Regulatory Capital Standards Deduction of Goodwill Net of Associated Deferred Tax Liability

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Federal Register / Vol. 73, No. 250 / Tuesday, December 30, 2008 / Rules and Regulations

■12. In § 110.5, paragraphs (b)(1), (d),

and (e) are revised, and paragraph (b)(2)

is removed and reserved to read as

follows:

§ 110.5

Aggregate biennial contribution

limitation for individuals (2 U.S.C.

441a(a)(3)).

*

*

*

*

*

(b) Biennial limitations. (1) In the two-

year period beginning on January 1 of an

odd-numbered year and ending on

December 31 of the next even-numbered

year, no individual shall make

contributions aggregating more than

$95,000, including no more than:

(i) $37,500 in the case of contributions

to candidates and the authorized

committees of candidates; and

(ii) $57,500 in the case of any other

contributions, of which not more than

$37,500 may be attributable to

contributions to political committees

that are not political committees of any

national political parties.

*

*

*

*

*

(d) Independent expenditures. The

biennial limitation on contributions in

this section applies to contributions

made to persons, including political

committees, making independent

expenditures under 11 CFR part 109.

(e) Contributions to delegates and

delegate committees. The biennial

limitation on contributions in this

section applies to contributions to

delegate and delegate committees under

11 CFR 110.14.

PART 113—USE OF CAMPAIGN

ACOUNTS FOR NON-CAMPAIGN

PURPOSES

■13. The authority citation for part 113

continues to read as follows:

Authority: 2 U.S.C. 432(h), 438(a)(8), 439a,

441a.

§ 113.1

[Amended]

■14. Section 113.1(g)(6)(ii) is amended

by removing the reference to ‘‘11 CFR

110.10(b)’’ and adding in its place ‘‘11

CFR 100.33’’.

PART 400—[REMOVED]

■15. Under the authority of 2 U.S.C.

437d(a)(8), part 400 is removed.

PART 9001—SCOPE

■16. The authority citation for part

9001 continues to read as follows:

Authority: 26 U.S.C. 9009(b).

§ 9001.1

[Amended]

■17

441a.

§ 113.1

[Amended]

■14. Section 113.1(g)(6)(ii) is amended

by removing the reference to ‘‘11 CFR

110.10(b)’’ and adding in its place ‘‘11

CFR 100.33’’.

PART 400—[REMOVED]

■15. Under the authority of 2 U.S.C.

437d(a)(8), part 400 is removed.

PART 9001—SCOPE

■16. The authority citation for part

9001 continues to read as follows:

Authority: 26 U.S.C. 9009(b).

§ 9001.1

[Amended]

■17. Section 9001.1 is amended by

removing the number ‘‘400’’ and adding

in its place the number ‘‘300’’ in both

instances in which ‘‘400’’ appears.

PART 9003—ELIGIBILITY FOR

PAYMENTS

■18.The authority citation for part 9003

continues to read as follows:

Authority: 26 U.S.C. 9003 and 9009(b).

§ 9003.1

[Amended]

■19. In § 9003.1, paragraph (b)(8) is

amended by removing the number

‘‘400’’ and adding in its place the

number ‘‘300’’.

PART 9031—SCOPE

■20. The authority citation for part

9031 continues to read as follows:

Authority: 26 U.S.C. 9031 and 9039(b).

§ 9031.1

[Amended]

■21. Section 9031.1 is amended by

removing the number ‘‘400’’ and adding

in its place the number ‘‘300’’ in both

instances in which ‘‘400’’ appears.

PART 9033—ELIGIBILITY FOR

PAYMENTS

■22. The authority citation for part

9033 continues to read as follows:

Authority: 26 U.S.C. 9003(e), 9033 and

9039(b).

§ 9033.1

[Amended]

■23. In § 9033.1, paragraph (b)(10) is

revised by removing the number ‘‘400’’

and adding in its place the number

‘‘300’’.

Dated: December 23, 2008.

On behalf of the Commission,

Donald F. McGahn, II,

Chairman, Federal Election Commission.

[FR Doc. E8–31032 Filed 12–29–08; 8:45 am]

BILLING CODE 6715–01–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Part 3

[Docket ID OCC–2008–0025]

RIN 1557–AD13

FEDERAL RESERVE SYSTEM

12 CFR Parts 208 and 225

[Regulations H and Y; Docket No. R–1329]

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 325

RIN 3064–AD32

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 567

[Docket No

LLING CODE 6715–01–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Part 3

[Docket ID OCC–2008–0025]

RIN 1557–AD13

FEDERAL RESERVE SYSTEM

12 CFR Parts 208 and 225

[Regulations H and Y; Docket No. R–1329]

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 325

RIN 3064–AD32

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 567

[Docket No. OTS–2008–0019]

RIN 1550–AC22

Minimum Capital Ratios; Capital

Adequacy Guidelines; Capital

Maintenance; Capital: Deduction of

Goodwill Net of Associated Deferred

Tax Liability

AGENCIES: Office of the Comptroller of

the Currency, Treasury; Board of

Governors of the Federal Reserve

System; Federal Deposit Insurance

Corporation; and Office of Thrift

Supervision, Treasury.

ACTION: Final rule.

SUMMARY: The Office of the Comptroller

of the Currency (OCC), the Board of

Governors of the Federal Reserve

System (Board), the Federal Deposit

Insurance Corporation (FDIC), and the

Office of Thrift Supervision (OTS)

(collectively, the Agencies) are

amending their regulatory capital rules

to permit banks, bank holding

companies, and savings associations

(collectively, banking organizations) to

reduce the amount of goodwill that a

banking organization must deduct from

tier 1 capital by the amount of any

deferred tax liability associated with

that goodwill. For a banking

organization that elects to apply this

final rule, the amount of goodwill the

banking organization must deduct from

tier 1 capital would reflect the

maximum exposure to loss in the event

that such goodwill is impaired or

derecognized for financial reporting

purposes.

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s to apply this

final rule, the amount of goodwill the

banking organization must deduct from

tier 1 capital would reflect the

maximum exposure to loss in the event

that such goodwill is impaired or

derecognized for financial reporting

purposes.

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79603

Federal Register / Vol. 73, No. 250 / Tuesday, December 30, 2008 / Rules and Regulations

1 Unless otherwise indicated, the term ‘‘banking

organization’’ includes banks, savings associations,

and bank holding companies (BHCs). The terms

‘‘bank holding company’’ and ‘‘BHC’’ refer only to

bank holding companies regulated by the Board.

2 See the Agencies’ capital rules for more detail

on what assets are required to be deducted from

regulatory capital and how these deductions are

calculated. See 12 CFR part 3 (national banks); 12

CFR part 208 (state member banks); 12 CFR part 225

(bank holding companies); 12 CFR part 325 (state

nonmember banks); and 12 CFR part 567 (savings

associations). This final rule is focused on the

deduction of goodwill from tier 1 capital.

3 See 73 FR 56756 (September 30, 2008).

4 See 12 U.S.C. 1828(n).

DATES: Effective date: This rule is

effective January 29, 2009.

Applicability date: Banking

organizations may elect to apply this

final rule for purposes of the regulatory

reporting period ending on December

31, 2008.

FOR FURTHER INFORMATION CONTACT:

OCC: Paul Podgorski, Risk Expert,

Capital Policy (202–874–4755); or Jean

Campbell, Senior Attorney, or Ron

Shimabukuro, Senior Counsel,

Legislative and Regulatory Activities

Division (202–874–5090)

09.

Applicability date: Banking

organizations may elect to apply this

final rule for purposes of the regulatory

reporting period ending on December

31, 2008.

FOR FURTHER INFORMATION CONTACT:

OCC: Paul Podgorski, Risk Expert,

Capital Policy (202–874–4755); or Jean

Campbell, Senior Attorney, or Ron

Shimabukuro, Senior Counsel,

Legislative and Regulatory Activities

Division (202–874–5090).

Board: Barbara Bouchard, Associate

Director (202–452–3072), Mary Frances

Monroe, Manager (202–452–5231),

David Snyder, Supervisory Financial

Analyst (202–728–5893), Division of

Banking Supervision and Regulation; or

Mark Van Der Weide, Assistant General

Counsel (202–452–2263) or Dinah

Knight, Senior Attorney (202–452–

3838), Legal Division. For users of

Telecommunications Device for the Deaf

(‘‘TDD’’) only, contact 202–263–4869.

FDIC: Christine M. Bouvier, Senior

Policy Analyst (Bank Accounting) (202–

898–7289), Accounting and Securities

Disclosure Section, Division of

Supervision and Consumer Protection;

Nancy Hunt, Senior Policy Analyst

(202–898–6643), Capital Markets

Branch, Division of Supervision and

Consumer Protection; Mark Handzlik,

Senior Attorney (202–898–3990), or

Michael Phillips, Counsel (202–898–

3581), Supervision Branch, Legal

Division.

OTS: Christine A. Smith, Project

Manager, Capital Policy (202–906–

5740); Marvin Shaw, Senior Attorney,

Regulations and Legislation (202–906–

6639); Patricia M. Hildebrand, Senior

Policy Accountant, Accounting (202–

906–7048); or Craig Phillips, Senior

Policy Accounting Fellow, Accounting

(202–906–5628).

SUPPLEMENTARY INFORMATION:

I. Background

Under the Agencies’ existing risk-

based and leverage capital rules, a

banking organization 1 must deduct

certain assets from tier 1 capital.2 A

banking organization is permitted to net

any associated deferred tax liability

against some of those assets prior to

making the deduction from tier 1

capital

ccounting Fellow, Accounting

(202–906–5628).

SUPPLEMENTARY INFORMATION:

I. Background

Under the Agencies’ existing risk-

based and leverage capital rules, a

banking organization 1 must deduct

certain assets from tier 1 capital.2 A

banking organization is permitted to net

any associated deferred tax liability

against some of those assets prior to

making the deduction from tier 1

capital. Included among the assets

eligible for this netting treatment are

certain intangible assets arising from a

nontaxable business combination. Such

netting generally is not permitted for

goodwill and other intangible assets

arising from a taxable business

combination. In these cases, the full or

gross carrying amount of the asset is

deducted.

On September 30, 2008, the Agencies

published a notice of proposed

rulemaking (the proposal or NPR) in the

Federal Register that would permit a

banking organization to reduce the

amount of goodwill arising from a

taxable business combination that it

must deduct from tier 1 capital by the

amount of any deferred tax liability

associated with that goodwill.3 The

Board, OCC, and OTS also proposed

revisions to their respective capital rules

that were intended to conform certain

provisions of their rules to

developments in generally accepted

accounting principles (GAAP), clarify

certain definitions and related

provisions, and present the rule text in

a manner that is consistent across the

Agencies. The Agencies requested

comment on all aspects of the proposal

and whether to extend the proposed

capital treatment for any deferred tax

liability associated with goodwill to

deferred tax liabilities associated with

other intangible assets acquired in a

taxable business combination.

II. Comments

The Agencies received 13 public

comments on the proposal from banking

organizations, industry associations,

and other parties. The majority of the

commenters supported the proposal

proposed

capital treatment for any deferred tax

liability associated with goodwill to

deferred tax liabilities associated with

other intangible assets acquired in a

taxable business combination.

II. Comments

The Agencies received 13 public

comments on the proposal from banking

organizations, industry associations,

and other parties. The majority of the

commenters supported the proposal.

Five of the commenters who supported

the proposal encouraged the Agencies to

adopt the final rule so that it could be

applicable for regulatory capital

reporting purposes as of December 31,

2008. The Agencies agree and are

permitting banking organizations to

elect to apply the rule for purposes of

the regulatory reporting period ending

on December 31, 2008.

The Agencies note that the NPR

requested comment and solicited data

on the capital impact of potentially

extending the proposed rule to

intangible assets other than goodwill

acquired in a taxable business

combination. Although several

commenters submitted general requests

to extend the capital treatment proposed

for goodwill to other intangible assets,

they did not provide quantitative data to

support broadening the scope of the

proposal. In the absence of any

supportive analyses, the Agencies have

decided not to broaden the scope of the

rule.

Two commenters noted that the

proposed rule either would or should

permit the inclusion of goodwill in

regulatory capital. The Agencies are

prohibited by law from permitting a

banking organization to include

goodwill in regulatory capital.4 The

Agencies note that this final rule

continues to require a banking

organization to deduct goodwill from

tier 1 capital.

As several commenters stated, if

goodwill becomes impaired or is

derecognized under GAAP, a banking

organization’s maximum exposure to

loss is equal to the carrying value of the

goodwill less any associated deferred

tax liability

de

goodwill in regulatory capital.4 The

Agencies note that this final rule

continues to require a banking

organization to deduct goodwill from

tier 1 capital.

As several commenters stated, if

goodwill becomes impaired or is

derecognized under GAAP, a banking

organization’s maximum exposure to

loss is equal to the carrying value of the

goodwill less any associated deferred

tax liability. The Agencies agree with

commenters that, unlike most other

liabilities, a deferred tax liability

associated with goodwill does not

represent a claim on or interest in the

cash or assets of the organization. For

these reasons, the Agencies believe that

it is appropriate to permit a banking

organization to reduce the amount of

goodwill it must deduct from tier 1

capital by the amount of any associated

deferred tax liability, that is, the amount

that reflects the banking organization’s

maximum exposure to loss if such

goodwill becomes impaired or

derecognized under GAAP.

One commenter disagreed with the

calculation of the maximum capital

reduction that could occur as a result of

the impairment of goodwill in the

example in the NPR. This commenter

asserted that the maximum capital

reduction under GAAP should be equal

to the carrying value of goodwill less the

sum of tax benefits recognized as of the

date of impairment and those tax

benefits to be realized in future periods.

The Agencies believe that current rules

adequately address the treatment of

deferred tax assets for regulatory capital

purposes and that deferred tax assets

that may be created for tax benefits to

be realized in the future are beyond the

scope of this NPR. One commenter

expressed concern about the tax rate

used in the example in the NPR. The

Agencies emphasize that the tax rate in

the example was simply an assumption

for illustrative purposes.

Two commenters opposed the

proposal. One expressed general

opposition to any rule that would

reduce the regulatory capital

requirements for banking organizations

re are beyond the

scope of this NPR. One commenter

expressed concern about the tax rate

used in the example in the NPR. The

Agencies emphasize that the tax rate in

the example was simply an assumption

for illustrative purposes.

Two commenters opposed the

proposal. One expressed general

opposition to any rule that would

reduce the regulatory capital

requirements for banking organizations.

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Federal Register / Vol. 73, No. 250 / Tuesday, December 30, 2008 / Rules and Regulations

5 See 5 U.S.C. 603(a) and 5 U.S.C. 605(b).

6 See 13 CFR 121.201.

7 As of June 30, 2008, there were approximately

2,636 small bank holding companies, 730 small

national banks, 467 small state member banks,

3,222 small state nonmember banks, and 412 small

savings associations.

8 See 44 U.S.C. 3506; 5 CFR 1320 Appendix A.1.

9 Consolidated Reports of Condition and Income

(Call Report) (OMB Nos. 7100–0036, 3064–0052,

1557–0081), Thrift Financial Report (TFR) (OMB

No. 1550–0023), Consolidated Financial Statements

for Bank Holding Companies (FR Y–9C) (OMB No.

7100–0128).

Another commenter urged the Agencies

to withdraw the proposal in light of

other efforts by the Federal government

to provide capital support to the

financial services industry.

Alternatively, if the Agencies did not

withdraw the proposal, this commenter

requested an extension of the comment

period to address valuation issues.

Further, this commenter criticized the

proposal as an attempt to provide

artificial capital support to certain

banking organizations. In addition,

several commenters that supported the

proposal raised questions about the

valuation of goodwill. The Agencies

believe that the rule as proposed

achieves consistency with GAAP for

regulatory reporting purposes and for

determining the carrying amount of both

goodwill and deferred tax liabilities.

III

empt to provide

artificial capital support to certain

banking organizations. In addition,

several commenters that supported the

proposal raised questions about the

valuation of goodwill. The Agencies

believe that the rule as proposed

achieves consistency with GAAP for

regulatory reporting purposes and for

determining the carrying amount of both

goodwill and deferred tax liabilities.

III. Final Rule

After reviewing the comments, the

Agencies have adopted the proposal

without change. Under the final rule, a

banking organization may reduce the

amount of goodwill that it must deduct

from tier 1 capital by the amount of any

deferred tax liability associated with

that goodwill. However, a banking

organization that reduces the amount of

goodwill deducted from tier 1 capital by

the amount of the deferred tax liability

is not permitted to net this deferred tax

liability against deferred tax assets when

determining regulatory capital

limitations on deferred tax assets. For

these banking organizations, the amount

of goodwill deducted from tier 1 capital

will reflect each organization’s

maximum exposure to loss in the event

that the entire amount of goodwill is

impaired or derecognized, an event

which triggers the concurrent

derecognition of the related deferred tax

liability for financial reporting

purposes.

IV. Other Revisions

As discussed in the preamble to the

proposed rule, the OCC is consolidating

the various provisions permitting a bank

to deduct assets from tier 1 capital on

a basis net of any associated deferred tax

liability together in one section of the

regulatory text to make it easier to

locate. The OCC is also clarifying the

current regulatory text’s special

treatment of intangible assets acquired

due to a nontaxable purchase business

combination

the OCC is consolidating

the various provisions permitting a bank

to deduct assets from tier 1 capital on

a basis net of any associated deferred tax

liability together in one section of the

regulatory text to make it easier to

locate. The OCC is also clarifying the

current regulatory text’s special

treatment of intangible assets acquired

due to a nontaxable purchase business

combination. In addition, the OCC is

replacing the term ‘‘purchased mortgage

servicing rights’’ with the broader term

‘‘servicing assets,’’ making clarifying

changes to more accurately reflect the

OCC’s existing interpretation of the

current regulatory text, amending the

definition of goodwill to conform to

GAAP, and making other technical and

miscellaneous changes to its regulatory

capital rules. No comments were

received on these amendments. The

amendments are adopted by the OCC as

proposed. However, existing regulatory

text not printed in the proposal has been

added at section 2(c) for ease of reader

reference to clarify that goodwill is

required to be deducted from tier 1

capital.

The Board is adopting as final the

non-substantive technical changes

proposed in the NPR that conform the

definition of goodwill in its regulatory

capital rules to GAAP. Further, the

Board is amending Appendix A to 12

CFR part 225 to remove obsolete text

that relates to goodwill recognized by a

BHC prior to December 31, 1992. The

Board received no comments on its

proposal to make these rule changes.

OTS is adopting as final the changes

to its capital regulations as proposed in

the NPR as follows: First, OTS is

amending its definition of ‘‘intangible

assets’’ in 12 CFR 567.1 and 12 CFR

567.9 to reference servicing assets as

intangible assets

t relates to goodwill recognized by a

BHC prior to December 31, 1992. The

Board received no comments on its

proposal to make these rule changes.

OTS is adopting as final the changes

to its capital regulations as proposed in

the NPR as follows: First, OTS is

amending its definition of ‘‘intangible

assets’’ in 12 CFR 567.1 and 12 CFR

567.9 to reference servicing assets as

intangible assets. Second, OTS is

conforming its regulatory text to that of

the other Agencies to provide for netting

a deferred tax liability specifically

related to certain intangible assets

against those intangible assets, prior to

deduction when calculating regulatory

capital, and to add regulatory text

addressing the regulatory capital

limitation on deferred tax assets. In

addition, OTS is amending its definition

in 12 CFR 565.2(f) and other proposed

regulatory text in 12 CFR 567.9(c)(1) to

conform with changes in this rule.

Effective Date and Applicability Date

This final rule takes effect 30 days

after publication in the Federal

Register. In response to requests from

commenters, the Agencies are

permitting banking organizations to

elect to apply this final rule for

purposes of the regulatory reporting

period ending on December 31, 2008.

Regulatory Flexibility Act Analysis

The Regulatory Flexibility Act (RFA)

requires an agency that is issuing a final

rule to provide a final regulatory

flexibility analysis or to certify that the

rule will not have a significant

economic impact on a substantial

number of small entities.5

Under regulations issued by the Small

Business Administration,6 a small entity

includes a bank holding company,

commercial bank, or savings association

with assets of $175 million or less

(collectively, small banking

organizations).7 This final rule would in

effect permit a banking organization to

compute its deduction from regulatory

capital of goodwill net of any associated

deferred tax liability

ations issued by the Small

Business Administration,6 a small entity

includes a bank holding company,

commercial bank, or savings association

with assets of $175 million or less

(collectively, small banking

organizations).7 This final rule would in

effect permit a banking organization to

compute its deduction from regulatory

capital of goodwill net of any associated

deferred tax liability. The Agencies

believe that this final rule will not have

a significant economic impact on a

substantial number of small entities

because the final rule is elective and,

thus, does not require a banking

organization to compute its deduction

from regulatory capital of goodwill net

of any associated deferred tax liability.

In addition, the Agencies did not

receive any comments that the proposal

would have a significant impact on

small banking organizations.

Accordingly, each of the Agencies

certifies that this rule will not have a

significant economic impact on a

substantial number of small entities.

Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1995, the Agencies

reviewed the rule regarding the

treatment of a deferred tax liability

attributable to goodwill as required by

the Office of Management and Budget.8

No collections of information pursuant

to the Paperwork Reduction Act are

contained in the rule. However,

implementation of this rule will require

certain clarifying revisions to the

instructions for the Agencies’ quarterly

regulatory reports 9 to reflect the change

in a banking organization’s tier 1

capital.

Plain Language

Section 722 of the Gramm-Leach-

Bliley Act requires the Agencies to use

plain language in all proposed and final

rules published after January 1, 2000. In

light of this requirement, the Agencies

have sought to present the rule in a

simple and straightforward manner

e Agencies’ quarterly

regulatory reports 9 to reflect the change

in a banking organization’s tier 1

capital.

Plain Language

Section 722 of the Gramm-Leach-

Bliley Act requires the Agencies to use

plain language in all proposed and final

rules published after January 1, 2000. In

light of this requirement, the Agencies

have sought to present the rule in a

simple and straightforward manner.

OCC and OTS Executive Order 12866

Determinations

Executive Order 12866 requires

Federal agencies to prepare a regulatory

impact analysis for agency actions that

are found to be significant regulatory

actions. Significant regulatory actions

include, among other things,

rulemakings that have an annual effect

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10 See 2 U.S.C. 1532.

11 The OCC and OTS adjusted $100 million for

inflation using the GDP implicit price deflator with

the second quarter of 1995 as the base index. The

result was $132.64 million, which OCC and OTS

rounded to $133 million.

12 See 2 U.S.C. 1535.

on the economy of $100 million or more

or adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

state, local, or tribal governments or

communities. The OCC and OTS each

have determined that its portion of the

rule is not a significant regulatory

action.

OCC and OTS Executive Order 13132

Determinations

The OCC and OTS each determined

that its portion of the rulemaking does

not have any federalism implications for

purposes of Executive Order 13132

onment, public health or safety, or

state, local, or tribal governments or

communities. The OCC and OTS each

have determined that its portion of the

rule is not a significant regulatory

action.

OCC and OTS Executive Order 13132

Determinations

The OCC and OTS each determined

that its portion of the rulemaking does

not have any federalism implications for

purposes of Executive Order 13132.

OCC and OTS Unfunded Mandates

Reform Act of 1995 Determinations

Section 202 of the Unfunded

Mandates Reform Act of 1995 (UMRA)10

requires that an agency prepare a

budgetary impact statement before

promulgating a rule that includes a

Federal mandate that may result in the

expenditure by state, local, and tribal

governments, in the aggregate, or by the

private sector of $100 million or more

(adjusted annually for inflation) in any

one year.11 If a budgetary impact

statement is required, section 205 of the

UMRA also requires an agency to

identify and consider a reasonable

number of regulatory alternatives before

promulgating a rule.12 The OCC and

OTS each have determined that its rule

will not result in expenditures by state,

local, and tribal governments, or by the

private sector, of $133 million or more.

Accordingly, neither OCC nor OTS has

prepared a budgetary impact statement

or specifically addressed the regulatory

alternatives considered.

List of Subjects

12 CFR Part 3

Accounting, Administrative practice

and procedure, Banks, Banking, Capital,

National banks, Reporting and

recordkeeping requirements, Risk.

12 CFR Part 208

Accounting, Administrative practice

and procedure, Banks, Banking, Capital,

Reporting and recordkeeping

requirements, Risk.

12 CFR Part 225

Accounting, Administrative practice

and procedure, Banks, Banking, Capital,

Federal Reserve System, Reporting and

recordkeeping requirements, Risk.

12 CFR Part 325

Accounting, Banks, Banking,

Administrative practice and procedure,

Capital, Reporting and recordkeeping

requirements, Risk

d procedure, Banks, Banking, Capital,

Reporting and recordkeeping

requirements, Risk.

12 CFR Part 225

Accounting, Administrative practice

and procedure, Banks, Banking, Capital,

Federal Reserve System, Reporting and

recordkeeping requirements, Risk.

12 CFR Part 325

Accounting, Banks, Banking,

Administrative practice and procedure,

Capital, Reporting and recordkeeping

requirements, Risk.

12 CFR Part 565

Administrative practice and

procedure, Capital, Savings

associations.

12 CFR Part 567

Capital, Reporting and recordkeeping

requirements, Risk, Savings

associations.

Department of the Treasury

Office of the Comptroller of the

Currency

12 CFR Chapter I

Authority and Issuance

■For the reasons set forth in the

common preamble, part 3 of chapter I of

title 12 of the Code of Federal

Regulations is amended as follows:

PART 3—MINIMUM CAPITAL RATIOS;

ISSUANCE OF DIRECTIVES

■1. The authority citation for part 3

continues to read as follows:

Authority: 12 U.S.C. 93a, 161, 1818,

1828(n), 1828 note, 1831n note, 1835, 3907

and 3909.

■2. In Appendix A to part 3, Section 1

is amended by:

■a. Removing, in paragraph (c)(1), the

third sentence, the phrase ‘‘section

1(c)(8)’’ and by adding in lieu thereof

the phrase ‘‘section 1(c)(10)’’; and

■b. Revising paragraph (c)(17) to read

as follows:

Appendix A to Part 3—Risk-Based

Capital Guidelines

Section 1.

Purpose, Applicability of

Guidelines, and Definitions.

*

*

*

*

*

2. In Appendix A to part 3, Section 1

is amended by:

■a. Removing, in paragraph (c)(1), the

third sentence, the phrase ‘‘section

1(c)(8)’’ and by adding in lieu thereof

the phrase ‘‘section 1(c)(10)’’; and

■b. Revising paragraph (c)(17) to read

as follows:

Appendix A to Part 3—Risk-Based

Capital Guidelines

Section 1.

Purpose, Applicability of

Guidelines, and Definitions.

*

*

*

*

*

(c) * * *

(17) Goodwill is an intangible asset that

represents the excess of the cost of an

acquired entity over the net of the amounts

assigned to assets acquired and liabilities

assumed.

*

*

*

*

*

■3. In Appendix A to part 3, Section 2

is amended by:

■a. Revising paragraphs (c)

introductory text, and (c)(1)

introductory text;

■b. Removing, in paragraph (c)(1)(iii),

the phrase ‘‘section 2(c)(3)’’ and by

adding in lieu thereof the phrase

‘‘sections 2(c)(3) and (2)(c)(6)’’;

■c. Removing, in paragraph (c)(1)(iv),

the phrase ‘‘section 4(a)(3)’’ and by

adding in lieu thereof the phrase

‘‘section 4(a)(2)’’;

■d. Removing, in footnote 6, the phrase

‘‘section 1(c)(14)’’ and by adding in lieu

thereof the phrase ‘‘section 1(c)(18)’’,

and removing the phrase ‘‘section

4(a)(3)’’ and by adding in lieu thereof

the phase ‘‘section 4(a)(2)’’;

■e. Removing paragraph (c)(2)(iv);

■f. Adding a heading to paragraph

(c)(3)(i);

■g. Removing paragraph (c)(3)(iii) and

redesignating paragraph (c)(3)(iv) as

paragraph (c)(3)(iii);

■h. Removing paragraph (c)(4)(iii);

■i. Redesignating paragraph (c)(6) as

paragraph (c)(7) and adding a new

paragraph (c)(6) to read as follows; and

■j. Amending the introductory text of

newly designated paragraph (c)(7) by

removing the word ‘‘items’’ and adding

in lieu thereof the word ‘‘assets’’.

The revisions and addition are set

forth below.

Section 2.

Components of Capital.

*

*

*

*

*

oving paragraph (c)(4)(iii);

■i. Redesignating paragraph (c)(6) as

paragraph (c)(7) and adding a new

paragraph (c)(6) to read as follows; and

■j. Amending the introductory text of

newly designated paragraph (c)(7) by

removing the word ‘‘items’’ and adding

in lieu thereof the word ‘‘assets’’.

The revisions and addition are set

forth below.

Section 2.

Components of Capital.

*

*

*

*

*

(c) Deductions from Capital. The following

items are deducted from the appropriate

portion of a national bank’s capital base

when calculating its risk-based capital ratio:

(1) Deductions from Tier 1 Capital. The

following items are deducted from Tier 1

capital before the Tier 2 portion of the

calculation is made:

*

*

*

*

*

(3) * * * (i) Net unrealized gains and

losses on available-for-sale securities. * * *

*

*

*

*

*

(6) Netting of Deferred Tax Liability. (i)

Banks may elect to deduct the following

assets from Tier 1 capital on a basis that is

net of any associated deferred tax liability:

(A) Goodwill;

(B) Intangible assets acquired due to a

nontaxable purchase business combination,

except banks may not elect to deduct from

Tier 1 capital on a basis that is net of any

associated deferred tax liability, regardless of

the method by which they were acquired:

(1) Purchased credit card relationships;

and

(2) Servicing assets that are includable in

Tier 1 capital;

(C) Disallowed servicing assets;

(D) Disallowed credit-enhancing interest-

only strips; and

(E) Nonfinancial equity investments, as

defined in section 1(c)(1) of this appendix A.

t is net of any

associated deferred tax liability, regardless of

the method by which they were acquired:

(1) Purchased credit card relationships;

and

(2) Servicing assets that are includable in

Tier 1 capital;

(C) Disallowed servicing assets;

(D) Disallowed credit-enhancing interest-

only strips; and

(E) Nonfinancial equity investments, as

defined in section 1(c)(1) of this appendix A.

(ii) Deferred tax liabilities netted in this

manner cannot also be netted against

deferred tax assets when determining the

amount of deferred tax assets that are

dependent upon future taxable income as

calculated under section 2(c)(1)(iii) of this

appendix A.

*

*

*

*

*

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Federal Reserve System

12 CFR Chapter II

Authority and Issuance

■For the reasons set forth in the

common preamble, the Board of

Governors of the Federal Reserve

System amends parts 208 and 225 of

chapter II of title 12 of the Code of

Federal Regulations as follows:

PART 208—MEMBERSHIP OF STATE

BANKING INSTITUTIONS IN THE

FEDERAL RESERVE SYSTEM

(REGULATION H)

■1. The authority citation for part 208

continues to read as follows:

Authority: 12 U.S.C. 24, 92(a), 248(a),

248(c), 321–328a, 371d, 461, 481–486, 601,

611, 1814, 1816, 1818, 1820(d)(9), 1823(j),

1828(o), 1831, 1831o, 1831p–1, 1831r–1,

1831w, 1831x, 1835(a), 1882, 2901–2907,

3105, 3310, 3331–3351, and 3906–3909; 15

U.S.C. 78b, 781(b), 781(g), 781(i), 78o–4(c)(5),

78q, 78q–1, and 78w, 1681s, 1681w, 6801

and 6805; 31 U.S.C. 5318; 42 U.S.C. 4012a,

4104a, 4104b, 4106, and 4128.

■2. In appendix A to part 208, amend

section II.B. by revising paragraphs 1.a.,

1.e.iii., and 1.f. to read as follows:

Appendix A to Part 208: Capital

Adequacy Guidelines for State Member

Banks: Risk-Based Measure

*

*

*

*

*

II. * * *

B

81(b), 781(g), 781(i), 78o–4(c)(5),

78q, 78q–1, and 78w, 1681s, 1681w, 6801

and 6805; 31 U.S.C. 5318; 42 U.S.C. 4012a,

4104a, 4104b, 4106, and 4128.

■2. In appendix A to part 208, amend

section II.B. by revising paragraphs 1.a.,

1.e.iii., and 1.f. to read as follows:

Appendix A to Part 208: Capital

Adequacy Guidelines for State Member

Banks: Risk-Based Measure

*

*

*

*

*

II. * * *

B. * * *

1. * * *

a. Goodwill. Goodwill is an intangible asset

that represents the excess of the cost of an

acquired entity over the net of the amounts

assigned to assets acquired and liabilities

assumed. Goodwill is deducted from the sum

of core capital elements in determining Tier

1 capital.

*

*

*

*

*

e. * * *

iii. Banks may elect to deduct goodwill,

disallowed mortgage servicing assets,

disallowed nonmortgage servicing assets, and

disallowed credit-enhancing I/Os (both

purchased and retained) on a basis that is net

of any associated deferred tax liability.

Deferred tax liabilities netted in this manner

cannot also be netted against deferred tax

assets when determining the amount of

deferred tax assets that are dependent upon

future taxable income.

f. Valuation. Banks must review the book

value of goodwill and other intangible assets

at least quarterly and make adjustments to

these values as necessary. The fair value of

mortgage servicing assets, nonmortgage

servicing assets, purchased credit card

relationships, and credit-enhancing I/Os also

must be determined at least quarterly. This

determination shall include adjustments for

any significant changes in original valuation

assumptions, including changes in

prepayment estimates or account attrition

rates. Examiners will review both the book

value and the fair value assigned to these

assets, together with supporting

documentation, during the examination

process

ncing I/Os also

must be determined at least quarterly. This

determination shall include adjustments for

any significant changes in original valuation

assumptions, including changes in

prepayment estimates or account attrition

rates. Examiners will review both the book

value and the fair value assigned to these

assets, together with supporting

documentation, during the examination

process. In addition, the Federal Reserve may

require, on a case-by-case basis, an

independent valuation of a bank’s goodwill,

other intangible assets, or credit-enhancing I/

Os.

*

*

*

*

*

PART 225—BANK HOLDING

COMPANIES AND CHANGE IN BANK

CONTROL (REGULATION Y)

■3. The authority citation for part 225

continues to read as follows:

Authority: 12 U.S.C. 1817(j)(13), 1818,

1828(o), 1831i, 1831p–1, 1843(c)(8), 1844(b),

1972(1), 3106, 3108, 3310, 3331–3351, 3906,

3907, and 3909; 15 U.S.C. 1681s, 1681w,

6801 and 6805.

■4. In appendix A to part 225, amend

section II.B. by revising paragraphs 1.a.,

1.e.iii, and 1.f. to read as follows:

Appendix A to Part 225: Capital

Adequacy Guidelines for Bank Holding

Companies: Risk-Based Measure

*

*

*

*

*

II. * * *

B. * * *

1. * * *

a. Goodwill. Goodwill is an intangible asset

that represents the excess of the cost of an

acquired entity over the net of the amounts

assigned to assets acquired and liabilities

assumed. Goodwill is deducted from the sum

of core capital elements in determining tier

1 capital.

*

*

*

*

*

e. * * *

iii. Bank holding companies may elect to

deduct goodwill, disallowed mortgage

servicing assets, disallowed nonmortgage

servicing assets, and disallowed credit-

enhancing I/Os (both purchased and

retained) on a basis that is net of any

associated deferred tax liability. Deferred tax

liabilities netted in this manner cannot also

be netted against deferred tax assets when

determining the amount of deferred tax assets

that are dependent upon future taxable

income.

f. Valuation

assets, disallowed nonmortgage

servicing assets, and disallowed credit-

enhancing I/Os (both purchased and

retained) on a basis that is net of any

associated deferred tax liability. Deferred tax

liabilities netted in this manner cannot also

be netted against deferred tax assets when

determining the amount of deferred tax assets

that are dependent upon future taxable

income.

f. Valuation. Bank holding companies must

review the book value of goodwill and other

intangible assets at least quarterly and make

adjustments to these values as necessary. The

fair value of mortgage servicing assets,

nonmortgage servicing assets, purchased

credit card relationships, and credit-

enhancing I/Os also must be determined at

least quarterly. This determination shall

include adjustments for any significant

changes in original valuation assumptions,

including changes in prepayment estimates

or account attrition rates. Examiners will

review both the book value and the fair value

assigned to these assets, together with

supporting documentation, during the

inspection process. In addition, the Federal

Reserve may require, on a case-by-case basis,

an independent valuation of a bank holding

company’s goodwill, other intangible assets,

or credit-enhancing I/Os.

*

*

*

*

*

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

■For the reasons set forth in the

common preamble, part 325 of chapter

III of title 12 of the Code of Federal

Regulations is amended as follows:

PART 325—CAPITAL MAINTENANCE

■1. The authority citation for part 325

continues to read as follows:

Authority: 12 U.S.C. 1815(a), 1815(b),

1816, 1818(a), 1818(b), 1818(c), 1818(t),

1819(Tenth), 1828(c), 1828(d), 1828(i),

1828(n), 1828(o), 1831o, 1835, 3907, 3909,

4808; Pub. L. 102–233, 105 Stat. 1761, 1789,

1790 (12 U.S.C. 1831n note); Pub. L. 102–

242, 105 Stat. 2236, 2355, as amended by

Pub. L. 103–325, 108 Stat. 2160, 2233 (12

U.S.C. 1828 note); Pub. L. 102–242, 105 Stat

as follows:

Authority: 12 U.S.C. 1815(a), 1815(b),

1816, 1818(a), 1818(b), 1818(c), 1818(t),

1819(Tenth), 1828(c), 1828(d), 1828(i),

1828(n), 1828(o), 1831o, 1835, 3907, 3909,

4808; Pub. L. 102–233, 105 Stat. 1761, 1789,

1790 (12 U.S.C. 1831n note); Pub. L. 102–

242, 105 Stat. 2236, 2355, as amended by

Pub. L. 103–325, 108 Stat. 2160, 2233 (12

U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.

2236, 2386, as amended by Pub. L. 102–550,

106 Stat. 3672, 4089 (12 U.S.C. 1828 note).

■2. Section 325.5 is amended by

revising paragraph (g)(5) to read as

follows:

§ 325.5

Miscellaneous.

*

*

*

*

*

(g) * * *

(5) Goodwill and other intangible

assets. This paragraph (g)(5) provides

the capital treatment for intangible

assets acquired in a nontaxable business

combination, and goodwill acquired in

a taxable business combination.

(i) Intangible assets acquired in

nontaxable purchase business

combinations. A deferred tax liability

that is specifically related to an

intangible asset (other than mortgage

servicing assets, nonmortgage servicing

assets, and purchased credit card

relationships) acquired in a nontaxable

purchase business combination may be

netted against this intangible asset. Only

the net amount of this intangible asset

must be deducted from Tier 1 capital.

(ii) Goodwill acquired in a taxable

purchase business combination. A

deferred tax liability that is specifically

related to goodwill acquired in a taxable

purchase business combination may be

netted against this goodwill. Only the

net amount of this goodwill must be

deducted from Tier 1 capital.

le asset. Only

the net amount of this intangible asset

must be deducted from Tier 1 capital.

(ii) Goodwill acquired in a taxable

purchase business combination. A

deferred tax liability that is specifically

related to goodwill acquired in a taxable

purchase business combination may be

netted against this goodwill. Only the

net amount of this goodwill must be

deducted from Tier 1 capital.

(iii) Treatment of a netted deferred

tax liability. When a deferred tax

liability is netted in accordance with

paragraph (g)(5)(i) or (ii) of this section,

the taxable temporary difference that

gives rise to this deferred tax liability

must be excluded from existing taxable

temporary differences when

determining the amount of deferred tax

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assets that are dependent upon future

taxable income and calculating the

maximum allowable amount of such

assets.

(iv) Valuation. The FDIC in its

discretion may require independent fair

value estimates for goodwill and other

intangible assets on a case-by-case basis

where it is deemed appropriate for

safety and soundness purposes.

Office of Thrift Supervision

12 CFR Chapter V

■For the reasons set forth in the

common preamble, parts 565 and 567 of

chapter V of title 12 of the Code of

Federal Regulations are amended as

follows:

PART 565—PROMPT CORRECTIVE

ACTION

■1. The authority citation for part 565

continues to read as follows:

Authority: 12 U.S.C. 1831o.

■2. Section 565.2 is amended by

revising paragraph (f) to read as follows:

§ 565.2

Definitions.

*

*

*

*

*

reasons set forth in the

common preamble, parts 565 and 567 of

chapter V of title 12 of the Code of

Federal Regulations are amended as

follows:

PART 565—PROMPT CORRECTIVE

ACTION

■1. The authority citation for part 565

continues to read as follows:

Authority: 12 U.S.C. 1831o.

■2. Section 565.2 is amended by

revising paragraph (f) to read as follows:

§ 565.2

Definitions.

*

*

*

*

*

(f) Tangible equity means the amount

of a savings association’s core capital as

computed in part 567 of this chapter

plus the amount of its outstanding

cumulative perpetual preferred stock

(including related surplus), minus

intangible assets as defined in § 567.1 of

this chapter, except mortgage servicing

assets to the extent they are includable

under § 567.12. Non-mortgage servicing

assets that have not been previously

deducted in calculating core capital are

deducted.

*

*

*

*

*

PART 567—CAPITAL

■3. The authority citation for part 567

continues to read as follows:

Authority: 12 U.S.C. 1462, 1462a, 1463,

1464, 1467a, 1828 (note).

■4. Section 567.1 is amended by

revising the definition for intangible

assets to read as follows:

§ 567.1

Definitions.

*

*

*

*

*

Intangible assets. The term intangible

assets means assets considered to be

intangible assets under generally

accepted accounting principles. These

assets include, but are not limited to,

goodwill, core deposit premiums,

purchased credit card relationships,

favorable leaseholds, and servicing

assets (mortgage and non-mortgage).

Interest-only strips receivable and other

nonsecurity financial instruments are

not intangible assets under this

definition.

*

*

*

*

*

■5. Section 567.5 is amended by adding

new paragraph (a)(2)(vii) to read as

follows:

§ 567.5

Components of capital.

*

*

*

*

*

remiums,

purchased credit card relationships,

favorable leaseholds, and servicing

assets (mortgage and non-mortgage).

Interest-only strips receivable and other

nonsecurity financial instruments are

not intangible assets under this

definition.

*

*

*

*

*

■5. Section 567.5 is amended by adding

new paragraph (a)(2)(vii) to read as

follows:

§ 567.5

Components of capital.

*

*

*

*

*

(a) * * *

(2) * * *

(vii) Deferred tax assets that are not

includable in core capital pursuant to

§ 567.12 of this part are deducted from

assets and capital in computing core

capital.

*

*

*

*

*

■6. Section 567.9 is amended by

revising paragraph (c)(1) to read as

follows:

§ 567.9

Tangible capital requirements.

*

*

*

*

*

(c) * * *

(1) Intangible assets (as defined in

§ 567.1) except for mortgage servicing

assets to the extent they are includable

in tangible capital under § 567.12, and

credit enhancing interest-only strips and

deferred tax assets not includable in

tangible capital under § 567.12.

*

*

*

*

*

■7. Section 567.12 is amended by:

■a. Revising the heading and

paragraphs (a) and (b)(3);

■b. Adding paragraph (b)(5);

■c. Revising paragraph (e)(3); and

■d. Adding paragraph (h) to read as

follows:

§ 567.12

Purchased credit card

relationships, servicing assets, intangible

assets (other than purchased credit card

relationships and servicing assets), credit-

enhancing interest-only strips, and deferred

tax assets.

(a) Scope. This section prescribes the

maximum amount of purchased credit

card relationships, serving assets,

intangible assets (other than purchased

credit card relationships and servicing

assets), credit-enhancing interest-only

strips, and deferred tax assets that

savings associations may include in

calculating tangible and core capital.

interest-only strips, and deferred

tax assets.

(a) Scope. This section prescribes the

maximum amount of purchased credit

card relationships, serving assets,

intangible assets (other than purchased

credit card relationships and servicing

assets), credit-enhancing interest-only

strips, and deferred tax assets that

savings associations may include in

calculating tangible and core capital.

(b) * * *

(3) Intangible assets, as defined in

§ 567.1 of this part, other than

purchased credit card relationships

described in paragraph (b)(1) of this

section, servicing assets described in

paragraph (b)(2) of this section, and core

deposit intangibles described in

paragraph (g)(3) of this section, are

deducted in computing tangible and

core capital, subject to paragraph

(e)(3)(ii) of this section.

*

*

*

*

*

(5) Deferred tax assets may be

included (that is not deducted) in

computing core capital subject to the

restrictions of paragraph (h) of this

section, and may be included in tangible

capital in the same amount.

*

*

*

*

*

(e) * * *

(3) Computation. (i) For purposes of

computing the limits and sublimits in

paragraphs (e) and (h) of this section,

core capital is computed before the

deduction of disallowed servicing

assets, disallowed purchased credit card

relationships, disallowed credit-

enhancing interest-only strips

(purchased and retained), and

disallowed deferred tax assets.

me amount.

*

*

*

*

*

(e) * * *

(3) Computation. (i) For purposes of

computing the limits and sublimits in

paragraphs (e) and (h) of this section,

core capital is computed before the

deduction of disallowed servicing

assets, disallowed purchased credit card

relationships, disallowed credit-

enhancing interest-only strips

(purchased and retained), and

disallowed deferred tax assets.

(ii) A savings association may elect to

deduct the following items on a basis

net of deferred tax liabilities:

(A) Disallowed servicing assets;

(B) Goodwill such that only the net

amount must be deducted from Tier 1

capital;

(C) Disallowed credit-enhancing

interest only strips (both purchased and

retained); and

(D) Other intangible assets arising

from non-taxable business

combinations. A deferred tax liability

that is specifically related to an

intangible asset (other than purchased

credit card relationships) arising from a

nontaxable business combination may

be netted against this intangible asset.

The net amount of the intangible asset

must be deducted from Tier 1 capital.

(iii) Deferred tax liabilities that are

netted in accordance with paragraph

(e)(3)(ii) of this section cannot also be

netted against deferred tax assets when

determining the amount of deferred tax

assets that are dependent upon future

taxable income.

*

*

*

*

*

(h) Treatment of deferred tax assets.

For purposes of calculating Tier 1

capital under this part (but not for

financial statement purposes) deferred

tax assets are subject to the conditions,

limitations, and restrictions described in

this section.

against deferred tax assets when

determining the amount of deferred tax

assets that are dependent upon future

taxable income.

*

*

*

*

*

(h) Treatment of deferred tax assets.

For purposes of calculating Tier 1

capital under this part (but not for

financial statement purposes) deferred

tax assets are subject to the conditions,

limitations, and restrictions described in

this section.

(1) Tier 1 capital limitations. (i) The

maximum allowable amount of deferred

tax assets net of any valuation

allowance that are dependent upon

future taxable income will be limited to

the lesser of:

(A) The amount of deferred tax assets

that are dependent upon future taxable

income that is expected to be realized

within one year of the calendar quarter-

end date, based on a projected future

taxable income for that year; or

(B) Ten percent of the amount of Tier

1 capital that exists before the deduction

of any disallowed servicing assets, any

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disallowed purchased credit card

relationships, any disallowed credit-

enhancing interest-only strips, and any

disallowed deferred tax assets.

(ii) For purposes of this limitation, all

existing temporary differences should

be assumed to fully reverse at the

calendar quarter-end date. The recorded

amount of deferred tax assets that are

dependent upon future taxable income,

net of any valuation allowance for

deferred tax assets, in excess of this

limitation will be deducted from assets

and from equity capital for purposes of

determining Tier 1 capital under this

part. The amount of deferred tax assets

that can be realized from taxes paid in

prior carryback years and from the

reversal of existing taxable temporary

differences generally would not be

deducted from assets and from equity

capital.

ferred tax assets, in excess of this

limitation will be deducted from assets

and from equity capital for purposes of

determining Tier 1 capital under this

part. The amount of deferred tax assets

that can be realized from taxes paid in

prior carryback years and from the

reversal of existing taxable temporary

differences generally would not be

deducted from assets and from equity

capital.

(iii) Notwithstanding paragraph

(h)(1)(B)(ii) of this section, the amount

of carryback potential that may be

considered in calculating the amount of

deferred tax assets that a savings

association that is part of a consolidated

group (for tax purposes) may include in

Tier 1 capital may not exceed the

amount which the association could

reasonably expect to have refunded by

its parent.

(2) Projected future taxable income.

Projected future taxable income should

not include net operating loss

carryforwards to be used within one

year of the most recent calendar quarter-

end date or the amount of existing

temporary differences expected to

reverse within that year. Projected

future taxable income should include

the estimated effect of tax planning

strategies that are expected to be

implemented to realize tax

carryforwards that will otherwise expire

during that year. Future taxable income

projections for the current fiscal year

(adjusted for any significant changes

that have occurred or are expected to

occur) may be used when applying the

capital limit at an interim calendar

quarter-end date rather than preparing a

new projection each quarter.

at are expected to be

implemented to realize tax

carryforwards that will otherwise expire

during that year. Future taxable income

projections for the current fiscal year

(adjusted for any significant changes

that have occurred or are expected to

occur) may be used when applying the

capital limit at an interim calendar

quarter-end date rather than preparing a

new projection each quarter.

(3) Unrealized holding gains and

losses on available-for-sale debt

securities. The deferred tax effects of

any unrealized holding gains and losses

on available-for-sale debt securities may

be excluded from the determination of

the amount of deferred tax assets that

are dependent upon future taxable

income and the calculation of the

maximum allowable amount of such

assets. If these deferred tax effects are

excluded, this treatment must be

followed consistently over time.

Dated: December 15, 2008.

John C. Dugan,

Comptroller of the Currency.

By order of the Board of Governors of the

Federal Reserve System, December 19, 2008.

Jennifer J. Johnson,

Secretary of the Board.

Dated at Washington, DC, this 16th day of

December, 2008.

By order of the Board of Directors.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

Dated: December 15, 2008.

By the Office of Thrift Supervision.

John Reich,

Director.

[FR Doc. E8–30780 Filed 12–29–08; 8:45 am]

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P;

6720–01–P

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 140

RIN 3038–AC68

Delegation of Authority and Change in

Position Title

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rules.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’) is

amending certain provisions of its part

140 regulations to add the Chief

Economist and the Deputy Chief

Economist of the Office of the Chief

Economist as persons to whom certain

authorities are delegated

ation of Authority and Change in

Position Title

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rules.

SUMMARY: The Commodity Futures

Trading Commission (‘‘Commission’’) is

amending certain provisions of its part

140 regulations to add the Chief

Economist and the Deputy Chief

Economist of the Office of the Chief

Economist as persons to whom certain

authorities are delegated. The

Commission is also amending part 140

to reflect a change in position title from

‘‘Regional Coordinators’’ to ‘‘Regional

Administrators.’’

DATES: Effective Date: December 30,

2008.

FOR FURTHER INFORMATION CONTACT:

Megan Sperling, Office of the General

Counsel, U.S. Commodity Futures

Trading Commission, Three Lafayette

Centre, 1155 21st Street, NW.,

Washington, DC 20581. Telephone:

202–418–5150. E-mail:

msperling@cftc.gov.

SUPPLEMENTARY INFORMATION:

I. Background Information

On July 1, 2002, the Commission

reassigned the responsibilities of the

former Division of Trading and Markets

and Division of Economic Analysis to

the newly established Division of

Clearing and Intermediary Oversight,

Division of Market Oversight and Office

of the Chief Economist. On October 7,

2002, the Commission amended several

of its rules in Chapter I of Title 17 of the

Code of Federal Regulations to reflect

the reassignment of responsibilities,

including delegations of authority,

resulting from the reorganization of its

staff. The Commission failed to include

certain delegations of authority to the

Chief Economist of the Office of the

Chief Economist.

The Commission is amending rules

140.72 and 140.73 in Chapter I of Title

17 of the Code of Federal Regulations to

reflect delegated authority to the Chief

Economist and the Deputy Chief

Economist of the Office of the Chief

Economist

reorganization of its

staff. The Commission failed to include

certain delegations of authority to the

Chief Economist of the Office of the

Chief Economist.

The Commission is amending rules

140.72 and 140.73 in Chapter I of Title

17 of the Code of Federal Regulations to

reflect delegated authority to the Chief

Economist and the Deputy Chief

Economist of the Office of the Chief

Economist. Rule 140.72(a), which

delegates authority to disclose

confidential information to a contract

market, registered futures association or

self-regulatory organization, is hereby

amended to extend delegated authority

to the Chief Economist and the Deputy

Chief Economist of the Office of the

Chief Economist. In addition, the

Commission is revising Rule 140.72(a)

to reflect the change in name of the

position of ‘‘Regional Coordinator’’ to

‘‘Regional Administrator.’’ Rule

140.73(a), which delegates authority to

disclose information to the United

States, States, foreign government

agencies and foreign futures authorities,

is amended to extend delegated

authority to the Chief Economist and the

Deputy Chief Economist of the Office of

the Chief Economist. As amended, these

rules reflect the assignment of

delegation authority to the Office of the

Chief Economist, and the technical

correction of a position title.

II. Related Matters

A. No Notice Required Under 5 U.S.C.

553

The Commission has determined that

these amendments are exempt from the

provisions of the Administrative

Procedure Act, 5 U.S.C. 553, which

generally requires notice of proposed

rulemaking and provides other

opportunities for public participation.

According to the exemptive language of

5 U.S.C. 553, these amendments pertain

to ‘‘rules of agency organization,

procedure or practice,’’ as to which

there exists agency discretion not to

provide notice. If made effective

immediately, they will promote

efficiency and facilitate the

Commission’s core mission without

imposing a new burden

ides other

opportunities for public participation.

According to the exemptive language of

5 U.S.C. 553, these amendments pertain

to ‘‘rules of agency organization,

procedure or practice,’’ as to which

there exists agency discretion not to

provide notice. If made effective

immediately, they will promote

efficiency and facilitate the

Commission’s core mission without

imposing a new burden. Thus, the

Commission has determined to make

the amendments to Rules 140.72 and

140.73 effective immediately. For the

above reasons, the notice requirements

under 5 U.S.C. 553 are inapplicable.

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