Organization and Functions, Availability and Release of Information, Contracting Outreach Program

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 4

[Docket No. 98-18]

RIN 1557-AB65

Organization and Functions, Availability and Release of

Information, Contracting Outreach Program

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

[[Page 62928]]

ACTION: Interim rule with request for comments.

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

amending its disclosure regulation. Among other things, the amendment

clarifies that Suspicious Activity Reports are non-public documents and

that the OCC may make non-public OCC information available to a

supervised entity and to other persons, as in the sole discretion of

the Comptroller may be necessary or appropriate, without a request for

records or testimony.

DATES: This interim rule is effective on November 10, 1998. Comments

must be received by January 11, 1999.

ADDRESSES: Comments should be directed to: Office of the Comptroller of

the Currency, Communications Division, 250 E Street, SW, Washington, DC

20219, Attention: Docket No. 98-18. Comments will be available for

public inspection and photocopying at the same location. In addition,

comments may be sent by facsimile transmission to FAX number (202) 874-

5274 or by electronic mail to [email protected]

FOR FURTHER INFORMATION CONTACT: Ursula Pfeil, Attorney, Legislative

and Regulatory Activities (202) 874-5090; or Stuart Feldstein,

Assistant Director, Legislative and Regulatory Activities (202) 874-

5090.

SUPPLEMENTARY INFORMATION:

Background and Discussion of Interim Rule

The OCC is amending subpart C of 12 CFR Part 4 which governs the

release of non-public OCC information. Part 4 currently requires a

person seeking non-public OCC information to submit a request in

writing to the OCC. The current rule does not include a procedure for

the release of non-public OCC information to supervised entities and

other persons without a specific request for the information.

The OCC has authority to prescribe rules governing the release of

agency records and information under its grant of statutory authority

to promulgate substantive regulations to carry out the responsibilities

of the office, 12 U.S.C. 93a, as well as under statutes that

contemplate the sharing of information with other agencies and persons.

See, e.g., 12 U.S.C. 481; 12 U.S.C. 1867; 12 U.S.C. 1820(d)(6).

In some circumstances, the safety and soundness or financial

stability of national banks may be affected unless the OCC discloses

non-public information to supervised entities or certain other persons

without a request. For example, if the OCC obtains information that a

check fraud ring has targeted multiple banks in a particular area, it

may be necessary for the OCC to disclose confidential supervisory

information obtained from one of the targeted banks to other banks that

may also be targets of the same scheme. Similarly, the OCC's ability to

help national banks attain Year 2000 readiness depends, in part, on the

OCC's ability to share information concerning third parties with

supervised entities and other persons.1

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\1\ For example, ``other persons'' may include self-regulatory

organizations or state banks with whom the OCC seeks to share

information.

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This interim rule amends part 4 to include a new section on the

dissemination of non-public OCC information without a request. This new

section authorizes the OCC to make non-public OCC information available

to a supervised entity and to other persons, as in the sole discretion

of the Comptroller may be necessary or appropriate, without a request

for records or testimony.2 This interim rule defines the

term ``supervised entity'' to include a national bank, a subsidiary of

a national bank, or a federal branch or agency of a foreign bank

licensed by the OCC. The OCC may continue to impose conditions and

limitations on the disclosure of information through the entry of a

protective order or a written agreement of confidentiality, as provided

for under the current rule.

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\2\ This approach is consistent with the long-standing

disclosure regulation of the Federal Reserve Board (FRB). See 12 CFR

261.20. The FRB disclosure regulation similarly authorizes the FRB

to share confidential supervisory information with supervised

financial institutions and, from time to time, to make other

discretionary disclosures that the FRB determines necessary.

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Current Sec. 4.32 defines non-public OCC information as

information, confidential or otherwise, that the OCC is not required to

release under the Freedom of Information Act (FOIA) (5 U.S.C. 552) or

that the OCC has not yet published or made available under 12 U.S.C.

1818(u), the statute requiring publication of certain enforcement

orders. FOIA specifically exempts from disclosure several categories of

information including records contained in, or related to, examination

and operating or condition reports concerning financial institutions.

This interim rule adds a new provision to the part 4 definition of non-

public OCC information to include a Suspicious Activity Report (SAR)

filed by the OCC or a supervised entity under 12 CFR 21.11. This new

provision clarifies that SARs, which are sensitive and confidential

documents, are subject to the procedures for the release of non-public

OCC information under part 4.

This interim rule also clarifies that non-public OCC information

remains the property of the OCC even after it is disclosed, and that it

may not be disclosed to others except as authorized by the OCC. In

addition, no current or former OCC employee or agent may disclose or

permit the disclosure of any non-public OCC information to anyone other

than an employee or agent of the OCC who is entitled to the information

for the performance of OCC duties. Current or former OCC employees or

agents subpoenaed or otherwise requested to provide OCC information

must notify the OCC immediately under procedures set forth in

Sec. 4.37(a)(2).

Effective Date

Section 553 of the Administrative Procedure Act permits an agency

to issue a rule without prior notice and comment when the agency for

good cause finds that notice and public procedure thereon are

impracticable, unnecessary, or contrary to the public interest. 5

U.S.C. 553(b)(B); 5 U.S.C. 553(d). Likewise, section 302 of the Riegle

Community Development and Regulatory Improvement Act of 1994 (CDRI),

Pub. L. 103-325, authorizes a banking agency to issue a rule without

notice and comment to be effective before the first day of the calender

quarter that begins on or after the date on which the regulations are

published in final form if the agency finds good cause for an earlier

effective date. 12 U.S.C. 4802(b)(1).

The OCC finds good cause for issuing this interim rule without

prior notice and comment and for the rule to take effect upon

publication in the Federal Register. Among other things, making this

interim rule effective immediately will allow the OCC to disclose non-

public OCC information to supervised entities and other persons in

certain enforcement contexts requiring immediate action where a request

for the information may not be forthcoming or may be delayed. The OCC's

ability to help national banks attain Year 2000 readiness in the short

time remaining also depends, in part, on the OCC's ability to provide

information rapidly concerning third parties to supervised entities and

other persons without a request. The OCC's ability to carry out its

mission to ensure national banks' safety and soundness, in certain

circumstances, may be impaired unless it can make disclosures, as

authorized by this interim rule, promptly after acquiring the

information in question. For these reasons, the OCC concludes that

prior notice and comment

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procedures and a delayed effective date are impracticable and would be

contrary to the public interest. 5 U.S.C. 553(b)(B).

Request for Comment

The OCC is interested in the views of the public regarding this

interim rule and therefore welcomes comments on any and all aspects of

this interim rule.

Regulatory Flexibility Act

An initial regulatory flexibility analysis under the Regulatory

Flexibility Act is only required whenever an agency is required to

publish a general notice of proposed rulemaking. 5 U.S.C. 603. As noted

previously, the OCC has determined that it is not necessary to publish

a notice of proposed rulemaking for this rule. Accordingly, an initial

regulatory flexibility analysis is not required. Nonetheless, since

this interim rule imposes no new requirements on any national bank, the

OCC finds that this interim rule does not have a secondary or

incidental effect on a substantial number of small entities or create

any additional burden on small entities.

OCC Executive Order 12866 Statement

The OCC has determined that the interim rule is not a significant

regulatory action under Executive Order 12866.

Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1995, Public Law 104-4

(Unfunded Mandates Act), applies only when an agency is required to

promulgate a general notice of proposed rulemaking or a final rule for

which a general notice of proposed rulemaking was published. 2 U.S.C.

1532. As noted previously, the Agencies have determined that it is not

necessary to publish a notice of proposed rulemaking for these

Guidelines. Accordingly, an unfunded mandates act analysis is not

required. Nonetheless, since this interim rule prescribed no mandate of

any kind, the OCC finds that this interim rule will not result in

expenditure by State, local, and tribal governments, or by the private

sector, of more than $100 million in any one year. Accordingly, the OCC

has not prepared a budgetary impact statement or specifically addressed

the regulatory alternatives considered.

List of Subjects in 12 CFR Part 4

Freedom of information, National banks, Organization and functions

(Government agencies), Reporting and recordkeeping requirements.

Authority and Issuance

For the reasons set out in the preamble, part 4 of chapter I of

title 12 of the Code of Federal Regulations is amended as set forth

below:

PART 4--ORGANIZATIONS AND FUNCTIONS, AVAILABILITY AND RELEASE OF

INFORMATION, CONTRACTING OUTREACH PROGRAM

1. The authority citation for part 4 is revised to read as follows:

Authority: 12 U.S.C. 93a. 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, 1817(a)(3), 1818(u) and (v),

1820(d)(6), 1821(c), 1821(o), 1821(t), 1831m, 1831p-1, 1831o, 1867,

1951 et seq., 2601 et seq., 2801 et seq., 2901 et seq., 3101 et

seq., 3401 et seq.; 15 U.S.C. 77uu(b), 78q(c)(3); 18 U.S.C. 641,

1905, 1906; 29 U.S.C. 1204; 31 U.S.C. 9701; 42 U.S.C. 3601; 44

U.S.C. 3506, 3510. Subpart D also issued under 12 U.S.C. 1833e.

Subpart C--Release of Non-Public OCC Information

2. Section 4.31 is amended by revising paragraphs (a)(1) and (b)(1)

to read as follows:

Sec. 4.31 Purpose and scope.

(a) Purpose. * * *

(1) Afford an orderly mechanism for the OCC to process

expeditiously requests for non-public OCC information; to address the

release of non-public OCC information without a request; and, when

appropriate, for the OCC to assert evidentiary privileges in

litigation;

* * * * *

(b) Scope. (1) This subpart applies to requests for, and

dissemination of, non-public OCC information, including requests for

records or testimony arising out of civil lawsuits and administrative

proceedings to which the OCC is not a party and the release of non-

public OCC information without a specific request. Lawsuits and

administrative proceedings to which the OCC is not a party include

proceedings in which a Federal agency is a party in opposition to the

private requester.

* * * * *

3. Section 4.32 is amended by redesignating paragraph (e) as

paragraph (f); by removing the word ``and'' from paragraph (b)(1)(v);

and by adding new paragraphs (b)(1)(vii) and (e) to read as follows:

Sec. 4.32 Definitions.

* * * * *

(b) * * *

(1) * * *

(vii) A Suspicious Activity Report filed by the OCC or a supervised

entity under 12 CFR 21.11; and

* * * * *

(e) Supervised entity includes a national bank, a subsidiary of a

national bank, a Federal branch or agency of a foreign bank licensed by

the OCC as defined under 12 CFR 28.11(h) and (i), or any other entity

supervised by the OCC.

* * * * *

4. Sections 4.36 through 4.39 are redesignated as Secs. 4.37

through 4.40, respectively.

5. A new Sec. 4.36 is added to read as follows:

Sec. 4.36 Disclosure of non-public OCC information.

(a) Discretionary disclosure of non-public OCC information. The OCC

may make non-public OCC information available to a supervised entity

and to other persons, as in the sole discretion of the Comptroller may

be necessary or appropriate, without a request for records or

testimony.

(b) Conditions and limitations. The OCC may impose any conditions

or limitations on disclosures under this section, including the

restrictions on dissemination contained in Sec. 4.38, that it

determines are necessary to effect the purposes of this section.

(c) Unauthorized disclosures prohibited. All non-public OCC

information remains the property of the OCC. No supervised entity,

government agency, person, or other party to whom the information is

made available, or any officer, director, employee, or agent thereof,

may disclose non-public OCC information without the prior written

permission of the OCC, except in published statistical material that

does not disclose, either directly or when used in conjunction with

other publicly available information, the affairs of any individual,

corporation, or other entity. Except as authorized by the OCC, no

person obtaining access to non-public OCC information under this

section may make a copy of the information and no person may remove

non-public OCC information from the premises of the institution,

agency, or other party in authorized possession of the information.

6. Paragraph (a) of newly designated Sec. 4.37 is revised to read

as follows:

Sec. 4.37 Persons and entities with access to OCC information;

prohibition on dissemination.

(a) Current and former OCC employees or agents--(1) Generally.

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Except as authorized by this subpart or otherwise by the OCC, no

current or former OCC employee or agent in any manner, may disclose or

permit the disclosure of any non-public OCC information to anyone other

than an employee or agent of the Comptroller for use in the performance

of OCC duties.

(2) Duty of person served. Any current or former OCC employee or

agent subpoenaed or otherwise requested to provide information covered

by this subpart must immediately notify the OCC as provided in this

paragraph. The OCC may intervene, attempt to have the compulsory

process withdrawn, and register appropriate objections when a current

or former OCC employee or agent receives a subpoena and the subpoena

requires the current or former employee or agent to appear or produce

OCC information. If necessary, the current or former employee or agent

must appear as required and respectfully decline to produce the

information sought, citing this subpart as authority and United States

ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). The current or former OCC

employee or agent must immediately notify the OCC if subpoenaed or

otherwise asked for non-public OCC information:

(i) In a civil action, by notifying the Director of the OCC's

Litigation Division at the Washington, DC office; or

(ii) In a criminal action, by notifying the appropriate district

counsel for current and former district employees or agents; or the

Director of the OCC's Enforcement and Compliance Division at the

Washington, DC office, for current and former Washington employees or

agents.

* * * * *

Dated: October 28, 1998.

Julie L. Williams,

Acting Comptroller of the Currency.

[FR Doc. 98-30044 Filed 11-9-98; 8:45 am]

BILLING CODE 4870-33-P