83 FR 15327 - Transferred OTS Regulations Regarding Fiduciary Powers of State Savings Associations and Consent Requirements for the Exercise of Trust Powers

FEDERAL DEPOSIT INSURANCE CORPORATION

Federal Register Volume 83, Issue 69 (April 10, 2018)

The Federal Deposit Insurance Corporation (FDIC) proposes to rescind and remove from the Code of Federal Regulations the part entitled Fiduciary Powers of State Savings Associations and to amend current FDIC regulations regarding consent to exercise trust powers to reflect the applicability of these parts to both State savings associations and State nonmember banks.

[Federal Register Volume 83, Number 69 (Tuesday, April 10, 2018)]
[Proposed Rules]
[Pages 15327-15332]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-07227]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 83, No. 69 / Tuesday, April 10, 2018 / 
Proposed Rules

[[Page 15327]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 303, 333, and 390

RIN 3064-AE23


Transferred OTS Regulations Regarding Fiduciary Powers of State 
Savings Associations and Consent Requirements for the Exercise of Trust 
Powers

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to 
rescind and remove from the Code of Federal Regulations the part 
entitled Fiduciary Powers of State Savings Associations and to amend 
current FDIC regulations regarding consent to exercise trust powers to 
reflect the applicability of these parts to both State savings 
associations and State nonmember banks.

DATES: Comments must be received on or before June 11, 2018.

ADDRESSES: You may submit comments, identified by RIN 3064-AE23, by any 
of the following methods:
     Agency Website: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on 
the Agency website.
     Email: [email protected]. Include the RIN 3064-AE23 on the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, Room F-1054, 550 17th 
Street NW, Washington, DC 20429.
     Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7:00 a.m. and 5:00 p.m.
    Please Note: All comments received must include the agency name and 
RIN 3064-AE23 for this rulemaking. All comments received will be posted 
without change to http://www.fdic.gov/regulations/laws/federal/, 
including any personal information provided. Paper copies of public 
comments may be requested from the Public Information Center by 
telephone at 877-275-3342 or 703-562-2200.

FOR FURTHER INFORMATION CONTACT: Michael W. Orange, Trust Examination 
Specialist, Division of Risk Management and Supervision, ph. (678) 916-
2289 or [email protected]; or Annmarie H. Boyd, Counsel, Legal Division, 
ph. (202) 898-3714 or [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

The Dodd-Frank Act

    The Dodd-Frank Act provided for a substantial reorganization of the 
regulation of State and Federal savings associations and their holding 
companies.\1\ Beginning July 21, 2011, the transfer date established by 
section 311 of the Dodd-Frank Act,\2\ the powers, duties, and functions 
formerly performed by the Office of Thrift Supervision (OTS) were 
divided among the FDIC, as to State savings associations, the Office of 
the Comptroller of the Currency (OCC), as to Federal savings 
associations, and the Board of Governors of the Federal Reserve System 
(Federal Reserve Board), as to savings and loan holding companies. 
Section 316(b) of the Dodd-Frank Act \3\ provides the manner of 
treatment for all orders, resolutions, determinations, regulations, and 
advisory materials that had been issued, made, prescribed, or allowed 
to become effective by the OTS. The section provides that if such 
materials were in effect on the day before the transfer date, they 
continue to be in effect and are enforceable by or against the 
appropriate successor agency until they are modified, terminated, set 
aside, or superseded in accordance with applicable law by such 
successor agency, by any court of competent jurisdiction, or by 
operation of law.
---------------------------------------------------------------------------

    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 12 U.S.C. 5301 et seq. (2010).
    \2\ 12 U.S.C. 5411.
    \3\ 12 U.S.C. 5414(b).
---------------------------------------------------------------------------

    Section 316(c) of the Dodd-Frank Act \4\ further directed the FDIC 
and OCC to consult with one another and to publish a list of the 
continued OTS regulations that would be enforced by the FDIC and the 
OCC, respectively. On June 14, 2011, the FDIC's Board of Directors 
approved a ``List of OTS Regulations to be enforced by the OCC and the 
FDIC Pursuant to the Dodd-Frank Wall Street Reform and Consumer 
Protection Act.'' This list was published by the FDIC and the OCC as a 
Joint Notice in the Federal Register on July 6, 2011.\5\
---------------------------------------------------------------------------

    \4\ 12 U.S.C. 5414(c).
    \5\ 76 FR 39247 (July 6, 2011).
---------------------------------------------------------------------------

    Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act \6\ 
granted the OCC rulemaking authority relating to both State and Federal 
savings associations, nothing in the Dodd-Frank Act affected the FDIC's 
existing authority to issue regulations under the FDI Act and other 
laws as the ``appropriate Federal banking agency'' or under similar 
statutory terminology. Section 312(c) of the Dodd-Frank Act amended the 
definition of ``appropriate Federal banking agency'' contained in 
section 3(q) of the FDI Act \7\ to add State savings associations to 
the list of entities for which the FDIC is designated as the 
``appropriate Federal banking agency.'' As a result, when the FDIC acts 
as the designated ``appropriate Federal banking agency'' (or under 
similar terminology) for State savings associations and State nonmember 
banks, as it does here, the FDIC is authorized to issue, modify, and 
rescind regulations involving such institutions, as well as insured 
branches of foreign banks.
---------------------------------------------------------------------------

    \6\ 12 U.S.C. 5412(b)(2)(B)(i)(II).
    \7\ 12 U.S.C. 1813(q).
---------------------------------------------------------------------------

    As noted, on June 14, 2011, pursuant to this authority, the FDIC's 
Board of Directors reissued and redesignated certain transferring 
regulations of the former OTS. These transferred OTS regulations were 
published as new FDIC regulations in the Federal Register on August 5, 
2011.\8\ When it republished the transferred OTS regulations as new 
FDIC regulations, the FDIC specifically noted that it would evaluate 
the transferred OTS regulations and might later incorporate the 
transferred OTS regulations into other FDIC rules, amend them, or 
rescind them, as appropriate.
---------------------------------------------------------------------------

    \8\ 76 FR 47652 (August 5, 2011).
---------------------------------------------------------------------------

    One of the regulations transferred to the FDIC governed the 
fiduciary powers (also known as trust powers) of State

[[Page 15328]]

savings associations. The OTS regulation, formerly found at 12 CFR 
550.10(b)(1), was transferred to the FDIC with only nominal changes and 
is now found in the FDIC's rules at 12 CFR part 390 subpart J.

II. Part 390 Subpart J: Fiduciary Powers of State Savings Associations

    12 CFR part 390 subpart J provides that a State savings association 
must conduct its fiduciary (trust) operations in accordance with 
applicable State law and must exercise its fiduciary powers in a safe 
and sound manner. Subpart J was derived from former OTS rule 12 CFR 
550.10(b)(1) regarding fiduciary operations of Federal savings 
associations,\9\ which was added originally in order to recognize the 
OTS's interest in ensuring that State savings associations conduct 
their trust operations in a safe and sound manner and in accordance 
with State law.\10\
---------------------------------------------------------------------------

    \9\ Generally, section 5(n) of HOLA authorizes the OCC 
(previously, the OTS) to grant special permits to Federal savings 
associations for the right to act as trustee, executor, 
administrator, guardian, or in any other fiduciary capacity in which 
State banks, trust companies, or other corporations which compete 
with Federal savings associations are permitted to act under the 
laws of the State in which the Federal savings association is 
located. 12 U.S.C. 1464(n).
    \10\ Office of Thrift Supervision, Final Rule, 62 FR 67696-01 
(Dec. 30, 1997).
---------------------------------------------------------------------------

III. State Nonmember Banks and Trust Powers

    Unlike the explicit requirement applicable to State savings 
associations in subpart J, there is no express rule that requires State 
nonmember banks to conduct fiduciary operations in accordance with 
applicable State law and to exercise their fiduciary powers in a safe 
and sound manner. However, the FDIC has long recognized that State 
nonmember banks, like State savings associations, must comply with 
State law when exercising trust or fiduciary powers.\11\ This reflects 
a widely understood industry principle that the trust powers of State 
chartered institutions are granted under State law and are primarily 
administered by the State chartering authority.\12\
---------------------------------------------------------------------------

    \11\ FDIC Trust Examination Manual, available at: http://www.fdic.gov/regulations/examinations/trustmanual/section_10/section_x.html#B1 (The trust powers of State nonmember banks are 
granted under State law and that the administration of trust powers 
primarily goes to the State as the State nonmember bank's chartering 
authority.)
    \12\ Id.
---------------------------------------------------------------------------

    State nonmember banks approved for Federal deposit insurance after 
December 1, 1950, are generally required to file an application for 
consent to exercise trust powers.\13\ Therefore, if a State nonmember 
bank seeks to change the nature of its current business to include 
trust activities, section 333.2 requires the bank to obtain the FDIC's 
prior written consent.\14\ Under section 333.101(b), however, prior 
written consent is not required when a State nonmember bank seeks to 
act as trustee or custodian of certain qualified retirement, education, 
and health savings accounts, or other similar accounts in which the 
bank's duties are essentially custodial or ministerial in nature and 
the acceptance of such accounts without trust powers is not contrary to 
applicable State law.\15\
---------------------------------------------------------------------------

    \13\ Banks granted trust powers by statute or charter prior to 
December 1, 1950, are considered grandfathered from the requirement 
to obtain consent to exercise trust powers.
    \14\ 12 CFR 333.2 requires the FDIC's prior written consent for 
a change in the general character or type of business exercised by a 
state nonmember bank.
    \15\ These accounts include Individual Retirement Accounts 
(IRAs), Self-Employed Retirement Plans, Roth IRAs, Coverdell 
Education Savings Accounts, Health Savings Accounts, and other 
accounts in which: (1) The bank's duties are essentially custodial 
or ministerial in nature; (2) the bank is required to invest the 
funds from such plans only in its own time or savings deposits or in 
any other assets at the direction of the customer; and (3) the 
bank's acceptance of such accounts without trust powers is not 
contrary to applicable State law.
---------------------------------------------------------------------------

    Section 303.242 of the FDIC rules contains application procedures 
that a State nonmember bank must follow to obtain the FDIC's prior 
written consent before engaging in trust activities. Prior to granting 
such consent, the FDIC considers whether the bank will conduct trust 
operations in a safe and sound manner, consistent with State law.

IV. The Proposal

    After careful review, the FDIC has concluded that the retention of 
part 390 subpart J is unnecessary and that rescission of subpart J in 
its entirety would streamline the FDIC rules and regulations.
    Consistent with its legal authority to issue and modify regulations 
as the appropriate Federal banking agency under section 3(q) of the 
Federal Deposit Insurance Act, the FDIC also proposes to amend and 
revise certain provisions of parts 333 and 303 to clarify and state 
explicitly that both State savings associations and State nonmember 
banks are required to obtain the FDIC's prior written consent to 
exercise trust powers. The FDIC, as the appropriate Federal banking 
agency for State savings associations and State nonmember banks, is 
responsible for ensuring that they engage in the safe and sound 
exercise of their trust powers and in accordance with applicable state 
law.\16\ State nonmember banks and State savings associations are 
required to comply with State laws governing the administration of 
trusts, such as State law implementation of the Uniform Trust Code, 
Uniform Prudent Investor Act, and Uniform Probate Code, as well as 
applicable Federal laws, such as the Employee Retirement Income 
Security Act of 1974. Moreover, State savings associations and State 
nonmember banks are subject to potential liability for breaches of 
fiduciary duty as provided for under State law. Accordingly, the 
proposed rule will further ensure the consistent exercise of the FDIC's 
supervisory authority with regard to trust activities of both State 
savings associations and State nonmember banks and provide for the safe 
and sound exercise of trust powers in accordance with the applicable 
law.\17\
---------------------------------------------------------------------------

    \16\ 12 U.S.C. 1813(q).
    \17\ 12 U.S.C. 1819(a) (Tenth); 12 U.S.C. 1818; 12 U.S.C. 1831p-
1.
---------------------------------------------------------------------------

    The proposed revisions would add a new section 333.3 to clarify 
that State savings associations and State nonmember banks must seek 
prior written consent from the FDIC to exercise trust powers. For State 
nonmember banks, Sec.  333.3 would make explicit the FDIC's existing 
requirement that State nonmember banks must receive FDIC's consent 
before exercising trust powers as a change in the general character of 
business under 12 CFR 333.2. However, Sec.  333.3 would represent a 
change for State savings associations, which are not currently required 
to receive FDIC's consent before exercising trust powers granted by 
their chartering authorities. Section 333.3 would explicitly state that 
both State nonmember banks and State savings associations would be 
required to follow the application procedures set forth in section 
303.242. Section 333.101(b) also would be revised to permit State 
savings associations to act as custodians of certain qualifying 
accounts without obtaining prior written consent from the FDIC, in the 
same manner as is permitted for State nonmember banks.
    As noted above, the proposed rule would make section 303.242 
applicable to State savings associations in addition to State nonmember 
banks. Similar to State nonmember banks, under the proposed rule, State 
savings associations would not be required to receive the FDIC's prior 
written consent to exercise trust powers in the following 
circumstances:
    (1) Where the institution received authority to exercise trust 
powers from its chartering authority prior to December 1, 1950; or
    (2) Where the institution continues to conduct trust activities 
pursuant to

[[Page 15329]]

authority granted by its chartering authority subsequent to a charter 
conversion or withdrawal from membership in the Federal Reserve System.
    In order to provide more information to State nonmember banks and 
State savings associations, section 303.242 would also be amended to 
provide a more complete description of the application's required 
documentation.

V. Alternatives

    The FDIC considered alternatives to the proposed rule but believes 
that the proposed amendments represent the most appropriate option. As 
discussed previously, the Dodd-Frank Act transferred certain powers, 
duties, and functions formerly performed by the OTS to the FDIC. The 
FDIC's Board of Directors reissued and redesignated certain transferred 
regulations from the OTS, but noted that it would evaluate them and 
might later incorporate them into other FDIC rules, amend them, or 
rescind them, as appropriate. The FDIC has evaluated the existing 
regulations regarding fiduciary trust operations of covered entities, 
including sections 303, 333, and 390, subpart J. The FDIC considered 
the status quo alternative of retaining the current, bifurcated 
regulations but determined that it would be unnecessarily complex and 
potentially confusing to maintain substantively similar regulations 
regarding fiduciary trust powers of State non-member banks and State 
savings associations in different locations within the Code of Federal 
Regulations. Therefore, the FDIC proposes to amend the regulations and 
make them consistent for both State savings associations and State 
nonmember banks.

VI. Request for Comments

    The FDIC invites comments on all aspects of this proposed 
rulemaking. In particular, the FDIC requests comments on the following 
questions:
    1. Should part 390 subpart J pertaining to the fiduciary powers of 
State savings associations be retained in whole or in part? Please 
substantiate your response.
    2. What positive or negative impacts, if any, can you foresee in 
the FDIC's proposal to revise parts 333 and 303 of the Code of Federal 
Regulations, including the impact on State savings associations not 
currently exercising trust powers, who would need to obtain FDIC 
consent if they choose to do so in the future?

VII. Regulatory Analysis and Procedure

A. The Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
(PRA) of 1995 (44 U.S.C. 3501-3521), the FDIC may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (OMB) control number.
    This rule proposes to amend part 333 and 303 to clarify the 
existing consent and application requirements for State nonmember banks 
and to incorporate references to State savings associations into those 
parts. The revision of parts 333 and 303 to include State savings 
associations would add additional burden to the FDIC's current 
information collection under OMB control number 3064-0025,\18\ 
Application for Consent to Exercise Trust Powers, as State savings 
associations would be required to complete the designated application 
and submit required documentation to comply with parts 333 and 303. 
Currently, there are a total of 47 State savings associations. There is 
only one State savings association currently exercising trust powers, 
and there are 46 additional State savings associations that would 
potentially need to seek the FDIC's consent pursuant to the proposed 
revision to parts 333 and 303 if they choose to exercise trust 
powers.\19\ The FDIC proposes to revise this information collection as 
follows:
---------------------------------------------------------------------------

    \18\ The information collection for Application for Consent to 
Exercise Trust Powers, OMB No. 3064-0025, was renewed by OMB on 
August 30, 2017 and now expires on August 31, 2020.
    \19\ CALL Report Data, September 2017.
---------------------------------------------------------------------------

    Title: Application for Consent to Exercise Trust Powers.
    OMB Number: 3064-0025.
    Form Number: FDIC 6200/09.
    Affected Public: Insured State nonmember banks and insured State 
savings associations wishing to exercise trust powers.

----------------------------------------------------------------------------------------------------------------
                                                    Estimated       Estimated                      Total annual
                                Type of burden      number of       hours per      Frequency of      estimated
                                                   respondents      response         response     burden (hours)
----------------------------------------------------------------------------------------------------------------
Eligible depository            Reporting.......               9               8  On Occasion....              72
 institutions.
Not-eligible depository        Reporting.......               4              24  On Occasion....              96
 institutions.
                                                ----------------------------------------------------------------
    Totals...................  ................              13  ..............  ...............             168
----------------------------------------------------------------------------------------------------------------

    In the chart above, eligible depository institutions are those that 
satisfy the criteria for expedited processing in 12 CFR 303.2(r) and 
not-eligible depository institutions are those that do not meet the 
expedited processing criteria. The numbers of respondents are estimated 
based on the number of filers annually, and the numbers of hours per 
response are estimated based on the supporting information typically 
requested of filers (which may include additional supporting financial 
projections for applicants ineligible for expedited processing). 
Because the proposed rule will affect State savings associations as 
described above, and most filers are eligible for expedited processing, 
the FDIC is proposing to increase the estimated number of respondents 
in the eligible category from eight to nine.
    Comments are invited on: (a) Whether the collection of information 
is necessary for the proper performance of the FDIC's functions, 
including whether the information has practical utility; (b) the 
accuracy of the estimates of the brden of the information collection, 
including the validity of the methodology and assumptions used and the 
proposed change to require state savings associations to obtain consent 
before exercising trust powers granted by their state chartering 
authorities; (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 start-up costs and costs of 
operation, maintenance, and purchase of services

[[Page 15330]]

to provide information. All comments will become a matter of public 
record.

B. The Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \20\ requires that, in 
connection with a notice of proposed rulemaking, an agency prepare and 
make available for public comment an initial regulatory flexibility 
analysis that describes the impact of the proposed rule on small 
entities (defined in regulations promulgated by the Small Business 
Administration to include banking organizations with total assets of 
less than or equal to $550 million). However, a regulatory flexibility 
analysis is not required if the agency certifies that the rule will not 
have a significant economic impact on a substantial number of small 
entities and publishes its certification and a short explanatory 
statement in the Federal Register together with the rule. As discussed 
in Section I. of this proposal, the FDIC has authority to issue, modify 
and rescind regulations as the appropriate Federal banking agency for 
State savings associations and State nonmember banks. The FDIC also 
considered alternatives as outlined in Section V of this proposal, 
including maintaining the status quo or amending the regulations to be 
consistent for both State savings associations and State non-member 
banks.
---------------------------------------------------------------------------

    \20\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------

    The FDIC supervises 3,674 institutions, of which 2,950 are ``small 
entities'' according to the terms of RFA. There are 2,907 small state 
non-member banks and 44 small state savings associations.\21\
---------------------------------------------------------------------------

    \21\ CALL Report Data, September 2017.
---------------------------------------------------------------------------

    The proposed rule amends section 333 to state that both State 
savings associations and State nonmember banks that seek to exercise 
trust powers need to obtain FDIC consent. The proposed rule is not 
expected to have any effect on State nonmember banks. With respect to 
State nonmember banks, the proposed rule includes no substantive 
changes and only includes clarifying changes to explicitly state the 
longstanding requirement that State nonmember banks receive FDIC's 
consent before newly exercising trust powers granted by their 
chartering authorities as a change in the character of business under 
12 CFR 333.2. As discussed above, the proposed amendments to section 
333 would represent a new requirement for State savings associations to 
receive FDIC's consent before exercising trust powers granted by their 
chartering authorities. The application to seek consent to exercise 
trust powers would be a one-time process that is not anticipated to 
create a significant economic impact for State savings associations. 
The information requested in the application would require an applicant 
State savings association to identify the type of trust power it wishes 
to exercise and to provide documentation that includes proof of the 
adoption of the FDIC's Statement of Principles of Trust Department 
Management, identification of the applicable trust officer, trust 
committee, and trust counsel, servicing arrangements, proof of the 
requisite approvals by the appropriate State authority, a projection of 
the proposed trust activity's three-year performance, and a statement 
of its impact on the applicant.\22\ Based on the FDIC's supervisory 
experience, most of the documentation required, such as requisite State 
approval, servicing arrangements, and designation of personnel to serve 
as appropriate trust counsel, trust officer, and trust committee 
directors, is based on information and resources that an applicant 
State savings association would already possess or have to establish in 
order to exercise trust powers, regardless of whether it seeks the 
FDIC's prior written consent. Submitting already existing information 
is not expected to create significant, additional expenses for a State 
savings association seeking the FDIC's prior written consent to 
exercise trust powers. The FDIC also estimates that it will receive 
relatively few applications, given the small overall number of State 
savings associations (47), which would be affected only if they propose 
to exercise trust powers.
---------------------------------------------------------------------------

    \22\ FDIC 6200/09 (10-05).
---------------------------------------------------------------------------

    For these reasons, the FDIC certifies that the Proposed Rule, if 
adopted in final form, would not have a significant economic impact on 
a substantial number of small entities, within the meaning of those 
terms as used in the RFA. Accordingly, a regulatory flexibility 
analysis is not required.
    The FDIC invites any comments that will further inform the FDIC's 
consideration of RFA.

C. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \23\ requires each 
Federal banking agency to use plain language in all of its proposed and 
final rules published after January 1, 2000. As a Federal banking 
agency subject to the provisions of this section, the FDIC has sought 
to present the proposed rule to rescind part 390 subpart J and revise 
parts 333 and 303 of the FDIC rules in a simple and straightforward 
manner. The FDIC invites comments on whether the proposal is clearly 
stated and effectively organized, and how the FDIC might make the 
proposal easier to understand.
---------------------------------------------------------------------------

    \23\ 12 U.S.C. 4809.
---------------------------------------------------------------------------

     Has the FDIC organized the material to inform your needs? 
If not, how could the FDIC present the rule more clearly?
     Are the requirements in the rule clearly stated? If not, 
how could the rule be more clearly stated?
     Do the regulations contain technical language or jargon 
that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the FDIC incorporate to make the 
regulation easier to understand?

D. Riegle Community Development and Regulatory Improvement Act of 1994

    The Riegle Community Development and Regulatory Improvement Act of 
1994 (RCDRIA) requires that each Federal banking agency, in determining 
the effective date and administrative compliance requirements for new 
regulations that impose additional reporting, disclosure, or other 
requirements on insured depository institutions, consider, consistent 
with principles of safety and soundness and the public interest, any 
administrative burdens that such regulations would place on depository 
institutions, including small depository institutions, and customers of 
depository institutions, as well as the benefits of such regulations. 
In addition, new regulations and amendments to regulations that impose 
additional reporting, disclosure, or other new requirements on insured 
depository institutions generally must take effect on the first day of 
a calendar quarter that begins on or after the date on which the 
regulations are published in final form.\24\
---------------------------------------------------------------------------

    \24\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

    The FDIC notes that comment on these matters have been solicited in 
other sections of this Supplementary Information section, and that the 
requirements of RCDRIA will be considered as part of the overall 
rulemaking process. In addition, the FDIC also invites any other 
comments

[[Page 15331]]

that further will inform its consideration of RCDRIA.

E. The Economic Growth and Regulatory Paperwork Reduction Act

    Under section 2222 of the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all 
of its regulations, at least once every 10 years, in order to identify 
any outdated or otherwise unnecessary regulations imposed on insured 
institutions.\25\ The FDIC, along with the other federal banking 
agencies, submitted a Joint Report to Congress on March 21, 2017 
(``EGRPRA Report'') discussing how the review was conducted, what has 
been done to date to address regulatory burden, and further measures we 
will take to address issues that were identified. As noted in the 
EGRPRA Report, the FDIC is continuing to streamline and clarify its 
regulations through the OTS rule integration process. By removing 
outdated or unnecessary regulations, such as subpart J, and amending 
parts 333 and 303, this rule complements other actions the FDIC has 
taken, separately and with the other federal banking agencies, to 
further the EGRPRA mandate.
---------------------------------------------------------------------------

    \25\ Public Law 104-208, 110 Stat. 3009 (1996).
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 303

    Administrative practice and procedure; Bank deposit insurance; 
Banks, banking; Reporting and recordkeeping requirements; Savings 
associations.

12 CFR Part 333

    Banks, banking.

12 CFR Part 390

    Administrative practice and procedure; Advertising; Aged; Civil 
rights; Conflict of interests; Credit; Crime; Equal employment 
opportunity; Fair housing; Government employees; Individuals with 
disabilities; Reporting and recordkeeping requirements; Savings 
associations.

Authority and Issuance

    For the reasons stated in the preamble, the Board of Directors of 
the Federal Deposit Insurance Corporation proposes to amend 12 CFR 
parts 308, 333, and 390 as follows:

PART 303--FILING PROCEDURES

0
1. The authority citation for part 303 is revised to read as follows:

    Authority:  12 U.S.C. 378, 1464, 1601-1607, 1813, 1815, 1817, 
1818, 1819(a) (Seventh and Tenth), 1820, 1823, 1828, 1831a, 1831e, 
1831o, 1831p-1, 1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5414, 
5415, and 15 U.S.C. 1601-1607.

Subpart M--Other Filings

0
2. Revise Sec.  303.242 to read as follows:


Sec.  303.242   Exercise of trust powers.

    (a) Scope. This section contains the procedures to be followed by a 
state nonmember bank or state savings association that seeks to obtain 
the FDIC's prior written consent to exercise trust powers. The FDIC's 
prior written consent to exercise trust powers is not required in the 
following circumstances:
    (1) Where a state nonmember bank or state savings association 
received authority to exercise trust powers from its chartering 
authority prior to December 1, 1950; or
    (2) Where the institution continues to conduct trust activities 
pursuant to authority granted by its chartering authority subsequent to 
a charter conversion or withdrawal from membership in the Federal 
Reserve System.
    (b) Where to file. Applicants shall submit to the appropriate FDIC 
office a completed form, ``Application for Consent to Exercise Trust 
Powers.'' This form may be obtained from any FDIC regional director.
    (c) Content of filing. The filing shall consist of the completed 
trust application form indicating whether the respective state 
nonmember bank or state savings association will exercise full or 
limited trust powers and all required documentation as provided in the 
application instructions, including:
    (1) A certified copy of the resolution of the applicant's board of 
directors certifying the extent of the institution's compliance with 
applicable FDIC guidance;
    (2) Information regarding the trust powers granted by the state 
authority;
    (3) Information on the individual designated as the primary Trust 
Officer;
    (4) Servicing arrangements, if any;
    (5) A list of proposed members of the Trust Committee;
    (6) Information on the individual or law firm designated to serve 
as trust counsel;
    (7) Projection of trust accounts, assets, and profitability for the 
first three calendar years after the trust department begins operations 
and analysis of any adverse impact of potential net operating losses of 
the applicant institution arising from the offering of trust services.
    (d) Additional information. The FDIC may request additional 
information at any time during processing of the filing.
    (e) Expedited processing for eligible depository institutions. An 
application filed under this section by an eligible depository 
institution as defined in Sec.  303.2(r) will be acknowledged in 
writing by the FDIC and will receive expedited processing, unless the 
applicant is notified in writing to the contrary and provided with the 
basis for that decision. The FDIC may remove an application from 
expedited processing for any of the reasons set forth in Sec.  
303.11(c)(2). Absent such removal, an application processed under 
expedited procedures will be deemed approved 30 days after the FDIC's 
receipt of a substantially complete application.
    (f) Standard processing. For those applications that are not 
processed pursuant to the expedited procedures, the FDIC will provide 
the applicant with written notification of the final action when the 
decision is rendered.

PART 333--EXTENSION OF CORPORATE POWERS

0
3. The authority citation for part 333 is revised to read as follows:

    Authority:  12 U.S.C. 1816, 1817(i), 1818, 1819(a) (Seventh, 
Eighth, and Tenth), 1828, 1828(m), 1831p-1(c), 5414, and 5415.

0
4. Add Sec.  333.3 to read as follows:


Sec.  333.3  Consent Required for Exercise of Trust Powers.

    Except as provided in Sec.  303.242(a), a State nonmember bank or 
State savings association seeking to exercise trust powers must obtain 
prior written consent from the FDIC. Procedures for obtaining the 
FDIC's prior written consent are set forth in Sec.  303.242 of this 
part.
0
5. Revise Sec.  333.101 paragraph (b) to read as follows:


Sec.  333.101   Prior consent not required.

* * * * *
    (b) An insured State nonmember bank or State savings association, 
not exercising trust powers, may act as trustee or custodian of 
Individual Retirement Accounts established pursuant to the Employee 
Retirement Income Security Act of 1974 (26 U.S.C. 408), Self-Employed 
Retirement Plans established pursuant to the Self-Employed Individuals 
Retirement Act of 1962 (26 U.S.C. 401), Roth Individual Retirement 
Accounts and Coverdell Education Savings Accounts established pursuant 
to the Taxpayer Relief Act of 1997 (26 U.S.C. 408A and 530 
respectively), Health Savings Accounts established pursuant to the 
Medicare

[[Page 15332]]

Prescription Drug Improvement and Modernization Act of 2003 (26 U.S.C. 
223), and other similar accounts without the prior written consent of 
the Corporation provided:
    (1) The bank's or savings association's duties as trustee or 
custodian are essentially custodial or ministerial in nature,
    (2) The bank or savings association is required to invest the funds 
from such plans only
    (i) In its own time or savings deposits, or
    (ii) In any other assets at the direction of the customer, provided 
the bank or savings association does not exercise any investment 
discretion or provide any investment advice with respect to such 
account assets, and
    (3) The bank's or savings association's acceptance of such accounts 
without trust powers is not contrary to applicable State law.

PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT 
SUPERVISION

0
6. The authority citation for part 390 is revised to read as follows:

    Authority:  12 U.S.C. 1819.

Subpart J--[Removed and Reserved]

0
7. Remove and reserve subpart J.

    Dated at Washington, DC, on March 20, 2018.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2018-07227 Filed 4-9-18; 8:45 am]
 BILLING CODE 6714-01-P