Agricultural Loan Loss Amortization

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 35

[Docket No. 95-01]

RIN 1557-AB44

Agricultural Loan Loss Amortization

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) proposes

to remove its rule governing agricultural loan loss amortization,

effective January 1, 1999. This proposal is another component of the

OCC's Regulation Review Program, which is intended to update and

streamline OCC regulations and to reduce unnecessary regulatory costs

and other burdens. This action is needed to eliminate the rule when it

becomes obsolete.

DATES: Comments must be received by April 10, 1995.

ADDRESSES: Comments should be directed to: Communications Division,

Office of the Comptroller of the Currency, 250 E Street, SW,

Washington, DC 20219, Attention: Docket No. 95-01. Comments will be

available for public inspection and photocopying at the same location.

FOR FURTHER INFORMATION CONTACT: Andrew T. Gutierrez, Attorney,

Legislative and Regulatory Activities Division, (202) 874-5090.

SUPPLEMENTARY INFORMATION:

Background

The OCC proposes to remove 12 CFR part 35 as a component of its

Regulation Review Program. The goal of the Regulation Review Program is

to review all of the OCC's rules to revise, streamline, and simplify

them, and to eliminate provisions that do not contribute significantly

to maintaining the safety and soundness of national banks or to

accomplishing the OCC's other statutory responsibilities.

Title VIII of the Competitive Equality Banking Act of 1987, Pub. L.

100-86, 101 Stat. 635 (1987), added 12 U.S.C. 1823(j) in an attempt to

alleviate some of the financial pressures then facing agricultural

banks. In particular, 12 U.S.C. 1823(j) permits an agricultural bank to

amortize over a period not to exceed seven years: (1) Any loss on a

qualified agricultural loan that the bank would otherwise be required

to show on its annual financial statement for any year between December

31, 1983, and January 1, 1992; and (2) any loss resulting from the

reappraisal of property that the bank owned or acquired between January

1, 1983, and January 1, 1992, in connection with a qualified

agricultural loan. The OCC implemented this statutory provision by

promulgating 12 CFR part 35 with a temporary rule published on November

2, 1987 (52 FR 41959), and a final rule published on July 28, 1988 (53

FR 28373).

Because the statute requires that a loss occur on or before

December 31, 1991, to qualify, and that the amortization period may not

exceed seven years, the program becomes obsolete on January 1, 1999.

Reflecting this fact, the OCC's rule requires that loans under the

program [[Page 7468]] must be fully amortized by December 31, 1998. 12

CFR 35.3(b).

The OCC proposes to remove 12 CFR part 35, effective January 1,

1999, obviating the need for regulatory action in the future. Prior to

that date, an annotation to part 35 in title 12 of the Code of Federal

Regulations would indicate the effective date for removal of the part.

Regulatory Flexibility Act

It is hereby certified that this regulation will not have a

significant economic impact on a substantial number of small entities.

Accordingly, a regulatory flexibility analysis is not required. This

regulation has no material impact on national banks, regardless of

size.

Executive Order 12866

The OCC has determined that this proposal is not a significant

regulatory action under Executive Order 12866.

Paperwork Reduction Act

The collection of information contained in 12 CFR 35.7 has been

approved by the Office of Management and Budget (OMB) under OMB Control

Number 1557-0186. This proposal would remove as unnecessary, for the

reasons set forth in the preamble, that collection of information

effective January 1, 1999. Comments on the OCC's proposed elimination

of this collection of information should be sent to the Office of

Management and Budget, Paperwork Reduction Project (1557-0186),

Washington, DC 20503, with a copy to the OCC's Legislative and

Regulatory Activities Division (Attn: 1557-0186) at the OCC address

previously specified.

List of Subjects in 12 CFR Part 35

Accounting, Agriculture, National banks, Reporting and

recordkeeping requirements.

Authority and Issuance

For the reasons set out in the preamble, and under the authority of

12 U.S.C. 93a and 1823(j), chapter I of title 12 of the Code of Federal

Regulations is proposed to be amended as follows:

PART 35--[REMOVED]

1. Part 35 is removed effective January 1, 1999.

Dated: February 3, 1995.

Eugene A. Ludwig,

Comptroller of the Currency.

[FR Doc. 95-3117 Filed 2-7-95; 8:45 am]

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