Agency Disapproval of Directors and Senior Executive Officers of Savings Associations and Savings and Loan Holding Companies

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 563f and 574

[No. 98-28]

RIN 1550-AB10

Agency Disapproval of Directors and Senior Executive Officers of

Savings Associations and Savings and Loan Holding Companies

AGENCY: Office of Thrift Supervision, Treasury.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Office of Thrift Supervision (OTS) proposes to amend its

regulations implementing section 32 of the Federal Deposit Insurance

Act (FDIA). This statute requires certain savings associations and

savings and loan holding companies to provide prior notice of the

appointment or employment of directors and senior executive officers.

The proposed changes eliminate unnecessary regulatory burden, implement

changes enacted in the Economic Growth and Regulatory Paperwork

Reduction Act of 1996 (EGRPRA), and more closely conform OTS

regulations to those of the other banking agencies as required under

section 303 of the Community Development and Regulatory Improvement Act

of 1994 (CDRIA).

DATES: Comments must be received on or before May 26, 1998.

ADDRESSES: Send comments to Manager, Dissemination Branch, Records

Management and Information Policy, Office of Thrift Supervision, 1700 G

Street, NW., Washington, D.C. 20552, Attention Docket No. 98-28. These

submissions may be hand-delivered to 1700 G Street, NW., from 9:00 a.m.

to 5:00 p.m. on business days; sent by facsimile transmission to FAX

number (202) 906-7755; or sent by e-mail: [email protected].

Those commenting by e-mail should include their name and telephone

number. Comments will be available for inspection at 1700 G Street,

NW., from 9:00 a.m. until 4:00 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Frances C. Augello, Senior Counsel,

Business Transactions Division, Chief Counsel's Office (202) 906-6151;

Scott Ciardi, Financial Analyst, Corporate Activities Division, (202)

906-6960; or Mary Jo Johnson, Project Manager, Supervision Policy (202)

906-5739, Office of Thrift Supervision, 1700 G Street, NW., Washington

D.C. 20552.

SUPPLEMENTARY INFORMATION:

I. Background

Section 32 of FDIA 1 requires certain savings

associations and savings and loan holding companies to notify the OTS

at least 30 days before adding any individual to the board of directors

or employing an individual as a senior executive officer. Section 2209

of the EGRPRA 2 amended section 32 of the FDIA by changing

the circumstances under which a notice must be filed. Section 2209 also

provided that the OTS may have as long as 90 days to issue a notice of

disapproval of the proposed addition of a director or employment of a

senior executive officer.

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

\1\ 12 U.S.C. 1831i.

\2\ Pub.L. 104-208, 110 Stat. 3009 (Sept. 30, 1996).

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

The OTS proposes to amend its regulations implementing section 32

of FDIA to reflect the EGRPRA amendments and to eliminate unnecessary

burden. In accordance with section 303 of the CDRIA,3 the

OTS has coordinated with other federal banking agencies to streamline

and clarify the regulations implementing section 32 of FDIA. The

proposed OTS rule conforms generally to regulations that have been

promulgated by the Office of the Comptroller of the Currency (OCC) and

the Board of Governors of the Federal Reserve System (FRB), and

proposed by the Federal Deposit Insurance Corporation

(FDIC).4

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

\3\ Pub. L. 103-325, 108 Stat. 2215 (Sept. 23, 1994).

\4\ (OCC) 61 FR 60341 (November 27, 1996); (FRB) 62 FR 9290

(February 28, 1997); (FDIC) 61 FR 52809 (October 9, 1997).

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

The proposed rule is discussed in detail below. This proposal

restates the provisions of the existing rule at Sec. 574.9 with the

revisions noted in the discussion. In addition, the OTS has rewritten

the rule using plain language drafting techniques promoted by the Vice

President's National Performance Review Initiative and new guidance in

the Federal Register Document Drafting Handbook (January 1997 edition).

The primary goal of plain language drafting is to make regulations

easier to understand. Plain language drafting emphasizes the use of

informative headings (often written as a question), non-technical

language (including the use of ``you'') and sentences in the active

voice.

The use of the plain language format has not altered the substance

of the regulation. The OTS welcomes comments on the plain language

format, and suggestions on how to improve it. The OTS is committed to

converting more of its regulations to the plain language format to

reduce regulatory burden.

II. Proposed Amendments

Proposed Section 574.10--What does this subpart do?

Proposed Sec. 574.10 states that the new regulations implement

section 32 of the FDIA.

Proposed Section 574.11--What definitions apply to this subpart?

Proposed Sec. 574.11 sets forth the definitions that apply to the

notice requirement under section 32. The proposed provision retains the

substance of the existing definitions, except as noted below.

The proposed regulation revises the definition of ``director'' to

clarify the circumstances under which an advisory director would not be

considered a director. Those circumstances would be if the individual

(1) is not elected by the shareholders; (2) is not authorized to vote

on any matters before the board, or any committee of the board; (3)

provides

[[Page 14845]]

only general policy advice to the board or any committee of the board;

and (4) has not been identified by the OTS in writing as an individual

who performs the functions of a director, or who exercises a

significant influence over, or participates in, major policymaking

decisions of the board.

The current definition of ``senior executive officer'' would also

be clarified. The proposed rule states explicitly that the president of

a savings association or savings and loan holding company is a senior

executive officer.

Finally, the existing definitions of ``complete notice'' and

``complete notice date'' are eliminated as unnecessary.

Proposed Section 574.12--Who must give prior notice?

Proposed Sec. 574.12(a) sets forth the circumstances under which

notice is required, and implements certain changes made in EGRPRA.

Prior to EGRPRA, section 32 of the FDIA required a savings

association or savings and loan holding company to file prior notice

where: (1) the savings association was chartered less than two years,

(2) the savings association or savings and loan holding company had

undergone a change of control within the preceding two years, or (3)

the savings association or savings and loan holding company was not in

compliance with minimum capital requirements or was otherwise in a

troubled condition.

Section 2209 of the EGRPRA eliminated the notice requirement for

savings associations chartered for less than two years, and for savings

associations and savings and loan holding companies that had undergone

a change in control within the previous two years. Section 2209 also

added a new provision requiring prior notice where an agency

determines, in connection with its review of a capital restoration plan

required under section 38 of the FDIA or otherwise, that prior notice

is appropriate.

The proposed regulation makes those changes and also makes minor

clarifications to existing filing requirements. For example, the

proposed regulation clarifies that filings are required when an

existing senior executive officer changes responsibilities.

Proposed Sec. 574.12(b) permits an individual seeking election to a

board of directors to file a notice, if the individual has not been

nominated by management. The current regulation includes a similar

provision. See existing Sec. 574.9(d)(l)(ii).

The current regulation includes a special rule for multi-tiered

savings and loan holding companies. The special rule limits the

circumstances under which filings are required with respect to changes

in directors or senior executive officers of savings and loan holding

companies. See existing Sec. 574.9(d)(5). The OTS originally

promulgated this special rule to reduce the number of unnecessary

filings by multi-tiered savings and loan holding companies within two

years of a change of control. Because EGRPRA eliminated the filing

requirement relating to changes of control, the proposed regulation

eliminates the special rule for multi-tiered savings and loan holding

companies.

The proposed regulations require filings only from entities

described in proposed Sec. 574.12. For example, a savings and loan

holding company is required to file if it is in troubled condition. A

savings association is required to file if it is undercapitalized or in

troubled condition or if OTS requires, as part of prompt corrective

action, the filing of a notice.

Proposed Section 574.13--What procedures govern the filing of my

notice?

The proposed regulation at Sec. 574.13 sets forth the procedures

governing the filing of notices. This proposed section retains the

existing requirement that the notice must be filed in accordance with

the procedures in 12 CFR 516.1.

Proposed Section 574.14--What information must I include in my notice?

The proposed regulation eliminates specific notice content

requirements currently set forth at existing Sec. 574.9(d)(2)(i)-(iii).

Instead, the proposed rule requires that the notice contain the

information required under paragraph 6(A) of the Change in Bank Control

Act,5 and information prescribed in appropriate interagency

forms. Currently, these forms include the Interagency Notice of Change

in Director or Senior Executive Officer,6 and the

Interagency Biographical and Financial Report (Notice

Forms).7

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

\5\ 12 U.S.C. 1817(j)(6)(A).

\6\ OTS Form 1624.

\7\ OTS Form 1623.

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

In addition, the proposed regulation retains the current

requirement that a proposed director or senior executive officer

provide legible fingerprints. Fingerprints may be omitted, if the

individual previously submitted fingerprints as part of a notice filed

with the OTS under section 32 of the FDIA within the previous three

years.

Finally, the proposed regulation requires the submission of such

other information required by the OTS. The proposed regulation further

states explicitly that the OTS may require or accept other information

in lieu of the specific requirements of Sec. 574.14.

The OTS proposes to eliminate the current regulatory provision

requiring certain certifications. See existing Sec. 574.9(d)(l)(ii).

The cited OTS Notice Forms already require similar certifications.

Moreover, the signature requirement on the Notice Forms adequately

ensures the accuracy of the information provided in the form.

8

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

\8\ See also 12 CFR 563.180(b) which provides that no person

filing or seeking approval of any application shall knowingly make

any written or oral statement to the OTS that is false or misleading

with respect to any material fact or omits to state any material

fact concerning any matter within the jurisdiction of the OTS.

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

Proposed Section 574.15--What procedures govern OTS review of my notice

for completeness?

Proposed Sec. 574.15 sets forth the procedures governing OTS review

of the notice, and consolidates several provisions in the current

regulations.9 The revised regulation provides that the OTS

will review the notice to determine if it is complete. If the notice is

complete, the OTS will notify the filer in writing of the date that the

OTS received the complete notice. If the OTS determines that the notice

is incomplete, the OTS will notify the filer in writing why it is

incomplete, and will request the filer to submit additional information

within a specified time period.

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

\9\ See 12 CFR 574.9(d)(1), (d)(3), and (d)(4).

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

If the OTS requests additional information, the filer must provide

the information or request the OTS to suspend processing of the notice

within the time period prescribed by the OTS. If the filer does not act

within the specified period, the OTS may treat the notice as withdrawn

or review the notice based on the provided information. In its review,

the OTS may draw reasonable inferences from the filer's failure to

provide the requested information.

The proposed regulation eliminates the current provision permitting

the OTS to suspend processing for up to 60 days upon the request of the

filer. See existing Sec. 574.9(d)(4)(i). This provision is unnecessary

in light of the EGRPRA amendments permitting OTS to extend the 30-day

notice period for an additional 60 days. In any event, OTS may suspend

processing at the filer's request for a specified period of time.

[[Page 14846]]

In addition, the proposal streamlines the regulation by eliminating

the current provision which permits the OTS to suspend processing for

60 days if the OTS does not receive a report requested from another

agency. See existing Sec. 574.9(d)(4)(ii). This provision is no longer

necessary because the statute now permits the agency to extend the

review period up to an additional 60 days and the OTS may always

request the filer to suspend the time periods voluntarily.

Proposed Section 574.16--What standards and procedures will govern OTS

review of the substance of my notice?

Proposed Sec. 574.16 sets forth the review standard for notices

submitted under section 32 of the FDIA. The proposed review standard is

unchanged, except that it eliminates the reference to the best

interests of the savings and loan holding company. This change conforms

the rule more closely to section 32 of FDIA. See existing

Sec. 574.9(d)(6).

Proposed Section 574.17--When may a proposed director or senior

executive officer begin service?

Proposed Sec. 574.17 sets forth the circumstances under which a

proposed director or senior executive officer may begin service. The

proposed regulation incorporates the current regulations at

Secs. 574.9(b)(2), (d)(7) and (d)(9). Consistent with the EGRPRA

amendments, the OTS may extend the 30-day review period for an

additional period not to exceed 60 days. The OTS expects to continue to

process most section 32 notices within 30 days. In special

circumstances, such as where the administrative record is incomplete,

however, extensions may be necessary.

Proposed Section 574.18--When will the OTS waive the prior notice

requirement?

Proposed Sec. 574.18(a) addresses waiver of the prior notice

requirement. The current regulation permits the OTS to waive the notice

if the OTS ``finds that waiver would be in the best interest of the

savings association or the savings and loan holding company, would be

in the public interest, or that other extraordinary circumstances

justify waiving the prior notice requirement of this provision.'' See

existing Sec. 574.9(d)(8).

The proposed regulation revises the standard. The OTS may waive the

prior notice requirement if it finds that delay in the individual's

assumption of the position would threaten the safety or soundness of

the savings association, or would not be in the public interest, or

other extraordinary circumstances exist. The proposed regulation

conforms more closely to section 32 of the FDIA, which states that the

OTS may prescribe by regulation conditions under which prior notice may

be waived in the event of extraordinary circumstances.

The proposed regulation includes the current requirement that if a

waiver is granted, the notice must be filed within the time period

specified in the waiver.

Proposed Sec. 574.18(b) waives the prior notice requirement with

respect to certain individuals elected to the board of directors. An

individual will qualify for this waiver if he or she was not nominated

by management and provides the required notice within seven calendar

days after being elected. This provision is based on existing

Sec. 574.9(d)(8)(ii).

Finally, the proposed regulation, in conformity with the statute,

provides that a waiver shall not affect the authority of the OTS to

disapprove a notice within 30 days after a waiver is granted. For the

individual who is serving pursuant to proposed Sec. 574.18(b), the 30

day period would commence with the individual's election. The OTS notes

that the waiver section of the statute does not specifically provide

for any extension of this 30 day period.10

III. Disposition of Existing Regulations

The following chart gives an overview of the changes made to Part

574.

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

Revised provision Former provision Comments

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

Sec. 574.10........................... .......................... Added.

574.11................................. 574.9(a).................. Modified.

574.12................................. Sec. 574.9(b), (c)(3) and Significantly modified.

(d)(1)(ii).

574.9(c)(1) and (2)....... Deleted.

Sec. 574.13........................... Sec. 574.9(d)(1)......... Modified.

Sec. 574.14........................... Sec. 574.9(d)(1) and (2). Modified and added.

Sec. 574.15........................... Sec. 574.9(d)(3) and (4). Significantly modified.

Sec. 574.9(d)(5)......... Deleted.

Sec. 574.16........................... Sec. 574.9(d)(6)......... Modified.

Sec. 574.17........................... Sec. 574.9(b)(2), (d)(7) Significantly modified.

and (d)(9).

Sec. 574.18........................... Sec. 574.9(d)(8)......... Modified.

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

IV. Executive Order 12866

The Director of the OTS has determined that this proposed rule does

not constitute a ``significant regulatory action'' for purposes of

Executive Order 12866.

V. Regulatory Flexibility Act

Pursuant to section 605(b) of the Regulatory Flexibility Act, the

OTS certifies that this proposed rule will not have a significant

economic impact on a substantial number of small entities. The proposed

rule does not impose any additional burdens or requirements upon small

entities and reduces several paperwork and other burdens on all savings

associations and savings and loan holding companies.

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

\10\ Compare 12 U.S.C. 1831i(a).

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

VI. Paperwork Reduction Act

There are no new information collection requirements contained in

this proposal. The information collection requirements contained in

this proposal are the same as those required in the form Interagency

Notice of Change in Director and Senior Executive Officer,11

which has been previously submitted to and approved by the Office of

Management and Budget for review in accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507(d)) under OMB Control No. 1550-

0047.

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

\11\ OTS Form 1624.

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

VII. Unfunded Mandates Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L.

104-4 (Unfunded Mandates Act), requires that an agency prepare a

budgetary impact statement before promulgating a rule that includes a

federal mandate that may result in expenditures by state, local, and

tribal governments, in the aggregate, or by the private sector, of $100

million or more in any one year. If a budgetary impact statement is

required, section 205 of the Unfunded Mandates Act also requires

[[Page 14847]]

an agency to identify and consider a reasonable number of regulatory

alternatives before promulgating a rule. The OTS has determined that

the proposed rule will not result in expenditures by state, local, and

tribal governments, or by the private sector, of $100 million or more.

Accordingly, this rulemaking is not subject to section 202 of the

Unfunded Mandates Act.

List of Subjects

12 CFR Part 563f

Antitrust, Holding companies, Reporting and recordkeeping

requirements, Savings associations.

12 CFR Part 574

Administrative practice and procedure, Holding companies, Reporting

and recordkeeping requirements, Savings associations, Securities.

Accordingly, the Office of Thrift Supervision proposes to amend

chapter V, title 12, Code of Federal Regulations, as set forth below.

PART 574--ACQUISITION OF CONTROL OF SAVINGS ASSOCIATIONS

1. The authority citation for part 574 continues to read as

follows:

Authority: 12 U.S.C. 1467a, 1817, 1831i.

2. Existing Secs. 574.1 through 574.8 are designated as subpart A,

and the subpart heading is added to read as follows:

Subpart A--Acquisition of Control

* * * * *

Sec. 574.9 [Removed and Reserved]

3. Section 574.9 is removed and reserved.

4. Subpart B, consisting of Secs. 574.10 through 574.18, is added

to read as follows:

Subpart B--Notice of Change of Director or Senior Executive Officer

Sec.

574.10 What does this subpart do?

574.11 What definitions apply to this subpart?

574.12 Who must give prior notice?

574.13 What procedures govern the filing of my notice?

574.14 What information must I include in my notice?

574.15 What procedures govern OTS review of my notice for

completeness?

574.16 What standards and procedures will govern OTS review of the

substance of my notice?

574.17 When may a proposed director or senior executive officer

begin service?

574.18 When will the OTS waive the prior notice requirement?

Subpart B--Notice of Change of Director or Senior Executive Officer

Sec. 574.10 What does this subpart do?

This subpart implements 12 U.S.C. 1831i, which requires certain

savings associations and savings and loan holding companies to notify

the OTS before appointing or employing directors and senior executive

officers.

Sec. 574.11 What definitions apply to this subpart?

The following definitions apply to this subpart:

Director means an individual who serves on the board of directors

of a savings association or savings and loan holding company. This term

does not include an advisory director who:

(1) Is not elected by the shareholders;

(2) Is not authorized to vote on any matters before the board of

directors or any committee of the board of directors;

(3) Provides only general policy advice to the board of directors

or any committee of the board of directors; and

(4) Has not been identified by the OTS in writing as an individual

who performs the functions of a director, or who exercises significant

influence over, or participates in, major policymaking decisions of the

board of directors.

Senior executive officer means an individual who holds the title or

performs the function of one or more of the following positions

(without regard to title, salary, or compensation): president, chief

executive officer, chief operating officer, chief financial officer,

chief lending officer, or chief investment officer. Senior executive

officer also includes any other person identified by 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.

Troubled condition means:

(1) A savings association that has a composite rating of 4 or 5, as

defined in Sec. 516.3(c) of this chapter;

(2) A savings and loan holding company that has an unsatisfactory

rating under the OTS's holding company rating system, or that is

informed in writing by the OTS that it has an adverse effect on its

subsidiary savings association;

(3) A savings association or savings and loan holding company that

is subject to a capital directive, a cease-and-desist order, a consent

order, a formal written agreement, or a prompt corrective action

directive relating to the safety and soundness or financial viability

of the savings association, unless otherwise informed in writing by the

OTS; or

(4) A savings association or savings and loan holding company that

is informed in writing by the OTS that it is in troubled condition

based on information available to the OTS.

Sec. 574.12 Who must give prior notice?

(a) Savings association or savings and loan holding company. Except

as provided under Sec. 574.18, you must notify the OTS at least 30 days

before adding or replacing any member of your board of directors,

employing any person as a senior executive officer, or changing the

responsibilities of any senior executive officer so that the person

would assume a different senior executive position if:

(1) You are a savings association and at least one of the following

circumstances apply:

(i) You do not comply with all minimum capital requirements under

part 567 of this chapter;

(ii) You are in troubled condition; or

(iii) The OTS has notified you, in connection with its review of a

capital restoration plan required under section 38 of the Federal

Deposit Insurance Act or part 565 of this chapter or otherwise, that a

notice is required under this subpart; or

(2) You are a savings and loan holding company and you are in

troubled condition.

(b) Notice by individual. If you are an individual seeking election

to the board of directors of a savings association or savings and loan

holding company, and have not been nominated by management, you may

provide the prior notice required under paragraph (a) of this section

or you may follow the process under Sec. 574.18.

Sec. 574.13 What procedures govern the filing of my notice?

The procedures found in Sec. 516.1 of this chapter govern the

filing of your notice under Sec. 574.12.

Sec. 574.14 What information must I include in my notice?

(a) Content requirements. Your notice must include:

(1) 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 and the Interagency Biographical and

Financial Report;

(2) Legible fingerprints of the proposed director or senior

executive officer. You are not required to file fingerprints if, within

three years prior to the date of submission of the notice, the proposed

director or senior executive officer provided legible

[[Page 14848]]

fingerprints as part of a notice filed with the OTS under 12 U.S.C.

1831i; and

(3) Such other information required by the OTS.

(b) Modification of content requirements. The OTS may require or

accept other information in place of the content requirements in

paragraph (a) of this section.

Sec. 574.15 What procedures govern OTS review of my notice for

completeness?

The OTS will first review your notice to determine whether it is

complete.

(a) If your notice is complete, the OTS will notify you in writing

of the date that the OTS received the complete notice.

(b) If your notice is not complete, the OTS will notify you in

writing what additional information you need to submit, why we need the

information, and when you must submit it. You must, within the

specified time period, provide additional information or request that

the OTS suspend processing of the notice. If you fail to act within the

specified time period, the OTS may treat the notice as withdrawn or may

review the application based on the information provided.

Sec. 574.16 What standards and procedures will govern OTS review of

the substance of my notice?

The OTS will disapprove a notice if the OTS finds that the

competence, experience, character, or integrity of the proposed

director or senior executive officer indicates that it would not be in

the best interests of the depositors of the savings association or of

the public to permit the individual to be employed by, or associated

with, the savings association or savings and loan holding company. If

the OTS disapproves a notice, it will issue a written notice that

explains why the OTS disapproved the notice. The OTS will send the

notice to the savings association or savings and loan holding company

and the individual.

Sec. 574.17 When may a proposed director or senior executive officer

begin service?

(a) A proposed director or senior executive officer may begin

service 30 days after the date the OTS receives all required

information, unless:

(1) The OTS notifies you that it has disapproved the notice; or

(2) The OTS extends the 30-day period for an additional period not

to exceed 60 days. If the OTS extends the 30-day period, it will notify

you in writing that the period has been extended, and will state the

reason for the extension. The proposed director or senior executive

officer may begin service upon expiration of the extended period,

unless the OTS notifies you that it has disapproved the notice during

the extended period.

(b) Notwithstanding paragraph (a) of this section, a proposed

director or senior executive officer may begin service after OTS

notifies you, in writing, of its intention not to disapprove the

notice.

Sec. 574.18 When will the OTS waive the prior notice requirement?

(a) Waiver request. (1) An individual may serve as a director or

senior executive officer before filing a notice under this subpart if

OTS issues a written finding that:

(i) Delay would threaten the safety or soundness of the savings

association;

(ii) Delay would not be in the public interest; or

(iii) Other extraordinary circumstances exist that justify waiver

of prior notice.

(2) If the OTS grants a waiver, you must file a notice under this

subpart within the time period specified by the OTS.

(b) Automatic waiver. An individual may serve as a director before

filing a notice under this subpart, if the individual was not nominated

by management and the individual submits a notice under this subpart

within seven days after election as a director.

(c) Subsequent OTS action. The OTS may disapprove a notice within

30 days after OTS issues a waiver under paragraph (a) of this section

or within 30 days after the election of an individual who has filed a

notice and is serving pursuant to an automatic waiver under paragraph

(b) of this section.

5. Existing Sec. 574.100 is designated as subpart C, and the

subpart heading is added to read as follows:

Subpart C--Rebuttal of Control Agreement

* * * * *

PART 563f--MANAGEMENT OFFICIAL INTERLOCKS

6. The authority citation for part 563f continues to read as

follows:

Authority: 12 U.S.C. 3201-3208.

7. Section 563f.2 is amended by revising paragraph (l)(1)(iii) to

read as follows:

Sec. 563f.2 Definitions.

* * * * *

(l) Management official. (1) * * *

(iii) A senior executive officer as that term is defined in

Sec. 574.11 of this chapter;

* * * * *

8. Section 563f.5 is amended by revising paragraphs (b)(2)(i) and

(b)(2)(ii) to read as follows:

Sec. 563f.5 Regulatory Standards exemption.

* * * * *

(b) * * *

(2) * * *

(i) That official is approved by the OTS to serve as a director or

senior executive officer of that institution pursuant to Sec. 547.17 of

this chapter; and

(ii) The institution had operated for less than two years, was not

in compliance with minimum capital requirements, or otherwise was in a

``troubled condition'' as defined in Sec. 574.11 of this chapter at the

time the service under that section was approved.

* * * * *

9. Section 563f.6 is amended by revising paragraphs (b)(1) and

(b)(2) to read as follows:

Sec. 563f.6 Management Consignment exemption.

* * * * *

(b) * * *

(1) A proposed management official is capable of strengthening the

management of a depository institution described in paragraph (a)(3) of

this section if that official is approved by the OTS to serve as a

director or senior executive officer of that institution pursuant to

Sec. 574.17 of this chapter and the institution had operated for less

than two years at the time the service under Sec. 574.17 of this

chapter was approved; and

(2) A proposed management official is capable of strengthening the

management of a depository institution described in paragraph (a)(4) of

this section if that official is approved by the OTS to serve as a

director or senior executive officer of that institution pursuant to

Sec. 574.17 of this chapter and the institution was not in compliance

with minimum capital requirements or otherwise was in a ``troubled

condition'' as defined under Sec. 574.11 of this chapter at the time

service under Sec. 574.11 of this chapter was approved.

* * * * *

Dated: March 18, 1998.

By the Office of Thrift Supervision.

Ellen Seidman,

Director.

[FR Doc. 98-7883 Filed 3-26-98; 8:45 am]

BILLING CODE 6720-01-P