed.
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d) Vessels desiring to enter or operate within a safety zone should contact the COTP or the designated representative via VHF channel 16 or by telephone at (203) 468-4401 to obtain permission to do so. Vessels given permission to enter or operate in a safety zone must comply with all directions given to them by the COTP Sector Long Island Sound or the designated on-scene representative.
(e) Upon being hailed by an official patrol vessel or the designated representative, by siren, radio, flashing light or other means, the operator of the vessel shall proceed as directed. Failure to comply with a lawful direction may result in expulsion from the area, citation for failure to comply, or both.
(f) Fireworks barges used in these locations will also have a sign on their port and starboard side labeled “FIREWORKS—STAY AWAY.” This sign will consist of 10 inch high by 1.5 inch wide red lettering on a white background.
Coast Guard, DHS.
Notice of temporary deviation from regulations; request for comments.
The Coast Guard is issuing a temporary deviation from the operating schedule that governs the Florida East Coast Railway (FEC) Railroad Bridge across the New River, mile 2.5, at Fort Lauderdale, FL. This deviation will test a change to the drawbridge operation schedule to address the inability of the bridge owner, FEC, to operate the bridge under current regulations.
This deviation is effective from 6 a.m. on May 18, 2015 through 6 a.m. on October 16, 2015.
Comments and related material must be received by the Coast Guard on or before August 17, 2015. Requests for public meetings must be received by the Coast Guard on or before June 16, 2015.
You may submit comments identified by docket number USCG-2015-0271 using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this test deviation, call or email Robert Glassman at telephone 305-415-6746, email
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to
If you submit a comment, please include the docket number for this rulemaking (USCG-2015-0271), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online (
To submit your comment online, type the docket number [USCG-2015-0271] in the “SEARCH” box and click “SEARCH.” Click on “Submit a Comment” on the line associated with this rulemaking. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one on or before June 16, 2015, using one of the four methods specified under
The bridge owner, FEC Railway, requested permission to operate the FEC Railroad Bridge across the New River with an automated system. The FEC Railroad Bridge in Fort Lauderdale, FL has a vertical clearance of 4 feet at mean high water in the closed position and horizontal clearance of 60 feet. Traffic on the waterway includes both commercial and recreational vessels.
Presently, in accordance with 33 CFR 117.5, the bridge is required to open on signal for the passage of vessels. The bridge is usually maintained in the open to navigation position and only closes for train traffic.
The bridge owner, FEC, determined that by installing an automated system, vessel transit will be more efficient. This automated system allows the railroad dispatcher to receive a signal that the bridge must close for approaching trains. The dispatcher will then be advised when trains clear the bridge so it can reopen.
Any vessel requesting a bridge opening must contact the bridge tender via telephone or radiotelephone (marine radio) on VHF-FM channel 9 or 16 to coordinate safe passage through the bridge. The tender must provide information to include, but not limited to authorization for the vessel to continue its transit when the bridge is open to navigation, or the tender must advise that the vessel will have to wait because a train is approaching. If a vessel is required to wait, the bridge tender must indicate the amount of time the vessel will have to wait until the train is clear of the bridge. The FEC Dispatch number and bridge tender phone number will be posted at the bridge so they can be seen by vessels approaching from either direction. The bridge tender's number is 305-889-5572 and the FEC Dispatch number is 800-342-1131.
This deviation seeks comments on FEC's operating schedule and tests an automatic operating system as the method for operating the bridge to determine whether a permanent change to operations can be approved. The deviation period will run from 6 a.m. on May 18, 2015 through 6 a.m. on October 16, 2015.
During the test deviation period, the draw of the FEC Railroad Bridge across the New River, mile 2.5, at Fort Lauderdale, FL, will operate as follows:
(a) The bridge is constantly tended.
(b) The bridge tender will utilize a VHF-FM radio to communicate on channels 9 and 16 and may be contacted by telephone at 305-889-5572.
(c) Signage will be posted displaying VHF radio contact information and the bridge tender and dispatch telephone number. A countdown clock for bridge closure shall be posted at the bridge site and visible for maritime traffic.
(d) A bridge log will be maintained including, at a minimum, bridge opening and closing times.
(e) When the draw is in the fully open position, green lights will be displayed to indicate that vessels may pass.
(f) When a train approaches, the lights go to flashing red and a horn starts four blasts, pauses, and then continues four blasts then the draw lowers and locks.
(g) After the train has cleared the bridge, the draw opens and the lights return to green.
(h) The bridge shall not be closed more than 60 minutes combined for any 120 minute time period beginning at 12:01 a.m.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the upper deck of the Steel Bridge, mile 12.1, and the Burnside Bridge, mile 12.4, both crossing the Willamette River, at Portland, OR. The deviation is necessary to accommodate the route of the annual Rose Festival Parade event, which crosses the Steel Bridge and Burnside Bridge. This deviation allows the upper deck of the Steel Bridge and Burnside Bridge to remain in the closed-to-navigation position and need not open for marine traffic to allow for the safe movement of event participants and cleanup crew.
This deviation is effective from 7 a.m. to 2 p.m. on June 6, 2015.
The docket for this deviation, [USCG-2015-0415] is
If you have questions on this temporary deviation, call or email Mr. Steven Fischer, Bridge Administrator, Thirteenth Coast Guard District; telephone 206-220-7282, email
TriMet Public Transit and Multnomah County have requested that the upper deck of the Steel Bridge and the Burnside Bridge remain in the closed-to-navigation position to accommodate the annual Rose Festival Parade event. The Steel Bridge, mile 12.1, and the Burnside Bridge, mile 12.4, both cross the Willamette River.
The Steel Bridge is a double-deck lift bridge with a lower lift deck and an upper lift deck which operate independent of each other. When both decks are in the down position the bridge provides 26 feet of vertical clearance. When the lower deck is in the up position, the bridge provides 71 feet of vertical clearance. This deviation does not affect the operating schedule of the lower deck which opens on signal.
The normal operating schedule for the upper deck of the Steel Bridge operates in accordance with 33 CFR 117.897(c)(3)(ii) which states from 8 a.m. to 5 p.m. Monday through Friday one hour advance notice shall be given for draw openings, and at all other times two hours advance notice shall be given to obtain an opening.
The Burnside Bridge provides a vertical clearance of 64 feet in the closed-to-navigation position. The normal operating schedule for the Burnside Bridge operates in accordance with 33 CFR 117.897(c)(3)(iii) which states from 8 a.m. to 5 p.m. Monday through Friday, one hour's notice shall be given for draw openings. At all other times, two hours notice is required. The Steel Bridge and Burnside Bridge clearances are above Columbia River Datum 0.0.
The deviation period is from 7 a.m. to 2 p.m. on June 6, 2015 to accommodate the route of the annual Rose Festival Parade event. The deviation allows the upper deck of the Steel Bridge, mile 12.1, and the Burnside Bridge, mile 12.4, both crossing the Willamette River, to remain in the closed-to-navigation position and need not open for maritime traffic from 7 a.m. to 2 p.m. on June 6, 2015. Waterway usage on this part of the Willamette River includes vessels ranging from commercial tug and barge to small pleasure craft.
Vessels able to pass through the Steel Bridge and Burnside Bridge in the closed positions may do so at anytime. The bridges will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridges so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the safety zones for annual firework displays in the Captain of the Port, Puget Sound Zone during the dates and times noted below. This action is necessary to prevent injury and to protect life and property of the maritime public from the hazards associated with the firework displays. During the enforcement periods, entry into, transit through, mooring, or anchoring within these safety zones is prohibited unless authorized by the Captain of the Port, Puget Sound or their Designated Representative.
The regulations in 33 CFR 165.1332 will be enforced between July 4 and July 12, 2015.
If you have questions on this document, call or email MST1 Kenneth Hoppe, Sector Puget Sound Waterways Management, Coast Guard; telephone 206-217-6051,
The Coast Guard will enforce the safety zones established for Annual Fireworks Displays within the Captain of the Port, Puget Sound Area of Responsibility in 33 CFR 165.1332 during the dates and times noted below.
The following safety zones will be enforced from 5:00 p.m. on July 4, 2015 through 1:00 a.m. on July 5, 2015.
The following safety zone will be enforced from 5:00 p.m. on July 11, 2015 through 1:00 a.m. on July 12, 2015:
The special requirements listed in 33 CFR 165.1332, which published in the
The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.
This document is issued under authority of 33 CFR 165.1332 and 33 CFR part 165 and 5 U.S.C. 552(a). In addition to this document, the Coast Guard will provide the maritime community with extensive advanced notification of the safety zones via the Local Notice to Mariners and marine information broadcasts on the day of the events.
Forest Service, Agriculture; Fish and Wildlife Service, Interior.
Final rule.
This final rule establishes regulations for seasons, harvest limits, methods, and means related to taking of fish for subsistence uses in Alaska during the 2015-2016 and 2016-2017 regulatory years. The Federal Subsistence Board (Board) completes the biennial process of revising subsistence hunting and trapping regulations in even-numbered years and subsistence fishing and shellfish regulations in odd-numbered years; public proposal and review processes take place during the preceding year. The Board also addresses customary and traditional use determinations during the applicable biennial cycle.
This rule is effective May 18, 2015.
The Board meeting transcripts are available for review at the Office of Subsistence Management, 1011 East Tudor Road, Mail Stop 121, Anchorage, AK 99503, or on the Office of Subsistence Management Web site (
Chair, Federal Subsistence Board, c/o U.S. Fish and Wildlife Service, Attention: Eugene R. Peltola, Jr., Office of Subsistence Management; (907) 786-3888 or
Under Title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126), the Secretary of the Interior and the Secretary of Agriculture (Secretaries) jointly implement the Federal Subsistence Management Program. This program provides a preference for take of fish and wildlife resources for subsistence uses on Federal public lands and waters in Alaska. The Secretaries published temporary regulations to carry out this program in the
Consistent with subpart B of these regulations, the Secretaries established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board comprises:
• A Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture;
• The Alaska Regional Director, U.S. Fish and Wildlife Service;
• The Alaska Regional Director, U.S. National Park Service;
• The Alaska State Director, U.S. Bureau of Land Management;
• The Alaska Regional Director, U.S. Bureau of Indian Affairs;
• The Alaska Regional Forester, U.S. Forest Service; and
• Two public members appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture.
Through the Board, these agencies participate in the development of regulations for subparts C and D, which, among other things, set forth program eligibility and specific harvest seasons and limits.
In administering the program, the Secretaries divided Alaska into 10 subsistence resource regions, each of which is represented by a Regional Advisory Council. The Regional Advisory Councils provide a forum for rural residents with personal knowledge of local conditions and resource requirements to have a meaningful role in the subsistence management of fish and wildlife on Federal public lands in Alaska. The Council members represent varied geographical, cultural, and user interests within each region.
The Board addresses customary and traditional use determinations during the applicable biennial cycle. Section __.24 (customary and traditional use determinations) was originally published in the
The Departments published a proposed rule on January 10, 2014 (79 FR 1791), to amend the fish section of subparts C and D of 36 CFR part 242 and 50 CFR part 100. The proposed rule opened a comment period, which closed on March 28, 2014. The Departments advertised the proposed rule by mail, radio, and newspaper, and comments were submitted via
The 10 Regional Advisory Councils met again, received public comments, and formulated their recommendations to the Board on proposals for their respective regions. The Regional Advisory Councils had a substantial role in reviewing the proposed rule and making recommendations for the final rule. Moreover, a Council Chair, or a designated representative, presented each Council's recommendations at the Board's public meeting of January 21-23, 2015. These final regulations reflect Board review and consideration of Regional Advisory Council recommendations and public comments. The public received extensive opportunity to review and comment on all changes.
Of the 18 proposals, 10 were on the Board's regular agenda and 8 were on the consensus agenda. The consensus agenda is made up of proposals for which there is agreement among the affected Subsistence Regional Advisory Councils, a majority of the Interagency Staff Committee members, and the Alaska Department of Fish and Game concerning a proposed regulatory action. Any Board member may request that the Board remove a proposal from the consensus agenda and place it on the non-consensus (regular) agenda. The Board votes en masse on the consensus agenda after deliberation and action on all other proposals.
Of the proposals on the consensus agenda, the Board adopted one, adopted one with modification, took no action on one, and rejected five. The adopted consensus proposals are reflected in the rule portion of this document and consist of the addition of a definition to § ___.25 and the addition of the last two subparagraphs in § __.27 ((e)(13)(xx) and (xxi)). Analysis and justification for each action are available for review at the Office of Subsistence Management, 1011 East Tudor Road, Mail Stop 121, Anchorage, AK 99503, or on the Office of Subsistence Management Web site (
The Board rejected or took no action on five non-consensus proposals. The rejected proposals were recommended for rejection by one or more of the Regional Advisory Councils unless noted below.
The Board rejected a proposal to restrict the use of driftnets in selected districts of the Yukon River. This action would have been unnecessarily restrictive to subsistence users and was not supported by substantial evidence. This action was supported by three Councils and contrary to the recommendation of one Council.
The Board took no action on one proposal to allow the use of dipnets with provisions to require the release of Chinook salmon. This decision was based on the Board's earlier action on a similar proposal allowing the use of dipnets.
The Board rejected a proposal to require the immediate recording of harvested Steelhead on Prince of Wales Island, because the in-season manager could include the provision as a permit condition.
The Board took no action on two proposals for the Stikine River. One proposal requested to change the subsistence Sockeye salmon annual guideline harvest level, and the second requested a requirement to check the nets every 2 hours. These decisions were based on its earlier action on a similar proposal requiring nets to be checked twice daily and eliminating the harvest level.
The Board adopted or adopted with modification five non-consensus proposals. Modifications were suggested by the affected Regional Council(s), developed during the analysis process, or developed during the Board's public deliberations. All of the adopted proposals were recommended for adoption by at least one of the Regional Councils unless noted below.
The Board adopted a proposal to allow the use of dipnets for the harvest of salmon on the Kuskokwim River. This action provides subsistence users an additional gear type that could be used when gillnet restrictions are in place for conservation concerns.
The Board adopted a proposal with modification to establish an experimental community gillnet fishery on the Kasilof River for the residents of Ninilchik. This action provides additional opportunity for subsistence users.
The Board adopted a proposal to establish a community gillnet fishery on the Kenai River for the residents of Ninilchik. This action provides additional opportunity for subsistence users.
The Board adopted with modification a proposal requiring nets to be checked twice daily and eliminating the guideline harvest limits on the Stikine River. The change of the guideline harvest levels will require amending the Pacific Salmon treaty, and final implementation is contingent upon review and approval by the Transboundary Panel of the U.S./Canada Pacific Salmon Commission and approval by the Pacific Salmon Commission.
The Board adopted a proposal to close Federal public waters to non-Federally qualified users in the Makhnati Island area to the harvest of herring and herring spawn. This closure was enacted for potential conservation concerns and to protect subsistence uses. This action varied from the Council recommendation, yet met its intent.
These final regulations reflect Board review and consideration of Regional Council recommendations and public and Tribal comments. Because this rule concerns public lands managed by an agency or agencies in both the Departments of Agriculture and the Interior, identical text will be incorporated into 36 CFR part 242 and 50 CFR part 100.
The Board has provided extensive opportunity for public input and involvement in compliance with Administrative Procedure Act requirements, including publishing a proposed rule in the
In the more than 25 years that the Program has been operating, no benefit to the public has been demonstrated by delaying the effective date of the subsistence regulations. A lapse in regulatory control could affect the continued viability of fish or wildlife populations and future subsistence opportunities for rural Alaskans, and would generally fail to serve the overall public interest. Therefore, the Board finds good cause pursuant to 5 U.S.C. 553(d)(3) to make this rule effective upon the date set forth in
A Draft Environmental Impact Statement that described four alternatives for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. The Final Environmental Impact Statement (FEIS) was published on February 28, 1992. The Record of Decision (ROD) on Subsistence Management for Federal Public Lands in Alaska was signed April 6, 1992. The selected alternative in the FEIS (Alternative IV) defined the administrative framework of an annual regulatory cycle for subsistence regulations.
The following
A 1997 environmental assessment dealt with the expansion of Federal jurisdiction over fisheries and is available at the office listed under
An ANILCA section 810 analysis was completed as part of the FEIS process on the Federal Subsistence Management Program. The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. The final section 810 analysis determination appeared in the April 6, 1992, ROD and concluded that the Program, under Alternative IV with an annual process for setting subsistence regulations, may have some local impacts on subsistence uses, but will not likely restrict subsistence uses significantly.
During the subsequent environmental assessment process for extending fisheries jurisdiction, an evaluation of the effects of this rule was conducted in accordance with section 810. That evaluation also supported the Secretaries' determination that the rule will not reach the “may significantly restrict” threshold that would require notice and hearings under ANILCA section 810(a).
An agency may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. This rule does not contain any new collections of
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that this rule is not significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601
Under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801
Title VIII of ANILCA requires the Secretaries to administer a subsistence priority on public lands. The scope of this Program is limited by definition to certain public lands. Likewise, these regulations have no potential takings of private property implications as defined by Executive Order 12630.
The Secretaries have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502
The Secretaries have determined that these regulations meet the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform.
In accordance with Executive Order 13132, the rule does not have sufficient Federalism implications to warrant the preparation of a Federalism summary impact statement. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands unless it meets certain requirements.
The Alaska National Interest Lands Conservation Act, Title VIII, does not provide specific rights to tribes for the subsistence taking of wildlife, fish, and shellfish. However, the Board provided Federally recognized Tribes and Alaska Native corporations opportunities to consult on this rule. Consultation with Alaska Native corporations are based on Public Law 108-199, div. H, Sec. 161, Jan. 23, 2004, 118 Stat. 452, as amended by Public Law 108-447, div. H, title V, Sec. 518, Dec. 8, 2004, 118 Stat. 3267, which provides that: “The Director of the Office of Management and Budget and all Federal agencies shall hereafter consult with Alaska Native corporations on the same basis as Indian tribes under Executive Order No. 13175.”
The Secretaries, through the Board, provided a variety of opportunities for consultation: Commenting on proposed changes to the existing rule; engaging in dialogue at the Regional council meetings; engaging in dialogue at the Board's meetings; and providing input in person, by mail, email, or phone at any time during the rulemaking process.
On January 21, 2015, the Board provided Federally recognized Tribes and Alaska Native Corporations a specific opportunity to consult on this rule prior to the start of its public regulatory meeting. Federally recognized Tribes and Alaska Native Corporations were notified by mail and telephone and were given the opportunity to attend in person or via teleconference.
This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. However, this rule is not a significant regulatory action under E.O. 13211, affecting energy supply, distribution, or use, and no Statement of Energy Effects is required.
Theo Matuskowitz drafted these regulations under the guidance of Eugene R. Peltola, Jr. of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Additional assistance was provided by
• Daniel Sharp, Alaska State Office, Bureau of Land Management;
• Mary McBurney, Alaska Regional Office, National Park Service;
• Dr. Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs;
• Trevor T. Fox, Alaska Regional Office, U.S. Fish and Wildlife Service; and
• Thomas Whitford, Alaska Regional Office, U.S. Forest Service.
Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife.
Administrative practice and procedure, Alaska, Fish, National
For the reasons set out in the preamble, the Federal Subsistence Board amends title 36, part 242, and title 50, part 100, of the Code of Federal Regulations, as set forth below.
16 U.S.C. 3, 472, 551, 668dd, 3101-3126; 18 U.S.C. 3551-3586; 43 U.S.C. 1733.
(a) * * *
(e) * * *
(4) * * *
(ix) You may only take salmon by gillnet, beach seine, fish wheel, dipnet, or rod and reel subject to the restrictions set out in this section, except that you may also take salmon by spear in the Kanektok, and Arolik River drainages, and in the drainage of Goodnews Bay.
(10) * * *
(iv) * * *
(I) Residents of Ninilchik may harvest Sockeye, Chinook, Coho, and Pink salmon through an experimental community gillnet fishery in the Federal public waters of the upper mainstem of the Kasilof River from a Federal regulatory marker on the river below the outlet of Tustumena Lake downstream to the Tustumena Lake boat launch July 1-31. The experimental community gillnet fishery will expire 5 years after approval of the first operational plan.
(J) Residents of Ninilchik may harvest Sockeye, Chinook, Coho, and Pink salmon with a gillnet in the Federal public waters of the Kenai River. Residents of Ninilchik may retain other species incidentally caught in the Kenai River except for Rainbow trout and Dolly Varden 18 inches or longer. Rainbow trout and Dolly Varden 18 inches or greater must be released.
(13) * * *
(xiii) * * *
(E) Fishing nets must be checked at least twice each day. The total annual guideline harvest level for the Stikine River fishery is 125 Chinook, 600 Sockeye, and 400 Coho salmon. All salmon harvested, including incidentally taken salmon, will count against the guideline for that species.
(xx) The Klawock River drainage is closed to the use of seines and gillnets during July and August.
(xxi) The Federal public waters in the Makhnati Island area, as defined in § __.3(b)(5) are closed to the harvest of herring and herring spawn except by Federally qualified users.
Environmental Protection Agency.
Direct final rule.
The Environmental Protection Agency (EPA) is taking direct final action to approve a State Implementation Plan (SIP) revision submitted by the State of Utah. On March 9, 2015, the Governor of Utah submitted a revision to the Utah SIP, adding a new rule regarding trading of motor vehicle emission budgets (MVEB) for Utah County. The rule allows trading from the motor vehicle emissions budget for primary particulate matter of 10 microns or less in diameter (PM
This rule is effective on July 17, 2015 without further notice, unless EPA receives adverse comment by June 17, 2015. If adverse comment is received, EPA will publish a timely withdrawal of the direct final rule in the
Submit your comments, identified by Docket ID No. EPA-R08-OAR-2015-0227, by one of the following methods:
•
•
•
•
•
Tim Russ, Air Program, EPA, Region 8, Mailcode 8P-AR, 1595 Wynkoop Street, Denver, Colorado 80202-1129, (303) 312-6479,
1.
2.
a. Identify the rulemaking by docket number and other identifying information (subject heading,
b. Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
c. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
d. Describe any assumptions and provide any technical information and/or data that you used.
e. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
f. Provide specific examples to illustrate your concerns, and suggest alternatives.
g. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
h. Make sure to submit your comments by the comment period deadline identified.
In this action, we are approving and soliciting public comment regarding the Governor's March 9, 2015, submittal of Utah's new Rule R307-311 for adoption into the Utah SIP. The rule will allow certain trading of MVEBs for the purposes of transportation conformity for PM
The above SIP action that was adopted by the Utah Air Quality Board (UAQB), and subsequently submitted to EPA by the Governor of Utah for approval, is discussed in greater detail in sections III, IV, and V below. We also discuss the state's associated technical support document (TSD), which gives technical information to support new Rule R307-311.
Sections 110(a)(2) and 110(l) of the CAA requires that a state provide reasonable notice and public hearing before adopting a SIP revision and submitting it to us. More detailed requirements for notice and public hearing are set out in 40 CFR 51.102.
On December 4, 2014 the UAQB proposed for public comment amendments to the Utah SIP for Utah Air Quality Rule R307-311; “Utah County: Trading of Emission Budgets for Transportation Conformity.” In addition on January 12, 2015, the Utah Division of Air Quality (UDAQ) made the proposed TSD available for public comment and extended the Rule R307-311 public comment period to February 12, 2015. EPA notes that included with the state's administrative documentation for this SIP and Rule revision was a letter memorandum, DAQ-010-15 dated February 19, 2015, from Bryce Bird, Director, UDAQ to the UAQB. This letter memorandum indicated that a public comment period was held from January 1, 2015 through February 12, 2015 regarding the proposed Rule R307-311 SIP revisions. The UDAQ February 19, 2015 letter memorandum noted that no public comments were received on the proposed rule R307-311, but that EPA did comment on the TSD. UDAQ summarized and responded to EPA's comments in its February 19, 2015 letter memorandum to the UAQB. In addition, UDAQ noted that no public hearings were requested. In consideration of the February 19, 2015 UDAQ letter memorandum, the UAQB subsequently adopted the proposed Rule R307-311, and a revised TSD, on March 4, 2015. The SIP Rule revision became state effective on March 5, 2015 and was submitted by the Governor to EPA by a letter dated March 9, 2015. By a subsequent letter dated March 11, 2015, Bryce Bird, Director, UDAQ submitted the necessary administrative documentation that supported the Governor's submittal.
We have evaluated Utah's March 9, 2015 SIP submittal and the March 11, 2015 submitted administrative documentation and have determined that the state met the requirements for reasonable notice and public hearing under section 110(a)(2) of the CAA. By a letter dated March 24, 2015, we advised the state that the SIP submittal was complete under section 110(k)(1)(B) of the Act, because the submittal met the minimum “completeness” criteria found in 40 CFR part 51, Appendix V.
Transportation conformity is required by section 176 of the CAA to ensure that federally supported highway and transit project activities are consistent with (“conform to”) the purpose of a SIP. Conformity to the purpose of the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the national ambient air quality standards (NAAQS). EPA's transportation conformity rule establishes the criteria and procedures for determining whether transportation activities conform to the state air quality plan.
One key provision of EPA's transportation conformity rule (see 40 CFR part 93, subpart A) requires a demonstration that emissions from the RTP and TIP are consistent with the MVEB in the applicable SIP (40 CFR 93.118 and 93.124). The transportation conformity MVEB is defined as the level of on-road mobile source emissions relied upon in the SIP to attain or maintain compliance with the NAAQS in the nonattainment or maintenance area.
In this particular instance, the NAAQS involved is PM
Transportation conformity is demonstrated when future year's projected on-road mobile source's emissions, for a particular pollutant or precursor, are estimated to be at or below the on-road motor vehicle's emissions budget for that pollutant or precursor in the applicable SIP. For the PM
Currently, the Utah SIP does not contain an approved rule that establishes an appropriate mechanism for trading of emissions between the PM
An overview of all portions of the state's new Rule R307-311 is provided below:
1. R307-311 is entitled “Utah County: Trading of Emission Budgets for Transportation Conformity.”
2. R307-311-1 “Purpose.” The stated purpose of this new rule is:
This rule establishes the procedures that may be used to trade a portion of the primary PM
3. R307-311-2. “Definitions.” This section provides applicable definitions:
The definitions contained in 40 CFR 93.101, effective as of the date referenced in R307-101-3,
“Budget” means the motor vehicle emission projections used in the attainment demonstration in the Utah County portion of Section IX, Part A of the State Implementation Plan, “Fine Particulate Matter (PM
“NO
“Primary PM
“Transportation Conformity” means a demonstration that a transportation plan, transportation improvement program, or project conforms with the emissions budgets in a state implementation plan, as outlined in 40 CFR, Chapter 1, Part 93;
4. R307-311-3. “Applicability”. This portion of the rule defines its applicability. EPA notes that this rule may only be applied to Utah County and only for PM
(A) This rule applies to agencies responsible for demonstrating transportation conformity with the Utah County portion of Section IX, Part A of the State Implementation Plan, “Fine Particulate Matter (PM
(B) This rule does not apply to emission budgets from Section IX, Part C.6 of the State Implementation Plan, “Carbon Monoxide Maintenance Provisions.
5. R307-311-4. “Trading Between Emission Budgets.” This portion of the rule specifies the trading mechanism and provides the trading ratio of NO
The agencies responsible for demonstrating transportation conformity are authorized to supplement the budget for NO
(a) The metropolitan planning organization shall include the following information in the transportation conformity demonstration:
(i) The budget for primary PM
(ii) The portion of the primary PM
(iii) The remainder of the primary PM
(iv) The budget for primary PM
(b) Transportation conformity for NO
(c) The primary PM
The Governor's SIP revision submittal provided a TSD to support the new Rule R307-311 and address MVEB trading, as contemplated by 40 CFR 93.124(b), for PM
PM
Currently in Utah County, the RTP and TIP must demonstrate conformity to the MVEBs for PM
The state's TSD describes how each ton of gaseous NO
However, not all NO
From a historical perspective, the conversion of NO
The conversion process may depend on several variables, including the availability of chemical reactants in the atmosphere for the conversion process, and the difference in mass between the PM
These statements were cited in our 2002 proposed approval of the MVEB trading rule (R307-310) for Salt Lake County. 67 FR 21609 (May 1, 2002).
However, EPA has more recently issued guidance on interpollutant trading provisions for fine particulate matter (PM
Our Revised 2011 Trading Policy provides a general framework for such efforts, involving the following steps:
1. Definition of the appropriate geographical area.
2. Sensitivity runs with appropriate air quality models.
3. Calculation of interpollutant ratios.
4. Quality assurance of the results.
To support Utah's rule R307-311, the UDAQ applied the above methodology to the Utah County 24-hour PM
The UDAQ states in the TSD that exceedances of the PM
The TSD for Rule R307-311 identifies that parts of Utah County (the valley regions, western area of the County) are also designated as nonattainment for the 2006 24-hour PM
The emission inventories that were developed by UDAQ for the Utah County PM
Having made these adjustments to the CMAQ model, UDAQ ran the model to generate a time-series plot (refer to Appendix A of the TSD). The UDAQ determined that the ratio of NO
With regard to ambient 24-hour PM
Section 110(1) of the CAA states that a SIP revision cannot be approved if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress towards attainment of a NAAQS or any other applicable requirement of the CAA. EPA's evaluation above shows that this SIP revision will not interfere with attainment of the PM
In addition to being a designated nonattainment area for PM
As discussed above, part of Utah County (the western portion) was designated by EPA as nonattainment for the 2006 24-hour PM
However, Rule R307-311 provides for reductions in PM
As derived from the state's information and as presented in Table 1 above, for every ton of PM
Based on this 1:0.409 ratio and the equivalence ratio of 13.09:1 for NO
The EPA notes that additional supporting information was provided in the PM
As noted previously, the Provo-Orem area is a CO attainment/maintenance area (70 FR 66264, November 2, 2005). EPA notes that NO
For purposes of completeness, the state provided recent CO ambient air quality monitoring data in the Rule R307-311 TSD. These data have been excerpted by EPA and are provided in the table below:
As can be seen in Table 2 above, the Provo area continues to demonstrate compliance with both the CO Annual and CO 8-hour NAAQS.
The EPA notes that NO
To assess the potential impacts to Utah County's continued attainment of the 2008 8-hour ozone NAAQS, EPA considered ozone ambient air quality monitoring data for Utah County and predicted future-year NO
The state provided recent ozone air quality monitoring data in the Rule R307-311 TSD. EPA has excerpted that information from the TSD and presents those data in Table 3 below:
As can be seen in Table 3 above, Utah County continues to demonstrate compliance with 2008 8-hour ozone NAAQS.
The provisions of Rule R307-311 would allow for an increase in the Utah County PM
Our April 28, 2014 final rule included new Tier 3 emission standards to reduce exhaust and evaporative emissions from light-duty vehicles, light-duty trucks, and heavy-duty vehicles up to 14,000 pounds Gross Vehicle Weight Rating. In addition, the final rule specified corresponding changes to in-use fuel requirements. The motor vehicle tailpipe standards include different phase-in schedules that vary by vehicle class, but generally phase-in between model years 2017 to 2021 for light duty vehicles and up to 2025 for heavy duty vehicles. The vehicle emission standards combined with the reduction of gasoline sulfur content, which allows both current and new vehicle emission control systems to function at a higher pollutant removal efficiently, will significantly reduce motor vehicle emissions of NO
The EPA notes that NO
To assess the potential impacts to Utah County's continued attainment of the 2010 1-hour NO
As can be seen in Table 4 above, Utah County continues to demonstrate compliance with 2010 1-hour NO
On the basis of the above EPA analyses, we have concluded that using a portion of the Utah County PM
Section 110(l) of the CAA states that a SIP revision cannot be approved if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress towards attainment of a NAAQS or any other applicable requirement of the CAA. In view of the state's rule language for its new Rule R307-311, our analyses presented above in section “V. EPA's Evaluation of the Technical Support Document for R307-311” with respect to PM
The EPA is publishing this rule without prior proposal because the Agency views the Governor of Utah's March 9, 2015 submitted SIP revisions for Utah's Rule R307-311 and the Rule's associated TSD as a noncontroversial amendment and anticipates no adverse
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Utah SIP materials and rules described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents generally available electronically through
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard.
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission; to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, and Volatile organic compounds.
42 U.S.C. 7401
40 CFR part 52 is amended to read as follows:
42 U.S.C. 7401
(c) * * *
(79) Revisions to the Utah State Implementation Plan involving Utah Rule R307-311;
(
(A) Utah Rules R307,
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes an exemption from the requirement of a tolerance for residues of
This regulation is effective May 18, 2015. Objections and requests for hearings must be received on or before July 17, 2015, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2012-0963, is available at
Robert McNally, Biopesticides and Pollution Prevention Division (7511P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2012-0963 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 17, 2015. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2012-0963, by one of the following methods:
•
•
•
In the
Subsequently, the petitioner provided additional data (
Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance or tolerance exemption, and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” Additionally, FFDCA section 408(b)(2)(D) requires that EPA consider “available information concerning the cumulative effects of [a particular pesticide's] . . . residues and other substances that have a common mechanism of toxicity.”
EPA evaluated the available toxicity and exposure data on
An analytical method is not required for enforcement purposes for the reasons contained in the April 20, 2015, document entitled “Federal Food, Drug, and Cosmetic Act (FFDCA) Considerations for
This action establishes a tolerance exemption under FFDCA section 408(d) in response to a petition submitted to EPA. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance exemption in this action, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes. As a result, this action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, EPA has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, EPA has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require EPA's consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
An exemption from the requirement of a tolerance is established for residues of
Federal Communications Commission.
Final rule; announcement of effective date.
In this document, the Federal Communications Commission (Commission) announces that the Office of Management and Budget (OMB) has approved, for a period of three years, certain information collection requirements associated with the Commission's
47 CFR 1.40001(c)(3)(i), 1.140001(c)(3)(iii), and 1.140001(c)(4), published at 80 FR 1238, January 8, 2015, are effective on May 18, 2015.
Cathy Williams by email at
This document announces that, on May 5, 2015, OMB approved certain information collection requirements contained in the Commission's
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received OMB approval on May 5, 2015, for the new information collection requirements contained in the Commission's rules at 47 CFR 1.40001(c)(3)(i), 1.140001(c)(3)(iii), and 1.140001(c)(4). Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-1208.
The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.
The total annual reporting burdens and costs for the respondents are as follows:
The following are the information collection requirements in connection with subpart CC of part 1 of the Commission's rules:
• 47 CFR 1.40001(c)(3)(i)—To toll the 60-day review timeframe on grounds that an application is incomplete, the reviewing State or local government must provide written notice to the applicant within 30 days of receipt of the application, clearly and specifically delineating all missing documents or information. Such delineated information is limited to documents or information meeting the standard under paragraph (c)(1) of Section 1.40001.
• 47 CFR 1.40001(c)(3)(iii)—Following a supplemental submission from the applicant, the State or local government will have 10 days to notify the applicant in writing if the supplemental submission did not provide the information identified in the State or local government's original
• 47 CFR 1.40001(c)(4)—If a request is deemed granted because of a failure to timely approve or deny the request, the deemed grant does not become effective until the applicant notifies the applicable reviewing authority in writing after the review period has expired (accounting for any tolling) that the application has been deemed granted.
These collections are necessary to effectuate the rule changes that implement and enforce the requirements of Section 6409(a).
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is establishing a temporary safety zone in Lake Union for the Seattle Seafair 4th of July fireworks display. The safety zone is necessary to help ensure the safety of the maritime public during the display and will do so by prohibiting all persons and vessels from entering the safety zone unless authorized by the Captain of the Port or his designated representative.
Comments and related material must be received by the Coast Guard on or before June 17, 2015.
You may submit comments identified by docket number using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this rule, call or email Petty Officer Kenneth Hoppe, Waterways Management Division, Sector Puget Sound, U.S. Coast Guard; telephone (206) 217-6051, email
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online at
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one, using one of the methods specified under
Coast Guard Captains of the Port are granted authority to establish safety and security zones in 33 CFR 1.05-1(f) for safety and environmental purposes as described in 33 CFR part 165.
The Seattle Seafair 4th of July fireworks display will take place this year in Lake Union. Fireworks displays create hazardous conditions for the maritime public because of the large number of vessels that congregate near the displays as well as the noise, falling debris, and explosions that occur during the event. A safety zone is necessary in order to prevent vessels from congregating in the proximity of the firework discharge site to ensure maritime public safety.
Due to the hazards associated with the fireworks display, the Coast Guard is proposing to establish a temporary safety zone in Lake Union, WA in a 300 yard radius around the point 47°38′24.85″ N, 122°20′3.81″ W. The safety zone would be effective from 5:00 p.m. on July 4 until 1:00 a.m. on July 5, 2015.
All persons and vessels would be prohibited from entering the safety zone during the dates and times they are effective unless authorized by the Captain of the Port or his Designated Representative.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes or executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. This rule is not a significant regulatory action because it creates a safety zone that is minimal in size and short in duration.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit through the established safety zone during the times of enforcement. This rule will not have a significant economic impact on a substantial number of small entities because the temporary safety zone is minimal in size and short in duration, maritime traffic will be able to transit around it and may be permitted to transit through with the permission from the Captain of the Port or a Designated Representative.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this proposed rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a temporary safety zone around a fireworks display in Lake Union. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. A preliminary environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is establishing a temporary safety zone in Friday Harbor for the San Juan Island Independence Day Celebration fireworks display. The safety zone is necessary to help ensure the safety of the maritime public during the display and will do so by prohibiting all persons and vessels from entering the safety zone unless authorized by the Captain of the Port or his designated representative.
Comments and related material must be received by the Coast Guard on or before June 17, 2015.
You may submit comments identified by docket number using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this rule, call or email Petty Officer Kenneth Hoppe, Waterways Management Division, Sector Puget Sound, U.S. Coast Guard; telephone (206) 217-6051, email
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online at
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one, using one of the methods specified under
Coast Guard Captains of the Port are granted authority to establish safety and security zones in 33 CFR 1.05-1(f) for safety and environmental purposes as described in 33 CFR part 165.
The San Juan Island Independence Day Celebration fireworks display will be held on July 4, 2015. Fireworks displays create hazardous conditions for the maritime public because of the large number of vessels that congregate near the displays as well as the noise, falling debris, and explosions that occur during the event. A safety zone is necessary in order to prevent vessels from congregating in the proximity of the firework discharge site to ensure maritime public safety.
In order to mitigate the hazards associated with the fireworks display, the Coast Guard is proposing to establish a temporary safety zone in Friday Harbor, WA in a 200 yard radius around the point 48°32.471′ N, 123°0.714′ W. This safety zone would be in effect from 5:00 p.m. on July 4 until 1:00 a.m. on July 5, 2015.
All persons and vessels would be prohibited from entering the safety zone during the dates and times they are effective unless authorized by the Captain of the Port or his Designated Representative.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes or executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. This rule is not a significant regulatory action because it creates a safety zone that is minimal in size and short in duration.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit through the established safety zone during the times of enforcement. This rule will not have a significant economic impact on a substantial number of small entities because the temporary safety zone is minimal in size and short in duration, maritime traffic will be able to transit around it and may be permitted to transit through with the permission from the Captain of the Port or a Designated Representative.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a temporary safety zone around a fireworks display in Friday Harbor. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. A preliminary environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(1) All waters within a 200 yard radius around the point 48°32.471′ N, 123°0.714′ W.
(2) [Reserved]
(b)
Personnel authorized by the Captain of the Port to grant persons or vessels permission to enter or remain in the safety zone created by this section. See 33 CFR part 165, subpart C, for additional information and requirements.
(c)
(d)
Environmental Protection Agency.
Proposed rule.
The EPA is proposing to approve portions of an August 19, 2011 State Implementation Plan (SIP) submission from the State of Wyoming that are intended to demonstrate that its SIP meets certain interstate transport requirements of the Clean Air Act (Act or CAA) for the 2006 24-hour fine particulate matter (PM
Comments must be received on or before June 17, 2015.
Submit your comments, identified by Docket ID No. EPA-R08-OAR-2012-0351, by one of the following methods:
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Adam Clark, Air Program, U.S. Environmental Protection Agency, Region 8, Mailcode 8P-AR, 1595 Wynkoop, Denver, Colorado 80202-1129, (303) 312-7104,
For the purpose of this document, we are giving meaning to certain words or initials as follows:
(i) The words or initials
(ii) The initials
(iii) The initials
(iv) The words
(v) The initials
(vi) The initials
(vii) The initials
(viii) The initials
(ix) The initials
(x) The initials
(xi) The initial
(xii) The initials
(xiii) The words
1.
2.
• Identify the rulemaking by docket number and other identifying information (subject heading,
• Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
• Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
• Describe any assumptions and provide any technical information and/or data that you used.
• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
• Provide specific examples to illustrate your concerns, and suggest alternatives.
• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
• Make sure to submit your comments by the comment period deadline identified.
On September 21, 2006, EPA promulgated a final rule revising the 1997 24-hour primary and secondary NAAQS for PM
Section 110(a)(1) of the CAA requires each state to submit to EPA, within three years (or such shorter period as the Administrator may prescribe) after the promulgation of a primary or secondary NAAQS or any revision thereof, a SIP that provides for the “implementation, maintenance, and enforcement” of such NAAQS. EPA refers to these specific submittals as “infrastructure” SIPs because they are intended to address basic structural SIP requirements for new or revised NAAQS. For the 2006 24-hour PM
The interstate transport provisions in CAA section 110(a)(2)(D)(i) (also called “good neighbor” provisions) require each state to submit a SIP that prohibits emissions that will have certain adverse air quality effects in other states. CAA section 110(a)(2)(D)(i) identifies four distinct elements related to the impacts of air pollutants transported across state lines. The two elements under 110(a)(2)(D)(i)(I) require SIPs to contain adequate provisions to prohibit any source or other type of emissions activity within the state from emitting air pollutants that will (element 1) contribute significantly to nonattainment in any other state with respect to any such national primary or secondary NAAQS, and (element 2) interfere with maintenance by any other state with respect to the same NAAQS. The two elements under 110(a)(2)(D)(i)(II) require SIPs to contain adequate provisions to prohibit emissions that will interfere with measures required to be included in the applicable implementation plan for any other state under part C (element 3) to prevent significant deterioration of air quality or (element 4) to protect visibility. In this action, EPA is addressing elements one, two and three of CAA section 110(a)(2)(D)(i).
EPA has previously addressed the requirements of CAA section 110(a)(2)(D)(i)(I) in past regulatory actions.
On September 25, 2009, EPA issued a guidance memorandum that provides recommendations to states for making submissions to meet the requirements of CAA section 110(a)(2)(D)(i) for the 2006 PM
With respect to element 2 of CAA section 110(a)(2)(D)(i) to prohibit emissions that would interfere with maintenance of the NAAQS by any other state, the Guidance stated that SIP submissions must address this independent and distinct requirement of the statute and provide technical information appropriate to support the State's conclusions, and suggested consideration of the same technical information that would be appropriate for element 1 of this CAA requirement.
In this action, EPA is proposing to use the conceptual approach to evaluating interstate pollution transport under CAA section 110(a)(2)(D)(i)(I) that EPA explained in the 2006 PM
With respect to the requirements in section 110(a)(2)(D)(i)(II) which address elements 3 (PSD) and 4 (visibility), EPA most recently issued an infrastructure guidance memo on September 13, 2013 that included guidance on these two elements.
On August 19, 2011, the Wyoming Department of Environmental Quality (WDEQ) made a submission certifying that Wyoming's SIP is adequate to implement the 2006 24-hour PM
To meet the requirements of CAA sections 110(a)(2)(D)(i)(I) (elements 1 and 2), WDEQ's submission referenced the State's May 3, 2007 interstate transport SIP. The May 3, 2007 SIP was determined by EPA to meet the interstate transport requirements of CAA section 110(a)(2)(D)(i) for the 1997 ozone and PM
To meet the element 3 (PSD) requirement of CAA section 110(a)(2)(D)(i), Wyoming referenced Wyoming Air Quality Standards and Regulations (WAQSR) Chapter 6, section 2, Permit requirements for construction, modification, and operation, as well as its May 3, 2007 Interstate Transport SIP. In its April 23, 2015 letter to EPA, Wyoming clarified its element 3 submittal by indicating that it will issue permits to sources locating in nonattainment areas pursuant to 40 CFR part 51, appendix S until it has a SIP-approved nonattainment NSR program.
To determine whether the CAA section 110(a)(2)(D)(i)(I) requirement is satisfied, EPA first determines whether a state's emissions contribute significantly to nonattainment or interfere with maintenance in other states. If a state is determined not to have such contribution or interference, then section 110(a)(2)(D)(i)(I) does not require any changes to that state's SIP.
Consistent with the first step of EPA's approach in the 1998 NO
As noted above, Wyoming's August 19, 2011 submission does not include a technical demonstration specific to the 2006 24-hour PM
Our supplemental evaluation considers several factors, including identification of the ambient air monitors in other states that are appropriate “nonattainment receptors” or “maintenance receptors,” consistent with EPA's approach in the CSAPR, and additional technical information to evaluate whether emissions from Wyoming contribute significantly to nonattainment or interfere with maintenance of the 2006 24-hour PM
Our Technical Support Document (TSD) contains a detailed evaluation and is available in the public docket for this rulemaking, which may be accessed online at
EPA evaluated data from existing monitors over three overlapping 3-year periods (
This approach is similar to that used in the modeling done during the development of CSAPR, but differs in that it relies on monitoring data (rather than modeling) for the western states not included in the CSAPR modeling domain.
EPA continues to believe that the more widespread and serious transport problems in the eastern United States are analytically distinct. For the 2006 24-hour PM
EPA reviewed technical information to evaluate the potential for Wyoming emissions to contribute significantly to nonattainment of the 2006 24-hour PM
Because geographic distance is a relevant factor in the assessment of potential pollution transport, EPA first reviewed information related to potential transport of PM
EPA also evaluated potential PM
Based on our evaluation, we propose to conclude that emissions of direct PM
We also reviewed technical information to evaluate the potential for Wyoming emissions to interfere with maintenance of the 2006 24-hour PM
Based on this evaluation, EPA proposes to conclude that emissions of direct PM
With regard to the PSD portion of CAA section 110(a)(2)(D)(i)(II), this requirement may be met by a state's confirmation in an infrastructure SIP submission that new major sources and major modifications in the state are subject to a comprehensive EPA-approved PSD permitting program in the SIP that applies to all regulated new source review (NSR) pollutants and that satisfies the requirements of EPA's PSD implementation rules.
As stated in the 2013 I-SIP Guidance, in-state sources not subject to PSD for any one or more of the pollutants subject to regulation under the CAA because they are in a nonattainment area for a NAAQS related to those particular pollutants may also have the potential to interfere with PSD in an attainment or unclassifiable area of another state. One way a state may satisfy element 3 with respect to these sources is by citing an air agency's EPA-approved nonattainment NSR provisions addressing any pollutants for which the state has designated nonattainment areas. Alternatively, if an air agency makes a submission indicating that it issues permits pursuant to 40 CFR part 51, appendix S in a nonattainment area because a nonattainment NSR program for a particular NAAQS pollutant has not yet been approved by EPA for that area, that permitting program may generally be considered adequate for purposes of meeting the requirements of element 3 with respect to sources and pollutants subject to such program. Where neither of the circumstances described above exist, it may also be possible for EPA to find, given the facts of the situation, that other SIP provisions and/or physical conditions are adequate to prohibit interference by such sources with other air agencies' measures to prevent significant deterioration of air quality.
EPA recently finalized a rulemaking which disapproved a portion of Wyoming's May 10, 2011 SIP revision that attempted to add nonattainment NSR permitting requirements to the state plan for the first time (80 FR 9194, February 20, 2015). In this partial disapproval, EPA found that this SIP revision failed to create unambiguous and enforceable obligations for sources that would be subject to the nonattainment NSR requirements. Accordingly, the State does not currently have any SIP-approved nonattainment NSR permitting provisions which would subject sources locating in nonattainment areas in the State to regulation. The State has confirmed, via a clarification letter sent to EPA on April 23, 2015, that it will issue permits to sources locating in such nonattainment areas pursuant to 40 CFR part 51, appendix S until it has a SIP-approved nonattainment NSR program.
Because the State has committed to applying appendix S until it has a SIP-approved nonattainment NSR program, EPA is proposing to approve the infrastructure SIP submission with regard to the requirements of element 3 of section 110(a)(2)(D)(i) for the 2006 24-hour PM
EPA is proposing to approve the 110(a)(2)(D)(i)(I) portion of Wyoming's August 19, 2011 submission. We propose to approve elements 1 and 2 of this portion of the submission based on EPA's supplemental evaluation of relevant technical information, which supports a finding that emissions from Wyoming do not significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM
EPA is also proposing to approve element 3 of 110(a)(2)(D)(i) from Wyoming's August 19, 2011 submission, based on a finding that the Wyoming SIP is adequate to meet the PSD requirement of CAA section 110(a)(2)(D)(i)(II).
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations (42 U.S.C. 7410(k), 40 CFR 52.02(a)). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves state law as meeting federal requirements; this proposed action does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and,
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.
42 U.S.C. 7401
Environmental Protection Agency.
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of Utah. On March 9, 2015, the Governor of Utah submitted a revision to the Utah SIP, adding a new rule regarding trading of motor vehicle emission budgets for Utah County. The rule allows trading from the motor vehicle emissions budget for primary particulate matter of 10 microns or less in diameter (PM
Written comments must be received on or before June 17, 2015.
Submit your comments, identified by Docket ID No. EPA-R08-OAR-2015-0227, by one of the following methods:
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Please see the direct final rule which is located in the Rules Section of this
Tim Russ, Air Program, EPA, Region 8, Mailcode 8P-AR, 1595 Wynkoop Street, Denver, Colorado 80202-1129, (303) 312-6479,
In the “Rules and Regulations” section of this
If EPA receives no adverse comments, EPA will not take further action on this proposed rule. If EPA receives adverse comments, EPA will withdraw the direct final rule and it will not take effect. EPA will address all public comments in a subsequent final rule based on this proposed rule.
EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. For further information, please see the
Please note that if EPA receives adverse comment on a distinct provision of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. See the information provided in the Direct Final action of the same title which is located in the Rules and Regulations Section of this
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Notice of final action denying petition for reconsideration.
This action provides notice that on May 11, 2015, the U.S. Environmental Protection Agency (EPA) Administrator, Gina McCarthy, signed a letter denying a petition for reconsideration of the final New Source Performance Standards (NSPS) for Nitric Acid Plants published in the
Effective May 18, 2015.
Mr. Nathan Topham, Sector Policies and Programs Division (D243-02), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-0483; fax number: (919) 541-3207; email address:
This
Any petitions for review of the letter and enclosure denying the petition for reconsideration described in this document must be filed in the United States Court of Appeals for the District of Columbia Circuit by July 17, 2015.
The initial Nitric Acid Plants NSPS were promulgated on December 23, 1971 (36 FR 24881) and codified at 40 CFR part 60, subpart G pursuant to section 111 of the Clean Air Act (CAA). Pursuant to section 111(b)(1)(B) of the CAA, we reviewed the NSPS three times over the past few decades. Based on the results of the third review, which we completed in August 2012, we determined it was appropriate to revise the NSPS. The revised NSPS were published in the
Throughout the rulemaking process, we received comments, data and information that supported these revisions. This information is available in the docket for this action. The revisions were proposed on October 14, 2011 (76 FR 63878). We received additional data and comments during the comment period. These data and comments were considered and analyzed and, where appropriate, revisions to the NSPS were made and incorporated into the final rule published on August 14, 2012.
On October 10, 2012, Dyno Nobel Inc. (DNI) submitted a petition for reconsideration of the final rule for nitric acid plants. Under section 307(d)(7)(B) of the CAA, a petitioner seeking reconsideration must show that the objection or objections raised in its reconsideration petition “is of central relevance to the outcome of the rule.” In the EPA's view, an objection is of central relevance to the outcome of the rule only if it provides substantial support for the argument that the promulgated regulation should be revised.
After carefully considering the petition and supporting information, the EPA Administrator, Gina McCarthy, denied the petition for reconsideration on May 11, 2015, in a letter to the petitioner. The EPA denied the petition because the information and analysis submitted by DNI is not of central relevance to the outcome of the rule, in that it does not demonstrate that the rule should be reconsidered. A summary of the petition issues and the EPA's responses are provided below. The letter from Administrator McCarthy and the accompanying enclosure, which are available in the docket for this action, explain in greater detail the issues presented in the petition, the EPA's responses to those issues, and the EPA's reasons for the denial.
The main issues raised by DNI in their petition for reconsideration are the following: They believe the EPA should have established a subcategory and a different emissions limit for modified or reconstructed nitric acid plants that use non-selective catalytic reduction (NSCR); and they argue the EPA did not meet the legal requirement of having representative emission data to establish a new emission limit.
Regarding the petitioner's argument that the EPA should establish a subcategory for modified or reconstructed plants that use NSCR, we have several reasons why we disagree with this request.
First, the EPA believes it is inappropriate to establish subcategories based on differences in control technologies, so it is inappropriate to establish a subcategory for plants using NSCR.
Second, regarding the petitioner's argument that the EPA did not meet the legal requirement of having representative emission data to set an emission limit, we believe the agency had ample test data to support selective catalytic reduction as the best system of emission reduction and to establish a revised emission limit.
Third, although some units with NSCR may not be able to meet the limit without improving their controls, based on available data we believe it is feasible for some units with NSCR to comply with this NSPS without the need for any additional controls as some existing units with NSCR are already achieving the NSPS emission limit.
Finally, we believe other units with NSCR that are modified or reconstructed, could comply with the NSPS limit by improving their controls at reasonable costs.
Therefore, based on our review and evaluation of all issues raised by the petitioner and relevant available data and information, we have concluded that reconsideration is not warranted.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability of fishery management plan amendment; request for comments.
NMFS announces that the Mid-Atlantic and New England Fishery Management Councils have submitted an Omnibus Amendment to the Fishery Management Plans of the Northeastern United States to simplify vessel baselines. This amendment incorporates a draft Environmental Assessment and preliminary Regulatory Impact Review, for review and approval by the Secretary of Commerce, and NMFS is requesting comments from the public. The Omnibus Amendment to Simplify Vessel Baselines would eliminate the one-time limit on vessel upgrades and remove gross and net tonnages from vessel baseline specifications considered when determining a vessel's baseline for replacement purposes. Implementing these measures would reduce the administrative burden to permit holders and NMFS, and would have little effect on fleet capacity. This action would also remove the requirement for vessels to send in negative fishing reports (
Comments must be received on or before July 17, 2015.
You may submit comments, identified by NOAA-NMFS-2011-0213, by any one of the following methods.
1. Go to
2. Click the “Comment Now!” icon, complete the required fields
3. Enter or attach your comments.
Copies of the Omnibus Amendment to Simplify Vessel Baselines, and of the draft Environmental Assessment and preliminary Regulatory Impact Review (EA/RIR), are available from the Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA 01930 The EA/RIR is also accessible via the Internet at:
Travis Ford, Fishery Policy Analyst, 978-281-9233.
The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires that each Regional Fishery Management Council submit any Fishery Management Plan (FMP) amendment it prepares to NMFS for review and approval, disapproval, or partial approval. The Magnuson-Stevens Act also requires that NMFS, upon receiving an FMP amendment, immediately publish notification in the
The MAFMC developed the first limited entry program in 1977 for the surfclam/quahog fishery, which included restrictions on replacement vessels. This program required that a replacement vessel be of “substantially similar capacity” in an effort to maintain and not increase the harvest capacity of the fleet at that time. Over the following two decades, the MAFMC and NEFMC implemented additional limited entry programs. By 1998, there were four different sets of vessel upgrade and replacement restrictions among the various FMPs. The upgrade restrictions became confusing for fishing industry members with more than one limited access permit, because each permit had the potential to have different vessel upgrade regulations apply. In addition, some vessels added limited access permits to their vessel that originally qualified on another vessel that was a different size and/or horsepower. This results in a vessel having multiple baselines. Thus, in 1999, the MAFMC and NEFMC, in consultation with NMFS, developed an amendment to Achieve Regulatory Consistency on Permit Related Provisions for Vessels Issued Limited Access Federal Fishery Permits (64 FR 8263, February 19, 1999) (Consistency Amendment) to streamline and make consistent baseline provisions and upgrade restrictions across FMPs.
The Consistency Amendment standardized definitions and restrictions for vessel baselines, upgrades, and replacements across all limited access fisheries. It simplified regulations for vessel replacements, permit transfers, and vessel upgrades, making them consistent and less restrictive in order to facilitate business transactions. Although the Consistency Amendment did standardize the vessel baseline requirements for the fisheries of the northeast, some burdensome requirements remain. Under current restrictions, a vessel baseline is defined by vessel length overall, gross tonnage, net tonnage, and horsepower. We determine the baseline for a limited access permit based on the size (length, gross tonnage, and net tonnage) and horsepower of the first vessel issued a limited access permit for that fishery or, for fisheries that adopted baseline restrictions through the Consistency Amendment, the permitted vessel at the time the final rule became effective.
Current baseline regulations require that a replacement vessel or an upgrade made to an existing vessel with a
The Baseline Amendment would:
1. Eliminate gross and net tonnage from the baseline specifications considered when determining a vessel's baseline for replacement purposes. Both the Councils and NMFS consider tonnages the most variable of vessel baseline specifications and, therefore, they have little effect on limiting vessel capacity when compared to length and horsepower restrictions. There is more than one acceptable method of determining tonnages, and the tonnages of a vessel can vary significantly depending on whether an exact measurement or simplified calculation is used. In addition, vessel owners can circumvent net tonnage limits by modifying internal bulkheads. Eliminating tonnages would simplify the vessel baseline verification and replacement process. In addition, it could reduce the cost burden on the industry if they only need horsepower verification because this would eliminate the need for a marine survey prior to any permit transactions.
2. Remove the one-time limit on vessel upgrades. Eliminating the one-time upgrade limit would provide more flexibility for vessel owners in the selection of replacement vessels and upgrades to existing vessels. Some vessel owners have been constrained by the one-time limit because they or a previous owner did not maximize the one-time upgrade with a previous vessel replacement, due to cost or availability or for other reasons, and have since been unable to further upgrade the vessel. Eliminating the one-time limit would also simplify the baseline verification and vessel replacement process for vessel owners and NMFS by eliminating the need to research and document whether a vessel owner used the one-time upgrade during the vessel's entire limited access history.
This rule proposes to remove the requirement for vessels to send in negative fishing reports (
We are soliciting public comments on the Baseline Amendment and its incorporated documents through the end of the comment period stated in this notice of availability. A proposed rule that would implement the revised Baseline Amendment will be published in the
16 U.S.C. 1801
Agricultural Marketing Service, USDA.
Notice of extension of nomination period.
The Agricultural Marketing Service (AMS) published a notice soliciting nominations from qualified individuals to serve on the National Organic Standards Board (NOSB) in the
The nomination period for the notice published on April 9, 2015 (AMS-NOP-15-0005; NOP-15-04) is extended. Written nominations must be post-marked on or before June 17, 2015. Electronic submissions must be received on or before June 17, 2015.
Nominations should be sent to Rita Meade, USDA-AMS-NOP, 1400 Independence Avenue SW., Room 2648-So., Ag Stop 0268, Washington, DC 20250-0268 or via email to
Michelle Arsenault, (202) 720-0081, Email:
Food Safety and Inspection Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 and Office of Management and Budget (OMB) regulations, the Food Safety and Inspection Service (FSIS) is announcing its intention to extend the approved information collection regarding requirements for official establishments to notify FSIS of adulterated or misbranded product, prepare and maintain written recall procedures, and document certain HACCP plan reassessments. The approval for this information collection will expire on August 31, 2015. FSIS is making no changes to the approved collection. The public may comment on either the entire information collection or on one of its three parts.
Submit comments on or before July 17, 2015.
FSIS invites interested persons to submit comments on this information collection. Comments may be submitted by one of the following methods:
• Federal eRulemaking Portal: This Web site provides the ability to type short comments directly into the comment field on this Web page or attach a file for lengthier comments. Go to
• Mail, including CD-ROMs, etc.: Send to Docket Clerk, U.S. Department of Agriculture, Food Safety and Inspection Service, Docket Clerk, Patriots Plaza 3, 1400 Independence Avenue SW., Mailstop 3782, Room 8-163A, Washington, DC 20250-3700.
• Hand- or courier-delivered submittals: Deliver to Patriots Plaza 3, 355 E Street SW., Room 8-163A, Washington, DC 20250-3700.
Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW., Room 6067, South Building, Washington, DC 20250; (202) 690-6510.
The regulations at 9 CFR 417.4(a)(3) require establishments to notify FSIS of adulterated or misbranded product, prepare and maintain written recall procedures, and document certain HACCP plan reassessments.
FSIS is requesting an extension of the approved information collection addressing paperwork and recordkeeping requirements for these three activities. FSIS has made the following estimates based upon an information collection assessment.
Copies of this information collection assessment can be obtained from Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 1400 Independence SW., Room 6077, South Building, Washington, DC 20250, (202)690-6510.
Comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of FSIS's functions, including whether the information will have practical utility; (b) the accuracy of FSIS's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques, or other forms of information technology. Comments may be sent to both FSIS, at the addresses provided above, and the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20253.
Responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations,
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at
Send your completed complaint form or letter to USDA by mail, fax, or email:
U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW., Washington, DC 20250-9410.
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
Food Safety and Inspection Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 and Office of Management and Budget (OMB) regulations, the Food Safety and Inspection Service (FSIS) is announcing its intention to collect certificates of medical examination to determine whether or not an applicant for an FSIS Food Inspector, Consumer Safety Inspector, or Veterinary Medical Officer in-plant position meets the Office of Personnel Management (OPM) approved medical qualification standards.
Submit comments on or before July 17, 2015.
FSIS invites interested persons to submit comments on this information collection. Comments may be submitted by one of the following methods:
•
•
•
Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW., Room 6067, South Building, Washington, DC 20250; (202)690-6510.
Annually, the occupants of in plant positions in FSIS inspect more than 8 billion birds and more than 130 million head of livestock. Veterinary Medical Officers, Food Inspectors, and Consumer Safety Inspectors check animals before and after slaughter, preventing diseased animals from entering the food supply, and examining carcasses for visible defects that can affect safety and quality. Consumer Safety Inspectors work in processed product inspection, assuring products are processed under sanitary conditions, are not adulterated, and are truthfully labeled. Inspection activities of Veterinary Medical Officers, Food Inspectors, and Consumer Safety Inspectors are carried out in over 6,000 privately owned establishments nationwide.
The duties performed by in-plant inspection personnel can be arduous, requiring standing and walking 8-9 hours daily, often on slippery and hazardous surfaces. Work is typically performed in high humidity and, depending on weather conditions, warm or cold temperatures. The work involves frequent contact with animal tissues, animal body fluids, chemical sanitation rinses and water.
FSIS plans to request a new information collection to collect certificates of medical examination to determine whether or not an applicant for a Food Inspector, Consumer Safety Inspector, or Veterinary Medical Officer in-plant position meets the Office of Personnel Management (OPM)-approved medical qualification standards for the position. These new forms ensure accurate collection of the required data. The OPM-approved medical qualification standards apply only to positions in FSIS, not positions in other Federal agencies.
When requesting that applicants for the positions listed above undergo the medical examination, a representative of FSIS will notify the applicants in writing of the reasons for the examination, the process, and the consequences of the failure to report for an examination or provide medical documentation. Any physical condition which would hinder an individual's full, efficient, and safe performance of his or her duties will be considered disqualifying for employment, except when convincing evidence is presented that the individuals can perform the essential functions of the job efficiently and without hazard to themselves or others.
In accordance with the Rehabilitation Act of 1973, and the Americans with Disabilities Act Amendments Act of 2008, FSIS will make reasonable accommodations for the known physical or mental limitations of qualified individuals with disabilities unless the accommodation would impose an undue hardship on the operation of FSIS.
FSIS has made the following estimates on the basis of an information collection assessment.
Copies of this information collection assessment can be obtained from Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 1400 Independence SW., Room 6077, South Building, Washington, DC 20250, (202)690-6510.
Comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of FSIS's functions, including whether the information will have practical utility; (b) the accuracy of FSIS's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques, or other forms of information technology. Comments may be sent to both FSIS, at the addresses provided above, and the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20253.
Responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations,
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at
Send your completed complaint form or letter to USDA by mail, fax, or email:
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
Forest Service, USDA.
Notice of meeting.
The South Central Idaho Resource Advisory Committee (RAC) will meet in Jerome, Idaho. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act. Additional RAC information, including the meeting agenda and the meeting summary/minutes can be found at the following Web site:
The meeting will be held on June 24, 2015, from 9:00 a.m. to 3:00 p.m.
All RAC meetings are subject to cancellation. For status of meeting prior to attendance, please contact the person listed under
The meeting will be held at the Idaho Department of Fish and Game, 324 South 417 East, Jerome, Idaho.
Written comments may be submitted as described under
Julie Thomas, Designated Federal Officer, by phone at 208-737-3262 or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of the meeting is:
1. Oral presentations from individuals or groups proposing projects for funding,
2. A question and answer perdiod for proponents; and
3. Reports from other projects presented at the end of the day.
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by May 29, 2015 to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Julie Thomas, Designated Federal Officer, 2647 Kimberly Road East, Twin Falls, Idaho, 83301; by email to
Forest Service, USDA.
Notice of initiating the assessment phase of the Gila National Forest land management plan revision.
The Gila National Forest, located in southwestern New Mexico, is initiating the forest planning process pursuant to the 2012 Forest Planning Rule. This process results in a Forest Land Management Plan which describes the strategic direction for management of forest resources for the next fifteen years on the Gila National Forest. The first phase of the process, the assessment phase, is beginning and interested parties are invited to contribute in the development of the assessment (36 CFR 219.6). The trends and conditions identified in the assessment will help in identifying the current plan's need for change, and aid in the development of plan components. The Forest hosted a series of community conversations with key stakeholders in March 2015. Additional public participation opportunities are forthcoming in the near future to discuss the assessment process—information on these opportunities and all future public participation opportunities will be made available on
A draft of the assessment report for the Gila National Forest is expected to be completed by late spring 2016 and will be posted on the following Web site at
The Gila National Forest is currently inviting the public to engage in a collaborative process to identify relevant information and local knowledge to be considered for the assessment. Once the assessment is completed, the Forest will initiate procedures pursuant to the 2012 Planning Rule and the National Environmental Policy Act (NEPA) to prepare a forest plan revision.
Written comments or questions concerning this notice should be addressed to Gila National Forest, Attn.: Matt Schultz, 3005 E. Camino del Bosque, Silver City, NM 88061.
Matt Schultz, Forest Planner, 575-388-8280. Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 5 a.m. and 5 p.m., Pacific Time, Monday through Friday. More information on the planning process can also be found on the Gila National Forest Web site at
The National Forest Management Act (NFMA) of 1976 requires that every National Forest System (NFS) unit develop a land management plan. On April 9, 2012, the Forest Service finalized its land management planning rule (2012 Planning Rule), which provides broad programmatic direction to National Forests and National Grasslands for developing and implementing their land management plans. Forest plans describe the strategic direction for management of forest resources for fifteen years, and are adaptive and amendable as conditions change over time.
Under the 2012 Planning Rule, the assessment of ecological, social, cultural, and economic trends and conditions is the first stage of the planning process. The second stage is a plan development and decision process guided, in part, by the National Environment Policy Act (NEPA) and includes the preparation of a draft environmental impact statement and revised Forest Plan for public review and comment, and the preparation of the final environmental impact statement and revised Forest Plan, subject to the objection process 36 CFR 219 Subpart B prior to final plan approval. The third stage of the process is monitoring and feedback, which is ongoing over the life of the revised forest plans.
With this notice, the agency invites other governments, non-governmental parties, and the public to contribute to the development of the assessment report. The assessment will rapidly evaluate existing information about relevant ecological, economic, cultural and social conditions, trends, and sustainability within the context of the broader landscape. It will help inform the planning process through the use of Best Available Scientific Information, while also taking into account other forms of knowledge, such as local information, national perspectives, and native knowledge. Lastly, the assessment provides information that will help to identify the need to change the existing 1986 plan. Public engagement as part of the assessment phase supports the development of relationships of key stakeholders throughout the plan revision process, and is an essential step to understanding current conditions, available data, and feedback needed to support a strategic, efficient planning process.
As public meetings, public review and comment periods and other opportunities for public engagement are identified to assist with the development of the forest plan revision, public announcements will be made. Notifications will be posted on the Forest's Web site at
The responsible official for the revision of the land management plan for the Gila National Forest is David Warnack, acting Forest Supervisor, Gila National Forest, 3005 E. Camino del Bosque, Silver City, NM 88061.
Forest Service, USDA.
Notice of plan approval for the Shoshone National Forest.
Regional Forester Daniel J. Jiron signed the final Record of Decision (ROD) for the Shoshone National Forest revised Land Management Plan (Plan) on May 6, 2015. The Final ROD documents the Regional Forester's decision and rationale for approving the revised plan.
The effective date of the plan is 30 calendar days after this notice. To view the final ROD, revised Plan, FEIS errata, and other related documents please visit the Shoshone National Forest Web site at
Further information about the Shoshone planning process can be obtained from Olga Troxel during normal office hours (weekdays 8:00 a.m. to 4:30 p.m. Mountain Time) at the Shoshone National Forest Supervisor's Office (Address: Shoshone National Forest, 808 Meadow Lane, Cody, WY 82414); Phone/voicemail: (307) 527-6241.
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The revised plan describes desired conditions, objectives, standards, guidelines, and identifies lands suitable for various uses. The plan will guide project and activity decision making and all resource management activities on the Forest for the next 15 years. The plan is part of the long-range resource planning framework established by the Forest and Rangeland Renewable Resources Planning Act.
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. chapter 35).
The justification that follows is in support of the demographic data.
The demographic information collected in the CPS provides a unique set of data on selected characteristics for the civilian non-institutional population. Some of the demographic information we collect are age, marital status, gender, Armed Forces status, education, race, origin, and family income. We use these data in conjunction with other data, particularly the monthly labor force data, as well as periodic supplement data. We also use these data independently for internal analytic research and for evaluation of other surveys. In addition, we use these data as a control to produce accurate estimates of other personal characteristics.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to reorganize FTZ 175 under the ASF is approved with a service area comprised of Benton, Buchanan, Cedar, Clinton, Delaware, Johnson, Jones, Linn, Louisa, Muscatine and Scott Counties, subject to the FTZ Act and the Board's regulations, including Section 400.13, and to the Board's standard 2,000-acre activation limit for the zone.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) and the International Trade Commission (the ITC) have determined that revocation of the antidumping duty (AD) order on certain oil country tubular goods (OCTG) from the People's Republic of China (PRC) would likely lead to continuation or recurrence of dumping and material injury to an industry in the United States. The Department and the ITC have also determined that revocation of
David Cordell (AD Order), AD/CVD Operations, Office VI, or Shane Subler (CVD Order), AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0408 or (202) 482-0189, respectively.
On December 1, 2014, the Department initiated
On May 12, 2015, the ITC published its determination that revocation of the AD and CVD orders on OCTG from the PRC would likely lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time, pursuant to section 751(c) of the Act.
The scope of this order consists of certain OCTG, which are hollow steel products of circular cross-section, including oil well casing and tubing, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, regardless of end finish (
The merchandise covered by the order is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7304.29.10.10, 7304.29.10.20, 7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 7304.29.41.60, 7304.29.41.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.61.15, 7304.29.61.30, 7304.29.61.45, 7304.29.61.60, 7304.29.61.75, 7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.29.10.30, 7306.29.10.90, 7306.29.20.00, 7306.29.31.00, 7306.29.41.00, 7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and 7306.29.81.50.
The OCTG coupling stock covered by the order may also enter under the following HTSUS item numbers: 7304.39.00.24, 7304.39.00.28, 7304.39.00.32, 7304.39.00.36, 7304.39.00.40, 7304.39.00.44, 7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 7304.39.00.62, 7304.39.00.68, 7304.39.00.72, 7304.39.00.76, 7304.39.00.80, 7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 7304.59.80.25, 7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 7304.59.80.45, 7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 7304.59.80.65, 7304.59.80.70, and 7304.59.80.80.
Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive.
As a result of the determinations by the Department and the ITC that revocation of the AD order would likely lead to a continuation or recurrence of dumping and material injury to an industry in the United States and revocation of the CVD order would likely lead to continuation or recurrence of countervailable subsidies and material injury to an industry in the United States, pursuant to section 75l(d)(2) of the Act and 19 CFR 351.218(a), the Department hereby orders the continuation of the AD and CVD orders on OCTG from the PRC. U.S. Customs and Border Protection will continue to collect AD and CVD cash deposits at the rates in effect at the time of entry for all imports of subject merchandise.
The effective date of the continuation of the AD and CVD orders will be the date of publication in the
These five-year sunset reviews and this notice are in accordance with section 751(c) of the Act and published pursuant to section 777(i)(1) of the Act and 19 CFR 351.218(f)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 42 assessment webinars for Gulf of Mexico Red Grouper.
The SEDAR 42 assessment of Gulf of Mexico Red Grouper will consist of a series of webinars. This notice is for a webinar associated with the Assessment portion of the SEDAR process. See
The final assessment webinar for SEDAR 42 will be held on Thursday, June 4, 2015, from 1 p.m. to 3 p.m. eastern time.
The meeting will be held via webinar. The webinar is open to the public. Those interested in participating should contact Julie A. Neer at SEDAR (see
Julie A. Neer, SEDAR Coordinator; phone: (843) 571-4366; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions, have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a multi-step process including: (1) Data Workshop; and (2) a series of assessment webinars; and (3) Review Workshop. The product of the Data Workshop is a report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Webinar Process is a report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses; and describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, Highly Migratory Species Management Division, and Southeast Fisheries Science Center. Participants include: Data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and non-governmental organizations (NGOs); international experts; and staff of Councils, Commissions, and state and federal agencies.
The items of discussion in the Assessment Process webinars are as follows:
1. Using datasets and initial assessment analysis recommended from the Data Workshop, panelists will employ assessment models to evaluate stock status, estimate population benchmarks and management criteria, and project future conditions.
2. Panelists will recommend the most appropriate methods and configurations for determining stock status and estimating population parameters.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
Note: The times and sequence specified in this agenda are subject to change.
16 U.S.C. 1801
National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice of funding availability.
The purpose of this notice is to announce the policies and application procedures for the FY 2015 Regional Coastal Resilience Grants Program. Awards made under this program will support eligible entities as they develop or implement activities that build resilience of coastal regions, communities, and economic sectors to the negative impacts from extreme weather events, climate hazards, and changing ocean conditions.
Funds will be available to support activities that: (1) Identify and address priority data, information, and capacity gaps; (2) develop tools, as needed, to inform sound, science-based decisions, which support regional efforts to plan for a resilient ocean and coastal economy; (3) acquire and integrate socioeconomic information with physical and biological information to improve the assessment of risk and vulnerability for planning and decision making; (4) understand how hazards and changing ocean conditions affect coastal economies, including existing and emerging sectors that depend on the ocean and coasts; (5) develop the information and approaches needed for improved risk communication, and the necessary tools, technical assistance and training tailored toward enhanced resilience to weather events, climate hazards, and changing ocean conditions; (6) evaluate the costs, benefits, and tradeoffs of systems-based development or redevelopment approaches that incorporate both natural defenses and hard structural solutions; or (7) support the development of sustainable recovery, redevelopment, and adaptation plans and implement programs and projects that incentivize rebuilding and development approaches which reduce risk and increase resilience.
See the full FY 2015 Regional Coastal Resilience Grants Federal Funding Opportunity (FFO), located on Grants.gov, as described in the
Applications must be postmarked, provided to a delivery service, or received by
Application packages for proposals are available through the apply function on Grants.gov by searching for Funding Opportunity Number NOAA-NOS-OCM-2015-2004324. If an applicant does not have Internet access, application packages shall be requested from Lisa Warr, 1305 East-West Hwy, N/OCM6, Silver Spring, MD 20910; or contact her at 301-563-1153 or via email to
For administrative or technical questions regarding this announcement, contact Lisa Warr, Office for Coastal Management, 1305 East-West Hwy, N/OCM6, Silver Spring, MD 20910; or contact her at 301-563-1153 or via email to
Coastal Zone Management Act (16 U.S.C. 1456c), Section 310 (“Technical Assistance”).
As noted above, the purpose of this notice is to announce the policies and application procedures for the FY 2015 Regional Coastal Resilience Grants Program. Awards made under this program will support eligible entities as they develop or implement activities that build resilience of coastal regions, communities, and economic sectors to the negative impacts from extreme weather events, climate hazards, and changing ocean conditions. Successful applicants will develop proposals that plan or implement actions that mitigate the impacts of these environmental drivers on overall resilience, including economic and environmental resilience.
Proposals submitted in response to this announcement shall employ a regional approach that results in improved ability of multiple coastal jurisdictions to prepare for, absorb impacts of, recover from, and/or adapt to adverse events and changing environmental, economic, and social conditions. Proposals should demonstrate coordinated effort of multiple jurisdictions (
Projects/proposals are expected to:
• Result in increased resilience of coastal communities through regional activities that reduce current and potential future risk associated with extreme weather events, climate hazards, and changing ocean conditions; increase capacity to recover from adverse events; and/or increase capacity to effectively adapt to adverse events;
• employ a regional approach that engages appropriate stakeholders and demonstrates collaboration and leveraging of resources;
• result in increased access to and/or understanding of information for decision makers regarding current and future environmental, economic, and social conditions and/or increased capacity to incorporate this type of information into decision/rule making across the project area.
Priority will be given to projects that:
• Focus on resilience strategies that address land and ocean use, development, resource management, resource protection, hazard mitigation, pre-disaster recovery, or other similar plans. This includes the creation of new tools, training, workshops, or other resources that build capacity of decision makers or practitioners;
• leverage available resources (such as programs, plans, partnerships, tools and trainings across government, industry, and NGOs) and/or leverage Federal funding with direct or in-kind match from non-Federal sources;
• evaluate project results using clear measure(s) of success and monitor longer-term effectiveness of employed strategies where appropriate. The collection of additional data or information for monitoring effectiveness is eligible; however, only for the duration of the award's period of performance. If data collection is proposed, applicants are encouraged to plan for longer-term data management needs in coordination with NOAA.
The funding instrument for awards may be a grant or cooperative agreement. In the case of a cooperative agreement, NOAA will have substantial involvement in the project. If NOAA is proposed as a partner in a cooperative agreement, the applicant must clearly identify this funding instrument in the proposal summary and cover sheet and clearly articulate the roles and responsibilities of NOAA and each partner in implementing the project.
Section IV.B. of the FFO describes the complete standard NOAA financial assistance application package and suggested information to include in the proposal.
This competition is one of two competitions being administered by NOAA to build coastal resilience. The companion competition, Coastal Ecosystem Resilience Grants, is being administered by NOAA's National Marine Fisheries Service (NMFS) to improve the resiliency of ocean and coastal ecosystems. The FFO for this program can also be found on
Total anticipated funding for all awards is up to $5,000,000 for FY 2015. NOAA anticipates funding approximately 5-10 awards. The maximum amount that may be requested for the Federal share of each proposal is $1,000,000 and the minimum that may be requested is $500,000. The amount of funding per project will depend on the size, location, and type of project. There is no limit on the number of proposals from any geographic area or jurisdiction. The exact amount of funds for each award will be determined in pre-award negotiations between the applicant and NOAA representatives. Applicants must be in good standing with all existing NOAA grants in order to receive funds. Proposals not funded in the current fiscal period may be considered for funding in another fiscal period without NOAA repeating the competitive process outlined in this announcement.
Eligible funding applicants are: Regional organizations (see Section III.C of the FFO for explanation), nonprofit
Federal funds awarded under this program must be matched with non-Federal funds (through cash or in-kind services) at a 2:1 ratio of Federal to non-Federal contributions.
The general evaluation criteria and selection factors that apply to full applications to this funding opportunity are summarized below. Further information about the evaluation criteria and selection factors can be found in the full FFO announcement in
Reviewers will assign scores to applications ranging from 0 to 100 points based on the following five standard NOAA evaluation criteria and respective weights specified below. Applications that best address these criteria will be the most competitive.
1. Importance and/or relevance and applicability of proposed project to the program goals (35 points): This ascertains whether there is intrinsic value in the proposed work and/or relevance to NOAA, federal, regional, state, tribal, or local activities. Projects/proposals will be evaluated according to the degree to which they:
• Support activities that are likely to reduce current and potential future risk to regions, communities, and existing and emerging sectors associated with extreme weather events, climate hazards, and changing ocean conditions; increase capacity to recover from adverse events; or increase capacity to effectively adapt to adverse events (10 points);
• employ a regional approach that engages a range of stakeholders and demonstrates collaboration and leveraging of resources, as evidenced by letters of collaboration from partners and community members (10 points);
• improve access to and/or understanding of information for decision makers regarding current and future environmental, economic, and social conditions and improve capacity to incorporate this information into planning and decision/rule making across the project area (10 points);
• support other NOAA and Administration priorities (5 points).
2. Technical and scientific merit (20 points): This criterion assesses whether the approach is technically sound and/or innovative, if the methods are appropriate, and whether there are clear project goals and objectives. For this competition, projects/proposals will be evaluated according to the degree to which:
• The approach is fully described and the stated goals and objectives are technically sound, safe for the public, and use the appropriate methods and personnel, including any methods to evaluate results and monitor effectiveness, and methods outlined in the Data Sharing Plan (7 points);
• the project supports strategies called for or developed by regional, federal, state, tribal or local entities including but not limited to land and ocean use, development, resource management, resource protection/restoration, hazard mitigation, pre-disaster recovery, or other similar plans (8 points); and
• the project leverages available resources, such as programs, plans, partnerships, tools and trainings within NOAA and across government, industry, and NGOs (5 points).
3. Overall qualifications of the funding applicants (20 points): This criterion ascertains whether the funding applicant possesses the necessary education, experience, training, facilities, and administrative resources to accomplish the project. For this competition, projects/proposals will be evaluated according to the degree to which:
• An applicant demonstrates the capacity (
• the project involves the appropriate partners to execute the project, as well as the key personnel from other agencies and institutions partnering on the project with the experience, expertise and/or networks needed to capitalize on available expertise (8 points).
4. Project costs (15 points). This criterion evaluates the budget to determine if it is realistic and commensurate with the project needs and time-frame. For this competition, projects/proposals will be evaluated according to the degree to which:
• The budget request is reasonable, the applicant justifies the costs requested, and the requested funds for salaries and fringe benefits are for those personnel directly involved in implementing the proposed project and/or are directly related to specific products or outcomes of the proposed project (6 points);
• the project optimizes the cost effectiveness of the project to leverage Federal resources through strategic partnerships with collaborating institutions, agencies, or other entities (5 points); and,
• indirect costs are based on the indirect cost rate negotiated and approved by the applicant's cognizant agency for indirect costs and that other administrative costs have been minimized to the extent possible (4 points).
5. Outreach and Education (10 points): This criterion assesses whether the project provides a focused and effective education and/or outreach strategy regarding the NOAA's mission to understand and protect the Nation's natural resources. For this competition, this strategy should describe approaches for communicating with various audiences and employ best practices for risk communication. Projects/proposals will be evaluated according to the degree to which:
• Engagement: The proposal demonstrates that the public and project stakeholders will be engaged in development of the desired project outcomes (8 points); and
• Outreach: The proposal demonstrates that information generated by the project will reach its target audience and have a positive impact in the project area(s), including improved risk communication. (2 points).
Screening, review, and selection procedures will take place in three steps: (1) An initial screening by competition program staff within NOAA's Office for Coastal Management; (2) a merit review; and (3) final selection by the Selecting Official (
Applications under the FFO are subject to Executive Order 12372, “Intergovernmental Review of Programs.” For states that participate in this process, it is the state agency's responsibility to contact their state's Single Point of Contact (SPOC) to find out about and comply with the state's process under Executive Order 12372. To assist the applicant, the names and addresses of the SPOCs are listed on the Office of Management and Budget's Web site
In no event will NOAA or the Department of Commerce be responsible for proposal preparation costs if these programs fail to receive funding or are cancelled because of other agency priorities. Publication of this announcement does not oblige NOAA to award any specific project or to obligate any available funds.
NOAA must analyze the potential environmental impacts, as required by the National Environmental Policy Act (NEPA), for applicant projects or proposals which are seeking NOAA federal funding opportunities. Consequently, as part of an applicant's package, and under their description of their program activities, applicants are required to provide detailed information on the activities to be conducted, locations, sites, species and habitat to be affected, possible construction activities, and any environmental concerns that may exist (
The Department of Commerce Pre-Award Notification Requirements for Grants and Cooperative Agreements contained in the
The FFO contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA). The use of Standard Forms 424, 424A, 424B, and SF-LLL and CD-346 has been approved by the Office of Management and Budget (OMB) under the respective control numbers 0348-0043, 0348-0044, 0348-0040, 0348-0046, and 0605-0001. Notwithstanding any other provision of law, no person is required to, nor shall a person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA unless that collection of information displays a currently valid OMB control number.
This notice has been determined to be not significant for purposes of Executive Order 12866.
It has been determined that this notice does not contain policies with federalism implications as that term is defined in Executive Order 13132.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of an incidental harassment authorization.
In accordance with the Marine Mammal Protection Act (MMPA) regulations, we, NMFS, hereby give notification that the National Marine Fisheries Service has issued an Incidental Harassment Authorization (IHA) to Glacier Bay National Park (Glacier Bay NP), to take marine mammals, by Level B harassment, incidental to conducting seabird monitoring and research activities in Alaska, May through September, 2015.
Effective May 15, 2015, through September 30, 2015.
The public may obtain an electronic copy of Glacier Bay NP's application, supporting documentation, the authorization, and a list of the references cited in this document by visiting:
The Environmental Assessment and associated Finding of No Significant Impact, prepared pursuant to the National Environmental Policy Act of 1969, are also available at the same site.
Jeannine Cody, NMFS, Office of Protected Resources, NMFS (301) 427-8401.
Section 101(a)(5)(D) of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
An Authorization shall be granted for the incidental taking of small numbers of marine mammals if NMFS finds that the taking will have a negligible impact on the species or stock(s), and will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant). The Authorization must also set forth the permissible methods of taking; other means of effecting the least practicable adverse impact on the species or stock and its habitat; and requirements pertaining to the mitigation, monitoring and reporting of such taking. NMFS has defined “negligible impact” in 50 CFR 216.103 as “an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.”
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].
On January 15, 2015, NMFS received an application from Glacier Bay NP requesting that we issue an Authorization for the take of marine mammals, incidental to conducting monitoring and research studies on glaucus-winged gulls (
NMFS previously issued an Authorization to Glacier Bay NP for the same activities in 2014 (79 FR 56065, September 18, 2014). No seabird research activities occurred during the effective period of the 2014 Authorization.
Glacier Bay NP proposes to conduct ground-based and vessel-based surveys to collect data on the number and distribution of nesting gulls within five study sites in Glacier Bay, AK. Glacier Bay NP proposes to complete up to five visits per study site, from May through September 2015.
The activities are within the vicinity of pinniped haulout sites and the following aspects of the proposed activities are likely to result in the take of marine mammals: Noise generated by motorboat approaches and departures; noise generated by researchers while conducting ground surveys; and human presence during the monitoring and research activities. NMFS anticipates that take by Level B harassment only, of individuals of harbor seals (
Glacier Bay NP proposes to identify the onset of gull nesting; conduct mid-season surveys of adult gulls, and locate and document gull nest sites within the following study areas: Boulder, Lone, and Flapjack Islands, and Geikie Rock. Each of these study sites contains harbor seal haulout sites and Glacier Bay NP proposes to visit each study site up to five times during the research season.
Glacier Bay NP must conduct the gull monitoring studies to meet the requirements of a 2010 Record of Decision for a Legislative Environmental Impact Statement (NPS, 2010) which states that Glacier Bay NP must initiate a monitoring program for the gulls to inform future native egg harvests by the Hoonah Tlingit in Glacier Bay, AK. Glacier Bay NP actively monitors harbor seals at breeding and molting sites to assess population trends over time (
The Authorization would be effective from May 15, 2015 through September 30, 2015. Following is a brief summary of the activities.
Glacier Bay NP proposes to conduct a maximum of three ground-based surveys per each study site and a maximum of two vessel-based surveys per each study site. NMFS refers the reader to the notice of proposed Authorization (80 FR 18359, April 6, 2015) for detailed information on the scope of the proposed activities.
The proposed study sites would occur in the vicinity of the following locations: Boulder (58°33′18.08″ N; 136°1′13.36″ W), Lone (58°43′17.67″ N; 136°17′41.32″ W), and Flapjack (58°35′10.19″ N; 135°58′50.78″ W) Islands, and Geikie Rock (58°41′39.75″ N; 136°18′39.06″ W) in Glacier Bay, Alaska. Glacier Bay NP will also conduct studies at Tlingit Point Islet located at 58°45′16.86″ N; 136°10′41.74″ W; however, there are no reported pinniped haulout sites at that location.
Glacier Bay NP proposes to conduct: (1) Ground-based surveys at a maximum frequency of three visits per site; and (2) vessel-based surveys at a maximum frequency of two visits per site from the period of May 15 through September 30, 2015.
The observers would access each island using a kayak, a 32.8 to 39.4-foot (ft) (10 to 12 meter (m)) motorboat, or a 12 ft (4 m) inflatable rowing dinghy. The landing craft's transit speed would not exceed 4 knots (4.6 miles per hour (mph). Ground surveys generally last from 30 minutes to up to two hours depending on the size of the island and the number of nesting gulls. Glacier Bay NP will discontinue ground surveys after they detect the first hatchling to minimize disturbance to the gull colonies.
We published a notice of receipt of Glacier Bay NP's application and proposed Authorization in the
We also received comments from one private citizen who opposed the authorization on the basis that NMFS should not allow any Authorizations for harassment. We considered the commenter's general opposition to Glacier Bay NP's activities and to our issuance of an Authorization. The Authorization, described in detail in the
Regarding the commenter's opposition to authorizing harassment, the MMPA allows U.S. citizens (which includes Glacier Bay NP) to request take of marine mammals incidental to specified activities, and requires us to authorize such taking if we can make the necessary findings required by law and if we set forth the appropriate prescriptions. As explained throughout the
The marine mammals most likely to be harassed incidental to conducting seabird monitoring and research are Pacific harbor seals. We do not anticipate harassment of Steller sea lions due to the researchers avoiding any site with Steller sea lions present.
NMFS refers the public to the Glacier Bay NP's application and the 2014 NMFS Marine Mammal Stock Assessment Report available online at:
Northern sea otters (
Acoustic and visual stimuli generated by: (1) Noise generated by kayak, motorboat, or dinghy approaches and departures; (2) human presence during seabird monitoring and research activities, have the potential to cause Pacific harbor seals hauled out on Boulder, Lone, and Flapjack Islands, and Geikie Rock to flush into the surrounding water or to cause a short-term behavioral disturbance for marine mammals.
We expect that acoustic and visual stimuli resulting from the proposed activities has the potential to harass marine mammals. We also expect that these disturbances would be temporary and result, at worst, in a temporary modification in behavior and/or low-level physiological effects (Level B harassment) of harbor seals.
We included a summary and discussion of the ways that the types of stressors associated with Glacier Bay NP's specified activities (
We considered these impacts in detail in the notice for the proposed authorization (80 FR 18359, April 6, 2015). Briefly, we do not anticipate that the proposed research would result in any temporary or permanent effects on the habitats used by the marine mammals in the proposed area, including the food sources they use (
In order to issue an incidental take authorization under section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable adverse impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses (where relevant). Applications for incidental take authorizations must include the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting the activity or other means of effecting the least practicable adverse impact on the affected species or stock and their habitat 50 CFR 216.104(a)(11).
The Glacier Bay NP has reviewed the following source documents and has incorporated a suite of proposed mitigation measures into their project description.
(1) Recommended best practices in Womble
To reduce the potential for disturbance from acoustic and visual stimuli associated with the activities Glacier Bay NP and/or its designees has proposed to implement the following mitigation measures for marine mammals:
• Perform pre-survey monitoring before deciding to access a study site;
• Avoid accessing a site based on a pre-determined threshold number of animals present; sites used by pinnipeds for pupping; or sites used by Steller sea lions;
• Perform controlled and slow ingress to the study site to prevent a stampede and select a pathway of approach to minimize the number of marine mammals harassed;
• Monitor for offshore predators at study sites. Avoid approaching the study site if killer whales (
• Maintain a quiet research atmosphere in the visual presence of pinnipeds.
NMFS has carefully evaluated Glacier Bay NP's proposed mitigation measures in the context of ensuring that we prescribe the means of effecting the least practicable impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another:
• The manner in which, and the degree to which, the successful implementation of the measure is expected to minimize adverse impacts to marine mammals;
• The proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and
• The practicability of the measure for applicant implementation.
Any mitigation measure(s) prescribed by NMFS should be able to accomplish, have a reasonable likelihood of accomplishing (based on current science), or contribute to the accomplishment of one or more of the general goals listed here:
1. Avoidance or minimization of injury or death of marine mammals wherever possible (goals 2, 3, and 4 may contribute to this goal).
2. A reduction in the numbers of marine mammals (total number or number at biologically important time or location) exposed to motorboat operations or visual presence that we expect to result in the take of marine mammals (this goal may contribute to 1, above, or to reducing harassment takes only).
3. A reduction in the number of times (total number or number at biologically important time or location) individuals exposed to motorboat operations or visual presence that we expect to result in the take of marine mammals (this goal may contribute to 1, above, or to reducing harassment takes only).
4. A reduction in the intensity of exposures (either total number or number at biologically important time or location) to motorboat operations or visual presence that we expect to result in the take of marine mammals (this goal may contribute to a, above, or to reducing the severity of harassment takes only).
5. Avoidance or minimization of adverse effects to marine mammal habitat, paying special attention to the food base, activities that block or limit passage to or from biologically important areas, permanent destruction of habitat, or temporary destruction/disturbance of habitat during a biologically important time.
6. For monitoring directly related to mitigation—an increase in the probability of detecting marine mammals, thus allowing for more effective implementation of the mitigation.
Based on the evaluation of Glacier Bay NP's proposed measures, NMFS has determined that the proposed mitigation measures provide the means of effecting the least practicable impact on marine mammal species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an ITA for an activity, section 101(a)(5)(D) of the MMPA states that NMFS must set forth “requirements pertaining to the monitoring and reporting of such taking.” The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for Authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that we expect to be present in the proposed action area. Glacier Bay NP submitted a marine mammal monitoring plan in section 13 of their Authorization application. NMFS or the Glacier Bay NP has not modified or supplemented the plan based on comments or new information received from the public during the public comment period.
Monitoring measures prescribed by NMFS should accomplish one or more of the following general goals:
1. An increase in our understanding of the likely occurrence of marine mammal species in the vicinity of the action, (
2. An increase in our understanding of the nature, scope, or context of the likely exposure of marine mammal species to any of the potential stressor(s) associated with the action (
3. An increase in our understanding of how individual marine mammals respond (behaviorally or physiologically) to the specific stressors associated with the action (in specific contexts, where possible,
4. An increase in our understanding of how anticipated individual responses, to individual stressors or anticipated combinations of stressors, may impact either: The long-term fitness and survival of an individual; or the population, species, or stock (
5. An increase in our understanding of how the activity affects marine mammal habitat, such as through effects on prey sources or acoustic habitat (
6. An increase in understanding of the impacts of the activity on marine mammals in combination with the impacts of other anthropogenic activities or natural factors occurring in the region.
7. An increase in our understanding of the effectiveness of mitigation and monitoring measures.
8. An increase in the probability of detecting marine mammals (through improved technology or methodology), both specifically within the safety zone (thus allowing for more effective implementation of the mitigation) and in general, to better achieve the above goals.
As part of its Authorization application, Glacier Bay NP proposes to sponsor marine mammal monitoring during the project, in order to implement the mitigation measures that require real-time monitoring, and to satisfy the monitoring requirements of the MMPA.
The Glacier Bay NP researchers will monitor the area for pinnipeds during all research activities. Monitoring activities will consist of conducting and recording observations on pinnipeds within the vicinity of the proposed research areas. The monitoring notes would provide dates and location of the researcher's activities and the number and type of species present. The researchers would document the behavioral state of animals present, and any apparent disturbance reactions or lack thereof.
Glacier Bay NP can add to the knowledge of pinnipeds in the proposed action area by noting observations of: (1) Unusual behaviors, numbers, or distributions of pinnipeds, such that any potential follow-up research can be conducted by the appropriate personnel; (2) tag-bearing carcasses of pinnipeds, allowing transmittal of the information to appropriate agencies and personnel; and (3) rare or unusual species of marine mammals for agency follow-up.
If at any time injury, serious injury, or mortality of the species for which take is authorized should occur, or if take of any kind of any other marine mammal occurs, and such action may be a result of the proposed land survey, Glacier Bay NP would suspend research and monitoring activities and contact NMFS immediately to determine how best to proceed to ensure that another injury or death does not occur and to ensure that the applicant remains in compliance with the MMPA.
Glacier Bay NP actively monitors harbor seals at breeding and molting haul out locations to assess trends over time. This monitoring program involves collaborations with biologists from the Alaska Department of Fish and Game, and the National Marine Mammal Laboratory. Glacier Bay NP will continue these collaborations and encourage continued or renewed monitoring of marine mammal species. Additionally, they would report vessel-based counts of marine mammals, branded, or injured animals, and all observed disturbances to the appropriate state and federal agencies.
Glacier Bay NP will submit a draft monitoring report to us no later than 90 days after the expiration of the Incidental Harassment Authorization, if we issue it. The report will describe the operations conducted and sightings of marine mammals near the proposed project. The report will provide full documentation of methods, results, and interpretation pertaining to all monitoring. The report will provide:
1. A summary and table of the dates, times, and weather during all research activities.
2. Species, number, location, and behavior of any marine mammals observed throughout all monitoring activities. Report the numbers of disturbances, by species and age, according to a three-point scale of intensity including: (1) Head orientation in response to disturbance, which may include turning head towards the disturbance, craning head and neck while holding the body rigid in a u-shaped position, or changing from a lying to a sitting position and/or slight movement of less than 1 meter; “alert”; (2) Movements in response to or away from disturbance, typically over short distances (1-3 meters) and including dramatic changes in direction or speed of locomotion for animals already in motion; “movement”; and (3) All flushes to the water as well as lengthier retreats (>3 meters); “flight”.
3. An estimate of the number (by species) of marine mammals exposed to acoustic or visual stimuli associated with the research activities.
4. A description of the implementation and effectiveness of the
In the unanticipated event that the specified activity clearly causes the take of a marine mammal in a manner prohibited by the authorization, such as an injury (Level A harassment), serious injury, or mortality (
• Time, date, and location (latitude/longitude) of the incident;
• Description and location of the incident (including water depth, if applicable);
• Environmental conditions (
• Description of all marine mammal observations in the 24 hours preceding the incident;
• Species identification or description of the animal(s) involved;
• Fate of the animal(s); and
• Photographs or video footage of the animal(s) (if equipment is available).
Glacier Bay NP shall not resume its activities until NMFS is able to review the circumstances of the prohibited take. We will work with Glacier Bay to determine what is necessary to minimize the likelihood of further prohibited take and ensure MMPA compliance. Glacier Bay NP may not resume their activities until notified by us via letter, email, or telephone.
In the event that Glacier Bay NP discovers an injured or dead marine mammal, and the lead researcher determines that the cause of the injury or death is unknown and the death is relatively recent (
In the event that Glacier Bay NP discovers an injured or dead marine mammal, and the lead visual observer determines that the injury or death is not associated with or related to the authorized activities (
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].
All anticipated takes would be by Level B harassment, involving temporary changes in behavior. NMFS expects that the proposed mitigation and monitoring measures would minimize the possibility of injurious or lethal takes. NMFS considers the potential for take by injury, serious injury, or mortality as remote. NMFS expects that the presence of Glacier Bay NP personnel could disturb animals hauled out and that the animals may alter their behavior or attempt to move away from the researchers.
As discussed earlier, NMFS considers an animal to have been harassed if it moved greater than 1 m (3.3 ft) in response to the surveyors' presence or if the animal was already moving and changed direction and/or speed, or if the animal flushed into the water. NMFS does not consider animals that became alert without such movements as harassed.
Based on pinniped survey counts conducted by Glacier Bay NP (
Harbor seals tend to haul out in small numbers (on average, less than 50 animals) at most sites with the exception of Flapjack Island (Womble, Pers. Comm.). Animals on Flapjack Boulder Islands generally haul out on the south side of the Islands and are not located near the research sites located on the northern side of the Islands. Aerial survey maximum counts show that harbor seals sometimes haul out in large numbers at all four locations (see Table 2 in Glacier Bays NP's application), and sometimes individuals and mother/pup pairs occupy different terrestrial locations than the main haulout (J. Womble, personal observation).
Considering the conservation status for the Western stock of the Steller sea lion, the Glacier Bay NP researchers would not conduct ground-based or vessel-based surveys if they observe Steller sea lions before accessing Boulder, Lone, and Flapjack Islands, and Geikie Rock. Thus, NMFS expects no takes to occur for this species during the proposed activities.
NMFS does not propose to authorize any injury, serious injury, or mortality. NMFS expect all potential takes to fall under the category of Level B harassment only.
Negligible impact' is “an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival” (50 CFR 216.103). The lack of likely adverse effects on annual rates of recruitment or survival (
Although Glacier Bay NP's survey activities may disturb harbor seals hauled out at the survey sites, NMFS expects those impacts to occur to a small, localized group of animals for a limited duration (
For reasons stated previously in this document and based on the following factors, Glacier Bay NP's specified activities are not likely to cause long-term behavioral disturbance, injury, serious injury, or death. These reasons include:
1. The effects of the research activities would be limited to short-term responses and temporary behavioral changes due to the short and sporadic duration of the research activities. Minor and brief responses are not likely to constitute disruption of behavioral patterns, such as migration, nursing, breeding, feeding, or sheltering.
2. The availability of alternate areas for pinnipeds to avoid the resultant disturbances from the research operations. Anecdotal reports from previous Glacier Bay NP activities have shown that the pinnipeds returned to the various sites and did not permanently abandon haul-out sites after Glacier Bay NP conducted their research activities.
3. There is no potential for large-scale movements leading to injury, serious injury, or mortality because the researchers would delay ingress into the landing areas only after the pinnipeds have slowly entered the water.
4. Glacier Bay NP will limit access to Boulder, Lone, and Flapjack Islands, and Geikie Rock when there are high numbers (more than 25) harbor seals hauled out (with or without young pups present), any time pups are present, or any time that Steller sea lions are present, the researchers will not approach the island and will not conduct gull monitoring research.
NMFS does not anticipate that any injuries, serious injuries, or mortalities would occur as a result of Glacier Bay NP's proposed activities with the mitigation and related monitoring, and NMFS does not propose to authorize injury, serious injury, or mortality at this time. In addition, the research activities would not take place in areas of significance for marine mammal feeding, resting, breeding, or calving and would not adversely impact marine mammal habitat.
Due to the nature, degree, and context of Level B (behavioral) harassment anticipated and described (see “Potential Effects on Marine Mammals” section in this notice), we do not expect the activity to impact annual rates of recruitment or survival for any affected species or stock.
In summary, NMFS anticipates that impacts to hauled-out harbor seals during Glacier Bay NP's research activities would be behavioral harassment of limited duration (
As mentioned previously, NMFS estimates that Glacier Bay NP's activities could potentially affect, by Level B harassment only, one species of marine mammal under our jurisdiction. For harbor seals, this estimate is small (9.9 percent) relative to the population size and we have provided the percentage of the harbor seal's regional population estimate that the activities may take by Level B harassment in this notice.
Based on the analysis contained in this notice of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the mitigation and monitoring measures, NMFS finds that Glacier Bay NP's proposed activities would take small numbers of marine mammals relative to the populations of the affected species or stocks.
There are no relevant subsistence uses of marine mammals implicated by this action. Glacier Bay National Park prohibits subsistence harvest of harbor seals within the Park (Catton, 1995).
NMFS does not expect that Glacier Bay NP's proposed research activities (which includes mitigation measures to avoid harassment of Steller sea lions) would affect any species listed under the ESA. Therefore, NMFS has determined that a section 7 consultation under the ESA is not required.
In 2014, NMFS prepared an Environmental Assessment (EA) analyzing the potential effects to the human environment from NMFS' issuance of a Authorization to Glacier Bay NP for their seabird research activities.
In September 2014, NMFS issued a Finding of No Significant Impact (FONSI) on the issuance of an Authorization for Glacier Bay NP's research activities in accordance with section 6.01 of the NOAA Administrative Order 216-6 (Environmental Review Procedures for Implementing the National Environmental Policy Act, May 20, 1999). Glacier Bay NP's proposed activities and impacts for 2015 are within the scope of the 2014 EA and FONSI. NMFS provided relevant environmental information to the public through a previous notice for the proposed Authorization (80 FR 18359, April 6, 2015) and considered public comments received in response prior to finalizing the 2014 EA and deciding whether or not to issue a Finding of No Significant Impact (FONSI).
NMFS has reviewed the 2014 EA and determined that there are no new direct, indirect, or cumulative impacts to the human and natural environment associated with the Authorization requiring evaluation in a supplemental EA and NMFS, therefore, reaffirms the 2014 FONSI. NMFS' EA and FONSI for this activity are available upon request (see
As a result of these determinations, we have issued an Incidental Harassment Authorization to Glacier Bay National Park for conducting seabird research May 15, 2015 through September 30, 2015, provided they incorporate the previously mentioned mitigation, monitoring, and reporting requirements.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Mid-Atlantic Fishery Management Council's (Council's) Cooperative Research Committee will hold a public meeting.
The meeting will be held on Tuesday, June 2, 2015, from 9:30 a.m. to 11:30 a.m., via internet webinar.
The meeting will be held via webinar with a telephone-only connection option.
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526-5255. The Council's Web site,
In August 2014, the Council voted to suspend the Research Set-Aside (RSA) program for 2015 in order to address a range of issues, including abuse of the program and inconsistencies in the quality and usefulness of RSA-funded research. During this period of suspension, staff is working with the RSA Committee and Council to identify potential cooperative research approaches that will enable the Council to achieve these goals more effectively.
During this meeting the Cooperative Research Committee will discuss a revised action plan and specific next steps for the ongoing review and restructuring of the Council's involvement in cooperative research. The Committee's recommendations will be reviewed by the full Council at its meeting on June 8-11, in Virginia Beach, VA.
Although non-emergency issues not contained in this agenda may come before this group for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), those issues may not be the subject of formal action during these meetings. Actions will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
Webinar and phone connection information, a detailed agenda, and any briefing materials will be posted at
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M. Jan Saunders, (302) 526-5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that Dr. Isaac Wirgin, New York University School of Medicine, Department of Environmental Medicine, 57 Old Forge Road, Tuxedo, NY 10987, has applied in due form for a permit to take early life stages (ELS) of endangered, captive shortnose sturgeon (
Written, telefaxed, or email comments must be received on or before June 17, 2015.
The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species (APPS) home page,
These documents are also available upon written request or by appointment in the Permits and Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376.
Written comments on this application should be submitted to the Chief, Permits and Conservation Division, at the address listed above. Comments may also be submitted by facsimile to (301) 713-0376, or by email to
Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division at the address listed above. The request should set forth the specific reasons why a hearing on this application would be appropriate.
Malcolm Mohead or Rosa L. González, (301) 427-8401.
The subject permit is requested under the authority of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
In directed research with shortnose sturgeon ELS, researchers propose to define the toxic concentrations of the industrial contaminants polychlorinated biphenyl (PCBs) and Dioxin (2,3,7,8-TCDD). Twenty-thousand fertilized embryos of shortnose sturgeon would be imported annually from a Canadian captive source and exposed (2 to 3-day post-fertilization) to graded doses of the above contaminants. The laboratory tests would be run both singly and in combination with 10 different temperatures or varying levels of dissolved oxygen, representing environmental stresses. Surviving progeny would be euthanized after tests are completed each year. The permit would be valid for five years from issuance date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Groundfish Committee to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Thursday, June 4, 2015 at 9:30 a.m.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The items of discussion on the agenda are:
The Committee plans to discuss, Framework Adjustment 55/Groundfish Specifications, this action would set specifications for all stocks in the Northeast Multispecies (Groundfish) Fishery Management Plan (FMP) for Fishing Year 2016 through Fishing Year 2018. They will also review the At-Sea Monitoring Framework Adjustment. They will review work of the Groundfish Plan Development Team and develop potential modifications to at-sea monitoring requirements in the groundfish sector program. They will provide a brief update on Amendment 18 progress, (fleet diversity and accumulation limits). Additionally, the committee will receive an update on the Monkfish Framework 9/Northeast Multispecies Framework 54. This joint action would modify Northeast Multispecies regulations to allow the declaration of a Northeast Multispecies Day-At-Sea while at sea and the reduction in minimum standup gillnet mesh size in order to target dogfish. They will also discuss other business as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The North Pacific Fishery Management Council (Council) and its advisory committees will hold public meetings, June 1-9, 2015.
The Council will begin its plenary session at 8 a.m. on Wednesday, June 3, continuing through Tuesday, June 9, 2015. The Scientific Statistical Committee (SSC) will begin at 8 a.m. on Monday, June 1 and continue through Wednesday, June 3, 2015. The Council's Advisory Panel (AP) will begin at 8 a.m. on Tuesday, June 2, and continue through Saturday, June 6, 2015. All meetings are open to the public, except executive sessions. The Council's Legislative Committee will meet Tuesday, June 2 at the Westmark Hotel, 330 Seward Street, Founders Room, Sitka, AK 99835, from 1 p.m. to 5 p.m.
All meetings except for the Legislative Committee meeting will be held at the Centennial Hall, 330 Harbor Drive, Sitka, AK.
David Witherell, Council staff; telephone: (907) 271-2809.
The SSC agenda will include the following issues:
In addition to providing ongoing scientific advice for fishery management decisions, the SSC functions as the Councils primary peer review panel for scientific information as described by the Magnuson-Stevens Act section 302(g)(1)(e), and the National Standard 2 guidelines (78 FR 43066). The peer review process is also deemed to satisfy the requirements of the Information
The Agenda is subject to change, and the latest version will be posted at
Although non-emergency issues not contained in this agenda may come before these groups for discussion, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Gail Bendixen at (907) 271-2809 at least 7 working days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings and hearings.
The Western Pacific Fishery Management Council (Council) will hold a meeting of its American Samoa Archipelago Fishery Ecosystem Plan (FEP) Advisory Panel (AP) to discuss and make recommendations on fishery management issues in the Western Pacific Region.
The American Samoa Archipelago FEP AP will meet on June 1, 2015, between 4:30 p.m. and 6:30 p.m. All times listed are local island times. For specific times and agendas, see
The American Samoa Archipelago FEP AP will meet at the Toa Conference Room at the Toa Bar & Grill in Nu'uli, Tutuila, American Samoa.
Kitty M. Simonds, Executive Director; telephone: (808) 522-8220.
Public comment periods will be provided in the agenda. The order in which agenda items are addressed may change. The meetings will run as late as necessary to complete scheduled business.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kitty M. Simonds, (808) 522-8220 (voice) or (808) 522-8226 (fax), at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Joint Ecosystem Based Fishery Management (EBFM) and Herring Committees to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from these groups will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Tuesday, June 2, 2015 at 9 a.m.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The committees plan to review and discuss scientific advice developed by the EBFM Plan Development Team (PDT) on Atlantic herring control rules considering its role in the ecosystem and as a forage species. Related input will also be provided by the Scientific and Statistical Committee (SSC). The Joint Committee may develop recommendations on how to apply this advice for Amendment 8 to the Herring FMP. They will also be reviewing Amendment 8 scoping comments and discuss Amendment 8 goals and objectives; develop further guidance and related recommendations. The committees will also review and discuss results from the Atlantic herring operational assessment, including comments/recommendations from the May 20, 2015 SSC meeting; develop recommendations. Additionally, the Herring Committee will convene a closed session to review Advisory Panel applications and nominate individuals to fill open seats on the Herring Advisory Panel. The committee will discuss other business as necessary.
Although non-emergency issues not contained in this agenda may come before these groups for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration, NOAA, Commerce.
Notice of a public meeting.
The SAFMC will hold a meeting of its Scientific and Statistical Committee (SSC) to review stock projections for blueline tilefish. See
The SSC meeting will be held via webinar on Wednesday, June 3, 2015, from 1 p.m. to 3 p.m.
The meeting will be held via webinar. The webinar is open to members of the public. Those interested in participating should contact John Carmichael at the SAFMC (see
John Carmichael; 4055 Faber Place Drive, Suite 201, North Charleston, SC 29405; phone: (843) 571-4366 or toll free (866) SAFMC-10; fax: (843) 769-4520; email:
This meeting is held to discuss yield and stock status projections for blueline tilefish. This SSC reviewed the SEDAR 32 blueline tilefish stock assessment in October 2013, and considered revised projections in April 2014. The Council has directed the SSC to review the most recent stock projections and consider if they still provide an adequate basis to support the fishery management program.
Items to be addressed during this meeting.
Blueline Tilefish Stock Projections
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The Western Pacific Fishery Management Council (Council) will convene a meeting of the Risk of Overfishing (denoted by P*) Working Group (P* WG) for the Main Hawaiian Island Deep 7 Bottomfish Fishery. The P* WG will finalize the scores for the different P* dimensions and criteria, from the last working group meeting and recommend an appropriate risk of overfishing levels. This will be the basis for the specification of Acceptable Biological Catch (ABC) levels for the Scientific and Statistical Committee (SSC) to consider.
The P* WG meeting will be on June 4, 2015. For specific times and agendas, see
The P* WG meeting will be held at the Council office, 1164 Bishop Street, Suite 1400, Honolulu, HI 96813; telephone: (808) 522-8220.
Kitty M. Simonds, Executive Director; telephone: (808) 522-8220.
Public comment periods will be provided. The order in which agenda items are addressed may change. The meetings will run as late as necessary to complete scheduled business.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kitty M. Simonds, (808) 522-8220 (voice) or (808) 522-8226 (fax), at least 5 days prior to the meeting date.
16 U.S.C. 1801
Commodity Futures Trading Commission; Securities and Exchange Commission.
Final interpretation.
In accordance with section 712(d)(4) of the Dodd-Frank Wall Street
This interpretation is effective on May 18, 2015.
CFTC: Elise Pallais, Counsel, (202) 418-5577,
In
1. The embedded optionality does not undermine the overall nature of the agreement, contract, or transaction as a forward contract;
2. The predominant feature of the agreement, contract, or transaction is actual delivery;
3. The embedded optionality cannot be severed and marketed separately from the overall agreement, contract, or transaction in which it is embedded;
4. The seller of a nonfinancial commodity underlying the agreement, contract, or transaction with embedded volumetric optionality intends, at the time it enters into the agreement, contract, or transaction to deliver the underlying nonfinancial commodity if the optionality is exercised;
5. The buyer of a nonfinancial commodity underlying the agreement, contract or transaction with embedded volumetric optionality intends, at the time it enters into the agreement, contract, or transaction, to take delivery of the underlying nonfinancial commodity if it exercises the embedded volumetric optionality;
6. Both parties are commercial parties; and
7. The exercise or non-exercise of the embedded volumetric optionality is based primarily on physical factors, or regulatory requirements, that are outside the control of the parties and are influencing demand for, or supply of, the nonfinancial commodity.
In response to requests from market participants,
After a careful review of the comments received, the CFTC has determined to finalize its interpretation as proposed with some additional clarifications. Accordingly, an agreement, contract, or transaction falls within the forward exclusion from the swap and future delivery definitions, notwithstanding that it contains embedded volumetric optionality, when:
1. The embedded optionality does not undermine the overall nature of the agreement, contract, or transaction as a forward contract;
2. The predominant feature of the agreement, contract, or transaction is actual delivery;
3. The embedded optionality cannot be severed and marketed separately from the overall agreement, contract, or transaction in which it is embedded;
4. The seller of a nonfinancial commodity underlying the agreement, contract, or transaction with embedded volumetric optionality intends, at the time it enters into the agreement, contract, or transaction to deliver the underlying nonfinancial commodity if the embedded volumetric optionality is exercised;
5. The buyer of a nonfinancial commodity underlying the agreement, contract or transaction with embedded volumetric optionality intends, at the time it enters into the agreement, contract, or transaction, to take delivery of the underlying nonfinancial commodity if the embedded volumetric optionality is exercised;
6. Both parties are commercial parties; and
7. The embedded volumetric optionality is primarily intended, at the time that the parties enter into the agreement, contract, or transaction, to address physical factors or regulatory requirements that reasonably influence demand for, or supply of, the nonfinancial commodity.
As stated in the Proposed Interpretation, the first six elements of this interpretation are largely unchanged from the Products Release.
As a general matter, the CFTC clarifies that its interpretation with respect to forward contracts with embedded volumetric optionality should not be read to alter or expand the historic interpretation of the forward contract exclusion. As the first two elements affirm, the interpretation presupposes the existence of an underlying forward contract, as determined by applying the historic interpretation of the forward contract exclusion.
In response to commenters, the CFTC clarifies that the fourth and fifth elements of the interpretation do not preclude bandwidth (a.k.a. “swing”) contracts, which provide for delivery of a nonfinancial commodity within a certain minimum and maximum range, from falling within the forward contract exclusion from the swap and future delivery definitions.
As stated in the Proposed Interpretation, the seventh element addresses the primary reason for including embedded volumetric optionality in a forward contract.
As indicated in the Proposed Interpretation, the focus of the seventh element is the intent of the party with the right to exercise the embedded volumetric optionality at the time of contract initiation.
The CFTC clarifies that the seventh element's reference to “physical factors” should be construed broadly to include any fact or circumstance that could reasonably influence supply of or demand for the nonfinancial commodity under the contract. Such facts and circumstances could include not only environmental factors, such as weather or location, but relevant “operational considerations” (
The CFTC reiterates, however, that if the embedded volumetric optionality is primarily intended, at contract initiation, to address concerns about price risk (
Additionally, as stated in the Proposed Interpretation, the CFTC understands that in certain retail electric market demand-response programs, electric utilities have the right to interrupt or curtail service to a customer to support system reliability.
Finally, in response to requests from commenters, the CFTC clarifies that commercial parties may choose to either rely on their good faith characterization of an existing contract (
The CFTC believes that these modifications are appropriately measured to clarify the meaning of certain language in the seventh element and should not be construed as a shift in the CFTC's longstanding precedent on the difference between forward contracts and options.
By the Securities and Exchange Commission.
On this matter, Chairman Massad and Commissioners Wetjen, Bowen, and Giancarlo voted in the affirmative. No Commissioner voted in the negative.
I support the staff's recommendations to finalize a proposal we made in November regarding contracts with embedded volumetric optionality—a contractual right to receive more or less of a commodity at the negotiated contract price.
As I said in my statement on the proposal, with reforms as significant as these, it is inevitable that there will be a need for some minor adjustments. And that is what we are doing. The changes we are proposing today help ensure that as we regulate the potential for excessive risks in these markets, we make sure that the commercial businesses—whether they are farmers, ranchers, manufacturers or others—that rely on these markets to hedge routine risks can continue to do so efficiently and effectively.
Specifically, we proposed to clarify when a contract with embedded volumetric optionality will be excluded from being considered a swap. We received a number of comments on this and we have incorporated some of the concerns in the final clarification. Today, following action by the SEC last week, we are posting to the
In certain situations, commercial parties are unable to predict at the time a contract is entered into the exact quantities of the commodity that they may need or be able to supply, and the embedded volumetric optionality offers them the flexibility to vary the quantities delivered accordingly. The CFTC put out an interpretation, consisting of seven factors, to provide clarity as to when such contracts would fall within the forward contract exclusion from the swap definition, but some market participants have felt this interpretation, in particular the seventh factor, was hard to apply. In some cases, the two parties would reach different conclusions about the same contract.
Today we are finalizing clarifications to the interpretation that I believe will alleviate this ambiguity and allow contracts with volumetric optionality that truly are intended to address uncertainty with respect to the parties' future production capacity or delivery needs, and not for speculative purposes or as a means to obtain one-way price protection, to fall within the exclusion.
Today we are approving a final interpretation regarding forward contracts with embedded optionality. This interpretation is improved compared to the proposed interpretation and I am voting in favor of it. However, I am concerned that this interpretation does not provide the clarity that may be required.
Staff has done a remarkable job in considering the comments received and drafting this final interpretation and they deserve ample praise for their hard work. Yet, staff, and this Commission, face statutory restrictions regarding the definitions of forwards and options that place limits on the relief available through interpretations of the forward contract exclusion. There is no interpretation, by this Commission or its staff, which can turn an option into a forward.
Given the interpretive questions about the final rule defining “swap” and the difficulties in classifying forward contracts with embedded optionality, I think it is important to be clear on what this interpretation can and cannot do—I do not want people to make business decisions based upon a mistaken belief that they have received relief when they have not.
The central issue industry faces is that, in the manufacturing, agriculture and energy sectors, a wide variety of physically-delivered instruments are used to secure companies' commercial needs for a physical commodity. These instruments often contain elements of both a forward contract and a commodity option. These contracts, particularly in the energy sector, are all commonly referred to as physical contracts, and they, according to what I have been told, often receive similar treatment from both a business operations and an accounting standpoint within the entities that use them.
Furthermore, my understanding is that these physical contracts are often handled and accounted for separately from other derivatives, such as futures contracts or cash-settled swaps. Treating some portion of these physical contracts as swaps simply because they may contain some characteristics of commodity options can lead to significant costs and difficulties. For instance, companies may have to reconfigure their business systems to parse transactions where there was, before Dodd Frank, no need to undertake such a reconfiguration.
I have studied this issue closely, meeting with industry and the public and reviewing the comments we have received. In the case of these transactions which are used to address physical commodity needs, I have doubts about whether any public interest is served by requiring manufacturing, agricultural and energy companies to undertake such a burden and reconfigure processes to comply with Commission swap regulations.
The limits on relief through this interpretation flow from the statutory lines drawn between options and forward contracts. Under the CEA, options and forwards are discrete, mutually exclusive categories. Options are subject to the Commission's plenary, exclusive jurisdiction. Forward contracts, on the other hand, are almost entirely excluded from the Commission's jurisdiction. If a contract, or some portion of a contract, meets the definition of an “option,” that portion which is an option inherently cannot be a forward contract.
Under the CEA, a critical difference between a physically-delivered option and a forward contract is the nature of the delivery obligation. A forward contract binds both parties to make and take delivery of a commodity at some date in the future. The contract may only be offset through a separate negotiation of the parties. In a physically-settled option contract, only the party offering the option is bound to make or take delivery at the time of contract.
The forward contract exclusion from the swap definition, applies only to a “[A] sale of a nonfinancial commodity or security for deferred shipment or delivery, so long as the transaction is intended to be physically settled.” The key part of this definition is that it only applies to a “sale” of a commodity. A “sale” means that one party has agreed to make and the other to take delivery of that commodity.
The CFTC believes that the forward contract exclusion in the Dodd-Frank Act with respect to nonfinancial commodities should be read consistently with th[e] established, historical understanding that a forward contract is a commercial merchandising transaction.
Many commenters discussed the issue of whether the requirement in the Dodd-Frank Act that a transaction be “intended to be physically settled” in order to qualify for the forward exclusion from the swap definition with respect to nonfinancial commodities reflects a change in the standard for determining whether a transaction is a forward
This interpretation was ratified in the final rule, “
An option, in contrast, is only the option to undertake such a “sale”, not the sale itself. The sale occurs only when the option is exercised. The option to buy or sell a commodity at some later point simply is not the same thing as the sale of that commodity itself. The Commission's Office of the General Counsel memorialized this interpretation in 1985:
[T]he [forward] contract must be a binding agreement on both parties to the contract: One must agree to make delivery and the other to take delivery of the commodity. Second, because forward contracts are commercial, merchandizing transactions which result in delivery, the courts and the Commission have looked for evidence of the transactions' use in commerce. Thus, the courts and the Commission have examined whether the parties to the contracts are commercial entities that have the capacity to make or take delivery and whether delivery, in fact, routinely occurs under such contracts
Thus, an option is a contract in which only the grantor is obligated to perform. As a result, the option purchaser has a limited risk from adverse price movements. This characteristic distinguishes an option from a forward contract in which both parties must routinely perform and face the full risk of loss from adverse price changes since one party must make and the other take delivery of the commodity. In contrast, in an option, only the grantor of a call (put) is required to sell (buy) a given quantity of a commodity (or a futures contract on that commodity) on or by a specified date in the future if the option is exercised. “
The Commission ratified this interpretation in 1990 in its “
The interpretation being promulgated today does not change this, and therein lays my concern regarding this interpretation's limits.
I think much of the confusion regarding the seven-part test has been based upon a failure to recognize the difference between forward and option contracts under the Commodity Exchange Act. The fact that a forward contract element and a commodity option are packaged together does not change the regulatory treatment of the different components. Hybrid or packaged instruments are common throughout the industry. There are hybrid or packaged instruments which may have characteristics of futures contracts and securities, swaps and security-based swaps, futures and forward transactions, and even forward contracts and commodity options. Each portion of the contract might be subject to different regulatory treatment. A security does not become a future, nor does a future become a security simply by virtue of being packaged in the same instrument.
Relevant to the instruments we are discussing today, forward contracts with embedded volumetric optionality, it seems that most of them, as described in the comments, have at least two separate, identifiable contractual obligations, each of which must be considered on their own merits. There is a forward contract element which binds the parties to make and take delivery of a set amount of a commodity. In addition, there is an embedded volumetric optionality element that binds the forward contract offeror to make or take delivery of an additional amount of the commodity if the embedded volumetric optionality is exercised by the forward contract offeree. The latter contractual obligation looks like a classic option.
The difficulty this interpretation faces in providing the relief industry seeks is this: Even though the embedded optionality has the form of an option, can it somehow fit within the forward exclusion? The answer this interpretation gives is, essentially, yes, it can, if it can be demonstrated that, despite the embedded optionality having the form of an option, it is utilized, in practice, as a forward contract. While the seven-prong test and the interpretive guidance around it do not provide an exact roadmap for determining when embedded volumetric optionality included in a forward contract may or may not fall into the option definition, or when embedded volumetric optionality may undermine a forward contract, I think it does provide a good sense of the factors that parties must consider in making those determinations for themselves.
Such a test, however, is necessarily a facts and circumstances test with no bright lines. Ensuring compliance with this interpretation poses a challenge, and, therefore, that is an area where I would like to see greater legal certainty for these contracts.
In closing, I support this final interpretation, but I think industry would benefit from broader relief that provides greater legal certainty. I look forward to continuing to work with my fellow Commissioners and staff to make sure that commercial entities have access to the tools they need to manage the commercial risks of their operations.
Bureau of Consumer Financial Protection.
Notice and request for comment.
In accordance with the Paperwork Reduction Act of 1995 (PRA), the Consumer Financial Protection Bureau (Bureau) is requesting to renew the approval for an existing information collection titled, “Mortgage Acts and Practices (Regulation N) 12 CFR 1014.”
Written comments are encouraged and must be received on or before July 17, 2015 to be assured of consideration.
You may submit comments, identified by the title of the information collection, OMB Control Number (see below), and docket number (see above), by any of the following methods:
• Electronic:
• Mail: Consumer Financial Protection Bureau (Attention: PRA Office), 1700 G Street NW., Washington, DC 20552.
• Hand Delivery/Courier: Consumer Financial Protection Bureau (Attention: PRA Office), 1275 First Street NE., Washington, DC 20002.
Documentation prepared in support of this information collection request is available at
Corporation for National and Community Service.
Notice.
The Corporation for National and Community Service (CNCS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95) (44 U.S.C. 3506(c)(2)(A)). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirement on respondents can be properly assessed.
Currently, CNCS is soliciting comments concerning its proposed renewal of the AmeriCorps Member Application Form. Applicants will respond to the questions included in this ICR in order to apply to serve as AmeriCorps members.
Copies of the information collection request can be obtained by contacting the office listed in the
Written comments must be submitted to the individual and office listed in the
You may submit comments, identified by the title of the information collection activity, by any of the following methods:
(1)
(2)
(3)
Individuals who use a telecommunications device for the deaf (TTY-TDD) may call 1-800-833-3722 between 8:00 a.m. and 8:00 p.m. Eastern Time, Monday through Friday.
Erin Dahlin, 202-606-6931 or
CNCS is particularly interested in comments that:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are expected to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology (
This Member Application Form will be used by applicants who are interested in serving as AmeriCorps members. The information requested in the application form makes it possible for programs to select members to serve. Programs also use this form as an example that they customize to develop their own recruitment materials.
Changes have been made align form with program and technological needs and resources. The information collection will otherwise be used in the same manner as the existing application. CNCS also seeks to continue using the current application until the revised application is approved by OMB. The current application is due to expire on July 31, 2015.
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.
Department of the Army, DoD.
Notice of open committee meeting.
The Department of the Army is publishing this notice to announce the following Federal advisory committee meeting of the Advisory Committee on Arlington National Cemetery (ACANC). The meeting is open to the public. For more information about the Committee, please visit
The Committee will meet from 9:30 a.m.-3:30 p.m. on Wednesday, June 24, 2015.
Women in Military Service for America Memorial, Conference Room, Arlington National Cemetery, Arlington, VA 22211.
Ms. Brenda Curfman; Alternate Designated Federal Officer for the Committee, in writing at Arlington National Cemetery, Arlington, VA 22211, or by email at
This meeting is being held under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), the Sunshine in the Government Act of 1976 (U.S.C. 552b, as amended) and 41 CFR 102-3.150.
Office of the Assistant Secretary of Defense for Health Affairs, DoD.
Notice.
In compliance the
Consideration will be given to all comments received by July 17, 2015.
You may submit comments, identified by docket number and title, by any of the following methods:
• Federal eRulemaking Portal:
• Mail: Department of Defense, Office of the Deputy Chief Management Officer, Directorate of Oversight and Compliance, Regulatory and Audit Matters Office, 9010 Defense Pentagon, Washington, DC 20301-9010.
Any associated form(s) for this collection may be located within this same electronic docket and downloaded for review/testing. Follow the instructions at
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Defense Health Services Systems (DHSS) Program Executive Office (PEO), ATTN: CDR Patrick Amersbach, Defense Health Headquarters (DHHQ) 7700 Arlington Boulevard, Falls Church ,VA 22042-2902, or call 703-681-0845.
Currently, CCQAS provides credentialing, privileging, risk-management and adverse actions capabilities which support medical quality assurance activities in the direct care system. CCQAS is fully deployed world-wide and is used by all Services (Army, Navy, Air Force) and Components (Guard, Reserve). CCQAS serves users functioning at the facility (defined by an individual UIC), Service, and DoD levels. Access to CCQAS modules and capabilities within each module is permissions-based, so that users have access tailored to the functions they perform and sensitive information receives maximal protection. Within each module, access control is available to the screen level.
Assistant Secretary of Defense (Health Affairs), DoD.
Notice of meeting.
The Department of Defense is publishing this notice to announce a Federal Advisory Committee meeting of the Uniform Formulary Beneficiary Advisory Panel (hereafter referred to as the Panel).
Thursday, June 11, 2015, from 9:00 a.m. to 1:00 p.m.
Naval Heritage Center Theater, 701 Pennsylvania Avenue NW., Washington, DC 20004.
Mr. William H. Blanche, Alternate DFO, Uniform Formulary Beneficiary Advisory Panel, 7700 Arlington Boulevard, Suite 5101, Falls Church, VA 22042-5101. Telephone: (703) 681-2890. Fax: (703) 681-1940. Email Address:
This meeting is being held under the provisions of the Federal Advisory Committee Act of 1972 (Title 5, United States Code (U.S.C.), Appendix, as amended) and the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended).
7. Panel Discussions and Vote
Written statements that do not pertain to the scheduled meeting of the Panel may be submitted at any time. However, if individual comments pertain to a specific topic being discussed at a planned meeting, then these statements must be submitted no later than 5 business days prior to the meeting in question. The DFO will review all submitted written statements and provide copies to all the committee members.
To ensure timeliness of comments for the official record, the Panel encourages that individuals and interested groups consider submitting written statements instead of addressing the Panel.
Armed Forces Medical Examiner (AFMES), DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by July 17, 2015.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Office of the Armed Forces Repository of Specimen Samples for the Identification of Remains, Armed Forces Medical Examiner System (AFMES), 115 Purple Heart Drive, Dover AFB, DE, 19902-5051, ATTN: Mr. John Martin, Legal Counsel, AFMES at (302) 346-8634.
Respondents are deploying civilian or contractors and military personnel family members. The principal purpose of the collection is identify reference specimen samples that will be stored and not analyzed until needed for remain identification purposes. The donors at various military collection points and other federal agencies provide a blood sample which is stained on laboratory grade blood stain card (BSC). The identifying information on the blood stain card provided the donor reflects the individual's full name, signature, social security number (SSN), date of birth collection date and branch of service. The BSC is air dried and vacuumed sealed in a poly foil pouch. An adhesive label reflecting the donor information and redacted (SSN) is printed on the label, along with the unique accession number. In the event of the donor's death, the blood sample is scientifically analyzed and a DNA profile is created. This profile is then compared with the post-mortem sample obtained at the autopsy for positive identification.
Office of Postsecondary Education, Department of Education
Notice.
Notice inviting applications for new awards for fiscal year (FY) 2015.
Catalog of Federal Domestic Assistance (CFDA) Number: 84.382A.
Applications Available: May 18, 2015.
Deadline for Transmittal of Applications: July 2, 2015.
Deadline for Intergovernmental Review: August 31, 2015.
These priorities are:
Projects that are designed to address one or both of the following:
(a) Reducing the net cost, median student loan debt, and likelihood of student loan default for high-need students who enroll in college, other postsecondary education, or other career and technical education.
(b) Supporting the development and implementation of high-quality online or hybrid credit-bearing and accessible learning opportunities that reduce the cost of higher education, reduce time to degree completion, or allow students to progress at their own pace.
Projects that are designed to increase the number and percentage of effective teachers in lowest-performing schools, schools in rural local educational agencies, or schools with high concentrations of students from low-income families and minority students, through such activities as:
(a) Improving the preparation, recruitment, selection, and early career development of teachers; implementing performance-based certification systems; reforming compensation and advancement systems; and reforming hiring timelines and systems.
(b) Improving the retention of effective teachers through such activities as creating or enhancing opportunities for teachers' professional growth; delivering professional development to teachers that is relevant, effective, and outcome-oriented; reforming compensation and advancement systems; and improving workplace conditions to create opportunities for successful teaching and learning.
In developing logic models, applicants may want to use resources such as the Pacific Education Laboratory's Education Logic Model Application (
For a State with an approved request for flexibility under the ESEA, priority schools or Tier I and Tier II schools that have been identified under the School Improvement Grants (SIG) program.
For any other State, Tier I and Tier II schools that have been identified under the SIG program.
(a)(1) Any Title I school that has been identified for improvement, corrective action, or restructuring under section 1116 of the ESEA and that—
(i) Is among the lowest-achieving five percent of Title I schools in improvement, corrective action, or restructuring or the lowest-achieving five Title I schools in improvement, corrective action, or restructuring in the State, whichever number of schools is greater; or
(ii) Is a high school that has had a graduation rate, as defined in 34 CFR 200.19(b), that is less than 60 percent over a number of years; and
(2) Any secondary school that is eligible for, but does not receive, Title I funds that—
(i) Is among the lowest-achieving five percent of secondary schools or the lowest-achieving five secondary schools in the State that are eligible for, but do not receive, Title I funds, whichever number of schools is greater; or
(ii) Is a high school that has had a graduation rate, as defined in 34 CFR 200.19(b), that is less than 60 percent over a number of years.
(b) To identify the lowest-achieving schools, a State must take into account both—
(i) The academic achievement of the “all students” group in a school in terms of proficiency on the State's assessments under section 1111(b)(3) of the ESEA, in reading/language arts and mathematics combined; and
(ii) The school's lack of progress on those assessments over a number of years in the “all students” group.
(a) A school among the lowest five percent of Title I schools in the State based on the achievement of the “all students” group in terms of proficiency on the statewide assessments that are part of the state educational agency's (SEA's) differentiated recognition, accountability, and support system, combined, and has demonstrated a lack of progress on those assessments over a number of years in the “all students” group;
(b) A Title I-participating or Title I-eligible high school with a graduation rate that is less than 60 percent over a number of years; or
(c) A Tier I or Tier II school under the SIG program that is using SIG funds to implement a school intervention model.
(a) A Title I school that has been identified as in improvement, corrective action, or restructuring under section 1116 of the ESEA and that is identified by the SEA under paragraph (a)(1) of the definition of persistently-lowest achieving school.
(b) An elementary school that is eligible for title I, part A funds that—
(1)(i) Has not made adequate yearly progress for at least two consecutive years; or
(ii) Is in the State's lowest quintile of performance based on proficiency rates on the State's assessments under section 1111(b)(3) of the ESEA in reading/language arts and mathematics combined; and
(2) Is no higher achieving than the highest-achieving school identified by the SEA under paragraph (a)(1)(i) of the definition of persistently-lowest achieving school.
(a) A secondary school that is eligible for, but does not receive, title I, part A funds and is identified by the SEA under paragraph (a)(2) of the definition of persistently-lowest achieving schools.
(b) A secondary school that is eligible for title I, part A funds that—
(1)(i) Has not made adequate yearly progress for at least two consecutive years; or
(ii) Is in the State's lowest quintile of performance based on proficiency rates on the State's assessments under section 1111(b)(3) of the ESEA, in reading/language arts and mathematics combined; and
(2)(i) Is no higher achieving than the highest-achieving school identified by the SEA under paragraph (a)(2)(i) of the definition of persistently-lowest achieving school; or
(ii) Is a high school that has had a graduation rate, as defined in 34 CFR 200.19(b), that is less than 60 percent over a number of years.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in FY 2016 from the list of unfunded applicants from this competition.
The Department is not bound by any estimates in this notice.
1.
(a) Have an enrollment of needy students, as defined by section 371(c)(3) of the HEA (20 U.S.C. 1067q(c)(3)).
The term
(i) In the second fiscal year preceding the fiscal year for which the determination is made, were Federal Pell Grant recipients for such year;
(ii) Come from families that receive benefits under a means-tested Federal benefit program (as defined in section 371(c)(5) of the HEA, 20 U.S.C. 1067q(c)(5));
(iii) Attended a public or nonprofit private secondary school that—
(A) Is in the school district of an LEA that was eligible for assistance under part A of title I of the ESEA (20 U.S.C. 6311
(B) For the purpose of this paragraph and for that year, was determined by the Secretary (pursuant to regulations and after consultation with the SEA of the State in which the school is located) to be a school in which the enrollment of children counted under a measure of poverty described in section 1113(a)(5) of the ESEA (20 U.S.C. 6313(a)(5)) exceeds 30 percent of the total enrollment of such school; or
(iv) Are first-generation college students, as that term is defined in section 402A(h) of the HEA (20 U.S.C. 1070a-11(h)), and a majority of such first-generation college students are low-income individuals, as that term is defined in section 402A(h) of the HEA (20 U.S.C. 1070a-11(h));
(b) Have an average educational and general expenditure that is low, per full-time equivalent (FTE) undergraduate student, in comparison with the average educational and general expenditure per FTE undergraduate student of IHEs that offer similar instruction. The Secretary may waive this requirement, in accordance with section 392(b) of the HEA (20 U.S.C. 1068a(b)), in the same manner as the Secretary applies the waiver requirements to grant applicants under section 312(b)(1)(B) of the HEA (20 U.S.C. 1058(b)(1)(B));
(c) Have an enrollment of undergraduate students—
(i) That is at least 40 percent Black American students;
(ii) That is at least 1,000 undergraduate students;
(iii) Of which not less than 50 percent of the undergraduate students enrolled at the institution are low-income individuals, as that term is defined in section 402A(h) of the HEA (20 U.S.C. 1070a-11(h)), or first-generation college students, as that term is defined in section 402A(h) of the HEA (20 U.S.C. 1070a-11(h)); and
(iv) Of which not less than 50 percent of the undergraduate students are enrolled in an educational program leading to a bachelor's or associate's degree that the institution is licensed to award by the State in which the institution is located;
(d) Be legally authorized to provide, and provide, within the State an educational program for which the IHE awards a bachelor's degree or, in the case of a junior or community college, an associate's degree;
(e) Be accredited by a nationally recognized accrediting agency or association determined by the Secretary to be a reliable authority as to the quality of training offered, or be, according to such an agency or association, making reasonable progress toward accreditation; and
(f) Not be receiving assistance under part B of title III or part A of title V of the HEA or an annual authorization of appropriations under the Act of March 2, 1867 (20 U.S.C. 123).
The notice for applying for designation as an eligible institution was published on November 3, 2014 (75 FR 65197) and applications were due on December 22, 2014. Only institutions that submitted applications by the deadline date and that the Department determined are eligible may apply for a grant.
Applicants must provide, as an attachment to the application, the documentation the institution relied upon to determine that at least 40 percent of the institution's undergraduate enrollment are Black American students. The 40 percent requirement applies only to
2.
1.
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Individuals with disabilities can obtain a copy of the application package in an accessible format (
2.
Requirements concerning the content of an application, together with the forms you must submit, are in the application package for this program.
Page Limit: The application narrative (Part III of the application) is where you, the applicant, address the selection criteria and the competitive preference priorities that reviewers use to evaluate your application. We have established the following mandatory page limits. You must limit the section of the application narrative that addresses:
• The selection criteria to no more than 40 pages.
• A competitive preference priority, if you are addressing one or both, to no more than three pages (for a total of six pages if you address both).
Accordingly, under no circumstances may the application narrative exceed 46 pages. Please include a separate heading for each competitive preference priority that you address.
For the purpose of determining compliance with the page limit, each page on which there are words will be counted as one full page. Applicants must use the following standards:
• A “page” is 8.5″ x 11″, on one side only, with 1” margins at the top, bottom, and both sides. Page numbers and an identifier may be within the 1” margins.
• Double space (no more than three lines per vertical inch) all text in the application narrative,
• Use a font that is either 12 point or larger, or no smaller than 10 pitch (characters per inch). However, you may use a 10-point font in charts, tables, figures, graphs, footnotes, and endnotes.
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial. Applications submitted in any other font (including Times Roman and Arial Narrow) will not be accepted.
The page limit does not apply to Part I, the cover sheet SF 424; Part II, the budget section, including the narrative budget justification; or Part IV, the assurances and certifications. The page limit also does not apply to the table of contents, the one-page abstract, the resumes, the bibliography, or the letters of support. If you include any attachments or appendices not specifically requested, these items will be counted as part of the application narrative for purposes of the page-limit requirement. You must include your complete response to the selection criteria and priorities in the application narrative.
We will reject your application if you exceed the page limit.
3.
Applications Available: May 18, 2015.
Deadline for Transmittal of Applications: July 2, 2015.
Applications for grants under this program must be submitted electronically using the Grants.gov Apply site (Grants.gov). For information (including dates and times) about how to submit your application electronically, or in paper format by mail or hand delivery if you qualify for an exception to the electronic submission requirement, please refer to section IV. 7.
We do not consider an application that does not comply with the deadline requirements.
Individuals with disabilities who need an accommodation or auxiliary aid in connection with the application process should contact the person listed under
Deadline for Intergovernmental Review: August 31, 2015.
4.
5.
6.
a. Have a Data Universal Numbering System (DUNS) number and a Taxpayer Identification Number (TIN);
b. Register both your DUNS number and TIN with the System for Award Management (SAM) (formerly the Central Contractor Registry (CCR)), the Government's primary registrant database;
c. Provide your DUNS number and TIN on your application; and
d. Maintain an active SAM registration with current information while your application is under review by the Department and, if you are awarded a grant, during the project period.
You can obtain a DUNS number from Dun and Bradstreet. A DUNS number can be created within one to two business days.
If you are a corporate entity, agency, institution, or organization, you can obtain a TIN from the Internal Revenue Service. If you are an individual, you can obtain a TIN from the Internal Revenue Service or the Social Security Administration. If you need a new TIN, please allow two to five weeks for your TIN to become active.
The SAM registration process can take approximately seven business days, but may take upwards of several weeks, depending on the completeness and accuracy of the data entered into the SAM database by an entity. Thus, if you think you might want to apply for Federal financial assistance under a program administered by the Department, please allow sufficient time to obtain and register your DUNS number and TIN. We strongly recommend that you register early.
Once your SAM registration is active, you will need to allow 24 to 48 hours for the information to be available in Grants.gov and before you can submit an application through Grants.gov.
If you are currently registered with SAM, you may not need to make any changes. However, please make certain that the TIN associated with your DUNS number is correct. Also note that you will need to update your registration annually. This may take three or more business days.
Information about SAM is available at
In addition, if you are submitting your application via Grants.gov, you must (1) be designated by your organization as an Authorized Organization Representative (AOR); and (2) register yourself with Grants.gov as an AOR. Details on these steps are outlined at the following Grants.gov Web page:
7.
a.
Applications for grants under the PBI Program, CFDA number 84.382A, must be submitted electronically using the Governmentwide Grants.gov Apply site at
We will reject your application if you submit it in paper format unless, as described elsewhere in this section, you qualify for one of the exceptions to the electronic submission requirement
You may access the electronic grant application for the PBI Program at
Please note the following:
• When you enter the Grants.gov site, you will find information about submitting an application electronically through the site, as well as the hours of operation.
• Applications received by Grants.gov are date and time stamped. Your application must be fully uploaded and submitted and must be date and time stamped by the Grants.gov system no later than 4:30:00 p.m., Washington, DC time, on the application deadline date. Except as otherwise noted in this section, we will not accept your application if it is received—that is, date and time stamped by the Grants.gov system—after 4:30:00 p.m., Washington, DC time, on the application deadline date. We do not consider an application that does not comply with the deadline requirements. When we retrieve your application from Grants.gov, we will notify you if we are rejecting your application because it was date and time stamped by the Grants.gov system after 4:30:00 p.m., Washington, DC time, on the application deadline date.
• The amount of time it can take to upload an application will vary depending on a variety of factors, including the size of the application and the speed of your Internet connection. Therefore, we strongly recommend that you do not wait until the application deadline date to begin the submission process through Grants.gov.
• You should review and follow the Education Submission Procedures for submitting an application through Grants.gov that are included in the application package for this competition to ensure that you submit your application in a timely manner to the Grants.gov system. You can also find the Education Submission Procedures pertaining to Grants.gov under News and Events on the Department's G5 system home page at
• You will not receive additional point value because you submit your application in electronic format, nor will we penalize you if you qualify for an exception to the electronic submission requirement, as described elsewhere in this section, and submit your application in paper format.
• You must submit all documents electronically, including all information you typically provide on the following forms: the Application for Federal Assistance (SF 424), the Department of Education Supplemental Information for SF 424, Budget Information—Non Construction Programs (ED 524), and all necessary assurances and certifications.
• You must upload any narrative sections and all other attachments to your application as files in a PDF (Portable Document) read-only, non-modifiable format. Do not upload an interactive or fillable PDF file. If you upload a file type other than a read-only, non-modifiable PDF or submit a password-protected file, we will not review that material. Additional, detailed information on how to attach files is in the application instructions.
• Your electronic application must comply with any page-limit requirements described in this notice.
• After you electronically submit your application, you will receive from Grants.gov an automatic notification of receipt that contains a Grants.gov tracking number. (This notification indicates receipt by Grants.gov only, not receipt by the Department.) The Department then will retrieve your application from Grants.gov and send a second notification to you by email. This second notification indicates that the Department has received your application and has assigned your application a PR/Award number (an ED-specified identifying number unique to your application).
• We may request that you provide us original signatures on forms at a later date.
If you are prevented from electronically submitting your application on the application deadline date because of technical problems with the Grants.gov system, we will grant you an extension until 4:30:00 p.m., Washington, DC time, the following business day to enable you to transmit your application electronically or by hand delivery. You also may mail your application by following the mailing instructions described elsewhere in this notice.
If you submit an application after 4:30:00 p.m., Washington, DC time, on the application deadline date, please contact the person listed under
The extensions to which we refer in this section apply only to the unavailability of, or technical problems with, the Grants.gov system. We will not grant you an extension if you failed to fully register to submit your application to Grants.gov before the application deadline date and time or if the technical problem you experienced is unrelated to the Grants.gov system.
• You do not have access to the Internet; or
• You do not have the capacity to upload large documents to the Grants.gov system;
• No later than two weeks before the application deadline date (14 calendar days or, if the fourteenth calendar day before the application deadline date falls on a Federal holiday, the next business day following the Federal holiday), you mail or fax a written statement to the Department, explaining which of the two grounds for an exception prevents you from using the Internet to submit your application.
If you mail your written statement to the Department, it must be postmarked no later than two weeks before the application deadline date. If you fax your written statement to the Department, we must receive the faxed statement no later than two weeks before the application deadline date.
Address and mail or fax your statement to: Bernadette D. Miles, U.S. Department of Education, 1990 K Street NW., Room 6025, Washington, DC 20006-8513. Fax: (202) 502-7861.
Your paper application must be submitted in accordance with the mail or hand delivery instructions described in this notice.
b.
If you qualify for an exception to the electronic submission requirement, you may mail (through the U.S. Postal Service or a commercial carrier) your application to the Department. You must mail the original and two copies of your application, on or before the application deadline date, to the Department at the following address:
U.S. Department of Education, Application Control Center, Attention: (CFDA Number 84.382A) LBJ Basement Level 1, 400 Maryland Avenue SW., Washington, DC 20202-4260.
You must show proof of mailing consisting of one of the following:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education.
If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
If your application is postmarked after the application deadline date, we will not consider your application.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, you should check with your local post office.
c.
If you qualify for an exception to the electronic submission requirement, you (or a courier service) may deliver your paper application to the Department by hand. You must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address:
U.S. Department of Education, Application Control Center, Attention: (CFDA Number 84.382A), 550 12th Street SW., Room 7039, Potomac Center Plaza, Washington, DC 20202-4260.
The Application Control Center accepts hand deliveries daily between 8:00 a.m. and 4:30:00 p.m., Washington, DC time, except Saturdays, Sundays, and Federal holidays.
If you mail or hand deliver your application to the Department—
(1) You must indicate on the envelope and—if not provided by the Department—in Item 11 of the SF 424 the CFDA number, including suffix letter, if any, of the competition under which you are submitting your application; and
(2) The Application Control Center will mail to you a notification of receipt of your grant application. If you do not receive this notification within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at (202) 245-6288.
1.
a.
1. The magnitude of the need for the services to be provided or the activities to be carried out by the proposed project. (5 points)
2. The extent to which the proposed project will focus on serving or otherwise addressing the needs of disadvantaged individuals. (5 points)
3. The extent to which specific gaps or weaknesses in services, infrastructure, or opportunities have been identified and will be addressed by the proposed project, including the nature and magnitude of those gaps or weaknesses. (5 points)
b.
1. The extent to which the goals, objectives, and outcomes to be achieved by the proposed project are clearly specified and measurable. (10 points)
2. The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of the target population or other identified needs. (10 points)
3. The extent to which the proposed project is supported by strong theory (as defined in this notice). (10 points)
c.
1. The extent to which the services to be provided by the proposed project are appropriate to the needs of the intended recipients or beneficiaries of those services. (5 points)
2. The extent to which the services to be provided by the proposed project reflect up-to-date knowledge from research and effective practice. (5 points)
d.
In addition, the Secretary considers:
1. The qualifications, including relevant training and experience, of the project director or principal investigator. (5 points)
2. The qualifications, including relevant training and experience, of key project personnel. (5 points)
e.
1. The extent to which the budget is adequate to support the proposed project. (3 points)
2. The extent to which the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project. (2 points)
f.
1. The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks. (5 points)
2. The adequacy of procedures for ensuring feedback and continuous improvement in the operation of the proposed project. (5 points)
3. The adequacy of mechanisms for ensuring high-quality products and services from the proposed project. (5 points)
g.
1. The extent to which the methods of evaluation are thorough, feasible, and appropriate to the goals, objectives, and outcomes of the proposed project. (5 points)
2. The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible. (5 points)
3. The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving intended outcomes. (5 points)
2.
In addition, in making a competitive grant award, the Secretary also requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
3.
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multi-year award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). Please see the application package for details of annual and final reporting requirements. For specific requirements on reporting, please go to
4.
(a) The percentage of change in the number of full-time, degree-granting undergraduate students enrolled at PBIs.
(b) The percentage of first-time, full-time, degree-seeking undergraduate students at four-year PBIs who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same four-year PBI.
(c) The percentage of first-time, full-time, degree-seeking undergraduate students at two-year PBIs who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same two-year PBI.
(d) The percentage of first-time, full-time, degree-seeking undergraduate students enrolled at four-year PBIs who graduate within six years of enrollment.
(e) The percentage of first-time, full-time, degree-seeking undergraduate students enrolled at two-year PBIs who graduate within three years of enrollment.
5.
If you use a TDD or a TTY, call the FRS, toll free, at 1-800-877-8339.
Delegation of Authority: The Secretary of Education has delegated authority to Jamienne S. Studley, Deputy Under Secretary, to perform the functions and duties of the Assistant Secretary for Postsecondary Education.
Institute of Education Sciences (IES), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before June 17, 2015.
Comments submitted in response to this notice should be submitted electronically through the Federal eRulemaking Portal at
For specific questions related to collection activities, please contact Tracy Rimdzius, 202-208-7154.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested
Office of Fossil Energy, DOE.
Record of Decision.
The U.S. Department of Energy (“DOE”) announces its decision in FE Docket No. 12-97-LNG to issue DOE/FE Order No. 3638, granting long-term, multi-contract authorization for Cheniere Marketing, LLC and Corpus Christi Liquefaction, LLC (collectively “CMI”) to engage in export of domestically produced liquefied natural gas (“LNG”) in an amount up to 782 million million Btu (million MMBtu) per year, which is equivalent to approximately 767 billion cubic feet (“Bcf”) of natural gas per year, for a 20-year period commencing the earlier of the date of first export or seven-years from the date of issuance of the authorization requested. CMI is seeking authorization to export LNG from the proposed Corpus Christi Liquefaction Project (“Liquefaction Project”) near Corpus Christi, Texas, to any nation with which the United States has not entered into a free trade agreement (“FTA”) that requires national treatment for trade in natural gas (non-FTA countries). Order No. 3638 is issued under section 3 of the Natural Gas Act (“NGA”) and 10 CFR part 590 of the DOE regulations. DOE participated as a cooperating agency with the Federal Energy Regulatory Commission (“FERC”) in preparing an environmental impact statement (“EIS”) analyzing the potential environmental impacts of the proposed Liquefaction Project and associated pipeline that, if constructed, will support the export authorization sought from DOE's Office of Fossil Energy (“DOE/FE”).
The EIS and this Record of Decision (“ROD”) are available on DOE's National Environmental Policy Act (“NEPA”) Web site at
To obtain additional information about the project, the EIS, or the ROD, contact Mr. John Anderson, U.S. Department of Energy, Office of Oil & Gas Global Security & Supply, Office of Oil and Natural Gas, Office of Fossil Energy, Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585, (202) 586-5600; or Mr. Edward LeDuc, U.S. Department of Energy, Office of the Assistant General Counsel for Environment, 1000 Independence Avenue SW., Washington, DC 20585, (202) 586-4007.
DOE prepared this ROD and Floodplain Statement of Findings pursuant to the National Environmental Policy Act of 1969 (42 United States Code [U.S.C.] 4321,
Cheniere Marketing, LLC, a Delaware limited liability company with its principal place of business in Houston, Texas, is affiliated with Corpus Christi Liquefaction, LLC (Cheniere Marketing, LLC's co-Applicant in this proceeding) and Cheniere Corpus Christi Pipeline, L.P. (“CCP”), the developers of the Corpus Christi LNG Project (“Corpus Christi LNG Project” or “Project” collectively refers to the Liquefaction Project and the Cheniere Pipeline). Cheniere Marketing, LLC is an indirect subsidiary of Cheniere Energy, Inc., a Delaware corporation with its primary place of business in Houston, Texas. Cheniere Energy, Inc. is a developer of LNG terminals and natural gas pipelines on the Gulf Coast, including the Corpus Christi LNG Project.
Cheniere Marketing, LLC filed an application (“Application”) with DOE/FE on August 31, 2012, seeking long-term, multi-contract authorization to export to non-FTA countries up to 782 million MMBtu per year of LNG, equivalent to approximately 767 Bcf per year of natural gas, for a period of 22 years beginning on the earlier of the date of first export or eight years from the date the authorization is granted by DOE/FE. On October 10, 2012, Cheniere Marketing, LLC clarified that it is requesting authorization to export LNG both on its own behalf and as agent for other parties who hold title to the LNG
The Application was filed in conjunction with the Liquefaction Project being developed by Corpus Christi Liquefaction, LLC and Cheniere Corpus Christi Pipeline, L.P. at the site of the previously authorized import terminal and associated pipeline in San Patricia and Nueces Counties Texas.
On August 31, 2012, in Docket No. 12-99-LNG, Cheniere Marketing, LLC filed with DOE/FE a separate application for long-term multi-contract authorization to engage in the export of LNG in an amount up to 782 million MMBtu per year, to any nation with which the United States has or in the future will have an FTA that requires national treatment for trade in natural gas; that has developed, or in the future develops, the capacity to import LNG; and with which trade is not prohibited by U.S. law or policy. On October 16, 2012, DOE/FE Order No. 3164 was issued in FE Docket No 12-99-LNG granting long-term export authorization to FTA countries from the Project.
The Liquefaction Project will be located on a 991-acre site located along the northern shore of the La Quinta Channel north and east of the City of Corpus Christi, Texas and will include three ConocoPhillips Optimized Cascade
In accordance with NEPA, FERC issued a draft EIS for the proposed Corpus Christi LNG Project on June 13, 2014. The notice of availability (“NOA”) for the draft EIS was published in the
Issues raised by commenters included concerns regarding: Air pollution (including greenhouse gas emissions and mitigation and compliance with the National Ambient Air Quality Standards), construction dust and noise vibrations, land use changes, impacts of water discharges on aquatic species (including impacts to an essential fish habitat (“EFH”)), light pollution, visual impacts, public safety and lack of an emergency response plan, water use and CMI's source of water, impacts on property values, expanding the scope of the cumulative impact analysis and alternatives analysis, recreational impacts and workforce availability.
The final EIS was published on October 8, 2014, and recommended that the FERC approve the Corpus Christi LNG Project. It concluded that the Project will result in some adverse environmental impacts; however, those impacts would not be significant if the Project is constructed and operated in accordance with applicable laws and regulations.
Accordingly FERC issued an Order
In accordance with 40 CFR 1506.3, after an independent review of the FERC's final EIS, DOE adopted the EIS and the U.S. Environmental Protection Agency published a notice of that adoption in the
On June 4, 2014, DOE/FE published the Draft Addendum for public comment (79 FR 32258). Although not required by NEPA, DOE/FE prepared the Addendum in an effort to be responsive to the public and to provide the best information available on a subject that had been raised by commenters. The Addendum is a review of existing literature and was intended to provide information only on the resource areas potentially impacted by unconventional gas production.
The 45-day comment period on the Draft Addendum closed on July 21, 2014. DOE/FE received 40,745 comments in 18 separate submissions, and considered those comments in issuing the Addendum on August 15, 2014. DOE/FE provided a summary of the comments received and responses to substantive comments in Appendix B of the Addendum. DOE/FE has incorporated the Draft Addendum, comments, and final Addendum into the record in its CMI proceeding.
The EIS conducted an alternatives analysis for the Liquefaction Project that could achieve the Project objectives. The range of alternatives analyzed included the No-Action Alternative,
While the No-Action Alternative would avoid the potential adverse and beneficial environmental impacts identified in the EIS, adoption of this alternative would preclude meeting the Project objectives. Other LNG export/import projects could also be developed elsewhere in the Gulf Coast region or in other areas of the United States, but would likely result in similar or potentially greater environmental impacts than those of the proposed Project. The No-Action Alternative could also require potential end users to make other arrangements to obtain natural gas service, or continue the use of alternative fossil fuel energy sources (such as coal or fuel oil) to compensate for the reduced availability of natural gas that would otherwise be supplied by the Corpus Christi LNG Project.
The EIS evaluated 12 system alternatives for the Project, including 6 operating LNG import terminals in the Gulf of Mexico area, and 6 proposed or planned export projects along the Gulf Coast. All of the systems were eliminated from further consideration for reasons that include the need for substantial construction beyond that currently proposed, production volume limitations, in-service dates scheduled significantly beyond the Project schedule, and potential environmental impacts that were considered comparable to or greater than those of the Project.
The EIS also evaluated three alternative Liquefaction Project sites, two in proximity to the proposed site and one near Brownsville, Texas. Construction of the terminal at each of the alternative sites would have comparable or greater environmental impacts when compared to the proposed terminal site; therefore, none of the three sites evaluated were determined to be environmentally preferable.
Approximately 86 percent of the Pipeline would be co-located, overlap, or parallel existing rights-of-way, so many types of environmental impacts have already been reduced or avoided. While two route alternatives were evaluated, the EIS did not identify any site-specific environmental concerns along the proposed route that would make the alternative pipeline routes preferable.
The EIS evaluated a total of five alternative sites for the proposed compressor stations but determined that none of these sites were environmentally preferable to the proposed sites.
When compared against the other action alternatives assessed in the EIS, as discussed above, the Corpus Christi LNG Project is the environmentally preferred alternative. While the No-Action Alternative would avoid the environmental impacts identified in the EIS, adoption of this alternative would not meet the Project objectives.
DOE/FE has decided to issue Order No. 3638 to grant the long-term, multi-contract authorization for CMI to engage in exports of domestically produced liquefied natural gas in an amount up to 767 Bcf per year for a 20-year period, commencing the earlier of the date of first export or seven-years from the date of issuance of the authorization requested. The authorization is to export LNG from the proposed Corpus Christi Liquefaction Project to any nation with which the United States does not now or in the future have an FTA requiring the national treatment for trade in natural gas, that has, or in the future develops, the capacity to import LNG and with which trade is not prohibited by U.S. law or policy.
Concurrently with this Record of Decision, DOE/FE is issuing Order No. 3638 in which it finds that the granting of the requested authorization has not been shown to be inconsistent with the public interest, and that the Application should be granted subject to compliance with the terms and conditions set forth in Order No. 3638, including the environmental conditions adopted in the FERC Order at Appendix A. Additionally, the authorization is conditioned on CMI's compliance with any other preventative and mitigative measures imposed by other Federal or state agencies.
DOE/FE's decision is based upon the analysis of potential environmental impacts presented in the EIS, and DOE/FE's determination in Order No. 3638 that the opponents of the Application have failed to overcome the statutory presumption that the proposed export authorization is not inconsistent with the public interest. Although not required by NEPA, DOE/FE also considered the Addendum, which summarizes available information on potential upstream impacts associated with unconventional natural gas activities, such as hydraulic fracturing.
As a condition of its decision to issue Order No. 3638 authorizing CMI to export LNG to non-FTA countries, DOE/FE is imposing requirements that will avoid or minimize the environmental impacts of the project. These conditions include the environmental conditions adopted in the FERC Order at Appendix A. Mitigation measures beyond those included in DOE/FE Order No. 3638 that are enforceable by other Federal and state agencies are additional conditions of Order No. 3638. With these conditions, DOE/FE has determined that all practicable means to avoid or minimize environmental harm from the project have been adopted.
DOE prepared this Floodplain Statement of Findings in accordance with DOE's regulations entitled “Compliance with Floodplain and Wetland Environmental Review Requirements” (10 CFR part 1022). The required floodplain and wetland assessment was conducted during development and preparation of the EIS.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the Summerlin Pipe Replacement Project involving construction and operation of facilities by Kern River Gas Transmission Company (Kern River) in Clark County, Nevada. The Commission will use this EA in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies on the project. You can make a difference by providing us with your specific comments or concerns about the project. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the EA. To ensure that your comments are timely and properly recorded, please send your comments so that the Commission receives them in Washington, DC on or before June 11, 2015.
If you sent comments on this project to the Commission before the opening of this docket on March 26, 2015, you will need to file those comments in Docket
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this proposed project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The company would seek to negotiate a mutually acceptable agreement. However, if the Commission approves the project, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings where compensation would be determined in accordance with state law.
Kern River provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” This fact sheet addresses a number of typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. It is also available for viewing on the FERC Web site (
For your convenience, there are three methods you can use to submit your comments to the Commission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502-8258 or
(1) You can file your comments electronically using the
(2) You can file your comments electronically by using the
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the project docket number (CP15-132-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
Kern River proposes the Summerlin Pipe Replacement Project to replace a 1.56-mile-long segment of its existing 36-inch-diameter A-line pipeline from milepost 543.63 to 545.19 in Clark County, Nevada. When originally constructed, this portion of the A-line was designed as pipeline located in a Class I location. This pipe segment must be upgraded with thicker-walled pipe to satisfy U.S. Department of Transportation safety regulations for a Class 3 location as a result of a planned residential development in the vicinity of the existing pipeline.
In order to maintain delivery to Kern River's customers, the pipeline segment would remain in service until the new pipeline segment is constructed and placed into service, after which the old segment would be removed. Due to a crossover of two existing pipelines, the new pipeline segment would be installed at a 25-foot offset from another existing Kern River line (B-line) for 1.15 miles and at a 25-foot offset from the existing A-line for 0.41 mile. To allow for uninterrupted service during the project, Kern River would install a new 24-inch-diameter crossover valve near milepost 0 of the project by hot tapping the 36-inch-diameter A-line and installing crossover piping to the 24-inch-diameter B-line crossover piping. An existing 0.22-acre valve and pig
Pipeline facilities are proposed to be installed and removed between October 2015 and December 2015. Kern River expects the new pipeline segment to be placed into service by December 29, 2015.
Construction of the proposed facilities would disturb about 39.30 acres of land, which includes 9.74 acres of permanent right-of-way, 22.23 acres of construction right-of-way (
Following construction, Kern River would maintain 9.74 acres for permanent operation of the project's facilities with only 1.10 acres of new disturbance, accounting for overlapping rights-of-way with A-line and B-line and previously disturbed land. The remaining acreage used during construction would be restored according to Kern River's project-specific Reclamation Plan and revert to former uses.
The proposed pipeline crosses 0.44 mile (9.22 acres) of land owned and managed by the Bureau of Land Management (BLM), 1.06 miles (27.34 acres) of private property, and 0.06 mile (2.74 acres) owned by Clark County.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
In the EA we will discuss impacts that could occur as a result of the construction and operation of the proposed project under these general headings:
• Geology and soils;
• land use;
• water resources, fisheries, and wetlands;
• cultural resources;
• vegetation and wildlife;
• air quality and noise;
• endangered and threatened species;
• public safety; and
• cumulative impacts.
We will also evaluate reasonable alternatives to the proposed project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
The EA will present our independent analysis of the issues. The EA will be available in the public record through eLibrary. Depending on the comments received during the scoping process, we may also publish and distribute the EA to the public for an allotted comment period. We will consider all comments on the EA before making our recommendations to the Commission. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section, beginning on page 2.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues of this project to formally cooperate with us in the preparation of the EA.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with the applicable State Historic Preservation Office (SHPO), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
We have already identified issues that we think deserve attention based on a preliminary review of the proposed facilities and the environmental information provided by Kern River, namely the impact on federally listed threatened and endangered species as well as BLM identified species. Other issues may be added based on your comments and our analysis.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project. We will update the environmental mailing list as the analysis proceeds to ensure that we send the information related to this environmental review to all individuals, organizations, and government entities interested in and/or potentially affected by the proposed project.
If we publish and distribute the EA, copies of the EA will be sent to the environmental mailing list for public review and comment. If you would prefer to receive a paper copy of the document instead of the CD version or would like to remove your name from the mailing list, please return the attached Information Request (appendix 2).
In addition to involvement in the EA scoping process, you may want to become an “intervenor” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Instructions for becoming an intervenor are in the User's Guide under the “e-filing” link on the Commission's Web site.
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC Web site at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits will be posted on the Commission's calendar located at
Take notice that on April 30, 2015, Southern Star Central Gas Pipeline, Inc. (Southern Star), 4700 State Highway 56, Owensboro, Kentucky 42301, filed a prior notice application pursuant to sections 157.205, 157.208, 157.211, and 157.216 of the Federal Energy Regulatory Commission's (Commission)
Any questions regarding this application should Phyllis K. Medley, Senior Analyst, Regulatory Compliance, Southern Star Central Gas Pipeline, Inc., 4700 State Highway 56, Owensboro, Kentucky 42301, or phone (270) 852-4653, or by email
Relocation of Southern Star's 6,600 foot section of 16-inch Pipeline EX-00 is needed since the Kansas Department of Transportation and Missouri Department of Transportation are working to demolish the Platte Purchase Bridge and replace it with a new bridge system in the pipeline's location by December 1, 2016.
Any person or the Commission's staff may, within 60 days after issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention and pursuant to section 157.205 of the regulations under the NGA (18 CFR 157.205), a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for filing a protest. If a protest is filed and not withdrawn within 30 days after the allowed time for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding, or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenter will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
a. Date and Time of Meeting: Monday, June 8, 2015, beginning at 10:00 a.m. (EDT) and concluding at 1:00 p.m. (EDT).
b. Place: Safe Harbor Water Power Corporation, 1 Powerhouse Road, Conestoga, PA 17516-9651.
c.
d. Purpose of Meeting: To discuss the Commission's March 16, 2015 Order approving an increase in the normal maximum water surface elevation of Lake Clarke to 227.6 feet mean sea level (msl) from April 15 to October 15. The Order also approved a temporary increase of Lake Clarke, up to elevation 228.0 feet msl, from April 15 to October 15, if the results of the Safe Harbor annual spring mudflat surveys demonstrate that the minimum area of shorebird habitat can be maintained.
e. A summary of the meeting will be prepared for the project record.
f. All local, state, and federal agencies, Indian tribes, and other interested parties are invited to participate. Please call Rebecca Martin at (202) 502-6012 or send an email to
g. FERC conferences are accessible under section 508 of the Rehabilitation Act of 1973. For accessibility accommodations please send an email to
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e)(1)(v).
The following is a list of off-the-record communications recently received by the Secretary of the Commission. The communications listed are grouped by docket numbers in ascending order. These filings are available for electronic review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at
Federal Energy Regulatory Commission, DOE.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, 44 U.S.C. 3506(c)(2)(A), the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on the requirements and burden
Comments on the collection of information are due July 17, 2015.
You may submit comments (identified by Docket No. IC15-7-000) by either of the following methods:
• eFiling at Commission's Web site:
• Mail/Hand Delivery/Courier: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.
Ellen Brown may be reached by email at
The total estimated annual cost burden to respondents is: $416,293.
Take notice that on May 5, 2015, Equitrans, L.P. (Equitrans) filed an amendment, pursuant to section 7(c) of the Natural Gas Act and Part 157 of the Commission's Regulations, for the Ohio Valley Connector Project in West Virginia, and Ohio. The application of the project was originally filed on December 30, 2014 in Docket No. CP15-41-000. The amended filing may be viewed on the web at
Any questions regarding this application should be directed to Paul W. Diehl, Senior Counsel, Midstream, Equitrans, L.P., 625 Liberty Avenue, Suite 1700, Pittsburgh, PA 15222. Telephone (412) 395-5540, fax (412) 553-7781, and email:
Equitrans states that after filing the original application, Equitrans has continued working with landowners and other interested parties with respect to the route of the pipeline and the specific facilities that will be necessary. Also, after discussions with a proposed shipper, Equitrans has determined that the proposed H-313 pipeline will not be required to provide the firm transportation service. To accommodate this change, Equitrans proposes to eliminate the H-313 pipeline from the scope of the project. The H-313 pipeline is approximately 14.0 miles and 24-inch diameter. Equitrans also proposes four minor re-routes of the proposed H-310 pipeline and changes of facilities. The amendment does not affect the Ohio Valley Connector Project's designed capacity of 850 MMcf/day.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 5 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of any mailed environmental documents, and will be notified of any meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
Motions to intervene, protests and comments may be filed electronically via the Internet in lieu of paper; see, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site under the “e-Filing” link. The Commission strongly encourages electronic filings.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), “Facility Ground-Water Monitoring Requirements (Renewal)” (EPA ICR No. 0959.15, OMB Control No. 2050-0033) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (44 U.S.C. 3501
Additional comments may be submitted on or before June 17, 2015.
Submit your comments, referencing Docket ID No. EPA-HQ-RCRA-2014-0926, to (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Peggy Vyas, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: 703-308-5477; fax number: 703-308-8433; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
This ICR examines the ground-water monitoring standards for permitted and interim status facilities at 40 CFR parts 264 and 265, as specified. The ground-water monitoring requirements for regulated units follow a tiered approach whereby releases of hazardous contaminants are first detected (detection monitoring), then confirmed (compliance monitoring), and if necessary, are required to be cleaned up (corrective action). Each of these tiers requires collection and analysis of ground-water samples. Owners or operators that conduct ground-water monitoring are required to report information on releases of contaminants and to maintain records of ground-water monitoring data at their facilities. The goal of the ground-water monitoring program is to prevent and quickly detect releases of hazardous contaminants to groundwater, and to establish a program whereby any contamination is expeditiously cleaned up as necessary to protect human health and environment.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), “Continuous Release Reporting Regulations (CRRR) Under CERCLA 1980 (Renewal)” (EPA ICR No. 1445.12, OMB Control No. 2050-0086) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (44 U.S.C. 3501
Additional comments may be submitted on or before June 17, 2015.
Submit your comments, referencing Docket ID Number EPA-HQ-SFUND-2015-0100, to (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Elizabeth Bosecker, Regulations Implementation Division, Office of Emergency Management, (5104A), Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 564-7612; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
Section 103(f)(2) of CERCLA provides facilities relief from this per-occurrence notification requirement if the hazardous substance release at or above the RQ is continuous and stable in quantity and rate. Under the Continuous Release Reporting Requirements (CRRR), the facility must make an initial telephone call to the NRC, an initial written report to the EPA Region, and, if the source and chemical composition of the continuous release does not change and the level of the continuous release does not significantly increase, a follow-up written report must be submitted to the EPA Region one year after submission of the initial written report. If the source or chemical composition of the previously reported continuous release changes, notifying the NRC and EPA Region of a change in the source or composition of the release is required. Further, a significant increase in the level of the previously reported continuous release must be reported immediately to the NRC according to section 103(a) of CERCLA. Finally, any change in information submitted in support of a continuous release notification must be reported to the EPA Region. The reporting of a hazardous substance release that is equal to or above the substance's RQ allows the Federal government to determine whether a Federal response action is required to control or mitigate any potential adverse effects to public health or welfare or the environment.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency has submitted a new information collection request (ICR), “TSCA Section 402 and Section 404 Training and Certification, Accreditation and Standards for Lead-Based Paint Activities and Renovation, Repair, and Painting” (EPA ICR No. 1715.14, OMB Control No. 2070-0155) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (44 U.S.C. 3501
Additional comments may be submitted on or before June 17, 2015.
Submit your comments, referencing Docket ID Number EPA-HQ-OPPT-2014-0486, to (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Colby Lintner, Environmental Assistance Division, Office of Pollution Prevention and Toxics, Mail code: 7408-M, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: 202-554-1404; fax number: 202-564-8251; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
Sections 402(a) and 402(c)(3) of TSCA require EPA to develop and administer a training and certification program as well as work practice standards for persons who perform lead-based paint activities and/or renovations. The current regulations in 40 CFR part 745, subpart E, cover work practice standards, recordkeeping and reporting requirements, individual and firm certification, and enforcement for renovations done in target housing or child-occupied facilities. The current regulations in 40 CFR part 745, subpart L, cover inspections, lead hazard screens, risk assessments, and abatement activities (referred to as “lead-based paint activities”) done in target housing and child-occupied facilities. The current regulations in 40 CFR part 745, subpart Q, establish the requirements that state or tribal programs must meet for authorization to administer the standards, regulations, or other requirements established under TSCA section 402. (See Attachment 2 for 40 CFR part 745, subparts E, L and Q.) Section 401 of TSCA defines target housing as any housing constructed before 1978 except housing for the elderly or disabled or 0-bedroom dwellings.
Sections 402(a) and 402(c)(3) of TSCA require reporting and/or recordkeeping from four entities: Firms engaged in lead-based paint activities or renovations in target housing and child-occupied facilities; individuals who perform lead-based paint activities in target housing and child-occupied facilities; training providers; and states/territories/tribes/Alaskan native villages.
Responses to the collection of information are mandatory. Respondents may claim all or part of a response confidential. EPA will disclose information that is covered by a claim of confidentiality only to the extent permitted by, and in accordance with, the procedures in TSCA section 14 and 40 CFR part 2.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted the following information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (PRA):
Comments must be received on or before June 17, 2015.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2014-0567, to both EPA and OMB as follows:
• To EPA online using
• To OMB via email to
EPA's policy is that all comments received will be included in the docket without change, including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI), or other information whose disclosure is restricted by statute. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.
Rame Cromwell, Field and External Affairs Division (7506P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number: (703) 308-9068; email address:
Under PRA, 44 U.S.C. 3501
FIFRA section 18 allows EPA to grant emergency exemptions to states, U.S. Territories, and Federal agencies to allow an unregistered use of a pesticide for a limited time if EPA determines that emergency conditions exist. Section 18 requests include unregistered pesticide use exemptions for specific agricultural, public health, and quarantine purposes. FIFRA section 24(c) allows EPA to grant permission to a particular state to register additional uses of a federally registered pesticide for distribution and use within that state to meet a SLN.
44 U.S.C. 3501
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written PRA comments should be submitted on or before July 17, 2015. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
The Federal Communications Commission (“Commission”) received approval from the OMB to develop a new application titled, “Application for Authority to Construct or Make Changes in an International Broadcast Station (FCC Form 420-IB)” to request authority from the Commission to construct or make changes in an international broadcast station. This application has not been implemented and released to the public yet due to a lack of budget resources and technical staff. After the FCC Form 420-IB has been implemented and the Commission has obtained final approval from the OMB, it will be completed by international broadcasters in lieu of the “Application for Authority to Construct or Make Changes in an International, Experimental Television, Experimental Facsimile, or a Developmental Broadcast Station,” (FCC Form 309). In the interim, applicants will continue to file the FCC Form 309 with the Commission. (Note: The OMB approved the FCC Form 309 under OMB Control No. 3060-1035.
The information collected pursuant to the rules set forth in 47 CFR part 73, subpart F, is used by the Commission to assign frequencies for use by international broadcast stations, to grant authority to operate such stations and to determine if interference or adverse propagation conditions exist that may impact the operation of such stations. If the Commission did not collect this information, it would not be in a position to effectively coordinate spectrum for international broadcasters or to act for entities in times of frequency interference or adverse propagation conditions. The orderly nature of the provision of international broadcast service would be in jeopardy without the Commission's involvement.
Currently, the FCC Form 308 is only available to the public in paper form. The Commission obtained OMB approval of a revised FCC Form 308, in Excel format, that will be made available to the public on the FCC Forms page of the FCC's Web site,
FCC Form 308 applicants now have the
Without this collection of information, the Commission would not be able to ascertain whether the main studio owner in the U.S. meets various legal requirements or the foreign broadcast facility, which receives and retransmits programming from the main studio in the U.S., meets various technical requirements that prevent harmful interference to other broadcast stations or telecommunications facilities.
Federal Communications Commission.
Federal Communications Commission.
Notice.
The Federal Communications Commission (FCC) has received Office of Management and Budget (OMB) approval for the following public information collections pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). An agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number, and no person is required to respond to a collection of information unless it displays a currently valid control number. Comments concerning the accuracy of the burden estimates and any suggestions for reducing the burden should be directed to the person listed in the
Timothy May, Policy and Licensing Division, Public Safety and Homeland Security Bureau, at (202) 418-1463, or email:
This document announces that, on April 20, 2015, OMB approved the information collection requirements relating to the text-to-911 rules contained in the Commission's
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
Additionally, the rules adopted by the
Federal Communications Commission.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before July 17, 2015. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele at (202) 418-2991.
The Commission has established a web portal that allows citizens to file complaints or inquiries online. The simple questionnaire will ask the filer to type in the following information: (1) Name of PSAP; (2) PSAP ID (enables a link to the Master PSAP Registry); (3) PSAP Physical Address (number, street, city, state, zip code); (4) PSAP County of Operation; (5) Complainant's Name; (6) Complainant's Title; (7) Complainant's Organization; (8) Complainant's Phone Number; (9) Complainant's Email; (10) Nature of Inquiry—a. Complaint; b. Inquiry; (11) Complaint/Inquiry Type—a. 911 Service Outage; b. Phase1/Phase 2 Deployments; c. Location Accuracy; d. Text-to-911 Service; e. Fraudulent 911 Calls; f. PSAP—Carrier Lines of Demarcation; g. Request for Update of Master PSAP Registry; (12) Description of complaint/inquiry (Max. 1500 words); and (13) Attachments—Upload tool (should support Word Suite, PDF, Text). The questionnaire will also provide filers with the ability to upload documents and files to complete their complaints and inquiries.
Federal Communications Commission.
Federal Election Commission.
Wednesday, May 13, 2015 at 11:00 a.m.
999 E Street NW., Washington, DC
This meeting was closed to the public.
Information the premature disclosure of which would be likely to have a considerable adverse effect on the implementation of a proposed Commission action.
Internal personnel rules and procedures or matters affecting a particular employee.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the following meeting for the aforementioned committee:
Agenda items are subject to change as priorities dictate.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces a meeting for the initial review of applications in response to Funding Opportunity Announcement Number, (FOA) DP15-008, Health Promotion and Disease Prevention Research Centers: Special Interest Project Competitive Supplements (SIPS).
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Administration for Community Living, Department of Health and Human Services.
Notice.
The Administration for Community Living (ACL) is transitioning the Rehabilitation Engineering and Assistive Technology Society of North America (RESNA) Catalyst Project Assistive Technology Technical Assistance Center (AT TA Center) and the University of New Hampshire Institute on Disability Assistive Technology Public Internet Site (National AT Web site) to ACL as a result of the Workforce Opportunity Improvement Act (Pub. L. 113-128) signed by President Obama in July 2014.
The RESNA Catalyst Project is a national training and technical assistance center for assistive technology programs that provides comprehensive information and state-specific, regional and national resources to entities funded under Sections 4 and 5 of the
The University of New Hampshire Institute on Disability supports the renovation, updating, and maintenance of an accessible National AT Web site that provides the public comprehensive, up-to-date information on accommodating individuals with disabilities and resources related to assistive technology, including but not limited to programs under the
The RESNA Catalyst Project and New Hampshire National AT Web site previously operated through a
Estimated Project Period—September 30, 2015 through September 30, 2016
This program is authorized under Section 6 of the
The purpose of the National Activities cooperative agreements with RESNA and the University of New Hampshire is to continue existing activities designed to support and improve the administration of the
For further information or comments regarding this action, contact Lori Gerhard, U.S. Department of Health and Human Services, Administration for Community Living, Center for Consumer Access and Self-Determination, Office of Integrated Programs, One Massachusetts Avenue NW., Washington, DC 20001; telephone (202) 357-3443; fax (202) 357-3469; email
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of grant funds for the support of the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH). The goal of the ICH is to bring together leading global drug regulatory agencies and pharmaceutical manufacturer associations to achieve greater harmonization of technical standards to ensure that safe, effective, and high-quality medicines are developed and registered in the most resource-efficient manner.
The application due date is September 30, 2015. The expiration date is October 1, 2015.
Submit electronic applications to:
Tracy Porter, Office of Strategic Programs, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 1173, Silver Spring, MD 20993, 301-796-7789,
For more information on this funding opportunity announcement (FOA) and to obtain detailed requirements, please refer to the full FOA located at
FDA activities to increase the harmonization of regulatory requirements to ensure that safe, effective, and high quality medicines are developed and registered in the most resource-efficient manner are authorized by 21 U.S.C. 383(c) and 393(b).
The ICH is a globally unique venue with the capability of bringing together the regulatory authorities and pharmaceutical industry to discuss scientific and technical aspects of drug registration. ICH is a programmatic global priority for FDA to achieve its identified strategic priority of globalization. Working through its Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research, FDA has played a leading role in ICH since its inception in 1990. ICH, founded to harmonize drug regulatory standards between three regions, the United States, the European Union, and Japan, has gradually evolved to respond to the increasingly global face of drug development, so that the benefits of international harmonization for better global health can be realized worldwide. ICH's mission is to achieve greater harmonization to ensure that safe, effective, and high-quality medicines are developed and registered in the most resource-efficient manner.
Over the past 2 years, FDA played a leadership role in transforming ICH to meet the challenges of 21st century standards development while firmly positioning ICH future work to continue the focus on technical standards harmonization informed by relevant expertise from regulatory agencies and regulated industry. This effort has included: (1) Establishing ICH as a formal legal entity in the form of a nonprofit association under Swiss law; (2) expanding the opportunities for formal participation of other drug regulatory authorities beyond the three founding regions via the ICH Assembly; and (3) ensuring adequate and predictable funding for the ICH harmonization work (which is also critical to FDA's mission).
FDA remains an ICH founding member and completely committed to ICH success as a science-based standards development venue to ensure harmonization globally for safe, effective, and high-quality medicines. As exemplified in the past 25 years, FDA leadership and participation is an
The program's grant funds will support the ICH to develop a series of international guidelines for implementation according to each region's requirements aimed at achieving the following: (1) Develop and register safe, effective, and high quality medicines in the most efficient and cost effective manner; (2) prevent unnecessary duplication of clinical trials and minimize the use of animal testing without compromising safety and effectiveness, and (3) provide public assurance that the rights, safety, and well-being of subjects are protected during clinical trials.
The ICH aims to make information readily available on ICH, ICH activities, and ICH guidelines to any country or company that requests the information. Additionally, the organization promotes a mutual understanding of regional initiatives in order to facilitate harmonization processes related to ICH guidelines regionally and globally, and to strengthen the capacity of drug regulatory authorities and industry to utilize the guidelines. These objectives will be accomplished by bringing together representatives from both regulatory agencies and pharmaceutic industries from the three founding regions to establish guidelines.
The following organization is eligible to apply: ICH. Within the ICH, the mission is to make recommendations towards achieving greater harmonization in the interpretation and application of technical guidelines and requirements for pharmaceutical product registration, thereby reducing or obviating duplication of testing carried out during the research and development of new human medicines. Leveraging its status as a neutral nonprofit entity focused on technical standards harmonization, the ICH aims to promote international harmonization of drug regulatory standards by bringing together representatives from both regulatory agencies and pharmaceutic industry to discuss and establish common guidelines.
FDA intends to fund one award, corresponding to a total of up to $500,000, for fiscal year (FY) 2016. Future year amounts will depend on annual appropriations, availability of funding, and awardee performance. CDER anticipates providing four additional years of support up to the following amounts:
The support will be 1 year with the possibility of an additional 4 years of noncompetitive support. Continuation beyond the first year will be based on satisfactory performance during the preceding year, receipt of a noncompeting continuation application and available Federal FY appropriations.
Only electronic applications will be accepted. To submit an electronic application in response to this FOA, applicants should first review the full announcement located at
For all electronically submitted applications, the following steps are required.
Steps 1 through 5, in detail, can be found at
Food and Drug Administration, HHS.
Notice; request for comments.
The Food and Drug Administration (FDA) is announcing the availability of draft recommendations for preparing a Study Data Standardization Plan (Standardization Plan). The Standardization Plan is referenced in the Study Data Technical Conformance Guide (Guide). The Guide supplements the guidance for industry “Providing Regulatory Submissions in Electronic Format—Standardized Study Data” and provides specifications, recommendations, and general considerations on submitting standardized study data using FDA-supported data standards. The Guide recommends that, for clinical and nonclinical studies, sponsors include a plan that describes the submission of standardized study data to FDA. The proposed recommendations describe the information that should be included in the Standardization Plan. The proposed recommendations for creating a Standardization Plan are posted on FDA's Study Data Standards Resources Web page at
Although you can comment on these recommendations at any time, to ensure that the Agency considers your comments, please submit either electronic or written comments by July 2, 2015.
Submit written requests for single copies of the recommendations to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or the Office of Communication, Outreach, and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests.
Submit electronic comments to
Ron Fitzmartin, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 1192, Silver Spring, MD 20993-002, 301-796-5333, email:
FDA is announcing the availability of draft recommendations for preparing the Standardization Plan. The Standardization Plan is referenced in the Guide. The Guide supplements the guidance for industry “Providing Regulatory Submissions in Electronic Format—Standardized Study Data” and provides specifications, recommendations, and general considerations on submitting standardized study data using FDA-supported data standards; it is posted on FDA's Study Data Standards Resources Web page at
The Guide recommends that, for clinical and nonclinical studies, sponsors include a plan that describes the submission of standardized study data to FDA. The Standardization Plan will assist FDA in identifying potential data standardization issues early in the development program (
Interested persons may submit either electronic comments regarding this document to
Persons with access to the Internet may obtain the proposed recommendations at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of the draft guidance entitled “Adaptive Designs for Medical Device Clinical Studies; Draft Guidance for Industry and Food and Drug Administration Staff.” This guidance provides sponsors and FDA staff with guidance on how to plan and implement adaptive designs for clinical studies when used in medical device development programs. An adaptive design for a medical device clinical study is defined as a clinical trial design that allows for prospectively planned modifications based on accumulating study data without undermining the trial's integrity and validity. Adaptive designs, when properly implemented, can reduce resource requirements and/or increase the chance of study success. This draft guidance is not final nor is it in effect at this time.
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment of this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by August 17, 2015.
An electronic copy of the guidance document is available for download from the Internet. See the
Submit electronic comments on the draft guidance to
Greg Campbell, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 2110, Silver Spring, MD 20993-0002, 301-796-5750.
This guidance provides sponsors and FDA staff with guidance on how to plan and implement adaptive designs for clinical studies when used in medical device development programs. This document addresses adaptive designs for medical device clinical trials and is applicable to premarket medical device submissions including premarket approval applications, premarket notification (510(k)) submissions, de novo submissions (evaluation of automatic class III designation), humanitarian device exemption applications, and investigational device exemption submissions. This guidance can be applied throughout the clinical development program of a medical device, from feasibility studies to pivotal clinical trials. This guidance does not apply to clinical studies of combination products or codevelopment of a pharmaceutical product with an unapproved diagnostic test.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on the adaptive design of clinical
Persons interested in obtaining a copy of the draft guidance may do so by downloading an electronic copy from the Internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This draft guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 807, subpart E, which have been approved under 0910-0120; 21 CFR part 812, which have been approved under 0910-0078; 21 CFR part 814, subparts A, B, and C, which have been approved under OMB control number 0910-0231; and 21 CFR part 814, subpart H, which have been approved under OMB control number 0910-0332.
Interested persons may submit either electronic comments regarding this document to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Patient Preference Information—Submission, Review in PMAs, HDE Applications, and
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by August 17, 2015.
An electronic copy of the guidance document is available for download from the Internet. See the
Submit electronic comments on the draft guidance to
Anindita Saha, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5414, Silver Spring, MD 20993-0002, 301-796-2537,
FDA is announcing the availability of a draft guidance for industry entitled “Patient Preference Information—Submission, Review in PMAs, HDE Applications, and
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on Patient Preference Information—Submission, Review in PMAs, HDE Applications, and
Persons interested in obtaining a copy of the draft guidance may do so by downloading an electronic copy from the Internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This guidance refers to currently approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR 812.25(c) have been approved under OMB control number 0910-0078; the collections of information in 21 CFR part 807 subpart E have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 814 subparts B and E have been approved under OMB control number 0910-0231; the collections of information in 21 CFR part 814 subpart H have been approved under OMB control number 0910-0332; and the collections of information in 21 CFR part 801 have been approved under OMB control number 0910-0485.
Interested persons may submit either electronic comments regarding this document to
Specifically the Agency would like comments on the following questions:
1. Section IV of the draft guidance recommends qualities for patient preference studies. Do you believe these recommended qualities are clear and understandable? If not, what should be reworded or edited? Is there anything missing? If so, what needs to be added?
2. Under what conditions should health care professional or patient labeling include information about patient preference studies?
3. How should sponsors present patient preference information in the health care professional and patient labeling?
4. How should labeling indicate that only a subset of patients in a patient preference study were willing to accept certain risks in order to achieve probable benefits?
5. How should sponsors and the FDA ensure that patients receive and understand patient preference information?
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a collection of information entitled, “Infant Formula Requirements” has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
FDA PRA Staff, Office of Operations, Food and Drug Administration, 8455 Colesville Rd., COLE-14526, Silver Spring, MD 20993-0002,
On March 4, 2015, the Agency submitted a proposed collection of information entitled, “Infant Formula Requirements” to OMB for review and clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has now approved the information collection and has assigned OMB control number 0910-0256. The approval expires on April 30, 2018. A copy of the supporting statement for this information collection is available on the Internet at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Notice is hereby given of a change in the meeting of the National Cancer Institute Special Emphasis Panel, June 09, 2015, 4:30 p.m. to June 10, 2015, 06:00 p.m., Doubletree Hotel Bethesda, (Formally Holiday Inn Select), 8120 Wisconsin Avenue, Bethesda, MD 20814 which was published in the
The meeting notice is amended to change the title from Exploratory/Development Research Grant Program Omnibus SEP-6 to NCI Omnibus R03 & R21 SEP-6. The meeting is closed to the public.
Notice is hereby given of a change in the meeting of the National Cancer Institute Special Emphasis Panel, June 29, 2015, 8:00 a.m. to June 30, 2015, 05:00 p.m., Hyatt Regency Bethesda, One Bethesda Metro Center, 7400 Wisconsin Avenue, Bethesda, MD 20814 which was published in the
The meeting notice is amended to change the title from Exploratory/Development Research Grant Program Omnibus SEP-3 to NCI Omnibus R03 & R21 SEP-3. The meeting is closed to the public.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the Division of Intramural Research Board of Scientific Counselors, NIAID.
The meeting will be closed to the public as indicated below in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended for the review, discussion, and evaluation of individual grant
Notice is hereby given of a meeting scheduled by the Deputy Director for Intramural Research at the National Institutes of Health (NIH) with the Chairpersons of the Boards of Scientific Counselors. The Boards of Scientific Counselors are advisory groups to the Scientific Directors of the Intramural Research Programs at the NIH. This meeting will take place on June 15, 2015, from 10:00 a.m. to 2:00 p.m., at the NIH, 1 Center Drive, Bethesda, MD 20892, Building 31, 6th Floor, Room 6. The agenda for the meeting is a discussion of policies and procedures that apply to the regular review of NIH intramural scientists and their work.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should contact Ms. Margaret McBurney at the Office of Intramural Research, NIH, Building 1, Room 160, Telephone: (301) 496-1921, FAX Number: (301) 402-4273, or email
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Periodically, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish a summary of information collection requests under OMB review, in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these documents, call the SAMHSA Reports Clearance Officer on (240) 276-1243.
The Substance Abuse and Mental Health Services Administration (SAMHSA) Center for Substance Abuse Treatment (CSAT) and Center for Behavioral Health Statistics and Quality (CBHSQ) are proposing a survey to assess health information technology (HIT) adoption among SAMHSA grantees. As part of its Strategic Initiative to advance the use of health information technologies to support integrated behavioral health care, SAMHSA has been working to develop a survey instrument that will examine the status of and plans for HIT adoption by behavioral health service providers who are implementing SAMHSA grant programs. The selected programs are funded by the by the Center for Mental Health Services (CMHS), the Center for Substance Abuse Prevention (CSAP), and (CSAT).
This project seeks to acquire baseline data necessary to inform the Agency's strategic initiative that focuses on fostering the adoption of HIT in community behavioral health services. The survey of SAMHSA grantees regarding their access to and use of health information technology will provide valuable information that will inform the behavioral HIT literature.
Approval of this data collection by the Office of Management and Budget (OMB) will allow SAMHSA to identify the current status of HIT adoption and use among a diverse group of grantees. Data from the survey will allow SAMHSA to enhance the HIT-related programmatic activities among its grantees by providing data on how HIT facilitates the implementation of different types of SAMHSA grants, thereby fostering the appropriate adoption of HIT within SAMSHA-funded programs.
The survey will collect data once, providing a snapshot view of the current state of HIT adoption. The proposed participant pool is comprised of SAMHSA grantee program leadership who are willing to provide the assistance needed to ensure a high rate of response. Awardees from nine different SAMHSA programs drawn from CMHS, CSAT, and CSAP comprise the pool of survey participants.
The survey mode for data collection will be web-based with embedded skip logic for respondents to avoid questions that are not applicable to them. The minimum amount of time for a respondent to complete the survey is 20 minutes, with respondents who do not skip items taking a maximum of 30 minutes for completion. The total estimated respondent burden is 149.6 hours.
The following table summarizes the estimated response burden.
Written comments and recommendations concerning the proposed information collection should be sent by June 17, 2015 to the SAMHSA Desk Officer at the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). To ensure timely receipt of comments, and to avoid potential delays in OMB's receipt and processing of mail sent through the U.S. Postal Service, commenters are encouraged to submit their comments to OMB via email to:
In compliance with Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, call the SAMHSA Reports Clearance Officer at (240) 276-1243.
Comments are invited on: (a) Whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The Center for Mental Health Services awards grants each fiscal year to each of the states, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands from allotments authorized under the PATH program established by Public Law 101-645, 42 U.S.C. 290cc-21
This submission is for a revision of the current approval of the annual grantee reporting requirements. Section 528 of the PHS Act specifies that not later than January 31 of each fiscal year, a funded entity will prepare and submit a report in such form and containing such information as is determined necessary for securing a record and description of the purposes for which amounts received under section 521 were expended during the preceding fiscal year and of the recipients of such amounts and determining whether such amounts were expended in accordance with statutory provisions.
The proposed changes to the PATH Annual Report are as follows:
To create a PATH report that is easier to read and questions that are easier to understand, language has been made more concise and questions have been renumbered.
All data elements align with the 2014 HMIS Data Standards and can be extracted from HMIS.
An element has been added to the Budget section to collect information about the number of trainings provided by PATH-funded staff.
To decrease reporting burden and improve data quality, several revisions were made to the collection of information about persons outreached and persons enrolled. Data elements were updated to more clearly describe the data to be reported and reduce confusion and potential for misinterpretation. Information about persons outreached has been divided into two elements to collect specific information about the location of the outreach contact (street outreach or service setting).
To improve data quality, several service category labels have been updated to more accurately reflect the type of service to be reported. The “Screening and Assessment” category has also been divided into two separate categories to capture specific information about screenings and clinical assessments provided by PATH staff. The “Total number of times this service was provided” column has been removed to reduce reporting burden.
To improve data quality, several referral category labels have been updated to more accurately reflect the type of referral to be reported. The “Total number of times this type of referral was provided” column has been removed to reduce reporting burden.
Elements collecting information regarding PATH program outcomes have been added. The PATH program's transition to using local HMIS to collect PATH client data allows data on client outcomes related to the PATH program to be more easily collected and reported.
Response categories for demographic data elements have been updated to fully align with the 2014 HMIS Data Standards. An element to gather information about PATH clients' connection to the SSI/SSDI Outreach, Access, and Recovery program (SOAR) has also been added.
To decrease reporting burden and improve the outreach and engagement process, demographic information for “Persons contacted” is no longer required. Providers are encouraged to gather information and build client records as early in the engagement process as possible. All demographic information should be collected by the point of PATH enrollment.
Definitions for PATH terms have been updated to streamline definitions and increase reliability of data reporting.
The estimated annual burden for these reporting requirements is summarized in the table below.
Send comments to Summer King, SAMHSA Reports Clearance Officer, Room 2-1057, One Choke Cherry Road, Rockville, MD 20857
Pursuant to Public Law 92-463, notice is hereby given that the Substance Abuse and Mental Health Services Administration's (SAMHSA's) Center for Substance Abuse Treatment (CSAT) National Advisory Council will meet on June 16, 2015, from 2:00 p.m.-3:15 p.m. (EDT) and June 24, 2016, from 2:00 p.m.—3:15 p.m. (EDT). Both meetings will be closed to the public.
The meetings will include discussion and evaluation of grant applications reviewed by Initial Review Groups, and involve an examination of confidential financial and business information as well as personal information concerning the applicants. Therefore, both meetings will be closed to the public, as determined by the SAMHSA Administrator, in accordance with Title 5 U.S.C. 552b(c)(4) and (6) and (c)(9)(B) and 5 U.S.C. App. 2, Section 10(d).
The meetings will be held virtually. Meeting information and a roster of Council members may be obtained either by accessing the SAMHSA Council Web site at:
In compliance with Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, call the SAMHSA Reports Clearance Officer on (240) 276-1243.
Comments are invited on: (a) Whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The Substance Abuse and Mental Health Services Administration's (SAMHSA) Center for Mental Health Services (CMHS) as part of an interagency agreement with the Federal Emergency Management Agency (FEMA) provides a toolkit to be used for the purposes of collecting data on the Crisis Counseling Assistance and Training Program (CCP). The CCP provides supplemental funding to states and territories for individual and community crisis intervention services during a federal disaster.
The CCP has provided disaster mental health services to millions of disaster survivors since its inception and, as a result of 30 years of accumulated expertise, it has become an important model for federal response to a variety of catastrophic events. Recent State CCPs include programs in New Jersey and New York following 2012 Hurricane Sandy; two programs in Colorado, one related to a wildfire and the second to a flood; a program in Oklahoma in the aftermath of severe storms and tornadoes in 2013; and programs in Washington and Alaska related to flooding and mudslides in 2014. These programs have primarily addressed the short-term mental health needs of communities through (a) outreach and public education, (b) individual and group counseling, and (c) referral. Outreach and public education serve primarily to normalize reactions and to engage people who might need further care. Crisis counseling assists survivors to cope with current stress and symptoms in order to return to predisaster functioning. Crisis counseling relies largely on “active listening,” and crisis counselors also provide psycho-education (especially about the nature of responses to trauma) and help clients build coping skills. Crisis counseling typically continues no more than a few times. Because crisis counseling is time-limited, referral is the third important functions of CCPs. Counselors are expected to refer clients to formal treatment if the person has developed more serious psychiatric problems.
Data about services delivered and users of services will be collected throughout the program period. The data will be collected via the use of a toolkit that relies on standardized forms. At the program level, the data will be entered quickly and easily into a cumulative database to yield summary tables for quarterly and final reports for the program. Additionally, we are in the process of developing and testing the feasibility of using mobile devices for data entry purposes. Because the data will be collected in a consistent way from all programs, they can be uploaded or linked into an ongoing national database that likewise provides CMHS
The components of the tool kit are listed and described below:
• Encounter logs. These forms document all services provided. Completion of these logs is required by the crisis counselors. There are three types of encounter logs: (1) Individual/Family or Household Crisis Counseling Services Encounter Log; (2) Group Encounter Log; and (3) Weekly Tally Sheet.
○ Individual/Family or Household Crisis Counseling Services Encounter Log. Crisis counseling is defined as an interaction that lasts at least 15 minutes and involves participant disclosure. This form is completed by the Crisis Counselor for each service recipient, defined as the person or persons who actively participated in the session (
○ Group Encounter Log. This form is used to identify either a group crisis counseling encounter or a group public education encounter. A check at the top identifies the class of activities (
○ Weekly Tally Sheet. This form documents brief educational and supportive encounters not captured on any other form. Information collected includes service characteristics, daily tallies and weekly totals for brief educational or supportive contacts, and material distribution with no or minimal interaction.
• Assessment and Referral Tools. This tool provides descriptive information about intense users of services either child/youth or adults, defined as all individuals receiving a third individual crisis counseling visit. This tool will be used beginning three months postdisaster and will be completed by the crisis counselor.
• Participant Feedback. These surveys are completed by and collected from a sample of service recipients, not every recipient. A time sampling approach (
• CCP Service Provider Feedback. These surveys are completed by and collected from the CCP service providers anonymously at six months and one year postevent. The survey will be coded on several program-level as well as worker-level variables. However, the program itself will be identified and shared with program management only if the number of individual workers was greater than 20.
There are no changes to the Individual Encounter Log, Group Encounter Log, Weekly Tally, and the Assessment and Referral Tools since the last approval. Revisions include the addition of mobile device questions to the Service Provider Feedback Form and minor revisions to the gender question on the Participant Feedback Form and Service Provider Feedback Form.
The table below is the estimates of annualized hour burden.
Send comments to Summer King, SAMHSA Reports Clearance Officer, Room 2-1057, One Choke Cherry Road, Rockville, MD 20857
Federal Emergency Management Agency, DHS.
Notice.
This notice amends the notice of a major disaster declaration for the State of Maine (FEMA-4208-DR), dated March 12, 2015, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472, (202) 646-2833.
The notice of a major disaster declaration for the State of Maine is hereby amended to include the following area among those areas determined to have been adversely affected by the event declared a major disaster by the President in his declaration of March 12, 2015.
Sagadahoc County for Public Assistance.
Sagadahoc County for snow assistance under the Public Assistance program for any continuous 48-hour period during or proximate the incident period.
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant;
Federal Emergency Management Agency, DHS.
Notice.
This is a notice of the Presidential declaration of a major disaster for the Commonwealth of Kentucky (FEMA-4216-DR), dated April 30, 2015, and related determinations.
Dean Webster, Office of Response and Recovery, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646-2833.
Notice is hereby given that, in a letter dated April 30, 2015, the President issued a major disaster declaration under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121
I have determined that the damage in certain areas of the Commonwealth of Kentucky resulting from severe winter storms, snowstorms, flooding, landslides, and mudslides during the period of February 15-22, 2015, is of sufficient severity and magnitude to warrant a major disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121
In order to provide Federal assistance, you are hereby authorized to allocate from funds available for these purposes such amounts as you find necessary for Federal disaster assistance and administrative expenses.
You are authorized to provide Public Assistance in the designated areas and Hazard Mitigation throughout the Commonwealth. You are further authorized to provide snow assistance under the Public Assistance program for a limited period of time during or proximate to the incident period. Consistent with the requirement that Federal assistance be supplemental, any Federal funds provided under the Stafford Act for Hazard Mitigation will be limited to 75 percent of the total eligible costs. Federal funds provided under the Stafford Act for Public Assistance also will be limited to 75 percent of the total eligible costs, with the exception of projects that meet the eligibility criteria for a higher Federal cost-sharing percentage under the Public Assistance Alternative Procedures Pilot Program for Debris Removal implemented pursuant to section 428 of the Stafford Act.
Further, you are authorized to make changes to this declaration for the approved assistance to the extent allowable under the Stafford Act.
The Federal Emergency Management Agency (FEMA) hereby gives notice that pursuant to the authority vested in the Administrator, under Executive Order 12148, as amended, Jose M. Girot, of FEMA is appointed to act as the Federal Coordinating Officer for this major disaster.
The following areas of the Commonwealth of Kentucky have been designated as adversely affected by this major disaster:
Boyd, Boyle, Caldwell, Clark, Estill, Floyd, Harlan, Jackson, Jessamine, Knott, Knox, Lawrence, Lee, Letcher, Lyon, Marshall, Menifee, Metcalfe, Morgan, Pendleton, Perry, Pike, Powell, Simpson, Taylor, Washington, and Wolfe Counties for Public Assistance.
Boyd, Boyle, Caldwell, Estill, Floyd, Jackson, Jessamine, Knott, Lawrence, Lee, Lyon, Menifee, Morgan, Pike, Powell, Simpson, Taylor, Washington, and Wolfe Counties for snow assistance under the Public Assistance program for any continuous 48-hour period during or proximate the incident period.
All areas within the Commonwealth of Kentucky are eligible for assistance under the Hazard Mitigation Grant Program.
The following Catalog of Federal Domestic Assistance Numbers (CFDA) are to be used for reporting and drawing funds: 97.030, Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling; 97.033, Disaster Legal Services; 97.034, Disaster Unemployment Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048, Disaster Housing Assistance to Individuals and Households In Presidentially Declared Disaster Areas; 97.049, Presidentially Declared Disaster Assistance—Disaster Housing Operations for Individuals and Households; 97.050, Presidentially Declared Disaster Assistance to Individuals and Households—Other Needs; 97.036, Disaster Grants—Public Assistance (Presidentially Declared Disasters); 97.039, Hazard Mitigation Grant.
Federal Emergency Management Agency, DHS.
Final Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
The effective date for each LOMR is indicated in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC 20472, (202) 646-4064, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Final Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
The effective date for each LOMR is indicated in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC 20472, (202) 646-4064, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Final Notice.
Flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final for the communities listed in the table below.
The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report are used by insurance agents and others to calculate appropriate flood insurance premium rates for buildings and the contents of those buildings.
The effective date of June 2, 2015 which has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community.
The FIRM, and if applicable, the FIS report containing the final flood hazard information for each community is available for inspection at the respective Community Map Repository address listed in the tables below and will be available online through the FEMA Map Service Center at
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC 20472, (202) 646-4064, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the new or modified flood hazard information for each community listed. Notification of these changes has been published in
This final notice is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the new or revised FIRM and FIS report available at the address cited below for each community or online through the FEMA Map Service Center at
The flood hazard determinations are made final in the watersheds and/or communities listed in the table below.
Federal Emergency Management Agency, DHS.
Final notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
The effective date for each LOMR is indicated in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
U.S. Citizenship and Immigration Services, Department of Homeland Security.
30-Day Notice.
The Department of Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995. The information collection notice was previously published in the
The purpose of this notice is to allow an additional 30 days for public comments. Comments are encouraged and will be accepted until June 17, 2015. This process is conducted in accordance with 5 CFR 1320.10.
Written comments and/or suggestions regarding the item(s) contained in this notice, especially regarding the estimated public burden and associated response time, must be directed to the OMB USCIS Desk Officer via email at
You may wish to consider limiting the amount of personal information that you provide in any voluntary submission you make. For additional information please read the Privacy Act notice that is available via the link in the footer of
If you need a copy of the information collection instrument with instructions, or additional information, please contact us at: USCIS, Office of Policy and Strategy, Regulatory Coordination Division, Laura Dawkins, Chief, 20 Massachusetts Avenue NW., Washington, DC 20529-2140, Telephone number (202) 272-8377. Please note contact information provided here is solely for questions regarding this notice. It is not for individual case status inquiries. Applicants seeking information about the status of their individual cases can check Case Status Online, available at the USCIS Web site at
You may access the information collection instrument with instructions, or additional information by visiting the Federal eRulemaking Portal site at:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A.
The
*Includes combined Consolidated Plan and Annual Action Plan and separate performance report.
**Includes hours for 100 localities to submit abbreviated plans,
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding
Anna Guido, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A.
The
Estimation of the total numbers of hours needed to prepare the information collection including number of respondents, frequency of response, and hours of response:
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Fish and Wildlife Service, Interior.
Notice of receipt of applications for permit.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species, marine mammals, or both. With some exceptions, the Endangered Species Act (ESA) and Marine Mammal Protection Act (MMPA) prohibit activities with listed species unless Federal authorization is acquired that allows such activities.
We must receive comments or requests for documents on or before June 17, 2015. We must receive requests for marine mammal permit public hearings, in writing, at the address shown in the
Brenda Tapia, U.S. Fish and Wildlife Service, Division of Management Authority, Branch of Permits, MS: IA, 5275 Leesburg Pike, Falls Church, VA 22041; fax (703) 358-2281; or email
Brenda Tapia, (703) 358-2104 (telephone); (703) 358-2281 (fax);
Send your request for copies of applications or comments and materials concerning any of the applications to the contact listed under
Please make your requests or comments as specific as possible. Please confine your comments to issues for which we seek comments in this notice, and explain the basis for your comments. Include sufficient information with your comments to allow us to authenticate any scientific or commercial data you include.
The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) Those that include citations to, and analyses of, the applicable laws and regulations. We will not consider or include in our administrative record comments we receive after the close of the comment period (see
Comments, including names and street addresses of respondents, will be available for public review at the street address listed under
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The applicant requests a permit to import biological samples from wild specimens of the hawksbill sea turtle (
The applicant requests a permit to import six captive born tigers (
The applicant requests renewal of their captive-bred wildlife registration under 50 CFR 17.21(g) for leopards (
The applicant requests a permit to import a sport-hunted trophy of one male bontebok (
The applicant requests a permit to photograph southern sea otters (
The applicant requests a permit to tag and biopsy walrus (
Concurrent with publishing this notice in the
Fish and Wildlife Service, Interior.
Notice of issuance of permits.
We, the U.S. Fish and Wildlife Service (Service), have issued the following permits to conduct certain activities with endangered species. We issue these permits under the Endangered Species Act (ESA).
Brenda Tapia, U.S. Fish and Wildlife Service, Division of Management Authority, Branch of Permits, MS: IA, 5275 Leesburg Pike, Falls Church, VA 22041; fax (703) 358-2281; or email
Brenda Tapia, (703) 358-2104 (telephone); (703) 358-2281 (fax);
On the dates below, as authorized by the provisions of the ESA (16 U.S.C. 1531
Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents to: U.S. Fish and Wildlife Service, Division of Management Authority, Branch of Permits, MS: IA, 5275 Leesburg Pike, Falls Church, VA 22041; fax (703) 358-2281.
Bureau of Ocean Energy Management (BOEM), Interior.
Availability of Revised North American Datum of 1927 (NAD 27) Outer Continental Shelf Official Protraction Diagrams and Supplemental Official Outer Continental Shelf Block Diagrams.
Notice is hereby given of the availability of certain NAD 27-based Outer Continental Shelf (OCS) Official Protraction Diagrams (OPDs) and Supplemental Official OCS Block Diagrams (SOBDs) depicting geographic areas located in the Gulf of Mexico. BOEM, in accordance with its authority and responsibility under the OCS Lands Act, is announcing the availability of maps used for the description of renewable energy, mineral, and oil and gas lease sales in the geographic areas they represent.
The following twelve (12) OPDs (dated October 1, 2014) have been revised to reflect coast line data of the Gulf Coast of Florida that was originally approved by the U.S. Baseline Committee in 1999. Specifically, the coast line, Submerged Lands Act boundary, and the OCS Lands Act “Section 8(g) Zone” boundary have been revised. Eight (8) SOBDs (dated October 1, 2014) located within OPD NH16-05 (Pensacola) have been revised to reflect the intersection of the Submerged Lands Act and Section 8(g) Zone boundaries for the States of Florida and Alabama (known as the “Florida wrap-around”). Two (2) SOBDs (dated October 1, 2014) also located within OPD NH16-05 (Pensacola) have been revised to reflect the intersection of the Submerged Lands Act and Section 8(g) Zone boundaries with the “Military Mission Line.”
BOEM is also publishing a total of six hundred ninety-two (692) SOBDs that were generated by the Minerals Management Service (a predecessor bureau of BOEM) using coast line data that was originally approved by the U.S. Baseline Committee in 1999. These SOBDs (dated March 1, 1999) reflect the Submerged Lands Act and the Section 8(g) Zone boundaries adjacent to the Gulf Coast of Florida. In 2000, the SOBDs were submitted to the State of Florida for signature, indicating their concurrence with the MMS depiction of the boundaries. Although Florida did not sign the SOBDs, the diagrams reflect the current Federal position of these boundaries, and will eventually be superseded by diagrams with an updated format and BOEM logo. BOEM will continue working with Florida to resolve any areas of boundary discrepancy.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 65)—3/01/1999:
20, 21, 64, 65, 108, 109, 152, 153, 196, 197, 198, 240, 241, 242, 243, 285, 286, 287, 329, 330, 331, 373, 374, 375, 417, 418, 419, 461, 462, 463, 506, 507, 508, 550, 551, 552, 595, 596, 639, 640, 641, 684, 685, 686, 729, 730, 731, 773, 774, 775, 818, 819, 820, 862, 863, 864, 907, 908, 909, 951, 952, 953, 996, 997, 998.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 73)—3/01/1999:
28, 29, 30, 73, 74, 75, 117, 118, 119, 162, 163, 164, 206, 207, 208, 251, 252, 253, 295, 296, 297, 339, 340, 341, 384, 385, 428, 429, 430, 472, 473, 474, 517, 518, 561, 562, 563, 605, 606, 607, 650, 651, 652, 653, 695, 696, 697, 698, 699, 701, 740, 741, 742, 743, 744, 745, 746, 786, 787, 788, 789, 790, 833, 834, 877, 878, 921, 922, 965, 966, 1009, 1010, 1011.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 8)—3/01/1999:
42, 43, 86, 87, 130, 131, 175, 219.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 72)—3/01/1999:
89, 133, 134, 177, 178, 221, 222, 223, 265, 266, 267, 268, 269, 270, 271, 272, 311, 312, 313, 314, 315, 316, 317, 359, 360, 361, 404, 405, 406, 449, 450, 451, 494, 495, 538, 539, 540, 583, 584, 627, 628, 629, 671, 672, 715, 716, 759, 760, 803, 804, 847, 848, 849, 892, 893, 933, 934, 935, 936, 937, 938, 939, 975, 976, 977, 978, 979, 980, 981, 982, 983, 984.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 102)—3/01/1999:
109, 110, 111, 112, 113, 114, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 169, 170, 171, 173, 174, 175, 194, 195, 196, 197, 202, 203, 204, 211, 212, 213, 214, 215, 216, 217, 218, 219, 237, 238, 239, 247, 248, 249, 254, 255, 256, 257, 258, 259, 260, 261, 262, 281, 282, 291, 292, 293, 298, 299, 300, 325, 326, 336, 337, 341, 342, 343, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 413, 414, 415, 457, 458, 459, 460, 502, 503, 504, 547, 548, 592, 636, 680, 724, 768, 812, 856, 900, 944, 969, 970, 988.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 29)—3/01/1999:
5, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 47, 48, 49, 50, 51, 59, 60, 89, 90, 91, 92, 93, 133, 134, 135, 136, 177, 178.
Intersection of the Submerged Lands Act and “Section 8(g) Zone” boundaries for the States of Florida and Alabama
753, 754, 797, 798, 841, 842, 885, 886.
Intersection of the Submerged Lands Act and “Section 8(g) Zone” boundaries with the “Military Mission Line” (Total of 2)—10/01/2014:
770, 814.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 86)—3/01/1999:
727, 728, 753, 754, 764, 765, 766, 767, 768, 769, 770, 771, 772, 773, 774, 775, 776, 777, 778, 797, 798, 801, 802, 803, 804, 805, 806, 807, 808, 809, 810, 811, 812, 813, 814, 815, 816, 817, 818, 819, 820, 821, 822, 823, 824, 825, 841, 842, 843, 844, 845, 846, 847, 848, 849, 850, 851, 852, 853, 866, 867, 868, 869, 870, 871, 872, 885, 886, 887, 888, 889, 890, 913, 914, 915, 916, 917, 959, 960, 961, 962, 963, 1005, 1006, 1007, 1008.
Submerged Lands Act and “Section 8(g) Zone” block (Total of 1)—3/01/1999:
38.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 115)—3/01/1999:
1, 2, 3, 4, 35, 36, 45, 46, 47, 48, 49, 79, 80, 81, 91, 92, 93, 94, 122, 123, 124, 136, 137, 138, 165, 166, 167, 168, 181, 182, 206, 207, 208, 209, 210, 211, 225, 226, 227, 249, 250, 251, 252, 253, 254, 270, 271, 291, 292, 293, 294, 295, 314, 315, 316, 334, 335, 336, 337, 338, 358, 359, 360, 377, 378, 379, 380, 403, 404, 405, 419, 420, 421, 422, 447, 448, 449, 450, 451, 452, 453, 454, 461, 462, 463, 464, 465, 492, 493, 494, 495, 496, 497, 498, 499, 500, 503, 504, 505, 506, 507, 542, 543, 544, 545, 546, 547, 548, 549, 550, 587, 588, 589, 590, 591.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 76)—3/01/1999:
1, 2, 45, 46, 47, 89, 90, 91, 92, 93, 134, 135, 136, 137, 138, 180, 181, 182, 183, 226, 227, 270, 271, 272, 314, 315, 316, 317, 359, 360, 361, 362, 404, 405, 406, 449, 450, 493, 494, 495, 537, 538, 539, 582, 583, 584, 585, 627, 628, 629, 630, 672, 673, 674, 675, 717, 718, 719, 762, 763, 764, 806, 807, 808, 851, 852, 853, 895, 896, 897, 940, 941, 984, 985, 986, 987.
Submerged Lands Act and “Section 8(g) Zone” blocks (Total of 65)—3/01/1999:
17, 18, 19, 20, 21, 22, 23, 62, 63, 64, 65, 66, 67, 110, 111, 154, 155, 198, 199, 242, 243, 244, 286, 287, 288, 331, 332, 375, 376, 377, 419, 420, 421, 463, 464, 507, 508, 551, 552, 593, 594, 595, 596, 636, 637, 638, 639, 640, 680, 681, 682, 724, 725, 768, 769, 812, 813, 856, 857, 900, 901, 944, 945, 988, 989.
Copies of the revised OPDs are available for download in .pdf format from
Copies of the revised SOBDs are available for download in .pdf format from
Douglas Vandegraft, Chief, Mapping and Boundary Branch at (703) 787-1312 or via email at
Bureau of Ocean Energy Management (BOEM), Interior.
List of Restricted Joint Bidders
Pursuant to the authority vested in the Director of the Bureau of Ocean Energy Management by the joint bidding provisions of 30 CFR 556.41, each entity within one of the following groups is restricted from bidding with any entity in any of the other following groups at Outer Continental Shelf oil and gas lease sales to be held during the bidding period May 1, 2015, through October 31, 2015. This List of Restricted Joint Bidders will cover the period May 1, 2015, through October 31, 2015, and replace the prior list published on October 29, 2014, which covered the period November 1, 2014, through April 30, 2015.
On the basis of the record
The Commission, pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. 1675(c)), instituted these reviews on March 3, 2014 (79 FR 11821) and determined on June 6, 2014 that it would conduct full reviews (79 FR 69127, November 20, 2014). Notice of the scheduling of the Commission's reviews and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission made these determinations pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. 1675(c)). It completed and filed its determinations in these reviews on May 12, 2015. The views of the Commission are contained in USITC Publication 4533 (May 2015), entitled
By order of the Commission.
On May 12, 2015, the Department of Justice lodged a proposed consent decree with the United States District Court for the District of Hawaii in the lawsuit entitled
In this action, the United States filed a complaint under the Clean Air Act alleging violations at the Kapa'a and Kalaheo Sanitary Landfill (“Landfill”) located on the island of Oahu in Hawaii. The United States' complaint alleges violations for the City and County of Honolulu's (“CCH”) failure to timely submit a design plan for a gas collection and control system (“GCCS”) and failure to timely install and operate a GCCS. The consent decree requires CCH to pay a civil penalty in the amount of $875,000 and to implement a Supplemental Environmental Project comprised of the installation and operation of a photovoltaic system at its waste-to-energy facility located on Hanua Street, Kapolei, Hawaii. The consent decree states that, during the period of the negotiations of this consent decree, CCH submitted a GCCS design plan approved by EPA for the Landfill, installed and commenced operation of the GCCS, developed a startup, shutdown and malfunction plan, and submitted a complete application for a Title V covered source permit.
The publication of this notice opens a period for public comment on the consent decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the consent decree may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $11.00 (25 cents per page reproduction cost) payable to the United States Treasury.
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning its proposal to extend the Office of Management and Budget's (OMB) approval of the information collection requirements specified by the 1,2-Dibromo-3-Chloropropane (DBCP) Standard (29 CFR 1910.1044).
Comments must be submitted (postmarked, sent, or received) by July 17, 2015.
Theda Kenney or Todd Owen Directorate of Standards and Guidance, OSHA, U.S. Department of Labor, Room N-3609, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693-2222.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent (
The information collection requirements in the DBCP Standard provide protection for workers from the adverse health effects associated with exposure to DBCP. In this regard, the DBCP Standard requires employers to: monitor workers' exposure to DBCP; monitor worker health, and provide workers with information about their exposures and the health effects of exposure to DBCP.
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the Agency's functions, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other technological information collection and transmission techniques.
After extensive research, OSHA found no U.S. employer who currently produces DBCP or DBCP-based end-use products, most likely because the Environmental Protection Agency (EPA) registration suspension for this substance remains in effect; therefore, no cost or time burdens accrue to employers under the Standard. The Agency requests one hour for OMB to approve the information collection provisions of the Standard so that it can enforce the paperwork requirements of the Standard if EPA lifts the suspension or technology develops new applications for DBCP.
You may submit comments in response to this document as follows: (1) electronically at
Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693-2350, (TTY (877) 889-5627).
Comments and submissions are posted without change at
Information on using the
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
Notice.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95) [44 U.S.C. 3506(c)(2)(A)]. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Office of Workers' Compensation Programs is soliciting comments concerning the proposed collection:
Authorization for Release of Medical Information (CM-936). A copy of the proposed information collection request can be obtained by contacting the office listed below in the
Written comments must be submitted to the office listed in the addresses section below on or before July 17, 2015.
Ms. Yoon Ferguson, U.S. Department of Labor, 200 Constitution Ave. NW., Room S-3201, Washington, DC 20210, telephone (202) 354-9647, fax (202) 343-5974, Email
I.
II.
* Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
* Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
* Enhance the quality, utility and clarity of the information to be collected; and
* Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
III.
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.
National Aeronautics and Space Administration.
Notice of Availability of inventions for licensing.
Patent applications on the inventions listed below assigned to the National Aeronautics and Space Administration, have been filed in the United States Patent and Trademark Office, and are available for licensing.
May 18, 2015.
Robin W. Edwards, Patent Counsel, Langley Research Center, Mail Stop 30, Hampton, VA 23681-2199; telephone (757) 864-3230; fax (757) 864-9190.
NASA Case No.: LAR-18463-1: Energy-Absorbing Beam Member;
NASA Case No.: LAR-18509-1: Infrasonic Stethoscope for Monitoring Physiological Processes;
NASA Case No.: LAR-18474-1: Compound Wing Vertical Takeoff and Landing Small Unmanned Aircraft System;
NASA Case No.: LAR-18526-1: Device and Method of Scintillating Quantum Dots for Radiation Imaging;
NASA Case No.: LAR-18447-1: System and Method for Multi-Wavelength Optical Signal Detection;
NASA Case No.: LAR-17769-2: Modification of Surface Energy via Direct Laser Ablative Surface Patterning.
National Aeronautics and Space Administration.
Notice of availability of inventions for licensing.
Patent applications on the inventions listed below assigned to the National Aeronautics and Space Administration, have been filed in the United States Patent and Trademark Office, and are available for licensing.
May 18, 2015.
Bryan A. Geurts, Patent Counsel, Goddard Space Flight Center, Mail Code 140.1, Greenbelt, MD 20771-0001; telephone (301) 286-7351; fax (301) 286-9502.
NASA Case No.: GSC-16883-3: Meta-Material Blocking Filter with Low Geometric Inductance.
National Aeronautics and Space Administration.
Notice of availability of inventions for licensing.
Patent applications on the inventions listed below assigned to the National Aeronautics and Space Administration, have been filed in the United States Patent and Trademark Office, and are available for licensing.
May 18, 2015.
Robert M. Padilla, Patent Counsel, Ames Research Center, Code 202A-4, Moffett Field, CA 94035-0001; telephone (650) 604-5104; fax (650) 604-2767.
NASA Case No.: ARC-16289-1: Low Burden Star Tracker;
NASA Case No.: ARC-17611-1: A System for the Analysis of Vascular Structures;
NASA Case No.: ARC-16956-1: Biologically Inspired Radiation Reflector.
National Aeronautics and Space Administration.
Notice of Availability of inventions for licensing.
Patent applications on the inventions listed below assigned to the National Aeronautics and Space Administration, have been filed in the United States Patent and Trademark Office, and are available for licensing.
May 18, 2015.
Robert H. Earp, III, Patent Attorney, Glenn Research Center at Lewis Field, Code 21-14, Cleveland, OH 44135; telephone (216) 433-3663; fax (216) 433-6790.
NASA Case No.: LEW-19036-1: Cavity Pull Rod: Device to Promote Single Crystal Growth from the Melt;
NASA Case No.: LEW-18477-2: Polymer Nanofiber Based Reversible Nano-Switch/Sensor Schottky Diode (nanoSSSD) Device;
NASA Case No.: LEW-19022-1: Passive Feed Electrolyzer;
NASA Case No.: LEW-19058-1: Process and Apparatus for Manufacturing a Multi-Material Hybrid Turbine Disk;
NASA Case No.: LEW-19041-1: Fuel Cell Power Management;
NASA Case No.: LEW-19200-1: Polyimide Aerogels having Polyamide Cross-Links and Processes for Making the Same;
NASA Case No.: LEW-19171-1: Low Power Charged Particle Counter;
NASA Case No.: LEW-18857-1: Superparamagnetic Energy Harvesting-Hummingbird Engine;
NASA Case No.: LEW-19156-1: Multi-Phase Ceramic System.
National Aeronautics and Space Administration.
Notice of Availability of inventions for licensing.
Patent applications on the inventions listed below assigned to the National Aeronautics and Space Administration, have been filed in the United States Patent and Trademark Office, and are available for licensing.
May 18, 2015.
James J. McGroary, Patent Counsel, Marshall Space Flight Center, Mail Code LS01, Huntsville, AL 35812; telephone (256) 544-0013; fax (256) 544-0258.
NASA Case No.: MFS-33169-1: Mechanical Stress Measurement During Thin-Film Fabrication.
National Aeronautics and Space Administration.
Notice of availability of inventions for licensing.
Patent applications on the inventions listed below assigned to the National Aeronautics and Space Administration, have been filed in the United States Patent and Trademark Office, and are available for licensing.
May 18, 2015.
Mark W. Homer, Patent Counsel, NASA Management Office—JPL, 4800 Oak Grove Drive, Mail Stop 180-200, Pasadena, CA 91109; telephone (818) 354-7770.
NASA Case No.: NPO-49310-1: Hollow-Core Fiber Lamp;
NASA Case No.: NPO-49481-1: Lens Coupled Dielectric Waveguides.
National Archives and Records Administration (NARA).
Notice of availability of proposed records schedules; request for comments.
The National Archives and Records Administration (NARA) publishes notice at least once monthly of certain Federal agency requests for records disposition authority (records schedules). Once approved by NARA, records schedules provide mandatory instructions on what happens to records when no longer needed for current Government business. They authorize agencies to preserve records of continuing value in the National Archives of the United States and to destroy, after a specified period, records lacking administrative, legal, research, or other value. NARA publishes notice for records schedules in which agencies propose to destroy records not previously authorized for disposal or reduce the retention period of records already authorized for disposal. NARA invites public comments on such records schedules, as required by 44 U.S.C. 3303a(a).
NARA must receive requests for copies in writing by June 17, 2015. Once NARA completes appraisal of the records, we will send you a copy of the schedule you requested. We usually prepare appraisal memoranda that contain additional information concerning the records covered by a proposed schedule. You may also request these. If you do, we will also provide them once we have completed the appraisal. You have 30 days after we send these requested documents in which to submit comments.
You may request a copy of any records schedule identified in this notice by contacting Records Management Services (ACNR) using one of the following means:
Margaret Hawkins, Director, by mail at Records Management Services (ACNR); National Archives and Records Administration; 8601 Adelphi Road; College Park, MD 20740-6001, by phone at 301-837-1799, or by email at
Each year, Federal agencies create billions of records on paper, film, magnetic tape, and other media. To control this accumulation, agency records managers prepare schedules proposing retention periods for records and submit these schedules for NARA's approval. These schedules provide for timely transfer into the National Archives of historically valuable records and authorize the disposal of all other records after the agency no longer needs them to conduct its business. Some schedules are comprehensive and cover all the records of an agency or one of its major subdivisions. Most schedules, however, cover records of only one office or program or a few series of records. Many of these update previously approved schedules, and some include records proposed as permanent.
The schedules listed in this notice are media neutral unless otherwise specified. An item in a schedule is media neutral when an agency may apply the disposition instructions to records regardless of the medium in which it has created or maintains the records. Items included in schedules submitted to NARA on or after December 17, 2007, are media neutral unless the item is limited to a specific medium. (See 36 CFR 1225.12(e).)
No agencies may destroy Federal records without the approval of the Archivist of the United States. The Archivist grants this approval only after a thorough consideration of the records' administrative use by the agency of origin, the rights of the Government and of private people directly affected by the Government's activities, and whether or not the records have historical or other value.
In addition to identifying the Federal agencies and any subdivisions requesting disposition authority, this notice lists the organizational unit(s) accumulating the records or that the schedule has agency-wide applicability (in the case of schedules that cover records that may be accumulated throughout an agency), provides the control number assigned to each schedule, the total number of schedule items, and the number of temporary items (the records proposed for destruction), and includes a brief description of the temporary records. The records schedule itself contains a full description of the records at the file unit level as well as their disposition. If NARA staff has prepared an appraisal memorandum for the schedule, it too includes information about the records. You may request additional information about the disposition process at the addresses above.
1. Department of the Army, Agency-wide (DAA-AU-2015-0012, 1 item, 1 temporary item). Master files of an electronic information system that contains records relating to materiel management.
2. Department of the Army, Agency-wide (DAA-AU-2015-0015, 1 item, 1 temporary item). Master files of an electronic information system used to track housing allowances for service members overseas.
3. Department of the Army, Agency-wide (DAA-AU-2015-0020, 1 item, 1 temporary item). Master files of an electronic information system used to manage maintenance and supply operations at the unit level.
4. Department of the Army, Agency-wide (DAA-AU-2015-0025, 1 item, 1 temporary item). Master files of an electronic information system that contains data used by military leaders to identify and address potential management problems.
5. Department of Health and Human Services, Office of Global Affairs (DAA-0468-2014-0005, 5 items, 2 temporary items). Records related to international partnerships to include resident requirement waiver files, country inquiry files, copies of responses, and related working files and background materials. Proposed for permanent retention are significant project files, agreements, and decisional policies.
6. Department of Homeland Security, Transportation Security Administration (DAA-0560-2013-0006, 13 items, 13 temporary items). Occupational safety program records to include safety and environmental incident and inspection reports, investigation records, hazardous waste management records, and related administrative materials.
7. Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives (DAA-0436-2013-0005, 2 items, 2 temporary items). Master files of an electronic information system used to collect and manage information
8. Department of the Navy, Naval Nuclear Propulsion Program (DAA-0594-2015-0001, 1 item, 1 temporary item). Records relating to the operation of nuclear powered vessels including reactor logs and related reports.
9. Department of the Navy, U.S. Marine Corps (DAA-0127-2014-0010, 1 item, 1 temporary item). Master files of an electronic information system used to manage and analyze collected intelligence imagery.
10. Department of the Navy, U.S. Marine Corps (DAA-0127-2014-0020, 1 item, 1 temporary item). Master files of an electronic information system used to manage and track the care and treatment of exceptional dependants of Marine Corps personnel.
11. Department of State, Bureau of Energy Resources (DAA-0059-2014-0022, 8 items, 4 temporary items). Records of the Office of the Assistant Secretary including routine correspondence, daily activity reports, bibliographic reference files, and courtesy copies. Proposed for permanent retention are memoranda, reports, telegrams, briefing books, and the calendar of the Assistant Secretary.
12. Broadcasting Board of Governors, Agency-wide (DAA-0517-2013-0002, 8 items, 5 temporary items). Records of the International Broadcasting Bureau, Voice of America, and the Office of Cuba Broadcasting to include broadcast recordings, associated broadcast logs, records used to create programming content, and social media content. Proposed for permanent retention are historically significant broadcast recordings and associated broadcast logs.
13. Central Intelligence Agency, Agency-wide (N1-263-15-1, 1 item, 1 temporary item). Records related to incentive, achievement, and certification awards of employees.
14. Court Services and Offenders Supervision Agency for the District of Columbia, Office of the General Counsel (DAA-0562-2013-0005, 14 items, 13 temporary items). Legal records to include legal opinion reviews related to specific cases, investigations, or ethics violations, and routine claims and litigation files. Proposed for permanent retention are general legal opinion reviews.
15. Environmental Protection Agency, Agency-wide (DAA-0412-2013-0011, 4 items, 4 temporary items). Administrative records related to the day-to-day activities of agency program offices, including reading files, mailing lists, and other short-term transitory records.
National Credit Union Administration (NCUA).
30-day notice of submission of information collection approval from OMB and request for comment.
As part of a Federal Government-wide effort to streamline the process to seek feedback from the public on service delivery, NCUA intends to amend and submit the Generic Information Collection Request (Generic ICR): “Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery” to the OMB for approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et. seq.). The purpose of this notice is to allow for 30 days of public comment.
Comments will be accepted until June 17, 2015
Interested persons are invited to submit comments to:
(i) Desk Officer for the National Credit Union Administration, 3133-0188, U.S. Office of Management and Budget, 725 17th Street NW., #10102, Washington, DC 20503, or by email to:
(ii) Jessica Khouri by mail at the National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, by fax at Fax No. 703-837-2861, or by email at
Requests for additional information, a copy of the information collection request, or a copy of submitted comments should be directed to Jessica Khouri by mail at the National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, by fax at Fax No. 703-837-2861, or by email at
NCUA is requesting comments on this proposed amendment to the current collection 3133-0188, “Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery.” The proposed amendment intends to increase the hours available to obtain feedback on services provided by NCUA offices. NCUA anticipates using a variety of methods to collect customer satisfaction feedback from credit unions, including, but not limited to, web and paper-based surveys or feedback forms, web-based polling or other interactive responses, comment cards, and social media. The information collection activity will garner qualitative stakeholder feedback in an efficient, timely manner, in accordance with NCUA's commitment to improving service delivery. Qualitative feedback is information that provides useful insights on perceptions and opinions, but is not a statistical survey that yields quantitative results that can be generalized to the population of study. This feedback will provide insights into stakeholder perceptions, experiences and expectations, provide an early warning of issues with service, or focus attention on areas where communication, training, or changes in operations might improve delivery of products or services. These collections will allow for ongoing, collaborative, and actionable communications between NCUA and its stakeholders. It will also allow feedback to contribute directly to the improvement of program management.
Feedback collected under this generic clearance will provide useful information, but it will not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: the target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential non-response bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely
The NCUA received no comments related to this collection in response to the 60-day notice and request for comment published in the
The NCUA requests that you send your comments on this collection to the locations listed in the addresses section. Your comments should address: (a) The necessity of the information collection for the proper performance of NCUA, including whether the information will have practical utility; (b) the accuracy of our estimate of the burden (hours and cost) of the collection of information, including the validity of the methodology and assumptions used; (c) ways we could enhance the quality, utility, and clarity of the information to be collected; and (d) ways we could minimize the burden of the collection of information on the respondents such as through the use of automated collection techniques or other forms of information technology. It is NCUA's policy to make all comments available to the public for review.
10:00 a.m., Thursday, May 21, 2015.
Board Room, 7th Floor, Room 7047, 1775 Duke Street (All visitors must use Diagonal Road Entrance), Alexandria, VA 22314-3428.
Open,
1. Corporate Stabilization Fund Quarterly Report.
10:20 a.m.
10:30 a.m., Thursday, May 21, 2015
Board Room, 7th Floor, Room 7047, 1775 Duke Street, Alexandria, VA 22314-3428.
Closed,
1. Consideration of Supervisory Action under NCUA's Rules and Regulations. Closed pursuant to Exemption (8).
Gerard Poliquin, Secretary of the Board, Telephone: 703-518-6304.
May 18, 25, June 1, 8, 15, 22, 2015.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and Closed.
This meeting will be webcast live at the Web address—
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of May 25, 2015.
There are no meetings scheduled for the week of June 1, 2015.
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of June 15, 2015.
This meeting will be webcast live at the Web address—
This meeting will be webcast live at the Web address—
The schedule for Commission meetings is subject to change on short notice. For more information or to verify the status of meetings, contact Glenn Ellmers at 301-415-0442 or via email at
The NRC Commission Meeting Schedule can be found on the Internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (
Members of the public may request to receive this information electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555 (301-415-1969), or email
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning an additional Global Plus 2C negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On May 11, 2015, the Postal Service filed notice that it has entered into an additional Global Plus 2C negotiated service agreement (Agreement).
To support its Notice, the Postal Service filed a copy of the Agreement, a copy of the Governors' Decision authorizing the product, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket No. CP2015-67 for consideration of matters raised by the Notice.
The Commission invites comments on whether the Postal Service's filing is consistent with 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 19, 2015. The public portions of the filing can be accessed via the Commission's Web site (
The Commission appoints Cassie D'Souza to serve as Public Representative in this docket.
1. The Commission establishes Docket No. CP2015-67 for consideration of the matters raised by the Postal Service's Notice.
2. Pursuant to 39 U.S.C. 505, Cassie D'Souza is appointed to serve as an officer of the Commission to represent the interests of the general public in this proceeding (Public Representative).
3. Comments are due no later than May 19, 2015.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning an additional Global Plus 1C negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On May 11, 2015, the Postal Service filed notice that it has entered into an additional Global Plus 1C negotiated service agreement (Agreement).
To support its Notice, the Postal Service filed a copy of the Agreement, a copy of the Governors' Decision authorizing the product, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket No. CP2015-66 for consideration of matters raised by the Notice.
The Commission invites comments on whether the Postal Service's filing is consistent with 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 19, 2015. The public portions of the filing can be accessed via the Commission's Web site (
The Commission appoints Kenneth R. Moeller to serve as Public Representative in this docket.
1. The Commission establishes Docket No. CP2015-66 for consideration of the
2. Pursuant to 39 U.S.C. 505, Kenneth R. Moeller is appointed to serve as an officer of the Commission to represent the interests of the general public in this proceeding (Public Representative).
3. Comments are due no later than May 19, 2015.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
NASDAQ proposes to amend the Exchange's transaction fees at Chapter XV, Section 2 entitled “NASDAQ Options Market—Fees and Rebates,” which governs pricing for NASDAQ members using the NASDAQ Options Market (“NOM”), NASDAQ's facility for executing and routing standardized equity and index options.
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on May 1, 2015.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Penny Pilot Options
The Exchange is proposing to amend Tier 5 of the Customer and Professional Penny Pilot Options Rebate to Add Liquidity which currently pays a $0.45 per contract rebate if Participant adds Customer, Professional, Firm,
Additionally, the Exchange is proposing to amend Tier 8 of the Customer and Professional Penny Pilot Options Rebate to Add Liquidity which currently pays a $0.48 per contract rebate to Customers and a $0.47 per contract rebate to Professionals if Participant adds Customer, Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity in Penny Pilot Options and/or Non-Penny Pilot Options of 0.75% or more of total industry customer equity and ETF option ADV contracts per day in a month. The Exchange proposes to amend the rebate to $0.48 per contract for Professionals, thereby increasing the Professional Tier 8 rebate from $0.47 to $0.48 per contract if the Participant adds Customer, Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity in Penny Pilot Options and/or Non-Penny Pilot Options
With respect to Tier 8, Participants that qualify for Tier 8 will continue to be eligible to be assessed a Professional, Firm, Non-NOM Market Maker, NOM Market Maker or Broker-Dealer Fee for Removing Liquidity in Penny Pilot Options of $0.48 per contract and a Customer Fee for Removing Liquidity in Penny Pilot Options of $0.47 per contract.
The Exchange is not amending the Penny Pilot Options Rebate to Add Liquidity for any other market participant.
Finally, the Exchange is proposing to amend note “a” to attribute it to Tier 8 and amend the text of note “a” to add Tier 8 as well. The Exchange's proposal to qualify for Tier 8 will include certification in the Investor Support Program which is further explained in note “a.” The Exchange is also proposing to remove the reference to note “b” in Tier 8 as the definition of
NASDAQ believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange's proposal to amend the Tier 5 Customer and Professional Penny Pilot Options Rebate to Add Liquidity is reasonable because the Exchange seeks to cap the current qualifying volume for the Tier 5 rebate to coincide with the amendment to the Tier 8 rebate, which would apply to Participants with similar volume over 0.75% of total industry customer equity and ETF option ADV contracts per day in a month. The Exchange desires to continue to encourage Participants to add more liquidity on NOM. The Tier 5 rebate requires Participants to add Customer, Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity to obtain the $0.45 per contract rebate. The Exchange will continue to require Participants to add such liquidity above 0.40% of total industry customer equity and ETF option ADV contracts per day in a month. The Exchange is adding the qualifier that the liquidity for this Tier 5 is above 0.40% to
The Exchange's proposal to amend the Tier 5 Customer and Professional Penny Pilot Options Rebate to Add Liquidity is equitable and not unfairly discriminatory because all eligible Participants that qualify for the Tier 5 Customer and Professional Penny Pilot Options Rebate to Add Liquidity will be uniformly paid the rebate. The Exchange will continue to pay all Participants a $0.45 per contract rebate that qualify for the Tier 5 rebate based on the new tier qualifications. All Participants are eligible for the Tier 5 rebate, provided they transact the requisite volume.
The Exchange's proposal to amend the Tier 8 Customer and Professional Penny Pilot Options Rebate to Add Liquidity is reasonable because the Exchange seeks to first adjust the volume level for liquidity to
The Exchange's proposal to expand the qualifier for the Tier 8 Customer or Professional Rebate to Add Liquidity to offer the rebate to Participants that add (1) Customer and/or Professional liquidity in Penny Pilot Options and/or Non-Penny Pilot Options of 30,000 or more contracts per day in a month, (2) the Participant has certified for the Investor Support Program set forth in Rule 7014, and (3) the Participant qualifies for rebates under the Qualified Market Maker (“QMM”) Program set forth in Rule 7014 will provide additional opportunities for Participants to qualify for this rebate. The Exchange offers similar incentives such as these today to qualify for the Tier 5 rebate. The Exchange proposes to similarly incentivize Participants to add even more Customer and/or Professional liquidity in Penny Pilot Options and/or Non-Penny Pilot Options (30,000 vs. 25,000 contracts), and also continues to offer opportunities to participate in the equities market as a means of qualifying for the Tier 8 rebate.
Today, Participants that add Customer, Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity in Penny Pilot Options and/or Non-Penny Pilot Options of 0.75% or more of total industry customer equity and ETF option ADV contracts per day in a month are paid a $0.48 per Customer Rebate to Add Liquidity in Penny Pilot Options and a $0.47 per contract Professional Rebate to Add Liquidity in Penny Pilot Options. This proposal would provide Participants with additional opportunities to earn the same Customer rebate and an increased Professional rebate of $0.48 per contract (increase from today's $0.47 per rebate). The Exchange believes that offering these opportunities to earn the Tier 8 rebate will encourage Participants to add liquidity to NOM. It is also reasonable to pay the same Tier 8 rebate of $0.48 per contract for Customer and Professionals as the qualifiers for this rebate are the same.
The Exchange's proposal to amend the Tier 8 Customer and Professional Penny Pilot Options Rebate to Add Liquidity is equitable and not unfairly discriminatory because all eligible Participants that qualify for the Tier 8 Customer and Professional Penny Pilot Options Rebate to Add Liquidity will be uniformly paid the rebate. The Exchange will pay Customers and Professionals alike a $0.48 per contract rebate that qualify for the Tier 8 rebate based on the existing and new tier qualifications. Further, all Participants may qualify to be eligible for these rebates, provided they transact the requisite amount of liquidity. Customer liquidity offers unique benefits to the market which benefits all market participants. Customer liquidity benefits all market participants by providing more trading opportunities, which attracts market makers. An increase in the activity of these market participants in turn facilitates tighter spreads, which may cause an additional corresponding increase in order flow from other market participants. The Exchange believes that encouraging Participants to add Professional liquidity creates competition among options exchanges because the Exchange believes that the rebates may cause market participants to select NOM as a venue to send Professional order flow.
Finally, the Exchange believes that the Exchange's proposal to amend note “a” to attribute it to Tier 8 and amend the text of note “a” to add Tier 8 as well is reasonable, equitable and not unfairly discriminatory because the Exchange desires to further explain what qualifies for inclusion in the Investor Support Program and provide Participants with clarity as to the fees. The Exchange's proposal to remove the reference to note “b” in Tier 8 is reasonable, equitable and not unfairly discriminatory as the definition of Total Volume is not utilized in Tier 8 and this reference is unnecessary.
NASDAQ does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the
Additionally, the Exchange is proposing to add additional qualifiers for the Tier 8 rebate. Both the Tier 5 and 8 rebates permit Participants to add all types of market participant liquidity to qualify for the rebate. This proposal does not create an undue burden on competition, rather the proposal will incentivize market participants to add greater liquidity on NOM. Customer liquidity offers unique benefits to the market which benefits all market participants. Customer liquidity benefits all market participants by providing more trading opportunities, which attract Specialists and Market Makers. An increase in the activity of these market participants in turn facilitates tighter spreads, which may cause an additional corresponding increase in order flow from other market participants. The Exchange believes that encouraging Participants to add Professional liquidity creates competition among options exchanges because the Exchange believes that the rebates may cause market participants to select NOM as a venue to send Professional order flow. The Exchange is offering to pay increased rebates in exchange for additional Professional order flow being executed at the Exchange, which additional order flow should benefit other market participants. Further, all Participants are eligible for the Customer and Professional rebates, provided they transact the requisite volume.
The Exchange operates in a highly competitive market in which many sophisticated and knowledgeable market participants can readily and do send order flow to competing exchanges if they deem fee levels or rebate incentives at a particular exchange to be excessive or inadequate. These market forces support the Exchange belief that the proposed rebate structure and tiers proposed herein are competitive with rebates and tiers in place on other exchanges. The Exchange believes that this competitive marketplace continues to impact the rebates present on the Exchange today and substantially influences the proposals set forth above.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposes to amend the constituent documents of its intermediate parent companies NYSE Holdings LLC, a Delaware limited liability company (“NYSE Holdings”), and Intercontinental Exchange Holdings, Inc., a Delaware corporation (“ICE Holdings”), and its ultimate parent company, Intercontinental Exchange, Inc., a Delaware corporation (“ICE”), to eliminate certain provisions that by their terms have become void and are of no further force and effect as a result of the sale by ICE of Euronext N.V. (“Euronext”) in June 2014. NYSE Arca also seeks approval of conforming changes to the Independence Policy of the Board of Directors of ICE (the “Independence Policy”). The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
NYSE Arca requests approval to amend the constituent documents of its intermediate parent companies NYSE Holdings and ICE Holdings, and of its ultimate parent company, ICE, to eliminate certain provisions that by their terms have become void and are of no further force and effect as a result of the sale by ICE of Euronext in June 2014, upon consummation of which ICE, ICE Holdings and NYSE Holdings ceased to control Euronext.
NYSE Arca believes the proposed changes are desirable to avoid the potential for confusion that could arise if ICE, ICE Holdings and NYSE Holdings were to retain in their constituent documents or in the Independence Policy provisions that are no longer operative.
In 2007, NYSE Arca's direct parent, NYSE Group Inc. (“NYSE Group”), entered into a business combination transaction with Euronext N.V. (“Euronext”) in which NYSE Group and Euronext became wholly owned subsidiaries of a newly formed company, NYSE Euronext, a Delaware corporation. The Certificate of Incorporation and Bylaws of NYSE Euronext included provisions (a) requiring NYSE Euronext and its board of directors to give due consideration to requirements of European law and regulation applicable to the operation of Euronext's European business; (b) requiring NYSE Euronext and its board of directors to cause Euronext's subsidiaries to operate in compliance with applicable law and regulation and to cooperate with European regulators; (c) relating to board compositions and similar matters; and (d) prohibiting the amendment of such provisions without a supermajority vote of the directors in light of Euronext's minority representation on the board (collectively, the “European Provisions”). NYSE Euronext's Certificate of Incorporation and Bylaws also included provisions for the automatic suspension or voiding of the European Provisions under specified circumstances, including circumstances under which NYSE Euronext no longer exercised a controlling interest (as therein defined) over Euronext (the “Voiding Provisions”).
In 2013, ICE Holdings (then known as IntercontinentalExchange, Inc.) entered into a business combination transaction with NYSE Euronext in which ICE Holdings and NYSE Holdings (then known as NYSE Euronext Holdings LLC), as successor to NYSE Euronext, became wholly owned subsidiaries of a newly formed company, ICE (then known as IntercontinentalExchange Group, Inc.). In connection with this transaction, the European Provisions and the Voiding Provisions were modified as they applied to NYSE Holdings and were incorporated, in substantially the same modified form, into the Certificate of Incorporation and Bylaws of ICE, along with the Voiding Provisions. In relevant part, the Voiding Provisions applicable to ICE and NYSE Holdings were modified to specify that the European Provisions would automatically become void and be of no further force and effect if at any time ICE or NYSE Holdings, as the case may be, ceased to “control” Euronext, with “control” defined under International Financial Reporting Standard 10 (as in force at its date of first effectiveness on January 1, 2014), and with cessation of control subject to confirmation from the entity's registered public accountants and to a public disclosure requirement.
In March 2014, in preparation for its announced plan to sell Euronext, ICE contributed its ownership of NYSE Holdings to ICE Holdings, and in connection therewith the Certificate and Bylaws of ICE Holdings were amended to incorporate the modified European Provisions and the modified Voiding Provisions.
In June 2014, ICE consummated the sale of substantially all of its interest in Euronext and, accordingly, ceased to control Euronext within the meaning of the Voiding Provisions. As a result, the Voiding Provisions in each of the Constituent Documents were triggered, and the European Provisions in the Constituent Documents automatically
NYSE Arca accordingly proposes to make the following changes to the constituent documents of ICE, ICE Holdings and NYSE Holdings:
• Pursuant to Art. XIII, Section A.2., the following provisions are void and would be deleted: Art. V, Section A.2.(d); Art. V, Section A.3.(a)(ii), (a)(iii)(z), (b)(ii), (c)(i)(y) and (d)(i)(y); Art. V, Section A.4.(b), A.8, A.9, A.10 and A.11; Art. V, Section B.2.(d); Art. V, Section B.3.(a)(ii), (a)(iii)(z), (b)(ii), (b)(y) and (c)(ii); Art. VII, clause (B); and Art. X, clause (B).
• In addition, the phrases “or any European Market Subsidiary (as defined below)” has been deleted from Art V, Section A.1., and the phrase “or any European Market Subsidiary” has been deleted from Art. V, Section B.1., in each case because the phrase refers to a term that is no longer used in the document.
• In Art. V, Section A.3.(a)(i), a reference has been added to ICE Holdings and the erroneous name NYSE Euronext LLC has been corrected to refer to NYSE Holdings LLC. Additionally, references to ICE Holdings and NYSE Holdings have been added to Art. V, Section B.3.(a)(i). These matters were previously addressed in the last sentence of Section 3.15(g) of the Bylaws of ICE.
• Art. XIII itself is deleted because its sole purpose was to define the circumstances under which ICE would no longer control Euronext and to specify the provisions that became void upon such event. NYSE Arca believes it would be confusing to retain Art. XIII because it refers to events that have occurred and to provisions that will have been deleted.
• Art. XIV, establishing an effective time for the document, has been deleted because the effective time is addressed in the initial certification.
• Pursuant to Section 10.9(b)(3), the following provisions are void and would be deleted: Sections 3.14(a)(1), 3.14(b)(2), 3.14(b)(4), 3.14(b)(6), 7.2, 8.1(b), 8.2(b), 8.2(c)(2), 8.3(b), 8.3(d), 8.5, 9.2, 9.5, and 10.8; each occurrence of the words “pursuant to a resolution adopted by at least 75% of the directors then in office” in Section 3.1; and additionally Sections 3.15(a), 3.15(b), 3.15(c), 3.15(d), 3.15(e), 3.15(f), 11.1(b), 11.2(b) and 11.3(A).
• In Section 3.1, where the reference to 75% of the directors then in office is eliminated, the standard for setting the number of directors is set to a majority of the directors then in office, which was the standard in effect at NYSE Group prior to the Euronext transaction in 2007.
• In Section 3.5, a provision calling for one board meeting to be held in Europe in each year is deleted. This provision was included to accommodate the interests of the Euronext-affiliated directors and, while it was not identified for automatic deletion, ICE views the requirement as imposing an unnecessary expense on ICE and believes the venue of meetings should be in the discretion of management.
• The last sentence of Section 3.15(g) (which will be redesignated Section 3.15) is deleted for the reasons discussed above under “Certificate of Incorporation of ICE”.
• Section 8.6, applicable to records that relate to both a European Market Subsidiary and a U.S. Regulated Subsidiary, has been deleted because the definition of European Market Subsidiary and all other references to the term have been deleted.
• Section 10.9 is deleted in its entirety for the reasons set forth above relating to Article XIII of the Certificate of Incorporation of ICE, and also because Section 10.9 refers to Stichting NYSE Euronext and its Articles of Formation, which no longer asserts any authority over ICE.
• Pursuant to Art. XIII, Section A.2., the following provisions are void and would be deleted: Art. V, Section A.2.(d); Art. V, Section A.3.(a)(ii), (a)(iii)(z), (b)(ii), (c)(i)(y) and (d)(i)(y); Art. V, Section A.4.(b), A.8, A.9, A.10 and A.11; Art. V, Section B.2.(d); Art. V, Section B.3.(a)(ii), (a)(iii)(z), (b)(ii), (b)(y) and (c)(ii); Art. VII, clause (B); and Art. X, clause (B).
• In addition, the phrases “or any European Market Subsidiary (as defined below)” has been deleted from Art V, Section A.1., and the phrase “or any European Market Subsidiary” has been deleted from Art. V, Section B.1., in each case because the phrase refers to a term that is no longer used in the document.
• Art. XIII itself is deleted for the same reasons as discussed above for ICE.
• Pursuant to Section 10.9(b)(3), the following provisions are void and would be deleted: Sections 3.14(a)(1), 3.14(b)(2), 3.14(b)(4), 3.14(b)(6), 7.2, 8.1(b), 8.2(b), 8.2(c)(2), 8.3(b), 8.3(d), 8.5, 9.2, 9.5, and 10.8; each occurrence of the words “pursuant to a resolution adopted by at a majority of the directors then in office” in Section 3.1; and additionally Sections 3.15(a), 3.15(b), 3.15(c), 3.15(d), 3.15(e), 3.15(f), 11.1(b), 11.2(b) and 11.3(A).
• In Section 3.5, a provision calling for one board meeting to be held in Europe in each year is deleted, for the reasons discussed above under “Bylaws of ICE.”
• Section 8.6 is deleted for the reasons discussed above under “Bylaws of ICE”.
• Section 10.9 is deleted in its entirety for the reasons set forth above under “Bylaws of ICE”.
• Pursuant to Section 16.3(b)(3), the following provisions are void and would be deleted: Sections 3.12(b)(1), 3.12(c)(2), 3.12(c)(4), 3.12(c)(6),
• Additional definitions that define terms no longer used in the document also are deleted from Section 1.1: “Euronext”, “Euronext Call Option”, “Euronext Transaction Time”, “European Disqualified Person”, “European Subsidiaries' Confidential Information”, “Execution Date”, “Extraordinary Transaction”, “Foundation”, “Governmental Entity” (and the reference to such term in the definition of “Law”), “Merger” and “Priority Shares”.
• Certain cross-references have been corrected in the definitions of “ETP Holder”, “MKT Member”, “NYSE Arca”, “NYSE Arca Equities”, “NYSE Market”, “NYSE Member”, “NYSE MKT”, “OTP Firm”, “OTP Holder” and “U.S. Disqualified Person”.
• In Section 3.7, a provision calling for one board meeting to be held in Europe in each year is deleted for the reasons discussed above under “Bylaws of ICE”.
• References to European filing requirements have been eliminated from Section 7.2.
• Section 12.4(c), applicable to records that relate to both a European Market Subsidiary and a U.S. Regulated Subsidiary, has been deleted for the reasons discussed above under “Bylaws of ICE,” Section 8.6.
• Section 16.3 itself is deleted for the reasons discussed under “Certificate of Incorporation of ICE” with reference to Art. XIII.
• The phrase “or any European Market Subsidiary” has been eliminated from Sections 9.1(a)(1) and 9.1(b)(1), in each case because the phrase refers to a term that is no longer used in the document.
In each case, where a provision being eliminated falls within a numbered or lettered list, the subsequent numbers or letters, as the case may be, and related cross-references have been adjusted for continuity. In some cases where a list contains only a small number of items after eliminations, the number or lettering has been removed entirely.
Other non-substantive conforming changes have been made as appropriate for clarity and consistency.
NYSE Arca believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act
NYSE Arca also believes that this filing furthers the objectives of Section 6(b)(5) of the Exchange Act
NYSE Arca does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change would shorten and simplify the Constituent Documents and the ICE Directors Independence Policy without making any substantive changes, thereby enhancing their transparency. The proposed rule change would result in no concentration or other changes of ownership of exchanges.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposes to amend the constituent documents of its intermediate parent companies NYSE Holdings LLC, a Delaware limited liability company (“NYSE Holdings”), and Intercontinental Exchange Holdings, Inc., a Delaware corporation (“ICE Holdings”), and its ultimate parent company, Intercontinental Exchange, Inc., a Delaware corporation (“ICE”), to eliminate certain provisions that by their terms have become void and are of no further force and effect as a result of the sale by ICE of Euronext N.V. (“Euronext”) in June 2014. NYSE MKT also seeks approval of conforming
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
NYSE MKT requests approval to amend the constituent documents of its intermediate parent companies NYSE Holdings and ICE Holdings, and of its ultimate parent company, ICE, to eliminate certain provisions that by their terms have become void and are of no further force and effect as a result of the sale by ICE of Euronext in June 2014, upon consummation of which ICE, ICE Holdings and NYSE Holdings ceased to control Euronext.
NYSE MKT believes the proposed changes are desirable to avoid the potential for confusion that could arise if ICE, ICE Holdings and NYSE Holdings were to retain in their constituent documents or in the Independence Policy provisions that are no longer operative.
In 2007, NYSE MKT's direct parent, NYSE Group Inc. (“NYSE Group”), entered into a business combination transaction with Euronext N.V. (“Euronext”) in which NYSE Group and Euronext became wholly owned subsidiaries of a newly formed company, NYSE Euronext, a Delaware corporation. The Certificate of Incorporation and Bylaws of NYSE Euronext included provisions (a) requiring NYSE Euronext and its board of directors to give due consideration to requirements of European law and regulation applicable to the operation of Euronext's European business; (b) requiring NYSE Euronext and its board of directors to cause Euronext's subsidiaries to operate in compliance with applicable law and regulation and to cooperate with European regulators; (c) relating to board compositions and similar matters; and (d) prohibiting the amendment of such provisions without a supermajority vote of the directors in light of Euronext's minority representation on the board (collectively, the “European Provisions”). NYSE Euronext's Certificate of Incorporation and Bylaws also included provisions for the automatic suspension or voiding of the European Provisions under specified circumstances, including circumstances under which NYSE Euronext no longer exercised a controlling interest (as therein defined) over Euronext (the “Voiding Provisions”).
In 2013, ICE Holdings (then known as IntercontinentalExchange, Inc.) entered into a business combination transaction with NYSE Euronext in which ICE Holdings and NYSE Holdings (then known as NYSE Euronext Holdings LLC), as successor to NYSE Euronext, became wholly owned subsidiaries of a newly formed company, ICE (then known as IntercontinentalExchange Group, Inc.). In connection with this transaction, the European Provisions and the Voiding Provisions were modified as they applied to NYSE Holdings and were incorporated, in substantially the same modified form, into the Certificate of Incorporation and Bylaws of ICE, along with the Voiding Provisions. In relevant part, the Voiding Provisions applicable to ICE and NYSE Holdings were modified to specify that the European Provisions would automatically become void and be of no further force and effect if at any time ICE or NYSE Holdings, as the case may be, ceased to “control” Euronext, with “control” defined under International Financial Reporting Standard 10 (as in force at its date of first effectiveness on January 1, 2014), and with cessation of control subject to confirmation from the entity's registered public accountants and to a public disclosure requirement.
In March 2014, in preparation for its announced plan to sell Euronext, ICE contributed its ownership of NYSE Holdings to ICE Holdings, and in connection therewith the Certificate and Bylaws of ICE Holdings were amended to incorporate the modified European Provisions and the modified Voiding Provisions.
In June 2014, ICE consummated the sale of substantially all of its interest in Euronext and, accordingly, ceased to control Euronext within the meaning of the Voiding Provisions. As a result, the Voiding Provisions in each of the Constituent Documents were triggered, and the European Provisions in the Constituent Documents automatically became void and are of no further force and effect.
NYSE MKT accordingly proposes to make the following changes to the constituent documents of ICE, ICE Holdings and NYSE Holdings:
• Pursuant to Art. XIII, Section A.2., the following provisions are void and would be deleted: Art. V, Section A.2.(d); Art. V, Section A.3.(a)(ii),
• In addition, the phrases “or any European Market Subsidiary (as defined below)” has been deleted from Art. V, Section A.1., and the phrase “or any European Market Subsidiary” has been deleted from Art. V, Section B.1., in each case because the phrase refers to a term that is no longer used in the document.
• In Art. V, Section A.3.(a)(i), a reference has been added to ICE Holdings and the erroneous name NYSE Euronext LLC has been corrected to refer to NYSE Holdings LLC. Additionally, references to ICE Holdings and NYSE Holdings have been added to Art. V, Section B.3.(a)(i). These matters were previously addressed in the last sentence of Section 3.15(g) of the Bylaws of ICE.
• Art. XIII itself is deleted because its sole purpose was to define the circumstances under which ICE would no longer control Euronext and to specify the provisions that became void upon such event. NYSE MKT believes it would be confusing to retain Art. XIII because it refers to events that have occurred and to provisions that will have been deleted.
• Art. XIV, establishing an effective time for the document, has been deleted because the effective time is addressed in the initial certification.
• Pursuant to Section 10.9(b)(3), the following provisions are void and would be deleted: Sections 3.14(a)(1), 3.14(b)(2), 3.14(b)(4), 3.14(b)(6), 7.2, 8.1(b), 8.2(b), 8.2(c)(2), 8.3(b), 8.3(d), 8.5, 9.2, 9.5, and 10.8; each occurrence of the words “pursuant to a resolution adopted by at least 75% of the directors then in office” in Section 3.1; and additionally Sections 3.15(a), 3.15(b), 3.15(c), 3.15(d), 3.15(e), 3.15(f), 11.1(b), 11.2(b) and 11.3(A).
• In Section 3.1, where the reference to 75% of the directors then in office is eliminated, the standard for setting the number of directors is set to a majority of the directors then in office, which was the standard in effect at NYSE Group prior to the Euronext transaction in 2007.
• In Section 3.5, a provision calling for one board meeting to be held in Europe in each year is deleted. This provision was included to accommodate the interests of the Euronext-affiliated directors and, while it was not identified for automatic deletion, ICE views the requirement as imposing an unnecessary expense on ICE and believes the venue of meetings should be in the discretion of management.
• The last sentence of Section 3.15(g) (which will be redesignated Section 3.15) is deleted for the reasons discussed above under “Certificate of Incorporation of ICE”.
• Section 8.6, applicable to records that relate to both a European Market Subsidiary and a U.S. Regulated Subsidiary, has been deleted because the definition of European Market Subsidiary and all other references to the term have been deleted.
• Section 10.9 is deleted in its entirety for the reasons set forth above relating to Article XIII of the Certificate of Incorporation of ICE, and also because Section 10.9 refers to Stichting NYSE Euronext and its Articles of Formation, which no longer asserts any authority over ICE.
• Pursuant to Art. XIII, Section A.2., the following provisions are void and would be deleted: Art. V, Section A.2.(d); Art. V, Section A.3.(a)(ii), (a)(iii)(z), (b)(ii), (c)(i)(y) and (d)(i)(y); Art. V, Section A.4.(b), A.8, A.9, A.10 and A.11; Art. V, Section B.2.(d); Art. V, Section B.3.(a)(ii), (a)(iii)(z), (b)(ii), (b)(y) and (c)(ii); Art. VII, clause (B); and Art. X, clause (B).
• In addition, the phrases “or any European Market Subsidiary (as defined below)” has been deleted from Art. V, Section A.1., and the phrase “or any European Market Subsidiary” has been deleted from Art. V, Section B.1., in each case because the phrase refers to a term that is no longer used in the document.
• Art. XIII itself is deleted for the same reasons as discussed above for ICE.
• Pursuant to Section 10.9(b)(3), the following provisions are void and would be deleted: Sections 3.14(a)(1), 3.14(b)(2), 3.14(b)(4), 3.14(b)(6), 7.2, 8.1(b), 8.2(b), 8.2(c)(2), 8.3(b), 8.3(d), 8.5, 9.2, 9.5, and 10.8; each occurrence of the words “pursuant to a resolution adopted by at a majority of the directors then in office” in Section 3.1; and additionally Sections 3.15(a), 3.15(b), 3.15(c), 3.15(d), 3.15(e), 3.15(f), 11.1(b), 11.2(b) and 11.3(A).
• In Section 3.5, a provision calling for one board meeting to be held in Europe in each year is deleted, for the reasons discussed above under “Bylaws of ICE.”
• Section 8.6 is deleted for the reasons discussed above under “Bylaws of ICE”.
• Section 10.9 is deleted in its entirety for the reasons set forth above under “Bylaws of ICE”.
• Pursuant to Section 16.3(b)(3), the following provisions are void and would be deleted: Sections 3.12(b)(1), 3.12(c)(2), 3.12(c)(4), 3.12(c)(6),
• Additional definitions that define terms no longer used in the document also are deleted from Section 1.1: “Euronext”, “Euronext Call Option”, “Euronext Transaction Time”, “European Disqualified Person”, “European Subsidiaries' Confidential Information”, “Execution Date”, “Extraordinary Transaction”, “Foundation”, “Governmental Entity” (and the reference to such term in the definition of “Law”), “Merger” and “Priority Shares”.
• Certain cross-references have been corrected in the definitions of “ETP Holder”, “MKT Member”, “NYSE Arca”, “NYSE Arca Equities”, “NYSE Market”, “NYSE Member”, “NYSE MKT”, “OTP Firm”, “OTP Holder” and “U.S. Disqualified Person”.
• In Section 3.7, a provision calling for one board meeting to be held in Europe in each year is deleted for the reasons discussed above under “Bylaws of ICE”.
• References to European filing requirements have been eliminated from Section 7.2.
• Section 12.4(c), applicable to records that relate to both a European Market Subsidiary and a U.S. Regulated Subsidiary, has been deleted for the reasons discussed above under “Bylaws of ICE,” Section 8.6.
• Section 16.3 itself is deleted for the reasons discussed under “Certificate of Incorporation of ICE” with reference to Art. XIII.
• The phrase “or any European Market Subsidiary” has been eliminated from Sections 9.1(a)(1) and 9.1(b)(1), in each case because the phrase refers to a term that is no longer used in the document.
In each case, where a provision being eliminated falls within a numbered or lettered list, the subsequent numbers or letters, as the case may be, and related cross-references have been adjusted for continuity. In some cases where a list contains only a small number of items after eliminations, the number or lettering has been removed entirely.
Other non-substantive conforming changes have been made as appropriate for clarity and consistency.
NYSE MKT believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act
NYSE MKT also believes that this filing furthers the objectives of Section 6(b)(5) of the Exchange Act
NYSE MKT does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change would shorten and simplify the Constituent Documents and the ICE Directors Independence Policy without making any substantive changes, thereby enhancing their transparency. The proposed rule change would result in no concentration or other changes of ownership of exchanges.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Chicago Board Options Exchange, Incorporated (the “Exchange” or “CBOE”) proposes to amend the terms of the Customized Option Pricing Service (“COPS”). The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to amend the terms of the Exhange's COPS,
COPS provides market participants with an “end-of-day”
COPS Data consists of indicative
The Exchange uses values produced by CBOE Trading Permit Holders (“TPHs”) to produce COPS Data. Participating CBOE TPHs submit values to MDX on options series specified by MDX on a daily basis. These values are generated by the TPH's internal pricing models. The valuations that MDX ultimately publishes are an average of multiple contributions of values from participating CBOE TPHs. For each value provided by MDX through COPS, MDX includes a corresponding indication of the number of TPH contributors that factored into that value.
CBOE TPHs that meet the following objective qualification criteria are allowed to contribute values to MDX for purposes of producing COPS Data. Interested CBOE TPHs must be approved by the Exchange, have the ability to provide valuations to MDX in a timely manner each day after the close of trading, and sign a services agreement with CBOE. Interested CBOE TPHs must also have the ability to provide both indicative and implied volatility valuations on several different types of options, including (i) options on all open FLEX series traded on any exchange that offers FLEX options for trading, (ii) options on any potential new FLEX options series, (iii) OTC options that have the same degree of customization as FLEX options, (iv) customized options where the strike price is expressed in percentage terms (the valuations provided to MDX must also be expressed in percentage terms), and (v) exotic options. In addition, interested CBOE TPHs must participate in a testing phase with MDX. The values submitted by a TPH during the testing phase and in live production must meet MDX's quality control standards designed to ensure the integrity and accuracy of COPS Data. MDX has implemented procedures including monthly performance reviews to help ensure the integrity and accuracy of COPS Data.
To help ensure that MDX receives numerous values from multiple TPHs on a consistent basis, MDX shares revenue from the sale of COPS Data with participating CBOE TPHs.
If only three TPHs participate, MDX shares 21% of total revenue with each TPH receiving a 7% share. If four TPHs participate, MDX shares 24% of total revenue with each TPH receiving a 6% share. If five or more TPHs participate, MDX shares 30% of total revenue divided equally among the TPHs. There are currently five participating TPHs.
In July 2014, the Exchange submitted a proposed rule change to, among other things, temporarily change the COPS contributor compensation structure from a revenue sharing plan to a fixed payment structure for a six month period (“Fixed Payment Period”).
The Exchange proposes to change the COPS contributor compensation structure for the remainder of 2015.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes the proposed rule change is not designed to permit unfair discrimination between CBOE TPHs because all COPS data revenue would be divided equally among TPH contributors for the remainder of 2015. The Exchange believes the proposed rule change is consistent with the protection of investors and the public interest in that it would provide incentive for all of the COPS contributors to continue to participate in COPS while the Exchange continues to grow the COPS business, thereby helping to maintain the quality of COPS Data.
CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes the proposal is procompetitive in that it will incentivize COPS TPH contributors to continue producing quality valuations to help keep COPS competitive with other similar market data products.
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing rule does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change or such shorter time as designated by the Commission,
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange filed a proposal to amend the fee schedule applicable to Members
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to modify its fee schedule in order to: (1) Amend the rebate associated with fee code BY; (2) eliminate the NBBO Setter and Joiner Tiers; (3) establish a Single MPID Investor Tier; and (4) simplify pricing related to Physical Connection Fees.
The Exchange currently provides a rebate of $0.0016 per share for Members' orders that yield fee code BY, which routes to BYX and removes liquidity using Destination Specific, TRIM, TRIM2, TRIM3, or SLIM routing strategies. The Exchange proposes to amend its Fee Schedule to decrease the rebate for orders that yield fee code BY to $0.0015 per share. The proposed change represents a pass through of the rate BATS Trading, Inc. (“BATS Trading”), the Exchange's affiliated routing broker-dealer, is provided for routing orders to BYX that remove liquidity. The proposed change is in response to BYX's May 2015 fee change where BYX decreased its rebate from $0.0016 per share to $0.0015 per share.
The Exchange currently offers an additional rebate per share for certain orders that establish a new NBBO or that join the NBBO when the Exchange is not already at the NBBO. Such additional rebates range from $0.0001 per share to $0.0005 per share. The Exchange is proposing to eliminate these additional rebates because the rebates have not achieved the desired effect, despite being designed to incentivize Members to add liquidity that sets or joins the Exchange to the NBBO. As such, the Exchange is proposing to eliminate the text in footnote four related to the NBBO Setter and Joiner Tiers.
The Exchange proposes to add new text to footnote four to establish a new Investor Tier under which a Member can qualify for a rebate of $0.0031 per share on an MPID by MPID basis if they meet the following criteria: (i) The MPID's ADAV
The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange's business is primarily conducted on a daily basis, and (ii) a
The Exchange proposes to simplify its pricing structure by imposing a uniform rate for physical ports regardless of the data center in which the port connection is made. Specifically, the Exchange proposes to charge $1,000 per month for all 1G physical port connections and $2,500 per month for all 10G physical ports in any location where the Exchange offers the ability to connect to Exchange systems, including the secondary data center and any PoP location. In conjunction with the proposed change, the Exchange also proposes minor changes to re-format the chart that sets forth physical connection fees and also proposes to re-locate such chart and the accompanying text such that physical connection fees directly follow logical port fees.
The Exchange proposes to implement the amendments to its fee schedule effective immediately.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that its proposal to decrease the rebate for orders that yield fee code BY represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities. Prior to the BYX's May 2015 fee change, BYX provided BATS Trading a rebate of $0.0016 per share to remove liquidity, which BATS Trading passed through to the Exchange and the Exchange provided its Members. When BATS Trading routes to BYX, it will now be provided a rebate of $0.0015 per share. The Exchange does not levy additional fees or offer additional rebates for orders that it routes to BYX through BATS Trading. Therefore, the Exchange believes that the proposed change to fee code BY is equitable and reasonable because it accounts for the pricing changes on BYX, which enables the Exchange to provide its Members the applicable pass-through rebate. Lastly, the Exchange notes that routing through BATS Trading is voluntary and believes that the proposed change is non-discriminatory because it would apply uniformly to all Members.
The Exchange believes that the proposed elimination of the NBBO Setter and Joiner Tiers represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities because, as described above, the additional rebates offered under these tiers are not affecting Members' behavior in the manner originally conceived by the Exchange. While the Exchange acknowledges the benefit of Members entering orders that set or join the NBBO, the Exchange has generally determined that it is providing additional rebates for liquidity that would be added on the Exchange regardless of whether the tiers existed. By paying these rebates, the Exchange is not only offering rebates for orders that would set or join the NBBO without being incentivized to do so, but also missing out on the opportunity to offer other rebates or reduced fees that could incentivize other behavior that would enhance market quality on the Exchange, which would benefit all Members. As such, the Exchange also believes that the proposed elimination of the NBBO Setter and Joiner Tiers would be non-discriminatory in that it currently applies equally to all Members and, upon elimination, would no longer be available to any Members. Further, it will allow the Exchange to explore other ways in which it may enhance market quality for all Members.
The Exchange believes that the proposed addition of the Single MPID Investor Tier represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities because it rewards Members with order flow characteristics that contribute meaningfully to price discovery on the Exchange. In other words, Members that post a substantial amount of liquidity and primarily post liquidity are valuable Members to the Exchange and the marketplace in terms of liquidity provision. By applying the tier on a single MPID rather than across a Member's entire trading activity, the Exchange is also allowing more Members to potentially receive the enhanced rebates for their trading activity related to liquidity provision. The Single MPID Investor Tier also encourages Members to primarily add liquidity in order to satisfy the ADAV as a percentage of ADV of at least 90%. Such increased volume increases potential revenue to the Exchange, and would allow the Exchange to spread its administrative and infrastructure costs over a greater number of shares, leading to lower per share costs. These lower per share costs would allow the Exchange to pass on the savings to Members in the form of higher rebates. The increased liquidity also benefits all investors by deepening the Exchange's liquidity pool, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. Volume-based rebates such as the ones proposed herein have been widely adopted in the cash equities markets, and are equitable because they are open to all Members on an equal basis and provide discounts that are reasonably related to the value to an exchange's market quality associated with higher levels of market activity, such as higher levels of liquidity provision and introduction of higher volumes of orders into the price and volume discovery processes.
In addition, the rebate is also reasonable in that other exchanges
The Exchange believes that providing uniform rates for all 1G and 10G physical connections to Exchange is reasonable because such change represents a reduction in fees for any Member that connects to the Exchange at a PoP location and no change to fees for any Member located in the Exchange's primary or secondary data center. The Exchange also believes that the proposal is equitably allocated and not unreasonably discriminatory because, as proposed, market participants will be able to access the Exchange at uniform rates regardless of whether such access is at the Exchange's primary or secondary data center location or another location where the Exchange offers access.
The Exchange does not believe its proposed amendments to its fee schedule would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes that its proposal to pass through the amended rebate for orders that yield fee code BY would increase intermarket competition because it offers customers an alternative means to route to BYX for the same rebate that they would be provided if they entered orders on that trading center directly. The Exchange believes that its proposal would not burden intramarket competition because the proposed rebate would apply uniformly to all Members.
The Exchange does not believe that its proposal to eliminate the NBBO Setter and Joiner Tiers would burden competition, but, rather, enhance the Exchange's ability to compete with other market centers. As described above, the Exchange believes that it is offering enhanced rebates for orders that would be submitted to the Exchange without the enhanced rebate, which prevents the Exchange from being able to offer other rebates or reduced fees that might be able to enhance market quality to the benefit of all Members. As such, eliminating the NBBO Setter and Joiner Tiers will allow the Exchange other opportunities to enhance market quality on the Exchange and ultimately, better compete with other market centers.
The Exchange believes that its proposal to adopt the Single MPID Investor Tier would increase intramarket competition by rewarding Members with order flow characteristics that contribute meaningfully to price discovery on the Exchange. In other words, the proposal is a competitive proposal in that it is designed to incentivize the entry of orders to the Exchange that will provide liquidity to other Members. The Exchange does not believe that its proposal would burden intramarket competition because the proposed rebate would apply uniformly to all Members that achieve the objective criteria of the Single MPID Investor Tier.
The Exchange does not believe that the proposed change to physical port fees represents a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Rather, as described above, the Exchange is simply normalizing its fees for physical access to the Exchange regardless of the location where a physical connection is made. The offering is consistent with the Exchange's own economic incentives to facilitate as many market participants as possible in connecting to its market. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. The Exchange does not believe that its proposal would burden intramarket competition because the fees for physical connections would apply uniformly to all Members.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold an Open Meeting on Wednesday, May 20, 2015 at 10:00 a.m., in the Auditorium, Room L-002.
The subject matters of the Open Meeting will be:
• The Commission will consider whether to propose new rules and forms and amendments to current rules and forms to modernize the reporting and disclosure of information by registered investment companies.
• The Commission will consider whether to propose form and rule amendments to require investment advisers to provide additional information concerning their operations, require the maintenance of performance records, and remove outdated transition provisions from rules.
At times, changes in Commission priorities require alterations in the scheduling of meeting items.
For further information and to ascertain what, if any, matters have been added, deleted, or postponed, please contact:
The Office of the Secretary at (202) 551-5400.
On March 20, 2015, NASDAQ OMX BX, Inc. (“BX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.
Accordingly, pursuant to Section 19(b)(2) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The proposed rule change consists of technical revisions to the: (i) DTC Custody Service Guide (“Custody Guide”) and (ii) DTC Deposits Service
In its filing with the Commission, DTC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. DTC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The proposed rule change would revise both of [sic] the Custody Guide and the Deposits Guide to make technical changes and updates to reflect current terminology, systems functionality, procedures and practices, as well as to simplify and clarify text.
In this regard, the Custody Guide would be revised to:
(i) Harmonize descriptions throughout regarding the eligibility of securities and other assets for deposit in the Custody Service, and update the list of items that are accepted or not accepted for deposit;
(ii) Update references to functionality with respect to Participant interfaces with DTC;
(iii) Clarify that Participants' may utilize the New York Window Service to facilitate physical transfers with respect to deliveries of securities for services offered by National Securities Clearing Corporation (NSCC) such as the Envelope Settlement Service (ESS) and the Automated Customer Account Transfer Service (ACATS);
(iv) Remove the “Terms and Conditions” section provided for the New York Window Service which is not necessary in light of the indemnification provisions relating to DTC's offering of services under DTC Rule 6;
(v) Update text, including descriptions of processes and address information for the Custody Service and cross-references throughout; and
(vi) Conform grammar and usage of terminology throughout.
In addition, the Deposits Guide would be revised to:
(i) Remove language relating to the Custody Service that is duplicative of the provisions in the Custody Guide;
(ii) Clarify that provisions relating DTC's use of Participants' medallion guarantee stamps for purposes of the Branch Deposit Service also apply with respect to the Restricted Deposit Service;
(iii) Update other text, including descriptions of processes and address information for the Deposits Service and cross-references throughout; and
(iv) Conform grammar and usage of terminology throughout.
The proposed rule change would become effective immediately.
The proposed rule change would revise the Custody Guide and the Deposits Guide to make technical changes and updates to reflect current terminology, systems functionality, procedures and practices, as well as simplify and clarify the texts of both guides. Therefore, DTC believes the proposed rule change is consistent with the requirements of: (i) The Act, in particular Section 17A(b)(3)(F) of the Act,
DTC does not believe that the proposed rule change would have any impact, or impose any burden, on competition.
Written comments relating to the proposed rule change have not yet been solicited or received. DTC will notify the Commission of any written comments received by DTC.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
FINRA is proposing to amend FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) to extend the Tier Size Pilot, which currently is scheduled to expire on May 15, 2015, for an additional three months, until August 14, 2015.
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
FINRA proposes to amend FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) (the “Rule”) to extend, until August 14, 2015, the amendments set forth in File No. SR-FINRA-2011-058 (“Tier Size Pilot” or “Pilot”), which currently are scheduled to expire on May 15, 2015.
The Tier Size Pilot was filed with the SEC on October 6, 2011,
The purpose of this filing is to extend the operation of the Tier Size Pilot for an additional three month period, until August 14, 2015, to provide FINRA with additional time to finalize its recommendation with regard to the Tier Size Pilot.
FINRA has filed the proposed rule change for immediate effectiveness. The operative date of the proposed rule change will be May 15, 2015.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA believes that the extension of the Tier Size Pilot for an additional three months is consistent with the Act in that it would provide the Commission and FINRA with additional time to determine whether the pilot tiers should be made permanent.
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
FINRA has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because such waiver will allow the pilot program to continue without interruption. Therefore, the Commission designates the proposal as operative upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange filed a proposal to amend the fee schedule applicable to Members
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to modify its fee schedule in order to: (1) Amend the rebate associated with removing liquidity from the Exchange; (2) eliminate the NBBO Setter Tier; and (3) simplify pricing related to Physical Connection Fees.
The Exchange currently provides a rebate of $0.0016 per share for Members' orders that remove liquidity from the Exchange, which includes those orders that yield fee codes BB, N, and W. The Exchange proposes to amend its Fee Schedule to decrease the rebate for orders that remove liquidity to $0.0015 per share.
The Exchange currently offers an additional incentive per share for orders from Members that have an ADAV
The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange's business is primarily conducted on a daily basis, and (ii) a secondary data center, which is predominantly maintained for business continuity purposes. The Exchange currently assesses fees to Members and non-Members of $1,000 for any 1G physical port connection at either data center and of $2,500 for any 10G physical port connection at either data center. The Exchange also provides market participants with the ability to access the Exchange's network through another data center entry point, or Point of Presence (“PoP”), at a data center other than the Exchange's primary or secondary data center.
The Exchange proposes to simplify its pricing structure by imposing a uniform rate for physical ports regardless of the data center in which the port connection is made. Specifically, the Exchange proposes to charge $1,000 per month for all 1G physical port connections and $2,500 per month for all 10G physical ports in any location where the Exchange offers the ability to connect to Exchange systems, including the secondary data center and any PoP location. In conjunction with the proposed change, the Exchange also proposes minor changes to re-format the chart that sets forth physical connection fees and also proposes to re-locate such chart and the accompanying text such that physical connection fees directly follow logical port fees.
The Exchange proposes to implement the amendments to its fee schedule effective immediately.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that its proposal to decrease the standard rebate for orders that remove liquidity and yield fee codes BB, N, or W represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities because it will reduce costs for the Exchange, thereby allowing the Exchange to apply those costs elsewhere to the benefit of all Members. While adjusting the Exchange's rebate of $0.0016 per share to remove liquidity to $0.0015 per share will obviously result in a reduction in rebates paid per share to Members, the Exchange believes that
The Exchange believes that the proposed elimination of the NBBO Setter Tier represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities because, as described above, the reduced fees offered by this tier is not affecting Members' behavior in the manner originally conceived by the Exchange. While the Exchange acknowledges the benefit of Members entering orders that set the NBBO, the Exchange has generally determined that it is providing additional rebates for liquidity that would be added on the Exchange regardless of whether the tier existed. By reducing these fees, the Exchange is not only reducing the fees it receives for orders that would set the NBBO without being incentivized to do so, but also missing out on the opportunity to offer other rebates or reduced fees that could incentivize other behavior that would enhance market quality on the Exchange, which would benefit all Members. As such, the Exchange also believes that the proposed elimination of the NBBO Setter Tier would be non-discriminatory in that it currently applies equally to all Members and, upon elimination, would no longer be available to any Members. Further, it will allow the Exchange to explore other ways in which it may enhance market quality for all Members.
The Exchange believes that providing uniform rates for all 1G and 10G physical connections to Exchange is reasonable because such change represents a reduction in fees for any Member that connects to the Exchange at a PoP location and no change to fees for any Member located in the Exchange's primary or secondary data center. The Exchange also believes that the proposal is equitably allocated and not unreasonably discriminatory because, as proposed, market participants will be able to access the Exchange at uniform rates regardless of whether such access is at the Exchange's primary or secondary data center location or another location where the Exchange offers access.
The Exchange does not believe its proposed amendments to its fee schedule would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe that its proposal to amend the standard rebate for orders that remove liquidity from the Exchange would burden competition, but, rather, enhance the Exchange's ability to compete with other market centers. As described above, the Exchange believes that the reduced rebate would allow the Exchange opportunities to use the cost savings in order to enhance other components of the Exchange, including offering enhanced rebates, reduced fees, and improved technology on the Exchange, which the Exchange believes would better equip it to compete with other market centers.
The Exchange does not believe that its proposal to eliminate the NBBO Setter Tier would burden competition, but, rather, enhance the Exchange's ability to compete with other market centers. As described above, the Exchange believes that it is offering a reduction in fees for orders that would be submitted to the Exchange without the reduced fee, which prevents the Exchange from being able to offer other rebates or reduced fees that might be able to enhance market quality to the benefit of all Members. As such, eliminating the NBBO Setter Tier will allow the Exchange other opportunities to enhance market quality on the Exchange and ultimately, better compete with other market centers.
The Exchange does not believe that the proposed change to physical port fees represents a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Rather, as described above, the Exchange is simply normalizing its fees for physical access to the Exchange regardless of the location where a physical connection is made. The offering is consistent with the Exchange's own economic incentives to facilitate as many market participants as possible in connecting to its market. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. The Exchange does not believe that its proposal would burden intramarket competition because the fees for physical connections would apply uniformly to all Members.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the constituent documents of its intermediate parent companies NYSE Holdings LLC, a Delaware limited liability company (“NYSE Holdings”), and Intercontinental Exchange Holdings, Inc., a Delaware corporation (“ICE Holdings”), and its ultimate parent company, Intercontinental Exchange, Inc., a Delaware corporation (“ICE”), to eliminate certain provisions that by their terms have become void and are of no further force and effect as a result of the sale by ICE of Euronext N.V. (“Euronext”) in June 2014. The Exchange also seeks approval of conforming changes to the Independence Policy of the Board of Directors of ICE (the “Independence Policy”). The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange requests approval to amend the constituent documents of its intermediate parent companies NYSE Holdings and ICE Holdings, and of its ultimate parent company, ICE, to eliminate certain provisions that by their terms have become void and are of no further force and effect as a result of the sale by ICE of Euronext in June 2014, upon consummation of which ICE, ICE Holdings and NYSE Holdings ceased to control Euronext.
The Exchange believes the proposed changes are desirable to avoid the potential for confusion that could arise if ICE, ICE Holdings and NYSE Holdings were to retain in their constituent documents or in the Independence Policy provisions that are no longer operative.
In 2007, the Exchange's direct parent, NYSE Group Inc. (“NYSE Group”), entered into a business combination transaction with Euronext N.V. (“Euronext”) in which NYSE Group and Euronext became wholly owned subsidiaries of a newly formed company, NYSE Euronext, a Delaware corporation. The Certificate of Incorporation and Bylaws of NYSE Euronext included provisions (a) requiring NYSE Euronext and its board of directors to give due consideration to requirements of European law and regulation applicable to the operation of Euronext's European business; (b) requiring NYSE Euronext and its board of directors to cause Euronext's subsidiaries to operate in compliance with applicable law and regulation and to cooperate with European regulators; (c) relating to board compositions and similar matters; and (d) prohibiting the amendment of such provisions without a supermajority vote of the directors in light of Euronext's minority representation on the board (collectively, the “European Provisions”). NYSE Euronext's
In 2013, ICE Holdings (then known as IntercontinentalExchange, Inc.) entered into a business combination transaction with NYSE Euronext in which ICE Holdings and NYSE Holdings (then known as NYSE Euronext Holdings LLC), as successor to NYSE Euronext, became wholly owned subsidiaries of a newly formed company, ICE (then known as IntercontinentalExchange Group, Inc.). In connection with this transaction, the European Provisions and the Voiding Provisions were modified as they applied to NYSE Holdings and were incorporated, in substantially the same modified form, into the Certificate of Incorporation and Bylaws of ICE, along with the Voiding Provisions. In relevant part, the Voiding Provisions applicable to ICE and NYSE Holdings were modified to specify that the European Provisions would automatically become void and be of no further force and effect if at any time ICE or NYSE Holdings, as the case may be, ceased to “control” Euronext, with “control” defined under International Financial Reporting Standard 10 (as in force at its date of first effectiveness on January 1, 2014), and with cessation of control subject to confirmation from the entity's registered public accountants and to a public disclosure requirement.
In March 2014, in preparation for its announced plan to sell Euronext, ICE contributed its ownership of NYSE Holdings to ICE Holdings, and in connection therewith the Certificate and Bylaws of ICE Holdings were amended to incorporate the modified European Provisions and the modified Voiding Provisions.
In June 2014, ICE consummated the sale of substantially all of its interest in Euronext and, accordingly, ceased to control Euronext within the meaning of the Voiding Provisions. As a result, the Voiding Provisions in each of the Constituent Documents were triggered, and the European Provisions in the Constituent Documents automatically became void and are of no further force and effect.
The Exchange accordingly proposes to make the following changes to the constituent documents of ICE, ICE Holdings and NYSE Holdings:
• Pursuant to Art. XIII, Section A.2., the following provisions are void and would be deleted: Art. V, Section A.2.(d); Art. V, Section A.3.(a)(ii), (a)(iii)(z), (b)(ii), (c)(i)(y) and (d)(i)(y); Art. V, Section A.4.(b), A.8, A.9, A.10 and A.11; Art. V, Section B.2.(d); Art. V, Section B.3.(a)(ii), (a)(iii)(z), (b)(ii), (b)(y) and (c)(ii); Art. VII, clause (B); and Art. X, clause (B).
• In addition, the phrases “or any European Market Subsidiary (as defined below)” has been deleted from Art V, Section A.1., and the phrase “or any European Market Subsidiary” has been deleted from Art. V, Section B.1., in each case because the phrase refers to a term that is no longer used in the document.
• In Art. V, Section A.3.(a)(i), a reference has been added to ICE Holdings and the erroneous name NYSE Euronext LLC has been corrected to refer to NYSE Holdings LLC. Additionally, references to ICE Holdings and NYSE Holdings have been added to Art. V, Section B.3.(a)(i). These matters were previously addressed in the last sentence of Section 3.15(g) of the Bylaws of ICE.
• Art. XIII itself is deleted because its sole purpose was to define the circumstances under which ICE would no longer control Euronext and to specify the provisions that became void upon such event. The Exchange believes it would be confusing to retain Art. XIII because it refers to events that have occurred and to provisions that will have been deleted.
• Art. XIV, establishing an effective time for the document, has been deleted because the effective time is addressed in the initial certification.
• Pursuant to Section 10.9(b)(3), the following provisions are void and would be deleted: Sections 3.14(a)(1), 3.14(b)(2), 3.14(b)(4), 3.14(b)(6), 7.2, 8.1(b), 8.2(b), 8.2(c)(2), 8.3(b), 8.3(d), 8.5, 9.2, 9.5, and 10.8; each occurrence of the words “pursuant to a resolution adopted by at least 75% of the directors then in office” in Section 3.1; and additionally Sections 3.15(a), 3.15(b), 3.15(c), 3.15(d), 3.15(e), 3.15(f), 11.1(b), 11.2(b) and 11.3(A).
• In Section 3.1, where the reference to 75% of the directors then in office is eliminated, the standard for setting the number of directors is set to a majority of the directors then in office, which was the standard in effect at NYSE Group prior to the Euronext transaction in 2007.
• In Section 3.5, a provision calling for one board meeting to be held in Europe in each year is deleted. This provision was included to accommodate the interests of the Euronext-affiliated directors and, while it was not identified for automatic deletion, ICE views the requirement as imposing an unnecessary expense on ICE and believes the venue of meetings should be in the discretion of management.
• The last sentence of Section 3.15(g) (which will be redesignated Section 3.15) is deleted for the reasons discussed above under “Certificate of Incorporation of ICE”.
• Section 8.6, applicable to records that relate to both a European Market Subsidiary and a U.S. Regulated Subsidiary, has been deleted because the definition of European Market Subsidiary and all other references to the term have been deleted.
• Section 10.9 is deleted in its entirety for the reasons set forth above relating to Article XIII of the Certificate of Incorporation of ICE, and also because Section 10.9 refers to Stichting NYSE Euronext and its Articles of Formation, which no longer asserts any authority over ICE.
• Pursuant to Art. XIII, Section A.2., the following provisions are void and would be deleted: Art. V, Section A.2.(d); Art V, Section A.3.(a)(ii), (a)(iii)(z), (b)(ii), (c)(i)(y) and (d)(i)(y); Art. V, Section A.4.(b), A.8, A.9, A.10 and A.11; Art. V, Section B.2.(d); Art. V, Section B.3.(a)(ii), (a)(iii)(z), (b)(ii), (b)(y) and (c)(ii); Art. VII, clause (B); and Art. X, clause (B).
• In addition, the phrases “or any European Market Subsidiary (as defined below)” has been deleted from Art. V, Section A.1., and the phrase “or any European Market Subsidiary” has been deleted from Art. V, Section B.1., in each case because the phrase refers to a term that is no longer used in the document.
• Art. XIII itself is deleted for the same reasons as discussed above for ICE.
• Pursuant to Section 10.9(b)(3), the following provisions are void and would be deleted: Sections 3.14(a)(1), 3.14(b)(2), 3.14(b)(4), 3.14(b)(6), 7.2, 8.1(b), 8.2(b), 8.2(c)(2), 8.3(b), 8.3(d), 8.5, 9.2, 9.5, and 10.8; each occurrence of the words “pursuant to a resolution adopted by at a majority of the directors then in office” in Section 3.1; and additionally Sections 3.15(a), 3.15(b), 3.15(c), 3.15(d), 3.15(e), 3.15(f), 11.1(b), 11.2(b) and 11.3(A).
• In Section 3.5, a provision calling for one board meeting to be held in Europe in each year is deleted, for the reasons discussed above under “Bylaws of ICE.”
• Section 8.6 is deleted for the reasons discussed above under “Bylaws of ICE”.
• Section 10.9 is deleted in its entirety for the reasons set forth above under “Bylaws of ICE”.
• Pursuant to Section 16.3(b)(3), the following provisions are void and would be deleted: Sections 3.12(b)(1), 3.12(c)(2), 3.12(c)(4), 3.12(c)(6),
• Additional definitions that define terms no longer used in the document also are deleted from Section 1.1: “Euronext”, “Euronext Call Option”, “Euronext Transaction Time”, “European Disqualified Person”, “European Subsidiaries' Confidential Information”, “Execution Date”, “Extraordinary Transaction”, “Foundation”, “Governmental Entity” (and the reference to such term in the definition of “Law”), “Merger” and “Priority Shares”.
• Certain cross-references have been corrected in the definitions of “ETP Holder”, “MKT Member”, “NYSE Arca”, “NYSE Arca Equities”, “NYSE Market”, “NYSE Member”, “NYSE MKT”, “OTP Firm”, “OTP Holder” and “U.S. Disqualified Person”.
• In Section 3.7, a provision calling for one board meeting to be held in Europe in each year is deleted for the reasons discussed above under “Bylaws of ICE”.
• References to European filing requirements have been eliminated from Section 7.2.
• Section 12.4(c), applicable to records that relate to both a European Market Subsidiary and a U.S. Regulated Subsidiary, has been deleted for the reasons discussed above under “Bylaws of ICE,” Section 8.6.
• Section 16.3 itself is deleted for the reasons discussed under “Certificate of Incorporation of ICE” with reference to Art. XIII.
• The phrase “or any European Market Subsidiary” has been eliminated from Sections 9.1(a)(1) and 9.1(b)(1), in each case because the phrase refers to a term that is no longer used in the document.
In each case, where a provision being eliminated falls within a numbered or lettered list, the subsequent numbers or letters, as the case may be, and related cross-references have been adjusted for continuity. In some cases where a list contains only a small number of items after eliminations, the number or lettering has been removed entirely.
Other non-substantive conforming changes have been made as appropriate for clarity and consistency.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act
The Exchange also believes that this filing furthers the objectives of Section 6(b)(5) of the Exchange Act
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change would shorten and simplify the Constituent Documents and the ICE Directors Independence Policy without making any substantive changes, thereby enhancing their transparency. The proposed rule change would result in no concentration or other changes of ownership of exchanges.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is proposing to change the name of “ConnectEdge” under Rule 13.9 to “BATS Connect”.
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
In early 2014, the Exchange and its affiliate, EDGA Exchange, Inc. (“EDGA”), received approval to effect a merger (the “Merger”) of the Exchange's parent company, Direct Edge Holdings LLC, with BATS Global Markets, Inc., the parent of BZX and BYX (together with BZX, EDGA, and EDGX, the “BGM Affiliated Exchanges”).
ConnectEdge is a communication and routing service that provides Members an additional means to receive market data from and route orders to any destination connected to the Exchange's network. ConnectEdge does not affect trade executions and would not report trades to the relevant Securities Information Processor. The servers of the Member need not be located in the same facilities as the Exchange in order to subscribe to ConnectEdge. Members may also seek to utilize ConnectEdge in the event of a market disruption where other alternative connection methods become unavailable.
Lastly, the Exchange proposes to correct a typographical error within Rule 13.9 by inserting the word “the” before “Exchanges network.”
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The proposed rule change will not affect competition as it is not designed to amend the content or services available via the renamed BATS Connect offering. It is simply intended to correct a typographical error and more closely align the renamed BATS Connect product with the Exchange's parent company, BATS Global Markets, Inc.
The Exchange has neither solicited nor received written comments on the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. Waiver of the 30-day operative delay would permit the Exchange to change the name of ConnectEdge to BATS Connect prior to the inclusion of the product offering on the Exchange's fee schedule effective May 1, 2015. Based on the foregoing, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to the authority granted to the United States Small Business Administration by the Final Order of the United States District Court of Oregon, Portland Division, entered October 15, 2014, the United States Small Business Administration hereby revokes the license of Smart Forest Ventures I. L.P., a Delaware Limited Partnership, to function as a small business investment company under the Small Business Investment Company License No. 10700195 issued to Smart Forest Ventures I, L.P., on January 19, 2001, and said license is hereby declared null and void as of October 15, 2014.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of Maryland dated 05/11/2015.
Incident: Civil Disorder.
Incident Period: 04/25/2015 through 05/03/2015.
05/11/2015.
Physical Loan Application Deadline Date: 07/10/2015.
Economic Injury (EIDL) Loan Application Deadline Date: 02/11/2016.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 14306 F and for economic injury is 14307 0.
The States which received an EIDL Declaration # are Maryland.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Connecticut (FEMA-4213-DR), dated 04/08/2015.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Connecticut, dated 04/08/2015, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of West Virginia (FEMA-4210-DR), dated 03/31/2015.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of WEST VIRGINIA, dated 03/31/2015, is hereby amended to establish the incident period for this disaster as beginning 03/03/2015 and continuing through 03/14/2015.
All other information in the original declaration remains unchanged.
Social Security Administration (SSA).
Notice of a renewal of an existing computer matching program that will expire on July 14, 2015.
In accordance with the provisions of the Privacy Act, as amended, this notice announces a renewal of an existing computer matching program that we are currently conducting with OPM.
We will file a report of the subject matching program with the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Government Reform of the House of Representatives; and the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). The matching program will be effective as indicated below.
Interested parties may comment on this notice by either telefaxing to (410) 966-0869 or writing to the Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 617 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401. All comments received will be available for public inspection at this address.
The Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, as shown above.
The Computer Matching and Privacy Protection Act of 1988 (Public Law (Pub. L.) 100-503), amended the Privacy Act (5 U.S.C. 552a) by describing the
The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:
(1) Negotiate written agreements with the other agency or agencies participating in the matching programs;
(2) Obtain approval of the matching agreement by the Data Integrity Boards of the participating Federal agencies;
(3) Publish notice of the computer matching program in the
(4) Furnish detailed reports about matching programs to Congress and OMB;
(5) Notify applicants and beneficiaries that their records are subject to matching; and
(6) Verify match findings before reducing, suspending, terminating, or denying a person's benefits or payments.
We have taken action to ensure that all of our computer matching programs comply with the requirements of the Privacy Act, as amended.
The purpose of this matching program is to set forth the terms, conditions, and safeguards under which OPM will provide us with civil service benefit and payment data. This disclosure will provide us with information necessary to verify an individual's self-certification of eligibility for the Extra Help with Medicare Prescription Drug Plan Costs program (Extra Help). It will also enable us to identify individuals who may qualify for Extra Help as part of our Medicare outreach efforts.
The legal authority for OPM to disclose information under this agreement is 42 U.S.C. 1383(f). The legal authority for us to conduct this matching program is 42 U.S.C. 1320b-14(a)(1) and (b)(1) and 1395w-114(a)(3).
OPM will electronically furnish the following information to us: Name, Social Security number, civil service claim number, and amount of current gross civil service benefits.
The effective date of this matching program is July 15, 2015 provided that the following notice periods have lapsed: 30 days after publication of this notice in the
Department of State.
Notice.
In accordance with Sections 3 and 6 of the Clean Diamond Trade Act of 2003 (Pub. L. 108-19) and Section 2 of Executive Order 13312 of July 29, 2003, the Department of State is updating the list of Participants eligible for trade in rough diamonds under the Act, and their respective Importing and Exporting Authorities, revising the previously published list of August 11, 2014 to reflect certain technical revisions of the List; to maintain temporary self-suspension of Venezuela from trade under the Kimberley Process as of November 4, 2010; and to maintain the suspension of the Central African Republic from trade under the Kimberley Process as of May 23, 2013.
Ashley Orbach, Special Advisor, Bureau of Economic and Business Affairs, Department of State, (202) 647-2856.
Section 4 of the Clean Diamond Trade Act (the “Act”) requires the President to prohibit the importation into, or the exportation from, the United States of any rough diamond, from whatever source, that has not been controlled through the Kimberley Process Certification Scheme (KPCS). Under Section 3(2) of the Act, “controlled through the Kimberley Process Certification Scheme” means an importation from the territory of a Participant or exportation to the territory of a Participant of rough diamonds that is either (i) carried out in accordance with the KPCS, as set forth in regulations promulgated by the President, or (ii) controlled under a system determined by the President to meet substantially the standards, practices, and procedures of the KPCS. The referenced regulations are contained at 31 CFR part 592 (“Rough Diamond Control Regulations”)(68 FR 45777, August 4, 2003).
Section 6(b) of the Act requires the President to publish in the
Pursuant to Sections 3 and 6 of the Act, Section 2 of Executive Order 13312, Department of State Delegation of Authority No. 245-1 (February 13, 2009), and the Delegation of Authority from the Deputy Secretary to the Under Secretary dated October 31, 2011, I hereby identify the following entities as
Angola—Ministry of Geology and Mines.
Armenia—Ministry of Trade and Economic Development.
Australia—Exporting Authority—Department of Industry, Tourism and Resources; Importing Authority—Australian Customs Service.
Bangladesh—Ministry of Commerce.
Belarus—Department of Finance.
Botswana—Ministry of Minerals, Energy and Water Resources.
Brazil—Ministry of Mines and Energy.
Cambodia—Ministry of Commerce.
Cameroon—National Permanent Secretariat for the Kimberley Process in Cameroon.
Canada—Natural Resources Canada.
China—General Administration of Quality Supervision, Inspection and Quarantine.
Congo, Democratic Republic of the—Ministry of Mines.
Congo, Republic of the—Ministry of Mines.
Cote D'Ivoire (Ivory Coast)—Ministry of Mines and Energy.
European Union—DG/External Relations/A.2.
Ghana—Precious Minerals and Marketing Company Ltd.
Guinea—Ministry of Mines and Geology.
Guyana—Geology and Mines Commission.
India—The Gem and Jewelry Export Promotion Council.
Indonesia—Directorate General of Foreign Trade of the Ministry of Trade.
Israel—The Diamond Controller.
Japan—Ministry of Economy, Trade and Industry.
Kazakhstan—Ministry of Finance.
Korea, South—Ministry of Commerce, Industry and Energy.
Laos—Ministry of Finance.
Lebanon—Ministry of Economy and Trade.
Lesotho—Commissioner of Mines and Geology.
Liberia—Ministry of Lands, Mines and Energy.
Malaysia—Ministry of International Trade and Industry.
Mali—Office of Expertise, Evaluation and Certification of Rough Diamonds.
Mauritius—Ministry of Commerce.
Mexico—Economic Secretariat.
Namibia—Ministry of Mines and Energy.
New Zealand—Ministry of Foreign Affairs and Trade.
Norway—The Norwegian Goldsmiths' Association.
Panama—National Customs Authority.
Russia—Ministry of Finance.
Sierra Leone—Government Gold and Diamond Office.
Singapore—Singapore Customs.
South Africa—South African Diamond Board.
Sri Lanka—National Gem and Jewellery Authority.
Swaziland—Office of the Commissioner of Mines.
Switzerland—State Secretariat for Economic Affairs.
Taiwan (Participating as Chinese Taipei—Bureau of Foreign Trade.
Tanzania—Commissioner for Minerals.
Thailand—Ministry of Commerce.
Togo—Ministry of Mines and Geology.
Turkey—Istanbul Gold Exchange.
Ukraine—State Gemological Centre of Ukraine.
United Arab Emirates—Dubai Metals and Commodities Center.
United States of America—Importing Authority—United
States Bureau of Customs and Border Protection; Exporting Authority—United States Census Bureau.
Vietnam—Ministry of Trade.
Zimbabwe—Ministry of Mines and Mining Development.
This notice shall be published in the
Federal Aviation Administration (FAA), DOT.
Notice of petition for exemption received.
This notice contains a summary of a petition seeking relief from specified requirements of 14 CFR. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before June 8, 2015.
You may send comments identified by Docket Number FAA-2015-0726 using any of the following methods:
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Alphonso Pendergrass (202) 267-4713. This notice is published pursuant to 14 CFR 11.85.
Docket No.: FAA-2015-0726.
Petitioner: Mr. Michael H. LeMee, MED-Trans Corporation.
Section of 14 CFR Affected: § 43.3(a).
Description of Relief Sought: On behalf of MED-Trans Corporation, Mr. Michael LeMee petitions the FAA for an exemption from 14 CFR 43.3(a) to allow properly trained medical personnel to perform the insertion and removal of litter systems, isolettes and secondary stretcher systems in the EC-135 and EC-155 aircraft operated by MED-Trans Corporation.
Federal Aviation Administration (FAA), DOT.
Notice of public meeting.
This notice announces a public meeting of the FAA's Aviation Rulemaking Advisory Committee (ARAC) Transport Airplane and Engine (TAE) Subcommittee to discuss TAE issues.
The meeting is scheduled for Wednesday, June 03, 2015, starting at 9:00 a.m. EST. The public must make arrangements by June 01, 2015, to present oral statements at the meeting.
929 Long Bridge Drive, Arlington, VA 22202.
Ralen Gao, Office of Rulemaking, ARM-209, FAA, 800 Independence Avenue SW., Washington, DC 20591, Telephone (202) 267-3168, FAX (202) 267-5075, or email at
Pursuant to Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463; 5 U.S.C. app. 2), notice is given of an ARAC Subcommittee meeting to be held on Wednesday, June 03, 2015.
The agenda for the meeting is as follows:
Participation is open to the public, but will be limited to the availability of teleconference lines.
To participate, please contact the person listed in
The public must make arrangements by June 01, 2015, to present oral or written statements at the meeting. Written statements may be presented to the Subcommittee by providing a copy to the person listed in the
If you need assistance or require a reasonable accommodation for the meeting or meeting documents, please contact the person listed in the
Federal Aviation Administration (FAA), DOT.
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Title 14 of the Code of Federal Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before June 8, 2015.
Send comments identified by docket number FAA-2015-0409 using any of the following methods:
Fax: Fax comments to Docket Operations at 202-493-2251.
Valentine Castaneda (202) 267-7977, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591.
This notice is published pursuant to 14 CFR 11.85.
Federal Aviation Administration (FAA), DOT.
Notice of petition for exemption received.
This notice contains a summary of a petition seeking relief from specified requirements of 14 CFR. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before June 8, 2015.
You may send comments identified by Docket Number FAA-2013-0221 using any of the following methods:
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Alphonso Pendergrass (202) 267-4713.
This notice is published pursuant to 14 CFR 11.85.
Petitioner requests amendments to the conditions and limitations of Exemption No. 10871, as amended. That exemption allows certain foreign pilots exercising private pilot privileges to act as a flight crewmember on Boeing aircraft that are being used to conduct evaluation and demonstration flights. The amendments requested by The Boeing Company would expand the types of evaluation and demonstration flights allowed under the exemption, and would add relief to carry additional supernumeraries on those flights.
Federal Highway Administration (FHWA), DOT.
Notice.
This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for the use of non-domestic steel cable nets for truck escape ramps used in a dragnet impact absorption system on State route (SR) 431, US550, and SR163 in the State of Nevada.
The effective date of the waiver is May 19, 2015.
For questions about this notice, please contact Mr. Gerald Yakowenko, FHWA Office of Program Administration, (202) 366-1562, or via email at
An electronic copy of this document may be downloaded from the
The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic manufacturing process for any steel or iron products (including protective coatings) that are permanently incorporated in a Federal-aid construction project. The regulation also provides for a waiver of the Buy America requirements when the application would be inconsistent with the public interest or when satisfactory quality domestic steel and iron products are not sufficiently available. This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for use of non-domestic steel cable nets used in a dragnet impact absorption system for truck escape ramps on SR431, US550, and SR163 in the State of Nevada.
In accordance with Division K, section 122 of the “Consolidated and Further Continuing Appropriations Act, 2015” (Pub. L. 113-235), FHWA published a notice of intent to issue a
In accordance with the provisions of section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), FHWA is providing this notice as its finding that a waiver of Buy America requirements is appropriate. The FHWA invites public comment on this finding for an additional 15 days following the effective date of the finding. Comments may be submitted to FHWA's Web site via the link provided to the Nevada waiver page noted above.
23 U.S.C. 313; Pub. L. 110-161, 23 CFR 635.410
Federal Highway Administration (FHWA), DOT.
Notice.
This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for the use of non-domestic steel cable nets for truck escape ramps used in a dragnet impact absorption system on State route (SR) 431, US550, and SR163 in the State of Nevada.
The effective date of the waiver is May 19, 2015.
For questions about this notice, please contact Mr. Gerald Yakowenko, FHWA Office of Program Administration, (202) 366-1562, or via email at
An electronic copy of this document may be downloaded from the
The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic manufacturing process for any steel or iron products (including protective coatings) that are permanently incorporated in a Federal-aid construction project. The regulation also provides for a waiver of the Buy America requirements when the application would be inconsistent with the public interest or when satisfactory quality domestic steel and iron products are not sufficiently available. This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for use of non-domestic steel cable nets used in a dragnet impact absorption system for truck escape ramps on SR431, US550, and SR163 in the State of Nevada.
In accordance with Division K, section 122 of the “Consolidated and Further Continuing Appropriations Act, 2015” (Pub. L. 113-235), FHWA published a notice of intent to issue a waiver on its Web site for non-domestic steel cable nets (
In accordance with the provisions of section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), FHWA is providing this notice as its finding that a waiver of Buy America requirements is appropriate. The FHWA invites public comment on this finding for an additional 15 days following the effective date of the finding. Comments may be submitted to FHWA's Web site via the link provided to the Nevada waiver page noted above.
Federal Highway Administration (FHWA), DOT.
Notice of Limitation on Claims for Judicial Review of Actions by the California Department of Transportation (Caltrans), pursuant to 23 U.S.C. 327.
The FHWA, on behalf of Caltrans, is issuing this notice to announce actions taken by Caltrans that are final within the meaning of 23 U.S.C. 139(
By this notice, the FHWA, on behalf of Caltrans, is advising the public of final agency actions subject to 23 U.S.C. 139(
For Caltrans: Kendall Schinke, Environmental Branch Chief, California Department of Transportation, District 3, 2379 Gateway Oaks Drive, Suite 150, Sacramento, CA 95833; Telephone (916) 274-0610 or email
Effective July 1, 2007, the Federal Highway Administration (FHWA) assigned, and the Caltrans assumed, environmental responsibilities for this project pursuant to 23 U.S.C. 327. Notice is hereby given that the Caltrans has taken final agency actions subject to 23 U.S.C. 139(
This notice applies to all Federal agency decisions as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to:
23 U.S.C. 139(
Departmental Offices, Department of the Treasury.
Notice and request for comments.
The Department of the Treasury invites the general public and other Federal agencies to comment on an extension of an existing information collection, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The Department of the Treasury is soliciting comments concerning the Authorization Agreement for Preauthorized Payments, which is scheduled to expire July 31, 2015.
Written comments must be received on or before July 17, 2015 to be assured of consideration.
You may submit comments by any of the following methods:
All responses to this notice will be included in the request for OMB's approval. All comments will also become a matter of public record.
Requests for additional information or a copy of the information collection can be directed to the addresses provided above.
Department of Veterans Affairs.
Amended Notice of Intent to Enter into an Amended Enhanced-Use Lease (EUL).
The Secretary of the Department of Veterans Affairs (VA) intends to amend the scope and terms of an existing EUL that was entered into on December 30, 2011, for certain land for the purpose of rehabilitating three buildings and developing units of supportive housing for Veterans.
Edward L. Bradley III, Office of Asset Enterprise Management (044), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461-7778.
The Secretary of the Department of Veterans Affairs (VA) intends to amend the scope and terms of an existing EUL that was entered into on December 30, 2011, for three parcels, a total of approximately 17.5 acres of land for the purpose of rehabilitating three buildings and
Office of the Comptroller of the Currency, Treasury.
Final rule.
The Office of the Comptroller of the Currency (OCC) is adopting a final rule to integrate its rules relating to policies and procedures for corporate activities and transactions involving national banks and Federal savings associations, to revise some of these rules in order to eliminate unnecessary requirements consistent with safety and soundness and to promote fairness in supervision, and to make other technical and conforming changes. The OCC also is adopting amendments to update its rules for agency organization and function.
This final rule is effective July 1, 2015.
For additional information, contact Heidi Thomas, Special Counsel; Melissa Lisenbee, Attorney; or Stuart Feldstein, Director, Legislative and Regulatory Activities Division, (202) 649-5490, for persons who are deaf or hard of hearing, TTY, (202) 649-5597; Kevin Corcoran, Assistant Director, or Richard Cleva, Senior Counsel, Bank Activities and Structure, (202) 649-5500; or Stephen Lybarger, Deputy Comptroller for Licensing, (202) 649-6319, Office of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219.
Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),
The OCC is in the process of reviewing its rules to determine whether it is appropriate to integrate them into a single set of rules for both national banks and savings associations, taking into account consistency with the underlying statutes that apply to each type of institution. The key objectives of this review are to reduce regulatory duplication, promote fairness in supervision, eliminate unnecessary burden consistent with safety and soundness, and create efficiencies for both national banks and savings associations, as well as the OCC.
As part of this review of our national bank and savings association rules, the OCC published in the
Concurrently, the OCC also is participating in an interagency review of regulations pursuant to section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA).
The Agencies published the first EGRPRA notice on June 4, 2014,
As part of this EGRPRA review, the Agencies also are holding a number of outreach meetings to provide interested parties with an opportunity to comment on regulatory burden reduction in our regulations. This preamble discusses relevant comments received at outreach meetings held on December 2, 2014, in Los Angeles, Calif., and February 4, 2015 in Dallas, Texas, to the extent they relate to OCC licensing rules.
Twelve CFR part 5 sets forth the OCC's rules, policies and procedures for national bank corporate activities and transactions. Subpart A sets forth the generally applicable rules and procedures, while subparts B through D contain the rules for national bank initial activities, the expansion of activities, and other changes in activities and operations. Subpart E addresses a national bank's payment of dividends, and subpart F addresses Federal branches and agencies. The OCC's equivalent rules, policies and procedures for Federal savings associations are dispersed throughout parts 100-199 with the generally applicable rules and procedures in part 116. This final rule revises part 5 to make it applicable to both national banks and Federal savings associations and, to the extent appropriate, deletes the corresponding provisions found in parts 100 through 199.
Specifically, the final rule consolidates most licensing provisions for Federal savings associations into the existing national bank rule in part 5 and eliminates parts 116, 146, 152, 159, 174 and the corresponding provision in parts 143, 144, 145, 150, 160, and 163. These combined rules are as follows:
• Rules of general applicability (subpart A)
• Organizing a national bank or Federal savings association (§ 5.20)
• Conversion from a national bank or Federal savings association to a state bank or state savings association (§ 5.25)
• Fiduciary powers of national banks or Federal savings associations (§ 5.26)
• Business combinations involving a national bank or Federal savings association (§ 5.33)
• Bank service company investments of a national bank or Federal savings association (§ 5.35)
• Investment in national bank or Federal savings association premises (§ 5.37)
• Change in location of a main office of a national bank or home office of a Federal savings association (§ 5.40)
• Corporate title of a national bank or Federal savings association (§ 5.42)
• Voluntary liquidation of a national bank or Federal savings association (§ 5.48)
• Change in control of a national bank or Federal savings association; reporting of stock loans (§ 5.50)
• Changes in directors and senior executive officers of a national bank or Federal savings association (§ 5.51)
• Change of address of a national bank or Federal savings association (§ 5.52)
• Substantial asset change by a national bank or Federal savings association (§ 5.53)
In other cases, this final rule retains separate rules for national banks and Federal savings association in part 5 because the rules do not apply to both charters, are better organized as separate rules, or their differences and complexity make integration difficult. The new Federal savings association rules are as follows:
• Federal mutual savings association charters and bylaws (§ 5.21)
• Federal stock savings association charters and bylaws (§ 5.22)
• Conversion to become a Federal savings association (§ 5.23)
• Establishment, acquisition, and relocation of a branch and establishment of an agency office of a Federal savings association (§ 5.31)
• Operating subsidiaries of a Federal savings association (§ 5.38)
• Increases in permanent capital of a Federal stock savings association (§ 5.45)
• Capital distributions by a Federal savings association (§ 5.55)
• Inclusion of subordinated debt securities and mandatorily redeemable preferred stock as supplementary (tier 2) capital (§ 5.56)
• Pass-through investments by a Federal savings association (§ 5.58)
• Service corporations of Federal savings associations (§ 5.59)
The remaining rules in part 5 continue to be applicable only to national banks, with the exception of subpart E. (Subpart E applies only to Federal branches and agencies, and we did not propose to amend it in the NPRM.) We are amending some of these rules to be consistent with the changes for Federal savings associations, revising the titles of some of these rules to reflect the inclusion of rules applicable to Federal savings associations in part 5, and making other technical changes. These national bank-only rules are as follows:
• Conversion to become a national bank (§ 5.24)
• Establishment, acquisition, and relocation of a branch of a national bank (§ 5.30)
• Expedited procedures for certain reorganizations of a national bank (§ 5.32)
• Operating subsidiaries of a national bank (§ 5.34)
• Other equity investments by a national bank (§ 5.36)
• Financial subsidiaries of a national bank (§ 5.39)
• Changes in permanent capital of a national bank (§ 5.46)
• Subordinated debt issued by a national bank (§ 5.47)
• Payment of dividends by national banks (Subpart E)
In addition to the placement and integration of Federal savings association rules, the final rule makes substantive changes to the OCC's licensing rules to eliminate unnecessary requirements and to further the safe and sound operation of the institutions the OCC supervises. Furthermore, the final rule makes conforming and technical changes to the rules in parts 5, 7, and 34 and in various provisions of parts 100 through 199 to reflect the movement of the licensing rules for savings associations to part 5, to adjust section titles, and to conform cross-references. In particular, the final rule replaces, where appropriate, references to “bank” with “national bank,” because it better parallels the term “Federal savings association.” Finally, the rulemaking amends the OCC's licensing rules to make consistent the OCC office to which a national bank or Federal savings association must file its notice or application. Specifically, the final rule amends each rule in part 5 to direct such filings to the institution's appropriate OCC licensing office or appropriate OCC supervisory office, as applicable, and, in clarifying amendments, updates the description of the OCC's supervisory structure in part 4.
A description of amendments made by this final rule, the comments received on the proposed rule, relevant comments received in response to the June 2014 EGRPRA notice, and
The OCC received one comment in response to the proposed rule, and that comment referred the OCC to a comment received in connection with the June 2014 EGRPRA notice. The OCC also received 48 public comments in response to the June 2014 EGRPRA notice, seven of which addressed issues related to licensing rule integration. These comments, the provisions they address, and the resulting changes to the OCC's rules are discussed below.
Part 4 covers several areas, including regulations pertaining to the OCC's organizational structure. Section 4.4 describes the role of the OCC's Washington, DC office. Section 4.5 describes the role of the OCC's district and field offices and sets forth the address of, and the geographical area covered by, each district office. However, §§ 4.4 and 4.5 do not completely describe all of the OCC's supervisory offices. We proposed to amend 12 CFR 4.5 to reflect more accurately the current supervisory structure for national banks and Federal savings associations. Specifically, we proposed to revise § 4.5 to include a description and address of the OCC's Midsize Bank Supervision program, and to provide that the district offices supervise community banks not otherwise supervised by the Washington office or Midsize Bank Supervision. The NPRM also proposed to replace the outdated reference to “duty stations” with the currently used term “field office.” We received no public comments on the proposed § 4.5 amendments and adopt them as proposed with some technical changes. First, the final rule adds American Samoa to the list of territories in § 4.5(b)(1). It was inadvertently left out of the proposed rule. Second, the final rule replaces the term “field office satellite offices” with “other supervisory offices” in § 4.5(b)(2), and makes changes to paragraph headings.
A number of public commenters made general comments regarding the OCC's licensing rule integration effort. One commenter, a banking trade association, supported the OCC's efforts to integrate its licensing rules as a starting point for a more efficient and streamlined regulatory regime for both national banks and Federal savings associations. However, this commenter stated that, by including a number of new substantive requirements and amendments, this rulemaking will increase burden on the industry, and is therefore inconsistent with the stated purpose of the EGRPRA process. This commenter requested that the OCC issue a separate proposed rule for any substantive changes that create burdens greater than those imposed by existing rules.
We note that the OCC has taken several considerations into account in integrating the national bank and Federal savings association rules. As stated in the preamble to the proposal, the key objective of this rulemaking is to integrate the national bank and Federal savings association rules in a way that promotes fairness in supervision, reduces regulatory duplication, eliminates unnecessary burden consistent with safety and soundness, and creates efficiencies for both national banks and savings associations, as well as the OCC. The final rule reflects a balance of these considerations.
In addition, this commenter stated that the OCC should have conducted industry outreach in advance of proposing the integration of national bank and Federal savings association licensing rules and should create a plan for outreach and the education of institutions on the proposed changes going forward. We note that we do intend to engage in efforts to educate the industry on the final rule, including discussing these changes in meetings with bankers, trade groups, and other interested parties, as appropriate, and providing summaries of the changes on the OCC's Internet Web page,
Another trade association commenter requested that the OCC provide tiered regulation that would provide different treatment for large banks and community banks. The OCC is committed to finding ways to reduce burden on community banks without negatively affecting the safety and soundness of those institutions, including applying less burdensome regulatory requirements where permissible and appropriate. However, we note that tiered regulation based on asset-size is not always appropriate in the licensing context because many of the application requirements are mandated by statutes that do not authorize the OCC to differentiate among institutions based on size or status as a community bank.
Twelve CFR part 5, subpart A, and 12 CFR part 116 set forth the OCC's generally applicable rules and procedures for processing filings
We proposed to apply all subpart A procedures to all part 5 OCC filings, unless the substantive rule specifically exempts the filing or the OCC states otherwise. We received no comments on this provision and adopt the procedures as proposed. This change creates more parity for national banks and Federal savings associations when filing an application for activities and transactions addressed in part 5.
Section 5.2(c) also states that the Comptroller's Licensing Manual provides additional filing information and is available on-line and, for a fee, in print. We proposed to revise this provision to state only that the Manual is available on-line. This proposed revision reflected the OCC's decision to stop printing the Manual in hard copy, to reduce paper consumption and to ensure that the public receives only the most up-to-date information. The OCC also is in the process of updating the Manual, as well as filing forms, to contain information on both national bank and Federal savings association filings. As indicated earlier in this preamble discussion, we are updating our electronic filing system so that a single system will receive filings from both national banks and Federal savings associations.
Additionally, § 5.2(d) states that the OCC may permit electronic filing for any class of filings. In order to reflect the agency's move toward the more efficient and less costly electronic filings, we proposed to revise this provision to state that the OCC encourages all filings to be made electronically. We received one comment on the § 5.2 filing procedures, which requested that the OCC make electronic submission available for all forms and reporting requirements. Currently, certain OCC licensing forms can be filled and submitted electronically,
The OCC also proposed to amend the definition of “eligible bank” in § 5.3(g) to add the term “eligible savings associations.” Currently, an “eligible bank” is a national bank that (1) is well capitalized under the OCC's Prompt Corrective Action (PCA) regulations, (2) has a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (CAMELS), (3) has an “Outstanding” or “Satisfactory” Community Reinvestment Act (CRA) rating, and (4) is not subject to a cease and desist order, consent order, formal written agreement, or PCA directive, or, if it is, the OCC has informed the bank that it may nonetheless be treated as an “eligible bank.” Under certain rules in part 5, an eligible bank may receive expedited review of a filing in the manner set out in the rule. Section 5.13(a)(2) sets out additional information about the expedited review process.
Part 116 also has an expedited review process for certain filings. Specifically, § 116.5 provides that a Federal savings association filing will receive expedited treatment unless: (1) It has a composite or compliance rating below 2 or a CRA rating of “Needs to Improve” or “Substantial Noncompliance,” (2) it fails any part 3 capital requirement, as applicable, and has been notified that it is in troubled condition,
We proposed to amend § 5.3(g) by defining “eligible bank or eligible savings association” (instead of “eligible bank”) and by adding an OCC compliance rating of 1 or 2 to the eligibility requirements for all institutions. As indicated in the preamble to the proposed rule, the OCC believes that a bank's compliance with consumer-related statutes and regulations should be a factor in determining whether a bank may qualify for expedited treatment. In addition, we note that, because a Federal savings association's compliance rating is included in part 116 as one of the criteria for expedited review, the addition of this rating to § 5.3(g) is a change for national banks, but not for Federal savings associations. However, as explained in greater detail below, because § 5.13(a)(2)(i) permits the OCC to remove a filing from expedited review if it raises certain issues, including compliance concerns,
Also, the proposal clarified that the CRA rating component of “eligible bank or eligible savings association” applies only if the CRA is applicable to the institution. We proposed this change because some limited purpose banks, such as trust banks, are not subject to the CRA.
We received one comment on proposed § 5.3(g). This commenter stated that adding a compliance rating as part of the eligibility requirement is redundant because it is already included in the CAMELS composite rating. However, while compliance is a factor in the management component of the CAMELS rating, the compliance rating referred to by the commenter, and in our proposed rule, is a separate assessment from the CAMELS rating,
For these reasons, the OCC is adopting the amendment to § 5.3(g) as proposed, with the technical clarification to the name of the compliance rating, discussed above.
We note that, with respect to Federal savings associations, there may be changes for some filings because the criteria in §§ 5.3 and 116.5 are not identical. Under the current rules, the two standards are similar in that they both require a composite CAMELS rating of 1 or 2 and a CRA rating of outstanding or satisfactory. In addition, if an institution has not received a rating, it is not eligible for expedited treatment under either set of current rules and would remain ineligible under the final rule. However, under the current savings association rule both well and adequately capitalized institutions are eligible for expedited treatment. Under the final rule, only savings associations that are well capitalized qualify for expedited review. We proposed to apply the well capitalized requirement to savings associations because, in the OCC's experience, national banks and Federal savings associations that are less than well capitalized are more likely than other institutions to present supervisory concerns and, therefore, expedited review is not necessarily appropriate. As a result, some savings associations that qualify for expedited treatment under the current rule may no longer qualify for such treatment under the final rule.
A second difference involves the supervisory condition of the savings association. Under the current savings association rule, the OCC must not have notified the institution that it is in a troubled condition while, under the new rule, an eligible savings association must not be subject to certain orders, agreements or directives. Although these standards are slightly different, we expect the outcomes generally will be similar and we will monitor for significant disparities.
The OCC also proposed to amend the definition of “eligible depository institution” to address the fact that either a national bank or a Federal savings association may enter into a transaction with an eligible depository institution. We received no comments on this provision and adopt it as proposed.
We also proposed to change the § 5.3 definition of “notice.” Section 5.3(j) defines a notice as a submission informing the OCC that a national bank intends to engage in or has commenced certain corporate activities or transactions. Under § 5.3, an “application” is a submission requesting prior OCC approval to engage in various corporate activities and transactions. The two definitions suggest that a “notice” does not require OCC approval. However, the rules use the term “notice” in several different ways. In some rules, a “notice” is the same as an application in that the filer must obtain prior OCC approval before engaging in the activity or transaction. In other rules, a “notice” is similar to an application in that, while the OCC does not “approve” the filing, the OCC may disapprove it. In still other rules, the notice only informs the OCC that the filer intends to engage in or has engaged in a transaction. The OCC may review the notice, but there is no requirement of prior OCC approval. Some of the latter notices can be filed after-the-fact. We proposed to add language to § 5.3(j) stating that the specific meaning of
The OCC also proposed to strike the § 5.3 definition of “appropriate district office” and, instead, to define “appropriate OCC licensing office” as described at
The OCC also proposed to change the definition of “short-distance relocation,” a term that is used in current national bank branch and main office relocations regulations,
The current “short-distance relocation” definition in the banking rule also references whether a branch is located within a “central city of a MSA (metropolitan statistical area).” The Office of Management and Budget (OMB), which designates MSAs, uses the term “principal city” in describing MSAs.
We received one comment letter on the general requirement to file a notice or application. This commenter advocated that institutions that are well capitalized and well managed generally should be exempt from prior notice or approval requirements, as in the FRB's Regulation Y (12 CFR 225.4(b)(1)) for purchases and redemptions of holding company stock for well-capitalized holding companies that meet certain requirements. The OCC disagrees with this comment. In many cases, we are required to consider approval standards under the relevant statute, and in these cases and in others, the review process serves a significant supervisory purpose. Furthermore, as described below, our licensing rules provide expedited processing for certain highly rated
Section 5.4(b) states that forms and instructions for filings are available in the Comptroller's Licensing Manual or from an OCC district office. We proposed to revise this section because the Manual is now only available on-line. As noted above, the OCC will be updating this Manual, and it will contain information on both national bank and Federal savings association filings.
Section 5.4(c) states that, at a filer's request, the OCC may accept another agency's form or filing if it contains substantially the same information required by the OCC. Section 116.25(c), which allows the OCC to waive certain filing requirements, has been used for this same purpose with respect to Federal savings association filings. Under the final rule, this option remains available for both national banks and Federal savings associations.
Section 5.4(d) directs a filer to submit a filing or other submission to the OCC's Director for District Licensing at the appropriate district office, unless directed otherwise in a prefiling communication. For Federal savings associations, § 116.40(a) directs filings to the Director for District Licensing at the appropriate OCC licensing office or the OCC licensing office at OCC headquarters. In addition, under § 116.40(b), if a filing involves significant issues of law or policy, or if the applicable regulation or form so directs, the applicant must also file copies at the OCC headquarters licensing office.
We proposed to change § 5.4(d) to direct that applicants address part 5 filings and related submissions to the appropriate OCC licensing or appropriate OCC supervisory office (unless the OCC advises otherwise through a prefiling communication) and to state that the relevant addresses are on the OCC's Internet Web page,
Furthermore, the OCC's current rules do not specify how many copies an applicant must file with the OCC. This information generally is stated on the form itself or in the Comptroller's Licensing Manual. In contrast, § 116.40(a) states that Federal savings association filers must submit to the appropriate licensing office or the OCC licensing office at headquarters the original form plus the number of copies specified on the application. If the number of copies is not specified there, § 116.40(a) directs applicants to submit the original plus two copies. We proposed to remove this requirement from the regulation for Federal savings associations and, instead, direct Federal savings association filers to consult the appropriate form and the Comptroller's Licensing Manual for information on the number of required copies.
Section 5.4(e) permits an applicant to incorporate by reference information contained in another OCC application or filing, provided that the material (1) is attached to the application, (2) is current, and (3) is responsive to the requested information. The filing must clearly indicate that the information is incorporated and include a cross-reference to the incorporated information. With respect to Federal savings association filings, § 116.25(c), which allows the OCC to waive certain filing requirements, is currently used to allow incorporation by reference. Moreover, the Federal savings association filing forms themselves typically provide for incorporating by reference other documents. We proposed to apply § 5.4(e) to all filings with the OCC, without any change to the regulatory language and with no material change to affected institutions or persons.
Finally, § 116.15(b)(2) encourages all applicants to contact the appropriate OCC licensing office to determine whether the applicant must attend a prefiling meeting or whether the submission of a draft business plan or other information would expedite the application review process. Section 116.20 describes the required contents of a draft business plan.
The OCC has found that prefiling meetings, as well as the submission of business plans or other information before such meetings, often result in a more efficient review process. Accordingly, we proposed to revise subpart A by adding a new § 5.4(f) that encourages application filers to contact the OCC to determine the need for a prefiling meeting, regardless of whether a prefiling meeting is specifically required by another regulation. This new provision also states that the OCC will decide on a case-by-case basis whether a meeting is necessary and that the prior submission of a draft business plan or other relevant information may expedite the process. Unlike part 116, however, the new provision does not specify the information to include in a draft business plan because that level of detail is better handled in the Comptroller's Licensing Manual.
We received no specific public comments on these proposed changes to § 5.4. However, one commenter at the Los Angeles EGRPRA outreach meeting advocated the use of prefiling meetings for both the agency and the organizers. We are adopting the amendments as proposed.
We proposed to apply § 5.5 to all fees paid to the OCC and to revise § 5.5 to state that fees may be paid by check, money order, cashier's check, or wire transfer. This statement is consistent with both the current Federal savings association rule and the OCC's ability to accept these forms of payment from all filers. The proposed section also states that additional filing fee information, including where to submit the fee, can be found in the Comptroller's Licensing Manual. Finally, as a technical amendment, we proposed to remove the word “annually” from the § 5.5 description of when the OCC publishes a fee schedule, to clarify that, as stated in 12 CFR 8.8, the OCC may publish an interim or amended filing fee schedule, in addition to its annual publication.
We received no public comments on the proposed § 5.5 amendments and adopt these amendments as proposed.
Section 5.7 also states that, as described in 12 CFR 8.6, the OCC has the authority to assess fees for special examinations and investigations. Section 8.6 is currently applicable to both national banks and Federal savings associations and related filings, as a result of the July 21, 2011 final rule,
We received no public comments on the proposed § 5.7 amendments, and adopt them as proposed.
Under § 116.60, a Federal savings association applicant must publish notice no earlier than seven days before, and no later than the date of, the filing. Under § 116.80, the applicant must publish this notice in an English-language newspaper unless the OCC determines that the primary language of a significant number of adult residents of the community is not English, in which case the agency may require the applicant to publish simultaneously one or more additional notices in the appropriate language or languages.
We proposed to apply § 5.8(a) to all applicants, and we are adopting the amendments as proposed. As a result, Federal savings associations are no longer required to publish a public notice within the seven days before the filing date but may publish as soon as practicable before or after filing, unless otherwise required.
In addition, final § 5.8(a) includes the requirement from § 116.80 to publish notices in English and, if the OCC determines it is necessary, also in other languages. This change further ensures that interested persons have meaningful access to the § 5.8(a) notice.
Section 5.8(b) now states that a public notice must include: (1) A statement that a filing is being made, (2) the date of the filing, (3) the applicant's name, (4) the subject matter of the filing, (5) a statement that the public may submit comments to the OCC and where such comments should be sent, (6) the comment period closing date, and (7) any other information that the OCC requires. Section 116.55 requires similar, but not identical, information to be included in a public notice.
The OCC proposed to revise § 5.8(b) to include Federal savings associations and to add some requirements to the notice included in § 116.55. We did not receive any comments on these proposed changes and are adopting the amendments as proposed. As a result, in addition to what § 5.8(b) currently requires, a public notice related to a national bank filing must also include: (1) The name of the institution that is the subject of the filing, (2) a statement that the public portion of the filing is available on request, and (3) the address of the applicant. The public notice also must state that the public may submit comments to the appropriate OCC licensing office and provide the address of this office. A public notice related to a Federal savings association filing, in addition to the information currently required under § 116.55, also must include a specific statement that a filing is being made and the date of the filing. The OCC believes that new § 5.8(b) will provide the public with the full range of helpful information and will treat all part 5 filings consistently, while adding little additional burden for filers. We also are adopting other proposed minor technical changes to § 5.8(b).
Section 5.8(c) currently requires a filer to confirm that the § 5.8(a) notice has been published by delivering to the OCC a statement of the date of publication, the name and address of the paper in which notice was published, and a copy of the notice. Federal savings association filers are required to do the same, although this requirement is set forth on the application itself and not included in the regulatory text. The OCC is adopting the proposal to apply § 5.8(c) to both national bank and Federal savings association filings pursuant to part 5.
Section 5.8(d) currently states that the OCC may consider more than one transaction, or a series of transactions, to be a single filing for purposes of the publication requirements of this section. When filing a single public notice for multiple transactions, the filer shall explain in the notice how the transactions are related. Although this is not specifically permitted under part 116, it has been an accepted practice for Federal savings association filings. No changes to § 5.8(d) are necessary for it to apply to a Federal savings association filing. Under this rulemaking, both national banks and Federal savings associations may continue to engage in this practice, which eliminates unnecessary publications while ensuring that the public's need for notice is met.
Section 5.8(f) allows the OCC to require or give public notice and request comment on any filing and in any manner that it determines is appropriate for a particular filing. There is no equivalent provision in part 116. The OCC is adopting the proposal to apply this provision to both national banks and Federal savings associations.
In addition, § 116.240(b) provides that, prior to the end of the applicable review period, if the OCC determines that an issue of law or change in circumstances has arisen that will substantially affect an application, it may require an applicant to publish, among other things, a new public notice. Although no specific national bank rule provides for this result, the OCC has a similar practice for national bank filings. In order to codify and clarify this practice, the OCC proposed to add a new § 5.8(g) that states that the OCC, at its discretion, may require an applicant to publish a new public notice if: (1) The applicant submits either a revised filing or new or additional information related to a filing, (2) there is a major issue of law or a change in circumstances that arises after a filing, or (3) the agency determines that a new public notice is appropriate. This provision does not represent a material change for either national bank or Federal savings association filers. The OCC did not receive any comments on this change, and we are adopting the amendment as proposed.
Section 5.9(c) addresses the confidential treatment of information included in a filing, explaining both that an applicant and an interested person submitting information may request that specific information be treated as confidential under the Freedom of Information Act (FOIA)
Section 116.35 addresses the public and confidential aspects of a Federal savings association filing. Paragraph (a) states that the OCC generally makes part 116 submissions available to the public but may keep portions confidential. Section 116.35(b) provides that an applicant may request confidential treatment of certain portions of a filing and explains how to make this request. It also states that the OCC will not treat as confidential the portion of a filing that describes how an applicant plans to meet its CRA objectives and notes that the agency will advise an applicant before it makes information designated as confidential available to the public.
We proposed to apply § 5.9 to all filings made pursuant to part 5, as revised. We received no public comments on the proposed § 5.9 amendments, and are adopting them as proposed. This revision is not intended to result in material changes for either national bank or Federal savings association filings. Although § 5.9 does not explicitly address the OCC's treatment of filing information regarding how a filer plans to meet its CRA objectives, the OCC does not treat this information as confidential.
We are also adopting other minor proposed changes to § 5.9(a) and (c), including to which OCC office a request to obtain the public portion of a decided or closed application or to withhold information from a public file should be submitted.
The Federal savings association rules are much more detailed, particularly with respect to application comments. Section 116.110 provides that any person may comment on a filing and § 116.120(a) states that a comment should include all relevant facts supporting the commenter's position. It further provides that a comment should address at least one reason why the OCC may deny the application under relevant law, recite facts and data supporting these reasons, and discuss how the approval could harm the commenter or any community. Under § 116.120(b), any request for a meeting must be included with the comment. Section 116.130 states that a commenter must file with the appropriate OCC licensing office and simultaneously must provide a copy of any written comment to the applicant. Under § 116.140, a commenter must file a comment within 30 days after publication of the initial public notice and further states that the OCC may consider later filed comments if the comment will assist in the disposition of the application.
The OCC has found that the less detailed and prescriptive approach in the current part 5 rules works well for both filers and the public and proposed to apply § 5.10 to all filings received by the OCC, with one clarification. We received no public comments on the proposed § 5.10 amendments and are adopting them as proposed. Therefore, the final rule will result in two changes with respect to Federal savings association filings. First, the amended rule does not specify what information to include in a comment. Second, a commenter on a Federal savings association filing will not be required to provide a copy of the comment to the Federal savings association, although the commenter may still do so if preferred. Instead, the Federal savings association will obtain a copy of the public portion of any comment from the OCC. The rule clarifies that comments relating to either a national bank or a Federal savings association should be submitted to the appropriate OCC licensing office. This is consistent with the current Federal savings association rule.
The OCC also is adopting other proposed changes to § 5.10 that affect both national banks and Federal savings associations. First, as revised, § 5.10(b)(1) provides that the OCC may require a new comment period of up to 30 days if a new public notice is required under proposed § 5.8(g). This change is necessary to provide interested parties with an opportunity to comment when a new notice is published, which, as explained in the discussion of proposed § 5.8(g), may be required in certain circumstances. Finally, the OCC is adopting a minor change to § 5.10(b)(2) to clarify that the OCC can extend any comment period, either an original or a new comment period. We did not receive any comments on these provisions.
We proposed to apply § 5.11(a) to all OCC hearing requests with respect to both national banks and Federal savings associations. As with the other proposed changes to § 5.11, the OCC did not receive any comments related to § 5.11(a) and we are adopting it as proposed, with one technical change. As a result, pursuant to the new § 5.11(a), a person seeking a hearing on a filing pertaining to a Federal savings association will no longer be required to request a hearing as part of a comment submission, and a hearing request would be submitted to the appropriate OCC office. This revision provides added flexibility to those requesting hearings related to Federal savings association filings.
Section 5.11(b) states that the OCC may grant or deny a hearing request, limit the issues to those it deems relevant or material, and order a hearing in the public's interest. Under § 5.11(c), if the OCC denies a hearing request, the agency will notify the requestor of the
Section 5.11(d) describes the OCC's pre-hearing procedures. Specifically, under § 5.11(d)(1), if the OCC decides to hold a hearing, it sends a Notice of Hearing to the applicant, the person requesting the hearing, and anyone else who requests a copy. The Notice states the subject and date of the filing, the time and place of the hearing, and the issues to be addressed at the hearing. Section 5.11(d)(2) states that the OCC appoints a presiding officer to conduct a hearing.
There are no equivalent provisions in the Federal savings association regulations. Instead, § 116.170(a) states that the OCC may either grant a meeting request or hold one on its own initiative, and it may limit the issues considered at a meeting to those it deems relevant or material. The OCC is adopting the proposal to apply § 5.11(d)(1) to all part 5 OCC hearings so that all interested parties are notified of an upcoming hearing when it is scheduled. As proposed, the rule would have amended § 5.11(d)(1) to state that the OCC may limit the issues considered at a hearing to those it determines are relevant or material. We are removing this statement in § 5.11(d)(1) in the final rule because it is duplicative of the language in § 5.11(b), and therefore unnecessary.
Section 5.11(e) states that a person who wishes to appear at a hearing shall notify the appropriate district office within 10 days after the OCC issues a Notice of Hearing. It also requires, at least five days before the hearing, that each participant submit the names of witnesses and one copy of each exhibit to be presented, to the OCC, the applicant, and any other person the OCC requires. There are no equivalent rules for Federal savings associations. The OCC is adopting the proposal to apply § 5.11(e) to all persons who wish to appear at an OCC hearing. Section 5.11(e) allows the OCC and other persons to prepare for a hearing and results in a more efficient and productive hearing.
Section 5.11(f) states that the OCC arranges for a hearing transcript and states that the person requesting a hearing generally bears the cost of one copy of the transcript. There is no equivalent part 116 provision. The OCC is adopting the proposal to apply this provision to all OCC hearings and also to replace the “generally bears” phrase with “may be required to bear.” This change reflects the fact that the OCC generally has not passed this cost onto a person who requests a hearing but may find it appropriate to do so in certain cases. Although this is a technical change with respect to national bank filers, a person requesting a hearing on a filing pertaining to a Federal savings association should be aware that, under the amended rule, a hearing transcript will be prepared and that the person may be required to pay its cost.
Section 5.11(g) explains how a part 5 hearing is conducted, providing generally that the applicant and participants may make opening statements and present witnesses, material, and data. It also requires a copy of any documentary material to be provided to the OCC, the applicant, and each participant. In contrast, the § 116.180 procedures for Federal savings association hearings provide that the OCC may conduct a meeting in any format, including telephone conferences, face-to-face meetings, or formal meetings. In addition, both §§ 5.11(g) and 116.180 provide that the Administrative Procedure Act, the Federal Rules of Evidence, the Federal Rules of Civil Procedure, and the OCC's relevant rules of practice and procedure (12 CFR part 19 and part 109, respectively) do not apply to these hearings. The OCC is adopting the proposal to apply § 5.11(g) to all subpart A hearings.
Under § 5.11(h), at an applicant's or participant's request, the OCC may keep the hearing record open for up to 14 days following its receipt of the hearing transcript. The agency resumes processing the filing after the record closes. Section 116.190 states that if the OCC conducts a meeting, it may suspend the applicable filing time frames. If suspended, the time period will resume when the OCC determines that the record has been sufficiently developed to support a determination on the issue(s) considered at the meeting.
The proposal would apply § 5.11(h) to all filings on which a hearing is held. The OCC is adopting this provision in the final rule unchanged, and as a result, all applicants, commenters, and other interested persons should be aware that the hearing record may be kept open for up to 14 days following receipt of the transcript, after which the OCC will resume processing the filing. The OCC believes that the public and affected parties benefit from knowing how long the record will remain open following a hearing.
Finally, § 5.11(i) addresses meetings other than hearings that the OCC may hold in connection with an application. Section 5.11(i)(1) states that the OCC may hold a public meeting either in response to a written request received during the comment period or on its own initiative. These public meetings are arranged and overseen by a presiding officer. Alternatively, under § 5.11(i)(2), the OCC may arrange a private meeting with an applicant or other interested parties to clarify, narrow, and resolve the issues. As noted above, § 116.180 states that the OCC may conduct meetings related to Federal savings association filings in any format.
As proposed, the OCC is adding paragraph (i)(3) to § 5.11, stating that the OCC may limit the issues considered at a meeting to those it determines to be relevant or material. This provision is substantively the same as the provision added to § 5.11(d) (regarding hearings) and permits the agency to ensure that meetings are meaningful and efficient. The OCC also is adopting minor, clarifying changes to § 5.11(i).
The final rule adds a new paragraph § 5.11(i)(4) that states that the OCC may conduct a meeting in any format that it determines is appropriate, including a telephone conference, a face-to-face meeting, or a more formal meeting. This new provision, which mirrors § 116.180(a), does not change what is permissible for the OCC, but rather highlights the options available to the agency. The proposed rule included this provision in § 5.11(g)(4). However, as the subject matter of paragraph (g) is hearings, this provision more appropriately belongs in paragraph (i), which contains the rules for meetings.
Section 116.185 states that the OCC will not approve or deny an application at a meeting. Although no similar language is included in either current or revised § 5.11, it is the OCC's practice not to decide on applications at hearings or other meetings. While hearings and meetings provide an opportunity for interested persons to share information with the OCC, the OCC considers information obtained at a hearing together with other materials and information pertaining to the application before rendering a decision. Decisions on filings are discussed in greater detail below.
In addition, § 116.190 provides that the OCC may suspend the application processing time frames if it decides to conduct a meeting. Although the part 5, subpart A rules do not state this directly, § 5.10(b)(2) allows the OCC to extend a comment period when necessary, § 5.11(h) allows the OCC to keep a hearing record open for 14 days after a hearing and resume processing the filing only when the record closes,
A single set of time computation rules for OCC filings would promote efficiency. Accordingly, we proposed to change § 5.12 to mirror the current Federal savings association rule. We received one comment in support of this change, and we are adopting the amendment as proposed. We also note that revised § 5.12 replaces “legal holiday” with “Federal holiday,” consistent with the current Federal savings association rule, to eliminate confusion when a legal state holiday is not also a Federal holiday.
Section 5.13(a)(2) explains the OCC expedited review process for filings concerning “eligible” banks, as defined in § 5.3. Specifically, these filings are deemed approved a certain number of days after the filing date or the close of the public comment period (or extension of the comment period under § 5.10), unless, prior to this date, the OCC notifies the filer otherwise. The number of days after which a particular filing is deemed approved varies depending on the activity or transaction at issue and is set out in the substantive part 5 rule for that particular activity or transaction.
Under § 5.13(a)(2)(i), the OCC may extend the expedited review period for filings subject to the CRA up to 10 days if the OCC receives comments containing certain assertions about the bank's CRA performance. Section 5.13(a)(2)(ii) states that the OCC will remove a filing from expedited review if a filing or a comment raises a significant supervisory, CRA (if applicable), compliance, legal, or policy concern or issue. The OCC will provide a written explanation if this removal occurs. Section 5.13(a)(2)(iii) also states that not all adverse comments cause the OCC to extend the expedited review period or remove a filing from expedited review.
Finally, § 5.13(a)(2)(iv) provides that if approval of a filing is contingent on the approval of another filing, or if multiple requests for approval are combined in a single application, none of the filings is deemed approved unless all of the applications are subject to expedited review procedures and the longest time period expires without the OCC issuing a decision or notifying the bank that the filings are not eligible for expedited review.
Filings that are not eligible for, or do not receive, expedited review are considered under the standard review process. The process and timeframes associated with the standard review process vary depending on the nature and circumstances of a filing and are set forth in the applicable rule.
Under § 5.13(b), the OCC may deny a filing if a significant supervisory, CRA (if applicable), compliance, legal, or policy concern exists or if an applicant fails to provide the OCC with information that it requests. Pursuant to § 5.13(c), a filing must contain the information required in the applicable part 5 rule, as well as any information the OCC may require. Section 5.13(c) further provides that the OCC may deem a filing abandoned if information that is required or requested is not provided within a specified time period and may return a filing it finds to be materially deficient.
Section 5.13(d) provides that the OCC will notify a filer and other interested party (or parties) of the final disposition of a filing, including a notification confirming expedited review. If a filing is denied, the OCC will explain the reasons for the denial. Under § 5.13(e), the OCC will make a decision public if it represents new or changed policy or issues of general interest. In rendering decisions, the OCC also may elect not to disclose information that it deems to be private or confidential.
Section 5.13(f) provides that a filer can appeal a decision by writing to the Deputy Comptroller for Licensing or the OCC Ombudsman (or, in some cases, to the Chief Counsel). Section § 5.13(g) provides that when the OCC approves or conditionally approves a filing, the agency generally gives the filer a specified period of time in which to commence the activity and generally does not grant extensions.
Finally, § 5.13(h) states that the OCC can nullify a filing decision if, for example, it discovers a misrepresentation or omission in a filing or supporting material after it renders a filing decision. A person responsible for a material misrepresentation or omission may be subject to various sanctions, including criminal penalties. The OCC also may nullify a filing decision that is contrary to law, regulation, or OCC policy or that was granted due to clerical or administrative error or a material mistake of law or fact.
Pursuant to part 116, a Federal savings association filing may receive either expedited treatment or standard treatment. If a filer is eligible for expedited treatment, as determined under § 116.5, it may file its application in the form of a notice. Pursuant to § 116.200, 30 days after filing a notice, the filer may engage in the proposed activity or transaction unless the OCC: (1) Requests additional information;
Pursuant to § 116.25, an applicant files a standard application if it is not eligible for expedited treatment. Under § 116.210, within 30 calendar days after receiving a standard application, the OCC will: (1) Notify the applicant that the application is complete and review will commence; (2) request more information; or (3) determine that the application is materially deficient, in which case the OCC will not process the filing. If the OCC takes no action, an application is deemed complete and the review period begins. Under § 116.270, this review period is generally 60 calendar days after an application is complete but may be extended. For example, under § 116.270(c), the OCC may extend the review period for up to
Section 116.280 explains that the OCC will approve or deny an application before the end of the applicable review period and will notify applicants of the decision. Under § 116.280(b), the application is approved if the OCC fails to notify an applicant.
Section 116.220 provides a detailed explanation of how the OCC will process an application if the OCC requests more information to complete a filing, including the time frames for taking certain actions. Section 116.240(a) explains that even if an application is deemed complete under § 116.210, the OCC may still require the filer to provide additional information to resolve or clarify an issue presented by the application. If the OCC determines that a major issue or law or change of circumstances has arisen, it may notify the filer that the application is now incomplete and require a new public notice to be filed under § 116.250. Under § 116.290, an application that is not approved or denied within two calendar years of filing is deemed withdrawn, subject to certain exceptions.
As is clear, the OCC has two different, albeit similar, sets of application processing procedures. In order to gain the efficiencies inherent in administering a single set of procedures and to create parity for OCC-regulated institutions, we proposed to apply § 5.13 to all OCC filings and to amend § 5.13, as described below.
The OCC did not receive written comments on any of the proposed changes to § 5.13. Commenters at both the Los Angeles and Dallas EGRPRA outreach meetings requested that the OCC make decisions on new charters and other applications at the district level instead of in Washington, DC. We agree with the importance of the relevant district office in the decision-making process, and our current process involves district level input in application decisions as well as our licensing office in Washington. Most filings are processed by the relevant district office and typically involve examination staff familiar with the applicant. The Comptroller's Licensing Manual also encourages applicants to contact the director for district licensing at the appropriate OCC district office to discuss the proposal.
We therefore are adopting § 5.13 as proposed.
As a result, Federal savings association filers will need to determine whether a filing is eligible for expedited review under subpart A based on the § 5.3(g) definition of “eligible bank or eligible savings association.” Because, as explained above, the criteria in §§ 5.3 and 116.5 are substantively similar, the OCC believes the status of most savings associations as eligible or not eligible will not be affected by the requirement to use the definition in § 5.3, nor does the OCC anticipate that there will be a significant difference in the filings that are eligible for expedited review under the current rules and the rules as revised. Furthermore, unlike § 116.200, part 5, subpart A, does not state the applicable expedited review time frames. These time frames are unique to the type of activity or transaction and are set out in the relevant part 5 section detailing that activity or transaction. If a filing is not eligible for expedited review, the filer must follow the standard review procedures set out in the rules applicable to the particular activity or transaction at issue.
In addition, the OCC is adopting the following proposed changes to § 5.13, which apply to filings related to both national banks and Federal savings associations. Specifically, the final rule adds a statement to the § 5.13(a) introductory language providing that when reviewing a filing, the OCC may consider information available from any source, including any comments submitted by interested parties or views expressed by interested parties at meetings with the OCC.
With respect to § 5.13(a)(2) concerning expedited review, the final rule removes the clause that states that the OCC grants eligible banks expedited review within a specified time, “including any extension of the comment period granted pursuant to § 5.10.” This change reflects the fact that when the OCC grants an extension of the comment period under § 5.10 a filing is no longer considered under the expedited review procedures. The circumstances that lead to an extended comment period are generally not compatible with expedited review.
In addition, as discussed above, § 5.13(a)(2)(i) provides that the OCC may extend the expedited review period for a filing subject to the CRA for up to 10 days if a comment makes certain assertions about the CRA and § 5.13(a)(2)(ii) provides that the OCC will remove a filing from expedited review if the filing presents significant supervisory, CRA (if applicable), compliance, legal or policy concerns or issues. This section also explains what constitutes a significant CRA concern in this context.
The final rule combines § 5.13(a)(2)(i) and (ii) into new § 5.13(a)(2)(i). These changes simplify § 5.13(a)(2) and are not intended to have a substantive effect on expedited review procedures. Comments and concerns about the CRA will continue to be given the same weight. The OCC also is adopting other proposed minor, technical, or conforming changes to § 5.13.
Many of the procedures organizers must follow to charter a national bank or Federal savings association are substantively similar. The OCC believes that many of these rules should be coordinated and harmonized to promote consistency and equal treatment between the two types of institutions and to remove unnecessary regulatory burden where possible. To accomplish these goals, the proposed rule amended § 5.20 to include Federal savings associations, added to § 5.20 some provisions that address the organizing process currently in parts 143 and 152, and removed other provisions in part 143, 152, and 163 that address the organizing process (§§ 143.2 through 143.7, 152.1 and 152.2, and 163.1).
The regulations for national banks and for Federal savings associations treat the provisions related to “organizing documents” (organization certificate and articles of association for national banks, charter for Federal savings associations, and bylaws) differently.
Specifically, we proposed to amend 12 CFR part 5, subpart B, by: (1) Revising § 5.20 to apply to both national banks and Federal savings associations and to make certain other changes as described below; (2) adding a new § 5.21 (based on part 144) to specify the language and requirements for the Federal mutual savings association charter, bylaws, and charter amendments and to require a Federal mutual savings association to make its charter and bylaws available to accountholders; and (3) adding a new § 5.22 (based on §§ 152.3 through 152.11) to specify the language and requirements for the Federal stock savings association charter, bylaws, charter amendments, and related matters. In addition, we proposed to amend parts 143, 144, 152, and 163 by rescinding various provisions in those parts concerning charters and bylaws.
First, based on statute and longstanding practice, the OCC uses a two-part approval process for
The national bank and Federal savings association processes in practice may not be different, but the OCC believes that use of a formal two-part approval framework provides more certainty and reduces the risk of an institution inadvertently operating before it has completed all required steps. Applying the bank rule's two-step approval process to savings associations also enhances consistency between the chartering application process for national banks and Federal savings associations. Therefore, we proposed to make an application to charter a Federal savings association subject to the two-part approval process contained in § 5.20(i)(5) and to remove §§ 143.4, 143.5, 143.6, and 152.1(c) through 152.1(i). We did not receive any comments on this change and are adopting it as proposed.
Second, § 5.20(i)(5)(iv) provides that preliminary approval expires if the national bank has not raised the required capital within 12 months or has not commenced business within 18 months. Sections 143.5(d) and 152.1(i) provide that a Federal savings association's charter becomes void if organization is not completed within six months after approval. The OCC proposed to amend § 5.20(i)(5)(iv) to apply the same 12- and 18-month expiration periods to Federal savings associations, rather than the six-month period. We received one comment in support of this change, and we are adopting it as proposed.
Third, we proposed to add Federal savings associations and savings and loan holding companies to § 5.20(j), which allows for expedited review of an application to establish a full-service national bank filed by a bank holding company with a lead depository institution that is an eligible depository institution. The current regulations for chartering a
Fourth, the OCC is adopting the proposal to add Federal savings associations to § 5.20(k)(3), which addresses investments in bankers' banks and § 5.20(l), which addresses chartering special purpose institutions. These provisions reflect authority that national banks and Federal savings associations possess. We did not receive any comments on this change.
Fifth, parts 143, 144, 152, and 163 contain various filing procedural matters. As discussed above, the OCC is amending part 5, subpart A, rules of general applicability, to include filing rules and procedures for Federal savings associations for all matters covered by part 5. Thus, because Federal savings associations are included in § 5.20 and new §§ 5.21 and 5.22 are added to part 5, filings related to the organizing process and to charters and bylaws will be governed by the filing provisions in subpart A. The final rule, therefore does not include the filing procedures provisions in parts 143, 144, 152, and 163 in the amendments to § 5.20, or in new §§ 5.21 and 5.22.
Sections 143.2(g)(2)(i) and 152.1(b)(3)(i) provide that approval of an application to organize a Federal mutual or stock savings association, respectively, is conditioned on OCC receipt of written confirmation from the FDIC that accounts will be insured. Similar requirements appear in §§ 143.5(c) and 152.1(f) (when a charter is issued, a Federal savings association, or a Federal stock savings association, respectively, must promptly meet all requirements necessary to obtain FDIC insurance of its accounts), as well as §§ 143.5(d) and 152.1(h)(1) (organization of a Federal savings association, or a Federal stock savings association, respectively, is complete when, among other things, the OCC receives confirmation of FDIC insurance).
For these reasons, the OCC proposed in § 5.20(e)(3) to retain the requirement that all Federal savings associations be insured by the FDIC. We did not receive any comments on this proposed change and adopt the amendment as proposed.
Second, § 143.3(b)(1) requires that all securities of a particular class in an initial offering must be sold at the same price. The OCC proposed to amend § 5.20(i)(5)(iii) to apply this requirement to both Federal savings associations and national banks. This requirement promotes fairness and uniformity, does not allow insiders to gain an unfair advantage over other shareholders, and discourages the formation of an institution for speculative purposes. Moreover, the FDIC also imposes this requirement in determining whether to approve an application for deposit insurance.
Third, §§ 143.5(d) and 152.1(i) require that, in the event the organization of a Federal savings association is not completed, all cash collected on subscriptions shall be returned. We proposed to amend § 5.20(i)(5)(iv) to apply this requirement to both Federal savings associations and national banks. We received no comments on this proposed change and adopt it as proposed.
First, the OCC did not propose that § 5.20 include §§ 143.2(g)(1) and 152.1(b)(1), which require the OCC to consider whether the Federal savings association will provide credit for housing in a safe and sound manner and whether the factors in § 143.3 (regarding capitalization, business and investment plans, the board of directors, and management) will be met. These approval criteria are not statutorily required. In most cases, these factors are similar to factors the OCC currently considers either under § 5.20 or as a matter of practice. Moreover, the provision of housing credit also is addressed by the lending and investment provisions of 12 U.S.C. 1464(c) and the qualified thrift lender test of 12 U.S.C. 1467a(m).
Second, as proposed, the final rule does not include the requirement in § 143.3(d) that the majority of a de novo Federal savings association's board of directors be representative of the state in which the association is located. We believe that this requirement is outdated and unnecessary given the advanced communication technology available today, and that it may unnecessarily impede the formation of new Federal savings associations. We note that one commenter to the June EGRPRA notice requested that we remove this requirement. The final rule retains the existing provision in § 5.20(g)(1), applicable to Federal savings association by this rulemaking, that the institution's initial board of directors generally is composed of many, if not all, of the organizers of the institution, and that the organizing group must include diverse community involvement.
Third, the OCC proposed to rescind §§ 143.7 and 152.17, which exempt from the requirements of part 143 and §§ 152.1 and 152.2 Federal savings associations created in connection with an association in default or in danger of default. These provisions are not necessary in light of the FDIC's authority, as part of the resolution process, to create new and bridge Federal savings associations under 12 U.S.C. 1821(m) and (n).
Fourth, we proposed to rescind § 143.3(f), which provides that the normal requirements that apply to an application to charter a Federal savings association do not apply to a supervisory transaction. This provision is not necessary because the OCC has the ability to waive such requirements under 12 CFR 5.2(b). Also, we proposed to rescind the requirements in §§ 143.5(c) and 152.1(f) for a proposed Federal savings association to promptly qualify as a member of a Federal Home Loan Bank. The HOLA no longer requires such membership.
We did not receive comments opposed to the removal of these provisions. Therefore, we adopt the amendments as proposed.
Second, § 5.20(g)(2) notes that, as a condition of a charter approval, the OCC retains the right to object to the hiring of any officer or appointment or election of any director for a two-year period from the date the institution commences business. We proposed to clarify that, in appropriate instances, the OCC may impose this condition for a longer period. This regulatory change reflects current authority and practice.
Third, § 5.20(g)(3)(ii) requires a proposed director to be able to supply or have a realistic plan to enable the institution to obtain capital when needed. The OCC proposed to clarify that this requirement applies to the proposed directors as a group, rather than each director individually.
We did not receive comments on any of these proposed changes. Therefore, we adopt the amendments as proposed.
New § 5.21(d) sets forth exceptions to the rules of general applicability. More specifically, it provides that §§ 5.8 through 5.11 do not apply to this section. These sections provide for public notice, public availability, comments and hearings on an application. The OCC believes it is not necessary to subject the charter and bylaws requirements to these provisions. This belief is consistent with current requirements for Federal mutual savings associations as well as national banks. New § 5.21(e) prescribes the language and requirements for a Federal mutual savings association charter and is substantively identical to § 144.1. New § 5.21(f) through (h) cover matters related to charter amendments and are substantively identical to § 144.2. New § 5.21(i) requires a Federal mutual savings association to make its charter, bylaws, and all amendments available to accountholders at all times in each savings association office, and to deliver to any accountholders a copy of the charter, bylaws or amendments, upon request. This provision is substantively identical to § 144.7.
New § 5.21(j) specifies the language and requirements for Federal mutual savings association bylaws. This new paragraph reflects the provisions in § 144.5. To reflect advances in technology, the final rule updates the provision regarding meetings of the board of directors by permitting telephonic or electronic participation of board members. The current rule provides only for telephonic participation. We note that the final rule also adds section headings and makes corresponding paragraph numbering changes to § 5.21(j).
Section 144.5(b)(11) provides that directors may only be removed “for cause” as defined in § 163.39 of this chapter, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors,” and § 144.5(b)(10) provides that “[a]ny officer may be removed by the board of directors with or without cause, but such removal, other than for cause, shall be without prejudice to the contractual rights, if any, of the person so removed.” For ease of use, the OCC is including the definition of “for cause” in new § 5.21(j)(2)(x)(B), rather than cross-referencing the definition in § 163.39. Where the term “for cause” is used elsewhere in § 5.21, and in § 5.22, for Federal stock savings associations, the regulation references the definition at § 5.21(j)(2)(x)(B).
The OCC believes that many of the bylaw provisions in § 144.5 are unnecessarily detailed or self-evident. Therefore, new § 5.21 does not include the provisions described below.
Section 144.5(b)(1) discusses the annual meeting of members. It provides, among other things, that the meeting be held “as designated by its board of directors, at a location within the state that constitutes the principal place of business of the association, or at any other convenient place the board of directors may designate.” New § 5.21(j)(2)(i) does not include the requirement that the meeting be held in the state that constitutes the principal place of business of the association. The OCC believes that this requirement introduces unnecessary detail into the regulation and that, in certain cases, there may be locations outside the state constituting the association's principal place of business at which the annual meeting may be held that are appropriately convenient to members.
Section 144.5(b)(2) provides, among other things, that the subject matter of a special shareholder meeting must be established in the notice for such meeting. The OCC believes this provision is self-evident and unnecessarily detailed and it is not included in new § 5.21(j).
Section 144.5(b)(3) covers the requirements for providing notice of meetings to members. Among other things, it provides that notice must be provided at a member's last address appearing on the books of the association. The OCC believes this provision merely states the obvious and it is not included in new § 5.21(j)(2)(iii).
Section 144.5(b)(4) states that the purpose of determining the record date is to determine the “members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or in order to make a determination of members for any other proper purpose.” The OCC believes this provision is self-evident and it is not included in new § 5.21(j)(2)(iv).
Section 144.5(b)(6) provides that procedures must be established for voting by proxy pursuant to the rules and regulations of the OCC, “including the placing of such proxies on file with the secretary of the association, for verification, prior to the convening of such meeting.” The OCC believes the inclusion language is self-evident and unnecessarily detailed and it is not included in § 5.21(j)(2)(vi).
Section 144.5(b)(9) provides that board of director meetings “shall be under the direction of a chairman, appointed annually by the board; or in the absence of the chairman, the meetings shall be under the direction of the president.” The OCC believes this provision is unnecessarily detailed and it is not included in § 5.21(j)(2)(ix).
Section 144.5(b)(10) provides, among other things, that “[a]ll officers and agents of the association, as between themselves and the association, shall have such authority and perform such duties in the management of the association as may be provided in the bylaws, or as may be determined by resolution of the board of directors not inconsistent with the bylaws. In the absence of any such provision, officers shall have such powers and duties as generally pertain to their respective offices.” The OCC believes this provision is unnecessary and self-evident and it is not included in § 5.21(j)(2)(x).
Section 144.5(b)(11) covers vacancies, resignation, and removal of directors. New § 5.21(j)(2)(xi) does not include the requirements in § 144.5(b)(11) that directors be elected by ballot and that resignation of a director be by written notice. The OCC believes that these provisions are self-evident.
Section 144.5(b)(12) covers the powers of the board of directors. It provides, among other things, that a board may, by resolution, “appoint from among its members and remove an executive committee and one or more other committees, which committee[s] shall have and may exercise all the powers of the board between the meetings or the board; but no such committee shall have the authority of the board to amend the charter or bylaws, adopt a plan of merger, consolidation, dissolution, or provide for the disposition of all or substantially all the property and assets of the association. Such committee shall not operate to relieve the board, or any member thereof, of any responsibility imposed by law.” This section further provides that a board may fix the compensation of directors, officers, and employees. The OCC believes these provisions are self-evident and unnecessarily detailed, and therefore, they are not included in § 5.21(j)(2)(xii).
Section 144.5(b)(14) provides in part that procedures for the introduction of new business at the annual meeting may require that such new business be stated in writing and filed with the secretary prior to the annual meeting at least 30 days prior to the date of the annual meeting. The OCC believes this provision is overly detailed and unnecessary. Accordingly, the OCC is not including this provision in new § 5.21(j)(2)(xiv).
Finally, § 144.5(b)(16) provides that the bylaws may address age limitations for directors or officers as long as they are consistent with applicable Federal law, rules or regulations. The OCC believes this provision is self-evident and unnecessary and therefore it is not included in new § 5.21(j)(2)(xvi).
New § 5.22(d) sets forth exceptions to the rules of general applicability. More specifically, it provides that §§ 5.8 through 5.11 do not apply to this section. These sections provide for public notice, public availability, comments and hearings on an application. The OCC believes it is not necessary to subject the charter and bylaws requirements to these provisions.
New § 5.22(e) prescribes the language and requirements for a Federal stock savings association charter and is substantively identical to § 152.3. New § 5.22(f) through (i) cover matters related to charter amendments and are substantively identical to § 152.4, with the addition of one provision. Section 152.4(b)(8) provides that a Federal stock savings association may amend its charter by adding certain anti-takeover provisions following mutual to stock conversions. One such provision is a prohibition on a person acquiring more than 10 percent of any class of equity securities of the association, unless “the purchase of shares [is] by a tax-qualified employee stock benefit plan which is exempt from the approval requirements under § 174.3(c)(2)(i)(D) of the OCC's regulations.” The final rule eliminates the cross-reference and includes the appropriate language in § 5.22(g)(8). The OCC does not intend for this amendment to have any substantive effect.
New § 5.22(j) specifies the requirements for adopting and filing Federal stock savings association bylaws. This paragraph reflects the provisions in § 152.5 with two exceptions. The first sentence of § 152.5(a) provides that “[a]t its first organizational meeting, the board of directors of a Federal stock association shall adopt a set of bylaws for the administration and regulation of its affairs.” The third sentence requires the bylaws to contain sufficient provisions to govern the association in accordance with the requirements of other sections of part 152 and prohibits the bylaws from containing a provision that is inconsistent with those sections or with applicable laws, rules, regulations or the association's charter. The OCC believes that these two provisions are unnecessarily detailed and self-evident and they are not included in new § 5.22(j).
The OCC is adding a new § 5.22(k) to address shareholder meetings and related matters. This paragraph reflects the provisions in § 152.6 with two exceptions. Section 152.6(a) provides, among other things, that shareholder meetings must be held in the state in which the association has its principal place of business. With respect to shareholder voting by proxy, § 152.6(f) provides, in part, that a “proxy may designate as holder a corporation, partnership or company as defined in
The OCC is adding a new § 5.22(l) to address matters involving a Federal stock savings association's board of directors. This paragraph reflects the provisions in § 152.7, with certain exceptions. Section 152.7(b) sets forth the permissible number and terms of directors to be included in an association's bylaws. It provides, among other things, that in “the case of a converting or newly chartered association where all directors shall be elected at the first election of directors, if a staggered board is chosen, the terms shall be staggered in length from one to three years.” Section 152.7(g) addresses matters concerning executive and other committees of a board of directors. It provides in pertinent part that each committee, to the extent provided in the resolution or bylaws of the association, shall have and may exercise all of the authority of the board of directors, subject to certain exceptions. The OCC believes these provisions are overly detailed and unnecessary. Accordingly, § 5.22(l)(2) and (7), respectively, do not include these provisions. In addition, this final rule does not include the provision in proposed § 5.22(l)(1), taken from § 152.7(a), that requires the savings association's board of directors to annually elect a chairman of the board from among its members and designate the chairman of the board, when present, to preside over meetings. As proposed, the final rule does not include this requirement in the new Federal mutual savings associations rule, § 5.21 because we find it to be unnecessarily detailed. We are removing this provision from § 5.22(l)(1) for the same reason and to conform our rules for stock and mutual Federal savings associations.
New § 5.22(m) addresses matters involving a Federal stock savings association's officers. This paragraph is substantively identical to § 152.8, with one exception. Section 152.8 mandates that a Federal stock savings association have certain officers. It further provides that the “board of directors also may elect or authorize the appointment of such other officers as the business of the association may require. The officers shall have such authority and perform such duties as the board of directors may from time to time authorize or determine. In the absence of action by the board of directors, the officers shall have such powers and duties as generally pertain to their respective offices.” The OCC believes that the quoted provision is self-evident and unnecessary and therefore has not included it in new § 5.22(m).
New § 5.22(n) addresses stock certificates. This new paragraph is substantively identical to § 152.9, with one exception. Section 152.9(a) provides in pertinent part that the “certificates shall be signed by the chief executive officer or by any other officer of the association authorized by the board of directors, attested by the secretary or an assistant secretary, and sealed with the corporate seal or a facsimile thereof. The signatures of such officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent or a registrar other than the association itself or one of its employees. Each certificate for shares of capital stock shall be consecutively numbered or otherwise identified.” The OCC believes this provision is overly detailed and is not included in new § 5.22(n)(1).
There is no comparable requirement for national banks and the OCC believes this provision is no longer necessary for Federal stock savings associations as this information is relatively easy for accountholders of these types of institutions to obtain. Conversely, accountholders of Federal mutual savings associations may not have easy access to these documents in light of the inability of accountholders to communicate directly with each other under § 144.8. Accordingly, the final rule continues to apply this requirement only with respect to Federal mutual savings associations under new § 5.21(i).
Section 144.8, which addresses communication between members of a Federal mutual savings association, is not a licensing regulation and does not involve an application process. The OCC is leaving it unchanged. Because it will be the only section that remains in part 144, the OCC is renaming part 144 as part 144—Federal mutual savings associations—communication between members.
Other provisions of § 152.2, which provide procedures for the organization of interim Federal savings associations, are addressed in revisions to the business combinations regulation—§ 5.33, described below. The remaining provisions of part 143, part 152, and part 163 contain other provisions applicable to Federal mutual and stock savings associations. The OCC is rescinding some of these provisions as described elsewhere in this preamble.
Twelve CFR 5.24 sets forth the rules and procedures that a state bank, state savings association, or Federal savings association must follow to convert to a national bank and for a national bank to convert to a state bank or Federal or state savings association. The OCC's rules for a mutual depository institution to convert to a Federal mutual savings association are at 12 CFR 143.8 through 143.14, and the rules for a stock form depository institution to convert to a Federal stock savings association are at 12 CFR 152.18. The rules for a Federal savings association to convert to a national bank or state bank are set forth at 12 CFR 152.19 and 163.22(b)(1)(ii) and (b)(2). While there are some differences in procedures, as discussed below, the rules for national banks and Federal savings associations are substantively similar.
We proposed to simplify this regulatory framework by: (1) Revising § 5.24 to include only rules for converting into a national bank, (2) placing all rules for converting into a Federal savings association (either stock or mutual) in new § 5.23, and (3) placing rules for conversion from national bank and Federal savings association charters in new § 5.25. We also proposed additional substantive and technical changes to these rules. The substantive changes include provisions implementing section 612 of the Dodd-Frank Act, which prohibits conversions from state to Federal charter, or Federal to state charter, in certain circumstances and adds requirements to the conversion process.
We did not receive any comments related to charter conversions. We therefore adopt the amendments to these provisions as proposed, with the changes described below.
Second, section 612(b) added a new section 12 U.S.C. 214d prohibiting a national bank from converting to a state bank or state savings association during any period in which the national bank is subject to a cease and desist order (or other formal enforcement order) issued by, or a memorandum of understanding entered into with, the OCC with respect to a significant supervisory matter. Section 612(c) similarly added a new paragraph (6) to the end of section 5(i) of the HOLA
Third, paragraph (e)(1) of section 612 requires that at the time an insured depository institution files a conversion application, it must transmit a copy of the conversion application to both the appropriate Federal banking agency for the institution and the Federal banking agency that would become the appropriate Federal banking agency for the institution after the proposed conversion. Reflecting this statutory requirement, as noted above, the final rule adds to our regulations at §§ 5.23(d)(2)(ii), 5.24(e)(2), and 5.25(d)(3)(i)(last sentence) a requirement to send a copy of the conversion application to the appropriate Federal banking agencies. Including the requirement in our regulations will help ensure applicants are aware of this requirement.
The final rule adds “stock state savings associations” to the description of the types of institutions that can apply to convert to a national bank and also adds the word “stock” before the phrase “Federal savings associations” throughout revised § 5.24. Stock state savings associations currently are included in the rule because they are within the definition of “state bank” incorporated from 12 U.S.C. 214(a). We are adding the express term both in the interest of eliminating any confusion and because section 612 added the term “state savings association” to 12 U.S.C. 35. We are adding the term “stock” to Federal savings association for clarity as well. National banks are corporate bodies, and a mutual institution cannot become a national bank unless it has first changed into corporate form under other law. These changes clarify the existing regulation and have no substantive impact.
Section 5.24(d) states the OCC's policy for approving and disapproving conversions to national bank charters. The final rule adds a statement that the institution seeking to convert to a national bank charter must obtain all necessary regulatory and shareholder approvals. Although this requirement is not new, it was not previously stated in § 5.24. There is a similar provision in the current Federal savings association regulation, § 143.8(a)(2). The final rule continues this requirement for Federal savings associations in § 5.23, and adds this requirement for national banks as well.
The final rule also clarifies the information the applicant must include in the application. As proposed, § 5.24(e)(2)(vii) in the final rule requires applicants to add bank service company investments and other equity investments to the current requirement to identify subsidiaries. This change reflects the OCC's current practice in conversion applications of reviewing the legal permissibility for the converted national bank to continue to hold these investments.
The OCC currently requests an applicant to include a business plan in the application on a case-by-case basis
Section 5.24 currently addresses the OCC's authority to permit a national bank to retain nonconforming assets of a converting state bank, subject to the requirements in 12 U.S.C. 35. The final rule (redesignated as paragraph (e)(4) in the revised regulation) clarifies that a converted national bank also may be permitted to retain nonconforming activities (as well as assets) of a state bank or stock state savings association and nonconforming assets or activities of a Federal stock savings association for a transition period after conversion. We believe this provision facilitates the transition from a state institution or Federal savings association to a national bank and also incorporates current OCC practice.
Current OCC rules require both a notice or application to the OCC to convert out of a Federal savings association charter
As proposed, the final rule also amends the expedited review provisions for a conversion application filed by an eligible depository institution. These provisions are set forth in the current rule at § 5.24(d)(4) and redesignated in this final rule as § 5.24(h). The final rule limits the availability of expedited review to applications by institutions already supervised by the OCC (
The final rule also extends the expedited review period from 30 days to 60 days. New § 5.23(d)(4) contains a similar expedited review provision for conversions of an eligible national bank to a Federal savings association.
In addition, the final rule adds a new paragraph (i) to § 5.24 (paragraph (h) in the proposed rule) providing that the resulting national bank after a conversion is the same business and corporate entity as the converting institution, and all assets, rights, liabilities, obligations, and other business of the converting institution continue in the resulting national bank by operation of law. This paragraph reflects longstanding case law under 12 U.S.C. 35
Finally, the final rule adds provisions to § 5.24 to implement section 612 of the Dodd-Frank Act, which are discussed below, and makes several technical or housekeeping changes to § 5.24 to make it easier to read.
The requirements of § 5.23 include many of the requirements in the current Federal savings association conversion regulations. However, the final rule does not retain certain provisions in parts 143 and 152 for which there is no statutory requirement in the HOLA. These include the confidentiality provisions set forth at § 143.8, which instead are addressed under the OCC's general confidentiality regulations, 12 CFR part 4, and the public notice and inspection requirements set forth at § 143.9(a)(2) (incorporating § 143.2(d)), which require public notice and inspection for applications to organize a new savings association. The OCC believes public notice is unnecessary in the case of conversions because the business of the existing institution continues under its new charter. We note that if there are instances where the OCC believes publication is warranted, the OCC could require publication under § 5.23(d)(3), which allows the OCC to require public notice if an application presents significant or novel policy, supervisory, or legal issues.
The final rule excludes a number of provisions in § 143.9 that advise applicants of the various steps in the process. Instead, the OCC addresses this information through the Comptroller's Licensing Manual, application forms, and the application process.
As with the amendments to § 5.24, the final rule adds a new paragraph § 5.23(f) that contains the provision regarding the “conversion out” aspect for national banks applying to convert to a Federal stock savings association originally included in proposed § 5.25(e)(1) and (e)(3). As a result, a national bank converting to a Federal stock savings association must include in its application filed pursuant to § 5.23
We note that there are four significant differences between §§ 5.24 and 5.23. First, the definition of “depository institution” for purposes of § 5.23, which is based on the definition in §§ 143.8(a) and 152.13, includes credit unions, unlike the definition in § 5.3(f), which is used in § 5.24. This is because credit unions may convert to a mutual Federal savings association but not to a national bank. Second, paragraph (c) of § 5.23 provides that the converting institution must have deposits insured by the FDIC or, if it is not so insured, must obtain insurance before converting. While some national banks may be uninsured,
Lastly, the final rule includes provisions in § 5.23 to implement section 612 of the Dodd-Frank Act, as discussed below.
The proposed rule had required, at new § 5.25(e), institutions planning to convert between a national bank and a Federal savings association to file a notice with the OCC to convert out of the old charter. This filing would be in addition to filing an application to convert to the new charter. As noted above, the final rule removes this notice requirement and instead adds a provision to § 5.23(f) and to § 5.24(f) to require that this “conversion-out” information be included in its application filed pursuant to § 5.23 or § 5.24. As a result, national banks and Federal savings associations will not have to file both a notice and an application for these transactions, as required by the current and proposed rule.
As discussed above, the applicable “converting-in” regulation (§ 5.24 or § 5.23) requires the institution to file an application with the OCC with respect to the “converting-in” aspect of the transaction.
Section 143.12, which implements section 5(i)(4) of the HOLA,
Twelve CFR 5.26 contains the application requirements and processes for national banks' fiduciary powers. Twelve CFR part 150, subpart A (§§ 150.70 through 150.125) addresses the fiduciary powers application requirements and processes for Federal savings associations. We proposed to consolidate the application and notice filing procedures for fiduciary powers for national banks and Federal savings associations by revising § 5.26 to cover Federal savings associations, incorporating certain provisions from part 150 in § 5.26, amending § 150.70 to remove the current language regarding filing requirements, directing Federal savings associations to § 5.26 for the application and notice procedures they should follow, and deleting §§ 150.80 through 150.125, which contain additional current Federal savings association filing requirements. We received one comment on our fiduciary powers rule, discussed below. We are adopting the amendments to § 5.26 and part 150, subpart A as proposed.
In general, the final rule revises § 5.26 by adding language that makes it applicable to both national banks and Federal savings associations. The final rule also makes the following revisions to the application requirements in § 5.26.
First, the final rule adds § 5.26(e)(2)(iii) to provide examples of factors the OCC will consider when reviewing an application to exercise fiduciary powers. These factors include financial condition, adequacy of capital, character and ability of proposed trust management, the adequacy of any proposed business plan, and the needs of the community served. These factors help to clarify the standard of review the OCC will use. Three of the factors are requirements found in both the
Second, the final rule adds a new paragraph (e)(5) to § 5.26. This paragraph requires a national bank or a Federal savings association that has not conducted previously approved fiduciary powers for 18 consecutive months to provide a notice to the OCC containing the information required by § 5.26(e)(2)(i) 60 days in advance of commencing the activities. This amendment is similar to a requirement for Federal savings associations at § 150.560, which requires filing a notice if the savings association has not conducted the fiduciary activity for five years after it was approved to engage in the activity. We have determined, however, that 18 months is a more appropriate timeframe for this notice because the management and condition of a national bank or Federal savings association may change in a shorter period of time. This amendment ensures that both a national bank and a Federal savings association previously granted fiduciary powers will still have the financial ability and managerial expertise necessary to conduct fiduciary activities in a safe and sound manner. The OCC also believes this notification is important because it will enable the agency to allocate supervisory resources to evaluate the institution when it resumes fiduciary activities in which it has not engaged for a long period of time.
Third, the final rule adds a new § 5.26(e)(1)(iv) that specifies that a national bank or Federal savings association that has received approval from the OCC to exercise limited fiduciary powers and would like to exercise full fiduciary powers must apply to the OCC. An applicant can apply for approval to offer limited services (authority for one or more specific type of fiduciary powers described in the application) or to offer full services (authority to exercise all powers authorized under the law). If an institution received prior approval to offer only certain services, it would need to file an application if it wished to begin offering other services. However, an institution that received approval to exercise full fiduciary powers could add to the activities in which it engages without additional application.
Finally, incorporating Federal savings associations in the application framework of § 5.26 also results in some other minor changes or clarifications of requirements for Federal savings associations. New paragraphs (b)(2) and (4) of § 5.26 set out circumstances in which a Federal savings association does not need to apply for fiduciary powers in connection with certain mergers. The new provision in § 5.26(e)(1)(iv), discussed above, requiring an application when an institution previously approved only to exercise specified limited powers planned to exercise more powers, replaces a current provision requiring a Federal savings association to apply if it planned to conduct fiduciary activities that are “materially different” from those previously approved, regardless of whether the prior approval had been for limited or full powers. Section 5.26(e)(3) provides for expedited review of applications by eligible national banks and eligible Federal savings associations. Part 150 does not provide for expedited treatment of fiduciary powers applications by Federal savings associations.
We received one comment with respect to fiduciary powers in response to our June EGRPRA notice. This comment requested that we amend the approval process in the existing Federal savings association rule, § 150.70(b), so that once the OCC has granted a Federal savings association permission to exercise some fiduciary powers, the association may exercise all fiduciary powers without further approval. The OCC disagrees with this commenter. The exercise of all fiduciary powers may raise safety and soundness concerns not associated with the exercise of limited fiduciary powers. Therefore, as described above, we are adopting the provision as proposed. We note that the change in standard of fiduciary activities “materially different from previously approved” in the current Federal savings association rule to the standard of limited powers to full powers in § 5.26 should reduce regulatory burden by lessening the need for a later filing.
Specifically, with respect to national banks, the term “branch” is defined by statute. The McFadden Act defines a “branch” as an office “at which deposits are received, or checks paid, or money lent.”
In addition,the statutes authorizing a national bank to establish a branch require that it obtain approval from the OCC.
The proposal retained these differences between national banks and Federal savings associations. Specifically, we proposed to add a new § 5.31 to part 5 in order to bring the establishment and relocation of branches by a Federal savings association within the licensing procedures of part 5 and did not propose adding Federal savings associations to 12 CFR 5.30 New § 5.31 is similar in format to § 5.30, but includes provisions based on §§ 145.92 and 145.93 regarding the definition of “branch” and the scope of the application requirements. Section 5.31 also includes the provisions of § 145.96 regarding agency offices. As a result, national banks and Federal savings associations generally will continue to be subject to different branching application provisions and requirements.
The preamble to the proposed rule also requested comment on two alternatives to the proposed rule's treatment of branching by Federal savings associations. The first alternative required Federal savings associations to file applications to establish or relocate a branch without exceptions. This alternative would harmonize the treatment of the branch licensing regulations of national banks and Federal savings associations in order to simplify our licensing procedures and provide for comparable treatment of national banks and Federal savings associations. The second alternative approach required Federal savings associations to file an after-the-fact notice instead of an application in cases where an application was not required. Such a notice would enable the OCC to obtain timely information on Federal savings association branching activity without requiring eligible Federal savings association to obtain prior OCC approval to engage in an activity that they now may do without approval.
We also proposed several minor substantive clarifications in § 5.30.
We adopt § 5.30 as proposed. We also adopt § 5.31 as proposed with the addition of the second alternative outlined above. We received one comment letter on this branching proposal and the alternatives. This comment is discussed below. Also as proposed, the final rule removes 12 CFR 145.93, 145.95 and 145.96, and makes a conforming change to § 145.92.
The final rule also revises the definition of “branch.” Section 5.30(d)(1)(ii)(B) currently excepts from the definition of “branch” a facility that is located at the site of, or is an extension of, an approved main office or branch office of the national bank. The final rule amends this paragraph to state that the OCC will consider a drive-in or pedestrian facility located within 500 feet of a public entrance to an existing main office or branch office to be such an extension, provided the functions performed at the drive-in or pedestrian facility are limited to functions ordinarily performed at a teller window. This “bright-line” 500-foot test for national banks is consistent with § 145.93(b)(1), which provides this exception for Federal savings associations. The final rule also adds new § 5.30(d)(1)(iii) to describe more clearly what is not a branch, including ATMs and remote service units,
In addition, the final rule updates § 5.30(e), relating to the principles that guide the OCC in making determinations on applications under this section, to reflect the OCC's statutory mission as amended in section 314 of the Dodd-Frank Act.
Finally, the final rule amends § 5.30(f)(6), which sets forth the procedures for expedited review of applications by eligible national banks. This change clarifies that the time period for review of an application for a short-distance relocation is the 15th day after the close of the comment period or the 30th day after the filing is received by the OCC, whichever is later. This period is consistent with the shorter comment period for applications for short-distance relocations (15 days rather than the standard 30 days).
The OCC received one comment on proposed § 5.31. This commenter stated that the OCC should retain the different branching rules for national banks and Federal savings associations, as proposed, and strongly supported this approach over the first alternative described in the preamble, which would require both national banks and Federal savings associations to file an application to establish or relocate a branch. With respect to this first alternative, the commenter noted that an application requirement would impose an unnecessary regulatory burden on Federal savings associations by making their branching decisions subject to prior OCC approval and by requiring Federal savings associations to adapt to the extensive case law and regulatory history associated with the meaning of “branch.” Finally, this commenter noted that implementing this alternative would reverse a burden reducing measure adopted as a result of the last EGRPRA review at the same time that the OCC is seeking further burden reducing measures in its second EGRPRA review.
The OCC has decided not to adopt the first alternative but to adopt the second alternative that requires the filing of an after-the-fact notice. This notice will enable the OCC to obtain timely information on Federal savings association branching activity without imposing significant regulatory burden. Specifically, an after-the fact notice will strengthen the OCC's ability to monitor savings association branching activity and will enable the OCC to maintain comprehensive supervisory and structural data for Federal savings associations. We note that we received no comments on this after-the-fact notice alternative.
Section 5.31 as adopted by this final rule, and its differences with the current Federal savings association branching rule, are described below.
Section 5.31(a) recites the statutory authority for the rule. Section 5.31(b) sets out the basic requirement that a Federal savings association must file an application to establish or relocate a branch, unless the transaction qualifies for one of the exceptions in the rule.
Section 5.31(c), the scope section, generally describes what the section covers—namely, the procedures and standards for review and approval of applications to establish or relocate a branch, the circumstances in which an application is not required, and the authority to establish agency offices. Section 5.31(c)(2) (similar to § 5.30(c)(2) as amended by this final rule) provides that the standards of § 5.31 (governing review and approval of applications by the OCC) apply to branches acquired or retained in a conversion approved under § 5.23 or a business combination approved under § 5.33, but that such branches are subject only to the application procedures set forth in §§ 5.23 or 5.33. Section 5.31(c)(3) states that § 5.31 also implements section 5(m) of the HOLA,
Section 5.31(d) adds a definition of “branch office” for Federal savings associations for purposes of § 5.31 by referring to the definition in 12 CFR 145.92(a). The final rule also includes a definition of “home state”—the state in which the association's home office is located.
Section 5.31(e) sets forth the policy principles that guide the OCC's review of an application to establish or relocate a branch. These principles reflect the OCC's statutory mission as amended in section 314 of the Dodd-Frank Act, and are identical to those principles set forth in § 5.30(e) for the OCC's review of a national bank branch application or relocation.
Paragraph (f)(1) of § 5.31 requires each Federal savings association to submit a separate application to establish or relocate a branch, unless the transaction qualifies for an exception in paragraph (f)(2). Sections 145.93 and 145.95 contain a number of provisions regarding the filing of notices and applications with the OCC as well as notices to the public. These provisions are no longer necessary once Federal savings association branch filings are subject to part 5. Paragraph (e) of § 145.93 does not have a corresponding provision in § 5.30, and the OCC is not including it in § 5.31. Under § 145.93(e), a Federal savings association may not file an application or notice, or use any of the exceptions, to establish a branch if the association has filed an application to merge or otherwise surrender its charter and the application has been pending for less than six months.
Paragraph (f)(2) of § 5.31 incorporates three of the exceptions from § 145.93(b) to the requirement to file an application: (1) The exception for the establishment of a drive-in or pedestrian office that is located within 500 feet of an existing home or branch office, (2) the exception for a short-distance relocation of a branch, and (3) the exception for the establishment or relocation of a branch by highly rated Federal savings associations.
Under this third exception in § 145.93(b)(3), a highly rated Federal savings association is not required to file an application to change the permanent location of an existing branch or to establish a new branch if it meets certain requirements. Those requirements are: (1) The Federal savings association is eligible for expedited treatment, (2) it publishes notice, at a time period specified in the rule, of its intent to establish or relocate a branch, (3) in the case of a relocation, it posts notice of its intent to relocate the branch at the existing branch, and (4) no person files a comment opposing the action, or if a comment is filed, the OCC determines the comment raises issues that are not relevant to the standards for approving a branch application.
The final rule continues these qualifying requirements with the following differences. First, as with other sections in part 5, the condition for qualifying is that the Federal savings association is an “eligible savings association” rather than eligible for expedited treatment. As discussed earlier in this preamble, there are some differences in these tests. Second, the application exceptions in § 5.31(f)(2) do not apply in the context of section 5(m) of the HOLA, described below in the discussion of § 5.31(j).
Section 5.31(f)(3) requires that highly rated Federal savings associations not required to file a branch application must file a notice with the OCC within 10 days after the opening of the branch. This notice must include the date the bank established or relocated the branch and the address of the branch. As indicated above, this is a new requirement for Federal savings associations.
Paragraph (d) of § 145.93 provides that the bank may retain such branches after a conversion or combination unless the transaction approval specifies otherwise. The final rule does not retain this provision in § 5.31. Instead, the final rule addresses the retention of branches in a conversion or business combination in the conversion and business combination regulations (in this final rule, § 5.23 for conversions to become a Federal savings association and § 5.33 for business combinations resulting in a Federal savings association).
Paragraph (g) of § 5.31 sets out exceptions to the rules of general applicability for applications by a Federal savings association to establish or relocate a branch. Specifically, the OCC may waive or reduce the public notice and comment period in certain emergency situations or with respect to certain temporary branches.
Paragraph (h) of § 5.31 provides that the OCC's approval of a branch expires if the branch has not commenced business within 18 months, unless the OCC grants an extension. This period is longer than the current 12-month expiration period for branch approvals for Federal savings associations under § 145.95(c).
Paragraph (i) of § 5.31 provides that Federal savings associations must comply with the portions of 12 U.S.C. 1831r-1 that apply to Federal savings associations with respect to branch closings.
Section 5.31(j) implements section 5(m)(1) of the HOLA.
Finally, paragraph (k) to § 5.31 includes provisions currently in § 145.96 regarding agency offices.
We note that the comment letter we received on the branching proposal asked the OCC to clarify that mobile phones and similar devices are not branches. With respect to national banks, if the mobile phone or similar device belongs to the customer, then it is not a facility established by the bank. If the mobile phone or similar device is owned or controlled by the bank, then it would be a remote service unit, and therefore not a branch pursuant to 12 U.S.C. 36(j) and 12 CFR 7.4003. Moreover, the final rule at § 5.30(d)(1)(iii) implicitly addresses this point by including “personal computer” as an example of a remote service unit.
With respect to Federal savings associations, a mobile phone is an “electronic means or facility” pursuant to current § 155.200 and excluded from the definition of branch under current § 145.92, as incorporated in proposed § 5.31.
Twelve CFR 5.32 provides the procedures for OCC review and approval of a national bank's reorganization to become a subsidiary of a bank holding company or a company that will, upon consummation of such reorganization, become a bank holding company. Section 5.32 currently does not expressly exempt such reorganizations from the general procedures in part 5 for public notice, public availability, and hearings and other meetings (§§ 5.8, 5.9, and 5.11). When originally adopted, it was not the OCC's intent to apply these procedures to these reorganizations, and, in general, the OCC has not required national banks to comply with these procedures. The OCC proposed to amend § 5.32 to make clear in the regulation that these procedural requirements do not apply unless the OCC concludes that an application presents significant and novel policy, supervisory, or other legal issues. This approach is consistent with procedural exceptions for conversions (§ 5.24), fiduciary powers (§ 5.26), operating subsidiaries (§ 5.34), bank service companies (§ 5.35), and change in asset composition (§ 5.53). The OCC did not receive any comments related to § 5.32, and we adopt it as proposed.
Business combinations include mergers and consolidations, as well as certain purchase and assumption transactions. The OCC's regulations governing the application requirements and procedures for national banks engaging in business combinations are contained in 12 CFR 5.33. The regulations governing the application requirements and procedures for Federal savings associations engaging in business combinations are contained in 12 CFR 163.22. The statutes governing mergers and consolidations by national banks contain extensive specifications for their authority, the procedures the bank must follow, and the effect of the merger or consolidation.
While these rules address a common subject, there are a number of differences between them. We proposed to harmonize the treatment of the business combination activities of national banks and Federal savings associations where consistent with underlying statutory authorities, to consolidate our regulations by amending 12 CFR 5.33 to apply to Federal savings associations, and to remove 12 CFR part 146 and 12 CFR 152.13, 152.14, 152.15, and 163.22.
We received three comment letters addressing proposed § 5.33. These comment letters and revised § 5.33 are discussed below.
Fourth, new § 5.33(d)(2)(v) revises an existing provision in § 5.33(d)(2), which currently includes in the definition of business combination only the assumption of deposit liabilities from another depository institution, to also include the assumption, from a credit union or any other institution that is not FDIC-insured, of deposit accounts or other liabilities that will become deposits at the assuming national bank or Federal savings association. Section 163.22(c) requires an application by a Federal savings association in such cases.
Fifth, the final rule includes the new term “other combination” in § 5.33(d)(10) to describe the following combinations that do not require application to the OCC under § 5.33: (1) mergers or consolidations where a national bank or Federal savings association is not the resulting institution; (2) the transfer of deposit liabilities by a national bank or Federal savings association to another insured depository institution, a credit union, or any other institution; and (3) acquisitions by a national bank or Federal savings association of all, or substantially all, of the assets or liabilities of any company not an insured depository institution (whole entity purchase and assumption transactions).
Currently, a Federal savings association has authority to engage in whole entity purchase and assumption transactions only with an entity with which it could engage in a consolidation or merger. These entities do not include a nonbank affiliate or other company. When a Federal savings association is permitted to engage in such transactions, it is required to file an application. A national bank has authority to engage in a whole entity purchase and assumption transaction without regard for whether it has the authority to consolidate or merge with the counterparty. The purchase and assumption of bank-permissible assets and liabilities is an exercise of a bank's power to engage in the business of banking under 12 U.S.C. 24(Seventh), not the power to combine organically with another institution, as in a merger. As proposed, the final rule adopts the same position regarding the power of a Federal savings association to engage in purchase and assumption transactions. Thus, a Federal savings association will have the authority to engage in a whole entity purchase and assumption without regard to whether it has authority to consolidate or merge with the counterparty because such transactions are included in the final rule at § 5.33(n)(2).
While national banks currently have this whole entity purchase and assumption authority, they are not required to apply to the OCC for approval unless it is a whole entity purchase and assumption with a depository institution. The proposed rule required an application for both national banks and Federal savings associations for a whole entity purchase and assumption that would result in a 25 percent or more increase in the asset size of the bank or savings association. We included this provision in the business combination rule because these transactions are similar to a merger. One commenter opposed this new application requirement, stating that the requirement is not connected to the integration of national banks and Federal savings association rules. We note, however, that Federal savings associations in current § 163.22(c) are subject to an application requirement for the purchase or sale in bulk not in the ordinary course of business. However, upon further consideration, we have amended this provision to streamline our rules. Because whole entity purchase and assumption transactions meeting the 25 percent asset size threshold may be subject to an application requirement under revised § 5.53(c)(1)(iii) as a substantial asset change, we find that the application requirement in § 5.33 for such transactions is not necessary. We therefore have removed these transactions from § 5.33 in the final rule by removing whole entity purchase and assumption transactions that result in a 25 percent or more increase in asset size from the definition of “business combination” in § 5.33(d)(2) and removing the asset size qualification from § 5.33(d)(10)(iv).
The OCC also is adding definitions of “credit union,” “savings association,” “state savings association,” and “state trust company” in § 5.33(d)(6), (11), and (12), respectively. In addition, the final rule is revising the definition of “home state” included in the proposed rule to remove references to savings associations, as this term is only used with respect to national banks in § 5.33.
The final rule includes three additional factors in § 5.33(e)(1)(ii) for applications in which the OCC reviews the transaction under the Bank Merger Act. First, the rule moves the money
As in the current rule, proposed § 5.33(e)(1)(iii) provides that, when the OCC evaluates an application for a business combination under the CRA, the OCC also considers the performance of the applicant and the other depository institutions involved in the business combination in helping to meet the credit needs of the relevant communities, including low- and moderate-income neighborhoods, consistent with safe and sound banking practices. One commenter recommended that the OCC require banks to demonstrate a record of strong community development and that this requirement should go beyond demonstrating a Satisfactory rating or above on the most recent CRA exam. This commenter also recommended that the OCC require banks to demonstrate a clear public benefit to both the current and expanded assessment areas, together with a formal CRA agreement with the local communities. The OCC declines to accept these recommendations. The commenter's proposed standards of a record of strong community development and clear public benefit are more stringent than the statutory requirement under the CRA. They are also different than the convenience and needs factor under the Bank Merger Act, 12 U.S.C. 1828(c)(5).
Another commenter stated that, in considering office closings in their assessment of the convenience and needs and CRA factors as part of a merger application review, the Federal banking agencies should recognize technological advancements that have led consumers to make greater use of alternative means to obtain products and services, including the use of mobile phones. The commenter states that the agencies should balance the consideration of office closings with consideration of an institution's use of alternative technologies that serve the public. We agree that an office closing does not necessarily result in a negative impact on service to the community given the increased use of alternate systems for delivering retail banking services. In assessing the probable effects of the business combination on the convenience and needs of the community to be served, the OCC would consider alternative systems for delivering retail banking services to the extent that the alternative delivery systems are available and effective in providing financial services to low- and moderate-income geographies and individuals. Furthermore, one reason the OCC's review of a merger application focuses on office closings is because of the branch closing procedural requirements of 12 U.S.C. 1831r-1. We therefore decline to make any change to our regulations on this point.
The final rule also clarifies the information the applicant must include in its application. Section 5.33(e)(2) currently requires an applicant to disclose the location of any branch it will acquire and retain in a business combination. The final rule provides that this disclosure include the location of any branches that are approved but not yet opened. Revised § 5.33(e)(3) adds a financial subsidiary investment, bank service company investment, service corporation investment, and other equity investment to the current requirement to identify subsidiaries and provide an analysis of the permissibility for the national bank or Federal savings association to hold the subsidiary or investment. This requirement reflects the current practice of the OCC to review the legal permissibility for the resulting national bank or Federal savings association to continue to hold these other investments when evaluating a business combination application.
In addition, the final rule adds Federal savings associations to the provision in § 5.33(e)(5) that allows banks to retain nonconforming assets for a limited period of time after consummation of a business combination. The final rule also adds a new paragraph (e)(5)(ii) applicable to Federal savings associations to address provisions in the HOLA regarding certain nonconforming assets.
In the provision regarding the exercise of fiduciary powers by the resulting national bank or Federal savings association, § 5.33(e)(6), the final rule adds a new paragraph (e)(6)(ii) to clarify that if the applicant intends to exercise fiduciary powers after the combination and requires OCC approval for such powers, it must include in the business combination application the information required in § 5.26 for a request for fiduciary powers. This requirement reflects current practice.
In the provision regarding the expiration of approval, § 5.33(e)(7), the final rule shortens the time an approval expires if the transaction has not been consummated from one year to six months, and adds a provision under which the OCC can extend the six-month period.
One commenter requested that we allow other forms of public notice of proposed transactions in addition to the newspaper notice required by 12 U.S.C. 1828(c)(3)(D), such as notice on an institution's Web site, and specifically requested that the OCC endorse a statutory amendment to the Bank Merger Act that permits alternative forms of public notice. We note that providing additional alternative forms of notice does not require a change in the law or our rules. An institution may provide notice on its Web site on its own initiative if it so chooses and thereby provide for increased notice opportunities to the public. With
Paragraph (f)(1)(ii) continues the current provisions under which a merger between a national bank and its nonbank affiliate is excepted from public notice and comment. Such mergers are merely internal reorganizations of the entities' existing operations.
Section 5.33(f)(3) addresses filings in which a national bank (and as revised, a Federal savings association) is the target company and will not be the resulting institution. The final rule clarifies this provision so that it no longer includes a Federal savings association as a resulting institution, as Federal savings associations now apply to the OCC under revised § 5.33(g)(3). The final rule also adds credit unions to this section because a merger or consolidation of a Federal savings association into a credit union may now be within the scope of § 5.33. In addition, the final rule removes §§ 5.2 (rules of general applicability) and 5.5 (fees) from the list of sections that do not apply to § 5.33(g)(6) and (g)(7), as they include general provisions that may be useful to apply in some situations.
The final rule amends § 5.33(g)(2) (merger or consolidation of a Federal savings association into a national bank) to reflect that the OCC now is the regulator of Federal savings associations. First, § 5.33(g)(2)(i)(B) includes requirements similar to those in 12 CFR part 146 and 12 CFR 152.13 and 163.22 (by referring to § 5.33(n) and (o)). In addition, § 5.33(g)(2)(i)(B) includes a provision under which a whole purchase and assumption of the target Federal savings association is treated as a consolidation for the Federal savings association, thus applying the procedural requirements in paragraph (o). The current regulations, at 12 CFR part 146 and 12 CFR 152.13, apply these requirements to these transactions through the definition of “combination” in § 152.13(b)(1), which includes a whole purchase and assumption transaction between depository institutions.
Second, because the OCC now has regulatory authority over both the national bank and the Federal savings association, the final rule amends the provision in § 5.33(g)(2)(ii), which currently provides that the OCC may conduct an appraisal of dissenters' shares of stock in a national bank involved in a consolidation with a Federal savings association if all the parties agree, to require that the OCC conduct this appraisal. The final rule also redesignates this provision as § 5.33(g)(2)(ii)(C).
Third, the final rule adds new § 5.33(g)(2)(ii)(A) and (B) to set out the process for appraisal of dissenters' shares of stock in a Federal stock savings association involved in a consolidation with or merger into a national bank. Consolidations and mergers of national and state banks into a national bank are governed by 12 U.S.C. 215 and 215a. These statutes include provisions on dissenters' rights. Consolidations and mergers of Federal savings associations into national banks are authorized under 12 U.S.C. 215c, but the statute has no provisions addressing dissenters' rights. Applications in which there are dissenting shareholders and the appraisal process is used are rare. The basic frameworks of the national bank and Federal savings association processes in the current rules are similar. In the interest of simplicity of administration and similar treatment for each type of institution, the OCC prefers to use only one dissenters' rights process. Because the process governing national bank dissenters' rights included in current § 5.33 for national banks is required by 12 U.S.C. 215 and 215a, the final rule applies this process to transactions in which a Federal savings association is merging or consolidating into a national bank rather than continuing the regulatory dissenters' rights provision in 12 CFR 152.14. However, the final rule makes one change to this process. Under the statutes, the bank is required to bear all costs.
Section 5.33(g)(2)(iii) includes a requirement that the consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution. This requirement is based on provisions in §§ 146.2(b)(9) and 152.13(f)(9). Although not currently in § 5.33, it is a requirement for national banks as discussed in the Comptroller's Licensing Manual.
New § 5.33(g)(3) addresses consolidations and mergers of other institutions into a Federal savings association.
Section 5.33(g)(3)(i)(B)(
Section 5.33(g)(3)(i)(C) sets out the process for appraisal of dissenters' shares of stock in a Federal stock savings association involved in a consolidation or merger into another Federal savings association. In applications in which a Federal savings association is merging into another Federal savings association, the final rule applies the statutory provisions governing national bank dissenters' rights in 12 U.S.C. 214a to Federal savings associations, as if the Federal savings association were a national bank merging into a state bank under section 214a. We are using the national bank dissenters' right process rather than continuing the regulatory dissenters' rights provision in 12 CFR 152.14 for the reasons discussed above. As above, because the process is being applied in these situations by regulation, not statute, the final rule includes a cost allocation provision. The final rule also includes the requirement from 12 U.S.C. 214a(b) that the plan of merger or consolidation must provide the manner of disposing of the shares of the resulting Federal savings association not taken by the dissenting shareholders. This requirement is a change from § 152.14(c)(11), under which such shares shall have the status of authorized and unissued shares of the resulting association. The plan of merger or consolidation could still provide such status for these shares, but such status is no longer mandatory.
Section 5.33(g)(3)(i)(D) provides that a state bank, state savings association or credit union that engages in a consolidation or merger into a Federal savings association follows the procedures and dissenters' rights process set out for such transactions in the law of the state or other jurisdiction under which it is organized. This provision is similar to the current provisions in § 5.33(g)(4) and (g)(5) for mergers between a national bank and its nonbank affiliate.
Section 5.33(g)(3)(ii) includes a requirement that the consolidation or merger agreement must address the effect upon and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution. This requirement is based on provisions in §§ 146.2(b)(9) and 152.13(f)(9). Although not currently in § 5.33, it is a requirement for national banks as discussed in the Comptroller's Licensing Manual.
Sections 5.33(g)(4) and (g)(5) address mergers between a national bank and its nonbank subsidiary or affiliate. Section 5.33(g)(4) covers mergers into the national bank; § 5.33(g)(5) covers mergers into the nonbank subsidiary or affiliate. They implement a statute applicable only to national banks, not Federal savings associations.
Section 5.33(g)(6) addresses a consolidation or merger under 12 U.S.C. 214a of a national bank with a state bank resulting in a state bank (as defined in 12 U.S.C. 214(a)). This new paragraph is based on the portions of current § 5.33(g)(3) that address a consolidation or merger of a national bank into a state bank.
The final rule adds a new § 5.33(g)(7), similar to proposed § 5.33(g)(6), to address a consolidation or merger of a Federal savings association into a state bank, state savings bank, state savings association, state trust company, or credit union. Under § 5.33(g)(7)(i), such transactions, where permissible, require only a notice to the OCC, not application and approval. This requirement is a change for Federal savings associations because, under § 163.22(c), an application is required for a combination with an uninsured bank, savings association or trust company or a credit union. Section 5.33(g)(7)(ii) addresses the procedures Federal savings association must follow to engage in the consolidation or merger and requires the association to follow the provisions of § 5.33(n) and (o), which are based on provisions in 12 CFR part 146 and 12 CFR 152.13 and 163.22. In addition, § 5.33(g)(7)(ii) includes a provision under which a whole purchase and assumption of the target Federal savings association is treated as a consolidation for the Federal savings association so that the procedural requirements in paragraph (o) apply. The current regulations, at 12 CFR part 146 and 12 CFR 152.13, apply these requirements to such transactions now through the definition of “combination” in § 152.13(b)(1), which includes a whole purchase and assumption transaction between depository institutions, in addition to a consolidation and a merger.
Section 5.33(g)(7)(iii) sets out the process for appraisal of dissenters' shares of stock in a Federal stock savings association involved in a consolidation or merger into a state bank, state savings bank, state savings association, state trust company, or credit union. The process is similar to the process included in § 5.33(g)(3)(i)(C), described above, for appraisal of dissenters' shares of stock in a Federal stock savings association involved in a consolidation or merger into a another Federal savings association. Section 5.33(g)(7)(iv) includes a requirement that the consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution. This requirement is based on provisions in §§ 146.2(b)(9) and 152.13(f)(9). Although not currently in § 5.33, it is a requirement for national banks as discussed in the Comptroller's Licensing Manual.
Under the final rule, expedited review under § 5.33(j) replaces the automatic approval provision in § 163.22(f) for Federal savings associations. Under § 163.22(f), an application is deemed to be approved automatically 30 days after the OCC sends the applicant a written notice that the application is complete. An application is removed from the automatic approval process in a number of specified circumstances. Many of these circumstances are the same as those that would cause an application not to be eligible for expedited review under § 5.33(j). However, the size-based limit included in § 163.22(f) is more restrictive than eligibility for expedited review as a business reorganization or streamlined application in § 5.33. Under § 163.22(f)(10), an application does not qualify for the automatic approval process if the acquiring institution has assets of $1 billion or more and proposes to acquire assets of $1 billion or more. Business reorganizations have no size limit. Streamlined applications under § 5.33(j) have limits based on the relative size of the acquiring institution and the assets to be acquired but do not have a fixed maximum dollar amount limit on the size. In addition, under § 163.22(f) a number of the other disqualifying conditions are based on the competitive impact of the proposed combination, creating safe harbors that the proposal must meet in order to qualify for the automatic approval process. The OCC believes it is not necessary to include competitive impact thresholds in the regulation. The OCC will notify the applicant that the application is not eligible for expedited review if it raises potential competitive concerns. Accordingly, the final rule does not include the automatic approval process of § 163.22(f), but does add one of the disqualifying factors set forth in § 163.22(f) to the streamlined application provision. Specifically, under § 5.33(j)(2), an applicant would not qualify for a streamlined business combination application if the transaction is part of a mutual to stock conversion under 12 CFR part 192.
We received one comment on this expedited process advocating the removal of expedited review from the regulation, stating that no bank should be able to merge without explicitly outlining the public benefits that will result from the merger. This commenter also notes that stating that the merger will not impede the bank's ability to comply with the CRA should not qualify as a plan under the CRA. The OCC disagrees with this comment. Allowing a merger only if explicit public benefits exist would represent a policy change and is more stringent than the statutory requirement. Furthermore, the OCC will remove the application from expedited processing if the application, or adverse comments regarding the application, presents a significant CRA concern. Finally, the OCC does not believe expedited processing should be withheld from the many filings where the CRA is not a concern.
The same commenter also requested that we actively continue to reach out to community organizations in the area affected by the transaction, through interviews and public hearings, to evaluate fully how the bank is addressing community needs and how it will do more after the merger. We note that in conjunction with the Federal Reserve Board the OCC has recently held a public meeting regarding a bank merger application and has periodically participated in public hearings or meetings sponsored by the Federal Reserve Board. The OCC will continue to consider carefully each application on the basis of all relevant factors when determining whether to grant a request for a public hearing, pursuant to § 5.11.
Section 5.33(o)(1) is based on §§ 146.2(b) and 152.13(e), except that the final rule reduces the required majority for the board of directors approval for Federal stock savings associations from two-thirds to a majority. The final rule does not reduce the requirement for Federal mutual savings associations. The board of directors vote is the principal vote and there typically is not a vote of the voting members, unless the OCC requires it as provided in § 5.33(o)(4). The final rule does not include in § 5.33 the provisions in §§ 146.2(b)(1) and 152.13(f) that require the savings association to include all terms regarding the combination in a combination agreement and to set out in some detail provisions that the agreement must contain. OCC practice with respect to national banks has not been to include these requirements in detailed regulations, as the drafting of a merger agreement is a business matter for the participating parties. However, we note that the Comptroller's Licensing Manual includes sample agreements.
The proposal included a number of changes to the provisions governing operating subsidiaries of national banks set forth at 12 CFR 5.34. Some of these changes incorporated elements of the Federal savings association operating subsidiary regulations currently contained in 12 CFR part 159 in order to promote consistency between the regulations for operating subsidiaries for both charters.
The OCC is adopting the amendments to § 5.34 as proposed with one clarifying change related to joint ventures. A summary of changes to § 5.34 and the comments we received on this provision are set forth below.
Section 5.34(e)(2) provides the criteria for a subsidiary to qualify as a national bank operating subsidiary. Section 5.34(e)(2)(i)(A) currently states that the national bank must have the ability to control the management and operations of the subsidiary. The proposed rule clarified this provision by adding that no other person or entity has the ability to control the management or operations of the subsidiary. This statement reflects current OCC practice regarding national bank operating subsidiaries and is based on a provision in § 159.3(c)(1). We added it to be consistent with that provision and the new Federal savings association operating subsidiary regulation.
We received two comments on this provision regarding control. One commenter stated that the current requirements already ensure the banks have sufficient control and that this new provision will create uncertainty for joint venture arrangements organized as national bank operating subsidiaries. Another commenter stated that the proposed language could be read to suggest that a bank must own 100 percent of the voting stock of an entity for that entity to be an operating subsidiary. This reading would prohibit a bank from acquiring a controlling interest in a joint venture as an operating subsidiary if another entity or person owns or controls a minority interest in the voting shares of the entity. The commenter noted that this would significantly depart from OCC precedent and therefore requests the OCC to clarify that a national bank may continue to invest in a joint venture or partnership that qualifies as an operating subsidiary under § 5.34(e)(2) if the bank has the ability to control the management and operations of the subsidiary and no other party controls more than 50 percent of the voting (or similar type of controlling) interest in the subsidiary.
As noted above, the proposed change was based on a provision in the Federal savings association rule and reflects current practice regarding national bank operating subsidiaries. However, to address the commenter's concern that this statement could be interpreted overly broadly, the final rule replaces the proposed language with the following statement: “and no other person or entity exercises effective operating control over the subsidiary or has the ability to influence the subsidiary's operations to an extent equal to or greater than that of the bank.” This language is taken in part from § 159.2, and we believe that it implements more clearly our intent that, for a joint venture company to qualify as an operating subsidiary, no other investor in the joint venture may have control or influence over the company that is equal to or more than the national bank.
The final rule also revises § 5.34(e)(2)(i)(B) to clarify that where the bank owns less than 50 percent of an operating subsidiary (but still controls it), no other party can own a greater percentage than the bank. This reflects current OCC practice set out in the Comptroller's Licensing Manual.
In addition, the final rule adds community development corporation subsidiaries under 12 U.S.C. 24(Eleventh) and part 24 as an additional example of the type of operating subsidiary not subject to § 5.34. The proposed rule did not include this example. We have added it to the final rule for clarification purposes.
Furthermore, the final rule adds a new § 5.34(e)(2)(iii) to clarify that the national bank must have reasonable policies and procedures to preserve the limited liability of the bank and its operating subsidiaries. We adapted this provision from § 159.10 and it is consistent with the new operating subsidiary rule for Federal savings associations. It clarifies that the requirement that the bank must control the operating subsidiary does not mean they should be treated as a single entity.
We received one comment on new § 5.34(e)(2)(iii). This commenter stated that the proposal did not provide sufficient analysis to explain why national banks should be subject to a new policies and procedures requirements and does not believe that this is a clarifying change. However, we believe that this requirement is necessary so that the bank and subsidiary are not treated as a single entity even if the bank controls the subsidiary. We also note that this requirement and the requirement in the Federal savings association operating subsidiary rule (§ 5.38) is much simpler and less burdensome than the current savings association rule requirements for separate corporate identity in 12 CFR 159.10. We therefore decline to make the suggested changes.
Current § 5.34(e)(3) provides that a national bank's operating subsidiary conducts activities authorized under § 5.34 pursuant to the same authorization, terms and conditions that apply to the conduct of the parent national bank, except as otherwise provided under sections 1044 and 1045 of the Dodd-Frank Act. The final rule revises § 5.34(e)(3) to provide that a national bank's operating subsidiary conducts these activities unless otherwise specifically provided by regulation or published OCC policy, in addition to as provided by statute, including 1044 and 1045 of the Dodd-Frank Act. This change clarifies that there are other instances where different treatment of the operating subsidiary and the parent national bank may occur in addition to those regarding the application of state law addressed by the Dodd-Frank Act.
Current § 5.34(e)(5)(i) provides that national banks meeting certain requirements are not required to file a prior application but may give after-the-fact notice when establishing or acquiring an operating subsidiary or performing a new activity in an existing operating subsidiary. Current § 5.34(e)(5)(ii) requires a prior application and OCC approval in other instances and sets out the information that must be included in the filing. The final rule reverses the order of the application and notice provisions so that the application provision is first. This change simplifies and clarifies the opening language of each paragraph. It also makes the order of these provisions the same as that of the similar provisions in the regulation for operating subsidiaries of Federal savings associations. The final rule also makes technical revisions in § 5.34(e)(5)(ii)(A)(
Current § 5.34(e)(5)(vi) provides that no application or notice is required for a national bank that is well managed and adequately capitalized or well capitalized to acquire or establish an operating subsidiary or to perform a new activity in an existing operating
The final rule also amends § 5.34(e)(5)(vii) to codify the OCC's position that when a national bank operating subsidiary wishes to act as a fiduciary, its national bank parent must have fiduciary powers and the operating subsidiary also must have its own fiduciary powers under the law applicable to the subsidiary. The operating subsidiary may not rely on the national bank's fiduciary powers. Further, this provision explicitly provides that when an operating subsidiary that exercises investment discretion on behalf of customers or provides investment advice for a fee is a registered investment adviser, it is not necessary for its national bank parent to have fiduciary powers. These provisions reflect OCC practice as set out in the Comptroller's Licensing Manual.
Twelve CFR 5.35 addresses national bank investments in bank service companies pursuant to the Bank Service Company Act, 12 U.S.C. 1861-1867. The Bank Service Company Act was amended in 2006 to permit Federal savings associations to invest in bank service companies.
The authority of Federal savings associations to invest in bank service companies under the Bank Service Company Act is separate from the authority to invest in service corporations under section 5(c)(4)(B) of the HOLA.
Specifically, the OCC proposed to amend the scope section in § 5.35(c) by including language, based on 12 CFR 159.1(a) to provide that the OCC may, for supervisory, legal, or safety and soundness reasons, limit at any time a national bank's or Federal savings association's investment in a bank service company or limit or refuse to permit any activities of any bank service company for which a national bank or Federal savings association is the principal investor. We did not receive any comments on this change and adopt it as proposed.
In addition, the OCC is adopting the proposed technical amendment to the definition of the term “depository institution” in § 5.35(d)(3) to conform it to 12 U.S.C. 1861(b)(4) as amended by section 357 of the Dodd-Frank Act. Section 357 of the Dodd-Frank Act also amended 12 U.S.C. 1861(b)(5) by striking the definition of “insured depository institution” and adding in its place a second definition of “depository institution” that refers to section 3 of the FDI Act. The OCC believes that the deletion of the term “insured depository institution” was inadvertent and not intended to effect a change because the statute continues to use this term throughout. Therefore, we have not changed the definition of “insured depository institution” in § 5.35(d)(4).
The OCC also proposed to change the filing and review process in § 5.35(f)(2). That section currently provides for an after-the-fact notice with no requirement for OCC approval before the bank makes the investment if specified eligibility conditions are met. We proposed to change it to a prior notice with OCC approval through an expedited review process, under which the notice is deemed approved on the 30th day after filing unless the OCC notifies the filer otherwise. We received one comment on this change. This commenter stated that the prior notice would be more burdensome than an after-the-fact notice. However, this prior notice process follows the statutory provisions more closely. Furthermore, because there have been very few Bank Service Company Act filings, this change should not add any material burden to the industry. Therefore, we are adopting the amendments as proposed.
We also are moving some of the provisions in § 5.35(f)(2) regarding what must be included in the notice to paragraph (g) of § 5.35, the general provision covering the required information. We also proposed to make a number of technical changes in § 5.35(c), (d)(3), (d)(4), (d)(6), (e), (f)(1), (f)(2), (f)(3), (f)(5) and (i). We did not receive any comments on these changes and adopt them as proposed. We also are making a technical change to correct a cross-reference in § 5.35(f)(2)(ii)(B), which currently refers to § 5.38(d). It should refer to § 5.38(e)(5)(v).
Under 12 U.S.C. 29, a national bank may purchase and hold real property necessary to transact business and may hold real estate in exchange for debts previously contracted subject to certain divestiture requirements. Under 12 U.S.C. 371d, a national bank is required to obtain prior OCC approval to invest in bank premises, unless its aggregate investment and related indebtedness is less than or equal to either the bank's capital stock or 150 percent of the bank's capital and surplus (and the bank meets certain other criteria, as described below).
National banks are subject to several regulations that further delineate the parameters of their investment in and use of real property. Specifically, 12 CFR 7.1000 details the types of real estate that are necessary, pursuant to 12 U.S.C. 29, for a national bank's transaction of business, including premises owned and occupied by the bank, its branches, and its subsidiaries; property intended to be used for future
No statute specifically addresses a Federal savings association's investment in banking premises.
The OCC proposed numerous changes to these regulations, including applying the national bank regulations to Federal savings associations, rescinding 12 CFR 160.37, and making clarifying amendments. We did not receive any comments on these proposed changes and adopt them as proposed, except for the change in date for the grandfathering provisions, discussed below.
Revised § 7.1000(a) permits a Federal savings association to invest in real estate necessary to transact its business. Revised § 7.1000(a)(2) provides a non-exclusive list of permissible real estate investments for Federal savings associations. These investments are generally permitted for Federal savings associations under § 160.37, with the addition of lodging for customers, officers, or employees of the Federal savings association, its branches or consolidated subsidiaries in areas where suitable commercial lodging is not readily available, which is currently permissible for national banks.
Under § 7.1000(a)(3), a national bank is permitted to hold premises through any reasonable and prudent means, including fee ownership, leasehold estate, and interest in a cooperative. It also is permitted to hold such premises directly or through one or more subsidiaries and to organize a premises subsidiary as a corporation, partnership, or similar entity, such as a limited liability company. Section 160.37 permits a Federal savings association to invest in real estate, whether improved or unimproved, to be used for office and related facilities of the association under certain conditions, though it does not address how a Federal savings association may hold such premises. By adding Federal savings associations to § 7.1000(a)(3), the OCC is making clear that a Federal savings association may hold its premises in any of the means set forth in that section. In addition, the OCC is adding a new paragraph to recognize a Federal savings association's separate authority under part 159, which is amended and redesignated as 12 CFR 5.59 in this final rule, to acquire and hold banking premises in a service corporation.
In paragraph (c)(1) of § 7.1000, the final rule deletes the reference to 12 U.S.C. 371d and replaces it with language to clarify that the quantitative limitations in § 5.37(d)(1)(i) and (d)(3)(i) govern when OCC approval is required to invest in banking premises. The final rule also divides § 7.1000(c)(2) into two separate paragraphs. Paragraph (c)(2)(i) clarifies that a national bank or Federal savings association must seek approval to invest in banking premises in accordance with § 5.37(d). New paragraph (c)(2)(ii) clarifies that a Federal savings association that invests in banking premises through a service corporation must comply with the quantitative limitations in § 5.37(d), and, to the extent applicable, § 5.59. As described below, the amendments to § 5.37(d) clarify which requirements in § 5.37(d) apply to service corporations.
Under redesignated § 7.1000(c)(3), a national bank must receive OCC approval to exercise an option to purchase banking premises or stock in a corporation holding banking premises if the price of the option and the bank's other investments in banking premises exceed the amount of the bank's capital stock. The final rule simplifies paragraph (c)(3) by removing the unnecessary language explaining when approval is required and replacing it with a statement that the national bank or Federal savings association must comply with the requirements in § 5.37(d). The procedures in § 5.37(d) are discussed below. In addition, we are making other nonsubstantive, clarifying changes. Section 160.37 does not address an option to purchase banking premises or stock in a corporation holding banking premises; therefore, this is a new requirement for a Federal savings association.
The final rule deletes § 7.1000(d), Other real property, because the two examples provided are based on well-established precedent, and we believe it is unnecessary to include them in § 7.1000. Section 7.1000(d) was not intended to be a limitation on ownership of real property, and deleting it eliminates the need to add clarifying language. Furthermore, deleting § 7.1000(d) simplifies § 7.1000 by limiting it to real estate necessary for the transaction of business.
Current § 34.84 provides rules for a national bank's investment in future banking premises and is contained in the OCC's rules on “other real estate owned” (OREO). Specifically, this section provides that a national bank normally should use real estate acquired for future expansion within five years and, after holding such real estate for one year, state by resolution of the board of directors or an appropriate authorized bank official or a subcommittee of the board of directors, definite plans for the use of such real estate.
To minimize practical difficulties that may arise as a result of these changes, the proposed rule included a transition provision, § 7.1000(e), that grandfathered Federal savings associations' existing premises investments, provided the investment complies with the legal requirements in effect prior to the publication date of the proposal and continues to comply with those requirements. The final rule includes this grandfathering provision. However, we have changed the transition date to the date of publication of the final rule, as we believe this is the more appropriate date on which to grandfather such investments. We note that modifying, expanding, or improving such investments, with the exception of routine maintenance, requires prior approval of the appropriate OCC supervisory office. We believe it is appropriate to require prior approval in these circumstances to ensure safety and soundness concerns are satisfied and to apply consistent standards to national banks and Federal savings associations.
Although current § 7.3001 provides for the sharing of office space and employees, § 160.37 does not specifically provide for such sharing arrangements. However, through guidance, a Federal savings association is authorized to share space in a manner similar to that provided in § 7.3001, and the safety and soundness requirements imposed are substantially similar, though not identical, to those imposed by § 7.3001(c). For example, both the guidance and § 7.3001(c) prohibit joint ventures, but the methods to determine what constitutes a joint venture are different. Under § 7.3001(c)(3), what constitutes a joint venture or partnership is determined by applicable state law. In addition, under revised § 7.3001(a), a Federal savings association is permitted to: (1) lease excess space on banking premises to one or more other businesses (including other banks, Federal or state savings institutions, or financial institutions); (2) share space jointly held with one or more other businesses; or (3) offer its services in space owned or leased to other businesses. Under revised § 7.3001(b), as part of such a sharing arrangement, a Federal savings association may, pursuant to a written agreement, agree that its employee may act as an agent for the other business, or an employee of the other business may act as an agent for the savings association. Under revised § 7.3001(c), a Federal savings association sharing office space is required to satisfy eight requirements intended to ensure that the practice of sharing space was conducted in a safe and sound manner and also provides customer protections. This treatment is substantially similar to that in OCC guidance for Federal savings associations.
To minimize practical difficulties that may arise as a result of these changes, the proposed rule added a transition provision, § 7.3001(e), that grandfathers existing sharing arrangements, provided such sharing arrangements comply with the legal requirements in effect prior to the publication date of this proposal and continue to comply with those requirements. The final rule includes this grandfathering provision. However, we have changed the transition date to the date of publication of the final rule, as we believe this is the more appropriate date on which to grandfather such arrangements. We note that the savings association may not amend or renew the agreement, or extend the agreement beyond its current term, without the prior approval of the appropriate OCC supervisory office. We believe it is appropriate to require prior approval in such circumstances to ensure customers are protected and safety and soundness concerns are satisfied, and to apply consistent standards to national banks and Federal savings associations.
Current § 5.37(d)(1)(i) requires a national bank to submit an application to the appropriate supervisory office to make an investment in bank premises, or to make loans to or upon the security of the stock of such a corporation, if the aggregate of all such investments and loans, together with the indebtedness incurred by any such corporation that is an affiliate of the national bank, will exceed the amount of its capital stock. Section 5.37(c) defines “bank premises” as including (but not limited to): (1) Premises that are owned and occupied (or to be occupied, if under construction) by the bank, its branches, or its consolidated subsidiaries; (2) capitalized leases and leasehold improvements, vaults, and fixed machinery and equipment; (3) remodeling costs to existing premises; (4) real estate acquired and intended, in good faith, for use in future expansion, or (5) parking facilities that are used by customers or employees of the bank, its branches, and its consolidated subsidiaries. In contrast, § 160.37 does not contain a detailed definition and states, in general, that real estate may be used for office and related facilities for the association's current and future use.
Current § 5.37(d)(1)(ii) requires the application to make an investment in banking premises to include a description of the bank's present investment in banking premises, the investment in the premises that the bank intends to make, the business reason for the investment, and the amount by which the national bank's aggregate investment will exceed the amount of its capital stock. Current § 5.37(d)(2) provides information regarding the approval process, including that an application is deemed approved on the 30th day after the filing is received by the OCC, unless the OCC notifies the national bank prior to that date that the filing presents a significant supervisory or compliance concern, or raises a significant legal or policy issue. The final rule makes these provisions applicable to a Federal savings association, and makes other nonsubstantive, clarifying changes.
Current § 5.37(d)(3) provides an after-the-fact notice process if a national bank
The final rule makes these provisions applicable to Federal savings associations. However, a Federal savings association may not be eligible for after-the-fact notice if 12 U.S.C. 1828(m)(1) applies to the transaction. Twelve U.S.C. 1828(m)(1) requires a Federal savings association to file a 30-day prior notice when it establishes or acquires a subsidiary or when it conducts a new activity in a subsidiary. Thus, a Federal savings association would not be eligible for the after-the-fact notice process described in § 5.37(d)(3)(i) if it proposes to establish or acquire a subsidiary to make an investment in banking premises, or if investing in banking premises would be a new activity for such a subsidiary. In those circumstances, the Federal savings association is required to comply with the provisions of § 5.38 in the case of an operating subsidiary or § 5.59 in the case of a service corporation. Accordingly, the final rule reorganizes current § 5.37(d)(3) by redesignating it as § 5.37(d)(3)(i), General rule, and adding a new paragraph (d)(3)(ii), Exception, to describe the circumstances under which a Federal savings association is not eligible for the after-the-fact notice process and to identify the applicable requirements.
Furthermore, the final rule provides that Federal savings associations' investments in banking premises through a service corporation are not subject to the application and notice requirements of § 5.37(d); instead, a Federal savings association must comply with the requirements in proposed § 5.59. However, the institution must include the amount of the investment when calculating the quantitative limitations in paragraph (d). Therefore, the final rule redesignates current § 5.37(d)(4), Exceptions to rules of general applicability, as paragraph (d)(5), and adds a new paragraph (d)(4) to clarify the treatment of an investment in banking premises through a service corporation.
As indicated above, pursuant to 12 U.S.C. 29 and 371d, current § 5.37 provides that the quantitative limitations on a national bank's investment in banking premises are expressed as a percentage of “capital stock” or “capital and surplus.” Under § 160.37, the sole quantitative limit on a Federal savings association's investment in banking premises is based on “total capital.”
In the case of a Federal mutual savings association, which by definition does not issue stock, a limit based on capital stock will not work. However, we believe it is important, wherever possible, to apply consistent standards to national banks and Federal savings associations, both from a safety and soundness perspective and an administrative perspective. Accordingly, because a Federal mutual savings association's equity capital consists primarily of retained earnings, we will use retained earnings as a proxy for capital stock for purposes of the quantitative limitations on investments in banking premises by Federal mutual savings associations. This limitation based on retained earnings is not a significant change for a Federal mutual savings association because, generally, “total capital” of a Federal mutual savings association mostly consists of retained earnings. Moreover, a Federal mutual savings association that is CAMELS 1- or 2-rated and well capitalized will have a higher limit of 150 percent of retained earnings.
The proposed rule added a transition provision, § 5.37(e), to grandfather existing banking premises investments. However, as indicated above, § 7.1000(e), which contains the substantive authority for national banks and Federal savings associations to invest in banking premises, contains the identical transition provision. Section 5.37(e) is therefore unnecessary and the final rule does not include it.
Twelve CFR part 159 addresses subordinate organizations of Federal savings associations. This part covers both operating subsidiaries and service corporations of Federal savings associations. The OCC proposed to create a new § 5.38 to address only operating subsidiaries of Federal savings associations and to remove those provisions of part 159 that address Federal savings association operating subsidiaries.
In order to make the regulations applicable to Federal savings
New § 5.38(b) requires a Federal savings association, when required under section 18(m) of the FDI Act,
Section 159.3(a)(1) also provides that any finance subsidiary that existed on January 1, 1997, is deemed to be an operating subsidiary without further action by the savings association. The OCC is not including this provision in § 5.38 as it is not needed. This omission is not intended to be a change in substance.
Paragraph (c) of new § 5.38 addresses the scope of this section. This paragraph mirrors paragraph (c) of § 5.34, including the additional language currently contained in § 159.1(a) added to § 5.34(c) by this rulemaking, that permits the OCC to limit a Federal savings association's investment in an operating subsidiary or limit or refuse to permit any activities of an operating subsidiary for supervisory, legal, or safety and soundness reasons. The OCC did not receive any comments on this provision.
Paragraph (d) of new § 5.38 sets out definitions for “well capitalized” and “well managed,” which the OCC will use to determine if an application is eligible for expedited review by the OCC. These definitions are the same as those in § 5.34(d), and the OCC uses these terms as criteria to permit national banks to make an after-the-fact notice filing pursuant to § 5.34(e)(5). They are used similarly in § 5.38 to determine if an application by a Federal savings association is eligible for expedited review. The OCC did not receive any comments on this provision.
Like §§ 159.3(e)(1) and 5.34(e)(1)(i), paragraph (e)(1)(i) of new § 5.38 provides that a Federal savings association may conduct in an operating subsidiary activities that are permissible for the savings association to engage in directly. Section 5.38(e)(1) provides that before beginning business, an operating subsidiary must comply with other laws applicable to it, including applicable licensing or registration requirements. This requirement is not new for Federal savings associations. The final rule adds this language to clarify that compliance with § 5.38 and approval of an operating subsidiary by the OCC are not the only requirements that must be met. As indicated above, the final rule amends § 5.34(e) to also include this provision for national banks. The OCC did not receive any comments on § 5.38(e)(1).
Pursuant to § 159.3(c)(1), a Federal savings association must own, directly or indirectly, more than 50 percent of the voting shares of an operating subsidiary and no one else may exercise effective operating control. New § 5.38(e)(2) describes what entities are “qualifying subsidiaries” for purposes of § 5.38. We have revised this provision in the final rule to mirror revised § 5.34(e)(2). Unlike § 159.3(c)(1), the rule includes as a qualifying subsidiary one in which the savings association owns less than 50 percent of the voting shares. Specifically, under the final rule, a qualifying subsidiary is one in which: (1) The savings association has the ability to control the management and operations of the subsidiary and no other person or entity exercises effective operating control over the subsidiary or has the ability to influence the subsidiary's operations to an extent equal to or greater than the savings association; and (2) the savings association owns and controls more than 50 percent of the voting (or similar type of controlling) interest of the operating subsidiary, or the parent savings association otherwise controls the operating subsidiary and no other party controls a greater percentage of the voting (or similar type of controlling) interest of the operating subsidiary than the Federal savings association. In addition, as is currently the case under part 159, the operating subsidiary must be consolidated with the savings association under generally accepted accounting principles (GAAP). Section 5.38(e)(2)(iii), adapted from § 159.10, expressly requires the savings association to have reasonable policies and procedures to preserve the limited liability of the savings association and its operating subsidiaries. Furthermore, it clarifies that the requirement that the savings association must control the operating subsidiary does not mean they should be treated as a single entity. We note that § 5.38 does not contain the detailed requirements for this corporate separateness that are in § 159.10.
We received one comment relating to § 5.38(e)(2) that requested additional clarification on how Federal savings associations could “otherwise [control] the operating subsidiary.” Because this is the same standard that is applied to national banks, Federal savings associations can look to the applications of this provision with respect to national banks to better understand how this standard operates, and the OCC staff is available to assist with any questions. We do not believe a change in this provision is necessary and adopt it as proposed.
We also are making a clarifying change to § 5.38(e)(2). Section 159.3(e)(1) explicitly provides that a Federal savings association may hold another insured depository institution as an operating subsidiary. While this proposition remained the case under the proposed rule, it was not explicitly set out in the regulatory text. Upon further review, we believe the regulation should explicitly indicate this permissibility, even though we expect these transactions to be rare, and have added new paragraph (e)(2)(ii) to § 5.38 to state this.
Paragraph (e)(3) of new § 5.38 mirrors proposed § 5.34(e)(3). Similar to § 159.3(h)(1), paragraph (e)(3) generally provides that an operating subsidiary of a Federal savings association conducts activities pursuant to the same authorization, terms, and conditions that apply to the parent savings association, unless otherwise specifically provided by statute, regulation or published OCC policy. It also includes reference to the provisions in the Dodd-Frank Act regarding the application of state law, the subject of which is currently addressed in § 159.3(n)(1), and language to clarify that regulations or published OCC policy also may provide other instances in which different treatment of the operating subsidiary and the parent Federal savings association may occur in addition to those regarding the
Twelve U.S.C. 1467a(m)(5) governs consolidation of the assets of a subsidiary with those of the parent savings association for purposes of calculating portfolio assets and the qualified thrift lender test. New § 5.38(e)(4) addresses consolidation of figures and provides that the savings association and its operating subsidiaries shall be combined for purposes of applying statutory or regulatory limitations when the combination is needed to effect the intent of the statute or regulation. Section 5.38(e)(4) is consistent with § 159.3(i)(1), (j)(1), (k)(1), and (m)(1). The OCC did not receive any comments on this provision.
Section § 159.11 provides that when required by 12 U.S.C. 1828(m), Federal savings associations must file a notice at least 30 days prior to establishing or acquiring an operating subsidiary or conducting a new activity in an existing operating subsidiary. The OCC processes this notice in a manner similar to the OCC's expedited review for applications and notices of national banks.
The § 5.38 expedited review process operates much like the process in § 159.11. As indicated above, under § 159.11 all Federal savings associations that wish to establish or obtain an interest in an operating subsidiary file a notice with the OCC when required under 12 U.S.C. 1828(m). No further action is required unless the OCC notifies the savings association within 30 days that the notice presents supervisory concerns or raises significant issues of law or policy, in which case the savings association must receive the OCC's approval under standard treatment processing procedures under part 116. Under § 159.11, all filings begin and are processed in this manner. Under the § 5.38 expedited review process, only filings that meet the eligibility requirements can begin as an expedited review application. However, we do not believe this change will be significant for savings associations. A filing that does not meet the eligibility test under the final rule has a higher likelihood of presenting supervisory concerns or raising significant issues of law or policy that would require an application under part 159. The OCC did not receive any comments on this provision.
Paragraph (e)(5)(iii) of new § 5.38 provides that the rules of general applicability at 12 CFR 5.8 (requiring public notice), 5.10 (addressing public comments received), and 5.11 (addressing requests for hearings or other meetings) do not apply to § 5.38, but the OCC may determine that any of these rules apply if the OCC concludes that the application presents significant or novel policy, supervisory, or legal issues.
Paragraph (e)(5)(v) of § 5.38 sets out a list of activities that are eligible for expedited review. This list is based on the list of activities eligible for notice for national banks in § 5.34(e)(5)(v), but has been adapted for Federal savings associations by listing only those activities that have been approved for operating subsidiaries of Federal savings associations in the past.. The OCC did not receive any comments on this provision.
Section 159.3(p)(1) provides that a Federal savings association must consult with the appropriate OCC licensing office prior to redesignating a service corporation as an operating subsidiary. It also requires the Federal savings association to make available for examination adequate internal records demonstrating that the redesignated operating subsidiary meets all of the requirements for an operating subsidiary and that the board of directors has approved the redesignation. Paragraph (e)(5)(vi) of § 5.38 requires a Federal savings association to provide 30 days' prior notice to the OCC when the savings association wants to redesignate a service corporation as an operating subsidiary. The OCC did not receive any comments on this provision.
Paragraph (e)(5)(vii) of new § 5.38 mirrors § 5.34(e)(5)(vii) and provides that when a Federal savings association operating subsidiary wishes to act as a fiduciary, its savings association parent must have fiduciary powers and the operating subsidiary also must have its own fiduciary powers under the law applicable to the subsidiary. The operating subsidiary may not rely on the savings association's fiduciary powers. Further, this provision provides that when an operating subsidiary that exercises investment discretion on behalf of customers or provides investment advice for a fee is a
Paragraph (e)(5)(viii) of new § 5.38 provides that an OCC approval granted under § 5.38 expires within 12 months if a Federal savings association has not established or acquired the operating subsidiary or commenced the new activity in an existing operating subsidiary, unless the OCC shortens, or extends the time period. The final rule also adds this provision to § 5.34 for national banks. As previously indicated, this provision is similar to other provisions in part 5 regarding the expiration of an OCC approval. A commenter noted that this change would be a new requirement for Federal savings associations. The OCC does not believe this change is an entirely new requirement for Federal savings associations, because in a number of cases, the OTS imposed the requirement as a condition of approval of the formation of the operating subsidiary. Moreover, the OCC finds that setting a time limit for OCC approval is necessary to ensure that the approval reflects the current status of the applicant. Therefore, we are adopting the amendment as proposed.
Paragraph (e)(6) of new § 5.38 contains provisions regarding grandfathered Federal savings association operating subsidiaries. It is modeled on § 5.34(e)(6) and provides that, notwithstanding the requirements for a qualifying operating subsidiary in § 5.38(e)(2) and unless otherwise notified by the OCC with respect to a particular operating subsidiary, an operating subsidiary that a Federal savings association lawfully acquired or established before May 18, 2015 the date of
Paragraph (e)(7) of new § 5.38 addresses the issuance of securities by an operating subsidiary. It is based on portions of § 159.12(a) and (c). The OCC also did not receive any comments on this provision.
The proposed rule included a new requirement for Federal savings associations to file an annual report with the OCC on operating subsidiaries that do business directly with consumers in the United States and that are not functionally regulated. This proposal mirrored the requirement for national banks at § 5.34(e)(7); there is no similar provision in part 159. We received one comment on this proposed report. This commenter stated that this reporting requirement would impose a new compliance burden without sufficient analysis or justification. The OCC has reconsidered this proposed report in light of this comment and no longer believes it is necessary. Federal savings associations have fewer operating subsidiaries than national banks, and the OCC is able to determine operating subsidiary ownership by means that are less burdensome than an annual report, such as through the examination process. However, the OCC will continue to monitor this area to determine if such a report becomes necessary in the future.
Finally, a chart in § 159.3 provides a detailed side-by-side comparison of operating subsidiaries and service corporations. The final rule includes some of this information from this chart in various provisions of § 5.38, such as the specific items that are necessary to set out qualifying requirements and licensing requirements. Furthermore, § 5.38(e)(4), Consolidation of figures, covers provisions included in the chart at § 159.3(i)(1), (k)(1), (l)(1), and (m)(1).
Twelve CFR 5.40 addresses changes in location of a national bank's main office. Twelve CFR 145.91, 145.93 and 145.95 address changes in location of a Federal savings association's home office.
Pursuant to § 145.93(a), a Federal savings association must file an application or notice with the OCC and receive approval or non-objection prior to changing the permanent location of its home office or prior to establishing a new home office. However, § 145.93(b) provides that an application or notice is not required for a Federal savings association to: (i) Establish a drive-in or pedestrian office within 500 feet of a public entrance to its existing home office; (ii) make a short-distance relocation of its home office; or (iii) redesignate an existing branch office as a home office when redesignating the existing home office as a branch office. In addition, § 145.93(b) permits certain highly rated Federal savings associations to change the permanent location of their home office or establish a new home office if the associations meet certain requirements without filing a notice or application. Section 145.95 contains processing procedures that apply to the aforementioned transactions.
The final rule reorganizes § 5.40 slightly and applies it to Federal savings associations. It therefore discontinues the exceptions to filing applications or notices under § 145.93(b) related to main office locations, and replaces the applicable processing procedures contained in § 145.95 with those contained in 12 CFR part 5.
Section 5.40(b) sets out the licensing requirements for national banks to relocate their main office, and § 5.40(c) sets out the scope of the rule. Section 5.40(d)(1) provides that national banks may relocate their main office to an authorized branch location within the same city, town, or village limits by giving prior notice to the OCC, and § 5.40(d)(2) provides that national banks may relocate their main office to any other location by filing an application with the OCC. Section 5.40(d)(3) requires national banks to obtain OCC approval pursuant to the standards in § 5.30 in order to establish a branch at the site of a former main office. Section 5.40(d)(4) provides that an application submitted by an eligible national bank to move its main office to a location other than an authorized branch location will be approved by the OCC as of the 15th day after the close of the public comment period or the 45th day after the filing is received by the OCC, whichever is later, unless the OCC notifies the bank prior to that time that the filing is not eligible for expedited review, or the expedited review period is extended under § 5.13(a)(2). Section 5.40(d)(5) provides for exceptions to rules of general applicability in part 5 for relocations to an authorized branch location within the same city, town, or village limits. Finally, § 5.40(e) provides that an OCC approval of a main office relocation shall expire if the national bank has not opened its main office at the relocated site within 18 months of the date of the approval.
The final rule redesignates the scope section as § 5.40(b) and combines former paragraphs (b) and (d), which address licensing requirements and procedures, into a redesignated § 5.40(c). The final rule also applies these newly redesignated provisions to Federal savings associations. Redesignated § 5.40(c)(1) requires national banks and Federal savings associations to give prior notice to the OCC when relocating a main office or home office, as applicable, to an authorized branch location within city, town, or village limits. Redesignated § 5.40(c)(2)(i) requires national banks to submit an application to the appropriate OCC licensing office in order to relocate a main office to any location other than an authorized branch location in the city, town, or village in which the main office of the bank is located or to any other location within 30 miles of the limits of such city, town, or village, as provided by 12 U.S.C. 30.
Redesignated § 5.40(c)(2)(ii) requires a Federal savings association to submit an application to the appropriate OCC licensing office and obtain prior OCC approval to relocate its home office to any location other than an authorized branch location within the city, town, or village in which the home office of the savings association is located. As with a national bank, a Federal savings association relocating the home office outside the limits of its city, town, or village is required to amend its charter. The final rule adds clarifying language to indicate that the savings association must obtain shareholder approval for such relocation of its main office if so required by its charter. We note that, unlike national banks, this shareholder approval is not required by statute.
Redesignated § 5.40(c)(3) requires a national bank or Federal savings association to follow the provisions of § 5.30 or § 5.31, respectively, in order to establish a branch at the site of a former main office or home office. Redesignated § 5.40(c)(4) provides expedited review for applications submitted under paragraph (c)(2) (relocations of a main office or home office to any location other than an authorized branch location) for eligible Federal savings associations as well as eligible national banks. The final rule also revises the expedited review time for short-distance relocations of a main office or home office so that they are deemed approved 15 days after the close of the comment period or 30 days after the date the notice is filed, whichever is later. This change reflects the shorter 15-day comment period for short-distance relocations.
Redesignated § 5.40(c)(5) provides exceptions to the OCC's rules of general applicability in part 5 of the OCC's regulations for relocations of a main office or home office to an authorized branch location within city, town, or village limits under paragraph (c)(1) and applies these exceptions to Federal savings associations. Redesignated § 5.40(d) requires Federal savings associations, like national banks, to open a relocated home office within 18 months from the date of OCC approval, unless the OCC grants an extension. Under § 145.95(c), Federal savings associations currently must open or relocate a home office for which they have received approval or non-objection from the OCC within 12 months.
Sections 5.42 and 143.1 set forth standards and procedures for when a national bank or Federal savings association seeks to change its corporate title. Under § 5.42(c), a national bank may change its corporate title without prior notice to the OCC if the new title includes the word “national” and complies with other OCC guidance and Federal laws, including laws regarding false advertising and misuse of names. In addition, if the national bank's articles of association specify the corporate title, § 5.42(d)(2) requires the bank to amend the articles in accordance with 12 U.S.C. 21a.
Pursuant to § 143.1(b), a Federal savings association must provide the OCC with prior notice of a change in corporate title. If the OCC does not object within 30 days, the Federal savings association may change its title by amending its charter in accordance with the Federal mutual savings association or Federal stock association charter amendment regulatory procedures in §§ 5.21 or 5.22, respectively. There is no specific statute addressing Federal savings association charter amendments. In addition, § 143.1(a) prohibits a Federal savings association from adopting a title that misrepresents the nature of the institution or the services it offers.
The OCC proposed to amend § 5.42 to include Federal savings associations. The OCC did not receive any comments on § 5.42, and we adopt the amendments as proposed, with one clarifying change. The result of the final rule is to eliminate the advance notice requirement currently applicable to Federal savings association corporate title changes. Instead, Federal savings associations must promptly provide a notice to the appropriate OCC licensing office subsequent to any change in its corporate title. The OCC believes that an after-the-fact notice will provide the OCC with adequate information for regulatory purposes and will reduce burden on Federal savings associations without affecting safety and soundness.
The proposed rule did not incorporate a provision in § 143.1(a) that prohibits a Federal savings association from adopting a title that misrepresents the nature of the institution or the services it offers. The preamble to the proposed rule stated that this statement is implicit in the current national bank rule as well as the proposed rule for both national banks and Federal savings associations and therefore not necessary in the revised rule. However, to emphasize this prohibition, we have amended the final rule to include a statement that the new title must continue to be consistent with § 5.20(f)(2)(i)(F). This provision, added by this final rule, states that, in approving an application to establish a national bank or Federal savings association, the OCC must consider whether the proposed bank or savings association does not have a title that misrepresents the nature of the institution or the services it offers.
The OCC also is making a number of conforming edits. Specifically, the OCC is adding to § 5.42 a cross-reference to §§ 5.21(g) or 5.22(g), the regulatory charter amendment procedures that a Federal mutual savings association or Federal stock association must follow when amending its charter to reflect a corporate title change. This cross-reference simply transfers these requirements from the current Federal savings association rule to the integrated rule. In addition, the OCC is removing the word “Federal” in § 5.42(c)(1) to clarify that the new title must comply with all applicable laws, whether Federal or state.
Twelve CFR 5.46 sets out the OCC's rules for national bank changes in permanent capital. These rules implement statutory provisions that establish the processes and requirements for a national bank to increase or decrease its permanent capital (
The OCC has established a streamlined approval process for most increases in permanent capital by national banks. However, in certain cases, the OCC requires a full application and prior approval. These involve situations in which the OCC has supervisory concerns or the capital contribution is not in cash, thus raising issues of properly valuing the capital increase.
These statutes do not apply to Federal savings associations, and there are not comparable provisions in the HOLA requiring a savings association to receive prior approval for increases to permanent capital. Accordingly, we did not propose to add Federal savings associations to § 5.46. However, we proposed to add a new § 5.45 to require a Federal stock savings association to apply to the OCC and obtain prior approval in the same circumstances in which a national bank would be required to file a full application under § 5.46. Those circumstances are: (1) When the savings association is required to receive OCC approval pursuant to letter, order, directive, written agreement or otherwise, (2) when the savings association is selling common or preferred stock for consideration other than cash, or (3) when the savings association is receiving a material noncash contribution to capital surplus. We did not receive any comments on new § 5.45 and adopt it as proposed, with one technical correction to § 5.45(g)(5) to reference Federal savings associations.
New § 5.45 applies only to Federal stock savings associations. Federal mutual savings associations generally do not raise additional capital, other than through retained earnings, by methods comparable to Federal stock savings associations and national banks. The OCC will review any proposed capital increases at Federal mutual savings associations on a case-by-case basis.
As indicated above, 12 CFR 5.46 implements statutory provisions that establish the processes and requirements for a national bank to increase or decrease
The final rule also makes a small number of technical changes, including revising the section's title to indicate that it applies only to national banks.
Twelve U.S.C. 181 and 182 establish liquidation standards and procedures for national banks, including requirements for public notice of liquidation plans.
There are no statutory requirements similar to 12 U.S.C. 181 and 182 that apply to Federal savings associations. However, § 146.4 contains standards and procedures for a Federal savings
The OCC proposed to amend § 5.48 to incorporate certain provisions from § 146.4, to make § 5.48 applicable to both Federal savings associations and national banks, and to rescind § 146.4. The OCC did not receive any comments on these proposed changes and adopts them as proposed. These changes provide the OCC with additional methods to ensure the safety and soundness of national banks and Federal savings associations. These changes also streamline and improve the process for an OCC-regulated institution to liquidate and thus reduce regulatory burden for the institution.
The amendments result in changes to the liquidation procedures for both types of institutions. Specifically, under § 5.48(b), a Federal savings association must provide preliminary notice to the OCC when it is considering voluntary liquidation and again when its liquidation plan is definite. These requirements currently apply only to national banks. The OCC has found that these advance notices are helpful to the agency in ensuring that the liquidations are planned and executed in a safe and sound manner and in anticipating any issues that may arise as liquidation commences. Also under § 5.48(b), neither a national bank nor a Federal savings association may commence liquidation until the OCC has notified it that the agency does not object to the liquidation plan. Although this requirement is included only in the current Federal savings association regulation, it is consistent with the OCC's current supervisory practice for national banks. The OCC has found that it can identify and communicate supervisory concerns in a timely manner if it reviews liquidation plans prior to the commencement of liquidation and believes that it is appropriate to include this requirement in the final rule.
Section 5.48(d) of the final rule specifies the factors the OCC will consider when reviewing a proposed liquidation plan. Current § 5.48 does not provide any factors and § 146.4 states only that the OCC will approve the plan if it believes dissolution is advisable and the plan is best for all concerned. However, the OCC believes that the additional specificity provided by the final rule assists filers in the preparation of liquidation plans. Specifically, § 5.48(d)(1) in the final rule states that in reviewing a liquidation plan, the OCC will consider the purpose of the liquidation, its impact on the liquidating institution's safety and soundness, and its impact on the institution's depositors, other creditors, and customers. These factors are similar to those that the OCC currently considers when reviewing the merger of a national bank with a nonbank affiliate and substantial changes in the composition of a national bank's assets.
Section 5.48(d)(2) states that the OCC also will review a national bank's liquidation plan for compliance with 12 U.S.C. 181 and 182. These statutory requirements do not apply to Federal savings associations and the OCC does not believe it is necessary to extend them to these institutions by regulation. Finally, because of the unique structure of mutual savings associations, revised § 5.48(d)(3) states that the OCC will assess the advisability and effect of liquidation, as well as any alternatives to such action, when a mutual savings association plans to liquidate. As stated above, the OCC believes it must consider these factors in assessing a plan and that it is appropriate to provide affected parties with notice that the OCC will consider these factors.
Sections 5.48(e)(1) and (e)(2) describe the requirements to provide notice of consideration of a plan, to submit a plan, and to receive OCC non-objection before proceeding with a plan. As amended, § 5.48(e)(3) provides that a national bank or Federal savings association's board of directors and its shareholders (or, in the case of a Federal mutual savings association, directors and members) must vote to approve a voluntary liquidation plan. While this requirement is included in § 146.4, only shareholders are required to vote on a liquidation plan under § 5.48(e). The OCC believes that it is prudent and appropriate for a national bank's board of directors also to vote to liquidate because of its direct role in governing the operation of the institution. We also believe that the addition of this requirement reflects existing practices of boards of directors in voluntary liquidations.
Currently, only a national bank is required to notify the OCC of a vote to liquidate. The OCC believes that each institution that it regulates should inform the OCC of such a vote so that the OCC knows the status of the liquidation process. Therefore, the final rule amends § 5.48(e)(3)(A) to state that a national bank or Federal savings association must file a notice with the OCC once the specified parties vote to liquidate. In addition, revised § 5.48(e)(3)(A) requires the bank or savings association to provide notice to depositors, other known creditors, and known claimants. Currently, § 146.4 has no specific notice requirement and, as noted above, § 5.48(e)(1) simply directs a bank to publish notice in accordance with 12 U.S.C. 182. The OCC believes that the public will be best served when notice to depositors, creditors, and claimants is provided and, therefore, the OCC has included this notice in the final rule. Section 5.48(e)(3)(B) makes clear, however, that the statutory vote and notice requirements of 12 U.S.C. 181 and 182 are applicable only to national banks.
The final rule also extends to Federal savings associations the § 5.48(e)(4) and (e)(5) requirements to submit reports of condition and progress to the OCC. The OCC finds these reports useful in determining whether a national bank is following its plan of liquidation and conducting the liquidation in a safe and sound manner. The OCC believes that it is useful to have this same information for a liquidating Federal savings association. In addition, the OCC is requiring the liquidating agent or committee to submit to the OCC a report at the start of liquidation showing the bank's current balance sheet.
Revised § 5.48(e)(6) requires a national bank and Federal savings association to submit a final report of the liquidation to the OCC. This requirement currently exists only for Federal savings associations. However,
Sections 5.48(f) and 146.4(b) contain substantively similar provisions for expedited liquidations, and the OCC is consolidating the two provisions by applying § 5.48(f) to Federal stock savings associations. The result of the § 146.4(b) provision that excepts from the voluntary liquidation requirements the transfer of all of a Federal savings association's assets and liabilities to a bank in a business combination transaction remains in effect under § 5.48(f). Consistent with § 146.4(b), however, the final rule does not extend paragraph (f) to Federal mutual savings associations because of the unique ownership structure of those savings associations. The final rule also eliminates § 5.48(g), concerning a national bank as an acquirer of a liquidating national bank, because it does not impose requirements beyond those stated in current law. Finally, the OCC is making other technical changes to clarify § 5.48 where necessary.
Twelve CFR 5.50, Change in bank control; Reporting of stock loans, and 12 CFR part 174, Acquisition of control of Federal savings associations, set forth the policy and establish the process for acquisitions of control of national banks and Federal savings associations, respectively. These rules provide the framework for prospective acquirers when they seek to acquire control of a national bank or Federal savings association. Specifically, § 5.50 and part 174 describe the application process and the factors the OCC considers in reviewing the qualifications of the prospective acquirer. The section also addresses the factors that prospective acquirers should consider when exploring possible acquisitions.
While both § 5.50 and part 174 implement the Change in Bank Control Act
We proposed to amend 12 CFR 5.50 to make it applicable to both national banks and Federal savings associations and to rescind 12 CFR part 174. As discussed below, we are adopting these amendments as proposed. The amendments to § 5.50 make uniform the treatment of ownership interests held in all national banks and Federal savings associations. The amendments also give guidance to investors contemplating purchasing shares in a national bank or Federal savings association by providing information about what transactions are covered by the requirements and when a notice is necessary. In addition, the amendments clarify the OCC's supervisory expectations for these transactions.
Specifically, the final rule amends § 5.50 to include a number of the definitions and substantive provisions found in part 174. In some instances, these amendments codify substantive differences, as described below.
The final rule also amends the definition section in § 5.50 to add a number of definitions from part 174. These additional terms include “controlling shareholder,” “management official,” “company,” and several definitions that are necessary because we have added Federal savings associations to the rule. The final rule also replaces the definition of “acquisition” with that of “acquire” from part 174, which contains a more detailed description of transactions that are be covered by the rule. Specifically, the final rule defines “acquire” as obtaining ownership, control, power to vote, or sole power of disposition of stock, directly or indirectly or through one or more transactions or subsidiaries, through purchase, assignment, transfer, pledge, exchange, succession, or other disposition of voting stock. The final rule also includes specific examples. Finally, the final rule retains and applies to Federal savings associations the current definition of “voting securities,” which replaces the part 174 definition of “voting stock.” The change will affect the standard for convertible securities. Currently, part 174 includes as voting stock any security that, upon transfer or otherwise, is convertible into voting stock or exercisable to acquire voting stock where the holder of the convertible security has the preponderant economic risk in the underlying voting stock. Section 5.50, by contrast, defines voting securities to include securities that are immediately convertible into voting securities at the option of the owner or holder. The OCC believes the immediately convertible standard is simpler and easier to apply than the preponderant economic risk standard and provides an appropriate standard for the treatment of securities that are convertible into, or exchangeable for, voting securities.
One commenter requested that the Federal banking agencies make the definitions of “acting in concert” and “immediate family” uniform. However, this change is outside the scope of our licensing integration and would need to be undertaken on an interagency basis. We will consider this change when reviewing our rules for any possible joint rulemakings in response to other EGRPRA-related amendments.
The amendments to § 5.50 add several presumptions of concerted action. These additional presumptions provide guidance about how and when parties are presumed to be acting in concert for purposes of § 5.50. Currently, an acquirer that proposes to rebut control of a national bank cannot have a representative on the board of directors. The amended rule allows acquirers to rebut a presumption of control in cases where the acquirer will have a representative on the board of directors of the relevant national bank or Federal savings association. This amendment provides greater flexibility for acquirers; in addition, these changes help make the OCC's proposed change in control regulations consistent with the Federal Reserve System's regulations. Additionally, the final rule establishes specific limitations in the rebuttal of control context on the total equity invested, where an acquirer proposes to acquire more than fifteen percent of the national bank's or Federal savings association's voting stock. The final rule also removes certain of the rebuttable presumptions of control with respect to Federal savings associations that are currently set forth in § 174.4(b) and (c), and certain of the rebuttable presumptions of concerted action currently set forth in § 174.4(d).
The final rule does not include the detailed part 174 procedures for rebuttal of control and concerted action, retaining instead the procedures in § 5.50(f)(2)(vi) and applying them to Federal savings associations. The OCC believes that rebuttals are processed in a timely manner under § 5.50, and that the processing procedures established in part 174 are unnecessarily detailed. The final rule also excludes certain other provisions that are included in part 174. For instance, amended § 5.50 retains the current prior notice exemption provisions for acquisition of control as a result of testate or intestate succession. Thus, both national banks and Federal
Likewise, amended § 5.50 does not include the presumptive disqualifiers from part 174—a list of factors, which, if present, may show a lack of integrity or lack of financial capability to proceed with a proposed transaction. While the OCC believes that the presumptive disqualifiers provide helpful guidance regarding circumstances in which the OCC might consider a change of control notice to be objectionable under the standards for disapproval, the OCC does not consider it necessary to include these detailed provisions in the regulation. The OCC intends to amend the Change in Bank Control Act booklet of the Comptroller's Licensing Manual to address the situations described in the presumptive disqualifiers to the extent it considers appropriate. The amended regulation retains the standards for disapproval set forth in § 5.50(e)(5) and (6).
One commenter recommended that the OCC amend § 5.50 to include a process by which institutions can obtain a binding interpretation of what constitutes a change in control so that institutions will know when a filing is necessary. However, the OCC does not believe a rule change is necessary to provide this information. Institutions can, and often have, asked the OCC for a legal opinion or interpretation of the statute and regulation regarding whether a change in control filing is required based on the facts and circumstances presented. The OCC will continue to provide this information on a case-by-case basis.
Revised § 5.50 also does not include the requirement at § 174.5(a) that acquirers of beneficial ownership exceeding 10 percent of any class of stock of a Federal savings association that do not file a control notice or control rebuttal file a certification of ownership. The OCC believes that the regulatory burden of these filings exceeds the benefits derived from them. We did not receive any comments on this change.
One comment letter, as well as a commenter at the Dallas EGRPRA outreach meeting, noted that the change in control application process allows the regulator to keep the application review period open indefinitely by stating that the filing is not yet informationally complete. These commenters noted that this creates uncertainty, which has a cost to the parties and the affected institutions. One of these commenters requested that there be a definitive cutoff period. However, such a change should be made on an interagency basis. Therefore, we will consider this comment when we review our rules for any possible joint rulemakings in response to other EGRPRA-related amendments.
We received comments at the Los Angeles EGRPRA outreach meeting requesting that we should approve change of control applications within 30 days, rather than the 60-day period that is currently used. We do not agree that this statutory period should be reduced as 60 days is necessary for the OCC to complete our review of the filing.
Finally, the final rule eliminates Appendix A to 174—Rebuttal of Control Agreement. Our rules contain no similar model agreement for national banks, and we do not believe this model is necessary for Federal savings associations.
Twelve CFR 5.51, Changes in directors and senior executive officers, and 12 CFR part 163, subpart H, Notice of change of director or senior executive officer (§§ 163.550 through 163.590), implement 12 U.S.C. 1831i, which requires certain national banks and Federal savings associations to notify the OCC of a change in a director or senior executive officer. In order to make the treatment of national banks and Federal savings associations more consistent, we proposed to amend § 5.51 by adding language to make it applicable to both national banks and Federal savings associations, making various clarifying changes to the rule, and rescinding 12 CFR part 163, subpart H.
The final rule adopts these amendments as proposed. The resulting changes for both national banks and Federal savings associations, and the comments that we received in response to the proposal, are described below.
Section 5.51(c)(2) defines the term “national bank.” To provide parallel treatment, the final rule redesignates § 5.51(c)(2) as § 5.51(c)(3) and adds a definition for the term “Federal savings association” at § 5.51(c)(2).
“Senior executive officer” is defined in § 5.51(c)(3) for a national bank and in § 163.555 for a Federal savings association. In addition to minor variances in wording, the definitions have two primary differences. First, the definition in § 163.555 includes an individual serving as president of the institution, while § 5.51(c)(3) does not. To eliminate any ambiguity, the final rule adds “president” to the definition of senior executive officer and redesignates § 5.51(c)(3) as § 5.51(c)(4). Second, the definition in § 163.555 specifies that a “senior executive officer” also includes any other person identified by the OCC or the OTS in writing as an individual who exercises significant influence over, or participates in, major policymaking decisions, whether or not hired as an employee, while § 5.51(c)(3) does not specify that the OCC provide notice in writing. The final rule amends redesignated § 5.51(c)(4) to clarify that the notification must be in writing.
We received one comment on this definition, which requested that the Federal banking agencies adopt uniform definitions of “director and senior officers.” This change is outside the scope of our licensing integration rulemaking and would need to be undertaken on an interagency basis. We will consider this change when reviewing our rules for any possible joint rulemakings in response to other EGRPRA-related amendments.
Section 5.51(c)(4) defines the term “technically complete notice” for a national bank to mean a notice that includes all information required by § 5.51(e)(2), and includes information that may be requested by the OCC after the original submission of the notice. While § 163.555 does not include a
Redesignated § 5.51(c)(6) defines the term “technically complete notice date” to mean the date on which the OCC has received a technically complete notice for a national bank or Federal savings association. A Federal savings association should be aware of this definition because it triggers the 90-day time period for OCC review and decision discussed below. We did not receive any comments on this change.
“Troubled condition” is defined in § 5.51(c)(6) for a national bank and in § 163.555 for a Federal savings association. The definitions are substantially similar, and we believe the definition of troubled condition for a national bank encompasses all of the actions included in the definition for a Federal savings association. However, § 5.51(c)(6) provides that a national bank may be designated in troubled condition based on information obtained as a result of an examination, while § 163.555 provides that a Federal savings association may be designated in troubled condition based on information available to the OCC. The language in § 163.555 is broader and thus provides the OCC with greater ability to ensure the safety and soundness of the institutions we supervise. Accordingly, the final rule amends § 5.51(c)(6) by redesignating it § 5.51(c)(7) and by deleting the phrase “as a result of an examination” and replacing it with the phrase “based on information pertaining to such national bank or Federal savings association.” We did not receive any comments on this change.
The final rule applies the national bank standards to Federal savings associations requiring them to provide 90 days prior notice of a new director or senior executive officer if certain prerequisites are met. We believe this longer prior notice is appropriate for both banks and savings associations and conforms with the review of these notices under current OCC practice pursuant to the notice period extension. In addition, under the revised rule, only a Federal savings association may file the notice with the OCC; an individual seeking election to the board of directors of a Federal savings association who has not been nominated by management no longer is allowed to do so. We believe that conducting the necessary review only after an individual has been elected to the board of directors is a more judicious use of OCC resources. The final rule also requires that if the OCC determines that prior notice is required based on review of an agency plan under section 38 of the FDI Act, such determination must be in writing.
We received one comment on the required 90-day notice, which requested that the Federal banking agencies adopt a uniform 30-day prior notice requirement. However, we disagree with this comment. The OCC frequently needs 90 days to make its determination. Therefore, we are adopting the provisions as proposed.
The final rule also adds language to § 5.51(e)(2) to permit the OCC to require additional information and to require or accept other information in place of the information required by this paragraph. This language, which provides valuable flexibility to the OCC, is currently included in § 163.570(a)(3) and (b). In addition, the final rule adds language to § 5.51(e)(2) to clarify how to calculate the three-year exception for providing fingerprints.
We did not receive any comments on these changes.
The final rule also clarifies in § 5.51(e)(5) that the OCC will provide the notice of intent not to disapprove to the individual in addition to the institution. This change clarifies an ambiguity and makes this provision consistent with other provisions in § 5.51.
Finally, the final rule revises § 5.51(e)(5) to require that an individual must satisfy all applicable legal requirements to begin service as a director or senior executive officer after receiving a notice of intent not to disapprove.
We did not receive any comments on these changes.
First, under redesignated § 5.51(e)(6)(i)(B), the final rule clarifies that the OCC's finding in support of the waiver must be in writing, which is the OCC's current practice and which is included in the savings association rule.
Second, § 5.51(e)(6) provides that the OCC may waive the prior notice requirement if delay could harm the national bank or the public interest, or if other extraordinary circumstances justify waiving the requirement. Under § 163.590(a), the OCC may grant a waiver if delay would threaten the safety and soundness of the savings association, would not be in the public interest, or if there are other extraordinary circumstances. The final rule revises § 5.51(e)(6) to incorporate the safety and soundness standard and modifies it slightly from what is included in the savings association rule. Specifically, as amended, the OCC may grant a waiver if delay could adversely affect the safety and soundness of the national bank or Federal savings association, would not be in the public interest, or other extraordinary circumstances justify the waiver.
Third, both § 5.51(e)(6) and § 163.590 provide that if the OCC grants a waiver, the national bank must file the required notice within the time period specified in the waiver. The final rule amends redesignated § 5.51(e)(6)(i)(C) to clarify that such notices must be technically complete within this specified time period.
Fourth, the final rule amends redesignated § 5.51(e)(6)(i)(D) by changing the alternative outcomes that may occur after a waiver is granted and the proposed individual has assumed the position on an interim basis. Section 163.590 does not include similar provisions. Under the current bank rule, if a proposed director or senior executive officer who is serving under a waiver receives notice of disapproval, that person could continue to serve pending resolution of an appeal. We believe it is not in the best interest of the national bank or Federal savings association, and would be unsafe or unsound, to allow a disapproved individual to continue to serve pending an appeal. Therefore, amended § 5.51(e)(6)(i)(D)(
Section 5.51(e)(6) also provides that if the required notice is not filed within the time period specified in the waiver, the proposed individual must resign his or her position. Thereafter, the individual may assume the position on a permanent basis only after the national bank receives a notice of intent not to disapprove, the review period elapses, or a notice of disapproval has been overturned on appeal. Section 163.590 does not include a similar provision. The rule also provides that a waiver does not affect the OCC's authority to issue a notice of disapproval within 30 days of the expiration of such waiver. The final rule clarifies in § 5.51(e)(6)(i)(E) that the individual may assume the position under these circumstances only after a technically complete notice has been filed and all other applicable requirements are satisfied. Furthermore, the final rule specifies in § 5.51(e)(6)(i)(D)(
The final rule also clarifies in § 5.51(e)(6)(i)(D)(
Section 5.51(e)(6)(ii) prescribes the requirements for an automatic waiver of the prior notice requirement for a national bank, and § 163.590(b) is the corresponding provision for a Federal savings association. Specifically, § 5.51(e)(6)(ii) provides that if a new director not proposed by management is elected at a shareholder meeting, a waiver of the prior notice requirement is granted automatically and the elected individual may begin service as a director. However, the national bank must file the required notice as soon as practical and not later than seven days from the date the individual is notified of the election. This provision differs from § 163.590(b), which requires the individual, and not the institution, to file the notice. The final rule applies
The final rule adds new § 5.51(e)(7)(i) to clarify that an individual may assume the office on a permanent basis prior to expiration of the review period only if the OCC notifies the national bank or Federal savings association in writing that the OCC does not disapprove the proposed director or senior executive officer. As indicated above, this provision is included in § 163.585(b). The final rule also adds conforming language in § 5.51(e)(7)(i), redesignated as § 5.51(e)(7)(ii)(A), to provide that the OCC's notice of disapproval must be in writing. We note that redesignated § 5.51(e)(7)(ii)(B) specifically prohibits individuals from beginning service at a Federal savings association, in addition to at a national bank, if the OCC deems the application abandoned. While § 163.575 applies the concept of abandonment to a Federal savings association when a notice is not complete, § 163.585 does not specifically prohibit individuals from serving if the OCC deems the application abandoned. We did not receive any comments on this change.
We received one comment related to the appeal of notices of disapproval. That commenter requested that all of the Federal banking agencies' rules include a procedure for the appeal of the denial of a notice for a change in a director or senior executive officer. However, this change is unnecessary for the OCC rules because, as indicated above, the OCC's current national bank rule already includes an appeals process and the OCC in this final rule applies that process to Federal savings associations.
Twelve CFR 5.52 requires a national bank to submit a written notice to the OCC if its main office or post office box address changes. Twelve CFR 145.91(b) requires a Federal savings association to notify the appropriate OCC licensing office if it changes the permanent address of its home office, with certain exceptions. The rules are substantially similar. In order to consolidate these rules and make them consistent, the OCC proposed amending § 5.52 to make it applicable to both national banks and Federal savings associations and to rescind § 145.91(b). The OCC did not receive any comments on the proposed changes and adopt the amendments as proposed. As previously discussed in this preamble with respect to § 5.40, the OCC uses the term “main office” when discussing a national bank and “home office” when discussing a Federal savings association.
As noted above, the current national bank and Federal savings association notice requirements are subject to certain exceptions. Specifically, § 5.52(b) currently provides that a national bank is not required to provide notice of a main office or post office box address change if the change results from a transaction approved under part 5. Section 145.91(b) provides that a Federal savings association is not required to provide a change of address notice if the association submitted an application or notice to relocate or establish a new home or branch office pursuant to §§ 145.93 and 145.95. The OCC is making these provisions consistent by providing in the final rule that neither a national bank nor a Federal savings association is required to file a notice if it submitted a notice under § 5.40(b), which addresses a relocation of a main office or home office. In addition, a Federal savings association is not required to file a notice for a transaction approved under part 5, consistent with the current treatment for national banks.
We note that under current Federal savings association rules, highly rated savings associations are exempt from the §§ 145.93 and 145.95 provisions requiring an application or notice for the relocation or establishment of a new home or branch office, and therefore must file a change in address notice under 145.91. As a result of the integration of §§ 145.93 and 145.95 into § 5.40 with respect to a relocation of a home office and the concurrent removal of the exemption for highly rated savings associations, all savings associations file an application or notice for the relocation of a home office pursuant to § 5.40 and therefore are exempt from the change in address notice under § 5.52.
Finally, § 145.91(a) provides that all operations of a Federal savings association are subject to direction from the home office. There is no equivalent provision for national banks. The OCC believes this provision to be unnecessary and has not included it in revised § 5.52.
Twelve CFR 5.53 sets out the OCC's rules addressing changes in asset composition for national banks. It requires a national bank to apply to the OCC and obtain prior written approval before changing the composition of all, or substantially all, of its assets (1) through sales or other dispositions, or, (2) having sold or disposed of all or substantially all of its assets, through subsequent purchases or other acquisitions or other expansions of its operations. It contains exceptions for changes in asset composition that occur in connection with an enforcement action, a liquidation under 12 CFR 5.48, or a bank's ordinary and ongoing business of originating and securitizing loans.
Twelve CFR 163.22(c) and (h)(2) set out the OCC's rules addressing changes in asset composition, as well as several other types of changes in business, for Federal savings associations. Section 163.22(c) requires a Federal savings association to file either an expedited treatment notice (which is a form of application) or a standard treatment application, as specified in § 163.22(h)(2), for transactions described in § 163.22(c). Section 163.22(c)
The OCC proposed to combine these rules in an expanded § 5.53 by including some additional requirements for approval of asset transfers based on § 163.22(c).
Specifically, the final rule revises § 5.53(b), the scope section, to make it a single sentence and moves the extended description of covered transactions and exceptions into a new definition section. In § 5.53(c)(1)(i) of the definition section, the final rule amends an existing provision to clarify that a sale of all or substantially all assets in a series of transactions is covered, not only the sale of assets in a single transaction to one purchaser.
The final rule adds two provisions in the definition that will bring some of the asset transfers that are covered by § 163.22(c) within the scope of § 5.53. Section 163.22(c) includes all purchases or sales or other transfers of assets in bulk not made in the ordinary course of business, unless the transaction is a combination with, or the assumption of deposits from, another insured depository institution and is subject to the Bank Merger Act. The final rule adds some, but not all, such transfers to § 5.53. The existing national bank rule at § 5.53(b) and (c)(1)(ii) (which this rulemaking includes at § 5.53(c)(1)(ii)) includes asset purchases only after a prior asset sale. The final rule adds: (1) Any other asset purchases or other expansions of business that are part of a plan to increase the size of the bank or savings association by more than 25 percent in one year; and (2) any other material increase or decrease in the size of the national bank or Federal savings association or a material alteration in the composition of the types of assets or liabilities of the national bank or Federal savings association (including the entry or exit of business lines), on a case-by-case basis, as determined by the OCC.
The amended rule advises banks and savings associations that are contemplating transactions that may constitute a material change to consult the appropriate OCC supervisory office and sets out factors the OCC will use in determining whether an application is required. The intent of this provision is to establish a mechanism for requiring prior approval of significant changes when the OCC considers it necessary for supervisory reasons without establishing specific application criteria in the rule that would require banks and savings associations to file applications in other cases.
The net effect of these changes on national banks is to require applications for approval in more situations than under current § 5.53, but these additional situations likely already would involve discussions between the bank and its supervisory office. The net effect of these changes on Federal savings associations will be fewer situations in which applications for approval are required than are now required under current § 163.22(c).
Section 5.53 has three exceptions to the requirement to file an application. An application under § 5.53 is not required if the bank is making the asset change in response to direction from the OCC (
Section 5.53 currently does not have a provision granting expedited review of applications by eligible banks. Section 163.22(c) covers a broader range of transactions than § 5.53, and § 163.22(c) and (h)(2) provided for expedited treatment of bulk transfer filings if all the participating Federal savings associations meet the conditions for expedited treatment. The OCC believes the transactions covered under § 5.53 will always be significant enough that expedited review is not appropriate. Therefore, the final rule does not include expedited review in § 5.53.
Finally, the final rule revises the approval requirement provision in § 5.53(d)(1) to eliminate language that is now covered by the term “substantial asset change” and revises the manner in which the review factors are set out in § 5.53(d)(2)(i) to be the same as the similar factors in 12 CFR 5.33.
Subpart E of part 163, Capital distributions, sets forth the procedures and standards for all capital distributions made by a Federal savings association. Section 5.46, Changes in permanent capital, and subpart E of part 5, Payment of dividends, describe the procedures and standards relating to a transaction resulting in a change in a national bank's permanent capital and declaration and payment of national bank dividends, respectively. Although part 163, subpart E and § 5.46 and subpart E of part 5 cover similar transactions, they are structured differently and apply in different ways to Federal savings associations and national banks. Therefore, the OCC did not propose to integrate these rules. However, in order to include all OCC licensing-related rules in part 5, we proposed to move the provisions contained in subpart E of part 163 to part 5 as new 12 CFR 5.55, update the cross-references in §§ 192.510(c)(1) and 192.520(c) to reflect the new § 5.55, and to make other conforming changes.
In addition, we proposed including in new § 5.55 filing procedures based on provisions in part 5 regarding eligible
We proposed no further substantive changes to the capital distributions rule for Federal savings associations.
The OCC did not receive any comments on proposed § 5.55. Therefore, we adopt these amendments as proposed.
The OCC currently has separate rules for subordinated debt issued by national banks and Federal savings associations (12 CFR 5.47 and 12 CFR 163.81, respectively). Because of the differences and complexity of these rules, we did not propose to integrate them in this rulemaking at this time. However, in order to include all OCC licensing-related rules in part 5, we proposed to move § 163.81 to part 5 as new 12 CFR 5.56 and update the cross-reference in § 193.101(c) to reflect the new § 5.56.
In addition, we proposed to include in new § 5.56 filing procedures based on provisions in part 5 regarding eligible savings associations and expedited review that would result in filing requirements similar to those in § 163.81. However, as described in the discussion of the part 5, subpart A, definition of “eligible bank or eligible savings association” elsewhere in this preamble, because the eligibility requirements in part 5 and in the current Federal savings association rules are not identical, the part 5 eligibility requirements for expedited review could affect which savings associations qualify for the expedited process.
We did not propose any other substantive changes to rules on subordinated debt for Federal savings associations.
The OCC did not receive any comments on proposed § 5.56, and we adopt it as proposed, with the following technical amendments. First, the final rule replaces the term “non-objection,” a carryover from § 163.81, with the term “approval” in § 5.56, which is the term used in part 5.
Second, because the effective date for the Basel III revisions to our capital rules took effect on a staggered basis, the proposed rule contained provisions specifically applicable to non-advanced approaches Federal savings associations, which did not need to comply with the revised capital rules until January 1, 2015. However, as this final rule is effective after this date, these specific provisions are no longer necessary, and the final rule removes them.
National banks and Federal savings associations may make, directly or through an operating subsidiary, non-controlling investments (the national bank term) or pass-through investments (the Federal savings association term) in entities pursuant to their respective authority under 12 U.S.C. 24 (Seventh) (national banks) and 12 U.S.C. 1464(c) (Federal savings associations) and other statutes. Twelve CFR 5.36 describes the procedures for making these non-controlling investments for national banks. Twelve CFR 160.32(a) addresses the authority of Federal savings associations to make pass-through investments, while § 160.32(b) and (c) describe the procedures for making pass-through investments for Federal savings associations.
With respect to Federal savings associations, § 160.32(a) codifies the authority of Federal savings associations to make pass-through investments in certain entities that hold only assets and engage only in activities permissible for Federal savings associations. When making the pass-through investment, a Federal savings association must comply with all the statutes and regulations that would apply if it were engaging in the activity directly. For example, a Federal savings association must aggregate a proportionate share of its pass-through investment in an entity with the assets the Federal savings association holds directly in calculating its investment limits.
Section 160.32(b) provides that a Federal savings association may make certain qualifying pass-through investments without prior notice to the OCC (a “no-notice procedure”) in any entity that is a limited partnership, an open-ended mutual fund, a closed-end investment trust, a limited liability company, or an entity in which the Federal savings association is investing primarily to use the company's services. To qualify for this no-notice procedure, the investment must satisfy the conditions set forth in § 160.32(b): (1) the investment is not more than 15 percent of the association's total capital, (2) the book value of the association's aggregate pass-through investments does not exceed 50 percent of the association's total capital, (3) the investment does not give the association direct or indirect control of the company, and (4) the association's liability is limited to the amount of the investment. Section 160.32(c) requires a Federal savings association to provide the OCC with 30 days advance written notice prior to making any pass-through investment that does not meet these no-notice standards. The notice is a form of application and may become a standard application if the OCC notifies the filer that the investment presents supervisory, legal, or safety and soundness concerns. Section 160.32 does not specify the content of the notice or application, as does § 5.36.
The OCC proposed to add a new § 5.58 to part 5 to make its filing requirements for non-controlling and pass-through investments consistent. New § 5.58 is based on § 5.36 and subjects Federal savings association pass-through investments to filing requirements very similar to those applicable to national banks. The OCC also proposed amending § 160.32(b) to become a cross-reference referring Federal savings associations to the new rule and removing § 160.32(c). We retained § 160.32(a) without change.
We did not propose to add Federal savings associations to § 5.36 at this time because of differences in the respective statutory authorities, the regulations implementing them, and their interpretation.
The OCC did not receive any comments on new § 5.58 and the amendments to § 160.32, and we adopt these provisions as proposed, with one technical amendment that corrects the cross-reference in § 160.32. New § 5.58 is described below.
The scope section at § 5.58(b) refers to the authority of Federal savings associations to make equity investments, including pass-through investments, under 12 U.S.C. 1464 and other statutes. It also reflects that the authority to make a pass-through investment subject to §§ 5.58(b) and 160.32(a) is in addition to authorities to make investments subject to §§ 5.35, Bank service company investments; 5.37, Investment in bank premises; 5.38, Operating subsidiaries; and 5.59, Service corporations.
Paragraph (c) of § 5.58 requires a Federal savings association to file a notice or application for a pass-through investment when required by § 5.58. Section 5.58(d) contains definitions used in the section. The definitions are like those in § 5.36(c).
Paragraph (e) of § 5.58 mirrors § 5.36(e) and provides that a well capitalized, well managed Federal savings association may make certain pass-through investments, directly or through its operating subsidiary, in certain entities
If a Federal savings association is not well capitalized and well managed or if the activity conducted by the enterprise does not qualify for the after-the-fact notice procedure, the savings association is required to apply to the OCC and receive prior approval for the non-controlling investment under § 5.58(f), which mirrors § 5.36(f). The application must satisfy the other conditions enumerated in proposed § 5.58(e).
Section 5.58(g)(1), based on § 5.36(g)(1), provides for an expedited notice procedure for pass-through investments in entities holding assets in satisfaction of debts previously contracted. Under § 5.58(g)(2), based on § 5.36(g)(2), a Federal savings association is not required to file a notice or application under § 5.58 when acquiring a non-controlling investment in shares of a company through foreclosure or otherwise in good faith to compromise a doubtful claim, or in the ordinary course of collecting a debt previously contracted.
The requirement for Federal savings associations to follow filing requirements for pass-through investments similar to the filing requirements for national bank non-controlling investments does not affect the authority of Federal savings associations to make pass-through investments in entities that engage only in activities permissible for Federal savings associations. In addition, § 5.36 permits national banks to make non-controlling investments greater than 25 percent of the company's equity. Under § 5.58, Federal savings associations are permitted to do the same. Such an investment, however, constitutes “control” under the definition used in 12 U.S.C. 1828(m) that is applicable to Federal savings associations, which makes the enterprise a subsidiary of the association for purposes of section 1828(m) and triggers a filing with the OCC pursuant to section 1828(m).
Section 5.58 also changes the filing requirements for Federal savings associations' non-controlling investments. Some pass-through investments could meet the requirements for the after-the-fact notice procedure, and the Federal savings association would need to file only the after-the-fact notice, not an application required under § 160.32(c). However, some non-controlling investments that currently may qualify for the no-notice procedure under current § 160.32(b) will require a filing under § 5.58. In this regard, we understand the no-notice procedure under current § 160.32(b) was primarily used for investments in investment companies that held assets permissible for a Federal savings association to hold directly. Section 5.58(h) continues the no-notice procedure for such investments by Federal savings associations.
Section 5(c)(4)(B) of the HOLA
The OCC received one comment on new § 5.59, relating to the proposed annual reporting requirement. The OCC is amending its proposal to reflect this comment, and adopting the remaining provisions of § 5.59 as proposed. Revised § 5.59 and this comment are described below.
The current service corporation regulation provides that, when required by section 18(m) of the FDI Act, a Federal savings association must file a notice under 12 CFR part 116 at least 30 days before establishing or acquiring a subsidiary or engaging in a new activity in a subsidiary.
New § 5.59 amends the service corporation regulation to require that a Federal savings association file with the OCC before acquiring or establishing any service corporation, including one that it would not control. The OCC believes that this requirement is more consistent with the underlying statute, 12 U.S.C. 1828(m), and also is more prudent from a regulatory standpoint, because it enables the OCC to review the proposed establishment or acquisition of all service corporations, not merely ones the Federal savings association controls.
As a result of this amendment, some Federal savings associations may currently have non-controlling investments in service corporations, for which the Federal savings association did not submit a filing under 12 U.S.C. 1828(m), but for which, if the Federal savings association made the service corporation investment now, an application would be required. The OCC does not believe that an application should be required in order for a Federal savings association to retain such investments, many of which may have occurred several years ago, and did not intend this result in the proposed rule. Accordingly, the final rule includes new paragraph (e)(10), which provides that where a Federal savings association made a non-controlling investment in a service corporation before May 18, 2015, the date of
The current service corporation regulation uses the definition of “control” in 12 CFR part 174. Instead, the final rule states, in § 5.59(d)(1) that “control” has the meaning set forth in 12 U.S.C. 1841, the Bank Holding Company Act (BHC Act), and the Federal Reserve Board's regulations thereunder, at 12 CFR part 225. The term “control” as it relates to the filing requirement, is set forth in section 18(m)(1) of the FDI Act. The FDI Act defines control by cross-referencing the definition of the term in the BHC Act, at 12 U.S.C. 1841.
Section 5.59(e)(5) explicitly states that service corporations may be organized in any organizational form that provides the same protections as the corporate form of organization, including limited liability. This provision is consistent with the OTS's intent in promulgating 12 CFR part 559, the predecessor to part 159,
The current service corporation regulation provides that state law applies to a service corporation regardless of whether state law applies to the parent Federal savings association.
Twelve CFR 163.161, Management and financial policies, includes a requirement that service corporations must be well managed and operate safely and soundly. That section also provides that service corporations must pursue financial policies that are safe and consistent with the purposes of savings associations and that service corporations must maintain sufficient liquidity to ensure their safe and sound operation. These requirements addressing service corporations are more appropriately included in the service corporation regulations, and the final rule includes them at § 5.59(e)(7).
Section 5.59(e)(8) retains the current rule's provisions regarding separate
Section 5.59(f) retains the list of preapproved activities currently in § 159.4, with minor changes. Section 159.4(h) addresses both community development and charitable activities. Section 5.59(f) divides this paragraph into two separate provisions, one addressing community development (paragraph (f)(8)), and the other addressing charitable activities (paragraph (f)(9)). In addition, the final rule simplifies the community development provision by deleting the current list of examples of preapproved community development activities (which generally fall within the scope of the 12 CFR 24.3 description of public welfare investments) and by revising the provision to include a reference to community and economic development or public welfare investments that are permissible under part 24. We note that the final rule makes technical edits to this provision as proposed to more accurately describe the types of investments considered community development investments by specifically referencing economic development and public welfare investments and to clarify that investments in rural business companies are permissible if those companies are licensed by the U.S. Department of Agriculture.
Section 5.59(g) is based on § 159.5, which specifies the limitations for a Federal savings association's investments in service corporations. As in the current rule, § 5.59(g)(1) provides that a Federal savings association may invest up to three percent of assets in service corporations, and that any investment that would cause a savings association's investment in service corporations to exceed two percent of assets must serve primarily community, inner city, or community development purposes. The current rule specifies several types of investments as serving primarily community, inner city, or community development purposes. As in the proposed rule, the final rule deletes these examples, all of which are within the scope of § 24.6, and instead provides that such investments must be consistent with § 24.6. The final rule makes technical edits to this provision as proposed to more accurately describe the types of investments permissible above two percent of assets by adding investments with economic development or public welfare purposes.
Section 5.59(g)(2) specifies the limitations for a Federal savings association's loans to service corporations. As permitted by the HOLA, and as proposed, the final rule clarifies that these loans may be made to any service corporation, both consolidated and nonconsolidated, provided that loans to service corporations that are not GAAP-consolidated meet the lending limits in 12 CFR part 32. Section 159.5(b) does not specifically address consolidated service corporations.
Section 5.59(h)(1)(ii) includes an information requirement for service corporations with respect to insurance activities that is similar to the requirement for operating subsidiaries. This provision, which is intended to help the OCC carry out its statutory responsibilities,
Section 5.59(h)(2) revises the circumstances under which a Federal savings association receives expedited review for a service corporation filing. Currently, the criteria for expedited review are set forth in 12 CFR part 116. Pursuant to this rulemaking, a service corporation filing is eligible for expedited review if the savings association is “well capitalized” and “well managed,” and the service corporation engages only in one or more of the preapproved activities listed in § 5.59(f).
The proposed rule included a new requirement for Federal savings associations to file an annual report listing, for each service corporation subsidiary that is not functionally regulated and does business with consumers in the United States, certain information including the name and principal place of business of the service corporation, the lines of business in which the service corporation subsidiary engages directly with consumers, and the nature of the parent savings association's interest in the service corporation subsidiary. This proposal was mirrored on the requirement for national banks at § 5.34(e)(7); there is no similar provision in part 159. We received one comment on this proposed report. As with the proposed report for operating subsidiaries of Federal savings associations, in proposed § 5.38, this commenter stated that this reporting requirement would impose a new compliance burden without sufficient analysis or justification. As we have done with the reporting requirement in § 5.38, the OCC has reconsidered this proposed report in light of this comment and no longer believes it is necessary. Fewer Federal savings association service corporations exist than national bank operating subsidiaries, and the OCC is able to determine service corporation ownership by means that are less burdensome than an annual report, such as through the examination process. However, the OCC will continue to monitor this area to determine if such a report becomes necessary in the future.
As indicated above, the OCC proposed to make conforming and technical changes to parts 5, 7, and 34 and in various provisions of parts 100 through 199 to reflect the movement of the licensing rules for savings association rules to part 5, to adjust section titles, and to conform cross-references. The OCC did not receive any comments on these proposed changes, and we adopt the amendments as proposed with the exception of the changes proposed to § 5.47. Because the OCC's interim final rule amending § 5.47, issued subsequent to the Licensing proposed rule, includes these technical amendments, we have
Specifically, the final rule amends § 162.4, Audit of savings associations, to replace the cross-reference to the part 116 definition of composite ratings with a reference to the Uniform Financial Institutions Rating System, as referred to in other OCC rules. The final rule also amends part 192, Conversions from mutual to stock form, to replace references to part 116; part 152, Federal savings associations incorporation, organization and conversion; subpart E, Capital distributions, and subpart H, Notice of change in directors or senior executive officers, of part 163; and part 174, Change in control, with the appropriate cross-references in amended part 5. In addition, the final rule amends § 160.35, Adjustments to home loans, by replacing the reference to the standard treatment processing procedures of part 116 with a statement that Federal savings associations must apply for and receive the OCC's prior written approval. Furthermore, the final rule conforms the cross-references to part 159, Subordinate Organizations, and § 163.81, (subordinated debt) to proposed §§ 5.59 and 5.56, respectively.
Part 32, Lending limits, also references the expedited and standard application processing procedures of part 116 at § 32.3(d), Loans by savings associations to develop domestic residential housing units. The OCC proposed to replace this reference with a new paragraph that sets forth the application procedures for Federal savings associations for this activity. These procedures are based on those in § 32.7(b) with the addition of an expedited review process. With respect to state savings associations, the OCC proposed to replace the citation to the FDIC application processing rule with a more general reference to the rules and procedures established by the appropriate Federal banking agency. The OCC did not receive any comments on these proposed changes to part 32, and adopt them as proposed.
The OCC also proposed to amend §§ 5.39, Financial subsidiaries
Furthermore, the OCC proposed to amend §§ 100.1, Certain regulations superseded, and 100.2, Waiver authority, so that these provisions continue to apply to rules pertaining to savings associations that would be included in parts other than parts 100 through 199 of Title I of Chapter 12 of the Code of Federal Regulations as a result of this rulemaking. The OCC received no comments on these amendments and adopt them as proposed.
Finally, the final rule makes additional technical amendments to our rules not included in the proposed rule. Specifically, the final rule corrects inaccurate cross-references in paragraphs (d)(2) and (g)(1) of § 5.36 and in § 32.2(g)(1)(iv). The final rule also updates the OCC's telephone number in § 4.18(b) and footnote 2 to part 7. Furthermore, the final rule makes a technical amendment to the definition of “service corporation” in § 161.45 that replaces the current definition with a cross-reference to the definition included in § 5.59(d)(4), as added by this final rule.
The following is a summary of the substantive changes, listed by rule, contained in this final rule for national banks. This summary is provided for reader reference only; it does not take the place of the actual regulatory text of the final rule.
• To qualify for expedited review as an “eligible bank,” a national bank will be required to have a consumer compliance rating of 1 or 2 under the Uniform Interagency Consumer Compliance Rating System. Currently, a bank's consumer compliance rating is not a factor in the requirements for eligibility; however, § 5.13(a)(2) currently permits the OCC to remove a filing from expedited review if it raises certain issues, including any compliance concerns.
• A national bank will be required to publish its public notice of a filing in English and, if the OCC determines necessary, also in other languages. Currently, the rules do not specify the language in which the notice must be published.
• In addition to what is currently required, a public notice related to a national bank filing will be required to state: (1) the name of the institution that is the subject of the filing, (2) that the public portion of the filing is available on request, and (3) the address of the applicant.
• The OCC, at its discretion, can require an applicant to publish a new public notice if: (1) The applicant submits either a revised filing or new or additional information related to a filing, (2) there is a major issue of law or a change in circumstances arises after a filing, or (3) the agency determines that a new public notice is appropriate. (Although this is not specifically permitted under current rules, this has been the practice of the OCC.)
• When computing time for national bank filings, the day of the filing will no longer be included and the time period will no longer end on a Saturday, Sunday, or Federal holiday but will end on the next day that is not a Saturday, Sunday or Federal holiday.
• National banks will be prohibited by regulation from adopting a title that misrepresents the nature of the institution or the services it offers. This reflects current practice.
• National banks will be required to sell all securities of a particular class in an initial offering at the same price.
• In the event the organization of a national bank is not completed, the organizers will be required to return all cash collected on subscriptions.
• The OCC charter approval may include a condition that the OCC will review proposed directors and officers for more than two years after the bank commences business. The regulation currently says two years, but a longer time is sometimes imposed in practice.
• Expedited OCC review will be available for an application to establish a full-service national bank filed by a bank holding company or savings and loan holding company only when the lead depository institution is an eligible national bank or eligible Federal savings association. Currently, the lead depository institution can be an eligible state institution.
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○ An institution seeking to convert to a national bank charter will be required by regulation to obtain all necessary regulatory and shareholder approvals. (OCC policy currently requires these approvals.)
○ The application must:
Identify bank service company investments and other equity investments, in addition to subsidiaries. (This requirement reflects current practice.)
Include a business plan if the converting institution has been operating for less than three years, plans to make significant changes to its business after the conversion, or at the request of the OCC. (The OCC currently requests this information on a case-by-case basis.)
Include information about enforcement actions and other supervisory criticisms and the applicant's analysis of whether conversion is permissible under 12 U.S.C. 35, especially the provisions added to section 35 by section 612 of the Dodd-Frank Act.
○ The OCC may permit a converted national bank to retain nonconforming activities of a state bank or stock state savings association and nonconforming assets or activities of a Federal stock savings association for a transition period after conversion. (This regulatory change reflects current OCC practice.) The regulation now provides that the OCC may only permit the retention of nonconforming assets of a converting state bank, subject to requirements in 12 U.S.C. 35.
○ Expedited OCC review will be available only for conversion applications by Federal savings associations because they are institutions the OCC already regulates. Expedited review will no longer be available for state-chartered institutions. The time for expedited review is extended from 30 to 60 days.
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○ A national bank converting to a Federal savings association no longer is required to file a notice with the OCC as well as a separate application. Information included in this former notice instead will be included in the conversion-in application pursuant to § 5.23.
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○ As required by section 612 of the Dodd-Frank Act, a national bank must include a copy of its conversion application filed with the state regulator to which it is applying for approval to convert in its notice to the OCC to convert, and it must send a copy of the application to the Federal banking agency that will become its appropriate Federal banking agency after the conversion.
○ It must also include a showing of its compliance with applicable requirements for converting.
• When reviewing an application to exercise fiduciary powers, the OCC will by regulation consider the bank's financial condition and capital adequacy, the character and ability of proposed trust management, the adequacy of any proposed business plan, and the needs of the community served. (Some of these factors are statutory and all reflect current OCC practice.)
• A national bank that has not conducted previously approved fiduciary powers for 18 consecutive months will be required to provide a notice to the OCC 60 days in advance of commencing the activities.
• A national bank that has received approval from the OCC to exercise limited fiduciary powers and desires to exercise full fiduciary powers will be required to apply to the OCC. (This requirement reflects current OCC practice.)
• A drive-in or pedestrian facility located within 500 feet of a branch will always be an extension of the branch, not a separate branch. Currently, this result depends on a case-by-case analysis.
• Under the expedited approval process, short-distance relocations of branches will be deemed approved 15 days after the close of the comment period or 30 days after the date the notice is filed, whichever is later. Currently, short-distance relocations are deemed approved 15 days after the close of the comment period or 45 days after the date the notice is filed, whichever is later.
• A national bank will not be required to comply with the public notice, public availability, and hearing requirements of part 5, subpart A (12 CFR 5.8, 5.9, and 5.11) for an application to reorganize to become a subsidiary of a bank holding company or a company that will, upon consummation of such reorganization, become a bank holding company unless the OCC concludes that an application presents significant and novel policy, supervisory, or other legal issues. Currently, such applications are subject to these subpart A requirements.
• An application to the OCC will be required for the assumption of deposit liabilities or other liabilities from a credit union or any other institution that is not FDIC-insured that will become deposits at the assuming national bank.
• In the application for a business combination, national banks will be required to identify a financial subsidiary investment, bank service company investment, service corporation investment, and other equity investment in addition to the current requirement to identify subsidiaries and provide an analysis of the permissibility for the national bank to hold the subsidiary or investment. This regulatory change reflects current practice.
• If the applicant intends to exercise fiduciary powers after the combination and requires OCC approval for such powers, the applicant will be required to include in the business combination application the information required in § 5.26 for a request for fiduciary powers. This regulatory change reflects current practice.
• Filings in which a national bank is the target company and will not be the resulting institution will no longer be exempt from §§ 5.2 and 5.5. Section 5.2, Rules of general applicability, provides that the OCC may adopt different procedures for particular filings, in exceptional circumstances or for unusual transactions, and that the OCC permits electronic filing. Section 5.5 provides that an applicant must pay the applicable filing fee, if any.
• If there are dissenting shareholders in a merger or consolidation between a national bank and Federal savings association, the OCC will conduct an appraisal of dissenters' shares of stock according to the statutory dissenters' appraisal processes that apply to mergers between national banks and state banks. Under the current rule, the OCC may conduct such an appraisal if all the parties agree.
• The OCC will have the authority to apportion costs for the dissenters' rights process for transactions to which 12 U.S.C. 214a or 215 and 215a are not applicable. (These statutes require the bank to bear all costs.) Under the current rule, in transactions that are not subject to those statutes, the parties must agree how costs are to be divided.
• A national bank's consolidation or merger agreement will be required to address the effect upon, and the terms of the assumption of, any liquidation account of any participating institution by the resulting institution. Although not currently in § 5.33, a resulting national bank in such transactions is required to establish and maintain a liquidation account, as discussed in the Comptroller's Licensing Manual.
• The national bank applicant in a consolidation or merger will be required to submit information showing that all steps needed to complete the transaction have been met and to notify the OCC of the planned consummation date. The OCC will then issue a certification letter documenting that the consolidation or merger occurred and specifying the effective date. This process reflects current OCC practice for national banks.
• The OCC's approval of a transaction under § 5.33 will expire in six months instead of 12 months; the OCC could extend this six-month period.
• A national bank that will not be the resulting bank in a merger or consolidation with another national bank will be required to file a notice to the OCC under § 5.33(k). (This notice is discussed in the next item.)
• When a national bank is consolidating or merging with a Federal savings association or a state chartered institution or credit union and the national bank is not the resulting institution, it will be required to include more information in the notice than currently required in § 5.33. This additional information includes a short description of the transaction or a copy of the filing made by the acquiring institution to its regulators for approval of the transaction and information showing the target national bank or Federal savings association has complied with the requirements to engage in the transaction (
• If a consolidation or merger of a national bank in which the national bank is not the resulting institution has not occurred within six months after the OCC's receipt of the notice of the transaction, the bank will be required to submit a new notice with the OCC.
• Before beginning business, an operating subsidiary will be required to comply with other laws applicable to it, including applicable licensing or registration requirements. This change codifies current OCC policy.
• The final rule makes the following changes regarding a national bank's control of an operating subsidiary:
○ Where a national bank has the ability to control the management and operations of an operating subsidiary, no other person or entity can exercise effective operating control over the subsidiary or have the ability to influence the subsidiary's operations to an extent equal to or greater than that of the bank. This change codifies current OCC policy.
○ Where a bank owns less than 50 percent of an operating subsidiary (but still controls it), no other party could own a greater percentage than the bank. This change codifies current OCC policy.
• A national bank must have reasonable policies and procedures to preserve the limited liability of the bank and its operating subsidiaries.
• Adequately capitalized banks will no longer be exempt from the application or notice requirements when acquiring or establishing an operating subsidiary or performing a new activity in an existing operating subsidiary when the activities of the new subsidiary are limited to those previously reported to the OCC in connection with a prior operating subsidiary and certain other requirements are met.
• If a national bank operating subsidiary wishes to act as a fiduciary, its national bank parent will be required to have fiduciary powers and the operating subsidiary also must have its own fiduciary powers under the law applicable to the subsidiary. The operating subsidiary no longer may rely on the national bank's fiduciary powers, except when the subsidiary exercises investment discretion on behalf of customers or provides investment advice for a fee as a registered investment adviser. This change codifies longstanding OCC practice.
• OCC approvals granted under § 5.34 expire within 12 months if a national bank has not established or acquired the operating subsidiary or commenced the new activity in an existing operating subsidiary, unless the OCC shortens or extends the time period.
• To invest in a bank service company, a national bank will be required to file a prior notice for OCC approval through an expedited review process, under which the notice will be deemed approved on the 30th day after filing unless the OCC notifies otherwise. Under the current rule, a national bank files an after-the-fact notice with no requirement for OCC approval before the bank makes the investment, if specified eligibility conditions are met.
• No substantive changes.
• No substantive changes.
• Under the expedited approval process, short-distance relocations of main offices will be deemed approved 15 days after the close of the comment period or 30 days after the date the notice is filed, whichever is later. Currently, short-distance relocations are deemed approved 15 days after the close of the comment period or 45 days after the date the notice is filed, whichever is later.
• No substantive changes.
• No substantive changes.
• The following provisions in the final rule codify existing OCC or national bank practice:
○ A national bank may not commence liquidation until the OCC has notified it that the agency does not object to the liquidation plan.
○ A national bank's board of directors, in addition to its shareholders, must vote to approve a voluntary liquidation plan.
○ A national bank must provide notice of the liquidation to depositors, other known creditors, and known claimants in addition to the current requirement to publish notice in accordance with 12 U.S.C. 182.
○ The national bank's liquidating agent or committee must submit to the OCC a report at the start of liquidation showing the bank's current balance sheet and a final report of the liquidation.
• The final rule adds several presumptions of concerted action. These additional presumptions provide clarity and guidance about how and when parties are presumed to be acting in concert for purposes of § 5.50.
• Acquirers will be permitted to rebut a presumption of control in cases where
• The final rule establishes specific limitations, in the rebuttal of control context, on the total equity invested, where an acquirer proposes to acquire more than fifteen percent of the national bank's voting stock.
• An advisory director of a national bank who may vote on matters before, or provides more than general advice to, any committee of the board of directors, in addition to the board itself, will be subject to the requirements of § 5.51.
• The notice of a change in directors or senior executive officers for a national bank will need to include financial information on the individual, except when the OCC determines in writing that such information is not required.
• If the OCC requests additional information regarding the notice, a national bank that cannot provide the requested information within the time specified by the OCC may request additional time to provide the information.
• An individual who is serving on an interim basis pursuant to an OCC-granted waiver and receives a notice of disapproval will be required to resign immediately from the board, and will be able to assume the position on a permanent basis only if the notice of disapproval is reversed on appeal and all other applicable legal requirements are satisfied. Currently, the individual may continue on the board pending resolution of an appeal.
• A national bank will not be required to file a notice of a change in the permanent address of its home office if it submitted a notice under § 5.40(b), Relocation of a main office to a branch location in the same city, town or village.
• With regard to a change in asset composition, the national bank rule requires approval of only the sale of all or substantially all of a bank's assets, and the subsequent purchase of assets or expansion of operations after such a sale. Under the final rule, the following additional transactions require approval under § 5.53:
○ Any other asset purchases or other expansions of business that are part of a plan to increase the size of the bank by more than 25 percent in one year.
○ As determined by the OCC on a case-by-case basis, any other material increase or decrease in the size of the bank or a material alteration in the composition of the types of its assets or liabilities (including the entry or exit of business lines). The OCC will consider the size and nature of the transaction and the condition of the institutions in determining whether to require an application and believes the additional situations in which the OCC will require an application likely already involve discussions between the bank and its appropriate supervisory office.
• The OCC will need to approve a bank's plan of voluntary liquidation in order for asset changes that are part of such liquidation to be exempt from the approval requirements of § 5.53. (The OCC also is amending the regulation governing liquidations, § 5.48, to require OCC approval of the plan of liquidation.)
• Asset changes that are subject to OCC approval under another application to the OCC will specifically be exempt from the approval requirements of § 5.53. This exception is now only implied.
The following is a summary of the substantive changes contained in this final rule, listed by revised rule, for Federal savings associations. This summary is provided for reader reference only; it does not take the place of the actual regulatory text of the final rule.
• As a result of removing 12 CFR part 116 and applying 12 CFR part 5, subpart A, Federal savings associations will need to follow different procedural and processing provisions. While many of the underlying processes are similar, minor variations and different terminology is sometimes used. Federal savings associations will need to adjust to these variations and differences.
• Adequately capitalized Federal savings associations will no longer qualify for expedited treatment; only well capitalized institutions will be eligible.
• A Federal savings association will no longer have to publish a public notice within the seven days before a filing date but may publish as soon as practicable before or after filing, unless otherwise required.
• In addition to what is currently required, a public notice related to a Federal savings association filing will have to state that a filing is being made and the date of the filing.
• A Federal savings association can publish a single public notice for multiple transactions or a single notice that will comply with the notice requirement of both the OCC and another Federal agency, if accepted by the OCC. (Although this is not specifically permitted under current rules, this has been an accepted practice for Federal savings association filings.)
• Federal savings associations will obtain from the OCC the public comments made in response to a filing's public notice. Currently, the commenter is required to send comments directly to the institution.
• All Federal savings associations:
○ The majority of a de novo savings association's board of directors will no longer be required to be representative of the state in which the association is located.
○ A savings association's board of directors no longer will be required to annually elect a chairman of the board from among its members and designate the chairman of the board, when present, to preside over meetings.
○ An application to charter a Federal savings association will be subject to the same two-part approval process used for
○ Expedited OCC review will be available for an application to establish a full-service Federal savings association filed by a bank holding company or savings and loan holding company when the lead depository institution is an eligible national bank or eligible Federal savings association. The current regulations for chartering a
○ The OCC's preliminary approval of an application for a new Federal savings association will expire if the savings association has not raised the required capital within 12 months or has not commenced business within 18 months. Under current rules, a Federal savings association's charter becomes void if organization is not completed within six months after approval.
○ In the
• Federal Stock Savings Associations:
○ A Federal stock savings associations no longer will be required to cause a true copy of its charter and bylaws to be available to accountholders at all times in each office of the savings association, or to deliver to any accountholders a copy of such charter and bylaws or amendments upon request.
○ The requirements for adopting and filing Federal stock savings association bylaws will no longer include the requirements that the adoption of bylaws be by the board of directors at its first organizational meeting.
○ Shareholder meetings no longer will be required to be held in the state in which the association has its principal place of business.
○ Staggered terms for certain directors will no longer be specified.
○ Stock certificates of a Federal savings association will no longer be required to be signed by the chief executive officer or by any other officer of the association authorized by the board of directors, attested by the secretary or an assistant secretary, and sealed with the corporate seal or a facsimile thereof. Furthermore, each certificate for shares of capital will not be required to be consecutively numbered or otherwise identified.
• Federal Mutual Savings Associations:
○ Federal mutual savings association bylaws no longer will be required to provide some of the language or requirements specified in current § 144.5(b) regarding aspects of: the location of and notices for the annual meeting of members; reporting requirements at the annual meeting; record dates; proxy voting; annual meeting governance; duties of officers and agents of the association; director election and resignation; executive committees; director, officer and employee compensation and removal; and age limits for directors.
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○ The applicant will no longer be required to publish a public notice of the application, and the application will no longer be available for public inspection, unless specifically required by the OCC.
○ An applicant that does not meet the qualified thrift lender test will be required to include in its application a plan for achieving compliance and a request for an exception. This is agency practice but is not expressly mentioned in the regulation.
○ Many details of the application process will no longer be included in the regulations. Instead, this information will be found in the Comptroller's Licensing Manual and other OCC guidance.
○ The applicant will be required to include in its conversion application information about enforcement actions and other supervisory criticisms and its analysis of whether conversion is permissible under 12 U.S.C. 35, especially the provisions added to section 35 by section 612 of the Dodd-Frank Act.
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○ A Federal savings association converting from its charter to a national bank no longer must file a notice to convert out as well as a separate application. Instead, information formerly included in this notice will be included in the conversion-in application pursuant to § 5.24.
○ As required by section 612 of the Dodd-Frank Act, a Federal savings association must include a copy of its conversion application filed with the state regulator to which it is applying for approval to convert in its notice to the OCC, and it must file a copy of its conversion application with the Federal banking agency that will become its appropriate Federal banking agency after the conversion.
○ The application must also include a showing of its compliance with applicable requirements for converting.
• The time period that triggers the need to re-notify the agency before beginning to exercise previously approved fiduciary powers that have not been exercised is shortened from 5 years to 18 months.
• The trigger for requiring a new application for a Federal savings association will be whether the original approval for fiduciary activities is for limited or full fiduciary powers. Under the current rule, the trigger for a new application is whether the activity is “materially different” from what had been approved.
• Eligible Federal savings associations will receive expedited review of applications for fiduciary powers.
• Only well capitalized Federal savings associations could be “eligible savings associations” as defined in part 5, and therefore exempt from the branch application requirement. Currently both well and adequately capitalized Federal savings associations are eligible for expedited treatment and therefore can be exempt from this requirement.
• A Federal savings association must obtain OCC approval in order to establish a branch at the site of a former home office unless the branch establishment meets one of the exceptions in § 5.31. Under the current rule, no notice or application is required in all cases of home office and branch office re-designations.
• Highly rated Federal savings associations not required to file a branch application must file a notice with the OCC within 10 days after the opening of the branch. This is a new requirement for Federal savings associations.
• The OCC's approval of a branch expires after 18 months, unless the OCC grants an extension. Under the current rule, OCC approval expires after 12 months.
• A state and Federal savings association must file an application with the OCC to establish or move a branch in the District of Columbia or move its principal office in the District of Columbia, pursuant to statutory requirements.
• A Federal savings association may acquire all or substantially all of the assets, or to assume all or substantially all of the liabilities, of nonbank affiliates, or any other company that is not a depository institution, in addition to credit unions. Currently, such acquisitions are limited to banks, savings associations, and credit unions.
• In the factors the OCC considers in reviewing a business combination, the factor covering the fairness of the transaction, equitable treatment, and disclosure is replaced by a factor
• In the application for a business combination, Federal savings associations must identify a financial subsidiary investment, bank service company investment, service corporation investment, and other equity investment in addition to the current requirement to identify subsidiaries and provide an analysis of the permissibility for the Federal savings association to hold the subsidiary or investment. This requirement reflects current practice.
• If the applicant intends to exercise fiduciary powers after the combination and requires OCC approval for such powers, the applicant must include in the business combination application the information required in § 5.26 for a request for fiduciary powers. This requirement reflects current practice.
• The OCC's approval of a transaction expires in six months; the OCC could extend this six-month period. Under current OCC practice, transactions not involving an interim association must be consummated in 120 days.
• A Federal savings association must publish an initial public notice and two other public notices during the standard 30-day public comment period. Currently, § 163.22(e)(1)(i) requires an initial publication and then publication on a weekly basis during the public comment period.
• The statutory provisions governing national bank dissenters' rights in 12 U.S.C. 215 and 215a apply to transactions in which a Federal savings association is merging or consolidating into a national bank, rather than the regulatory dissenters' rights provision in 12 CFR 152.14, with one exception—the final rule includes authority for the OCC to apportion costs for the dissenters' rights process.
• In consolidation or merger of a state bank, state savings association, state trust company or a credit union into a Federal savings association, the institution must follow the procedures and dissenters' rights process set out for such transactions in the law of the state or other jurisdiction under which it is organized.
• For consolidations or mergers of a Federal stock savings association into a another Federal savings association, the plan of merger or consolidation must provide the manner of disposing of the shares of the resulting Federal savings association not taken by dissenting shareholders. Under § 152.14(c)(11), such shares have the status of authorized and unissued shares of the resulting association. The plan of merger or consolidation could still provide such status for these shares, but under the final rule such status no longer is mandatory.
• A consolidation or merger of a stock Federal savings association into an uninsured bank, savings association, or trust company or into a credit union, or a consolidation or merger of a mutual Federal savings association into an uninsured bank, savings association, or trust company, requires only a notice to the OCC, not application and approval as required under § 163.22(c).
• Federal savings association applications for business reorganizations (defined in § 5.33(d)(3)) and streamlined applications (described in § 5.33(j)) that meet the requirements are eligible for expedited review, under which an application is deemed approved as of the later of the 45th day after the application was filed or the 15th day after the close of the comment period, unless the OCC notifies the applicant that the application is not eligible for expedited review or the expedited review process is extended. This process replaces the automatic approval provision in § 163.22(f), under which an application is deemed to be approved automatically 30 days after the OCC sends the applicant a written notice that the application is complete.
○ The size-based limit for expedited review of a business reorganization or streamlined application included in the final rule is less restrictive than the criteria for automatic approval under the current savings association rule, 12 CFR 163.22(f), which provides that an application does not qualify for the automatic approval process if the acquiring institution has assets of $1 billion or more and proposes to acquire assets of $1 billion or more. To qualify for expedited review under the final rule, business reorganizations are not limited by size and instead are limited based on the relative size of the acquiring institution and the assets to be acquired but do not have a fixed maximum dollar amount limit on the size.
○ The expedited procedures in the final rule do not include competitive impact thresholds as a disqualifier, as in the current savings association rule.
○ However, as in the current savings association rule, an applicant does not qualify for a streamlined business combination application if the transaction is part of a mutual to stock conversion under 12 CFR part 192.
• Federal savings associations will no longer be required by regulation to meet the requirements for Federal Home Loan Bank membership, as membership in a Federal Home Loan Bank is no longer mandatory.
• The approval of a board of directors of a business combination involving a Federal stock savings association is reduced from two-thirds to a majority of the directors.
• For a Federal stock savings association, the execution and filing of Articles of Combination as the method of documenting shareholder approval of the combination, consummation of the combination, and its effective date is replaced by a letter to the OCC followed by a certification issued by the OCC.
• A Federal savings association will not be required to include all terms regarding the combination in a combination agreement nor include the specific provisions in the agreement that are required by the current savings association rule.
• If a consolidation or merger of a Federal savings association in which the savings association is not the resulting institution has not occurred within six months after the OCC's receipt of the notice of the transaction, the savings association must submit a new notice to the OCC. The current rule requires a new notice after 12 months.
• No substantive changes. There are no regulations addressing Federal savings association investment in bank service companies, and the new rule closely implements the statute.
• For Federal stock savings associations, the quantitative limitations on investment in banking premises will be based on the association's capital stock or, if a 1 or 2 CAMELS rated, well capitalized association, 150 percent of capital and surplus. Currently, the sole quantitative limit on a Federal savings association's investment in banking premises is total capital. Because 150 percent of capital and surplus will be a greater amount than 100 percent of total capital, we expect that under the final rule, the amount that a savings association can invest in banking premises without OCC approval will be increased. For Federal savings associations that do not have a CAMELS rating of 1 or 2 and are not well capitalized, the relevant limitation will be capital stock, which is a significantly lower threshold than total capital.
• For Federal mutual savings associations, the quantitative investment limit in banking premises
• A Federal savings association will be required to follow the specific application requirements contained in § 5.37.
• The rulemaking will grandfather Federal savings associations' existing premises investments and arrangements for sharing office space and employees, provided the investment complies with the legal requirements in effect prior to the effective date of the final rule, and continues to comply with those requirements.
• The rule will specifically permit Federal savings associations to invest in lodging for customers, officers, or employees of the savings association, its branches, or consolidated subsidiaries in areas where suitable commercial lodging is not readily available.
• A Federal savings association will need to obtain OCC approval or provide after-the-fact notice to exercise an option to purchase banking premises or stock in a corporation that holds banking premises.
• A Federal savings association will be permitted by regulation to hold banking premises through an operating subsidiary and to hold premises by any reasonable and prudent means.
• A Federal savings association normally will need to use real estate acquired for future expansion within five years and, after holding such real estate for one year; will be required to state, by resolution of the board of directors or an appropriate authorized association official or a subcommittee of the board of directors, definite plans for use of such real estate. Currently, OCC guidance provides a Federal savings association with a one to three year timeframe for the use of real estate acquired for future premises.
• Before beginning business, an operating subsidiary of a Federal savings association will be required to comply with other laws applicable to it, including applicable licensing or registration requirements. This change will codify current OCC policy.
• Under the amended rule, an entity can be an operating subsidiary if a Federal savings association owns less than 50 percent of the voting shares of the entity, provided no other party owns a greater percentage than the savings association, the savings association otherwise controls the subsidiary, and no other person or entity can exercise effective operating control over the subsidiary or have the ability to influence the subsidiary's operations to an extent equal to or greater than that of the savings association. Currently, for an entity to be an operating subsidiary, a savings association must own, directly or indirectly, more than 50 percent of the voting shares of the subsidiary.
• A Federal savings association will be required to have reasonable policies and procedures to preserve the limited liability of the savings association and its operating subsidiaries. The detailed requirements for separate corporate identities for subsidiaries in 12 CFR 159.10 are removed.
• A Federal savings association will need to file an application and receive prior OCC approval to acquire or establish an operating subsidiary or to commence a new activity in an existing operating subsidiary. The current rule in § 159.11 requires filing a notice at least 30 days prior to establishing or acquiring a subsidiary or engaging in new activities in a subsidiary; this notice is treated like an application under § 159.1(b).
• Some applications will qualify for the expedited review of applications process. This expedited review is similar to the current rule's notice process: applications will be deemed approved by the OCC as of the 30th day after the filing is received, unless the OCC notifies the Federal savings association otherwise during the 30-day period.
○ For the application to qualify, the Federal savings association must be “well capitalized” and “well managed,” the activities to be performed by the operating subsidiary must be listed in § 5.38(e)(5)(v) (activities that have been approved for operating subsidiaries of Federal savings associations in the past), the operating subsidiary must be a corporation, limited liability company, or limited partnership, and the savings association must clearly demonstrate control over the operating subsidiary (it must meet a standard for control that is more stringent than the general standard for operating subsidiaries).
○ Under the current rule, all filings start as 30-day prior notices. They become standard treatment applications if the OCC notifies the applicant that the notice presents supervisory concerns or raises significant issues of law or policy.
○ While there is overlap between an application failing to meet the criteria to qualify for expedited review (and so requiring standard processing) and raising issues that would cause a filing to present supervisory concerns, or raises significant issues of law or policy (and so requiring standard processing), there may be instances in which a filing would have had to be processed under standard procedures under one test but not the other.
• For a Federal savings association operating subsidiary to act as a fiduciary, its savings association parent will be required to have fiduciary powers and the operating subsidiary also must have its own fiduciary powers under the law applicable to the subsidiary. The operating subsidiary no longer will be able to rely on the savings association's fiduciary powers, except when the subsidiary exercises investment discretion on behalf of customers or provides investment advice for a fee as a registered investment adviser. This change will codify OCC and OTS practice.
• OCC approvals granted under § 5.38 will expire within 12 months if a Federal savings association has not established or acquired the operating subsidiary or commenced the new activity in an existing operating subsidiary, unless the OCC shortens or extends this time period.
• Under the current rule, no notice or application is required if the relocation is a short-distance relocation, if the Federal savings association redesignates an existing branch office as a home office when redesignating the existing home office as a branch office, or if the savings association is highly rated and certain other requirements are met. If the relocation does not meet the above exceptions, a notice is required for savings associations that qualify for expedited treatment and OCC approval is required for all other savings associations. Under the final rule, all Federal savings associations will be required to:
○ Submit prior notice to the OCC for home office relocations to a branch site in the same city, town, or village of the current home office; and
○ Obtain prior OCC approval for home office relocations to a branch location other than a branch site in the same city, town, or village of the current home office. An application submitted by an eligible Federal savings association will be deemed approved by the OCC as of the 15th day after the close of the public comment period or the 45th day after the filing is received by the OCC (or in the case of a short-distance relocation, the 30th day after the filing is received by the OCC), whichever is later, unless the OCC notifies the bank or savings association prior to that time that the filing is not eligible for expedited review, or the expedited review period is extended.
○ Obtain OCC approval pursuant to § 5.31 (branching) in order to establish a branch at the site of a former home office unless the branch establishment meets one of the exceptions in § 5.31. Under the current rule, no notice or application is required in all cases of home office and branch office re-designations.
○ Open a relocated home office within 18 months from the date of OCC approval, unless the OCC grants an extension. Under the current rule, this office must be opened within 12 months of OCC approval or non-objection.
• Federal savings associations will be required to submit an after-the-fact notice to the OCC instead of a 30-day prior notice for a change in corporate title.
• Federal stock savings associations will be required to apply to the OCC and obtain prior approval for increases in capital in the following circumstances: (1) When the savings association is required to receive OCC approval pursuant to letter, order, directive, written agreement or otherwise, (2) when the savings association is selling common or preferred stock for consideration other than cash, or (3) when the savings association is receiving a material noncash contribution to capital surplus. Currently, savings associations are not required to apply for increases in capital.
• The Federal savings association's liquidating agent or committee will be required to submit to the OCC:
○ At the start of liquidation, a report showing the association's current balance sheet;
○ Quarterly Consolidated Reports of Condition and Income (Call Reports); and
○ Annual reports on the progress of the liquidation.
• The following provisions in the final rule codify existing OCC practice:
○ A Federal savings association will be required to provide notice of the liquidation to depositors, other known creditors, and known claimants.
○ A Federal savings association will be required to publish public notice of its plan to liquidate if so directed by the OCC.
• The current definition of “voting securities” in § 5.50 replaces the part 174 definition of “voting stock.” This will affect the standard for convertible securities. Currently, part 174 includes as voting stock any security that, upon transfer or otherwise, is convertible into voting stock or exercisable to acquire voting stock where the holder of the convertible security has the preponderant economic risk in the underlying voting stock. Section 5.50, by contrast, defines voting securities to include securities that are immediately convertible into voting securities at the option of the owner or holder.
• The final rule excludes part 174 procedures for rebuttal of control and concerted action, applying instead the provisions in § 5.50(f)(2)(vi).
• Persons who acquire control of a Federal savings association as a result of testate or intestate succession will need to file a notice and pay the appropriate filing fee within 90 calendar days after the transaction occurs. Currently, such persons need only file a notification of acquisition to the OCC within 60 days of the acquisition and provide information requested by the OCC.
• The final rule excludes the presumptive disqualifiers from part 174—a list of factors, which, if present, may show a lack of integrity or lack of financial capability to proceed with a proposed transaction.
• The regulatory changes have the effect of eliminating most of the rebuttable presumptions of control with respect to Federal savings associations that are currently set forth in 12 CFR 174.4(b) and (c). The regulatory changes also remove certain of the rebuttable presumptions of concerted action currently set forth in § 174.4(d).
• Acquirers of beneficial ownership exceeding 10 percent of any class of stock of a Federal savings association that do not file a control notice or control rebuttal will not be required to file a certification of ownership.
• A Federal savings association will be required to provide 90 days prior notice of a new director or senior executive officer if the association is not in compliance with minimum capital requirements, is otherwise in a troubled condition, or the OCC determines, under section 38 of the FDI Act (12 U.S.C. 1831o), that prior notice is appropriate. Currently, such an association is required to provide 30 days prior notice, which the OCC may extend for an additional 60 days.
• Only a Federal savings association will be permitted to file the notice with the OCC; an individual seeking election to the board of directors who has not been nominated by management will no longer be allowed to do so.
• A Federal savings association or a proposed individual will be able to appeal an OCC notice of disapproval. The current rule does not provide an appeal process, although the OCC has permitted appeals by Federal savings associations in practice.
• A Federal savings association no longer will be required to provide notice of a home office or post office box address change if the change results from any transaction approved under 12 CFR part 5. The current rule provides this exception only in cases of an application to relocate or establish a new home or branch office.
• All Federal savings associations no longer will be required to provide notice of a home office or post office box address change if they have filed a notice for the relocation or establishment of a new home or branch office pursuant to § 5.40 (main office and home office relocations). Under current rules, highly rated savings associations are required to file a change in address notice because they are exempt from the relocation notice requirement.
• Federal savings associations no longer will be subject to the requirement that all operations be directed from the home office.
• The Federal savings association rule now requires approval of all purchases or sales or other transfers of assets in bulk not made in the ordinary course of business, unless the transaction is subject to the Bank Merger Act (in which case other parts of the rule apply). Under the final rule, Federal savings associations will be required to obtain OCC approval only for the following (unless one of the exceptions applies):
○ The sale or other disposition of all, or substantially all, of the savings association's assets in a transaction or a series of transactions.
○ After having sold or disposed of all, or substantially all, of its assets, subsequent purchases or other acquisitions or other expansions of the savings association's operations.
○ Any other asset purchases or other expansions of business that are part of a plan to increase the size of the savings association by more than 25 percent in one year.
○ As determined by the OCC on a case-by-case basis, any other material increase or decrease in the size of the
• When an application is required, it will have standard processing. Currently, an application can qualify for expedited treatment if all participating Federal savings associations meet the conditions for expedited treatment.
• The expedited review process in part 5 will apply to Federal savings associations seeking expedited review of filings for capital distributions instead of the expedited treatment process in part 116. Because the eligibility requirements for expedited review differ from the requirements for expedited treatment, this change could affect which savings associations qualify for the expedited process.
○ Under the current savings association rule, both well and adequately capitalized institutions are eligible for expedited treatment. Under the new rule, only savings associations that are well capitalized will qualify for expedited review.
○ Under the current savings association rule, the institution must not have been notified that it is in troubled condition, while under the new rule an eligible savings association must not be subject to an enforcement action. (Although different, these supervisory condition tests generally should overlap.)
○ Under the current rule, a savings association that has not been assigned a CAMELS rating, a CRA rating, and a compliance rating is not eligible for expedited treatment. This requirement is not a factor in the requirements for eligible bank or eligible savings association status in part 5.
• The expedited review process in part 5 will apply to Federal savings associations seeking expedited review of filings to issue subordinated debt instead of the expedited treatment process in part 116. Because the eligibility requirements for expedited review differ from the requirements for expedited treatment, this change could affect which savings associations qualify for the expedited process, as described above for the capital distributions rule.
• Federal savings associations are allowed to make pass-through investments greater than 25 percent of the company's equity, but because this investment would make the company a subsidiary under law applicable to the Federal savings associations, the association will be required to submit an application for approval as a subsidiary.
• Federal savings associations may be subject to different filing requirements:
○ Some pass-through investments that currently may qualify for the no-notice procedure under current § 160.32(b) will require a filing under § 5.58. (However, pass-through investments in investment companies that hold assets permissible for a Federal savings association to hold directly will continue not to require a filing.)
○ For pass-through investments that meet the requirements for the after-the-fact notice procedure, the Federal savings association will need to file only the after-the-fact notice. This treatment applies both to investments that would have required a prior application under § 160.32(c) and investments that would have qualified for the no-notice procedure under current § 160.32(b).
• Federal savings associations are subject to the notice content requirements of § 5.58. Section 160.32 does not specify the content of the notice or application.
• The corporate separateness requirements are amended to eliminate the requirement that a Federal savings association's service corporation be adequately financed as a separate unit in light of normal obligations reasonably foreseeable for a business of the service corporation's size and character in order to maintain the requisite corporate separateness.
• Consistent with 12 U.S.C. 1828(m), a Federal savings association will be required to file an application with the OCC before investing in any service corporation, including one that it would not control. Currently, the service corporation regulation requires a Federal savings association to file with the OCC only if it directly or indirectly controls the service corporation.
• Applications to establish or acquire a service corporation will be required to list for each state the lines of business for which the service corporation holds, or will hold, an insurance license, and the state where the service corporation holds a resident license or charter.
Pursuant to the Administrative Procedure Act (APA), at 5 U.S.C. 553(b)(B), notice and comment are required prior to the issuance of a final rule unless an agency, for good cause, finds that “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” This final rule includes amendments not originally include in the proposed rule published on June 10, 2014, that: (1) Update OCC telephone or fax numbers in parts 4, 7, and 24, (2) replace a form in appendix 1 to part 24 with an identical form updated to include a new OCC phone number and revision date, and (3) corrects a number of inaccurate cross-references. These amendments are purely technical in nature and for this reason, the OCC has good cause to conclude that advance notice and comment under the APA are not necessary prior to their issuance.
The APA requires that a substantive rule must be published not less than 30 days before its effective date, unless, among other things, the rule grants or recognizes an exemption or relieves a restriction.
Pursuant to the Regulatory Flexibility Act (RFA),
We estimate that the monetized direct cost per bank will range from a low of approximately $7.6 thousand per bank to a high of approximately $15.4 thousand per bank. Using the upper bound average direct cost per small entity, we believe the compliance costs will have a significant economic impact on no more than 19 small entities (of which eight are small Federal savings associations), which is not a substantial number.
Although we believe that investments in premises may impact a small entity's competitiveness and profitability, our estimate of monetized direct costs does not include costs or benefits that may be associated with the OCC's implementation of the reduction in the quantitative limit for a Federal savings association's investments in premises. We exclude these costs and benefits for a variety reasons including the uncertainty surrounding the number of Federal savings associations that may submit applications to invest in premises, uncertainty about how the OCC will respond to any applications that may be submitted, and uncertainty of how investments in premises, if constrained, may impact small entities. However, because the OCC will require some Federal savings associations to obtain approval, we assume that investments in premises may be constrained for some small Federal savings associations. Specifically, we assume that investments may be constrained for 18 small Federal savings associations with a positive return on assets (ROA) that are currently eligible to file an after-the-fact notice for investments in premises and will not be able to do so under the final rule.
Based on the information set forth above, and pursuant to section 605(b) of the RFA, the OCC hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required.
The OCC has analyzed the final rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA).
The OCC's estimated UMRA cost is approximately $17 thousand.
Under the Paperwork Reduction Act (PRA) of 1995,
The final rule contains both new and revised information collection requirements. Some of the revisions provide exceptions to existing requirements, which will result in a reduction in burden. Some of the requirements are currently in place for national banks and are being extended to cover both national banks and Federal savings associations. Some of the amendments impose new requirements on Federal savings associations and amend the requirements for national banks. A number of the revisions involve amendments to definitions, which, in some cases, will affect the respondent count for related provisions. For example, the change in the definition of “eligible bank” to include the consumer compliance rating in addition to the CAMELS and CRA rating will affect respondent counts. A number of the provisions being amended contain existing PRA requirements that have been previously approved by OMB.
Federal savings associations will be required to follow the procedure and processing provisions currently imposed on national banks (part 5, subpart A) instead of those in part 116, which they currently follow. Only well capitalized Federal savings associations will qualify for expedited treatment and adequately capitalized institutions will no longer qualify. Public notices of filings will be required to be filed as soon as practicable after a filing date instead of seven days prior to the filing date. Public notice will have to state that a filing is being made and the date of the filing. A single public notice will be acceptable for multiple transactions or transactions filed with the OCC and another agency, under certain circumstances. Comments in response to a filing will have to be obtained from the OCC, as comments will no longer be sent directly to the institution.
The requirement for publication of notice of a filing by national banks will be made more specific and require the notice: To be published in English; to specify the name of institution that is the subject of the filing; to indicate that the public portion is available on request; and to provide the address of the applicant. Under certain circumstances, the OCC can require the applicant to publish a new notice.
In order to exercise fiduciary powers, Federal savings associations will be required to comply with the application requirements of § 5.26 in place of the requirements under current part 150. In addition, § 5.26 will be revised to require a national bank or Federal savings association that has not conducted previously approved fiduciary powers for 18 consecutive months to provide the OCC with 60 days' advance notice before engaging in the activities. It will also require that a national bank or Federal savings association that has received approval to exercise limited fiduciary powers apply to the OCC to exercise full fiduciary powers. Eligible Federal savings associations will receive expedited review of applications. A provision is added setting out the circumstances under which a Federal savings association does not need to apply for fiduciary powers in connection with certain mergers.
New § 5.31 addresses the establishment and relocation of branches, or the establishment of agency offices, by Federal savings associations and replaces several provisions currently found in part 145.
Section 5.31(f)(1) sets out the general requirement that each Federal savings association proposing to establish or relocate a branch shall submit a separate application for each proposed branch, unless the transaction qualifies for an exception. The provision in § 145.93(e) stating that a Federal savings association may not file an application or notice, or use any of the exceptions, to establish a branch if the association has filed an application to merge or otherwise surrender its charter and the application has been pending for less than six months has not been carried over to § 5.31.
Section 145.93(b)(3) provided that certain highly rated Federal savings associations are not required to file an application to change the permanent location of an existing branch or to establish a new branch if it meets certain requirements, including that the Federal savings association meet the eligibility requirements for expedited treatment. Under § 5.31(f)(2)(iii) of the final rule, the Federal savings association is an “eligible savings association,” as defined in 12 CFR 5.3(g), rather than eligible for expedited treatment.
Section 5.31(f)(3) is added in the final rule, which requires that highly rated Federal savings associations not required to file a branch application must file a notice with the OCC within 10 days after the opening of the branch. This notice must include the date the branch was established or relocated and the address of the branch.
Section 5.31(g) sets out exceptions to the rules of general applicability for applications by a Federal savings association to establish or relocate a branch and specifies that the OCC will be able to waive or reduce the public notice and comment period in certain emergency situations or with respect to certain temporary branches.
Section 5.31(h) provides that OCC's approval of a branch expires if the branch has not commenced business within 18 months, unless the OCC grants an extension. This period is longer than the current 12-month expiration period for branch approvals for Federal savings associations under § 145.95(c).
Section 145.93(c) currently requires prior approval for any savings association branch that would be subject to section 5(m)(1) of the HOLA (regarding District of Columbia savings associations), if the association meets the requirements of § 145.93(b) for an exception to the branch application filing requirement. New § 5.31(j) requires an application and prior written approval for each application. State and Federal savings associations will be required to file an application with the OCC to establish or move a branch in the District of Columbia.
Section 5.35 is expanded to cover Federal savings associations. It replaces the after-the-fact notice before making an investment in the equity of a bank service company or performing new activities in an existing bank service company with an expedited prior notice procedure.
Section 5.37 is expanded to cover Federal savings associations. In addition, an alternative, after-the-fact notice process is added for both national banks and Federal savings associations and an exception to the premise application and notice requirements for investments in banking premises
Under § 5.40, Federal savings associations will be required to submit prior notice to the OCC for home office relocations to a branch site in the same city, town, or village of the current home office and obtain prior approval for other relocations. They will also be required to obtain prior approval to establish a branch at the site of a former main or home office.
For change in corporate title, Federal savings associations will be required to submit an after-the-fact notice in place of the current 30-day prior notice under § 5.42.
Section 5.48 is expanded to cover Federal savings associations. The liquidating agent or committee of the national bank or Federal savings association will be required to submit: A report to the appropriate OCC licensing office at the start of liquidation showing the bank's or savings association's balance sheet as of the start of liquidation; quarterly Call Reports; a report of condition at the start of the liquidation; annual progress reports; and a final report of liquidation. National banks and Federal savings associations will be required to notify all depositors, other known creditors, and known claimants of the bank or savings association.
This section is expanded to cover Federal savings associations. Certain procedures for rebuttal of control and concerted action under part 174 will no longer be applicable to Federal savings associations. Persons who acquire control of a Federal savings association as a result of testate or intestate succession will need to file a notice within 90 days of the transaction, while the current regulations require only a notification of the acquisition within 60 days. Under § 5.50, acquirers of beneficial ownership exceeding 10 percent of any class of stock of a Federal savings association that does not file a control notice or control rebuttal will not be required to file a certification of ownership.
The notice of a change in directors or senior executive officers for a national bank in § 5.51 will need to include financial information on the individual, except when the OCC determines it is not required. If the OCC requests additional information, a national bank may request a time extension to provide the information, if necessary.
Federal savings associations will be required to provide 90 days prior notice of a new director or senior executive officer, under certain circumstances, in place of the current shorter notice period. Only a Federal savings association will be permitted to file the notice; nominees no longer will be able to file. Federal savings associations will be able to appeal an OCC notice of disapproval.
Section 5.52 provides that, under certain circumstances, national banks and Federal savings associations will no longer be required to file a notice of home office change of address and Federal savings associations will no longer be required to provide notice of a post office box address.
A number of provisions in part 7 are being expanded to cover Federal savings associations. A transition period is added to grandfather Federal savings associations' existing premise investments, provided they are not modified, expanded, or improved. A transition period is also provided for Federal savings associations that share space or employees with another business under an agreement that complies with legal requirements previously in place that would violate this provision. They will be permitted to continue under the existing agreement, but will not be able to amend, renew, or extend the agreement without prior approval.
The requirements in part 145 regarding the establishment of agency offices of Federal savings associations is removed and agency offices of Federal savings associations that conduct non-branch activities will not be considered branches and will not be required to obtain OCC approval for these offices.
In § 5.20, paragraph (h) specifies requirements for the organizers' business plan or operating plan, paragraph (i) lists the procedures that the organizers must follow, paragraph (j) specifies the requirements for expedited review of an application, and paragraph (l) lists requirements for the establishment of special purpose banks. An application to charter a Federal savings association will be subject to the two-part approval process contained in paragraph (i)(5). The OCC uses a two-part approval process for
The corresponding rules applicable to organizing Federal savings associations are found in parts 143, 144, and 152, and § 163.1. Sections 144.1 and 152.3 contain specific language and requirements to be used for the charter of Federal mutual savings associations and Federal stock savings associations, respectively, and §§ 144.2 and 152.4
Section 5.21(j) specifies the language and requirements for Federal mutual savings association bylaws. The provision reflects the requirements in § 144.5.
Section 5.22(e) specifies the language and requirements for a Federal stock savings association charter. The provision reflects the requirements in § 152.3.
Section 163.1(b), which requires each Federal savings association to cause a true copy of its charter and bylaws and all amendments thereto to be available to accountholders at all times in each office of the savings association, and to deliver to any accountholders a copy of such charter and bylaws or amendments thereto, upon request, is rescinded and the OCC will continue applying this requirement only with respect to Federal mutual savings associations under new § 5.21(i).
In § 5.24(d), regarding the policy for approving and disapproving conversions to national bank charters, a statement is added that the institution seeking to convert to a national bank charter must obtain all necessary regulatory and shareholder approvals. A parallel provision is found in § 143.8(a)(2), which is now in § 5.25 of the final rule. The public notice and inspection requirements at § 143.9(a)(2) are rescinded. If there are instances where the OCC believes publication is warranted, the OCC may require publication under § 5.2(b), which allows the OCC to require materially different procedures for a particular filing.
Section 5.24(e)(2)(ix) requires the application for conversion to include a business plan if the converting institution has been operating for less than three years or plans to make significant changes to its business after the conversion, instead of the current policy of requesting it on a case-by-case basis.
Section 5.24(g), which allows for expedited review of a conversion application filed by an eligible depository institution, will be limited to applications by institutions already supervised by the OCC.
Section 5.23(d)(2)(ii)(K) requires a converting institution that does not meet the qualified thrift lender test of 12 U.S.C. 1467a(m) to include a plan to achieve compliance within a reasonable period of time and to request an exception from the OCC in the application.
Section 5.25(d) provides that converting from a Federal charter does not require prior OCC approval. The institution must file only a notice with the OCC. Currently, Federal savings associations that are not eligible for expedited treatment must file an application to convert to a national bank or state bank. The notice must contain a copy of the conversion application to the regulator to which it is applying for approval to convert, and a discussion of any issues regarding the permissibility of the conversion under section 612 of Dodd-Frank Act. The institution will also be required to file a copy of its conversion application with the Federal banking agency that would become its appropriate Federal banking agency after the conversion.
For conversions between a national bank and a Federal savings association, the applicable “converting-in” regulation (§ 5.23 or § 5.24) will require the institution to file an application with the OCC with respect to the “converting-in” aspect of the transaction. Information regarding the “converting-out” to a national bank from a Federal savings association or from a Federal savings association to a national bank will no longer be required in a separate notice but included in the “converting-in” application.
Sections 5.24(e)(2)(x) and 5.23(d)(2)(ii)(J) will require the conversion application to include information about enforcement actions and other supervisory criticisms and the applicant's analysis of whether conversion is permissible under 12 U.S.C. 35, as amended by section 612.
Section 5.25(d)(3) would require that the information that must be submitted to the OCC when a national bank or Federal savings association plans to convert to a state bank or state savings association must include a discussion of the impact of any enforcement action on the permissibility of the conversion under 12 U.S.C. 214d or 1464(i)(6).
Sections 5.24(e)(2), 5.23(d)(2)(ii), 5.25(d)(3)(i), and 5.25(d)(3)(ii)(A) require that, at the time an insured depository institution files a conversion application, it must transmit a copy of the conversion application to both the appropriate Federal banking agency for the institution and the Federal banking agency that will become the appropriate Federal banking agency for the institution after the proposed conversion.
Under the current service corporation regulation, a Federal savings association must file a notice under part 116 at least 30 days before establishing or acquiring a subsidiary or engaging in a new activity in a subsidiary. A Federal savings association is not required to file a service corporation application if the association proposes to make a non-controlling investment in a service corporation. The final rule amends the service corporation regulation at § 5.59 to require that a Federal savings association file with the OCC before acquiring or establishing any service corporation, including one that it would not control.
Section 5.59(h)(1)(ii) requires a Federal savings association to list for each state the lines of business for which the service corporation holds, or will hold, an insurance license, and each state in which the service corporation holds a resident license or charter. Section 5.59(h)(2) changes the circumstances under which a Federal savings association would receive expedited review for a service corporation filing, currently found in part 116. A service corporation filing will be eligible for expedited review if the savings association is “well capitalized” and “well managed,” and the service corporation engages only in one or more of the preapproved activities listed in § 5.59(f).
New § 5.34(e)(2)(iii) is added to clarify that a national bank must have reasonable policies and procedures to preserve the limited liability of the bank and its operating subsidiaries. This requirement has been adapted from § 159.10 and is consistent with the new operating subsidiary rule for Federal savings associations.
Current § 5.34(e)(5)(i) provides that national banks meeting certain requirements are not required to file a prior application but may give after-the-fact notice when establishing or
Current § 5.34(e)(5)(vi) provides that no application or notice is required for a national bank that is well managed and adequately capitalized or well capitalized to acquire or establish an operating subsidiary or perform a new activity in an existing operating subsidiary, if the activities of the new subsidiary are limited to those previously reported to the OCC in connection with a prior operating subsidiary and certain other requirements are met. The final rule changes the criteria from adequately capitalized to well capitalized. This is consistent with the well capitalized requirement to be eligible for the after-the-fact notice procedure.
Section 5.38(b) will require a Federal savings association to file an application to acquire or establish any operating subsidiary or to commence a new activity in an existing operating subsidiary. Part 159 required Federal savings associations to give 30 days' notice to the OCC prior to establishing or acquiring an operating subsidiary or commencing a new activity in an operating subsidiary. Section 159.11 required a filing when it is required under 12 U.S.C. 1828(m), and section 1828(m) does not require a filing if the subsidiary is an insured depository institution. Section 5.38(b) will require an application to acquire an insured depository institution as an operating subsidiary. A proposal for a Federal savings association to own an insured depository institution subsidiary that would cause the savings association to be a bank holding company or a savings and loan holding company raises issues of law and policy as well as supervisory concerns. The acquisition of other insured depository institutions as operating subsidiaries also requires agency review. Accordingly, the OCC believes an application is needed, even if not required under 12 U.S.C. 1828(m).
Section 5.38(d) sets out definitions for “well capitalized” and “well managed,” which will be used as part of the determination of which applications are eligible for expedited review by the OCC. These definitions are the same as those in § 5.34(d), and the OCC uses these terms as criteria to permit national banks to make an after-the-fact notice filing pursuant to § 5.34(e)(5). They are also used in § 5.38 to determine if an application by a Federal savings association is eligible for expedited review.
Section 5.38(e)(2)(iv)(A) (similar to § 159.10) expressly requires a savings association to have reasonable policies and procedures to preserve the limited liability of the savings association and its operating subsidiaries. Section 5.38(e)(5) sets forth the operating subsidiary application requirements for savings associations.
Section 159.11 specifies when Federal savings associations must file a notice at least 30 days prior to establishing or acquiring an operating subsidiary or conducting a new activity in an existing operating subsidiary. Section 5.38(e)(5) specifies the procedures a Federal savings association must follow when filing applications required under § 5.38. Section 5.38(e)(5)(ii)(A) provides for expedited review of applications to establish or acquire an operating subsidiary, or to perform a new activity in an existing operating subsidiary. The expedited review process is similar to that contained in § 159.11.
Section 159.3(p)(1) provided that a Federal savings association must consult with the appropriate OCC licensing office prior to redesignating a service corporation as an operating subsidiary, and make available for examination adequate internal records demonstrating that the redesignated office meets all of the requirements for an operating subsidiary and that the board of directors has approved of the redesignation. Section 5.38(e)(vi) requires a Federal savings association to provide 30 days' prior notice to the OCC when the savings association wants to redesignate a service corporation as an operating subsidiary.
Section 160.32(b) currently provides that a Federal savings association may make certain qualifying pass-through investments without prior notice to the OCC in any entity that is a limited partnership, an open-ended mutual fund, a closed-end investment trust, a limited liability company, or an entity in which the Federal savings association is investing primarily to use the company's services. Section 160.32(c) requires a Federal savings association to provide the OCC with written notice 30 days prior to making any pass-through investment that does not meet the no-notice standards. The notice is a form of application and may become a standard application if the OCC notifies the filer that the investment presents supervisory, legal, or safety and soundness concerns. The final rule removes these provisions and cross-references § 5.36.
New § 5.58(e) mirrors § 5.36(e) and provides that a well capitalized, well managed Federal savings association may make certain pass-through investments, directly or through its operating subsidiary, in certain entities by filing a written after-the-fact notice with the OCC no later than 10 days after making the investment if the activity conducted by the enterprise is on the list of activities eligible for a notice filing for operating subsidiaries, or if it is substantially the same as an activity that has been previously approved for a Federal savings association (or its operating subsidiary).
If a Federal savings association is not well capitalized and well managed or if the activity conducted by the enterprise does not qualify for the after-the-fact notice procedure, the savings association will be required to apply to the OCC and receive prior approval for the non-controlling investment.
Section 5.58(g)(1) provides for an expedited notice procedure for pass-through investments in entities holding assets in satisfaction of debts previously contracted. A Federal savings association will not be required to file a notice or application under § 5.58 when acquiring a non-controlling investment in shares of a company through foreclosure or otherwise in good faith to compromise a doubtful claim, or in the ordinary course of collecting a debt previously contracted.
Under § 5.58, Federal savings associations will be permitted to make non-controlling investments greater than 25 percent of the company's equity. The investment, however, will constitute “control,” making the enterprise a subsidiary of the association and triggering a filing. Section 5.58(f)(2) provides that a Federal savings association must submit an application for approval prior to investing in an enterprise that is considered a subsidiary of the Federal savings association that would not be an operating subsidiary or a service corporation.
Section 5.58 changes the filing requirements for Federal savings associations' non-controlling investments. Some pass-through investments will meet the requirements for the after-the-fact notice procedure, and only the after-the-fact notice will be required. Some non-controlling investments that qualify for the no-notice procedure under § 160.32(b) will require a filing under § 5.58. Section 5.58(h) will continue the no-notice procedure for investments by Federal savings associations in investment companies that held assets permissible to be held directly. Some investments
The final rule expands the requirements of § 5.53 and removes § 163.22 regarding change in asset composition. Institutions contemplating transactions that may constitute a material change will be advised to consult the appropriate OCC supervisory office. National banks will find more situations in which applications for approval are required than under current § 5.53, but these additional situations likely already will involve discussions between the bank and its supervisory office. Federal savings associations will find fewer situations in which applications for approval are required than now required under current § 163.22(c).
Under the application exception for asset changes that are part of a voluntary liquidation, the final rule adds that the bank or savings association must have received OCC approval of its plan of liquidation.
The expedited treatment under § 163.22(c) for of bulk transfer filings if all of the participating Federal savings associations meet the conditions for expedited treatment is not carried over into § 5.53.
Section 5.33(d)(2)(v) expands the definition of “business combination” in § 5.33(d)(2), which currently includes only the assumption of deposit liabilities from another depository institution, to also include the assumption, from a credit union or any other institution that is not FDIC-insured, of deposit accounts or other liabilities that will become deposits at the assuming national bank or Federal savings association. Federal savings associations are currently required to file an application under § 163.22(c). The final rule retains the requirement and expands it to cover national banks.
The final rule amends § 5.33(e)(3) to require that the business combination application identify financial subsidiary investments, bank service company investments, service corporation investments, and other equity investments in addition to subsidiaries, and provide an analysis of the permissibility for the national bank or Federal savings association to hold the subsidiary or investment.
Under § 5.33(e)(6), regarding the exercise of fiduciary powers by the resulting national bank or Federal savings association, a clarification is made that if the applicant intends to exercise fiduciary powers after the combination and requires OCC approval for such powers, it must include in the business combination application the information required in § 5.26 for a request for fiduciary powers.
Section 5.33(f)(1) is amended to clarify that the requirement of public notice and comment would apply only when the application is subject to a public notice requirement under the Bank Merger Act or other applicable statute that requires notice to the public. This publication requirement is not a change for national banks or Federal savings associations. The frequency and timing of publication for transactions that are subject to the Bank Merger Act are changed for Federal savings associations. Section 163.22(e)(1)(i) requires an initial publication and then publication on a weekly basis during the public comment period. Under § 5.33(f)(1), the OCC will require the initial publication and two other publications during the standard 30-day public comment period.
Section 5.33(g)(1), addressing the merger or consolidation of a national bank or a state bank into a national bank, requires that a national bank that will not be the resulting bank in a merger or consolidation with another national bank file a notice to the OCC under § 5.33(k). This notice will also be required whenever a national bank or Federal savings association merges or consolidates into another institution. It provides the OCC information about the target national bank's compliance with requirements to “merge-out” and sets in motion the steps for the disappearing national bank to end its separate existence.
Section 5.33(g)(2)(ii), under which the OCC may conduct an appraisal of dissenters' shares of stock in a national bank involved in a consolidation with a Federal savings association if all the parties agree, is changed from a voluntary to a required process. Sections 5.33(g)(2)(ii)(A) and (B) specify the process for appraisal of dissenters' shares of stock in a stock Federal savings association involved in a consolidation or merger into a national bank.
Section 5.33(g)(2)(iii) includes a requirement that a consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution.
New § 5.33(g)(3), addressing consolidations and mergers of other institutions into a Federal savings association, requires an application to the OCC and compliance with requirements and procedures similar to those currently imposed on them. If a combination involves a whole purchase and assumption of a Federal savings association, then the combination will be treated as a consolidation for participating Federal savings associations, and the procedural requirements in § 5.33(o) will apply.
Section 5.33(g)(3)(ii) includes a requirement that the consolidation or merger agreement must address the effect upon and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution.
Section 5.33(g)(6)(iv) includes a requirement that the consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution. This requirement is based on provisions in §§ 146.2(b)(9) and 152.13(f)(9).
Section 5.33(g)(7) addresses a consolidation or merger of a Federal savings association into a state bank, state savings bank, state savings association, state trust company, or credit union and requires only a notice to the OCC, not application and approval. This requirement is a change for Federal savings associations from § 163.22(c), under which an application is required for a combination with an uninsured bank, savings association or trust company or a credit union. Section 5.33(g)(7)(ii) includes a provision under which a whole purchase and assumption of the target Federal savings association will be treated as a consolidation for the Federal savings association, so that the procedural requirements in § 5.33(o) will apply.
Section 5.33(g)(7)(iii) sets out the process for appraisal of dissenters' shares of stock in a stock Federal savings association involved in a consolidation or merger into a state bank, state savings bank, state savings association, state trust company, or credit union. Section 5.33(g)(7)(iv) requires that the consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any other participating institution by the resulting institution.
Section 5.33(i), which provides for expedited review of business reorganizations and streamlined applications, is expanded to include Federal savings association applications. Expedited review under § 5.33(j) replaces the automatic approval provision in § 163.22(f) for Federal savings associations, which provides that an application is deemed to be
New § 5.33(k) addresses notices to be filed when a national bank or Federal savings association is consolidating or merging with another national bank or Federal savings association or with a state chartered institution or credit union and the target national bank or Federal savings association is not the resulting institution. It includes the steps to be taken to terminate the institution's status as a national bank or Federal savings association. This consolidates requirements from §§ 5.33(g)(3), 146.2(g), 152.13(k), 163.22(b), and 163.22(h)(1)(i) and (ii). There is no change for Federal savings associations, but national banks will be required to include more information in the notice than currently required.
Section 5.33(m) addresses certification of a consolidation or merger and documentation of its effective date. The applicant will be required to submit information showing that all steps needed to complete the transaction have been met and to notify the OCC of the planned consummation date. This reflects current OCC practice for national banks. It accomplishes through an applicant notification letter and issuance of an OCC certification letter what § 152.13(j) does in requiring the applicant to submit two sets of “Articles of Combination” that are filed with the OCC, and then endorsed by the OCC, with one set returned to the applicant with a specification of the effective date.
New § 5.33(o) includes provisions from §§ 146.2 and 152.13 that set out the procedural requirements for board, shareholder (in the case of stock savings associations), and, if required by the OCC, voting member (in the case of mutual savings associations) approval of business combinations involving the Federal savings association.
Section 5.46(g)(1) is amended to describe more fully those increases in permanent capital of a national bank for which an application and prior approval are not required and when such increases are considered approved by the OCC. Portions of this requirement are currently in paragraph (i)(3), which addresses the bank's notification to the OCC that the increase has occurred and the certification of the increase by the OCC.
The expedited treatment process in part 116 for savings associations is replaced by the expedited review process in part 5 for Federal savings associations seeking expedited review of filings to issue subordinated debt. This could result in a change in which savings associations qualify for the expedited process, due to the difference between the eligibility requirements for expedited review and the requirements for expedited treatment.
New § 5.55 contains Federal savings association procedures and standards for capital distributions currently found in part 163 and filing procedures based on provisions in part 5 regarding eligible savings associations and expedited review. A Federal savings association must be an “eligible savings association” in order to qualify for expedited review of filings for capital distributions. Because the eligibility requirements in part 5 and in the current Federal savings association rules are not identical, the part 5 eligibility requirements for expedited review may affect which Federal savings associations qualify for the expedited process.
The change in burden for the collection is an overall increase of 46 hours, or 0.37 percent. The change in number of respondents is due to an increase in the number of regulated entities involved in licensing activities and the revisions to certain definitions. The change in burden per respondent is an overall decrease of .02 hours. This is a result of the combination of the expansion of national bank requirements to savings associations, the revision of requirements for both national banks and savings associations, the addition of exemptions, and the streamlining and elimination of unnecessary requirements.
The OCC requests comment on:
a. Whether the information collection is necessary for the proper performance of the OCC's functions, and how the instructions can be clarified so that information gathered has more practical utility;
b. The accuracy of the OCC's estimates of the burdens of the information collection, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
The following redesignation table is provided for reader reference. It lists the current savings association provision and identifies the provision in this final rule that replace it.
Administrative practice and procedure, Freedom of information, Individuals with disabilities, Minority businesses, Organization and functions (Government agencies), Reporting and recordkeeping requirements, Women.
Administrative practice and procedure, National banks, Reporting and recordkeeping requirements, Securities.
Computer technology, Credit, Insurance, Investments, National banks, Reporting and recordkeeping requirements, Securities, Surety bonds.
Banks, Banking, Consumer protection, Insurance, National banks, Reporting and recordkeeping requirements.
Affordable housing, Community development, Credit, Investments, Economic development and job creation, Low- and moderate-income areas, Low and moderate income housing, National banks, Public welfare investments, Reporting and recordkeeping requirements, Rural areas, Small businesses, Tax credit investments.
National banks, Reporting and recordkeeping requirements.
Mortgages, National banks, Reporting and recordkeeping requirements.
Savings associations.
Administrative practice and procedure, Reporting and recordkeeping requirements, Savings associations.
Reporting and recordkeeping requirements; Savings associations.
Reporting and recordkeeping requirements, Savings associations.
Consumer protection, Credit, Electronic funds transfers, Investments, Manufactured homes, Mortgages, Reporting and recordkeeping requirements, Savings associations.
Reporting and recordkeeping requirements, Savings associations.
Administrative practice and procedure, Reporting and recordkeeping requirements, Savings associations, Trusts and trustees.
Reporting and recordkeeping requirements, Savings associations, Securities.
Reporting and recordkeeping requirements, Savings associations, Subsidiaries.
Consumer protection, Investments, Manufactured homes, Mortgages, Reporting and recordkeeping requirements, Savings associations, Securities.
Administrative practice and procedure, Savings associations.
Accounting, Reporting and recordkeeping requirements, Savings associations.
Accounting, Administrative practice and procedure, Advertising, Conflict of interests, Crime, Currency, Investments, Mortgages, Reporting and recordkeeping
Administrative practice and procedure, Reporting and recordkeeping requirements, Savings associations, Securities.
Reporting and recordkeeping requirements, Savings associations, Securities.
Accounting, Savings associations, Securities.
For the reasons set forth in the preamble, and under the authority of 12 U.S.C. 93a and 5412(b)(2)(B), chapter I of title 12 of the Code of Federal Regulations is amended as follows:
12 U.S.C. 1, 12 U.S.C. 93a, 12 U.S.C. 5321, 12 U.S.C. 5412, and 12 U.S.C. 5414. Subpart A also issued under 5 U.S.C. 552. Subpart B also issued under 5 U.S.C. 552; E.O. 12600 (3 CFR 1987 Comp., p. 235). Subpart C also issued under 5 U.S.C. 301, 552; 12 U.S.C. 161, 481, 482, 484(a), 1442, 1462a, 1463, 1464 1817(a)(2) and (3), 1818(u) and (v), 1820(d)(6), 1820(k), 1821(c), 1821(o), 1821(t), 1831m, 1831p-1, 1831o, 1867, 1951
(a)
(b) District
(c)
12 U.S.C. 1
This part establishes rules, policies and procedures of the Office of the Comptroller of the Currency (OCC) for corporate activities and transactions involving national banks and Federal savings associations. It contains information on rules of general and specific applicability, where and how to file, and requirements and policies applicable to filings. This part also establishes the corporate filing procedures for Federal branches and agencies of foreign banks.
(a)
(b)
(c)
(d)
As used in this part:
(a)
(b)
(c)
(d)
(e)
(1) A bank's or Federal savings association's tier 1 and tier 2 capital calculated under the OCC's risk-based capital standards set forth in 12 CFR part 3, as applicable, as reported in the bank's or savings association's Consolidated Reports of Condition and Income (Call Reports) filed under 12 U.S.C. 161 or 12 U.S.C. 1464(v), respectively; plus
(2) The balance of the national bank's or Federal savings association's allowance for loan and lease losses not included in the institution's tier 2 capital, for purposes of the calculation of risk-based capital reported in the institution's Call Reports, described in paragraph (e)(1) of this section.
(f)
(g)
(1) Is well capitalized as defined in 12 CFR 6.4;
(2) Has a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (CAMELS);
(3) Has a Community Reinvestment Act (CRA), 12 U.S.C. 2901
(4) Has a consumer compliance rating of 1 or 2 under the Uniform Interagency Consumer Compliance Rating System; and
(5) Is not subject to a cease and desist order, consent order, formal written agreement, or Prompt Corrective Action directive (
(h)
(1) With respect to a national bank, a state bank or a Federal or state savings association that meets the criteria for an “eligible bank or eligible savings association” under § 5.3(g) and is FDIC-insured; and
(2) With respect to a Federal savings association, a state or national bank or a state savings association that meets the criteria for an “eligible bank or eligible savings association” under § 5.3(g) and is FDIC-insured.
(i)
(j)
(k)
(l)
(1) One thousand foot-radius of the site if the branch, main office, or home office is located within a principal city of an MSA;
(2) One-mile radius of the site if the branch, main office, or home office is not located within a principal city, but is located within an MSA; or
(3) Two-mile radius of the site if the branch, main office, or home office is not located within an MSA.
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(a)
(b)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(1) The applicant submits either a revised filing or new or additional information related to a filing;
(2) A major issue of law or change in circumstance arises after a filing; or
(3) The OCC determines that a new public notice is appropriate.
(a)
(b)
(c)
(a)
(b)
(2)
(i) The applicant fails to file all required publicly available information on a timely basis to permit review by interested persons or makes a request for confidential treatment not granted by the OCC that delays the public availability of that information;
(ii) Any person requesting an extension of time satisfactorily demonstrates to the OCC that additional time is necessary to develop factual information that the OCC determines is necessary to consider the application; or
(iii) The OCC determines that other extenuating circumstances exist.
(3)
(a)
(b)
(c)
(d)
(2)
(e)
(f)
(g)
(2)
(3)
(h)
(i)
(2)
(3)
(4)
In computing the period of days, the OCC does not include the day of the act or event (
(a)
(1)
(2)
(i) The OCC may extend the expedited review period or remove a filing from expedited review procedures if it concludes that the filing, or an adverse comment regarding the filing, presents a significant supervisory, CRA (if applicable), or compliance concern, or raises a significant legal or policy issue, requiring additional OCC review. The OCC will provide the applicant with a written explanation if it decides not to process an application from an eligible bank or eligible savings association under expedited review pursuant to this paragraph.
(ii) Adverse comments that the OCC determines do not raise a significant supervisory, CRA (if applicable), or compliance concern, or a significant legal or policy issue, or are frivolous, filed primarily as a means of delaying action on the filing, or that raise a CRA concern that the OCC determines has been satisfactorily resolved, do not affect the OCC's decision under paragraph (a)(2)(i) of this section. The OCC considers a CRA concern to have been satisfactorily resolved if the OCC previously reviewed (
(iii) If a bank or savings association files an application for any activity or transaction that is dependent upon the approval of another application under this part, or if requests for approval for more than one activity or transaction are combined in a single application under applicable sections of this part, none of the subject applications may be deemed approved upon expiration of the
(b)
(1) A significant supervisory, CRA (if applicable), or compliance concern exists with respect to the applicant;
(2) Approval of the filing is inconsistent with applicable law, regulation, or OCC policy thereunder; or
(3) The applicant fails to provide information requested by the OCC that is necessary for the OCC to make an informed decision.
(c)
(d)
(e)
(f)
(g)
(h)
(2)
(i) Contrary to law, regulation, or OCC policy thereunder; or
(ii) Granted due to clerical or administrative error, or a material mistake of law or fact.
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(e)
(ii) The OCC charters a Federal savings association under the authority of section 5 of the Home Owners' Loan Act, 12 U.S.C. 1464, which in an application to establish a Federal savings association requires the OCC to consider:
(A) Whether the applicants are persons of good character and responsibility;
(B) Whether a necessity exists for the association in the community to be served;
(C) Whether there is a reasonable probability of the association's usefulness and success; and
(D) Whether the association can be established without undue injury to properly conducted existing local savings associations and home financing institutions.
(iii) In determining whether to approve an application to establish a national bank or Federal savings association, the OCC verifies that the proposed national bank or Federal savings association has complied with the following requirements. A national bank or a Federal savings association shall:
(A) File either articles of association (for a national bank), or a charter and by-laws (for a Federal savings association) with the OCC;
(B) In the case of an application to establish a national bank, file an organization certificate containing specified information with the OCC;
(C) Ensure that all capital stock is paid in, or in the case of a Federal mutual savings association, ensure that at least a minimum amount of capital is paid in; and
(D) Have at least five elected directors.
(2)
(ii) Twelve CFR part 195 requires the OCC to take into account a proposed insured Federal savings association description of how it will meet its CRA objectives.
(3)
(f)
(i) Maintaining a safe and sound banking system;
(ii) Encouraging a national bank or Federal savings association to provide fair access to financial services by helping to meet the credit needs of its entire community;
(iii) Ensuring compliance with laws and regulations; and
(iv) Promoting fair treatment of customers including efficiency and better service.
(2)
(A) Has organizers who are familiar with national banking laws and regulations or Federal savings association laws and regulations, respectively;
(B) Has competent management, including a board of directors, with ability and experience relevant to the types of services to be provided;
(C) Has capital that is sufficient to support the projected volume and type of business;
(D) Can reasonably be expected to achieve and maintain profitability;
(E) Will be operated in a safe and sound manner; and
(F) Does not have a title that misrepresents the nature of the institution or the services it offers.
(ii) In evaluating an application to establish a Federal savings association, the OCC considers whether the proposed Federal savings association will be operated as a qualified thrift lender under section 10(m) of the Home Owners' Loan Act, 12 U.S.C. 1467a(m).
(iii) The OCC may also consider additional factors listed in section 6 of the Federal Deposit Insurance Act, 12 U.S.C. 1816, including the risk to the Federal deposit insurance fund, and whether the proposed institution's corporate powers are consistent with the purposes of the Federal Deposit Insurance Act, the National Bank Act, and the Home Owners' Loan Act, as applicable.
(3)
(g)
(2)
(3)
(ii) Because directors are often the primary source of additional capital for an institution not affiliated with a holding company, it is desirable that the proposed directors of the national bank or Federal savings association, as a group, be able to supply or have a realistic plan to enable the institution to obtain capital when needed.
(iii) Any financial or other business arrangement, direct or indirect, between the organizing group or other insiders and the proposed national bank or Federal savings association must be on nonpreferential terms.
(4)
(ii) A proposed national bank or Federal savings association shall not pay any fee that is contingent upon an OCC decision. Such action generally is grounds for denial of the application or withdrawal of preliminary approval. Organizational expenses for denied applications are the sole responsibility of the organizing group.
(5)
(i) An existing holding company;
(ii) Individuals currently affiliated with other depository institutions; or
(iii) Individuals who, in the OCC's view, are otherwise collectively experienced in banking and have demonstrated the ability to work together effectively.
(h)
(ii) The OCC may offset deficiencies in one factor by strengths in one or more other factors. However, deficiencies in some factors, such as unrealistic earnings prospects, may have a negative influence on the evaluation of other factors, such as capital adequacy, or may be serious enough by themselves to result in denial. The OCC considers inadequacies in a business plan or operating plan to reflect negatively on the organizing group's ability to operate a successful institution.
(2)
(3)
(ii) The organizing group may not hire an officer or elect or appoint a director if the OCC objects to that person at any time prior to the date the institution commences business.
(4)
(5)
(ii) As part of its business plan or operating plan, the organizing group shall submit a statement that demonstrates its plans to achieve CRA objectives.
(iii) Because community support is important to the long-term success of a national bank or Federal savings association, the organizing group shall include plans for attracting and maintaining community support.
(6)
(7)
(i)
(2)
(3)
(4)
(5)
(ii)(A) After the OCC grants preliminary approval, the organizing group shall elect a board of directors, take steps necessary to organize the proposed national bank or Federal savings association and prepare it for commencing business.
(B) A proposed national bank may not conduct the business of banking until the OCC grants final approval and issues a charter. A proposed Federal savings association may not commence business until the OCC grants final approval and issues a charter, which shall be in the form provided in this part.
(iii) For all capital obtained through a public offering a proposed national bank or Federal savings association shall use an offering circular that complies with the OCC's securities offering regulations, 12 CFR part 16 or part 197, as applicable. All securities of a particular class in the initial offering shall be sold at the same price.
(iv) A national bank or Federal savings association in organization shall raise its capital before it commences business. Preliminary approval expires if the proposed national bank or Federal savings association does not raise the required capital within 12 months from the date the OCC grants preliminary approval. Preliminary approval expires if the proposed national bank or Federal savings association does not commence business within 18 months from the date of preliminary approval, unless the OCC grants an extension. If preliminary approval expires, all cash collected on subscriptions shall be returned.
(j)
(1) Notifies the applicant prior to that date that the filing is not eligible for expedited review, or the expedited review process is extended, under § 5.13(a)(2); or
(2) Notifies the applicant prior to that date that the OCC has determined that the proposed bank will offer banking services that are materially different than those offered by the lead depository institution.
(k)
(2)
(3)
(l)
(a)
(b)
(c)
(d)
(e)
(f)
(1)
(2)
(ii)
(g)
(1)
(2)
(3)
(4)
(h)
(i)
(j)
(2)
(i)
(B) At each annual meeting, the officers shall make a full report of the financial condition of the association and of its progress for the preceding year and shall outline a program for the succeeding year.
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(A) A list of depositors in or borrowers from such association;
(B) Their addresses;
(C) Individual deposit or loan balances or records; or
(D) Any data from which such information could be reasonably constructed.
(viii)
(ix)
(x)
(B) Any officer may be removed by the board of directors with or without cause, but such removal, other than for cause, shall be without prejudice to the contractual rights, if any, of the person so removed. Termination for cause, for purposes of this § 5.21 and § 5.22, shall include termination because of the person's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease and desist order, or material breach of any provision of an employment contract.
(xi)
(xii)
(xiii)
(xiv)
(xv)
(A) Amendments shall be effective:
(
(
(B) When an association fails to meet its quorum requirement, solely due to vacancies on the board, the bylaws may be amended by an affirmative vote of a majority of the sitting board.
(xvi)
(3)
(B) For purposes of paragraph (j)(2) of this section, bylaw provisions that adopt the language of the OCC's model or optional bylaws, if adopted without change, and filed with the OCC within 30 days after adoption, are effective upon adoption.
(ii)
(iii)
(4)
(5)
(a)
(b)
(c)
(d)
(e)
Except for shares issued in the initial organization of the association or in connection with the conversion of the association from the mutual to stock form of capitalization, no shares of capital stock (including shares issuable upon conversion, exchange, or exercise of other securities) shall be issued, directly or indirectly, to officers, directors, or controlling persons of the association other than as part of a general public offering or as qualifying shares to a director, unless the issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal meeting. The holders of the common stock shall exclusively possess all voting power. Each holder of shares of common stock shall be entitled to one vote for each share held by such holder, except as to the cumulation of votes for the election of directors, unless the charter provides that there shall be no such cumulative voting. Subject to any provision for a liquidation account, in the event of any liquidation, dissolution, or winding up of the association, the holders of the common stock shall be entitled, after payment or provision for payment of all debts and liabilities of the association, to receive the remaining assets of the association available for distribution, in cash or in kind. Each share of common stock shall have the same relative rights as and be identical in all respects with all the other shares of common stock.
(f)
(1)
(2)
(ii)
(g)
(1)
(2)
(3)
(4)
Except for shares issued in the initial organization of the association or in connection with the conversion of the association from the mutual to the stock form of capitalization, no shares of capital stock (including shares issuable upon conversion, exchange, or exercise of other securities) shall be issued, directly or indirectly, to officers, directors, or controlling persons of the association other than as part of a general public offering or as qualifying shares to a director, unless their issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections hereto) shall entitle the holders of any class of a series of capital stock to vote as a separate class or series or to more than one vote per share, except as to the cumulation of votes for the election of directors, unless the charter otherwise provides that there shall be no such cumulative voting:
i. To any provision which would authorize the holders of preferred stock, voting as a class or series, to elect some members of the board of directors, less than a majority thereof, in the event of default in the payment of dividends on any class or series of preferred stock;
ii. To any provision that would require the holders of preferred stock, voting as a class or series, to approve the merger or consolidation of the association with another corporation or the sale, lease, or conveyance (other than by mortgage or pledge) of properties or business in exchange for securities of a corporation other than the association if the preferred stock is exchanged for securities of such other corporation:
iii. To any amendment which would adversely change the specific terms of any class or series of capital stock as set forth in this Section 5 (or in any supplementary sections hereto), including any amendment which would create or enlarge any class or series ranking prior thereto in rights and preferences. An amendment which increases the number of authorized shares of any class or series of capital stock, or substitutes the surviving association in a merger or consolidation for the association, shall not be considered to be such an adverse change.
A description of the different classes and series (if any) of the association's capital stock and a statement of the designations, and the relative rights, preferences, and limitations of the shares of each class of and series (if any) of capital stock are as follows:
A.
Whenever there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and of sinking fund, retirement fund, or other retirement payments, if any, to which such holders are respectively entitled in preference to the common stock, then dividends may be paid on the common stock and on any class or series of stock entitled to participate therewith as to dividends out of any assets legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the association, the holders of the common
B.
a. The distinctive serial designation and the number of shares constituting such series;
b. The dividend rate or the amount of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date(s), the payment date(s) for dividends, and the participating or other special rights, if any, with respect to dividends;
c. The voting powers, full or limited, if any, of shares of such series;
d. Whether the shares of such series shall be redeemable and, if so, the price(s) at which, and the terms and conditions on which, such shares may be redeemed;
e. The amount(s) payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution, or winding up of the association;
f. Whether the shares of such series shall be entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and if so entitled, the amount of such fund and the manner of its application, including the price(s) at which such shares may be redeemed or purchased through the application of such fund;
g. Whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes of stock of the association and, if so, the conversion price(s) or the rate(s) of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange.
h. The price or other consideration for which the shares of such series shall be issued; and
i. Whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of serial preferred stock and whether such shares may be reissued as shares of the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same relative rights as and be identical in all respects with all the other shares of the same series.
The board of directors shall have authority to divide, by the adoption of supplementary charter sections, any authorized class of preferred stock into series, and, within the limitations set forth in this section and the remainder of this charter, fix and determine the relative rights and preferences of the shares of any series so established.
Prior to the issuance of any preferred shares of a series established by a supplementary charter section adopted by the board of directors, the association shall file with the OCC a dated copy of that supplementary section of this charter established and designating the series and fixing and determining the relative rights and preferences thereof.
(5)
(6)
(7)
A.
In the event shares are acquired in violation of this section 8, all shares beneficially owned by any person in excess of 10 percent shall be considered “excess shares” and shall not be counted as shares entitled to vote and shall not be voted by any person or counted as voting shares in connection with any matters submitted to the stockholders for a vote.
For purposes of this section 8, the following definitions apply:
1. The term “person” includes an individual, a group acting in concert, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of the equity securities of the association.
2. The term “offer” includes every offer to buy or otherwise acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value.
3. The term “acquire” includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise.
4. The term “acting in concert” means (a) knowing participation in a joint activity or conscious parallel action
B.
C.
(h)
(i)
(j)
(2)
(
(
(B) Bylaw provisions that adopt the language of the OCC's model or optional bylaws, if adopted without change, and filed with the OCC within 30 days after adoption, are effective upon adoption.
(ii)
(iii)
(3)
(4)
(k)
(2)
(3)
(4)
(ii) In lieu of making the shareholders list available for inspection by any shareholders as provided in paragraph (j)(4)(i) of this section, the board of directors may perform such acts as required by paragraphs (a) and (b) of Rule 14a-7 of the General Rules and Regulations under the Securities and Exchange Act of 1934 (17 CFR 240.14a-7) as may be duly requested in writing, with respect to any matter which may be properly considered at a meeting of shareholders, by any shareholder who is entitled to vote on such matter and who shall defray the reasonable expenses to be incurred by the association in performance of the act or acts required.
(5)
(6)
(ii)
(7)
(8)
(l)
(2)
(3)
(4)
(5)
(6)
(ii) If less than the entire board is to be removed, no one of the directors may be removed if the votes cast against the removal would be sufficient to elect a director if then cumulatively voted at an election of the class of directors of which such director is a part.
(iii) Whenever the holders of the shares of any class are entitled to elect one or more directors by the provisions of the charter or supplemental sections thereto, the provisions of this section shall apply, in respect to the removal of a director or directors so elected, to the vote of the holders of the outstanding shares of that class and not to the vote of the outstanding shares as a whole.
(7)
(8)
(9)
(10)
(11)
(m)
(2)
(3)
(n)
(2)
(a)
(b)
(2) As used in this section, depository institution means any commercial bank (including a private bank), a savings bank, a trust company, a savings and loan association, a building and loan association, a homestead association, a cooperative bank, an industrial bank or a credit union, chartered in the United States and having its principal office located in the United States.
(c)
(d)
(2)
(ii)
(A) Be signed by the president or other duly authorized officer;
(B) Identify each branch that the resulting financial institution expects to operate after conversion;
(C) Include the institution's most recent audited financial statements (if any);
(D) Include the latest report of condition and report of income (the most recent daily statement of condition will suffice if the institution does not file these reports);
(E) Unless otherwise advised by the OCC in a prefiling communication, include an opinion of counsel that, in the case of state-chartered institutions, the conversion is not in contravention of applicable state law, or in the case of Federally-chartered institutions, the conversion is not in contravention of applicable Federal law;
(F) State whether the institution wishes to exercise fiduciary powers after the conversion;
(G) Identify all subsidiaries, service corporation investments, bank service company investments, and other equity investments that will be retained following the conversion, and provide the information and analysis of the subsidiaries' activities and the service corporation investments and other equity investments that would be required if the converting mutual institution or stock institution were a Federal mutual savings association or Federal stock savings association, respectively, establishing each subsidiary or making each service corporation or other equity investment pursuant to §§ 5.35, 5.36, 5.38, or 5.59, or other applicable law and regulation;
(H) Identify any nonconforming assets (including nonconforming subsidiaries) and nonconforming activities that the institution engages in, and describe the plans to retain or divest those assets and activities;
(I) Include a business plan if the converting institution has been operating for less than three years, plans to make significant changes to its business after the conversion, or at the request of the OCC;
(J) Include a list of all outstanding conditions or other requirements imposed by the institution's current appropriate Federal banking agency and, if applicable, current state bank supervisor or state attorney-general in any cease and desist order, written agreement, other formal enforcement order, memorandum of understanding, approval of any application, notice or request, commitment letter, board resolution, or in any other manner, including the converting institution's analysis whether any such actions prohibit conversion under 12 U.S.C. 35, and the converting institution's plans regarding adhering to such conditions and requirements after conversion; and
(K) If the converting institution does not meet the qualified thrift lender test of 12 U.S.C. 1467a(m), include a plan to achieve compliance within a reasonable period of time and a request for an exception from the OCC.
(iii) The OCC may permit a Federal savings association to retain nonconforming assets of a converting institution for the time period prescribed by the OCC following a conversion, subject to conditions and an OCC determination of the carrying value of the retained assets consistent with the requirements of section 5(c) of the HOLA relating to loans and investments. The OCC may permit a Federal savings association to continue nonconforming activities of a converting institution for the time period prescribed by the OCC following a conversion, subject to conditions.
(iv) Approval for an institution to convert to a Federal savings association expires if the conversion has not occurred within six months of the OCC's approval of the application, unless the OCC grants an extension of time.
(v) When the OCC determines that the applicant has satisfied all statutory and regulatory requirements and any other conditions, the OCC issues a charter. The charter provides that the institution is authorized to begin conducting business as a Federal mutual savings association or a Federal stock savings association as of a specified date.
(3)
(4)
(e)
(f)
(2)
(g)
(a)
(b)
(c)
(2) As used in this section,
(d)
(e)
(2)
(i) Be signed by the president or other duly authorized officer;
(ii) Identify each branch that the resulting bank expects to operate after conversion;
(iii) Include the institution's most recent audited financial statements (if any);
(iv) Include the latest report of condition and report of income (the most recent daily statement of condition will suffice if the institution does not file these reports);
(v) Unless otherwise advised by the OCC in a prefiling communication, include an opinion of counsel that, in the case of a state bank, the conversion is not in contravention of applicable state law, or in the case of a Federal stock savings association, the conversion is not in contravention of applicable Federal law;
(vi) State whether the institution wishes to exercise fiduciary powers after the conversion;
(vii) Identify all subsidiaries, bank service company investments, and other equity investments that will be retained following the conversion, and provide the information and analysis of the subsidiaries' activities, the bank service company investments, and the other equity investments that would be required if the converting bank or savings association were a national bank establishing each subsidiary or making each bank service company investment or other equity investment pursuant to §§ 5.34, 5.35, 5.36, 5.39, 12 CFR part 1, or other applicable law and regulation;
(viii) Identify any nonconforming assets (including nonconforming subsidiaries) and nonconforming activities that the institution engages in and describe the plans to retain or divest those assets and activities;
(ix) Include a business plan if the converting institution has been operating for fewer than three years, plans to make significant changes to its business after the conversion, or at the request of the OCC; and
(x) List all outstanding conditions or other requirements imposed by the institution's current appropriate Federal banking agency and, if applicable, current state bank supervisor or state attorney-general in any cease and desist order, written agreement, other formal enforcement order, memorandum of understanding, approval of any application, notice or request, commitment letter, board resolution, or in any other manner, including the converting institution's analysis whether the conversion is prohibited under 12 U.S.C. 35, and state the institution's plans regarding adhering to such conditions or requirements after conversion.
(3) The OCC may permit a national bank to retain nonconforming assets of a state bank or stock state savings association, subject to conditions and an OCC determination of the carrying value of the retained assets, pursuant to 12 U.S.C. 35. The OCC may permit a national bank to continue nonconforming activities of a state bank or stock state savings association, or to retain the nonconforming assets or nonconforming activities of a Federal stock savings association, for a reasonable period of time following a conversion, subject to conditions imposed by the OCC.
(4) Approval for an institution to convert to a national bank expires if the conversion has not occurred within six months of the OCC's approval of the application, unless the OCC grants an extension of time.
(5) When the OCC determines that the applicant has satisfied all statutory and regulatory requirements, including those set forth in 12 U.S.C. 35, and any other conditions, the OCC issues a charter certificate. The certificate provides that the institution is authorized to begin conducting business as a national bank as of a specified date.
(f)
(2)
(g)
(h)
(i)
(a)
(b)
(c)
(d)
(2)
(3)
(ii) The notice shall include:
(A) A copy of the conversion application; and
(B) An analysis demonstrating that the conversion is in compliance with laws of the applicable jurisdictions regarding the permissibility, requirements, and procedures for conversions, including any applicable stockholder or account holder approval requirements.
(4)
(5)
(e)
(a)
(b)
(1) Where two or more national banks consolidate or merge, and any of the national banks has, prior to the consolidation or merger, received OCC approval to exercise fiduciary powers and that approval is in force at the time of the consolidation or merger, the resulting national bank may exercise fiduciary powers in the same manner and to the same extent as the national bank to which approval was originally granted;
(2) Where two or more Federal savings associations consolidate or merge, and any of the Federal savings associations has, prior to the consolidation or merger, received approval from the OCC or the Office of Thrift Supervision to exercise fiduciary powers and that approval is in force at the time of the consolidation or merger, the resulting Federal savings association may exercise fiduciary powers in the same manner and to the same extent as
(3) Where a national bank with prior OCC approval to exercise fiduciary powers is the resulting bank in a merger or consolidation with a state bank, state savings association, or Federal savings association and the national bank will exercise fiduciary powers in the same manner and to the same extent to which approval was originally granted; and
(4) Where a Federal savings association with prior approval from the OCC or the Office of Thrift Supervision to exercise fiduciary powers is the resulting savings association in a merger or consolidation with a state bank, state savings association, or national bank and the Federal savings association will exercise fiduciary powers in the same manner and to the same extent to which approval was originally granted.
(c)
(d)
(e)
(i) A national bank or Federal savings association without fiduciary powers:
(ii) A national bank without fiduciary powers that desires to exercise fiduciary powers as the resulting bank after merging with a state bank, state savings association, or Federal savings association with fiduciary powers or a Federal savings association without fiduciary powers that desires to exercise fiduciary powers as the resulting savings association after merging with a state bank, state savings association or national bank with fiduciary powers;
(iii) A national bank that results from the conversion of a state bank or a state or Federal savings association that was exercising fiduciary powers prior to the conversion or a Federal savings association that results from a conversion of a state or national bank or a state savings association that was exercising fiduciary powers prior to the conversion; and
(iv) A national bank or Federal savings association that has received approval from the OCC to exercise limited fiduciary powers that desires to exercise full fiduciary powers.
(2)
(A) A statement requesting full or limited powers (specifying which powers);
(B) A statement that the capital and surplus of the national bank or Federal savings association is not less than the capital and surplus required by state law of state banks, trust companies, and other corporations exercising comparable fiduciary powers;
(C) Sufficient biographical information on proposed trust management personnel to enable the OCC to assess their qualifications;
(D) A description of the locations where the national bank or Federal savings association will conduct fiduciary activities;
(E) If requested by the OCC, an opinion of counsel that the proposed activities do not violate applicable Federal or state law, including citations to applicable law; and
(F) Any other information necessary to enable the OCC to sufficiently assess the factors described in paragraph (e)(2)(iii) of this section.
(ii) If approval to exercise fiduciary powers is desired in connection with any other transaction subject to an application under this part, the applicant covered under paragraph (e)(1)(ii), (e)(1)(iii), or (e)(1)(iv) of this section may include a request for approval of fiduciary powers, including the information required by paragraph (e)(2)(i) of this section, as part of its other application. The OCC does not require a separate application requesting approval to exercise fiduciary powers under these circumstances.
(iii) When reviewing any application filed under this section, the OCC considers factors such as the following:
(A) The financial condition of the national bank or Federal savings association;
(B) The adequacy of the national bank's or Federal savings association's capital and surplus and whether it is sufficient under the circumstances and not less than the capital and surplus required by state law or state banks, trust companies, and other corporations exercising comparable fiduciary powers;
(C) The character and ability of proposed trust management, including qualifications, experience, and competency. The OCC must approve any trust management change the bank or savings association makes prior to commencing trust activities;
(D) The adequacy of the proposed business plan, if applicable;
(E) The needs of the community to be served; and
(F) Any other factors or circumstances that the OCC considers proper.
(3)
(4)
(5)
(6)
(ii) Unless the national bank or Federal savings association provides notice through other means (such as a merger application), the national bank or Federal savings association shall provide written notice to the OCC no later than 10 days after it begins to engage in any of the activities specified in § 9.7(d) of this chapter in a state in addition to the state described in the application for fiduciary powers that the OCC has approved. The written notice must identify the new state or states
(iii) No notice is required if the national bank or Federal savings association is conducting only activities ancillary to its fiduciary business through a trust representative office or otherwise.
(7)
(8)
(a)
(b)
(c)
(2)
(d)
(i) A branch established by a national bank includes a mobile facility, temporary facility, intermittent facility, drop box or a seasonal agency as described in 12 U.S.C. 36(c).
(ii) A facility otherwise described in this paragraph (d)(1) is not a branch if:
(A) The bank establishing the facility does not permit members of the public to have physical access to the facility for purposes of making deposits, paying checks, or borrowing money (
(B) It is located at the site of, or is an extension of, an approved main office or branch office of the national bank. The OCC determines whether a facility is an extension of an existing main office or branch office on a case-by-case basis. For this purpose, the OCC will consider a drive-in or pedestrian facility located within 500 feet of a public entrance to an existing main office or branch office to be an extension of the existing main office or branch office, provided the functions performed at the drive-in or pedestrian facility are limited to functions that are ordinarily performed at a teller window.
(iii) A branch does not include an automated teller machine (ATM), a remote service unit (such as an automated loan machine or personal computer used in providing financial services), a loan production office, a deposit production office, a trust office, an administrative office, a data processing office, or any other office that does not engage in any of the activities in paragraph (d)(1) of this section.
(2)
(3)
(4)
(5)
(6)
(e)
(1) Maintaining a safe and sound banking system;
(2) Encouraging a national bank to provide fair access to financial services by helping to meet the credit needs of its entire community;
(3) Ensuring compliance with laws and regulations; and
(4) Promoting fair treatment of customers including efficiency and better service.
(f)
(2)
(3)
(4)
(5)
(6)
(g)
(h)
(2) The comment period on an application to engage in a short-distance relocation is 15 days.
(3) The OCC may waive or reduce the public notice and comment period, as appropriate, with respect to an application to establish a branch to restore banking services to a community affected by a disaster or to temporarily replace banking facilities where, because of an emergency, the bank cannot provide services or must curtail banking services.
(4) The OCC may waive or reduce the public notice and comment period, as appropriate, for an application by a national bank with a CRA rating of Satisfactory or better to establish a temporary branch which, if it were established by a state bank to operate in the manner proposed, would be permissible under state law without state approval.
(i)
(j)
(a)
(b)
(c)
(2)
(3)
(d)
(2)
(e)
(1) Maintaining a safe and sound banking system;
(2) Encouraging a Federal savings association to provide fair access to financial services by helping to meet the credit needs of its entire community;
(3) Ensuring compliance with laws and regulations; and
(4) Promoting fair treatment of customers including efficiency and better service.
(f)
(ii)
(iii)
(2)
(i)
(ii)
(iii)
(A) It published a public notice under § 5.8 of its intent to change the location of the branch office or establish a new branch office. The public notice must be published at least 35 days before the proposed action establishment or relocation. If the notice is published more than 12 months before the proposed action, the publication is invalid.
(B) If the Federal savings association intends to change the location of an existing branch office, it must post a notice of its intent in a prominent location in the existing office to be relocated. This notice must be posted for 30 days from the date of publication of the initial public notice described in paragraph (f)(2)(iii)(A) of this section.
(C)(
(
(3)
(g)
(2) The OCC may waive or reduce the public notice and comment period, as appropriate, for an application by a Federal savings association with a CRA rating of Satisfactory or better to establish a temporary branch which, if it were established by a state bank to operate in the manner proposed, would be permissible under state law without state approval.
(h)
(i)
(j)
(2) Any Federal savings association that must obtain approval of the OCC under 12 U.S.C. 1464(m)(1) shall follow the application procedures of this section. Any state savings association that must obtain approval of the OCC under 12 U.S.C. 1464(m)(1) shall follow the application procedures of this section as if it were a Federal savings association.
(k)
(i) Servicing, originating, or approving loans and contracts;
(ii) Managing or selling real estate owned by the Federal savings association; and
(iii) Conducting fiduciary activities or activities ancillary to the association's fiduciary business in compliance with § 5.26(e).
(2)
(ii)
(iii)
(3)
The revision and additions read as follows:
(d) * * *
(4)
(a)
(b)
(1) OCC review and approval of an application by a national bank or a Federal savings association for a business combination resulting in a national bank or Federal savings association; and
(2) Requirements of notices and other procedures for national banks and Federal savings associations involved in other combinations in which a national bank or Federal savings association is not the resulting institution.
(c)
(d)
(1)
(2)
(i) Any merger or consolidation between a national bank or a Federal savings association and one or more depository institutions or state trust companies, in which the resulting institution is a national bank or Federal savings association;
(ii) In the case of a Federal savings association, any merger or consolidation with a credit union in which the resulting institution is a Federal savings association;
(iii) In the case of a national bank, any merger between a national bank and one or more of its nonbank affiliates;
(iv) The acquisition by a national bank or a Federal savings association of all, or substantially all, of the assets of another depository institution; or
(v) The assumption by a national bank or a Federal savings association of any deposit liabilities of another insured depository institution or any deposit accounts or other liabilities of a credit union or any other institution that will become deposits at the national bank or Federal savings association.
(3)
(i) A business combination between eligible banks and eligible savings associations, or between an eligible bank or an eligible savings association and an eligible depository institution, that are controlled by the same holding company or that will be controlled by the same holding company prior to the combination; or
(ii) A business combination between an eligible bank or an eligible savings association and an interim national bank or interim Federal savings association chartered in a transaction in which a person or group of persons exchanges its shares of the eligible bank or eligible savings association for shares of a newly formed holding company and receives after the transaction substantially the same proportional share interest in the holding company as it held in the eligible bank or eligible savings association (except for changes in interests resulting from the exercise of dissenters' rights), and the reorganization involves no other transactions involving the bank or savings association.
(4)
(5) For business combinations under paragraphs (g)(4) and (5) of this section, a company or shareholder is deemed to
(i) Such company or shareholder, directly or indirectly, or acting through one or more other persons owns, controls, or has power to vote 25 percent or more of any class of voting securities of the other company, or
(ii) Such company or shareholder controls in any manner the election of a majority of the directors or trustees of the other company. No company shall be deemed to own or control another company by virtue of its ownership or control of shares in a fiduciary capacity.
(6)
(7)
(8)
(9)
(10)
(i) Any merger or consolidation between a national bank or a Federal savings association and one or more depository institutions or state trust companies, in which the resulting institution is not a national bank or Federal savings association;
(ii) In the case of a Federal stock savings association, any merger or consolidation with a credit union in which the resulting institution is a credit union;
(iii) The transfer by a national bank or a Federal savings association of any deposit liabilities to another insured depository institution, a credit union or any other institution; or
(iv) The acquisition by a national bank or a Federal savings association of all, or substantially all, of the assets, or the assumption of all or substantially all of the liabilities, of any company other than a depository institution.
(11)
(12)
(e)
(A) The capital level of any resulting national bank or Federal savings association
(B) The conformity of the transaction to applicable law, regulation, and supervisory policies;
(C) The purpose of the transaction;
(D) The impact of the transaction on safety and soundness of the national bank or Federal savings association; and
(E) The effect of the transaction on the national bank's or Federal savings association's shareholders (or members in the case of a mutual savings association), depositors, other creditors, and customers.
(ii)
(A)
(
(B)
(C)
(D)
(E)
(F)
(iii)
(2)
(3)
(ii) An national bank applicant proposing to acquire, through a business combination, a subsidiary, financial subsidiary investment, bank service company investment, service corporation investment, or other equity investment of any entity other than a national bank must provide the same information and analysis of the subsidiary's activities, or of the investment, that would be required if the applicant were establishing the subsidiary, or making such investment, pursuant to §§ 5.34, 5.35, 5.36, or 5.39.
(iii) A Federal savings association applicant proposing to acquire, through a business combination, a subsidiary, bank service company investment, service corporation investment, or other equity investment of any entity other than a Federal savings association must provide the same information and analysis of the subsidiary's activities, or of the investment, that would be required if the applicant were establishing the subsidiary, or making such investment, pursuant to §§ 5.35, 5.38, 5.58, or 5.59.
(4)
(ii)
(iii)
(A) On the date the OCC advises the interim national bank that its articles of association and organization certificate are acceptable or advises the interim Federal savings association that its charter and bylaws are acceptable; or
(B) On the date the interim national bank files articles of association and an organization certificate that conform to the form for those documents provided by the OCC in the Comptroller's Licensing Manual or the date the interim Federal savings association files a charter and bylaws that conform to the requirements set out in this part 5.
(iv)
(5)
(ii) Any resulting Federal savings association shall conform to the requirements of sections 5(c) and 10(m) of the Home Owners' Loan Act (12 U.S.C. 1464(c) and 1467a(m)) within the time period prescribed by the OCC.
(6)
(ii) If an applicant intends to exercise fiduciary powers after the combination and requires OCC approval for such powers, the applicant must include the information required under § 5.26(e)(2).
(7)
(8)
(ii) A national bank or Federal savings association applicant with one or more classes of securities subject to the registration provisions of section 12(b) or (g) of the Securities Exchange Act of 1934, 15 U.S.C. 78 l (b) or 78 l (g), shall file preliminary proxy material or information statements for review with the Director, Securities and Corporate Practices Division, OCC, Washington, DC 20219. Any other applicant shall submit the proxy materials or information statements it uses in connection with the combination to the appropriate OCC licensing office no later than when the materials are sent to the shareholders.
(f)
(ii)
(2)
(3)
(g)
(ii) Any national bank that will not be the resulting bank in a consolidation or merger under 12 U.S.C. 215 or 215a shall provide a notice to the OCC under paragraph (k) of this section.
(2)
(A) A national bank entering into the consolidation or merger shall follow the procedures of 12 U.S.C. 215 or 215a, respectively, as if the Federal savings association were a national bank.
(B)(
(
(ii)(A) National bank shareholders who dissent from a plan to consolidate may receive in cash the value of their national bank shares if they comply with the requirements of 12 U.S.C. 215 as if the Federal savings association were a national bank.
(B) Federal savings association shareholders who dissent from a plan to merge or consolidate may receive in cash the value of their Federal savings association shares if they comply with the requirements of 12 U.S.C. 215 or 215a as if the Federal savings association were a national bank.
(C) The OCC will conduct an appraisal or reappraisal of the value of the national bank or Federal savings association held by dissenting shareholders in accordance with the provisions of 12 U.S.C. 215 or 215a, as applicable, except that the costs and expenses of any appraisal or reappraisal may be apportioned and assessed by the Comptroller as he or she may deem equitable against all or some of the parties. In making this determination the Comptroller shall consider whether any party has acted arbitrarily or not in good faith in respect to the rights provided by this paragraph.
(iii) The consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any participating institution by the resulting institution.
(3)
(A)(
(
(B)(
(
(C)(
(
(
(D)(
(
(ii) The consolidation or merger agreement must address the effect upon, and the terms of the assumption of, any liquidation account of any participating institution by the resulting institution.
(4)
(ii) A national bank entering into the merger shall follow the procedures of 12 U.S.C. 215a as if the nonbank affiliate were a state bank, except as otherwise provided herein.
(iii) A nonbank affiliate entering into the merger shall follow the procedures for such mergers set out in the law of the state or other jurisdiction under which the nonbank affiliate is organized.
(iv) The rights of dissenting shareholders and appraisal of dissenters' shares of stock in the nonbank affiliate entering into the merger shall be determined in the manner prescribed by the law of the state or other jurisdiction under which the nonbank affiliate is organized.
(v) The corporate existence of each institution participating in the merger shall be continued in the resulting national bank, and all the rights, franchises, property, appointments, liabilities, and other interests of the participating institutions shall be transferred to the resulting national bank, as set forth in 12 U.S.C. 215a(a), (e), and (f) in the same manner and to the same extent as in a merger between a national bank and a state bank under 12 U.S.C. 215a(a), as if the nonbank affiliate were a state bank.
(5)
(ii) A national bank entering into the merger shall follow the procedures of 12 U.S.C. 214a, as if the nonbank affiliate were a state bank, except as otherwise provided in this section.
(iii) A nonbank affiliate entering into the merger shall follow the procedures for such mergers set out in the law of the state or other jurisdiction under which the nonbank affiliate is organized.
(iv)(A) National bank shareholders who dissent from an approved plan to merge may receive in cash the value of their national bank shares if they comply with the requirements of 12 U.S.C. 214a as if the nonbank affiliate were a state bank. The OCC may conduct an appraisal or reappraisal of dissenters' shares of stock in a national bank involved in the merger if all parties agree that the determination is final and binding on each party and agree on how the total expenses of the OCC in making the appraisal will be divided among the parties and paid to the OCC.
(B) The rights of dissenting shareholders and appraisal of dissenters' shares of stock in the nonbank affiliate involved in the merger shall be determined in the manner prescribed by the law of the state or other jurisdiction under which the nonbank affiliate is organized.
(v) The corporate existence of each entity participating in the merger shall be continued in the resulting nonbank affiliate, and all the rights, franchises, property, appointments, liabilities, and other interests of the participating national bank shall be transferred to the resulting nonbank affiliate as set forth in 12 U.S.C. 214b, in the same manner and to the same extent as in a merger between a national bank and a state bank under 12 U.S.C. 214a, as if the nonbank affiliate were a state bank.
(6)
(ii)
(iii)
(iv)
(7)
(ii)
(B) For purposes of this paragraph (g)(7), a combination in which a state bank, state savings bank, state savings association, state trust company, or credit union acquires all or substantially all of the assets, or assumes all or substantially all of the liabilities, of a Federal savings association shall be treated as a consolidation by the Federal savings association.
(iii)
(B) The plan of merger or consolidation must provide the manner of disposing of the shares of the resulting state institution not taken by the dissenting shareholders of the Federal savings association.
(iv)
(h)
(i)
(j)
(i) At least one party to the transaction is an eligible bank or eligible Federal savings association, and all other parties to the transaction are eligible banks, eligible Federal savings associations, or eligible depository institutions, the resulting national bank or resulting Federal savings association will be well capitalized immediately following consummation of the transaction, and the total assets of the target institution are no more than 50 percent of the total assets of the acquiring bank or Federal savings association, as reported in each institution's Consolidated Report of Condition and Income filed for the quarter immediately preceding the filing of the application;
(ii) The acquiring bank or Federal savings association is an eligible bank or eligible Federal savings association, the target bank or savings association is not an eligible bank, eligible Federal savings association, or an eligible depository institution, the resulting national bank or resulting Federal savings association will be well capitalized immediately following consummation of the transaction, and the applicants in a prefiling communication request and obtain approval from the appropriate OCC licensing office to use the streamlined application;
(iii) The acquiring bank or Federal savings association is an eligible bank or eligible Federal savings association, the target bank or savings association is not an eligible bank, eligible Federal savings association, or an eligible depository institution, the resulting bank or resulting Federal savings association will be well capitalized immediately following consummation of the transaction, and the total assets acquired do not exceed 10 percent of the total assets of the acquiring national bank or acquiring Federal savings association, as reported in each institution's Consolidated Report of Condition and Income filed for the quarter immediately
(iv) In the case of a transaction under paragraph (g)(4) of this section, the acquiring bank is an eligible bank, the resulting national bank will be well capitalized immediately following consummation of the transaction, the applicants in a prefiling communication request and obtain approval from the appropriate OCC licensing office to use the streamlined application, and the total assets acquired do not exceed 10 percent of the total assets of the acquiring national bank, as reported in the bank's Consolidated Report of Condition and Income filed for the quarter immediately preceding the filing of the application.
(2) Notwithstanding paragraph (j)(1) of this section, an applicant does not qualify for a streamlined business combination application if the transaction is part of a conversion under part 192 of this chapter.
(3) When a business combination qualifies for a streamlined application, the applicant should consult the Comptroller's Licensing Manual to determine the abbreviated application information required by the OCC. The OCC encourages prefiling communications between the applicants and the appropriate OCC licensing office before filing under paragraph (j) of this section.
(k)
(2)
(3)
(i)(A) A short description of the material features of the transaction, the identity of the acquiring institution, the identity of the state or Federal regulator to whom the application was made, and the date of the application; or
(B) A copy of a filing made with another Federal or state regulatory agency seeking approval from that agency for the transaction under the Bank Merger Act or other applicable statute;
(ii) The planned consummation date for the transaction;
(iii) Information to demonstrate compliance by the national bank or Federal savings association with applicable requirements to engage in the transactions (
(iv) If the national bank or Federal savings association submitting the notice maintains a liquidation account established pursuant to part 192 of this chapter, the notice must state that the resulting institution will assume such liquidation account.
(4)
(5)
(l)
(2) The authority in paragraph (l)(1) of this section is in addition to any authority granted by applicable statutes for specific transactions and is subject to the National Bank Act, the Home Owners' Loan Act, and other applicable statutes.
(m)
(2) When the transaction is consummated, the applicant shall notify the OCC of the consummation date. The OCC will issue a letter certifying that the combination was effective on the date specified in the applicant's notice.
(n)
(2) A Federal savings association may consolidate or merge with another depository institution, a state trust company or a credit union, or may engage in another business combination listed in paragraphs (d)(2)(iv) and (v) of this section, or may engage in an other combination listed in paragraph (d)(10), provided that:
(i) The combination is in compliance with, and receives all approvals required under, any applicable statutes and regulations;
(ii) Any resulting Federal savings association meets the requirements for insurance of accounts; and
(iii) If any combining savings association is a mutual savings association, the resulting institution shall be a mutually held savings association, unless:
(A) The transaction is approved under part 192 governing mutual to stock conversions; or
(B) The transaction involves a mutual holding company reorganization under 12 U.S.C. 1467a(o).
(3) Where the resulting institution is a Federal mutual savings association, the OCC may approve a temporary increase in the number of directors of
(4)(i) The Federal savings associations described in paragraph (n)(4)(ii) of this section below must provide affected accountholders with a notice of a proposed account transfer and an option of retaining the account in the transferring Federal savings association. The notice must allow affected accountholders at least 30 days to consider whether to retain their accounts in the transferring Federal savings association.
(ii) The following savings associations must provide the notices:
(A) A Federal mutual savings association transferring account liabilities to an institution the accounts of which are not insured by the Deposit Insurance Fund or the National Credit Union Share Insurance Fund; and
(B) Any Federal mutual savings association transferring account liabilities to a stock form depository institution.
(o)
(2)
(3)
(ii)
(A) It does not involve an interim Federal savings association or an interim state savings association;
(B) The association's charter is not changed;
(C) Each share of stock outstanding immediately prior to the effective date of the consolidation or merger is to be an identical outstanding share or a treasury share of the resulting Federal stock savings association after such effective date; and
(D) Either:
(
(
(iii)
(4)
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(i) In the case of a national bank:
(A) The national bank has received a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System in connection with its most recent examination; or
(B) In the case of any national bank that has not been examined, the existence and use of managerial resources that the OCC determines are satisfactory.
(ii) In the case of a Federal branch or agency:
(A) The Federal branch or agency has received a composite ROCA supervisory rating (which rates risk management, operational controls, compliance, and asset quality) of 1 or 2 at its most recent examination; or
(B) In the case of a Federal branch or agency that has not been examined, the existence and use of managerial resources that the OCC determines are satisfactory.
(e)
(A) Providing authorized products as principal; and
(B) Providing title insurance as principal if the national bank or subsidiary thereof was actively and lawfully underwriting title insurance before November 12, 1999, and no affiliate of the national bank (other than a subsidiary) provides insurance as principal. A subsidiary may not provide title insurance as principal if the state had in effect before November 12, 1999, a law which prohibits any person from underwriting title insurance with respect to real property in that state.
(ii) In addition to OCC authorization, before it begins business an operating subsidiary also must comply with other laws applicable to it and its proposed business, including applicable licensing or registration requirements, if any, such as registration requirements under securities laws.
(2)
(A) The bank has the ability to control the management and operations of the subsidiary, and no other person or entity exercises effective operating control over the subsidiary or has the ability to influence the subsidiary's operations to an extent equal to or greater than that of the bank;
(B) The parent bank owns and controls more than 50 percent of the voting (or similar type of controlling) interest of the operating subsidiary, or the parent bank otherwise controls the operating subsidiary and no other party controls a percentage of the voting (or similar type of controlling) interest of the operating subsidiary greater than the bank's interest; and
(C) The operating subsidiary is consolidated with the bank under generally accepted accounting principles (GAAP).
(ii) However, the following subsidiaries are not operating subsidiaries subject to this section:
(A) A subsidiary in which the bank's investment is made pursuant to specific authorization in a statute or OCC regulation (
(B) A subsidiary in which the bank has acquired, in good faith, shares through foreclosure on collateral, by way of compromise of a doubtful claim, or to avoid a loss in connection with a debt previously contracted.
(iii) Notwithstanding the requirements of paragraph (e)(2)(i) of this section,
(A) A national bank must have reasonable policies and procedures to preserve the limited liability of the bank and its operating subsidiaries; and
(B) OCC regulations shall not be construed as requiring a national bank and its operating subsidiaries to operate as a single entity.
(3)
(4)
(ii)
(5)
(B) The application must explain, as appropriate, how the bank “controls” the enterprise, describing in full detail structural arrangements where control is based on factors other than bank ownership of more than 50 percent of the voting interest of the subsidiary and the ability to control the management and operations of the subsidiary by holding voting interests sufficient to select the number of directors needed to control the subsidiary's board and to select and terminate senior management. In the case of a limited partnership or limited liability company that does not qualify for the notice procedures set forth in paragraph (e)(5)(ii) of this section, the bank must provide a statement explaining why it is not eligible. The application also must include a complete description of the bank's investment in the subsidiary, the proposed activities of the subsidiary, the organizational structure and management of the subsidiary, the relations between the bank and the subsidiary, and other information necessary to adequately describe the
(ii)
(
(
(
(
(
(
(B) The written notice must include a complete description of the bank's investment in the subsidiary and of the activity conducted and a representation and undertaking that the activity will be conducted in accordance with OCC policies contained in guidance issued by the OCC regarding the activity. To the extent that the notice relates to the initial affiliation of the bank with a company engaged in insurance activities, the bank must describe the type of insurance activity in which the company is engaged and has present plans to conduct. The bank also must list for each state the lines of business for which the company holds, or will hold, an insurance license, indicating the state where the company holds a resident license or charter, as applicable. Any bank receiving approval under this paragraph is deemed to have agreed that the subsidiary will conduct the activity in a manner consistent with published OCC guidance.
(iii)
(iv)
(v)
(A) Holding and managing assets acquired by the parent bank or its operating subsidiaries, including investment assets and property acquired by the bank through foreclosure or otherwise in good faith to compromise a doubtful claim, or in the ordinary course of collecting a debt previously contracted;
(B) Providing services to or for the bank or its affiliates, including accounting, auditing, appraising, advertising and public relations, and financial advice and consulting;
(C) Making loans or other extensions of credit, and selling money orders, savings bonds, and travelers checks;
(D) Purchasing, selling, servicing, or warehousing loans or other extensions of credit, or interests therein;
(E) Providing courier services between financial institutions;
(F) Providing management consulting, operational advice, and services for other financial institutions;
(G) Providing check guaranty, verification and payment services;
(H) Providing data processing, data warehousing and data transmission products, services, and related activities and facilities, including associated equipment and technology, for the bank or its affiliates;
(I) Acting as investment adviser (including an adviser with investment discretion) or financial adviser or counselor to governmental entities or instrumentalities, businesses, or individuals, including advising registered investment companies and mortgage or real estate investment trusts, furnishing economic forecasts or other economic information, providing investment advice related to futures and options on futures, and providing consumer financial counseling;
(J) Providing tax planning and preparation services;
(K) Providing financial and transactional advice and assistance, including advice and assistance for customers in structuring, arranging, and executing mergers and acquisitions, divestitures, joint ventures, leveraged buyouts, swaps, foreign exchange, derivative transactions, coin and bullion, and capital restructurings;
(L) Underwriting and reinsuring credit related insurance to the extent permitted under section 302 of the GLBA (15 U.S.C. 6712);
(M) Leasing of personal property and acting as an agent or adviser in leases for others;
(N) Providing securities brokerage or acting as a futures commission merchant, and providing related credit and other related services;
(O) Underwriting and dealing, including making a market, in bank permissible securities and purchasing and selling as principal, asset backed obligations;
(P) Acting as an insurance agent or broker, including title insurance to the extent permitted under section 303 of the GLBA (15 U.S.C. 6713);
(Q) Reinsuring mortgage insurance on loans originated, purchased, or serviced by the bank, its subsidiaries, or its affiliates, provided that if the subsidiary enters into a quota share agreement, the subsidiary assumes less than 50 percent of the aggregate insured risk covered by the quota share agreement. A “quota share agreement” is an agreement under which the reinsurer is liable to the primary insurance underwriter for an agreed upon percentage of every claim arising out of the covered book of business ceded by the primary insurance underwriter to the reinsurer;
(R) Acting as a finder pursuant to 12 CFR 7.1002 to the extent permitted by published OCC precedent for national banks;
(S) Offering correspondent services to the extent permitted by published OCC precedent for national banks;
(T) Acting as agent or broker in the sale of fixed or variable annuities;
(U) Offering debt cancellation or debt suspension agreements;
(V) Providing real estate settlement, closing, escrow, and related services; and real estate appraisal services for the subsidiary, parent bank, or other financial institutions;
(W) Acting as a transfer or fiscal agent;
(X) Acting as a digital certification authority to the extent permitted by published OCC precedent for national banks, subject to the terms and conditions contained in that precedent;
(Y) Providing or selling public transportation tickets, event and attraction tickets, gift certificates, prepaid phone cards, promotional and advertising material, postage stamps, and Electronic Benefits Transfer (EBT) script, and similar media, to the extent permitted by published OCC precedent for national banks, subject to the terms and conditions contained in that precedent;
(Z) Providing data processing, and data transmission services, facilities (including equipment, technology, and personnel), databases, advice and access to such services, facilities, databases and advice, for the parent bank and for others, pursuant to 12 CFR 7.5006 to the extent permitted by published OCC precedent for national banks;
(AA) Providing bill presentment, billing, collection, and claims-processing services;
(BB) Providing safekeeping for personal information or valuable confidential trade or business information, such as encryption keys, to the extent permitted by published OCC precedent for national banks;
(CC) Providing payroll processing;
(DD) Providing branch management services;
(EE) Providing merchant processing services except when the activity involves the use of third parties to solicit or underwrite merchants; and
(FF) Performing administrative tasks involved in benefits administration.
(vi)
(A) Activities of the new subsidiary are limited to those activities previously reported by the bank in connection with the establishment or acquisition of a prior operating subsidiary;
(B) Activities in which the new subsidiary will engage continue to be legally permissible for the subsidiary;
(C) Activities of the new subsidiary will be conducted in accordance with any conditions imposed by the OCC in approving the conduct of these activities for any prior operating subsidiary of the bank; and
(D) The standards set forth in paragraphs (e)(5)(ii)(A)(
(vii)
(B) Unless the subsidiary is a registered investment adviser, if an operating subsidiary proposes to exercise investment discretion on behalf of customers or provide investment advice for a fee, the national bank must have prior OCC approval to exercise fiduciary powers pursuant to § 5.26 and 12 CFR part 9.
(viii)
(6)
(7)
(A) Is not functionally regulated within the meaning of section 5(c)(5) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1844(c)(5)); and
(B) Does business directly with consumers in the United States. For purposes of paragraph (e)(7) of this section, an operating subsidiary, or any subsidiary thereof, does business directly with consumers if, in the ordinary course of its business, it provides products or services to individuals to be used primarily for personal, family, or household purposes.
(ii)
(A) The name and charter number of the parent national bank;
(B) The name (include any “dba” (doing business as), abbreviated names, or trade names used to identify the operating subsidiary when it does business directly with consumers), mailing address (include the street address or post office box, city, state, and zip code), email address (if any), and telephone number of the operating subsidiary;
(C) The principal place of business of the operating subsidiary, if different
(D) The lines of business in which the operating subsidiary is doing business directly with consumers by designating the appropriate code contained in appendix B (NAICS Activity Codes for Commonly Reported Activities) to the Instructions for Preparation of Report of Changes in Organizational Structure, Form FR Y-10, a copy of which is set forth on the OCC's Internet Web page at
(iii)
(a)
(b)
(c)
(d)
(2)
(3)
(4)
(5)
(6)
(e)
(f)
(2)
(ii) A notice is eligible for expedited review if all of the following requirements are met:
(A) The national bank or Federal savings association is “well capitalized” and “well managed” as defined in § 5.34(d) or § 5.38(d), as applicable; and
(B) The bank service company engages only in activities that are permissible for the bank service company under 12 U.S.C. 1864 and that are listed in § 5.34(e)(5)(v) or § 5.38(e)(5)(v), as applicable.
(3)
(4)
(5)
(g)
(1) The name and location of the bank service company;
(2) A complete description of the activities the bank service company will conduct and a representation and undertaking that the activities will be conducted in accordance with OCC guidance. To the extent the notice relates to the initial affiliation of the national bank or Federal savings association with a company engaged in insurance activities, the national bank or Federal savings association should describe the type of insurance activity that the company is engaged in and has present plans to conduct. The national bank or Federal savings association also must list for each state the lines of business for which the company holds, or will hold, an insurance license, indicating the state where the company holds a resident license or charter, as applicable;
(3) A complete description of the national bank's or Federal savings association's investment in the bank service company and information demonstrating that the national bank or Federal savings association will comply with the investment limitations of paragraph (i) of this section; and
(4) Information demonstrating that the bank service company will perform only those services that each insured depository institution shareholder or member is authorized to perform under applicable Federal or state law and will perform such services only at locations in a state in which each such shareholder or member is authorized to perform such services unless performing services that are authorized by the Federal Reserve Board under the authority of 12 U.S.C. 1865(b).
(h)
(i)
The revision reads as follows:
(a)
(b)
(c)
(1)
(i) Premises that are owned and occupied (or to be occupied, if under construction) by a national bank or Federal savings association, its respective branches, or its consolidated subsidiaries;
(ii) Capitalized leases and leasehold improvements, vaults, and fixed machinery and equipment;
(iii) Remodeling costs to existing premises;
(iv) Real estate acquired and intended, in good faith, for use in future expansion; or
(v) Parking facilities that are used by customers or employees of the national bank or Federal savings association.
(2)
(3)
(i) A national bank's or Federal savings association's tier 1 and tier 2 capital calculated under 12 CFR part 3, as applicable, as reported in the bank's or savings association's Consolidated Reports of Condition and Income (Call Reports) filed under 12 U.S.C. 161 or 12 U.S.C. 1464(v), respectively; plus
(ii) The balance of a national bank's or Federal savings association's allowance for loan and lease losses not included in the bank's or savings association's tier 2 capital, for purposes of the calculation of risk-based capital described in paragraph (c)(3)(i) of this section, as reported in the national bank's or Federal savings association's Call Reports filed under 12 U.S.C. 161 or 1464(v), respectively.
(d)
(ii)
(A) A description of the national bank's or Federal savings association's present investment in banking premises;
(B) The investment in banking premises that the national bank or Federal savings association intends to make, and the business reason for making the investment; and
(C) The amount by which the national bank's or Federal savings association's aggregate investment will exceed the amount of the national bank's or Federal stock savings association's capital stock, or, in the case of a Federal mutual savings association, the amount of retained earnings.
(2)
(3)
(ii)
(4)
(5)
(a)
(b)
(c)
(d)
(1)
(2)
(i) The Federal savings association has received a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System in connection with its most recent examination; or
(ii) In the case of any Federal savings association that has not been examined, the existence and use of managerial resources that the OCC determines are satisfactory.
(e)
(ii) In addition to OCC authorization, before it begins business an operating subsidiary also must comply with other laws applicable to it and its proposed business, including applicable licensing or registration requirements, if any, such as registration requirements under securities laws.
(2)
(A) The savings association has the ability to control the management and operations of the subsidiary, and no other person or entity exercises effective operating control over the subsidiary or has the ability to influence the subsidiary's operations to an extent equal to or greater than that of the savings association;
(B) The parent savings association owns and controls more than 50 percent of the voting (or similar type of controlling) interest of the operating subsidiary, or the parent savings association otherwise controls the operating subsidiary and no other party controls a percentage of the voting (or similar type of controlling) interest of the operating subsidiary greater than the savings association's interest; and
(C) The operating subsidiary is consolidated with the savings association under generally accepted accounting principles (GAAP).
(ii) Subject to the requirements in this section, a Federal savings association may hold another insured depository institution as an operating subsidiary.
(iii) However, the following subsidiaries are not operating subsidiaries subject to this section:
(A) A subsidiary in which the savings association's investment is made pursuant to specific authorization in a statute or OCC regulation (
(B) A subsidiary in which the savings association has acquired, in good faith, shares through foreclosure on collateral, by way of compromise of a doubtful
(iv) Notwithstanding the requirements of paragraph (e)(2)(i) of this section:
(A) A Federal savings association must have reasonable policies and procedures to preserve the limited liability of the savings association and its operating subsidiaries; and
(B) OCC regulations shall not be construed as requiring a Federal savings association and its operating subsidiaries to operate as a single entity.
(3)
(4)
(ii) Consolidation for purposes of calculating portfolio assets and qualified thrift investments is subject to 12 U.S.C. 1467a(m)(5).
(5)
(B) The application must explain, as appropriate, how the savings association “controls” the enterprise, describing in full detail structural arrangements where control is based on factors other than savings association ownership of more than 50 percent of the voting interest of the subsidiary and the ability to control the management and operations of the subsidiary by holding voting interests sufficient to select the number of directors needed to control the subsidiary's board and to select and terminate senior management. In the case of a limited partnership or limited liability company that does not qualify for the expedited review procedure set forth in paragraph (e)(5)(ii) of this section, the savings association must provide a statement explaining why it is not eligible. The application also must include a complete description of the savings association's investment in the subsidiary, the proposed activities of the subsidiary, the organizational structure and management of the subsidiary, the relations between the savings association and the subsidiary, and other information necessary to adequately describe the proposal. To the extent that the application relates to the initial affiliation of the savings association with a company engaged in insurance activities, the savings association must describe the type of insurance activity in which the company is engaged and has present plans to conduct. The savings association must also list for each state the lines of business for which the company holds, or will hold, an insurance license, indicating the state where the company holds a resident license or charter, as applicable. The application must state whether the operating subsidiary will conduct any activity at a location other than the home office or a previously approved branch of the savings association. The OCC may require an applicant to submit a legal analysis if the proposal is novel, unusually complex, or raises substantial unresolved legal issues. In these cases, the OCC encourages applicants to have a prefiling meeting with the OCC. Any savings association receiving approval under this paragraph is deemed to have agreed that the subsidiary will conduct the activity in a manner consistent with published OCC guidance.
(ii)
(B) An application is eligible for expedited review if all of the following requirements are met:
(
(
(
(
(
(
(
(iii)
(iv)
(v)
(A) Holding and managing assets acquired by the parent savings association or its operating subsidiaries, including investment assets and property acquired by the savings association through foreclosure or otherwise in good faith to compromise a doubtful claim, or in the ordinary course of collecting a debt previously contracted;
(B) Providing services to or for the savings association or its affiliates, including accounting, auditing, appraising, advertising and public relations, and financial advice and consulting;
(C) Making loans or other extensions of credit, and selling money orders and travelers checks;
(D) Purchasing, selling, servicing, or warehousing loans or other extensions of credit, or interests therein;
(E) Providing management consulting, operational advice, and services for other financial institutions;
(F) Providing check payment services;
(G) Acting as investment adviser (including an adviser with investment discretion) or financial adviser or counselor to governmental entities or instrumentalities, businesses, or individuals, including advising registered investment companies and mortgage or real estate investment trusts;
(H) Providing financial and transactional advice and assistance, including advice and assistance for customers in structuring, arranging, and executing mergers and acquisitions, divestitures, joint ventures, leveraged buyouts, swaps, foreign exchange, derivative transactions, coin and bullion, and capital restructurings;
(I) Underwriting and reinsuring credit life and disability insurance;
(J) Leasing of personal property;
(K) Providing securities brokerage;
(L) Underwriting and dealing, including making a market, in savings association permissible securities and purchasing and selling as principal, asset backed obligations;
(M) Acting as an insurance agent or broker for credit life, disability, and unemployment insurance; single property interest insurance; and title insurance;
(N) Offering correspondent services to the extent permitted by published OCC precedent for Federal savings associations;
(O) Acting as agent or broker in the sale of fixed annuities;
(P) Offering debt cancellation or debt suspension agreements;
(Q) Providing escrow services;
(R) Acting as a transfer agent; and
(S) Providing or selling postage stamps.
(vi)
(vii)
(B) Unless the subsidiary is a registered investment adviser, if an operating subsidiary proposes to exercise investment discretion on behalf of customers or provide investment advice for a fee, the Federal savings association must have prior OCC approval to exercise fiduciary powers pursuant to § 5.26 (or a predecessor provision) and 12 CFR part 150.
(viii)
(6)
(7)
The revision reads as follows:
(a)
(b)
(c)
(2)
(ii)
(3)
(4)
(5)
(ii) The comment period on any application filed under paragraph (c)(2) of this section to engage in a short-distance relocation of a main office or home office is 15 days.
(d)
(a)
(b)
(c)
(2) For a national bank, the new title must include the word “national.”
(d)
(2)
(3)
(4)
(a)
(b)
(c)
(d)
(e)
(1)
(2)
(3)
(i) The amount paid in on capital stock in excess of the par or stated value;
(ii) Direct capital contributions representing the amounts paid in to the Federal stock savings association other than for capital stock;
(iii) The amount transferred from retained net income; and
(iv) The amount transferred from retained net income reflecting stock dividends.
(4)
(5)
(f)
(1) Consistent with law, regulation, and OCC policy thereunder;
(2) Provides an adequate capital structure; and
(3) If appropriate, complies with the savings association's capital plan.
(g)
(i) Required to receive OCC approval pursuant to letter, order, directive, written agreement or otherwise;
(ii) Selling common or preferred stock for consideration other than cash; or
(iii) Receiving a material noncash contribution to capital surplus.
(2)
(i) Describe the type and amount of the proposed change in permanent capital and explain the reason for the change;
(ii) In the case of a material noncash contribution to capital, provide a description of the method of valuing the contribution; and
(iii) State if the savings association is subject to a capital plan with the OCC and how the proposed change would conform to a capital plan or if a capital plan is otherwise required in connection with the proposed change in permanent capital.
(3)
(4)
(A) The amount, including the par value of the stock, and effective date of the increase;
(B) A certification that the funds have been paid in, if applicable; and
(C) A statement that the savings association has complied with all laws, regulations and conditions imposed by the OCC.
(5)
(h)
(i)
(a)
(b)
(c)
(d)
(e)
(1)
(2)
(3)
(i) The amount paid in on capital stock in excess of the par or stated value;
(ii) Direct capital contributions representing the amounts paid in to the national bank other than for capital stock;
(iii) The amount transferred from undivided profits; and
(iv) The amount transferred from undivided profits reflecting stock dividends.
(4)
(f)
(1) Consistent with law, regulation, and OCC policy thereunder;
(2) Provides an adequate capital structure; and
(3) If appropriate, complies with the bank's capital plan.
(g)
(ii)
(A) Required to receive OCC approval pursuant to letter, order, directive, written agreement or otherwise;
(B) Selling common or preferred stock for consideration other than cash; or
(C) Receiving a material noncash contribution to capital surplus. The
(2)
(h)
(i)
(i) Describe the type and amount of the proposed change in permanent capital and explain the reason for the change;
(ii) In the case of a reduction in capital, provide a schedule detailing the present and proposed capital structure;
(iii) In the case of a material noncash contribution to capital, provide a description of the method of valuing the contribution; and
(iv) State if the bank is subject to a capital plan with the OCC and how the proposed change would conform to a capital plan or if a capital plan is otherwise required in connection with the proposed change in permanent capital.
(2)
(3)
(A) A description of the transaction, unless already provided pursuant to paragraph (i)(1) of this section;
(B) The amount, including the par value of the stock, and effective date of the increase;
(C) A certification that the funds have been paid in, if applicable;
(D) A certified copy of the amendment to the articles of association, if required; and
(E) A statement that the bank has complied with all laws, regulations and conditions imposed by the OCC.
(ii) After it receives the notice of capital increase, the OCC issues a certification specifying the amount of the increase and the effective date (
(4)
(5)
(j)
(k)
(a)
(b)
(c)
(d)
(i) The purpose of the liquidation;
(ii) Its impact on the safety and soundness of the national bank or Federal savings association; and
(iii) Its impact on the bank's or savings association's depositors, other creditors, and customers.
(2)
(3)
(e)
(2)
(ii) The national bank or Federal savings association must receive the OCC's supervisory non-objection to the liquidation plan before beginning the liquidation.
(3)
(A) File a notice with the appropriate OCC licensing office; and
(B) provide notice to depositors, other known creditors, and known claimants of the bank or savings association.
(ii)
(iii)
(4)
(5)
(6)
(f)
(2)
(i) The acquiring depository institution certifies to the OCC that it has purchased all the assets and assumed all the liabilities, including all contingent liabilities, of the national bank or Federal savings association in liquidation; and
(ii) The acquiring depository institution and the national bank or Federal savings association in liquidation have published notice that the bank or savings association will dissolve after the purchase and assumption to the acquiror. This notice shall be included in the notice and publication for the purchase and assumption required under the Bank Merger Act, 12 U.S.C. 1828(c).
(a)
(b)
(c)
(2)
(i) The acquisition of additional shares of a national bank or Federal savings association by a person who:
(A) Has, continuously since March 9, 1979, (or since that institution commenced business, if later) held power to vote 25 percent or more of the voting securities of that bank or Federal savings association; or
(B) Under paragraph (f)(2)(ii) of this section, would be presumed to have controlled that bank or Federal savings association continuously since March 9, 1979, if the transaction will not result in that person's direct or indirect ownership or power to vote 25 percent or more of any class of voting securities of the national bank or Federal savings association; or, in other cases, where the OCC determines that the person has controlled the bank or savings association continuously since March 9, 1979;
(ii) Unless the OCC otherwise provides in writing, the acquisition of additional shares of a national bank or Federal savings association by a person who has lawfully acquired and maintained continuous control of the bank or Federal savings association under paragraph (f) of this section after complying with the procedures and filing the notice required by this section;
(iii) A transaction subject to approval under section 3 of the Bank Holding Company Act, 12 U.S.C. 1842, section 18(c) of Federal Deposit Insurance Act, 12 U.S.C. 1828(c), or section 10 of the Home Owners' Loan Act (HOLA), 12 U.S.C. 1467a;
(iv) Any transaction described in section 2(a)(5) or 3(a) (A) or (B) of the Bank Holding Company Act, 12 U.S.C. 1841(a)(5) and 1842(a) (A) and (B), by a person described in those provisions;
(v) A customary one-time proxy solicitation or receipt of
(vi) The acquisition of shares of a foreign bank that has a Federally licensed branch in the United States. This exemption does not extend to the reports and information required under paragraph (i) of this section.
(3)
(i) The acquisition of control as a result of acquisition of voting shares of a national bank or Federal savings association through testate or intestate succession;
(ii) The acquisition of control as a result of acquisition of voting shares of a national bank or Federal savings association as a bona fide gift;
(iii) The acquisition of voting shares of a national bank or Federal savings association resulting from a redemption of voting securities;
(iv) The acquisition of control of a national bank or Federal savings association as a result of actions by third parties (including the sale of securities) that are not within the control of the acquiror; and
(v) The acquisition of control as a result of the acquisition of voting shares of a national bank or Federal savings association in satisfaction of a debt previously contracted in good faith.
(A) “Good faith” means that a person must either make, renew, or acquire a
(B) To ensure compliance with this section, the acquiror of a defaulted loan secured by a controlling amount of a national bank's or a Federal savings association's voting securities shall file a notice prior to the time the loan is acquired unless the acquiror can demonstrate to the satisfaction of the OCC that the voting securities are not the anticipated source of repayment for the loan.
(d)
(1)
(i) An increase in percentage ownership resulting from a redemption, repurchase, reverse stock split or a similar transaction involving other securities of the same class, and
(ii) The acquisition of stock by a group of persons and/or companies acting in concert, which shall be deemed to occur upon formation of such group.
(2)
(i) Knowing participation in a joint activity or parallel action towards a common goal of acquiring control whether or not pursuant to an express agreement; or
(ii) A combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement, or other arrangement, whether written or otherwise.
(3)
(4)
(5)
(6)
(7)
(8) Insured
(9)
(10)
(11)
(12)
(i) The transferability and voting of any stock or other indicia of participation in another entity, or
(ii) Achievement of a common or shared objective, such as to collectively manage or control another entity.
(13)
(14)
(i) Shares of stock, if the shares or interests, by statute, charter, or in any manner, allow the holder to vote for or select directors (or persons exercising similar functions) of the issuing national bank or Federal savings association, or to vote on or to direct the conduct of the operations or other significant policies of the issuing national bank or Federal savings association. However, preferred stock or similar interests are not voting securities if:
(A) Any voting rights associated with the shares or interests are limited solely to voting rights customarily provided by statute regarding matters that would significantly affect the rights or preference of the security or other interest. This includes the issuance of additional amounts of classes of senior securities, the modification of the terms of the security or interest, the dissolution of the issuing national bank, or the payment of dividends by the issuing national bank or Federal savings association when preferred dividends are in arrears;
(B) The shares or interests are a passive investment or financing device and do not otherwise provide the holder with control over the issuing national bank or Federal savings association; and
(C) The shares or interests do not allow the holder by statute, charter, or in any manner, to select or to vote for the selection of directors (or persons exercising similar functions) of the issuing national bank or Federal savings association.
(ii) Securities, other instruments, or similar interests that are immediately convertible, at the option of the owner or holder thereof, into voting securities.
(e)
(2)
(ii) Certain transactions, including foreclosures by depository institutions and other institutional lenders, fiduciary acquisitions by depository institutions, and increases of majority holdings by bank holding companies, are described in sections 2(a)(5)(D) and 3(a) (A) and (B) of the Bank Holding Company Act, 12 U.S.C. 1841(a)(5)(D) and 12 U.S.C. 1842(a) (A) and (B), but do not require the Federal Reserve Board's prior approval. For purposes of this section, they are considered subject to section 3 of the Bank Holding Company Act, 12 U.S.C. 1842, and do not require either a prior or subsequent notice to the OCC under this section.
(3)
(f)
(2)
(ii) The following persons shall be presumed to be acting in concert for purposes of this section:
(A) A company and any controlling shareholder, partner, trustee or management official of such company if both the company and the person own stock in the national bank or Federal savings association;
(B) A person and the members of the person's immediate family;
(C) Companies under common control;
(D) Persons that have made, or propose to make, a joint filing under section 13 or 14 of the Securities Exchange Act of 1934, and the rules thereunder promulgated by the Securities and Exchange Commission;
(E) A person or company will be presumed to be acting in concert with any trust for which such person or company serves as trustee, except that a tax-qualified employee stock benefit plan as defined in § 192.2(a)(39) of this chapter shall not be presumed to be acting in concert with its trustee or person acting in a similar fiduciary capacity solely for the purposes of determining whether to combine the holdings of a plan and its trustee or fiduciary; and
(F) Persons that are parties to any agreement, contract, understanding, relationship, or other arrangement, whether written or otherwise, regarding the acquisition, voting or transfer of control of voting securities of a national bank or Federal savings association, other than through a revocable proxy in connection with a proxy solicitation for the purposes of conducting business at a regular or special meeting of the institution, if the proxy terminates within a reasonable period after the meeting.
(iii) The OCC presumes, unless rebutted, that an acquisition or other disposition of voting securities through which any person proposes to acquire ownership of, or the power to vote, 10 percent or more of a class of voting securities of a national bank or Federal savings association is an acquisition by a person of the power to direct the bank's or savings association's management or policies if:
(A) The securities to be acquired or voted are subject to the registration requirements of section 12 of the Securities Exchange Act of 1934, 15 U.S.C. 78l; or
(B) Immediately after the transaction no other person will own or have the power to vote a greater proportion of that class of voting securities.
(iv) The OCC will consider a rebuttal of the presumption of control where the person or company intends to have no more than one representative on the board of directors of the national bank or Federal savings association.
(v) The presumption of control may not be rebutted if the total equity investment by the person or company in the national bank or Federal savings association, including 15 percent or more of any class of voting securities, equals or exceeds one third of the total equity of the national bank or Federal savings association.
(vi) Other transactions resulting in a person's control of less than 25 percent of a class of voting securities of a national bank or Federal savings association are not deemed by the OCC to result in control for purposes of this section.
(vii) If two or more persons, not acting in concert, each propose to acquire simultaneously equal percentages of 10 percent or more of a class of a national bank's or Federal savings association's voting securities, and either the acquisitions are of a class of securities subject to the registration requirements of section 12 of the Securities Exchange Act of 1934, 15 U.S.C. 78l, or immediately after the transaction no other shareholder of the national bank or Federal savings association would own or have the power to vote a greater percentage of the class, each of the acquiring persons shall either file a notice or rebut the presumption of control.
(viii) An acquiring person may seek to rebut a presumption established in paragraph (f)(2)(ii) or (iii) of this section by presenting relevant information in writing to the appropriate OCC licensing office. The OCC shall respond in writing to any person that seeks to rebut the presumption of control or the presumption of concerted action. No rebuttal filing is effective unless the OCC indicates in writing that the information submitted has been found to be sufficient to rebut the presumption of control.
(3)
(A) The notice must contain the information required under 12 U.S.C. 1817(j)(6)(A), and the information prescribed in the Interagency Biographical and Financial Report. This form is available on the OCC's Internet Web page,
(B) When the acquiring person is an individual, or group of individuals acting in concert, the requirement to provide personal financial data may be satisfied with a current statement of assets and liabilities and an income summary, together with a statement of
(ii) The OCC has 60 days from the date it declares the notice to be technically complete to review the notice.
(A) When the OCC declares a notice technically complete, the appropriate OCC licensing office sends a letter of acknowledgment to the applicant indicating the technically complete date.
(B) As set forth in paragraph (g) of this section, the applicant shall publish an announcement within 10 days of filing the notice with the OCC. The publication of the announcement triggers a 20-day public comment period. The OCC may waive or shorten the public comment period if an emergency exists. The OCC also may shorten the comment period for other good cause. The OCC may act on a proposed change in control prior to the expiration of the public comment period if the OCC makes a written determination that an emergency exists.
(C) An applicant shall notify the OCC immediately of any material changes in a notice submitted to the OCC, including changes in financial or other conditions that may affect the OCC's decision on the filing.
(iii) Within the 60-day period, the OCC may inform the applicant that the acquisition has been disapproved, has not been disapproved, or that the OCC will extend the 60-day review period for up to an additional 30 days. The period or the OCC's review of a notice may be further extended not to exceed two additional times for not more than 45 days each time if:
(A) The OCC determines that any acquiring party has not furnished all the information required under this part;
(B) In the OCC's judgment, any material information submitted is substantially inaccurate;
(C) The OCC has been unable to complete an investigation of each acquirer because of any delay caused by, or the inadequate cooperation of, such acquirer; or
(D) The OCC determines that additional time is needed to investigate and determine that no acquiring party has a record of failing to comply with the requirements of subchapter II of chapter 53 of title 31 of the United States Code.
(iv) The applicant may request a hearing by the OCC within 10 days of receipt of a disapproval (
(4)
(5)
(i) The proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States;
(ii) The effect of the proposed acquisition of control in any section of the country may be substantially to lessen competition or to tend to create a monopoly or the proposed acquisition of control would in any other manner be in restraint of trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;
(iii) Either the financial condition of any acquiring person or the future prospects of the institution is such as might jeopardize the financial stability of the bank or Federal savings association or prejudice the interests of the depositors of the bank or Federal savings association;
(iv) The competence, experience, or integrity of any acquiring person, or of any of the proposed management personnel, indicates that it would not be in the interest of the depositors of the bank or Federal savings association, or in the interest of the public, to permit that person to control the bank or Federal savings association;
(v) An acquiring person neglects, fails, or refuses to furnish the OCC all the information it requires; or
(vi) The OCC determines that the proposed transaction would result in an adverse effect on the Deposit Insurance Fund.
(6)
(g)
(i) In addition to the information required by § 5.8(b), the announcement must include the name of the national bank or Federal savings association named in the notice and the comment period (
(ii) Notwithstanding any other provisions of this paragraph (g), if the OCC determines in writing that an emergency exists and that the announcement requirements of this paragraph (g) would seriously threaten the safety and soundness of the national bank or Federal savings association to be acquired, including situations where the OCC must act immediately in order to prevent the probable failure of a national bank or Federal savings association, the OCC may waive or shorten the publication requirement.
(2)
(ii) The OCC handles requests for the non-public portion of the notice as requests under the Freedom of Information Act, 5 U.S.C. 552, and other applicable law.
(h)
(i)
(ii) The foreign bank, or any affiliate thereof, shall also file a copy of the report with its appropriate OCC supervisory office if that office is different from the national bank's or Federal savings association's appropriate OCC supervisory office. If the foreign bank, or any affiliate thereof, is not supervised by the OCC, it shall file a copy of the report filed with the OCC with its appropriate Federal banking agency.
(iii) Any shares of the national bank or Federal savings association held by the foreign bank, or any affiliate thereof, as principal must be included in the calculation of the number of shares in which the foreign bank or any affiliate thereof has a security interest for purposes of paragraph (h)(1)(i) of this section.
(2)
(i)
(ii)
(iii)
(A) Are acting together, in concert, or with one another to acquire or control shares of the same insured national bank or Federal savings association, including an acquisition of shares of the same national bank or Federal savings association at approximately the same time under substantially the same terms; or
(B) Have made, or propose to make, a joint filing under 15 U.S.C. 78m regarding ownership of the shares of the same depository institution.
(3)
(i) The person or group of persons referred to in paragraph (h)(1) of this section has disclosed the amount borrowed and the security interest therein to the appropriate OCC licensing office in connection with a notice filed under this section or any other application filed with the appropriate OCC licensing office as a substitute for a notice under this section, such as for a national bank or Federal savings association charter; or
(ii) The transaction involves a person or group of persons that has been the owner or owners of record of the stock for a period of one year or more or, if the transaction involves stock issued by a newly chartered bank or Federal savings association, before the bank's or Federal savings association's opening.
(4)
(ii) The foreign bank and all affiliates thereof shall file the consolidated report in writing within 30 days of the date on which the foreign bank or affiliate thereof first believes that the security for any outstanding credit consists of 25 percent or more of any class of voting securities of a national bank or Federal savings association.
(5)
(a)
(b)
(c)
(i) A director of a foreign bank that operates a Federal branch; and
(ii) An advisory director who does not have the authority to vote on matters before the board of directors or any committee of the board of directors and provides solely general policy advice to the board of directors or any committee.
(2)
(3)
(4)
(5)
(6)
(7)
(i) Has a composite rating of 4 or 5 under the Uniform Financial Institutions Rating System (CAMELS);
(ii) Is subject to a cease and desist order, a consent order, or a formal written agreement, unless otherwise informed in writing by the OCC; or
(iii) Is informed in writing by the OCC that, based on information pertaining to such national bank or Federal savings association, it has been designated in “troubled condition” for purposes of this section.
(d)
(1) The national bank or Federal savings association is not in compliance with minimum capital requirements, as prescribed in 12 CFR part 3 or is otherwise in troubled condition; or
(2) The OCC determines, in writing, in connection with the review by the agency of the plan required under section 38 of the Federal Deposit Insurance Act (12 U.S.C. 1831o), or otherwise, that such prior notice is appropriate.
(e)
(2)
(A) The information required under 12 U.S.C. 1817(j)(6)(A), and the information prescribed in the Interagency Notice of Change in Director or Senior Executive Officer, the biographical and certification portions of the Interagency Biographical and Financial Report (“IBFR”), and unless otherwise determined by the OCC in writing, the financial portion of the IBFR. These forms are available from the OCC;
(B) Legible fingerprints of the individual, except that fingerprints are not required for any individual who, within the three years immediately preceding the initial submission date of the notice currently under review, has been the subject of a notice filed with the OCC or the OTS pursuant to 12 U.S.C. 1831i, or this section, and has previously submitted fingerprints; and
(C) Such other information required by the OCC.
(ii)
(3)
(ii) If the national bank or Federal savings association cannot provide the information requested by the OCC within the time specified in paragraph (e)(3)(i) of this section, the national bank or Federal savings association may request in writing that the OCC suspend processing of the notice. The OCC will advise the national bank or Federal savings association in writing whether the suspension request is granted and, if granted, the length of the suspension.
(iii) If the national bank or Federal savings association fails to provide the requested information within the time specified in paragraphs (e)(3)(i) or (ii) of this section, the OCC may deem the filing abandoned under § 5.13(c) or may review the notice based on the information provided.
(4)
(5)
(6)
(B) The OCC may grant the waiver if it issues a written finding that:
(
(
(
(C) The OCC will determine the length of the waiver on a case-by-case basis. All waivers that the OCC grants under this paragraph (e)(6) are subject to the condition that the national bank or Federal savings association shall file a technically complete notice under this section within the time period specified by the OCC.
(D) Subject to paragraph (e)(6)(i)(C) of this section, the proposed individual may assume the position on an interim basis until the earliest of the following events:
(
(
(
(E) If the technically complete notice is not filed within the time period specified in the waiver, the proposed individual shall immediately resign his or her position. Thereafter, the individual may assume the position only after a technically complete notice has been filed, all other applicable requirements are satisfied, and:
(
(
(
(F) Notwithstanding the grant of a waiver, the OCC has authority to issue a notice of disapproval within 30 days of the expiration of such waiver.
(ii)
(7)
(i) Prior to the expiration of the review period, only if the OCC notifies the national bank or Federal savings association in writing that the OCC does not disapprove the proposed director or senior executive officer pursuant to paragraph (e)(5) of this section; or
(ii) Following the expiration of the review period, unless:
(A) The OCC issues a written notice of disapproval during the review period; or
(B) The national bank or Federal savings association does not provide additional information within the time period required by the OCC pursuant to paragraph (e)(3) of this section and the OCC deems the notice to be abandoned pursuant to § 5.13(c).
(8)
(f)
(2) The Comptroller, or an authorized delegate, may designate an appellate official who was not previously involved in the decision leading to the appeal at issue. The Comptroller, an authorized delegate, or the appellate official considers all information submitted with the original notice, the material before the OCC official who made the initial decision, and any information submitted by the appellant at the time of the appeal.
(3) The Comptroller, an authorized delegate, or the appellate official shall independently determine whether the reasons given for the disapproval are contrary to fact or insufficient to justify the disapproval. If either is determined to be the case, the Comptroller, an authorized delegate, or the appellate official may reverse the disapproval.
(4) Upon completion of the review, the Comptroller, an authorized delegate, or the appellate official shall notify the appellant in writing of the decision. If the original decision is reversed, the individual may assume the position in the national bank or Federal savings association for which he or she was proposed.
(a)
(b)
(c)
(2) No notice is required if the change in address results from a transaction approved under this part or if notice has been provided pursuant to § 5.40(b) with respect to the relocation of a main office or home office to a branch location in the same city, town or village.
(d)
(a)
(b)
(c)
(i) The sale or other disposition of all, or substantially all, of the national bank's or Federal savings association's assets in a transaction or a series of transactions;
(ii) After having sold or disposed of all, or substantially all, of its assets, subsequent purchases or other acquisitions or other expansions of the national bank's or Federal savings association's operations;
(iii) Any other purchases, acquisitions or other expansions of operations that are part of a plan to increase the size of the national bank or Federal savings association by more than 25 percent in a one year period; or
(iv) Any other material increase or decrease in the size of the national bank or Federal savings association or a material alteration in the composition of the types of assets or liabilities of the national bank or Federal savings association (including the entry or exit of business lines), on a case-by-case basis, as determined by the OCC.
(2)
(i) That the bank or savings association undertakes in response to direction from the OCC (
(ii) That is part of a voluntary liquidation under 12 CFR 5.48, if the bank or savings association in liquidation has obtained the OCC's non-objection to its plan of liquidation under 12 CFR 5.48 and has stipulated in its notice of liquidation to the OCC that its liquidation will be completed, the bank or savings association dissolved and its charter returned to the OCC within one year of the date it filed the notice of liquidation, unless the OCC extends the time period;
(iii) That occurs as a result of a bank's or savings association's ordinary and ongoing business of originating and securitizing loans; or
(iv) That are subject to OCC approval under another application to the OCC.
(d)
(2)
(3)
(
(
(
(
(
(B) The OCC may deny the application if the transaction would have a negative effect in any of these respects.
(ii)
(e)
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(i) A distribution of cash or other property to owners of a Federal savings association made on account of their ownership, but excludes:
(A) Any dividend consisting only of the shares of the savings association or rights to purchase the shares; or
(B) If the savings association is a Federal mutual savings association, any payment that the savings association is required to make under the terms of a deposit instrument and any other amount paid on deposits that the OCC determines is not a distribution for the purposes of this section;
(ii) A Federal savings association's payment to repurchase, redeem, retire or otherwise acquire any of its shares or other ownership interests; any payment to repurchase, redeem, retire, or otherwise acquire debt instruments included in its total capital under 12 CFR part 3; and any extension of credit to finance an affiliate's acquisition of the savings association's shares or interests;
(iii) Any direct or indirect payment of cash or other property to owners or affiliates made in connection with a corporate restructuring. This includes the Federal savings association's payment of cash or property to shareholders of another association or to shareholders of its holding company to acquire ownership in that association, other than by a distribution of shares;
(iv) Any other distribution charged against a Federal savings association's capital accounts if the savings association would not be well capitalized, as set forth in 12 CFR 6.4, following the distribution; and
(v) Any transaction that the OCC determines, by order or regulation, to be in substance a distribution of capital.
(4)
(5)
(6)
(e)
(i) The savings association is not an eligible savings association;
(ii) The total amount of all of the savings association's capital distributions (including the proposed capital distribution) for the applicable calendar year exceeds its net income for that year to date plus retained net income for the preceding two years;
(iii) The savings association would not be at least adequately capitalized, as set forth in 12 CFR 6.4, following the distribution; or
(iv) The savings association's proposed capital distribution would violate a prohibition contained in any applicable statute, regulation, or agreement between the savings association and the OCC or the OTS, or violate a condition imposed on the savings association in an application or notice approved by the OCC or the OTS.
(2)
(i) The savings association would not remain well capitalized, as set forth under 12 CFR 6.4, or would otherwise not remain an eligible savings association following the distribution;
(ii) The savings association's proposed capital distribution would reduce the amount of or retire any part of its common or preferred stock or retire any part of debt instruments such as notes or debentures included in capital under 12 CFR part 3 (other than regular payments required under a debt instrument approved under § 5.56);
(iii) The savings association's proposed capital distribution is payable in property other than cash;
(iv) The savings association is a direct or indirect subsidiary of a mutual savings and loan holding company; or
(v) The savings association is a direct or indirect subsidiary of a company that is not a savings and loan holding company.
(3)
(4)
(f)
(i) Be in narrative form;
(ii) Include all relevant information concerning the proposed capital distribution, including the amount, timing, and type of distribution; and
(iii) Demonstrate compliance with paragraph (h) of this section.
(2)
(3)
(g)
(2)
(i) Additional information is required to supplement the notice;
(ii) The notice is not eligible for expedited review, or the expedited reviewed process is extended, under 5.13(a)(2); or
(iii) The notice is disapproved.
(h)
(1) The Federal savings association will be undercapitalized, significantly undercapitalized, or critically undercapitalized as set forth in 12 CFR 6.4, as applicable, following the capital distribution. If so, the OCC will determine if the capital distribution is permitted under 12 U.S.C. 1831o(d)(1)(B).
(2) The proposed capital distribution raises safety or soundness concerns.
(3) The proposed capital distribution violates a prohibition contained in any statute, regulation, agreement between the Federal savings association and the OCC or the OTS, or a condition imposed on the Federal savings association in an application or notice approved by the OCC or the OTS. If so, the OCC will determine whether it may permit the capital distribution notwithstanding the prohibition or condition.
(i)
(a)
(2) For purposes of this section, mandatorily redeemable preferred stock means mandatorily redeemable preferred stock that was issued before July 23, 1985 or issued pursuant to regulations and memoranda of the Federal Home Loan Bank Board and approved in writing by the Federal Savings and Loan Insurance Corporation for inclusion as regulatory capital before or after issuance.
(b)
(ii)
(A) Additional information is required to supplement the notice;
(B) The notice is not eligible for expedited review, or the expedited reviewed process is extended, under § 5.13(a)(2); or
(C) The OCC denies the notice.
(iii)
(2)
(ii)
(
(
(B) Notwithstanding paragraph (b)(1)(ii) of this section, if the OCC conditions approval of prepayment in the form of a call option on a requirement that a Federal savings association must replace the covered security with a covered security of an equivalent amount that satisfies the requirements for a tier 1 or tier 2 instrument, the savings association must file an application to issue the replacement covered security and must receive prior OCC approval.
(c)
(d)
(1)
(A) Bear the following legend on its face, in bold type: “This security is
(B) State that the security is subordinated on liquidation, as to principal, interest, and premium, to all claims against the savings association that have the same priority as savings accounts or a higher priority;
(C) State that the security is not secured by the savings association's assets or the assets of any affiliate of the savings association. An affiliate means any person or company that controls, is controlled by, or is under common control with the savings association;
(D) State that the security is not eligible collateral for a loan by the savings association;
(E) State the prohibition on the payment of dividends or interest at 12 U.S.C. 1828(b) and, in the case of subordinated debt securities, state the prohibition on the payment of principal and interest at 12 U.S.C. 1831o(h), 12 CFR 3.11, and any other relevant restrictions;
(F) For subordinated debt securities, state or refer to a document stating the terms under which the savings association may prepay the obligation; and
(G) Where applicable, state or refer to a document stating that the savings association must obtain OCC's prior approval before the acceleration of payment of principal or interest on subordinated debt securities, redemption of subordinated debt securities prior to maturity, repurchase of subordinated debt securities, or exercising a call option in connection with a subordinated debt security.
(ii) A Federal savings association must include such additional statements as the OCC may prescribe for certificates, purchase agreements, indentures, and other related documents.
(2)
(ii) A Federal savings association is not required to use an indenture if the subordinated debt securities are sold only to accredited investors, as that term is defined in 15 U.S.C. 77d(6). A savings association must have an indenture that meets the requirements of paragraph (d)(2)(i) of this section in place before any debt securities for which an exemption from the indenture requirement is claimed, are transferred to any non-accredited investor. If a savings association relies on this exemption from the indenture requirement, it must place a legend on the debt securities indicating that an indenture must be in place before the debt securities are transferred to any non-accredited investor.
(e)
(i) The issuance of the covered securities is authorized under applicable laws and regulations and is consistent with the savings association's charter and bylaws;
(ii) The savings association is at least adequately capitalized under 12 CFR 6.4 and meets the regulatory capital requirements at 12 CFR 3.10;
(iii) The savings association is or will be able to service the covered securities;
(iv) The covered securities are consistent with the requirements of this section;
(v) The covered securities and related transactions sufficiently transfer risk from the Deposit Insurance Fund; and
(vi) The OCC has no objection to the issuance based on the savings association's overall policies, condition, and operations.
(2) The OCC's approval is conditioned upon no material changes to the information disclosed in the application or notice submitted to the OCC. The OCC may impose such additional requirements or conditions as it may deem necessary to protect purchasers, the savings association, the OCC, or the Deposit Insurance Fund.
(f)
(g)
(h)
(i)
(1) A written report indicating the number of purchasers, the total dollar amount of securities sold, the net proceeds received by the savings association from the issuance, and the
(2) Three copies of an executed form of the securities and a copy of any related documents governing the issuance or administration of the securities; and
(3) A certification by the appropriate executive officer indicating that the savings association complied with all applicable laws and regulations in connection with the offering, issuance, and sale of the securities.
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(e)
(1) Describe the structure of the investment and the activity or activities conducted by the enterprise in which the Federal savings association is investing. To the extent the notice relates to the initial affiliation of the Federal savings association with a company engaged in insurance activities, the savings association should describe the type of insurance activity that the company is engaged in and has present plans to conduct. The Federal savings association must also list for each state the lines of business for which the company holds, or will hold, an insurance license, indicating the state where the company holds a resident license or charter, as applicable;
(2) State:
(i) Which paragraphs of § 5.38(e)(5)(v) describe the activity; or
(ii) State that, and describe how, the activity is substantively the same as that contained in published OCC precedent for Federal savings associations, including published former OTS precedent, approving a pass-through investment by a Federal savings association or its operating subsidiary, state that the activity will be conducted in accordance with the same terms and conditions applicable to the activity covered by the precedent, and provide the citation to the applicable precedent;
(3) Certify that the Federal savings association is well managed and well capitalized at the time of the investment;
(4) Describe how the Federal savings association has the ability to prevent the enterprise from engaging in an activity that is not set forth in § 5.38(e)(5)(v) or not contained in published OCC precedent for Federal savings associations, including published former OTS precedent, approving a pass-through investment by a Federal savings association or its operating subsidiary, or how the savings association otherwise has the ability to withdraw its investment;
(5) Describe how the investment is convenient and useful to the Federal savings association in carrying out its business and not a mere passive investment unrelated to the savings association's banking business;
(6) Certify that the Federal savings association's loss exposure is limited as a legal matter and that the savings association does not have unlimited liability for the obligations of the enterprise; and
(7) Certify that the enterprise in which the Federal savings association is investing agrees to be subject to OCC supervision and examination, subject to the limitations and requirements of section 45 of the Federal Deposit Insurance Act (12 U.S.C. 1831v) and section 115 of the Gramm-Leach-Bliley Act (12 U.S.C. 1820a).
(f)
(2)
(g)
(1)
(2)
(h)
(1) The investment is in an investment company the portfolio of which consists exclusively of assets that the Federal savings association may hold directly;
(2) The Federal savings association is not investing more than 10 percent of its total capital in one company;
(3) The book value of the Federal savings association's aggregate non-controlling investments does not exceed 25 percent of its total capital after making the investment;
(4) The investment would not give Federal savings association direct or indirect control of the company; and
(5) The Federal savings association's liability is limited to the amount of its investment.
(i)
(a)
(b)
(1) Acquire or establish a service corporation; or
(2) Commence a new activity in an existing service corporation subsidiary.
(c)
(d)
(2)
(3)
(4)
(5)
(e)
(2)
(3)
(4)
(5)
(6)
(7)
(ii) The OCC may, at any time, limit a Federal savings association's investment in a service corporation, or limit or refuse to permit any activity of a service corporation, for supervisory, legal, or safety or soundness reasons.
(8)
(i) Their respective business transactions, accounts, and records are not intermingled;
(ii) Each observes the formalities of their separate corporate procedures;
(iii) Each is held out to the public as a separate enterprise; and
(iv) Unless the parent Federal savings association has guaranteed a loan to the service corporation, all borrowings by the service corporation indicate that the savings association is not liable.
(9)
(10)
(f)
(1)
(2)
(i) Accounting or internal audit;
(ii) Advertising, market research and other marketing;
(iii) Clerical;
(iv) Consulting;
(v) Courier;
(vi) Data processing;
(vii) Data storage facilities operation and related services;
(viii) Office supplies, furniture, and equipment purchasing and distribution;
(ix) Personnel benefit program development or administration;
(x) Printing and selling forms that require Magnetic Ink Character Recognition (MICR) encoding;
(xi) Relocation of personnel;
(xii) Research studies and surveys;
(xiii) Software development and systems integration; and
(xiv) Remote service unit operation, leasing, ownership or establishment.
(3)
(ii) Acquiring and leasing personal property;
(iii) Appraising;
(iv) Collection agency;
(v) Credit analysis;
(vi) Check or credit card guaranty and verification;
(vii) Escrow agent or trustee (under deeds of trust, including executing and delivery of conveyances, reconveyances and transfers of title); and
(viii) Loan inspection.
(4)
(ii) Foreign currency exchange;
(iii) Home ownership counseling;
(iv) Income tax return preparation;
(v) Postal services;
(vi) Stored value instrument sales;
(vii) Welfare benefit distribution;
(viii) Check printing and related services; and
(ix) Remote service unit operation, leasing, ownership, or establishment.
(5)
(ii) Acquiring improved real estate or manufactured homes to be held for rental or resale, for remodeling, renovating or demolishing and rebuilding for resale or rental, or to be used for offices and related facilities of a stockholder of the service corporation;
(iii) Maintaining and managing real estate; and
(iv) Real estate brokerage for property owned by a savings association that owns capital stock of the service corporation, or a lower-tier service corporation in which the service corporation invests.
(6)
(ii) Liquidity management;
(iii) Issuing notes, bonds, debentures, or other obligations or securities; and
(iv) Purchase or sale of coins issued by the U.S. Treasury.
(7)
(ii) Tax-exempt obligations of public housing agencies used to finance housing projects with rental assistance subsidies;
(iii) Small business investment companies and new markets venture capital companies licensed by the U.S. Small Business Administration;
(iv) Rural business investment companies licensed by the U.S. Department of Agriculture; and
(v) Investing in savings accounts of an investing thrift.
(8)
(9)
(10)
(11)
(g)
(2)
(i) Loans to service corporations other than a GAAP-consolidated subsidiary are subject to the lending limits in part 32 of this chapter.
(ii) The OCC may limit the amount of loans to any service corporation where safety and soundness considerations warrant such action.
(3)
(4)
(h)
(A) Acquiring or establishing a service corporation; or
(B) Commencing a new activity in an existing service corporation subsidiary.
(ii) The application must include a complete description of the savings association's investment in the service corporation, the proposed activities of the service corporation, the organizational structure and management of the service corporation, the relations between the savings association and the service corporation, and other information necessary to adequately describe the proposal. If the service corporation proposes to engage in insurance activities, the savings association must describe the type of insurance activity in which the service corporation proposes to engage. The savings association must also list for each state the lines of business for which the company holds, or will hold, an insurance license, indicating the state where the service corporation holds a resident license or charter, as applicable. The OCC may require an applicant to submit a legal analysis if the proposal is novel, unusually complex, or raises substantial unresolved legal issues. In these cases, the OCC encourages applicants to have a prefiling meeting with the OCC. Any savings association receiving approval under this paragraph is deemed to have agreed that the service corporation will conduct the activity in a manner consistent with published OCC guidance.
(2)
(ii) An application is eligible for expedited review if the following requirements are met:
(A) The savings association is “well capitalized” and “well managed”; and
(B) The service corporation engages only in one or more of the preapproved activities listed in § 5.59(f).
(3)
(4)
(5)
(i)
(i) The salvage investment protects the savings association's interest in the service corporation;
(ii) The salvage investment is consistent with safety and soundness; and
(iii) The savings association considered alternatives to the salvage investment and determined that such alternatives would not adequately satisfy paragraphs (i)(1)(i) and (ii) of this section.
(2) If the OCC notifies the Federal savings association within 30 days of the filing of the notification that the notification presents supervisory concerns, or raises significant issues of law or policy, the Federal savings association must apply for and receive the OCC's prior written approval before making the salvage investment.
(3) If a service corporation is a GAAP-consolidated subsidiary, the salvage investment will be considered an investment in a subsidiary for purposes of 12 CFR part 3.
(j)
12 U.S.C. 1
(a)
(2)
(i) Premises that are owned and occupied (or to be occupied, if under construction) by the national bank or Federal savings association, or its respective branches or consolidated subsidiaries;
(ii) Real estate acquired and intended, in good faith, for use in future expansion;
(iii) Parking facilities that are used by customers or employees of the national bank or Federal savings association, or its respective branches or consolidated subsidiaries;
(iv) Residential property for the use of officers or employees of the national bank or Federal savings association who are:
(A) Located in remote areas where suitable housing at a reasonable price is not readily available; or
(B) Temporarily assigned to a foreign country, including foreign nationals temporarily assigned to the United States; and
(v) Property for the use of national bank or Federal savings association officers, employees, or customers, or for the temporary lodging of such persons in areas where suitable commercial lodging is not readily available, provided that the purchase and operation of the property qualifies as a deductible business expense for Federal tax purposes.
(3)
(ii) A Federal savings association also may acquire and hold banking premises through a service corporation in accordance with 12 CFR 5.59.
(b)
(c)
(2)
(ii) A Federal savings association that invests in banking premises through a service corporation shall comply with the quantitative limitations in 12 CFR 5.37(d) and, to the extent applicable, 12 CFR 5.59.
(3)
(d)
(e)
(a)
(1) Lease excess space on national bank or Federal savings association premises to one or more other businesses (including other financial institutions);
(2) Share space jointly held with one or more other businesses; or
(3) Offer its services in space owned by or leased to other businesses.
(b)
(1) A national bank or Federal savings association employee may act as agent for the other business; or
(2) An employee of the other business may act as agent for the national bank or Federal savings association.
(c)
(1) The other business is conspicuously, accurately, and separately identified;
(2) Shared employees clearly and fully disclose the nature of their agency relationship to customers of the national bank or Federal savings association and of the other businesses so that customers will know the identity of the national bank, Federal savings association, or other business that is providing the product or service;
(3) The arrangement does not constitute a joint venture or partnership with the other business under applicable state law;
(4) All aspects of the relationship between the national bank or Federal savings association and the other business are conducted at arm's length, unless a special arrangement is warranted because the other business is a subsidiary of the national bank or Federal savings association;
(5) Security issues arising from the activities of the other business on the premises are addressed;
(6) The activities of the other business do not adversely affect the safety and soundness of the national bank or Federal savings association;
(7) The shared employees or the entity for which they perform services are duly licensed or meet qualification requirements of applicable statutes and regulations pertaining to agents or employees of such other business; and
(8) The assets and records of the parties are segregated.
(d)
(1) The national bank or Federal savings association must ensure compliance with all applicable statutory and regulatory provisions governing national bank or Federal savings association transactions with these persons or entities;
(2) The parties must comply with all applicable fiduciary duties; and
(3) The parties, if they are in competition with each other, must consider limitations, if any, imposed by applicable antitrust laws.
(e)
12 U.S.C. 1
12 U.S.C. 24 (Eleventh), 93a, 481, and 1818.
12 U.S.C. 1
(d) * * *
(2)
(A) The savings association is, and continues to be, in compliance with 12 CFR part 3, part 390, subpart Z, or part 324, as applicable;
(B) Upon application by a savings association under paragraph (d)(2)(iv) of this section, the appropriate Federal banking agency permits, subject to conditions it may impose, the savings association to use the higher limit set forth under this paragraph (d)(2)(i);
(C) The loans and extensions of credit made under this paragraph (d)(2)(i) to all borrowers do not, in aggregate, exceed 150 percent of the savings association's unimpaired capital and unimpaired surplus; and
(D) The loans and extensions of credit made under this paragraph (d)(2)(i) comply with the applicable loan-to-value requirements.
(ii) The authority of a savings association to make a loan or extension of credit under the exception in paragraph (d)(2)(i) of this section ceases immediately upon the association's failure to comply with any one of the requirements set forth in paragraph (d)(2)(i) of this section or any condition(s) set forth in an order issued by the appropriate Federal banking agency under paragraphs (d)(2)(i)(B) and (d)(2)(iv) of this section.
(iii) As used in this section, the term “
(iv)
(
(
(
(
(
(B)
12 U.S.C. 1
12 U.S.C. 1462a, 1463, 5412(b)(2)(B), 5414(b)(2).
12 U.S.C. 1462a, 1463, 1464, 1467a, 2901
12 U.S.C. 1462a, 1463, 1464, 1467a, 2901
12 U.S.C. 1462a, 1463, 1464, 1828. 5412(b)(2)(B).
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).
Except for fiduciary activities subject solely to subpart E, you should refer to 12 CFR 5.26 to determine if you must obtain OCC approval or file a notice with the OCC before you exercise fiduciary powers. A Federal savings association may not exercise fiduciary powers unless it obtains prior approval from the OCC to the extent required under 12 CFR 5.26.
12 U.S.C. 1462a, 1463, 1464, 1467a, 1701j-3, 1828, 3803, 3806, 5412(b)(2)(B); 42 U.S.C. 4106
The revision reads as follows:
(b) Your pass-through investments are subject to the requirements and filing procedures of 12 CFR 5.58.
(d) * * *
(3) * * * If the OCC provides such notice to the Federal savings association, the Federal savings association may not use that index unless it applies for and receives the OCC's prior written approval.
12 U.S.C. 1462a, 1463, 1464, 1467a, 5412(b)(2)(B).
The term
12 U.S.C. 1463, 5412(b)(2)(B).
12 U.S.C. 1462a, 1463, 1464, 1467a, 1817, 1820, 1828, 1831o, 3806, 5101
12 U.S.C. 1462a, 1463, 1464, 1467a, 2901, 5412(b)(2)(B); 15 U.S.C. 78c, 78
The revision reads as follows:
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B); 15 U.S.C. 78c(b), 78m, 78n, 78w.
Office of Postsecondary Education, Department of Education.
Notice of proposed rulemaking.
The Secretary proposes to amend the cash management regulations under subpart K and other sections of the Student Assistance General Provisions regulations issued under the Higher Education Act of 1965, as amended (HEA). These proposed regulations are intended to ensure that students have convenient access to their title IV, HEA program funds, do not incur unreasonable and uncommon financial account fees on their title IV funds, and are not led to believe they must open a particular financial account to receive their Federal student aid. In addition, these proposed regulations update other provisions in the cash management regulations under subpart K and otherwise amend the Student Assistance General Provisions. We also propose to clarify how previously passed coursework is treated for title IV eligibility purposes and streamline the requirements for converting clock hours to credit hours.
We must receive your comments on or before July 2, 2015.
Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments.
If you are submitting comments electronically, we strongly encourage you to submit any comments or attachments in Microsoft Word format. If you must submit a comment in Adobe Portable Document Format (PDF), we strongly encourage you to convert the PDF to print-to-PDF format or to use some other commonly used searchable text format.
•
•
For clock-to-credit-hour conversion: Amy Wilson, U.S. Department of Education, 1990 K Street NW., Room 8027, Washington, DC 20006-8502. Telephone: (202) 502-7689 or by email at:
For repeat coursework: Vanessa Freeman, U.S. Department of Education, 1990 K Street NW., Room 8040, Washington, DC 20006-8502. Telephone: (202) 502-7523 or by email at:
For cash management: Ashley Higgins, U.S. Department of Education, 1990 K Street NW., Room 8037, Washington, DC 20006-8502. Telephone: (202) 219-7061 or by email at:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Throughout this preamble, we refer to title IV, HEA program funds using naming conventions common to the student aid community, including “title IV student aid” and similar phrasing.
Over the past decade, the student financial products marketplace has shifted and the budgets of postsecondary institutions have become increasingly strained, in part due to declining State funding. These changes have coincided with a proliferation of agreements between postsecondary institutions and financial account providers. Cards offered pursuant to these arrangements, usually in the form of debit or prepaid cards and sometimes cobranded with the institution's logo or combined with student IDs, are marketed as a way for students to receive their title IV credit balances via a more convenient electronic means. However, as we describe in more detail elsewhere in this preamble, a number of reports from government and consumer groups document troubling practices employed by some financial account providers. Legal actions, especially those initiated by the Federal Reserve and Federal Deposit Insurance Corporation (FDIC), against the sector's largest provider reinforce some of these concerns.
According to these reports, many of the following practices were found:
• Providers prioritizing disbursements to their own affiliated accounts over aid recipients' preexisting bank accounts;
• Providers and schools strongly implying to students that signing up for the college card account was required to receive Federal student aid;
• Private student information unrelated to the financial aid process being given to providers before aid recipients consented to opening accounts;
• Access to the funds on the college card was not always convenient; and
• Aid recipients being charged onerous, confusing, or unavoidable fees in order to access their student aid funds or to otherwise use the account.
As discussed in further detail under the heading “Fee provisions for T1 accounts,” these practices indicate that many institutions have shifted costs of administering the title IV, student aid programs from institutions to students. Given that approximately nine million students attend schools with these agreements, that approximately $25 billion dollars in Pell Grant and Direct Loan program funds are disbursed to undergraduates at these institutions, that students are a captive audience subject to marketing from their institution, that the college card market is expanding, and given the concerns raised by existing practices, we believe regulatory action governing the disbursement of title IV, student aid is warranted.
In addition, we include in the proposed regulations a number of minor
Finally, we address in the proposed regulations two issues unrelated to cash management—repeat coursework and clock-to-credit-hour conversion—that were identified by the higher education community as requiring review. We believe these proposed regulatory changes would result in more equitable treatment of student aid recipients.
The proposed regulations would—
• Explicitly reserve the right for the Secretary to establish a method for directly paying credit balances to student aid recipients;
• Establish two different types of arrangements between institutions and financial account providers, “tier one (T1) arrangement” and “tier two (T2) arrangement,” respectively;
• Define a “T1 arrangement” as an arrangement between an institution and a third-party servicer that performs one or more of the functions associated with processing direct payments of title IV funds on behalf of the institution and that offers one or more financial accounts to students and parents;
• Define a “T2 arrangement” as an arrangement between an institution and a financial institution or entity that offers financial accounts through a financial institution under which financial accounts are offered and marketed directly to students or their parents, with the regulatory consequences of T2 status to apply absent documentation from the institution that students or parents do not have credit balances at the institution;
• Require institutions that have T1 or T2 arrangements to establish a student choice process that: Prohibits an institution from requiring students or parents to open an account into which their credit balances must be deposited; requires an institution to provide a list of account options that a student may choose from to receive credit balance funds, where each option is presented in a neutral manner and the student's preexisting bank account is listed as the first, most prominent, and default option; and ensures electronic payments made to a student's preexisting account are as timely as, and no more onerous, as payments deposited to an account made available pursuant to a T1 or T2 arrangement;
• Require that the institution obtain consent from the student or parent to open an account under a T1 or T2 arrangement (1) before the institution shares personal information about that student or parent with the financial account provider, and (2) before the institution or account provider sends an access device to the student or parent or links the student's ID card with a financial account;
• Mitigate fees incurred by student aid recipients by requiring reasonable access to surcharge-free automated teller machines (ATMs), and, for accounts offered under a T1 arrangement, both prohibiting point-of-sale fees and overdraft fees charged to student and parent account holders, and providing students and parents with 30 days following a disbursement of title IV funds to access those funds without any fees;
• Require that contracts governing T1 or T2 arrangements and cost information related to those contracts are publicly disclosed; and
• Require that institutions that have T1 or T2 arrangements establish and evaluate the contracts governing those arrangements in light of the best financial interests of students.
The proposed regulations would also—
• Allow an institution offering term-based programs to count, for enrollment purposes, courses a student is retaking that the student previously passed, up to one repetition per course, including when a student is retaking a previously passed course due to the student failing other coursework; and
• Streamline the requirements governing clock-to-credit-hour conversion by removing the provisions under which a State or Federal approval or licensure action could cause a program to be measured in clock hours.
Please refer to the
These proposed regulations would also benefit students by guaranteeing the right to receive their title IV credit balances at a financial institution and through an access device of their choice. Students who decide to choose accounts with lower fees, and who would have otherwise been steered toward a higher-cost account, will save money and be able to use more of their title IV aid for educational expenses. Students who open accounts covered by these regulations would benefit from having more surcharge-free ATMs from which to access their title IV credit balances. The proposed regulations also would help protect both students and parents from deceptive marketing practices aimed at encouraging them to do business with a particular financial institution in order to access title IV funds.
There would be costs incurred by postsecondary and financial institutions under these proposed regulations. Some postsecondary institutions and financial institutions that do not choose to price their products competitively or that do not justify higher prices (with, for example, superior customer service, better account features, free banking services, the elimination of certain fees) could lose future customers as students or parents decide to use lower-cost accounts as a result of fee disclosures. The T1 arrangement fee provisions will also have cost implications for affected financial institutions and for institutions that currently receive free- or reduced-price title IV administrative services (or other remuneration), and will likely lower the revenue for schools when financial account providers' ability to pass costs on to title IV recipients is limited under these regulations. Some of these costs will include performing due diligence reviews to ensure that contracts are made in the best interests of students, the costs of providing surcharge-free ATM network access, and the costs of presenting credit balance recipients with a list of neutral account options. Other costs would depend upon aid recipient behavior, and the Department expects that many financial account providers may earn less from their student accounts under the proposed regulations. The provisions regarding convenient access benefit students and could also have cost implications for some financial account providers and institutions. Financial account providers could have to deploy additional ATMs or pay fees to ATM network providers to comply with these proposed requirements.
Some institutions with T1 or T2 arrangements could incur costs when establishing a student choice process that would allow students to select among a list of available accounts into which title IV credit balances would be disbursed. Institutions would also likely incur some paperwork burden related to
• Whether proposed methods for prorating institutional charges under § 668.164(c)(5) are appropriate;
• How an institution should disclose the costs of books and supplies that are included as part of tuition and fees under § 668.164(c)(2) and frequency of those disclosures;
• Whether the option to receive a check should continue to be affirmatively offered to students as provided under proposed § 668.164(d)(4)(i)(B)(
• Whether there is a need to establish a minimum number of credit balance recipients at an institution before the institution must comply with the provisions of proposed § 668.164(f)(4);
• Whether the personal information that an institution may provide before a student or parent consents to open a financial account, as provided under § 668.164(e)(2)(i)(A) and (f)(4)(i)(A), is sufficient to meet the needs of a servicer or financial institution;
• Whether the Department should take more proscriptive action than the one proposed in this NPRM to prevent abusive marketing practices with respect to institutional devices such as student IDs and associated financial accounts;
• Whether 30 days following a disbursement is an appropriate timeframe to allow a title IV aid recipient an opportunity to reasonably access aid dollars free of charge as provided under proposed § 668.164(e)(2)(iii)(B)(
• Whether, as proposed in § 668.164(e)(2)(vii) and (f)(4)(vii), it would be in the best financial interests of students to require institutions that have a T1 or T2 arrangement to periodically conduct reasonable due diligence reviews to ascertain whether the fees imposed under the arrangement are excessive; and
• Whether the proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.
Please refer to the relevant portions of the
To ensure that your comments have maximum effect in developing the final regulations, we urge you to identify clearly the specific section or sections of the proposed regulations that each of your comments addresses, and provide relevant information and data, as well as other supporting materials in the request for comment, even when there is no specific solicitation of data. We also urge you to arrange your comments in the same order as the proposed regulations. Please do not submit comments outside the scope of the specific proposals and proposed regulations in this notice of proposed rulemaking, as we are not required to respond to comments that are outside of the scope of the proposed rule. See
We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from the proposed regulations. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the Department's programs and activities.
During and after the comment period, you may inspect all public comments about the proposed regulations by accessing Regulations.gov. You may also inspect the comments in person in room 8055, 1990 K Street NW., Washington, DC, between 8:30 a.m. and 4 p.m., Washington, DC time, Monday through Friday of each week except Federal holidays. If you want to schedule time to inspect comments, please contact the person listed under
On May 1, 2012, we published a notice in the
In that notice, we announced three public hearings at which interested parties could comment on the topics suggested by the Department and could suggest additional topics for consideration for action by a negotiated rulemaking committee. We also invited parties unable to attend a public hearing to submit written comments on the additional topics and to submit other topics for consideration. On May 13, 2013, we announced in the
Section 492 of the HEA, 20 U.S.C. 1098a, requires the Secretary to obtain public involvement in the development of proposed regulations affecting programs authorized by title IV of the HEA. After obtaining advice and recommendations from the public, including individuals and representatives of groups involved in the title IV, HEA programs, in most cases the Secretary must subject the proposed regulations to a negotiated rulemaking process. If negotiators reach consensus on the proposed regulations, the Department agrees to publish without alteration a defined group of regulations on which the negotiators reached consensus unless the Secretary reopens the process or provides a written explanation to the participants stating why the Secretary has decided to depart from the agreement reached during negotiations. Further information on the negotiated rulemaking process can be found at:
On November 20, 2013, we published a notice in the
The Department sought negotiators to represent the following groups: Students; legal assistance organizations that represent students; consumer advocacy organizations; State higher education executive officers; State attorneys general and other appropriate State officials; business and industry; institutions of higher education eligible to receive Federal assistance under title III, parts A, B, and F and title V of the HEA, which include Historically Black Colleges and Universities (HBCUs), Hispanic-Serving Institutions, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA; two-year public institutions of higher education; four-year public institutions of higher education; private, non-profit institutions of higher education; private, for-profit institutions of higher education; regional accrediting agencies; national accrediting agencies; specialized accrediting agencies; financial aid administrators at postsecondary institutions; business officers and bursars at postsecondary institutions; admissions officers at postsecondary institutions; institutional third-party servicers who perform functions related to the title IV Federal Student Aid programs (including collection agencies); State approval agencies; and lenders, community banks, and credit unions. The Department considered the nominations submitted by the public and chose negotiators who would represent the various constituencies.
The negotiating committee included the following members:
Chris Lindstrom, U.S. Public Interest Research Group, and Maxwell John Love (alternate), United States Student Association, representing students.
Whitney Barkley, Mississippi Center for Justice, and Toby Merrill (alternate), Project on Predatory Student Lending, The Legal Services Center, Harvard Law School, representing legal assistance organizations that represent students.
Suzanne Martindale, Consumers Union, representing consumer advocacy organizations.
Carolyn Fast, Consumer Frauds and Protection Bureau, New York Attorney General's Office, and Jenny Wojewoda (alternate), Massachusetts Attorney General's Office, representing State attorneys general and other appropriate State officials.
David Sheridan, School of International & Public Affairs, Columbia University in the City of New York, and Paula Luff (alternate), DePaul University, representing financial aid administrators.
Gloria Kobus, Youngstown State University, and Joan Piscitello (alternate), Iowa State University, representing business officers and bursars at postsecondary institutions.
David Swinton, Benedict College, and George French (alternate), Miles College, representing minority serving institutions.
Brad Hardison, Santa Barbara City College, and Melissa Gregory (alternate), Montgomery College, representing two-year public institutions.
Chuck Knepfle, Clemson University, and J. Goodlett McDaniel (alternate), George Mason University, representing four-year public institutions.
Elizabeth Hicks, Massachusetts Institute of Technology, and Joe Weglarz (alternate), Marist College, representing private, non-profit institutions.
Deborah Bushway, Capella University, and Valerie Mendelsohn (alternate), American Career College, representing private, for-profit institutions.
Casey McGuane, Higher One, and Bill Norwood (alternate), Heartland Payment Systems, representing institutional third-party servicers.
Russ Poulin, WICHE Cooperative for Educational Technologies, and Marshall Hill (alternate), National Council for State Authorization Reciprocity Agreements, representing distance education providers.
Dan Toughey, TouchNet, and Michael Gradisher (alternate), Pearson Embanet, representing business and industry.
Paul Kundert, University of Wisconsin Credit Union, and Tom Levandowski (alternate), Wells Fargo Bank Law Department, Consumer Lending & Corporate Regulatory Division, representing lenders, community banks, and credit unions.
Leah Matthews, Distance Education and Training Council, and Elizabeth Sibolski (alternate), Middle States Commission on Higher Education, representing accrediting agencies.
Carney McCullough, U.S. Department of Education, representing the Department.
Pamela Moran, U.S. Department of Education, representing the Department.
The negotiated rulemaking committee met to develop proposed regulations on February 19-21, 2014, March 26-28, 2014, and April 23-25, 2014. During the March session, the Department proposed adding a negotiated rulemaking session to the schedule to give the negotiators more time to consider the issues and reach consensus on proposed regulatory language. The negotiators agreed to add a fourth and final session. On April 11, 2014, we published in the
At its first meeting, the negotiating committee reached agreement on its protocols and proposed agenda. These protocols provided, among other things, that the committee would operate by consensus. Consensus means that there must be no dissent by any member in order for the committee to have reached agreement. Under the protocols, if the committee reached a final consensus on all issues, the Department would use the consensus-based language in its proposed regulations. Furthermore, the Department would not alter the consensus-based language of its proposed regulations unless the Department reopened the negotiated rulemaking process or provided a written explanation to the committee members regarding why it decided to depart from that language.
During the first meeting, the negotiating committee agreed to negotiate an agenda of six issues related to student financial aid. These six issues were: Clock-to-credit-hour conversion; State authorization of distance education; State authorization of foreign locations of domestic institutions; cash management; retaking coursework; and PLUS loan adverse credit history. Under the protocols, a final consensus would
During the meeting, the Department explained that it planned to include the proposed regulations that would be published after completion of the negotiated rulemaking process in two separate notices of proposed rulemaking (NPRMs). One NPRM would contain the proposed regulations regarding the definition of adverse credit history for PLUS loans. The second NPRM would contain the remaining topics. The Department has already published an NPRM and final regulations regarding the PLUS loan issues. This NPRM addresses the remaining issues, except for State authorization of distance education and State authorization of foreign locations of domestic institutions. While the Department continues to examine these two issues and work with the higher education community to explore how to address these important topics, we do not want those deliberations to delay the publication of regulations necessary to address cash management, clock-to-credit-hour conversion, and retaking coursework. For more information on the negotiated rulemaking sessions, please visit:
The proposed regulations would—
• Establish and modify the definitions of key terms applicable to subpart K;
• Remove outdated references to programs no longer authorized, especially with respect to the Federal Family Education Loan (FFEL) program;
• Require that an institution exercise the level of care and diligence required of a fiduciary with regard to managing title IV, HEA program funds;
• Remove the reference to the just-in-time payment method, and rename the “cash monitoring payment method” as the “heightened cash monitoring payment method”;
• Require institutions placed on the reimbursement or heightened cash monitoring payment methods to credit a student ledger account for the amount of title IV funds the student is eligible to receive, and pay any credit balance due to that student before seeking reimbursement from the Department;
• Require institutions to maintain title IV funds in an insured depository account consistent with guidance issued by OMB on December 26, 2013, codified at 2 CFR chapter I, 200, et al., Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards;
• Provide that, with limited exceptions, an institution must disburse during a payment period the amount of title IV funds that a student or parent is eligible to receive for that payment period;
• Provide that an institution may credit a student's ledger account to pay for allowable charges associated with a payment period;
• Provide that an institution may include the cost of books and supplies as part of tuition and fees;
• Reserve the Secretary's right to establish a method for directly paying credit balances to student aid recipients;
• Establish two different types of arrangements between institutions and financial account providers, “tier one (T1) arrangements” and “tier two (T2) arrangements,” respectively;
• Define a “T1 arrangement” as an arrangement between an institution and a third-party servicer that performs one or more of the functions associated with processing direct payments of title IV funds on behalf of the institution and that offers one or more financial accounts to students and parents;
• Define a “T2 arrangement” as an arrangement between an institution and a financial institution or entity that offers financial accounts through a financial institution, under which financial accounts are offered and marketed directly to students or their parents, with the regulatory consequences of T2 status to apply absent documentation from the institution that students or parents do not have credit balances at the institution;
• Require institutions that have T1 or T2 arrangements to establish a student choice process that: Prohibits an institution from requiring students or parents to open a certain account into which their credit balances are deposited; requires an institution to provide a list of account options that a student may choose from to receive credit balance funds, where each option is presented in a neutral manner and the student's preexisting bank account is listed as the first, most prominent, and default option; and ensures electronic payments made to a student's preexisting account are as timely as, and no more onerous to the student than, payments deposited to an account made available pursuant to a T1 or T2 arrangement;
• Require that the institution obtain consent from the student or parent to open an account under a T1 or T2 arrangement (1) before the institution shares personal information about that student or parent with the financial account provider, and (2) before the institution or provider sends an access device to the student or parent or links the student's ID card with a financial account;
• Mitigate fees incurred by student aid recipients by requiring reasonable access to surcharge-free ATMs, and, for accounts offered under a T1 arrangement, both prohibiting point-of-sale fees and overdraft fees charged to students and parents, and providing students and parents with 30 days following a disbursement of title IV funds to access those funds without any fees;
• Require that contracts governing T1 or T2 arrangements and cost information related to those contracts are publicly disclosed;
• Require that institutions that have T1 or T2 arrangements establish and evaluate the contracts governing those arrangements in light of the best financial interests of students; and
• Prohibit an institution under the reimbursement or heightened cash monitoring payment methods from holding credit balance funds on behalf of a student or parent. The proposed regulations would also—
• Allow an institution offering term-based programs to count, for enrollment purposes, courses a student is retaking that the student previously passed, up to one repetition per course; and
• Streamline the requirements governing clock-to-credit-hour conversion by removing the provisions under which a State or Federal approval or licensure action could cause a program to be measured in clock hours.
Over the past several years, a confluence of factors has significantly altered the landscape of financial products offered to students on college campuses.
In 2009, due largely to concerns raised by consumer advocates and students related to the marketing practices and financial incentives contained in contractual relationships between institutions and credit card providers,
A second product widely offered to students was a recommended or “preferred” student loan. In 2007, then-Attorney General for New York Andrew Cuomo led an investigation into financial incentives provided to colleges for steering students into certain types of student loans. As a result, Congress, as a part of the Higher Education Opportunity Act of 2008, banned gifts and revenue sharing as part of the so-called “preferred lender list” reforms. In 2010, Congress passed the President's student loan reform, moving to a 100 percent Direct Loan program for Federal student loans.
Finally, over the past several years, States have made significant cuts to higher education funding, resulting in budget shortfalls that have fostered an environment of tuition increases and other measures shifting costs to students which has coincided with the proliferation of college debit and prepaid card agreements between institutions and financial account providers.
The combination of funding cuts and limitations on cost-shifting to students through the CARD Act and preferred lender list reforms has created an environment where some colleges are increasingly searching for revenue-increasing strategies, especially those that can be borne by students. This has led to what the United States Public Interest Research Group (USPIRG) referred to as “the next financial frontier for banks and financial firms” that affects students, especially those receiving aid—the proliferation of marketing of campus debit and prepaid cards to students in exchange for monetary benefits to schools, often in the form of significant remuneration or the low- or no-cost administration of financial aid disbursement services.
As the House report on the Higher Education Opportunity Act of 2008 stated, “[t]he nation's financial aid system exists for a single purpose: To serve students and their families.”
The amount of Federal financial aid awarded to students and parents is determined, in part, on the basis of an enrolled student's cost of attendance. This includes charges typically paid directly to the school (such as tuition, fees, and on-campus room and board), as well as other costs such as books and supplies, housing, transportation, and dependent care. Typically, an institution applies the total amount of a student's aid against institutional charges, then releases a “credit balance” to the student in cases where the amount of aid exceeds the amount of charges.
When we refer to a credit balance in this document, we are referring to the remaining amount of title IV aid after all allowable charges, including tuition and fees, have been paid to the institution. At lower cost institutions, like community colleges, that enroll lower-income and historically underrepresented students, a higher percentage of students receive credit balances.
In the past several years, especially in light of tightening budgets and fewer revenue-generating credit card partnerships and student loans, “a growing number of schools have begun offering banking products to their students in the form of debit and prepaid cards issued through agreements with financial services providers.”
The agreements are more typical at public institutions—29 percent of public schools had such agreements, compared to 6.5 percent of nonprofit not-for-profit schools and 3.5 percent of for-profit schools.
As these agreements have begun to proliferate, one provider in particular has become the predominant actor in the market. “As of July 2013, one provider, Higher One Holdings, Inc., held about a 57 percent share of the college card market, as measured by number of agreements between schools and card providers, as well as number of students at schools with agreements,”
According to a National Association of College and University Business Officers (NACUBO) survey polling roughly 400 institutional respondents, “19 [percent] of surveyed institutions offer a credit balance on a stored value or debit card, 58 [percent] offer an [electronic funds transfer (EFT)] to a student's preexisting bank account, and 10 [percent] offer an EFT to a bank account at a school-selected bank or vendor.”
The proliferation of these agreements has coincided with a number of troubling practices that were first reported by USPIRG and reiterated and expanded upon in reports from GAO, the Department's Office of Inspector General (OIG), Consumers Union, and in inquiries from members of Congress. These practices have also resulted in adverse legal actions, especially against the largest financial account provider, Higher One. Each practice is discussed in detail in the relevant section of the preamble.
These reports made several recommendations, which include: Ensuring timely delivery of credit balances to students regardless of account sponsorship; providing a meaningful choice of how to receive title IV dollars, especially when a student has a preexisting bank or prepaid account; clarifying the nature of implied institutional endorsement of certain accounts; ensuring that private student information is not released prior to receiving students' consent to do so; providing neutral account disclosures to enable students to make informed choices about account selection; and giving aid recipients the ability to access their student aid balances conveniently and without onerous, confusing, or unavoidable fees.
In view of the reports from consumer groups and government organizations, the feedback we received from the public through hearings and negotiated rulemaking, and after meeting with staff from the FDIC, Office of the Comptroller of the Currency and Bureau of the Fiscal Service at the U.S. Department of the Treasury (Treasury), and CFPB, we believe it is critical to address the troubling practices arising from college card agreements. Moreover, given the number of students affected by these agreements, the amount of taxpayer-funded title IV aid at stake, and the expanding breadth of the college card market, we believe this regulatory action is necessary. The provisions in this NPRM regulate institutions and third-party servicers that administer the title IV, HEA programs, and do not regulate banking entities. To the extent that these regulations have a material impact on financial account providers, they do so indirectly and only for those providers that choose to engage with institutions that disburse title IV credit balances electronically.
We are proposing a number of more minor changes in subpart K related to the management of title IV, HEA program funds generally. In addition, we have also removed outdated cross references and references to programs that are no longer authorized, the most prominent of which is the FFEL program.
There are two additional issues that were raised as part of the program integrity and improvement negotiated rulemaking that are addressed in the proposed regulations: (1) Retaking coursework and (2) clock-to-credit-hour conversion rules. These issues, which are distinct from the cash management topics that comprise the majority of the proposed regulations, are discussed in the final portion of this preamble.
We discuss substantive issues under the sections of the regulations to which they pertain. Generally, we do not address regulatory provisions that are technical or otherwise minor in effect.
Section 401(e) of the HEA, regarding Pell Grants, provides that “[p]ayments under this section shall be made in accordance with regulations promulgated by the Secretary for such purpose, in such manner as will best accomplish the purpose of this section.” It adds that “[a]ny disbursement allowed to be made by crediting the student's account shall be limited to tuition and fees and, in the case of institutionally owned housing, room and board. . . .”
Section 401(a)(1) of the HEA provides that the Secretary shall pay “to each institution such sums as may be necessary to pay each eligible student . . . a Pell Grant.” It also provides for the Department to pay institutions the necessary sums prior to the start of each payment period; but, in addition, authorizes the Secretary to “determine[ ] and publish in the
Section 452(c) of the HEA, regarding Direct Loans, states that loan funds “shall be paid and delivered to an institution by the Secretary prior to the beginning of the payment period established by the Secretary in a manner that is consistent with payment and delivery of Federal Pell Grants. . . .”
Section 487 of the HEA requires, as a prerequisite to title IV participation, that an otherwise eligible institution enter into a program participation agreement with the Secretary conditioning its initial and continuing participation upon compliance with requirements that, among other things, the institution “use funds received by it for any program under this title and any interest or other earnings thereon solely for the purpose specified in and in accordance with the provision of that program,” and it “not charge any student a fee for processing or handing any application, form, or data required to determine the student's eligibility for assistance under this title or the amount of such assistance.”
The HEA also contains numerous provisions to ensure that students receive the title IV awards for which they are eligible for under the statute. For example, section 401(f)(1) of the HEA provides that “Each student financial aid administrator [at each institution] shall . . . (C) make the award to the student in the correct amount.” Under section 454(j) of the HEA, “proceeds of loans to students under [the Direct Loan program] shall be applied to the student's account for
Under section 455(a)(1) of the HEA, the Secretary may prescribe such regulations as may be necessary to carry out the purposes of the Direct Loan program, including regulations applicable to third-party servicers and for the assessment against such servicers of liabilities for program violations of the program regulations against such servicers, to establish minimum standards with respect to sound management and accountability of those the Direct Loan programs.
More broadly, section 487(c)(1)(B) of the HEA provides that the Secretary “shall prescribe such regulations as may be necessary to provide for” reasonable standards of financial responsibility, and appropriate institutional administrative capability to administer the title IV programs, in matters not governed by specific program provisions, “including any matter the Secretary deems necessary to the sound administration of the financial aid programs.” Third-party servicers are likewise by statute subject to the Department's oversight, including under HEA sections 481(c) and 487(c)(1)(C), (H), and (I) of the HEA.
The Department has consistently interpreted the HEA as authorizing regulation of the matters addressed in the proposed regulations,
Furthermore, the proposed definition of “access device” has the advantage of providing a concise way of referring to the different types of current and future tools students could use to access their financial accounts. During negotiated rulemaking, negotiators expressed concerns that our current terminology might not include new technologies students could use to access their funds. Since technology in this field is advancing rapidly, we were also concerned that the terminology could become outdated unless it referred to financial tools broadly. To address these concerns, the proposals that we circulated during negotiated rulemaking referred to “access devices” in conjunction with a prepaid card or debit card. However, to simplify the regulations, we simply define and use the term access device to mean both prepaid cards and debit cards. It is our intent to include new technologies in this definition, such as digital wallets and other technological advances that may emerge, so that we do not need to amend the regulations by listing the specific types of tools students may use to access their accounts.
Under current § 668.163(e), an institution must exercise the level of care and diligence required of a fiduciary with regard to maintaining and investing title IV, HEA program funds.
We relocate the current standard of conduct provisions in § 668.163(e) to proposed § 668.161(c), and revise § 668.161(b) of these regulations to specify that an institution must exercise the level of care and diligence required of a fiduciary with regard to managing title IV, HEA program funds.
We acknowledge that some sweep accounts are relatively risk free; however, other sweep accounts or investment vehicles may subject funds to losses, liens, or other attachments. Although we could attempt to differentiate between the two or define a safe investment account, we see no reason to do so. Under the current § 668.163(c)(4) that governs interest-bearing accounts, an institution must return to the Secretary any interest earnings over $250. Under proposed § 668.163(c), an institution must return any interest earnings over $500. Therefore, unlike the situation where an institution invests its own funds, there is no incentive to maximize earnings because the amount of earnings that an institution may retain is insignificant. As a trustee of Federal funds, the institution must ensure that all of the title IV, HEA program funds it receives from the Secretary remain unencumbered and delivered timely to students and parents that qualify for those funds.
We believe that relocating the standard of conduct provisions to the scope and institutional responsibility section of the proposed regulations is appropriate because an institution must exercise the level of care and diligence
Under § 668.166(a)(2), the provisions governing excess cash do not apply to an institution that receives title IV, HEA program funds under the just-in-time payment method.
Similarly, the current provisions governing the cash monitoring payment method under § 668.162(e) specify that an institution must first make disbursements to students and parents for the amount of title IV, HEA program funds those students and parents are eligible to receive before the institution seeks reimbursement from the Secretary for those funds. Under paragraph (e)(2) of this section, an institution seeks reimbursement by following the procedures under the reimbursement payment method, except that the Secretary may modify the documentation requirements and review procedures used to approve the reimbursement request.
Current § 668.164(e) requires that whenever the amount of title IV, HEA program funds credited to a student's account exceeds the amount of tuition and fees, room and board, and other authorized charges assessed the student, the institution must pay the resulting credit balance directly to the student or parent within a 14-day timeframe.
Similarly, under the heightened cash monitoring payment method in proposed § 668.162(d), an institution must first credit a student's ledger account for the amount of title IV, HEA program funds the student or parent is eligible to receive, and pay any credit balance due under proposed § 668.164(h), before the institution seeks reimbursement from the Secretary for those funds.
The current provisions under which the Department determines whether to approve a reimbursement request do not specify that an institution must submit documentation showing that it paid the credit balances that are due to students and parents. These proposed regulations make explicit that an institution placed on the reimbursement payment method or heightened cash monitoring payment method under § 668.162(d)(2) must demonstrate in accordance with procedures established by the Secretary that it paid directly to students and parents the credit balances that are included in its request for reimbursement before the Department will consider that request. For an institution placed on the heightened cash monitoring payment method under § 668.162(b)(1), the institution must maintain documentation showing that it paid any required credit balances directly to students and parents before it initiates a request for funds that includes those students and parents.
In addition, because the current regulations do not address the accounts into which foreign institutions must maintain Direct Loan program funds, we propose to apply the same requirements, to the extent possible, to those institutions—a depository account that is insured by the FDIC, NCUA, or by an equivalent agency of the government where the institution is located. We recognize, however, that there may be instances where there is no equivalent agency, so these proposed regulations would permit the Secretary to approve a bank account designated by the foreign institution.
(8) The non-Federal entity must maintain advance payments of Federal awards in interest-bearing accounts, unless the following apply.
(i) The non-Federal entity receives less than $120,000 in Federal awards per year.
(ii) The best reasonably available interest-bearing account would not be expected to earn interest in excess of $500 per year on Federal cash balances.
(iii) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.
(iv) A foreign government or banking system prohibits or precludes interest-bearing accounts.
Section 200.305(b)(9) states:
(9) Interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services, Payment Management System, Rockville, MD 20852. Interest amounts up to $500 per year may be retained by the non-Federal entity for administrative expenses.
Current § 668.164(b)(3) provides that except for late disbursements, an institution may disburse title IV, HEA program funds to a student or parent for a payment period only if the student is enrolled for classes for that payment period and is eligible to receive those funds.
Under § 668.2, a third-party servicer is defined as an organization, person, or State that enters into a contract with an eligible institution to administer any aspect of the institution's participation in any title IV, HEA program. This includes performing any function required by statute or regulation, or any arrangement, agreement, or limitation entered into under the authority of statutes applicable to title IV of the HEA, such as, but not limited to,
Current § 668.25 provides, in part, that in a contract with an institution, a third-party servicer must (1) comply with all statutory provisions of or applicable to title IV of the HEA, and all regulatory provisions prescribed under that statutory authority; (2) report to the OIG for investigation any information indicating there is a reasonable cause to believe that the institution may have engaged in fraud or other criminal misconduct in connection with administering the title IV, HEA programs, (3) be jointly and severally liable with the institution to the Secretary for any violation by the servicer of any statutory or regulatory provision of or applicable to title IV of the HEA, and (4) if the servicer disburses title IV, HEA program funds to a student, confirm the eligibility of the student before making that disbursement, where the confirmation must include but is not limited to any applicable information contained in the records required under § 668.24.
Proposed § 668.164(b)(3) provides that at the time that a disbursement is made for a payment period, the institution, along with the third-party servicer engaged by the institution to draw down title IV, HEA program funds or otherwise perform activities leading to or supporting that disbursement, must confirm that the student is enrolled at the institution, and that the student, or the student's parent, is eligible for that disbursement.
In program reviews of several institutions and third-party servicers, the Department found that neither the institution nor the servicer confirmed that students were eligible to receive title IV, HEA program funds before disbursements were made to those students. Under the contracts between these institutions and servicers, the servicers would perform a wide range of activities on behalf of the institutions including packaging aid awards, drawing down or requesting title IV funds, accounting for funds, and submitting data or reports to the Department. However, the contracts used the phrases “make arrangements for disbursements,” “intercept disbursement requests,” and “process awards including [the] preparation of disbursement journals” to apparently refer to a process where the servicer would provide the institution a list of the students and the amounts of their aid awards, and the institution would then credit the students' ledger accounts for those amounts, presumably after confirming the eligibility of those students. But those confirmations were either not performed or not performed adequately, in part, because the procedures under which the institution was expected to confirm the eligibility of its students were lacking or not documented. Nevertheless, the servicers accepted at face value that the institution confirmed eligibility when it disbursed title IV, HEA program funds by crediting the students' ledger accounts, and reported those disbursements to the Department as valid payments made to those students.
The Department finds it incongruous that a servicer who essentially controls the entire process for making awards to students would carve out in its contract with an institution the most fundamental aspect of the administering the title IV aid programs—that disbursements are made only to eligible students. Nevertheless, because the third-party servicer is bound by the same provisions that apply to an institution, the servicer must carry out its contracted activities in a manner keeping with a fiduciary under the title IV, HEA programs. In this regard, the servicer cannot feign ignorance over what the institution did or did not do in confirming eligibility. To the extent that the servicer relies on information provided by the institution that leads to or supports a disbursement, is used in determining the amount of funds to draw down for eligible students, or subsequently used for reporting valid disbursements to the Department, the servicer, along with the institution, is responsible for the veracity of that information. In the program reviews, the findings could have been ameliorated if the parties established and agreed to a documented process under which the institution would confirm eligibility and the servicer would verify periodically that the confirmations were made in accordance with that process.
We wish to emphasize that our proposed language holding an institution and its third-party servicer responsible for confirming a student's eligibility is not new policy or a change in policy—it merely emphasizes current requirements and reiterates institutional and servicer responsibilities.
Current § 668.164(e) provides that whenever an institution disburses title IV, HEA program funds by crediting a student's account and the total amount of those funds exceeds the amount of tuition and fees, room and board, and other authorized charges the institution assessed the student, the institution must pay the resulting credit balance directly to the student or parent as soon as possible but no later than (1) 14 days after the balance occurred, if the credit balance occurred after the first day of class of a payment period, or (2) 14 days after the first day of class of a payment period, if the credit balance occurred on or before the first day of class of that payment period.
Proposed § 668.164(c)(2) provides that, if an institution includes the cost of books and supplies as part of the amount it charges for tuition and fees, the institution must disclose those costs separately and explain why including them is in the student's best financial interests.
Proposed § 668.164(c)(3) specifies that an institution may include, in a payment period for the current year, prior-year charges of not more than $200 for (1) tuition, fees, and institutionally-provided room and board without obtaining a student's or parent's authorization, and (2) educationally related goods and services provided by the institution for which the institution obtains the student's or parent's
Under proposed § 668.164(c)(4), an institution may include in the current payment period allowable charges stemming from any previous payment period in the current year for which the student is eligible, if the student was not already paid for that previous payment period.
If an institution debits a student's ledger account for the entire cost of a program or otherwise debits the ledger account for more than the charges associated with the payment period, proposed § 668.164(c)(5) requires the institution to determine the prorated amount of charges for the payment period by (1) for a program that has substantially equal payment periods, dividing the total amount of institutional charges for the program by the number of payment periods in the program, or (2) for any other program, dividing the number of credit or clock hours the student enrolls in or is expected to complete in the current payment period by the total number of credit or clock hours in the program and multiplying that result by the total institutional charges for the program.
Under proposed § 668.164(h)(1), a title IV, HEA program credit balance occurs whenever the amount of title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount of allowable charges associated with that payment period. Proposed § 668.164(h)(2) maintains the same 14-day credit balance payment timeframes as the current regulations.
With regard to the definitions in proposed § 668.164(c)(3), we seek to codify in regulations the meaning of the terms “current year” and “prior year” that were previously used in guidance issued on September 8, 2009, in Dear Colleague Letter GEN-09-11.
In cases where institutions include the costs of required books and supplies as part of the total amount of tuition and fee charges, relevant information about those materials and the cost charged by institutions for those materials is not frequently provided to students. This practice effectively prevents students from purchasing required materials elsewhere for a lower price. For this reason, and based on findings by State attorneys general that some institutions required students to purchase books and supplies directly from them at grossly inflated prices, we proposed during negotiated rulemaking to prohibit institutions from including books and supplies as part of tuition and fees. However, some of the non-Federal negotiators noted that institutions are increasingly developing course-specific or course-embedded materials for pedagogical or safety reasons.
The Department is persuaded there are valid reasons for including some books and supplies as part of tuition and fees. While we acknowledge that course-embedded materials blur the distinction between tuition and fees and books and supplies, we continue to believe that where required books and supplies are separate items available for purchase in the marketplace, those books and supplies should generally not be included as part of tuition and fees. Indeed, section 472 of the HEA, regarding “costs of attendance,” treats books and supplies as separate from tuition and fees; and under other provisions (
Proposed § 668.164(e)(1) specifies that in a T1 arrangement, an institution has a contract with a third-party servicer under which the servicer performs one or more of the functions associated with processing direct payments of title IV, HEA program funds on behalf of the institution to one or more financial accounts that are offered under the contract or by the third-party servicer, or by an entity contracting with or affiliated with the third party servicer to students and their parents.
Proposed § 668.164(f)(1) specifies that in a T2 arrangement, an institution has a contract with a financial institution or entity that offers financial accounts through a financial institution, under which financial accounts are offered and marketed directly to students or their parents.
Proposed § 668.164(f)(2) provides that the Secretary presumes that title IV, HEA program funds are deposited or transferred into the financial accounts offered and marketed under § 668.164(f)(1). However, the institution does not have to comply with the requirements described in § 668.164(f)(4) if it documents that, for the most recently completed award year, no student or parent received a credit balance.
Proposed § 668.164(f)(3) explains that a financial account is “directly marketed to students and their parents” in three situations: (1) The institution communicates information directly to its students or their parents about the financial account and how it may be opened; (2) the financial account or access device is co-branded with the institution's name, logo, mascot, or other affiliation; and (3) a card or tool that is provided to the student or parent for institutional purposes, such as a student ID card, is linked with the financial account or access device.
As the incidence of these types of agreements has increased, so too has the scrutiny of the practices associated with them. In the past few years, USPIRG, Consumers Union, GAO, and OIG have conducted reviews into the college card marketplace and released reports detailing their findings and recommendations. A number of the findings in these reports are troubling, and the reports lay out recommendations for Department action that are explained in more fully in each of the relevant sections of this preamble, along with explanations of the provisions designed to address these findings. This section discusses a threshold issue—the types of arrangements that are subject to the proposed regulations.
During negotiated rulemaking, the committee spent a significant amount of time trying to identify which financial accounts would be considered “sponsored,” or endorsed by the institution. After multiple negotiating sessions, the Department's final proposal in the negotiations included the term “sponsored account,” which was defined as an account, access device, card (including student ID), or other tool that:
(1) Is specified or included in a contract between the institution and an entity,
(2) Is offered to a student (or parent) enrolled at the institution, and
(3) May be used by the student (or parent) to receive title IV funds.
This definition encompasses a variety of possible accounts. While the student advocates supported this definition, banking sector representatives opposed the definition, arguing that it was (1) overly broad and applicable to accounts that are outside the scope of the Department's interest in regulating the delivery of title IV aid, and (2) too vague as to what which accounts would fall under the definition. We acknowledge the concerns raised by banking industry representatives, so have tailored the proposed rules based on the circumstances in which the troubling practices have occurred.
In describing the questionable practices of the college card market, a consensus emerged from the consumer
Banks and credit unions have an incentive to create long-term relationships with college students—a potentially lucrative future cohort—at the time when those students have not yet established a relationship with a bank.
Other financial institutions, including, but not necessarily limited to, non-bank firms (such as third-party servicers), “may have different incentives for pursuing relationships with students.”
Ordinarily, an institution's incentive to agree to assessing high fees against students might be offset by its interest in protecting its students from the loss of significant financial assistance. However, colleges also have strong incentives to establish arrangements that provide for fee revenue (which ultimately benefits the institution in the form of remuneration or reduced-cost services from the third-party servicer). “Schools are searching for ways to make their services more cost effective and increase revenues,” and one increasingly common way of reducing costs is by hiring a third-party servicer to handle the administration of the student aid disbursement process.
These incentive structures have led to a number of troubling practices. OIG found that schools relinquished “significant control” over the title IV aid disbursement process and relied on servicer compliance to meet title IV regulations. “However, the schools did not appear to routinely monitor all servicer activities related to this contracted function, including compliance with all title IV regulations and student complaints.”
Third-party servicers' practices have also led to legal action. In August 2012, FDIC announced settlements with Higher One and one of its former bank partners, Bancorp Bank, after alleging “unfair and deceptive practices” relating to the manner in which it charged fees and other practices. Specifically, the FDIC alleged that the two firms violated the Federal Trade Commission Act by “charging student account holders multiple insufficient funds fees from a single transaction; allowing accounts to remain in overdrawn status for long periods and allowing these insufficient funds fees to continue accruing; and collecting the fees from subsequent deposits to the students' accounts, typically funds for tuition and other college expenses.”
We believe that absent targeted provisions addressing specific concerns, and especially because students are a captive audience to institutional marketing, students will continue to be subject to the troubling practices identified by government agencies and consumer groups. For these reasons, we propose to designate as “tier 1” those arrangements between an institution and a third-party servicer under which the servicer performs one or more of the functions associated with processing direct payments of title IV, HEA program funds for the institution, and offers accounts to students and parents. Institutions entering into such arrangements would be responsible for ensuring that accounts offered by third-party servicers comply with both the fee requirements and disclosure requirements of the regulations.
As explained above, in contrast to third-party servicers, traditional financial institutions and entities that offer financial accounts through a financial institution that do not engage in third-party servicing functions have stronger incentives to provide student-friendly accounts and convince students to become long-term customers.
However, arrangements between institutions and financial institutions that are not third-party servicers are not without the potential for harm to students. The biggest concern involving these accounts is that the apparent institutional endorsement of a particular financial account has the potential to lead aid recipients to believe that the account in question is required for aid receipt, has been competitively bid and negotiated by the school, or, at a minimum, represents a good deal because it has been endorsed by the institution.
There are multiple ways institutions convey this impression to students.
The most obvious way this occurs is with student IDs. In one-third of schools surveyed by GAO, student IDs, which are distributed to all students, have the capacity to be activated as either a debit or prepaid card.
More general co-branding can cause similar confusion. “Schools can appear to implicitly or explicitly endorse their college cards, by virtue of the relationship with the provider and co-branding of the card. Many students trust their schools and, as a result, may view co-branding as an endorsement and an indication their school has negotiated the best terms for them.”
Finally, when schools convey the information about a contracted-for financial account directly to students, students listen. “Card providers and schools market college cards directly to students through various methods, including mailings, on-campus presentations, and co-branded Web sites. Some card providers offer marketing assistance or materials to schools. For example, one provider told us it prefers assisting the school in developing messages, because students pay more attention to the information if it comes from the schools.”
These direct marketing methods appear to be especially effective. As Rohit Chopra, Student Loan Ombudsman at the CFPB, stated in his presentation to the negotiated rulemaking committee, “If a certain financial product where the school has a financial interest is chosen as the `default' choice or implies endorsement of the school, this can lead to mismatched incentives . . . [and] school incentives may impact financial product adoption rates.”
As GAO has recognized, there are no comprehensive data on the number of students who elect to receive their credit balances on a college card. However, “the largest provider reported that overall, 43 percent of students receiving financial aid payments at its client schools opened debit accounts.”
On the other hand, direct marketing by financial institutions in itself does not always establish that these accounts impact title IV aid. For example, a financial institution may contract with an institution to offer financial accounts to students in circumstances where no credit balances exist (typically at high-cost institutions), and students are therefore not receiving credit balances into the offered financial accounts. Where such circumstances exist, the integrity of the title IV programs is not at issue.
For this reason, we are limiting our oversight of T2 arrangements to institutions at which students and parents subject to these direct marketing tactics are expected to receive credit balances. Under this approach, if an institution documents that none of its students or parents received a credit balance in the most recently completed award year, it does not have to comply with the restrictions in § 668.164(f) that otherwise apply to financial accounts offered under a T2 arrangement. This approach is appropriate because it allows for the identification of arrangements where no credit balances are expected, while at the same recognizing the remarkable effectiveness of the marketing campaigns in general and the immediate need of students and parents for a place in which to have title IV credit balances deposited.
We invite comment on whether there is a need to establish a minimum threshold of credit balance recipients at an institution before that institution's arrangement would implicate the T2 provisions. We are seeking feedback to determine whether a threshold would be needed to balance burden on institutions and financial institutions against the benefits to students of proposed § 668.164. If a threshold is recommended, we are requesting data and analysis supporting the number chosen.
For the reasons discussed in the preceding paragraphs, we propose to limit the definition of “T2 arrangements” to arrangements where students receive credit balances and are
For purposes of clarifying what types of contracts fall under the purview of these proposed regulations, we are also providing the following examples of circumstances which are neither T1 nor T2 arrangements and therefore would not be subject to these proposed regulations if finalized as proposed in this NPRM:
• General marketing of a financial institution that does not specify the kind of account or how it may be opened (
• Sponsorship of on-campus facilities with financial institution branding that does not promote particular accounts;
• A lease permitting the operation of an on-campus branch or on-campus ATMs; or
• A list of area financial institutions recommended generally to students for informational purposes rather than being provided pursuant to a contract with the institution.
Finally, many agreements between institutions and financial account providers, including those agreements with monetary benefits for the school, are not clearly disclosed to the consumer or the public. We believe that requiring the disclosure of information relating to the costs to students and benefits provided to schools will encourage market competition.
In sum, we believe that the troubling practices described in various reports and manifested in legal actions demands a regulatory response ensuring student aid recipients are afforded sufficient protections and taxpayer dollars are not put at risk of loss to unreasonable fee-based charges. We believe the most prudent approach is to establish a set of regulatory requirements based on the level of risk to students and taxpayers represented by the type of arrangement between an institution and a third-party servicer or financial institution. Due to the numerous findings and recommendations of consumer and government reports, legal action taken against the predominant third-party servicer in the industry, and because third-party servicers have significant control over the disbursement process, we have determined a higher level of regulatory scrutiny over third-party servicer arrangements is appropriate.
Because student financial accounts offered by financial institutions (and entities that offer financial accounts through a financial institution) that are not third-party servicers do not present as much of a risk to students, we do not believe the same level of scrutiny is necessary for the arrangements between institutions and such entities (based in part on the work Consumers Union did to evaluate student financial account offerings
We believe this regulatory framework will provide a measured and effective level of consumer protection for those accounts that present the greatest risk to title IV recipients. We also believe the disclosure requirements will provide incentives for institutions and financial institutions to ensure that the financial products marketed are fair to aid recipients. Finally, the recommended delineations between types of arrangements are likely to improve clarity relative to the proposed definitions advanced during negotiations, while ensuring the regulatory requirements are tailored to address the problems identified by consumer groups and government agencies.
Current § 668.164(c)(3) permits an institution to establish a policy requiring its students to provide bank account information or open an account at a bank of their choosing, but requires the institution to disburse funds via check or cash if the student does not provide this information in a timely manner.
Current § 668.164(c)(3) also requires that, if the institution opens a bank account on behalf of a student or parent
For institutions required to establish a student choice process, the proposed regulations would establish four requirements under proposed § 668.164(d)(4)(i)(A) that must be met in implementing the process.
First, the institution must inform the student or parent in writing that he or she is not required to open or obtain a specific financial account or activate an access device offered by a specific financial institution in order to receive title IV funds. Second, the institution must ensure that the options listed are presented in a clear, fact-based, and neutral manner, except for listing a student or parent's preexisting account as the first, most prominent, and default option. Third, the institution must ensure that initiating direct payments electronically to an existing account is treated equivalently to initiating direct payments to an account offered pursuant to a T1 or T2 arrangement. Fourth, the institution must allow the student or parent the option to change his or her account preference with reasonable written notice.
In addition, the proposed regulations in § 668.164(d)(4)(i)(B) would provide four provisions governing the description of account options under the student choice process. First, the institution must present, prominently and as the first and default option, the ability to receive funds in the student's or parent's existing account. Second, the institution must list and identify the major features and commonly assessed fees associated with all accounts offered pursuant to a T1 or T2 arrangement. (Using a format published by the Secretary in the
We believe students and parents should be able to choose the account in which they receive their funds, and that, if students and parents are presented with options, those options should be presented in a clear and fact-based manner. This was a recommendation echoed by every group that has closely examined college card arrangements. GAO recommended that we develop regulations requiring that “objective and neutral information” be provided to students and parents regarding options for receiving Federal student aid payments.
We also believe that signing up for a financial account promoted or offered by the school should not be a prerequisite of receiving title IV aid. For those students with a preexisting bank account, we think it should be easy and straightforward to select their existing account for receipt of title IV funds. The fact that students or parents have an existing account implies that they have already exercised some measure of informed consumer choice; and our requirement that such an option be listed first, most prominently, and as the default choice, will ensure that students are not misled to believe that choosing an existing account is discouraged or will result in delays.
CFPB has recommended that, as a general matter, students receive their financial aid via direct deposit to an existing bank account.
More disturbing are the practices employed by some financial account providers that seem to eliminate, or at best hamper, the ability of students to choose a product that is best for them. The reports produced by GAO, OIG, CFPB, Consumers Union, and USPIRG all describe troubling practices and the lack of legitimate choice in the student financial products marketplace. These reports describe situations where these providers did not give students any choice as to how they receive credit balances, or where the choice was deceptive.
In another case, GAO found a school that was not only recommending its card over direct deposit to students' existing accounts, but also providing guidance to its students on how to switch from their existing accounts to the card option.
Some financial institutions and third-party service providers apparently work to create the impression that their product is required or a preferred option for receiving student aid funds. In many cases, financial institutions use access to private student information to send university-branded mailings or a financial access device before students have made a disbursement selection, or even arrived on campus, which may lead the students to believe that the account has already been established on their behalf.
A school implying that specific accounts are preferred or required is not the only way student choice is limited. Some providers create an environment where the provider's preferred account offering is a de facto requirement because of the way funds are disbursed. One example of this is to create circumstances (or at least the appearance of such circumstances) where receiving disbursement via a non-preferred electronic method will require additional steps or time. Some providers allow students to select the preferred account immediately, but selecting the student's own account requires additional steps, instructions, or documentation.
Even if additional steps are not required, some providers set up barriers by informing students that a deposit to an existing account will take additional time, and that selecting the preferred account will get students their money the fastest.
Finally, providers that are third-party servicers have frequently used their advantaged access to student information to market and persuade students to select their debit card over other delivery options.
Due to these troubling and widespread practices, we believe institutions should clearly inform students and parents of their options for receiving their title IV credit balance funds. Further, we believe these findings demonstrate that there is no reasonable explanation for delaying direct deposit to a student's existing account or requiring additional documentation or verification and forces students to choose the provider's preferred accounts to get timely access to student aid. Finally, we believe that after an aid recipient has selected a particular financial account—and has had experience with that account, he or she should be afforded the opportunity by the school to change that selection with reasonable written notice and that initial selection of an account should not force a student to use it indefinitely.
In addition, we are also concerned about the type of information students receive about their choices. While some schools present students with unbiased options for receiving their credit balances, GAO found instances where options for receiving payments “were not presented to students in a clear or neutral fashion,” and in fact encouraged students to choose the college card over other options.
FDIC staff told GAO that “requiring a clear and conspicuous affirmative statement that students have a choice could enhance student awareness of options.”
USPIRG argued that if students are not informed of the account terms in a clear and easily-understandable manner, they will be unable to make an informed choice as to the account that best meets their needs.
The importance of objective, neutral, and easily understandable disclosures is highlighted by the concerns of consumer advocates regarding fee disclosures. For example, a common complaint among consumer advocates is that students or parents may be surprised when they are charged fees that they may not have expected, such as the 50 cent PIN fee charged by some servicers. According to USPIRG, “[s]tudent consumers may have built in assumptions about the product and its fee structures and costs. . . . [T]hey are likely to think that a debit card is a debit card and won't discern the key differences.”
Since the release of the USPIRG and GAO reports, CFPB has issued an NPRM that proposes to create short form disclosures for prepaid accounts. These short form disclosures would highlight “key fees that [CFPB] believes are most important for consumers to know about. . . .”
To help students and parents obtain objective, neutral, and easily understandable information about their options, we propose to work with CFPB to ensure that students and parents receive fee information prior to acquiring an account by adding these disclosures to the selection process in a format similar to the disclosures CFPB has proposed. We agree with CFPB that receiving disclosures prior to the acquisition of an account would “ensure that the features of the prepaid accounts are fully, accurately, and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits, and risks associated with the account,”
Because the proposed disclosures in CFPB's NPRM are designed for prepaid accounts, and the financial accounts under T1 and T2 arrangements may be either prepaid accounts or traditional checking accounts, and because the model forms address certain fees not permitted under this NPRM to be assessed against students or parents opening financial accounts offered under a T1 arrangement, we will likely be unable to use the exact format of the short form disclosure proposed in CFPB's NPRM. In addition, CFPB may alter the requirements for its short form disclosures while we are in the process of developing final cash management regulations. For these reasons, instead of adopting the short form disclosures described in the CFPB NPRM at this time, we plan to develop consumer-friendly disclosures in close consultation with CFPB and to release the format for those disclosures in a
Finally, in our proposed regulations, we allow schools to provide information to students about other accounts not offered pursuant to a T1 or T2 arrangement because we do not want the student choice provisions to prevent schools from making good faith attempts to inform students of convenient banking options. The proposed regulations also allow students to continue to receive funds via a check because many institutions believe that a disbursement option via non-electronic means best serves their students. We invite comment as to whether the option to receive a check should continue to be affirmatively offered to students, although we note here that offering a check will continue to be allowed in the event students fail to make a choice on how to receive their credit balance.
One of the most critical aspects of this rulemaking is ensuring that students are truly able to easily receive their title IV funds in an account of their choosing. We believe that the requirements of proposed § 668.164(d)(4) would address the numerous problems with the existing account selection process and provide students the opportunity to choose their account, while still allowing institutions the opportunity to offer students a variety of options.
Proposed § 668.164(e)(2)(i)(B) and (f)(4)(i)(B) require that an institution obtain a student's or parent's consent to open a financial account before an access device, or any representation of an access device, is sent to the student or parent.
Proposed § 668.164(e)(2)(i)(C) and (f)(4)(i)(C) require that an institution obtain consent from the student or parent before a card or tool provided to the student or parent for institutional purposes, such as a student ID card, is linked with a financial account.
In its report, USPIRG raised concerns regarding third-party servicers and financial institutions using their access to personal information to market financial accounts to students.
While some negotiators also had concerns regarding the use of a student or parent's personally identifiable information in marketing or opening financial accounts, others expressed concerns that third-party servicers would be unable to perform their duties without data provided by institutions. In response, we revised our proposal to state that an institution may not share with the entity (
Prior to the final session, negotiators representing third-party servicers and financial institutions continued to express concerns that this draft language would prohibit third-party servicers from performing their duties and stated that, at minimum, servicers would require a student or parent's permanent address, delivery address (if different), date of birth, partial Social Security number or tax ID number, student ID number, cryptographic information, unique identifier(s), phone number, email address, secure alternatives to email messaging, gender, photos, password or other unique item only known by the student, and confirmation that the student is to receive a title IV credit balance disbursement and the amount of such disbursement.
In this proposal, we maintain our position that the only information that an institution may initially share with a third-party servicer or financial institution is the student's or parent's name, address, and email address. This limitation on sharing personal information applies to both T1 and T2 arrangements. While we appreciate the concerns of the negotiators for third-party servicers and financial institutions, we disagree that extensive personal information is necessary for a third-party servicer or financial institution before a student or parent gives consent to open an account. However, the institution may provide additional information after the student or parent consents to open the account.
To clarify our position, we have also amended the language to require that in order to share more than this basic contact information with a servicer or financial institution, a student or parent must provide consent to actually open an account, rather than simply select an option for receiving direct payments of financial aid.
We believe that the proposed language strikes a balance between the need for a third-party servicer to be able to perform its duties, a financial institution to make its financial accounts available to students and parents, and the privacy of an individual's personal information. We invite comment on whether the personal information that an institution may provide before a student or parent consents to open a financial account in our proposed regulations is sufficient to meet the needs of a servicer or financial institution.
USPIRG stated that “[o]ften, the disbursement card is mailed to the student before he or she has made a disbursement selection”
We share the concerns regarding manipulation and potentially deceptive marketing practices detailed by USPIRG. As a result of those concerns and in response to the suggestions of negotiators at the first session of negotiated rulemaking, we originally proposed provisions that would allow an institution to send a debit card, prepaid card, or access device associated with the account to a student or parent only if the student or parent specifically requests it after providing consent to open an account. While some negotiators supported our position that a student or parent should have to request a card, others expressed concerns that “[p]rohibiting [an] institution from sending an unactivated debit or similar card to a student interferes with the student's access to [t]itle IV funds . . . .”
In this NPRM, we have modified the approach we initially took in the negotiations by removing the requirement for the student or parent to specifically request the card, while retaining a requirement that the student or parent consent to opening the account before the card is sent by an institution, third party servicer, or an associated financial institution. Though we understand that the requirement to obtain consent to open a financial account before sending an access device
According to the GAO's report, in cases where student IDs can also be electronically linked with financial accounts, “either the school or the card provider issues student ID cards to all students. Students then can choose whether to have their ID card also serve as a debit or prepaid card.”
In our initial draft of the proposed regulations presented at the second session of negotiations, we proposed banning access devices from bearing the institution's logo or mascot, or otherwise implying an affiliation with the institution. According to negotiators, this would have prevented student IDs or similar institutional devices from being electronically linked to financial accounts that are controlled by outside entities. In response to those concerns, subsequent drafts contained provisions requiring consent to open an account that are very similar to the provisions contained in these proposed regulations.
We note that if an institution chooses to allow this functionality on products used for institutional purposes, the institution, third-party servicer, or financial institution is required to obtain consent from the student or parent to open the financial account. The proposed language in § 668.164(e)(2)(i)(C) and (f)(4)(i)(C) does not prohibit an institution or third-party servicer from distributing a student ID that is fully functional for institutional purposes and that contains an inactive device or other inactive means of using the card to access a linkable financial account. However, before activating this financial capability, electronically linking, or otherwise associating the ID card with the financial account, the institution must first secure consent to open the financial account from the student or parent. We believe this is a balanced approach that will not constrain institutional functions for which these cards may be necessary, but will ensure that students or parents make an affirmative decision before an account is effectively activated on their behalf.
While we believe that this provision allows students the option to obtain a multipurpose device while also improving consumer protections around student IDs and similar products, we have concerns about allowing devices distributed for institutional purposes to become associated with financial accounts. Because of these concerns, we are open to further suggestions from the public on how to prevent coercive marketing practices with respect to institutional devices such as student IDs and associated financial accounts.
Current § 668.164(c)(3)(v) states that institutions must ensure that the student has convenient access to a branch office of the bank or an ATM of the bank in which the account was opened (or an ATM of another bank), so that the student does not incur any cost in making cash withdrawals from that office or these ATMs. This branch office or these ATMs must be located on the institution's campus, in institutionally owned or operated facilities, or, consistent with the meaning of the term “public property” as defined in § 668.46(a), immediately adjacent to and accessible from the campus.
Current § 668.164(c)(3)(vi) requires that institutions ensure that the debit card, stored-value card, ATM card, or other device can be widely used. For example, the institution may not limit the use of the card or device to particular vendors.
Finally, current § 668.164(c)(3)(vii) requires that institutions not market or portray the account, card, or device as a credit card or credit instrument, or subsequently convert the account, card, or device to a credit card or credit instrument.
Proposed § 668.164(e)(2)(iii)(B)(
Proposed § 668.164(e)(2)(iii)(B)(
Proposed § 668.164(e)(2)(iii)(B)(
Proposed § 668.164(e)(2)(iv) maintains the current requirement that an institution ensure that the financial account or access device is not marketed or portrayed as a credit card, and would further specify that the card not be converted to a credit instrument and that no fee is charged to the student or parent for any transaction that exceeds the balance on the card, regardless of whether the full amount of the transaction is established at the time the transaction is authorized by the financial institution.
As noted previously, due to a number of factors, including changes made by the CARD Act and decreasing State support for higher education, to mitigate the cost and burden of disbursing title IV funds schools have increasingly opted to contract with third-party servicers. While institutions have saved money by outsourcing administrative functions, those savings may have been transferred as costs to students through fees that reduce their title IV aid balances. Indeed, Higher One has stated that about 50 percent of its $180 million in revenues for the year that ended December 31, 2011, came from account activity fees associated with one of its account offerings.
There is also evidence that some students are incurring unreasonably high fees associated with these account offerings. Public comment the Department received in anticipation of the negotiated rulemaking sessions indicated that fees were unnecessarily high and reduced student aid intended to address costs of attendance. Staff from the FDIC have reported that some students have “complained of paying aggregate fees ranging from hundreds of dollars to more than $1,000,”
During negotiated rulemaking, the Department's proposals on the subject of allowable fees in particular generated significant disagreement among negotiators. Student representatives voiced support for the Department's approach prohibiting most fees, and asked that debit card “swipe” fees also be prohibited from being charged under institutional agreements with outside parties. Other negotiators disagreed with prohibitions on fees—particularly the provision requiring unlimited reimbursement to students for ATM surcharges. These negotiators stated that prohibiting institutions from allowing fees to be charged to students would ultimately be counterproductive because it would prevent providers from recovering their costs and drive them from the market. Consequently, institutions would be forced to adopt less efficient, more costly processes for making payments to students and these less efficient processes would affect students through tuition increases that would be more onerous to students than paying account fees set at fair market rates.
In sum, most negotiators expressed a preference for a framework that would: (1) Allow a reasonable fee structure to remain in place, (2) not favor direct deposit to the point of preventing a student from selecting a more favorable sponsored account, and (3) present a clear set of options to allow students to make an informed choice.
The Department is sympathetic to the position advocated by consumer advocates and students. The intent of title IV student aid is to give students the financial assistance necessary to help pay for their postsecondary education. The greater the number and amount of fees, the less money students will have to pay for educationally related expenses such as housing, books, supplies, and childcare. Title IV grant recipients are typically low-income individuals and these fees will disproportionately impact low-income students.
However, even financial accounts available to the general public are not truly free, and fees can often be difficult to avoid entirely. As OIG stated, “students who choose to receive their title IV funds by check or direct deposit to an existing account might incur fees or other costs to access and spend the funds once they have been delivered. Students who have their funds transferred to an existing bank account are subject to the fees charged by their financial institution based on account activity, whereas students who choose to receive their funds by check may incur check-cashing fees.”
Perhaps the most disturbing aspects about fees charged to students are the complexity, obscurity, and confusing nature of certain fees that are charged. We believe that certain practices employed by institutional third party servicers are inconsistent with normal banking practices, or have damaging consequences to Federal student aid recipients, or both. We believe that absent targeted provisions addressing specific fee-related issues, students and parents that are offered financial accounts under T1 arrangements will continue to be subject to the alarming practices identified by government agencies and consumer groups that led to this rulemaking effort.
Under this approach, the Department is not prohibiting a financial institution from charging any particular fee; only that the contract negotiated by the institution and the servicer prohibit certain fees from being passed on or assessed to recipients of title IV aid who open accounts under a T1 arrangement. The institution and servicer would, as a part of normal contractual negotiations, bargain between themselves for services provided in full appreciation of the true costs being borne by all parties, including the costs to the servicer and its associated financial institutions of complying with these regulatory provisions. Under title IV, the cost of paying students is a responsibility incident to the administration of the programs which the HEA entrusts to institutions. We believe this is an appropriate remedy for the acknowledged cost-shifting from institutions to students of title IV disbursement services.
Current regulations require institutions to ensure that students have “convenient access” to their title IV funds through ATMs. GAO, OIG, USPIRG, and Consumers Union (among others) have recommended that the Department more clearly define convenient access, so that students “have meaningful ways to access their financial aid at no cost.”
However, the same level of access is not typically provided by third-party servicers, or their associated financial institutions. For example, according to USPIRG, Higher One is responsible for disbursing title IV funds for about 520 schools, but with 700 ATMs in service,
As noted previously, the common approach in the financial products market is to provide a network, either regional or national, of surcharge-free ATMs. Even third-party servicers who otherwise restrict surcharge-free access to a single ATM provide broader network coverage for a flat monthly fee,
One of the more troubling fees assessed to students by third party servicers is what is known as a “point-of-sale swipe” fee or “PIN debit” fee (hereafter referred to as a PoS fee). This fee is distinct from the interchange fee charged to merchants on a per-sale basis as a charge for the service of fulfilling the credit card or debit card payment request. Instead, the PoS fee is charged to students by the institution's financial account provider as a surcharge for selecting the “debit” function and entering a PIN to complete a purchase, and charges no such surcharge for selecting the “credit” function and signing for their transaction. Each PoS fee is typically small—usually about $0.50
First, because most student cards are marketed or portrayed as a debit card or having functionality similar to a debit card, students are likely to believe that selecting the “debit” option is required to complete the transaction.
Second, the PoS fee is excessive. The fee is assessed each time the student uses the card. Since one-third of all such transactions are for less than $15, the PoS fees are high relative to the cost of the purchase and can add up quickly with repeated charges.
Third, PoS fees are uncommon outside of the third-party servicer realm. GAO found that “no basic or student account that we reviewed for comparison purposes charged a transaction fee for using the account's debit card.”
Third-party servicers and institutional officials told GAO, and reiterated during negotiations, that adjustment of student behavior can limit these charges: “students can avoid fees in some cases by choosing to authorize debit transactions using a signature rather than a PIN. . . .”
PoS fees have been actively identified as harmful to students in multiple reports because they are atypical, opaque, difficult for students to anticipate and compare with other account offerings, and are often disproportionate to the amount of the underlying financial transaction. Most importantly, it is feasible for schools and their third-party servicers to negotiate the terms of a contract such that any cost is not passed on to account holders. Indeed, that is precisely what was accomplished at one institution when students became aware of the charge and relayed their complaints to the institution's administration.
Overdraft fees are more common in the general banking market. Overdraft fees (sometimes also referred to as overdraft protection, transaction denial fees, or insufficient funds charges, among other designations) are assessed when an account holder attempts to charge a purchase on a card or other access device in excess of the outstanding balance of the account.
Historically, such fees were “ad hoc courtesies banks would occasionally provide customers; they were never intended to become a routinely administered, extremely high-cost credit product.”
Nevertheless, these fees are not widely imposed across all sectors. CFPB's study of the prepaid card market indicated that of all prepaid card agreements surveyed, more than 95 percent did not extend overdraft service to their cards, indicating that not only is it possible to remove such “protection” from a device or account, but it is already a widespread practice in this market segment.
The Federal Reserve has adjusted the overdraft fee to an “opt-in” service; however, consumers are likely to misunderstand information given to them on such processes and whether these “protections” are in their best interests.
A number of practices around overdrafts are troubling and are likely to result in students incurring excessive fees to access their financial aid funds. Typically, the cost of the overdraft fee itself is as much as twice the underlying charge. The reasons for this are difficult to discern, especially because the banking provider can deny the transaction at no cost, rather than extending credit to the account holder.
Additionally, in 2012, Higher One settled a lawsuit with the FDIC, agreeing to return more than $10 million to students for account overcharges, including charging students multiple nonsufficient funds (NSF) fees for the same transaction.
As detailed above, the overdraft fees present the potential for significant costs and harm to students, especially because students are often among those most vulnerable to incurring such charges. However, in most cases, the remedy for such harm is simple and is already practiced by the vast majority of prepaid card providers. The financial institution has the opportunity to refuse the charge sought to be authorized.
As explained above, we recognize that, generally, institutions will charge account holders some fees, either on a regular basis or in response to specific behaviors. We have sought to address the three specific types of fees based on the impediments they pose for students seeking access to the title IV aid to which the students are entitled. We believe that these three types of fees are particularly onerous, difficult to understand and anticipate, or uncommon. The unifying characteristic of the proposed regulations addressing these specific fees is to give students a reasonable opportunity to access their full title IV credit balance refund—which is statutorily determined as the amount intended to provide the means by which to pay for the costs of attending the institution. The proposed regulation barring servicers or their associated financial institutions from assessing a fee for 30 days following the receipt of title IV funds is also consistent with our objective of affording students and parents a reasonable opportunity to access their full title IV credit balance.
As recommended by USPIRG, we believe aid recipients should particularly be able to access their title IV funds during the period immediately following disbursement, when they are most likely to need funds to cover educationally related expenses, without charge.
Finally, we emphasize that we do not intend these fee provisions to discourage institutions from negotiating even more favorable arrangements that provide students and parents with better account terms. We believe that institutions should use their considerable negotiating leverage to get the most favorable offerings on behalf of those they serve.
During negotiated rulemaking, several negotiators urged the Department to “issue regulations that require schools to publically disclose the terms of such arrangements, as well as the method and criteria used by the school in selecting the partner financial services company.”
However, not all negotiators agreed with the Department's position that the full contract should be available on the institution's Web site. Negotiators representing financial institutions and third-party servicers argued that “disclosure of [the] contract documents would potentially damage competition by making public critical proprietary information, and would create security concerns where, as is often the case, a servicer's technical system specifications and processes were appended to or otherwise included in the contract document.”
While we are sensitive to the concerns raised by third-party servicers and financial institutions, there is evidence that releasing the complete contract would not result in the negative outcomes cited. In a 2012 NACUBO survey, 55 percent of the responding institutions that contracted with a third-party vendor indicated that their agreements are publically available, and that these agreements are most likely accessible through public records requests (39 percent) or by written request to a specific office on campus (33 percent).
Although this survey was only sent to 2,036 institutions with 412 responding, we believe it makes the important point that institutions are already releasing contracts without damaging consequences. Given that third-party servicers and financial institutions continue to contract with institutions that make their agreements available to the public in various ways, we believe that disclosing those agreements is not harmful and is likely to enhance rather than inhibit competition.
However, to address the concerns raised by third-party servicers and financial institutions, our proposed regulations, like the final proposal distributed during negotiated rulemaking, would create an exemption for any provision of the contract that would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities and would permit the parties to the contract to redact such information. We believe that exempting these provisions from public disclosure will safeguard proprietary and security-related information while also creating the transparency that many advocates have called for.
During negotiations, non-Federal negotiators representing students and State attorneys general also encouraged the Department to add a provision requiring the release of a summary of the contract and “include in the summary form the fees imposed on sponsored accounts, the actual payments made in connection with the agreement, and the value of in-kind services provided to schools by third-party providers.”
As a result of these discussions, the final draft of the Department's proposal circulated at the fourth session contained a provision that would have required the disclosure of a contract summary. This latter draft would have required institutions to disclose the name of the financial institution offering the account and the third-party servicer or other parties involved in opening or enabling the account; whether the contract or arrangement provided for revenue sharing or royalty payments, and, if so, the nature and amount of that compensation; whether the account was a checking account, prepaid debit card, or other type of account; any fees or charges associated with the account; the number of allowable out-of-network surcharge-free ATM transactions; the network of surcharge-free ATMs available, indicating all the names associated with the network, the approximate number of available ATMs in that network both nationally and locally, and the number and location of surcharge-free ATMs on campus (if any) and their hours of accessibility, and a publicly accessible online ATM locator to search for in-network ATMs; and the total number of students and parents with an account and the average amount of fees paid by students and parents who had the account during the most recently completed award year or twelve-month period.
However, to reduce burden on institutions, we propose in these regulations that an institution must only provide to the Secretary, with respect to a contract summary provided under a T1 or T2 arrangement:
• The total consideration for the most recently completed award year, monetary and non-monetary, paid or received by the parties under the terms of the contract;
• The number of students and parents who had financial accounts under the contract at any time during the most recently completed award year; and
• The mean and median of the actual costs incurred by those account holders.
We believe that these proposed disclosures address the transparency issues raised by GAO, OIG, and others since the key information most commonly called for by advocates will now be available to the public, as well as the full contract, except for the redactions allowed, none of which concern consumer information.
Current § 668.14(b)(4) requires that a school establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under the title IV, HEA programs.
The GAO stated that it remains concerned that benefits to institutions, especially in the form of contractual remuneration, may “motivate schools to encourage the use of college cards or potentially choose the arrangement that provides the schools the most revenue rather than one that provides students the best terms.”
The failure on the part of some institutions to negotiate arrangements that serve the best financial interests of the students opening the accounts is troubling. At the institutions it reviewed, OIG found that officials did not even attempt to negotiate better terms on behalf of their students and instead accepted the preexisting fee schedules offered by the financial account providers. In justifying this approach, officials stated that they felt a student's relationship with a financial institution was separate from the relationship with the institution.
We are confident that postsecondary institutions can negotiate appropriate terms on behalf of their students, especially for products intended to be marketed to title IV recipients. Indeed, one of the institutions reviewed by OIG that initially declined to negotiate better terms on behalf of its students later did so after receiving numerous student complaints about PoS fees; after negotiations, the school was able to successfully eliminate PoS fees for students.
This institution's experience helps to substantiate USPIRG's argument that colleges have an advantageous negotiating position because they control access to a lucrative student market—and they therefore have the ability to negotiate on behalf of their students.
Finally, in an effort to address this problem during negotiated rulemaking, negotiators representing State attorneys general submitted a proposal to require “institutions to base decisions to enter into such arrangements solely on consideration of the best interest of students,”
(A) The account is held at an insured financial institution;
(B) The account is set up to meet the requirements for deposit insurance under 12 CFR part 330, or share insurance in accordance with 12 CFR part 745, such that the funds accessible through the card are insured for the benefit of the parent or student by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund;
(C) The account is not attached to a line of credit or loan agreement under which repayment from the account is triggered upon delivery of the Federal payments; and
(D) The issuer of the card complies with all of the requirements, and provides the holder of the card with all of the consumer protections, that apply to a payroll card account under the rules implementing the Electronic Fund Transfer Act, as amended.
While the requirements under 31 CFR 210.5 pertain specifically to federal payments made through the Automated Clearing House network, we believe that to ensure such protections are extended to students, they should apply to all financial accounts an institution includes in its student choice process under proposed paragraph § 668.164(d).
During the negotiated rulemaking process, some non-Federal negotiators recommended the Department clarify existing regulations for repeating coursework and supported limiting the applicability of the regulations to undergraduate students only. However, other non-Federal negotiators were concerned that, due to the high standards some graduate schools impose on their students, the limitations on retaking coursework should apply to graduate students as well. Based upon these discussions and the recommendations of some of the non-Federal negotiators, the Department proposed to allow an institution to count all of the coursework for a student, at all program levels, who is enrolled in a program using an integrated curriculum that requires a student who failed one course to retake both the failed course and all previously passed coursework to academically progress in the program. The current prohibition against counting more than one repetition of a previously passed course would remain.
The Department also clarified that the revised regulation would apply to undergraduate, graduate, and professional students.
The Department received tentative agreement from all members of the negotiating committee on the proposed changes to the regulations.
Under § 668.8(k)(3), the Federal and State approval provisions in § 668.8(k)(2)(i) that make a program a clock hour program do not apply if the program has a State or Federal approval or licensure requirement that a limited component of the program must include a practicum, internship, or clinical experience that is required to be measured in clock hours.
As more colleges and universities enter into agreements with financial institutions and third-party servicers to assist in the disbursement of financial aid to students, we believe it is necessary to address the troubling practices discussed more fully in the preamble. Concerns regarding the marketing strategies, lack of transparency, and financial incentives contained in contractual relationships between colleges and universities and financial institutions have arisen as colleges adopt new strategies to save costs. We propose to amend the current cash management regulations to address this changing marketplace. By doing so, the Department believes that these current arrangements, along with future arrangements, will be more beneficial and transparent to students and other parties.
Under Executive Order 12866, the Secretary must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by OMB. Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—
(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);
(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.
This proposed regulatory action is a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.
We have also reviewed these regulations under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—
(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and
(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.
Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”
We are issuing these proposed regulations only on a reasoned determination that their benefits would justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that these proposed regulations are consistent with the principles in Executive Order 13563.
In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs associated with this regulatory action are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.
This Regulatory Impact Analysis is divided into six sections. The “Need for Regulatory Action” section discusses why amending the current regulations is necessary.
The “Summary of Proposed Regulations” briefly describes the amended changes the Department is proposing in these regulations. The proposed regulations amend the cash management regulations, along with two issues unrelated to cash management: Retaking coursework and clock-to-credit-hour conversion.
The “Discussion of Costs, Benefits, and Transfers” section considers the cost and benefit implications of the proposed regulations for students, parents, financial institutions, and postsecondary institutions. Specifically, we considered the costs and benefits of interest-bearing bank accounts, accounts offered under T1 and T2 arrangements, retaking coursework, and clock-to-credit-hour conversion.
Under “Net Budget Impacts,” the Department presents its estimate that the proposed regulations would not have a significant net budget impact on the Federal government.
In “Alternatives Considered,” we describe other approaches the Department considered for key provisions of the proposed regulations, including prohibiting an institution from including books and supplies as part of tuition and fees; requiring an institution to obtain consent to open an account before sharing the student's or parent's information with a servicer; allowing an institution to send a debit card, prepaid card, or access device associated with the account to a student or parent only after the student or parent specifically requests it after providing consent to open an account; and additional disclosures relating to contracts between postsecondary institutions and financial institutions.
Finally, the “Initial Regulatory Flexibility Analysis” considers the effect of the proposed regulations on small entities.
Executive Order 12866 emphasizes that “Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people.” In this case, there is indeed a compelling public need for regulation. The Department's main goal in promulgating the proposed regulations is to address major concerns regarding the rapidly changing financial aid marketplace wherein financial products are offered to students who receive title IV, HEA credit balances.
Several changes in the student financial aid marketplace make the proposed regulations necessary. The number of institutions entering into these agreements continues to increase. For institutions, these agreements save money on administrative costs that they would otherwise incur in disbursing title IV credit balances to students. While a convenient option, we are concerned about some of the practices employed by financial institutions and third-party servicers in connection with these agreements. Some of these practices include requiring or giving preference to college card accounts over preexisting accounts, implying that the only way to receive Federal student aid is through college card accounts, allowing private student information to be made available to card providers without student consent, and imposing uncommon and confusing fees on aid recipients accessing their funds. These practices, along with others discussed in the preamble, reduce the amount of title IV aid available for educational expenses.
These practices are particularly disturbing because of the number of students impacted. While data on credit card agreements and credit balances is scarce, a GAO report from July 2013 identified 852 postsecondary institutions (11 percent of all schools that participate in the title IV programs) that had college card agreements in place. While 11 percent is a small percentage of total title IV participating schools, these schools had large enrollments, making up about 39 percent of all students at schools participating in title IV programs.
The GAO
Given the
The Department proposes to amend the cash management regulations under subpart K and other sections of the Student Assistance General Provisions regulations issued under the HEA. The proposed regulations are intended to ensure students have convenient access to their title IV, HEA program funds, do not incur unreasonable and uncommon financial account fees for accessing their title IV funds, and are not led to believe they must open a particular financial account to receive their Federal student aid. In addition, the proposed regulations update other provisions in the cash management regulations under subpart K and otherwise amend the Student Assistance General Provisions. We also propose to clarify how previously passed coursework is treated for title IV eligibility purposes and streamline the requirements for converting clock hours to credit hours. The table below briefly summarizes the major provisions of the proposed regulations.
We expect the effects of the proposed regulations would include improved information to facilitate consumer choice of financial accounts for receiving title IV credit balance funds, reasonable access to title IV funds without fees, a transfer of some types of fee income among students, institutions, and financial institutions, updated cash management rules to reflect current practices, streamlined rules for clock-to-credit-hour conversion, and the ability of students to receive title IV funds for repeat coursework in certain term programs. Students, institutions, and third-party servicers and the financial institutions that have contractual relationships described as T1 and T2 arrangements would be most affected by the proposed regulations.
In an attempt to quantify some of the costs and to reduce the burden associated with the proposed regulations, the Department analyzed its own data to estimate the prevalence of credit balances. While there may be instances where financial institutions have an agreement with a postsecondary institution to offer college card accounts to students who do not receive credit balances, the proposed regulations focus on accounts offered under T1 or T2 arrangements where students have a credit balance.
While comprehensive data on the number of students who receive credit balances on a college card do not currently exist, we attempted to calculate the incidence and distribution of credit balance recipients. We analyzed the data maintained by the Department to estimate the number of students who would potentially be affected by the proposed regulations and to evaluate whether, in order to reduce burden, we could establish a de minimis threshold below which an institution would not be subject to the T2 requirements by analyzing the percentage of students with a credit balance at various institutions.
The numbers of students who received title IV aid in the 2013-2014 school year (from the National Student Loan Data System (NSLDS) of the Department's Office of Federal Student Aid (FSA)) were matched by institution to data from the Integrated Postsecondary Education Data System (IPEDS) for tuition, fees, and room and board. The credit balance calculation established an institutional cost that included an estimated average tuition, fees, and room and board amount (which took into account the percentage of students who lived in-district, in-state, and out of state for tuition and fees expense, and the percentage of students who lived on-campus for room and board charges). Aid recipients were grouped by the amount of aid received (rounded into $500 ranges). For each institution, the students in the aid ranges above the estimated institutional cost were considered to have a credit balance. We then used the number of
We looked only at title IV participating institutions and aid recipients. From the data obtained, 3,400 institutions had both tuition estimates and aid recipient information. Unsurprisingly, there is an inverse relationship between an institution's tuition and fees and the percentage of students receiving a title IV credit balance. Our findings were consistent with findings from GAO and USPIRG. Based on our data, we estimated that 2,816,104 students at these 3,400 institutions were receiving a credit balance. The Department's data showed 70 percent of total students receiving a credit balance were at public two-year institutions (1,972,035 students). While we estimated that that there was a significant number of students who received a credit balance at all of the four-year institutions, the students at four-year institutions combined (819,062) still did not equal half the total number of students who received a credit balance at public two-year institutions (Table [2]). The number of students who received a credit balance was lowest at the less-than two-year institutions, which represented approximately 1.8 percent of institutions and under 1 percent of students who received a credit balance from the 3,400 institutions with both tuition and fee and financial aid data.
As several provisions of the proposed regulations apply to institutions with T1 or T2 arrangements, utilizing publically available sources and working with CFPB, we identified a listing of institutions that were known to have card agreements with financial institutions and applied the same methodology described above to this subset of institutions.
In a final attempt to analyze the data, the Department took the subset and identified only those institutions that had a T2 arrangement. This narrowed down the data to 191,242 students at 160 institutions. The identified institutional data was further analyzed by sector with data available for public two-year, public four-year or above, and private not-for-profit, four-year or above institutions. The data was similar to the larger datasets (see Table [4]) and produced inconclusive results on a threshold to reduce burden.
As described in the Data and Methodology section, we analyzed the available data to determine if we could identify a clear percentage threshold or minimum number of students who had a credit balance before the proposed regulations relating to T2 arrangements would apply. We believed that applying a threshold amount would reduce the burden on institutions where small percentages of students received a credit balance. However, we could not conclusively identify a clear cut-off amount as the data was evenly distributed in each of the datasets and subsets we analyzed. We request comment on whether we should establish a de minimis amount and, if so, what that amount should be, supporting data, and how this amount should be established.
We also reviewed reports related to campus card use for information on affected students and their account usage patterns. The GAO, USPIRG, and Consumers Union, among others, have analyzed the issue of student accounts and the use of college cards. Results from those reports that were used in the Department's calculations are noted in the discussion of specific provisions throughout this section.
Institutions with T1 arrangements are required to mitigate fees incurred by student aid recipients by prohibiting PoS and overdraft fees charged to students and parents. Additionally, these institutions must ensure that students have surcharge-free access to a national or regional ATM network that has ATMs on or near each campus of the institution. Little information is currently available on the total amount of college card fees paid by students. Most financial account providers are unwilling or unable to provide information on fees to the Department. The GAO report reviewed fee schedules from eight financial institutions and found that while college cards do not have monthly maintenance fees, fees for out-of-network ATM use, wire transfers, and overdraft fees were similar to the financial products marketed to non-students. Credit unions' fees were typically lower than those charged by college cards (see Table [5]). However, college card fees were lower than alternative financial products, such as check-cashing services.
While we
In addition to the uncertainty regarding the total amount of college card fees paid by students, consumer behavior is unpredictable, and the responses of students and parents to the proposed disclosures about account options and costs will significantly contribute to the effect of the proposed regulations. While it is assumed that consumers with appropriate information will make rational decisions, such as avoiding fees imposed on withdrawals from out-of-network ATMs or debit transactions that require a PIN rather than a signature, some students may not make the optimal choices in managing their accounts. We do not have data on the distribution of students in accounts with specific fee arrangements, student usage patterns, or the responsiveness of students to the information that would be provided under the proposed regulations, and therefore it is difficult to estimate the exact transfers that would occur if certain fees on student accounts were prohibited. However, there is some third-party analysis of account usage that can be used to establish a range of possible effects of the proposed regulations. In its August
An additional analysis by U.S. PIRG included data on overdraft behavior by age range with adults in the 18-25 age range having the highest incidence of paying overdraft fees with 53.6% paying zero, 21.5 percent paying 1 to 4, 10.3 percent paying 5-9, 7.9 percent paying 10 to 19, and 6.8 percent paying 20 or more overdraft fees.
Another element that complicates the analysis of the effects of the proposed regulations is the response of financial institutions and institutions. The proposed fee limitations relating to T1 arrangements would have cost implications for affected servicers. One purpose of the proposed regulations is to allow students to access financial aid funds without burden from fees or other costs; however we acknowledge that many third-party servicers in T1 arrangements could restructure their accounts to earn some of those funds through fees that would not be affected by the proposed regulations. Over time, as contracts are renewed or entered into, financial institutions could also increase the revenue they receive from institutions, but the split between the revenue that can be recaptured and that which might be lost to financial institutions is not estimated in this analysis.
As noted in the Summary of Proposed Regulations section, under the proposed regulations, institutions with T1 and T2 arrangements would be subject to several provisions designed to increase the disclosure of information related to student accounts and emphasize the availability of options for students to receive credit balances. We believe this access to account disclosures and other critical information would allow students and parents to make informed decisions regarding the handling and distribution of their title IV funds. The fee and contract disclosures would help students and parents determine whether the financial products marketed by financial institutions with relationships to their school are the best option for them. These disclosures would also help prevent students from being misled into believing that they must use those financial products.
Furthermore, the proposed regulations would require institutions to disclose the prices of books and other materials that they include as part of tuition and fees. We believe this will encourage schools to make one of two student-friendly changes: For schools that cannot justify including the price of books and supplies in tuition charges because it is not in students' best financial interest, students and parents will be able to compare prices to determine if there are other, more economically viable options available and buy materials available in the marketplace. Alternatively, students benefit from the buying power of the school in cases where the school can source the materials for lower-than-market costs.
The proposed regulations would also help protect both students and parents from deceptive marketing practices aimed at encouraging them to do business with a particular financial institution without presenting options. When students are not presented with clear choices or information, they may be pushed into using financial accounts with higher fees or less access than other options available to them. By requiring clear and neutral disclosures to students and parents, the student choice provisions would aid students and parents in identifying accounts with lower fees. Students who select accounts with lower fees would save money and be able to use all or more of their title IV aid for expenses critical to their educational needs.
As noted in the discussion of fee provisions related to T1 arrangements, under the proposed regulations, a third-party servicer with a T1 arrangement would have additional obligations with respect to the requirement that it provide students with convenient access to surcharge free regional or national ATM network. As under the current regulations, financial institutions must provide students convenient access to in-network ATMs. The proposed regulations would clarify that “convenient access” means ATMs are sufficient in number at each of the institution's locations such that funds are reasonably available from them. The provisions specifying what constitutes “convenient access” are designed for the benefit of students and could have cost implications for some third-party servicers and financial institutions. These servicers/financial institutions could have to deploy new ATMs or pay to be associated with a surcharge-free ATM network to meet these requirements. Students who open accounts under a T1 or T2 arrangement would benefit from having more surcharge-free ATMs from which to access their title IV credit balances.
The direct marketing methods employed by financial institutions, third-party servicers, and postsecondary institutions have proven to be fairly effective. As mentioned earlier in the Need for Regulatory Action section, 10 million students (Chart 1) are at title IV participating schools where card agreements are prevalent. While some information is available about these agreements, it is insufficient to support a comprehensive analysis on the costs of the proposed regulations. We do not have data on the total number of institutions with card agreements with financial institutions or the details of those agreements. There is also a lack of data on the total number of students who receive credit balances and in what form those students receive that aid.
Beyond the data limitations, forecasting the future behavior of students under the proposed regulations also presents another challenge in estimating costs. Students have a variety of choices on how to receive their aid. Based on data from the National Postsecondary Student Aid Study (NPSAS) conducted by the National Center for Education Statistics, we know that a majority of students receive a refund by depositing a refund directly to a bank account (37.2 percent) or by cashing or depositing a refund check at
Interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually. The proposed regulations would increase the amount allowed to be retained by non-Federal entities for administrative expenses from $250 to $500. By doing so, some institutions would see a minor benefit from being able to keep the first $500 in interest accrued on accounts holding title IV funds. Other updates to subpart K reflect technological changes and current practices in managing title IV funds.
The proposed regulations would eliminate provisions that prevent institutions from counting previously passed courses towards enrollment where the repetition is due to the student failing other coursework. This change would benefit a limited number of undergraduate, graduate, and professional students. Students in these circumstances would no longer be denied title IV aid and therefore would be less likely to drop out or need less desirable private education loans to continue their coursework. Institutions and students would benefit as students would be able to continue paying for educational costs with title IV aid.
By streamlining the clock-to-credit-hour conversion provisions, institutions would benefit from the simplification of regulations affecting institutional determinations relating to title IV eligibility.
We estimate that the proposed regulations would not have a significant net budget impact. Consistent with the requirements of the Credit Reform Act of 1990, budget cost estimates for the student loan programs reflect the estimated net present value of all future non-administrative Federal costs associated with a cohort of loans. A cohort reflects all loans originated in a given fiscal year.
The proposed regulations would require institutions to disclose agreements with financial services providers through which students may opt to receive title IV credit balances, and restrict the fees students could be charged for accounts offered pursuant to T1 arrangements. Additionally, the proposed regulations would make technical changes to subpart K cash management rules to reflect technological advances and improved disbursement practices. The proposed regulations also would simplify the clock-to-credit-hour conversion for title IV purposes by eliminating the reference to any State requirement or role in approving or licensing a program. Finally, the proposed regulations would eliminate the provision that prevents institutions from counting previously passed courses towards enrollment where the repetition is due to the student failing other coursework.
Although the proposed regulations would affect the arrangements among institutions, students, and financial service providers, they are not expected to affect the volume of title IV aid disbursed or the repayment patterns of students, and therefore, no significant budget impact on title IV programs is estimated.
We welcome comments on the estimates provided and will consider them in developing the RIA for the final regulations.
As required by OMB Circular A-4 (available at
As part of the development of the proposed regulations, the Department reviewed and considered various internal proposals, as well as proposals from non-Federal negotiators. In the following paragraphs we summarize the major proposals that we considered but ultimately declined to incorporate in the proposed regulations.
The Department initially considered prohibiting institutions from including books and supplies as part of tuition and fees. However, some of the non-Federal negotiators argued that institutions, for pedagogical or safety reasons, are increasingly developing course-specific or course-embedded materials that students must access and purchase from the school and that those materials should be included in tuition
The Department initially proposed to the negotiated rulemaking committee regulations that would have prevented institutions from sharing with a servicer any information about a student or parent until the student or parent affirmatively consented to open an account. Because the proposals considered during negotiated rulemaking did not separate T1 and T2 arrangements, the ban on information sharing would have affected both third-party servicers and financial institutions.
After multiple negotiation sessions and working with non-Federal negotiators representing third-party servicers, we elected to permit the sharing of only limited information—name, address, and email address—prior to receiving student or parent consent to open an account. We have also decided to apply the limitation to both T1 and T2 arrangements, under definitions more focused than those proposed to the negotiated rulemaking committee.
To clarify our position, we have also altered our phrasing to require that a student or parent must provide consent to actually open an account, rather than simply select an option for receiving direct payments of financial aid before more than this basic contact information with a third-party servicer or financial institution.
After the first negotiated rulemaking session, we proposed provisions that would allow an institution to send a debit card, prepaid card, or access device associated with the account to a student or parent only after the student or parent specifically requests it after providing consent to open an account. We modified this initial approach by removing the requirement for the student or parent to specifically request the card while retaining a requirement that the student or parent consent to opening the account before the card is sent. While we understand that the requirement to obtain consent to open a financial account before sending an access device to a student or parent may slow the speed with which a student or parent could access his or her credit balance, we believe that requiring student or parent consent to an account first helps to dispel the implication that the access device and its associated financial account are required by the institution. We also believe it reinforces the notion that use of the access device and its associated account is, in fact, a choice.
We also considered several proposals regarding the disclosure of the contracts between institutions of higher education and financial institutions, along with contract summaries, as described in other parts of the preamble. However, to reduce burden on institutions, we propose that an institution must only provide to the Secretary, with respect to a contract for a T1 or T2 arrangement, the following information: The total consideration for the most recently completed award year, monetary and non-monetary, paid or received by the parties under the terms of the contract; the number of students and parents who had financial accounts under the contract at any time during the most recently completed award year; and the mean and median of the actual costs incurred by those account holders.
The proposed regulations will affect institutions that participate in the title IV, HEA programs, financial institutions, and individual borrowers. The U.S. Small Business Administration (SBA) Size Standards define “for-profit institutions” as “small businesses” if they are independently owned and operated and not dominant in their field of operation with total annual revenue below $7,000,000. The SBA Size Standards define “not-for-profit institutions” as “small organizations” if they are independently owned and operated and not dominant in their field of operation, or as “small entities” if they are institutions controlled by governmental entities with populations below 50,000. The revenues involved in the sector that would be affected by the proposed regulations, and the concentration of ownership of institutions by private owners or public systems, means that the number of title IV, HEA eligible institutions that are small entities would be limited but for the fact that the not-for-profit entities fit within the definition of a “small organization” regardless of revenue. Given the definitions above, several of the entities that would be subject to the proposed regulations are small, leading to the preparation of the following Initial Regulatory Flexibility Analysis.
Over the past several years, a number of changes have occurred in the student financial products marketplace and in budgets of postsecondary institutions that have led to a proliferation of agreements between postsecondary institutions and “college card” providers. These cards, usually in the form of debit or prepaid cards and sometimes cobranded with the institution's logo or combined with student IDs, are marketed to students as a way to receive their title IV credit balances via more convenient electronic means. However, a number of government and consumer group reports have documented troubling practices employed by some of the providers of these college cards. Legal actions against the sector's largest provider further substantiate these reports' findings.
The Secretary proposes to amend the cash management regulations under subpart K and other sections of the Student Assistance General Provisions regulations issued under the HEA, to address the findings in multiple government and consumer group reports that students are not able to conveniently access their title IV, HEA program funds without onerous paper submissions and unnecessary waiting periods, unreasonable and uncommon financial account fees, or receiving misleading information indicating that a particular financial account is required to receive student aid. The proposed regulations also make a number of changes to update subpart K consistent with contemporary disbursement practices. Finally, the proposed regulations update two additional, unrelated provisions: Revising the way previously passed coursework is treated for title IV eligibility purposes so students remain in programs and do not have to find alternatives to title IV funding; and streamlining the requirements for converting clock hours to credit hours.
Given the number of students affected by these agreements, the amount of taxpayer-funded title IV aid at stake, and the troubling practices and expanding breadth of the college card market, we believe regulatory action governing the manner in which title IV student aid is disbursed is warranted.
In addition, it has been 20 years since subpart K was comprehensively updated, and in that time a number of technological improvements and changes in authorized title IV programs have occurred. We have therefore proposed a number of more minor changes throughout subpart K.
The proposed regulations would affect institutions, financial services providers, and students. Students are not considered small entities for the purpose of this analysis and the Department does not expect the financial institutions to meet the applicable definition of a small entity. However, a significant portion of institutions of higher education are considered to meet the applicable definition of a small entity, and therefore, this analysis focuses on those institutions. As discussed above, private non-profit institutions that do not dominate in their field are defined as small entities and some other institutions that participate in title IV, HEA programs do not have revenues above $7 million and are also categorized as small entities. Table [7] summarizes the distribution of small entities affected by the proposed regulation by sector.
The Secretary invites comments from small entities as to whether they believe the proposed changes would have a significant economic impact on them and, if so, requests evidence to support that belief.
The various provisions in the proposed regulations require disclosures by institutions as discussed in the Paperwork Reduction Act section of this preamble. Table [8] summarizes the estimated burden on small entities from the paperwork requirements associated with the proposed regulations.
The proposed regulations are unlikely to conflict with or duplicate existing Federal regulations. We consulted Federal banking regulators at FDIC, OCC and the Bureau of the Fiscal Service at the Treasury Department, and CFPB, for help in understanding Federal banking regulations and the Federal bank regulatory framework. We believe we have crafted these regulations in a way that will complement, rather than conflict with, existing banking regulations. The most significant risk of potential conflict is with respect to account disclosure requirements, described in more detail in the “
As described above, the Department participated in negotiated rulemaking when developing the proposed regulations, and considered a number of options for some of the provisions. No alternatives were aimed specifically at small entities.
As part of its continuing effort to reduce paperwork and respondent
Section 668.164 contains information collections requirements. Under the PRA, the Department has submitted a copy of this section, and an Information Collections Request (ICR) to OMB for its review.
A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number.
In the final regulations, we will display the control numbers assigned by OMB to any information collection requirements proposed in this NPRM and adopted in the final regulations.
Under proposed § 668.164(d)(4)(i), an institution that makes direct payments to a student or parent by EFT and that chooses to enter into an arrangement described in § 668.164(e) or § 668.164(f), must establish a selection process under which the student or parent chooses one of several options for receiving those payments. Alternatively, an institution that does not offer accounts under a Tier 1 (T1) or Tier 2 (T2) arrangement is not required to establish a student choice process and instead, may make direct payments to an existing account designated by the student or parent, issue a check, or disburse cash to the student or parent.
For institutions required to establish a student choice process under proposed § 668.164(d)(4)(i), the proposed regulations would establish requirements that must be met in implementing the process.
The institution must inform the student or parent in writing that he or she is not required to open or obtain a specific financial account or access device in order to receive title IV funds. The institution must ensure that the options listed are presented in a clear, fact-based, and neutral manner (except that a pre-existing account must be listed as the first, most prominent, and default option). The institution must ensure that initiating direct payments electronically to an existing account is as timely as, and no more onerous than initiating direct payments to an account offered pursuant to a T1 or T2 arrangement. The institution must allow the student or parent the option to change his or her account preference with reasonable written notice.
In addition to these requirements for establishing a student choice process, the proposed regulations under § 668.164(d)(4)(i)(B) contain the following provisions governing the description of account options under the student choice process.
The institution must present, prominently and as the first and default option, the ability to receive funds in a student's or parent's pre-existing financial account or pre-existing access device. The institution must list and identify the major features and commonly assessed fees associated with all accounts offered pursuant to a T1 or T2 arrangement (using a format published by the Secretary in the
We looked only at title IV participating institutions and aid recipients. From the data obtained, 3,400 institutions (out of the total 7,539 participating in title IV, HEA programs) had both tuition estimates and aid recipient information. Unsurprisingly, there was an inverse relationship between an institution's tuition and fees and the percentage of students receiving a title IV credit balance. The Department's findings were consistent with findings from GAO and USPIRG. In an effort to thoroughly analyze all of the available data, we also applied the same methodology described above to a subset of institutions. Utilizing publically available sources and working with the CFPB the Department identified a listing of institutions that were known to have card agreements with financial institutions from CFPB. If commenters have other sources for the number of institutions with these financial agreements, we invite them to provide those sources for our examination. The Department's NSLDS data, when combined with the IPED's data and the CFPB data the list of institutions that were known to have agreements (NSLDS-IPEDS-CFPB) had tuition and fees and aid recipient data for 672 of the 914 institutions identified by CFPB. From the data for 672 institutions, we projected the number of students with a title IV credit balance at the 914 institutions proportionately. As a result, there were a total of 1,798,756 students at the 914 institutions from this dataset who received a credit balance.
Of the 914 institutions with arrangements, the NSLDS-IPEDS-CFPB data show that 685 institutions would be public institutions. On average, we estimate the burden associated with developing and implementing the proposed student and parent choice options would increase by 20 hours per institution and therefore total burden of 13,700 hours (685 institutions times 20 hours per institution) under OMB Control Number 1845-0106.
Of the 914 institutions with financial arrangements, the NSLDS-IPEDS-CFPB data show that 154 institutions would be private not-for-profit institutions. On average, we estimate the burden associated with developing and implementing the student and parent choice options would increase by 20
Of the 914 institutions with arrangements, the NSLDS-IPEDS-CFPB data show that 75 would be private for-profit institutions. On average, we estimate the burden associated with developing and implementing the student and parent choice options would increase by 20 hours per institution and therefore total burden of 1,500 hours (75 institutions times 20 hours per institution) under OMB Control Number 1845-0106.
Overall, burden to institutions would increase by 18,280 hours (the sum of 13,700 hours, 3,080 hours, and 1,500 hours).
The NSLDS-IPEDS-CFPB data indicates that 1,798,756 title IV recipients with credit balances for the 2013-14 award year would be impacted by this proposed regulation. We estimate that each of the affected title IV recipients would take, on average, 20 minutes (.33 hours) to review the options presented by the institution or their third-party servicer and to make their selection.
Of the total number of title IV recipients with a credit balance, the data show that 1,736,141 recipients were enrolled in public institutions. On average, each recipient would take 20 minutes (.33 hours) to read the materials and make their selection, increasing burden by 572,927 hours (1,736,141 times .33 hours) under OMB Control Number 1845-0106.
Of the total number of title IV recipients with a credit balance, the data show that 13,601 recipients were enrolled in private not-for-profit institutions. On average each recipient would take 20 minutes (.33 hours) to read the materials and make their selection, increasing burden by 4,488 hours (13,601 recipients times .33 hours) under OMB Control Number 1845-0106.
Of the total number of title IV recipients with a credit balance, the data show that 49,014 recipients were enrolled in private for-profit institutions. On average each recipient would take 20 minutes (.33 hours) to read the materials and make their selection, increasing burden by 16,175 hours (49,014 recipients times .33 hours) under OMB Control Number 1845-0106.
Overall, burden to title IV recipients would increase by 593,590 hours (the sum of 572,927 hours, 4,488 hours, and 16,175 hours).
Under the proposed regulations in § 668.164(e), when an institution enters into a contract with a third-party servicer under which the servicer performs the functions of processing direct payments of title IV, HEA program funds on behalf of the institution to one or more financial accounts that are offered under the contract or by the third-party servicer, or by an entity contracting with or affiliated with the third party servicer to students and their parents, this would be considered a T1 arrangement between the institution and the third-party servicer.
Under a T1 arrangement the institution must comply with the following requirements:
1. The institution must obtain the student's or parent's consent to open the financial account before the institution provides any information about the student or parent, except for name, address, and email address, to the third-party servicer, the financial institution at which the financial account's funds would be deposited, or the agents of either an access device, or and before any representation of an access device, is sent to the student or parent; and before a card or tool provided to the student or parent for institutional purposes, such as a student ID card, is associated with the financial account;
2. The institution must inform the student or parent of the terms and conditions of the financial account, in a manner consistent with disclosure requirements specified by the Secretary in a notice published in the
3. The institution must ensure that the student or parent has convenient access to the financial account through surcharge-free national or regional ATM network that has ATMs located on or near each location of the institution, and that those ATMs are sufficient in number and housed and serviced such that the funds are reasonably available from them, including at the times the institution or its third-party servicer makes direct payments into them. The institution must also ensure that students and parents do not incur any cost for opening the financial account or initially receiving an access device, assessed by the institution, third-party servicer, or associated financial institution on behalf of the third-party servicer, when the student or parent conducts point-of-sale transactions; or for conducting any transaction on an ATM that belongs to the regional or national network;
4. The institution must ensure that students and parents do not incur a charge initiated by the institution, third-party servicer, or associated financial institution on behalf of the third-party servicer for at least 30 days following the date that title IV, HEA program funds are deposited or transferred to the financial account;
5. The institution must ensure that the financial account or access device is not marketed or portrayed as, or converted into a credit card; that the financial account or access device is not marketed or portrayed as, or converted into a credit instrument, that no credit may be extended or associated with the account, and that any transaction exceeding the balance on the card must be denied without charging the student or parent any fee for such denial;
6. No later than 60 days after the most recently completed award year, the institution must provide to the Secretary and disclose conspicuously on the institution's Web site, the contract between the institution and financial institution in its entirety, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities; the total consideration, monetary and non-monetary, paid or received by the parties under the terms of the contract, as well as the number of students and parents who had financial accounts under the contract at any time during the most recently completed award year, and the mean and median of the actual costs incurred by those account holders; and to annually provide a URL linking from the institution's Web site to the agreement and provide basic information about the agreement;
7. The institution must ensure that the terms of the T1 financial accounts are not inconsistent with the best financial interests of the students and parents opening them. The Secretary considers this requirement to be met if the institution documents that it periodically conducts reasonable due diligence reviews to ascertain whether the fees imposed under the T1 arrangement are, considered as a whole, excessive, in light of prevailing market rates; and all contracts for the marketing or offering of T1 accounts to the institution's students or parents provide for termination of the arrangement at the discretion of the institution based on complaints received from students or parents or a determination by the institution that the fees assessed under the T1 account are excessive;
8. The institution must take affirmative steps, by way of contractual arrangements with the third-party servicer as necessary, to ensure that these requirements are met with respect to all T1 financial accounts offered.
Based upon our examination of the 2013-14 NSLDS and IPEDS data that was further refined by examining the CFPB listing of 914 institutions known to have arrangements that would be considered either T1 and T2 arrangements under the proposed regulations, the data indicate that there were 80 private not-for-profit institutions with a T1 arrangement. We expect that these institutions would have to modify their systems or procedures to ensure compliance with these proposed regulations. Specifically, we expect that modifications would be required including, but not limited to: The establishment of a consent process; provide account terms and conditions disclosures; ensure compliance with the 30-day prohibition on charges made to an account following the date that title IV, HEA program funds are deposited or transferred into the account; and provide the proposed disclosures, contract disclosures, and use and cost data within 60 days after the end of the award year. In addition, other modifications would likely be needed with regard to how the institutions plan to conduct their proposed periodic due diligence and updating of third-party servicer contracts to allow for termination of the contract based upon student complaints or the institution's assessment that third-party servicer fees have become excessive. We estimate that the changes required by the proposed regulations would add an additional 55 hours of burden per institution, increasing burden by 4,400 hours (80 institutions times 55 hours per institution) under OMB Control Number 1845-0106.
Based upon our examination of the 2013-14 NSLDS and IPEDS data that was further refined by examining the CFPB listing of 914 institutions known to have arrangements that would be considered either T1 and T2 arrangements under the proposed regulations, the data indicate that there were 75 private for-profit institutions with a T1 arrangement. We expect that institutions would have to modify their systems or procedures to ensure compliance with these proposed regulations. Specifically, we expect that modifications would be required including, but not limited to: The establishment of a consent process; provide account terms and condition disclosures; ensure compliance with the 30-day prohibition for charges made to an account following the date that title IV, HEA program funds are deposited or transferred into the account; and provide the proposed disclosures, contract disclosures, and use and cost data within 60 days after the end of the award year. In addition, it is likely that institutions would make other changes regarding how they will conduct their proposed periodic due diligence and updating of third-party contracts to allow for termination of the contract based upon student complaints or the institution's assessment that third-party fees have become excessive. We estimate that the changes required by the proposed regulations would add an additional 55 hours of burden per institution, increasing burden by 4,125 hours (75 institutions times 55 hours per institution) under OMB Control Number 1845-0106.
Overall, burden to title IV institutions would increase by 38,280 (the sum of 29,755 hours, 4,400 hours, and 4,125 hours).
The NSLDS-IPEDS-CFPB data showed that there were 1,538,667 title IV recipients at the with credit balances at institutions with a T1 arrangement in the 2013-14 award year. Of that number of recipients, the data showed that 1,476,144 were enrolled at public institutions. We estimate that, on average, each recipient would take 15 minutes (.25 hours) to read the about the major features and fees associated with the financial account, information about the monetary and non-monetary remuneration received by the institution for entering into the T1 arrangement, along with the number of students and parents who had financial accounts under the T1 arrangement for the most recent completed year, the mean and median costs incurred by account holders, and whether to provide their consent to the institution. Therefore, the additional burden on title IV recipients would increase by 369,036 hours (1,476,144 times .25 hours) under OMB Control Number 1845-0106.
The data showed that 13,509 title IV recipients with credit balances were enrolled at private not-for-profit institutions. We estimate that, on average, each recipient would take 15 minutes (.25 hours) to read the about the major features and fees associated with the financial account, information about the monetary and non-monetary remuneration received by the institution for entering into the T1 arrangement, along with the number of students and parents who had financial accounts under the T1 arrangement for the most recent completed year, the mean and median costs incurred by account holders, and whether to provide their consent to the institution. Therefore, the additional burden on title IV recipients would increase by 3,377 hours (13,509 times .25 hours) under OMB Control Number 1845-0106.
The data showed that 49,014 title IV recipients with credit balances were enrolled at private for-profit institutions. We estimate that, on average, each recipient would take 15 minutes (.25 hours) to read the about the major features and fees associated with the financial account, information about the monetary and non-monetary remuneration received by the institution for entering into the T1 arrangement, along with the number of students and parents who had financial accounts under the T1 arrangement for the most recent completed year, the mean and median costs incurred by account holders, and whether to provide their consent to the institution. Therefore, the additional burden on title IV recipients would increase by 12,254 hours under OMB Control Number 1845-0106.
Overall, burden to recipients would increase by 384,667 hours (the sum of
Under the proposed regulations in § 668.164(f), when an institution enters into a contract with a financial institution under which financial accounts, into which title IV, HEA program funds will be transferred or deposited, are offered and marketed directly to students or their parents, the agreement would be considered a T2 arrangement. The Secretary considers that title IV, HEA program funds would be transferred or deposited into financial accounts that are offered under a contract between an institution and a financial institution if students or parents that receive credit balance funds are subject to the direct marketing. The Secretary considers that a financial account is marketed directly if the institution communicates information directly to its students or their parents about the financial account and how it may be opened; the financial account or access device is co-branded with the institution's name, logo, mascot, or other affiliation; or a card or tool that is provided to the student or parent for institutional purposes, such as a student ID card, is linked with the financial account or access device.
Under a T2 arrangement, the institution must comply with the following requirements:
1. The institution must obtain the student's or parent's consent to open the financial account before the institution provides, or permits a third-party servicer to provide, any information about the student or parent, except for name, address, and email address, to the financial institution or its agents; and before an institution provides any access device, or any representation of an access device, is sent to the student or parent; and before a card or tool provided to the student or parent for institutional purposes, such as a student ID card, is linked to the financial account;
2. The institution must inform the student or parent of the terms and conditions of the financial account, in a manner consistent with the disclosure requirements specified by the Secretary in a notice published in the
3. No later than 60 days after the most recently completed award year, the institution must provide to the Secretary and disclose conspicuously on the institution's Web site the contract between the institution and financial institution in its entirety, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities; as well as, the total consideration, monetary and non-monetary, paid or received by the parties under the terms of the contract; and the number of students and parents who had financial accounts under the contract at any time during the most recently completed award year, and the mean and median of the actual costs incurred by those account holders;
4. The institution must ensure that the funds deposited in the financial accounts are accessible through surcharge free in-network ATMs convenient to each of the institution's locations, and that those ATMs are sufficient in number and housed and serviced such that the funds are reasonably available from them, including at the times the institution or its third-party servicer makes direct payments into them;
5. The institution must ensure that the financial accounts are not marketed or portrayed as or converted into credit cards.
6. The institution must ensure that the terms of the T2 financial accounts are not inconsistent with the best financial interests of the students and parents opening them. The Secretary considers this requirement to be met if the institution documents that it periodically conducts reasonable due diligence reviews to ascertain whether the fees imposed under the T2 financial account are, considered as a whole, excessive, in light of prevailing market rates; and all contracts for the marketing or offering of T2 accounts to the institution's students or parents provide for termination of the arrangement at the discretion of the institution based on complaints received from students or parents or a determination by the institution under (B) that the fees assessed under the T2 account are excessive;
7. The institution must take affirmative steps, by way of contractual arrangements with the financial institution as necessary, to ensure that these requirements are met with respect to all T2 financial accounts offered.
Of the total number of 7,539 institutions in the 2013-14 award year, the NSLDS-IPEDS-CFPB data showed that there would be 144 public institutions with T2 arrangements. Under these proposed regulations, we estimate that an institutions would have to modify its systems or procedures to ensure compliance with these proposed regulation regulations by, among other things, including, but not limited to, establish a consent process; provide account terms and conditions disclosures; ensure compliance with the 30-day prohibition for charges made to an account following the date that title IV, HEA program funds are deposited or transferred into the account; as well as provide the proposed disclosures, contract disclosures, and use and cost data within 60 days after the end of the award year. In addition, other changes regarding how the institution will to conduct its proposed periodic due diligence and updating of third-party servicer contracts to allow for termination of the contract based upon student complaints or the institution's assessment that third-party servicer fees have become excessive. We estimate that the changes required by the proposed regulations would add an additional 45 hours of burden per institution, increasing burden by 6,480 hours under OMB Control Number 1845-0106.
Of the total number of 7,539 institutions, the NSLDS-IPEDS-CFPB data showed that there would be 74 private not-for-profit institutions that had a T2 arrangement. We estimate that an institutions would have to modify its systems or procedures to ensure compliance with these proposed regulation including, but not limited to, establish a consent process; provide account terms and condition disclosures; ensure compliance with the 30-day prohibition for charges made to an account following the date that title IV, HEA program funds are deposited or transferred into the account; as well as provide the proposed disclosures, contract disclosures, and use and cost data within 60 days after the end of the award year. In addition, other changes regarding how the institution will conduct its proposed periodic due diligence and updating of third-party servicer contracts to allow for termination of the contract based upon student complaints or the institution's assessment that third-party servicer fees have become excessive. We estimate that the changes required by the proposed regulations would add an additional 45 hours of burden per institution, increasing burden by 3,330 hours under OMB Control Number 1845-0106.
Of the total number of 7,539 institutions, the NSLDS-IPEDS-CFPB
Overall, burden to institutions would increase by 9,810 hours (the sum of 6,480 hours and 3,330 hours).
From the NSLDS-IPEDS-CFPB data, we projected that there were 260,089 title IV recipients with credit balances at institutions with T2 arrangements. Of that number of recipients, the data showed that 259,997 were enrolled at public institutions. We estimate that, on average, each recipient would take 15 minutes (.25 hours) to read the institution's consent information and decide whether to provide it or not. Therefore, the additional burden on title IV recipients would increase by 64,999 hours under OMB Control Number 1845-0106.
Of the total 260,089 title IV recipients with credit balances at institutions that had a T2 arrangement, we estimated that 92 were enrolled at private not-for-profit institutions. We estimate that, on average, each recipient would take 15 minutes (.25 hours) to read the institution's consent information and decide whether to provide it or not. Therefore, the additional burden on title IV recipients would increase by 23 hours under OMB Control Number 1845-0106.
Of the total 260,089 title IV recipients with credit balances at institutions with T2 arrangements, the data showed that zero were enrolled at private for-profit institutions.
Overall, burden to institutions would increase by 65,022 hours (the sum of 64,999 hours and 23 hours).
Collectively, the total increase in burden for § 668.164 would be 1,109,649 hours under OMB Control Number 1845-0106.
Consistent with the discussion above, the following chart describes the sections of the proposed regulations involving information collections, the information being collected, and the collections that the Department will submit to OMB for approval and public comment under the PRA, and the estimated costs associated with the information collections. The monetized net costs of the increased burden on institutions and borrowers, using wage data developed using BLS data, available at
The total burden hours and change in burden hours associated with each OMB Control number affected by the proposed regulations follows:
We have prepared an Information Collection Request (ICR) for these information collection requirements. If you want to review and comment on the ICR, please follow the instructions in the
The Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB), and the Department of Education review all comments posted at
In preparing your comments, you may want to review the ICR in by using the
We consider your comments on this proposed collection of information in—
• Deciding whether the proposed collection is necessary for the proper performance of our functions, including whether the information will have practical use;
• Evaluating the accuracy of our estimate of the burden of the proposed collection, including the validity of our methodology and assumptions;
• Enhancing the quality, usefulness, and clarity of the information we collect; and
• Minimizing the burden on those who must respond. This includes exploring the use of appropriate automated, electronic, mechanical, or other technological collection techniques.
Between 30 and 60 days after publication of this document in the
If your comments relate to the ICR for these proposed regulations, please specify the Docket ID number and indicate “Information Collection Comments” on the top of your comments.
These programs are not subject to Executive Order 12372 and the regulations in 34 CFR part 79.
In accordance with section 411 of the General Education Provisions Act, 20 U.S.C. 1221e-4, the Secretary particularly requests comments on whether the proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.
You may also access documents of the Department published in the
Administrative practice and procedure, Aliens, Colleges and universities, Consumer protection, Grant programs—education, Loan programs—education, Reporting and recordkeeping requirements, Selective Service System, Student aid, Vocational education.
For the reasons discussed in the preamble, the Secretary of Education proposes to amend part 668 of title 34 of the Code of Federal Regulations as follows:
20 U.S.C. 1070g, 1091, and 1094, unless otherwise noted.
(b) * * *
(1) For a program that measures progress in credit hours and uses standard terms (semesters, trimesters, or quarters), 12 semester hours or 12 quarter hours per academic term.
(2) For a program that measures progress in credit hours and does not use terms, 24 semester hours or 36 quarter hours over the weeks of instructional time in the academic year, or the prorated equivalent if the program is less than one academic year.
(3) For a program that measures progress in credit hours and uses nonstandard terms (terms other than semesters, trimesters or quarters) the number of credits determined by—
(i) Dividing the number of weeks of instructional time in the term by the number of weeks of instructional time in the program's academic year; and
(ii) Multiplying the fraction determined under paragraph (3)(i) of this definition by the number of credit hours in the program's academic year.
(4) For a program that measures progress in clock hours, 24 clock hours per week.
(5) A series of courses or seminars that equals 12 semester hours or 12 quarter hours in a maximum of 18 weeks.
(6) The work portion of a cooperative education program in which the amount of work performed is equivalent to the academic workload of a full-time student.
(7) For correspondence coursework, a full-time course load must be—
(i) Commensurate with the full-time definitions listed in paragraphs (1) through (6) of this definition; and
(ii) At least one-half of the coursework must be made up of non-correspondence coursework that meets one-half of the institution's requirement for full-time students.
(k)
(1) The program is at least two academic years in length and provides an associate degree, a bachelor's degree, a professional degree, or an equivalent degree as determined by the Secretary; or
(2) Each course within the program is acceptable for full credit toward that institution's associate degree, bachelor's degree, professional degree, or equivalent degree as determined by the Secretary provided that—
(i) The institution's degree requires at least two academic years of study; and
(ii) The institution demonstrates that students enroll in, and graduate from, the degree program.
(l)
(i) A semester hour must include at least 37.5 clock hours of instruction;
(ii) A trimester hour must include at least 37.5 clock hours of instruction; and
(iii) A quarter hour must include at least 25 clock hours of instruction.
(2) The institution's conversions to establish a minimum number of clock hours of instruction per credit may be less than those specified in paragraph (l)(1) of this section if the institution's designated accrediting agency, or recognized State agency for the approval of public postsecondary vocational institutions, for participation in the title IV, HEA programs has not identified any deficiencies with the institution's policies and procedures, or their implementation, for determining the credit hours that the institution awards for programs and courses, in accordance with 34 CFR 602.24(f), or, if applicable, 34 CFR 603.24(c), so long as—
(i) The institution's student work outside of class combined with the clock hours of instruction meet or exceed the numeric requirements in paragraph (l)(1) of this section; and
(ii)(A) A semester hour must include at least 30 clock hours of instruction;
(B) A trimester hour must include at least 30 clock hours of instruction; and
(C) A quarter hour must include at least 20 hours of instruction.
(a)
(2) As used in this subpart—
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(b)
(c)
(a)
(b)
(2) If the Secretary accepts that request, the Secretary initiates an EFT of that amount to the depository account designated by the institution.
(3) The institution must disburse the funds requested as soon as administratively feasible but no later than three business days following the date the institution received those funds.
(c)
(2) An institution seeks reimbursement by submitting to the Secretary a request for funds that does not exceed the amount of the disbursements the institution made to students or parents included in that request.
(3) As part of its reimbursement request, the institution must—
(i) Identify the students or parents for whom reimbursement is sought; and
(ii) Submit to the Secretary, or an entity approved by the Secretary, documentation that shows that each student or parent included in the request was—
(A) Eligible to receive and has received the title IV, HEA program funds for which reimbursement is sought; and
(B) Paid directly any credit balance due under § 668.164(h).
(4) The Secretary will not approve the amount of the institution's reimbursement request for a student or parent and will not initiate an EFT of that amount to the depository account designated by the institution, if the Secretary determines with regard to that student or parent, and in the judgment of the Secretary, that the institution has not—
(i) Accurately determined the student's or parent's eligibility for title IV, HEA program funds;
(ii) Accurately determined the amount of title IV, HEA program funds disbursed, including the amount paid directly to the student or parent; and
(iii) Submitted the documentation required under paragraph (c)(3) of this section.
(d)
(1) Submits a request for funds under the provisions of the advance payment method described in paragraph (b)(1) and (2) of this section, except that the institution's request may not exceed the amount of the disbursements the institution made to the students included in that request; or
(2) Seeks reimbursement for those disbursements under the provisions of the reimbursement payment method described in paragraph (c) of this section, except that the Secretary may modify the documentation requirements and review procedures used to approve the reimbursement request.
(a)(1)
(2) For each depository account that includes title IV, HEA program funds, an institution must clearly identify that title IV, HEA program funds are maintained in that account by—
(i) Including in the name of each depository account the phrase “Federal Funds”; or
(ii)(A) Notifying the depository institution that the depository account contains title IV, HEA program funds that are held in trust and retaining a record of that notice; and
(B) Except for a public institution located in a State or a foreign institution, filing with the appropriate State or municipal government entity a UCC-1 statement disclosing that the depository account contains Federal funds and maintaining a copy of that statement.
(b)
(1) The requirements in this subpart;
(2) The recordkeeping and reporting requirements in subpart B of this part; or
(3) Applicable program regulations.
(c)
(2) Any interest earned on Federal Perkins Loan program funds is retained by the institution as provided under 34 CFR 674.8(a).
(3) An institution may keep the initial $500 in interest it earns during the award year on other title IV, HEA program funds it maintains in accordance with paragraph (c)(1) of this section. By June 30 of that award year, the institution must remit to the Department of Health and Human Services, Payment Management System, Rockville, MD 20852 any interest over $500.
(d)
(1) Maintain accounting and internal control systems that identify the cash balance of the funds of each title IV, HEA program that are included in the institution's depository account or accounts as readily as if those funds were maintained in a separate depository account;
(2) Identify the earnings on title IV, HEA program funds maintained in the institution's depository account or accounts; and
(3) Maintain its fiscal records in accordance with the provisions in § 668.24.
(a)
(i) Funds received from the Secretary; or
(ii) Institutional funds used in advance of receiving title IV, HEA program funds.
(2)(i) For a Direct Loan for which the student is subject to the delayed disbursement requirements under 34 CFR 685.303(b)(4), if an institution credits a student's ledger account with institutional funds earlier than 30 days after the beginning of a payment period, the Secretary considers that the institution makes that disbursement on the 30th day after the beginning of the payment period; or
(ii) If an institution credits a student's ledger account with institutional funds earlier than 10 days before the first day of classes of a payment period, the Secretary considers that the institution makes that disbursement on the 10th day before the first day of classes of a payment period.
(b)
(2) An institution may make a prior year, late, or retroactive disbursement, as provided under paragraph (c)(3), (j), or (k) of this section, respectively, during the current payment period as long as the student was enrolled and eligible during the payment period
(3) At the time that a disbursement is made for a payment period, the institution, along with the third-party servicer engaged by the institution to draw down title IV, HEA program funds or otherwise perform activities leading to or supporting that disbursement, must confirm that the student is enrolled at the institution, and that the student, or the student's parent, is eligible for that disbursement.
(c)
(i) The amount of tuition, fees, and institutionally provided room and board assessed the student for the payment period or, as provided in paragraph (c)(5) of this section, the prorated amount of those charges if the institution debits the student's ledger account for more than the charges associated with the payment period; and
(ii) The amount incurred by the student for the payment period for purchasing books, supplies, and other educationally related goods and services provided by the institution for which the institution obtains the student's or parent's authorization under § 668.165(b).
(2) If an institution includes the cost of books and supplies as part of tuition and fees under paragraph (c)(1)(i) of this section, it must separately disclose those costs and explain why including them is in the best financial interests of students.
(3)(i) An institution may include in one payment period for the current year, prior year charges of not more than $200 for—
(A) Tuition, fees, and institutionally provided room and board, as provided under paragraph (c)(1)(i) of this section, without obtaining the student's or parent's authorization; and
(B) Educationally related goods and services provided by the institution, as described in paragraph (c)(1)(ii) of this section, if the institution obtains the student's or parent's authorization under § 668.165(b).
(ii) For purposes of this section—
(A) The current year is the current loan period for any student or parent who received a Direct Loan, or the current award year for any student who did not receive a Direct Loan; and
(B) A prior year is any loan period or award year prior to the current loan period or award year, as applicable.
(4) An institution may include in the current payment period allowable charges stemming from any previous payment period in the current award year or loan period for which the student was eligible, if the student was not already paid for such previous payment period.
(5) For purposes of this section, an institution determines the prorated amount of charges associated with the current payment period by—
(i) For a program with substantially equal payment periods, dividing the total institutional charges for the program by the number of payment periods in the program; or
(ii) For other programs, dividing the number of credit or clock hours the student enrolls in, or is expected to complete, in the current payment period, by the total number of credit or clock hours in the program and multiplying that result by the total institutional charges for the program.
(d)(1)
(i) To a student, for the amount of the title IV, HEA program funds that a student is eligible to receive, including Direct PLUS Loan funds that the student's parent authorized the student to receive, by—
(A) Initiating an EFT of that amount to the student's financial account;
(B) Issuing a check for that amount payable to, and requiring the endorsement of, the student; or
(C) Dispensing cash for which the institution obtains a receipt signed by the student;
(ii) To a parent, for the amount of the Direct PLUS Loan funds that a parent does not authorize the student to receive, by—
(A) Initiating an EFT of that amount to the parent's financial account;
(B) Issuing a check for that amount payable to and requiring the endorsement of the parent; or
(C) Dispensing cash for which the institution obtains a receipt signed by the parent.
(2)
(i) Mails the check to the student or parent; or
(ii) Notifies the student or parent that the check is available for immediate pick-up at a specified location at the institution. The institution may hold the check for no longer than 21 days after the date it notifies the student or parent. If the student or parent does not pick up the check, the institution must immediately mail the check to the student or parent, pay the student or parent directly by other means, or return the funds to the appropriate title IV, HEA program.
(3)
(4)
(A) In implementing its selection process, the institution must—
(
(
(
(
(B) In describing the options under its selection process, the institution—
(
(
(
(
(ii) An institution that does not offer or use any financial accounts described in paragraphs (e) or (f) of this section may make direct payments to a student's or parent's existing financial account, or issue a check or disburse cash to the student or parent without establishing the selection process described in paragraph (d)(4)(i) of this section.
(e)
(2) Under a T1 arrangement, the institution must—
(i) Obtain the student's or parent's consent to open the financial account before—
(A) The institution provides any information about the student or parent, except for name, address, and email address, to the third-party servicer, to the financial institution at which the financial account's funds would be deposited, or the agents of either;
(B) An access device, or any representation of an access device, is sent to the student or parent; or
(C) A card or tool provided to the student or parent for institutional purposes, such as a student ID card, is linked to the financial account;
(ii) Inform the student or parent of the terms and conditions of the financial account, as required under § 668.164(d)(4)(i)(B)(
(iii) Ensure that the student or parent—
(A) Has convenient access to the financial account through a surcharge-free national or regional ATM network that has ATMs located on or near each location of the institution, and that those ATMs are sufficient in number and housed and serviced such that the funds are reasonably available from them, including at the times the institution or its third-party servicer makes direct payments into the student or parent financial accounts;
(B) Does not incur any cost—
(
(
(
(
(iv) Ensure that—
(A) The financial account or access device is not marketed or portrayed as or converted into a credit card; and
(B) No credit may be extended or associated with the financial account, and that no fee is charged to the student or parent for any transaction that exceeds the balance on the card, regardless of whether the full amount of the transaction is established at the time the transaction is authorized by the financial institution;
(v) No later than 60 days after the most recently completed award year disclose conspicuously on the institution's Web site—
(A) The contract(s) establishing the T1 arrangement between the institution and third-party servicer and financial institution acting on behalf of the third-party servicer, as applicable, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities;
(B) The total consideration for the most recently completed award year, monetary and non-monetary, paid or received by the parties under the terms of the contract; and
(C) The number of students and parents who had financial accounts under the contract at any time during the most recently completed award year, and the mean and median of the actual costs incurred by those account holders;
(vi) Annually provide to the Secretary the URL for the items under paragraph (e)(2)(v) of this section for publication in a centralized database;
(vii) Ensure that the terms of the accounts offered pursuant to a T1 arrangement are not inconsistent with the best financial interests of the students and parents opening them. The Secretary considers this requirement to be met if—
(A) The institution documents that it periodically conducts reasonable due diligence reviews to ascertain whether the fees imposed under the T1 arrangement are, considered as a whole, not excessive in light of prevailing market rates; and
(B) All contracts for the marketing or offering of accounts pursuant to T1 arrangements to the institution's students or parents make provision for termination of the arrangement by the institution based on complaints received from students or parents or a determination by the institution under paragraph (e)(2)(vi)(A) of this section that the fees assessed under the T1 arrangement are excessive; and
(viii) Take affirmative steps, by way of contractual arrangements with the third-party servicer as necessary, to ensure that requirements of this section are met with respect to all accounts offered pursuant to T1 arrangements.
(f)
(2) The Secretary presumes that title IV, HEA program funds are deposited or transferred into the financial accounts offered and marketed under paragraph (f)(1) of this section. However, the institution does not have to comply with the requirements described in paragraph (f)(4) of this section if it documents that, for the most recently completed award year no student or parent received a credit balance.
(3) The Secretary considers that a financial account is marketed directly if—
(i) The institution communicates information directly to its students or their parents about the financial account and how it may be opened;
(ii) The financial account or access device is co-branded with the institution's name, logo, mascot, or other affiliation; or
(iii) A card or tool that is provided to the student or parent for institutional purposes, such as a student ID card, is linked with the financial account or access device.
(4) Under a T2 arrangement, the institution must—
(i) Obtain the student's or parent's consent to open the financial account before—
(A) The institution provides, or permits a third-party servicer to provide, any information about the student or parent, except for name, address, and email address, to the financial institution or its agents;
(B) An access device, or any representation of an access device, is sent to the student or parent; or
(C) A card or tool provided to the student or parent for institutional purposes, such as a student ID card, is linked to the financial account;
(ii) Inform the student or parent of the terms and conditions of the financial account as required under § 668.164(d)(4)(i)(B)(
(iii) No later than 60 days after the most recently completed award year, provide to the Secretary and disclose conspicuously on the institution's Web site—
(A) The contract(s) establishing the T2 arrangement between the institution and financial institution in its entirety, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities;
(B) The total consideration for the most recently completed award year, monetary and non-monetary, paid or received by the parties under the terms of the contract; and
(C) The number of students and parents who had financial accounts under the contract at any time during the most recently completed award year, and the mean and median of the actual costs incurred by those account holders;
(iv) Annually provide to the Secretary the URL for the items under paragraph (f)(4)(iii) of this section for publication in a centralized database;
(v) Ensure that the funds deposited in the financial accounts are accessible through surcharge free in-network ATMs convenient to each of the institution's locations, and that those ATMs are sufficient in number and housed and serviced such that the funds are reasonably available from them, including at the times the institution or its third-party servicer makes direct payments into them; and
(vi) Ensure that the financial accounts are not marketed or portrayed as or converted into credit cards;
(vii) Ensure that the terms of the accounts offered pursuant to a T2 arrangement are not inconsistent with the best financial interests of the students and parents opening them. The Secretary considers this requirement to be met if—
(A) The institution documents that it periodically conducts reasonable due diligence reviews to ascertain whether the fees imposed under the T2 arrangement are, considered as a whole, not excessive in light of prevailing market rates; and
(B) All contracts for the marketing or offering of accounts pursuant to T2 arrangements to the institution's students or parents make provision for termination of the arrangement by the institution based on complaints received from students or parents or a determination by the institution under paragraph (f)(4)(vi)(A) of this section that the fees assessed under the T2 arrangement are excessive;
(viii) Take affirmative steps, by way of contractual arrangements with the financial institution as necessary, to ensure that requirements of this section are met with respect to all accounts offered pursuant to T2 arrangements; and
(ix) Ensure students and parents incur no cost for opening the account or initially receiving an access device.
(g)
(h)
(2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than—
(i) 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or
(ii) 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period.
(i)
(i) If the student is enrolled in a credit-hour program offered in terms that are substantially equal in length, 10 days before the first day of classes of a payment period; or
(ii) If the student is enrolled in a credit-hour program offered in terms that are not substantially equal in length, a non-term credit-hour program, or a clock-hour program, the later of—
(A) Ten days before the first day of classes of a payment period; or
(B) The date the student completed the previous payment period for which he or she received title IV, HEA program funds.
(2) An institution may not—
(i) Make an early disbursement of a Direct Loan to a first-year, first-time borrower who is subject to the 30-day delayed disbursement requirements in 34 CFR 685.303(b)(4). This restriction does not apply if the institution is exempt from the 30-day delayed disbursement requirements under 34 CFR 685.303(b)(4)(i)(A) or (B); or
(ii) Compensate a student employed under the FWS program until the student earns that compensation by performing work, as provided in 34 CFR 675.16(a)(5).
(j)
(i) For a Direct Loan, the student is no longer enrolled at the institution as at least a half-time student for the period of enrollment for which the loan was intended; or
(ii) For an award under the Federal Pell Grant, FSEOG, Federal Perkins Loan, Iraq-Afghanistan Service Grant, and TEACH Grant programs, the student is no longer enrolled at the institution for the award year.
(2)
(i) The Secretary processed a SAR or ISIR with an official expected family contribution for the student for the relevant award year; and
(ii)(A) For a loan made under the Direct Loan program or for an award made under the TEACH Grant program, the institution originated the loan or award; or
(B) For an award under the Federal Perkins Loan or FSEOG programs, the institution made that award to the student.
(3)
(i) If the student withdrew from the institution during a payment period or period of enrollment, the institution must make any post-withdrawal disbursement required under § 668.22(a)(4) in accordance with the provisions of § 668.22(a)(5);
(ii) If the student completed the payment period or period of enrollment, the institution must provide the student or parent the choice to receive the amount of title IV, HEA program funds that the student or parent was eligible to receive while the student was enrolled at the institution. For a late disbursement in this circumstance, the institution may credit the student's ledger account as provided in paragraph (c) of this section, but must pay or offer any remaining amount to the student or parent; or
(iii) If the student did not withdraw but ceased to be enrolled as at least a half-time student, the institution may make the late disbursement of a loan under the Direct Loan program to pay for educational costs that the institution determines the student incurred for the period in which the student or parent was eligible.
(4)
(ii) An institution may not make a late second or subsequent disbursement of a loan under the Direct Loan program unless the student successfully completed the period of enrollment for which the loan was intended.
(iii) An institution may not make a late disbursement of a Direct Loan if the student was a first-year, first-time borrower as described in 34 CFR 685.303(b)(4) unless the student completed the first 30 days of his or her program of study. This limitation does not apply if the institution is exempt from the 30-day delayed disbursement requirements under 34 CFR 685.303(b)(4).
(iv) An institution may not make a late disbursement of any title IV, HEA program assistance unless it received a valid SAR or a valid ISIR for the student by the deadline date established by the Secretary in a notice published in the
(k)
(l)
(2) If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period.
(3) If a check sent to a student or parent is not returned but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check.
(m)
(i) The institution could disburse the title IV, HEA program funds for which the student is eligible; and
(ii) Presuming the funds were disbursed, the student would have a credit balance under paragraph (h) of this section.
(2) The amount the institution provides to the student to obtain or purchase books and supplies is the lesser of the presumed credit balance under this paragraph or the amount needed by the student, as determined by the institution.
(3) The institution must have a policy under which the student may opt out of the way the institution provides for the student to obtain or purchase books and supplies under this paragraph.
(4) If a student uses the method provided by the institution to obtain or purchase books and supplies under this paragraph, the student is considered to have authorized the use of title IV, HEA funds and the institution does not need to obtain a written authorization under paragraph (c) of this section and § 668.165(b) for this purpose.
(a)
(2) Except in the case of a post-withdrawal disbursement made in accordance with § 668.22(a)(5), if an institution credits a student's account at the institution with Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the institution must notify the student or parent of—
(i) The anticipated date and amount of the disbursement;
(ii) The student's or parent's right to cancel all or a portion of that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds and TEACH Grant proceeds returned to the Secretary; and
(iii) The procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement.
(3) The institution must provide the notice described in paragraph (a)(2) of this section in writing—
(i) No earlier than 30 days before, and no later than 30 days after, crediting the student's ledger account at the institution, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or
(ii) No earlier than 30 days before, and no later than seven days after, crediting the student's ledger account at the institution, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section.
(4)(i) A student or parent must inform the institution if he or she wishes to cancel all or a portion of a loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement.
(ii) The institution must return the loan or TEACH Grant proceeds, cancel the loan or TEACH Grant, or do both, in accordance with program regulations provided that the institution receives a
(A) By the later of the first day of a payment period or 14 days after the date it notifies the student or parent of his or her right to cancel all or a portion of a loan or TEACH Grant, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or
(B) Within 30 days of the date the institution notifies the student or parent of his or her right to cancel all or a portion of a loan, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section.
(iii) If a student or parent requests a loan cancellation after the period set forth in paragraph (a)(4)(ii) of this section, the institution may return the loan or TEACH Grant proceeds, cancel the loan or TEACH Grant, or do both, in accordance with program regulations.
(5) An institution must inform the student or parent in writing regarding the outcome of any cancellation request.
(6) For purposes of this section—
(i) Affirmative confirmation is a process under which an institution obtains written confirmation of the types and amounts of title IV, HEA program loans that a student wants for the period of enrollment before the institution credits the student's account with those loan funds. The process under which the TEACH Grant program is administered is considered to be an affirmative confirmation process; and
(ii) An institution is not required to return any loan or TEACH Grant proceeds that it disbursed directly to a student or parent.
(b)
(i) Use the student's or parent's title IV, HEA program funds to pay for charges described in § 668.164(c)(1)(ii) or (c)(3)(i)(B) that are included in that authorization; and
(ii) Unless the Secretary provides funds to the institution under the reimbursement payment method or the heightened cash monitoring payment method described in § 668.162(c)(2) or (d)(2), respectively, hold on behalf of the student or parent any title IV, HEA program, funds that would otherwise be paid directly to the student or parent as credit balance under § 668.164(h).
(2) In obtaining the student's or parent's authorization to perform an activity described in paragraph (b)(1) of this section, an institution—
(i) May not require or coerce the student or parent to provide that authorization;
(ii) Must allow the student or parent to cancel or modify that authorization at any time; and
(iii) Must clearly explain how it will carry out that activity.
(3) A student or parent may authorize an institution to carry out the activities described in paragraph (b)(1) of this section for the period during which the student is enrolled at the institution.
(4)(i) If a student or parent modifies an authorization, the modification takes effect on the date the institution receives the modification notice.
(ii) If a student or parent cancels an authorization to use title IV, HEA program funds to pay for authorized charges under paragraph (a)(4) of this section, the institution may use title IV, HEA program funds to pay only those authorized charges incurred by the student before the institution received the notice.
(iii) If a student or parent cancels an authorization to hold title IV, HEA program funds under paragraph (b)(1)(ii) of this section, the institution must pay those funds directly to the student or parent as soon as possible but no later than 14 days after the institution receives that notice.
(5) If an institution holds excess student funds under paragraph (b)(1)(ii) of this section, the institution must—(i) Identify the amount of funds the institution holds for each student or parent in a subsidiary ledger account designed for that purpose;
(ii) Maintain, at all times, cash in its depository account in an amount at least equal to the amount of funds the institution holds for the student; and
(iii) Notwithstanding any authorization obtained by the institution under this paragraph, pay any remaining balance on loan funds by the end of the loan period and any remaining other title IV, HEA program funds by the end of the last payment period in the award year for which they were awarded.
(a)
(1) Received those funds from the Secretary; or
(2) Deposited or transferred to its Federal account previously disbursed title IV, HEA program funds, such as those resulting from award adjustments, recoveries, or cancellations.
(b)
(c)
(1) Requiring the institution to reimburse the Secretary for the costs the Federal government incurred in providing that excess cash to the institution; and
(2) Providing funds to the institution under the reimbursement payment method or heightened cash monitoring payment method described in § 668.162(c) and (d), respectively.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the section or the application of its provisions to any person, act, or practice shall not be affected thereby.
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |