Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks from the Supplementary Leverage Ratio for Depository Institutions

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Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

not deviations. Awards to foreign

entities are not subject to this section.

(2) A single-case deviation is a

deviation which applies to one financial

assistance transaction and one

applicant, recipient, or subrecipient

only.

(3) A class deviation is a deviation

which applies to more than one

financial assistance transaction,

applicant, recipient, or subrecipient.

(b) Conditions for approval. The DOE/

NNSA officials specified in paragraph

(c) of this section may authorize a

deviation only upon a written

determination that the deviation is—

(1) Necessary to achieve program

objectives;

(2) Necessary to conserve public

funds;

(3) Otherwise essential to the public

interest; or

(4) Necessary to achieve equity.

(c) Approval procedures. (1) A

deviation request must be in writing and

must be submitted to the responsible

DOE/NNSA Contracting Officer. An

applicant for a subaward or a

subrecipient shall submit any such

request through the recipient.

(2) Except as provided in paragraph

(c)(3) of this section—

(i) A single-case deviation may be

authorized by the responsible HCA.

(ii) A class deviation may be

authorized by the Director, Office of

Acquisition Management, for DOE

actions, and the Deputy Associate

Administrator for the Office of

Acquisition and Project Management for

NNSA, for NNSA actions, or designee.

(3) Whenever the approval of OMB,

other Federal agency, or other DOE/

NNSA office is required to authorize a

deviation, the proposed deviation must

be submitted to the Director, Office of

Acquisition Management, for DOE

actions, and the Deputy Associate

Administrator for the Office of

Acquisition and Project Management for

NNSA, for NNSA actions, or designee

for concurrence prior to submission to

the authorizing official.

her Federal agency, or other DOE/

NNSA office is required to authorize a

deviation, the proposed deviation must

be submitted to the Director, Office of

Acquisition Management, for DOE

actions, and the Deputy Associate

Administrator for the Office of

Acquisition and Project Management for

NNSA, for NNSA actions, or designee

for concurrence prior to submission to

the authorizing official.

(d) Notice. Whenever a request for a

class deviation is approved, DOE/NNSA

will identify this class deviation (as

applicable) in the Notice of Funding

Opportunity(s) that may be affected.

(e) Subawards. A recipient may use a

deviation in a subaward only with the

prior written approval of a DOE/NNSA

Contracting Officer.

[FR Doc. 2020–10577 Filed 5–29–20; 8:45 am]

BILLING CODE 6450–01–P

DEPARTMENT OF TREASURY

Office of the Comptroller of the

Currency

12 CFR Parts 3 and 6

[Docket No. OCC–2020–0013]

RIN 1557–AE85

FEDERAL RESERVE SYSTEM

12 CFR Parts 208 and 217

[Regulations H and Q; Docket No. R–1718]

RIN 7100–AF91

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 324

RIN 3064–AF44

Regulatory Capital Rule: Temporary

Exclusion of U.S. Treasury Securities

and Deposits at Federal Reserve

Banks From the Supplementary

Leverage Ratio for Depository

Institutions

AGENCY: Office of the Comptroller of the

Currency (OCC), Board of Governors of

the Federal Reserve System (Board), and

Federal Deposit Insurance Corporation

(FDIC).

ACTION: Interim final rule and request

for comment.

SUMMARY: In light of recent disruptions

in economic conditions caused by the

coronavirus disease 2019 and strains in

U.S. financial markets, the OCC, the

Board, and the FDIC (together, the

agencies) are issuing an interim final

rule that temporarily revises the

supplementary leverage ratio

calculation for depository institutions.

Under the interim final rule, any

depository institution subsidiary of a

U.S

f recent disruptions

in economic conditions caused by the

coronavirus disease 2019 and strains in

U.S. financial markets, the OCC, the

Board, and the FDIC (together, the

agencies) are issuing an interim final

rule that temporarily revises the

supplementary leverage ratio

calculation for depository institutions.

Under the interim final rule, any

depository institution subsidiary of a

U.S. global systemically important bank

holding company or any depository

institution subject to Category II or

Category III capital standards may elect

to exclude temporarily U.S. Treasury

securities and deposits at Federal

Reserve Banks from the supplementary

leverage ratio denominator.

Additionally, under this interim final

rule, any depository institution making

this election must request approval from

its primary Federal banking regulator

prior to making certain capital

distributions so long as the exclusion is

in effect. The interim final rule is

effective as of the date of Federal

Register publication and will remain in

effect through March 31, 2021. The

agencies are adopting this interim final

rule to allow depository institutions that

elect to opt into this treatment

additional flexibility to act as financial

intermediaries during this period of

financial disruption. The tier 1 leverage

ratio is not affected by this interim final

rule.

DATES:

Effective date: This rule is effective on

June 1, 2020.

Comment date: Comments on the

interim final rule must be received no

later than July 16, 2020.

ADDRESSES:

OCC: Commenters are encouraged to

submit comments through the Federal

eRulemaking Portal or email, if possible.

Please use the title ‘‘Regulatory Capital

Rule: Temporary Exclusion of U.S.

Treasury Securities and Deposits at

Federal Reserve Banks from the

Supplementary Leverage Ratio’’ to

facilitate the organization and

distribution of the comments

no

later than July 16, 2020.

ADDRESSES:

OCC: Commenters are encouraged to

submit comments through the Federal

eRulemaking Portal or email, if possible.

Please use the title ‘‘Regulatory Capital

Rule: Temporary Exclusion of U.S.

Treasury Securities and Deposits at

Federal Reserve Banks from the

Supplementary Leverage Ratio’’ to

facilitate the organization and

distribution of the comments. You may

submit comments by any of the

following methods:

• Federal eRulemaking Portal—

Regulations.gov Classic or

Regulations.gov Beta:

Regulations.gov Classic: Go to https://

www.regulations.gov/. Enter ‘‘Docket ID

OCC–2020–0013’’ in the Search Box and

click ‘‘Search.’’ Click on ‘‘Comment

Now’’ to submit public comments. For

help with submitting effective

comments please click on ‘‘View

Commenter’s Checklist.’’ Click on the

‘‘Help’’ tab on the Regulations.gov home

page to get information on using

Regulations.gov, including instructions

for submitting public comments.

Regulations.gov Beta: Go to https://

beta.regulations.gov/ or click ‘‘Visit

New Regulations.gov Site’’ from the

Regulations.gov Classic homepage.

Enter ‘‘Docket ID OCC–2020–0013’’ in

the Search Box and click ‘‘Search.’’

Public comments can be submitted via

the ‘‘Comment’’ box below the

displayed document information or by

clicking on the document title and then

clicking the ‘‘Comment’’ box on the top-

left side of the screen. For help with

submitting effective comments please

click on ‘‘Commenter’s Checklist.’’ For

assistance with the Regulations.gov Beta

site, please call (877) 378–5457 (toll

free) or (703) 454–9859 Monday–Friday,

9 a.m.–5 p.m. ET or email regulations@

erulemakinghelpdesk.com.

• Email: regs.comments@

occ.treas.gov.

• Mail: Chief Counsel’s Office,

Attention: Comment Processing, Office

of the Comptroller of the Currency, 400

7th Street SW, suite 3E–218,

Washington, DC 20219.

• Hand Delivery/Courier: 400 7th

Street, SW, suite 3E–218, Washington,

DC 20219

(toll

free) or (703) 454–9859 Monday–Friday,

9 a.m.–5 p.m. ET or email regulations@

erulemakinghelpdesk.com.

• Email: regs.comments@

occ.treas.gov.

• Mail: Chief Counsel’s Office,

Attention: Comment Processing, Office

of the Comptroller of the Currency, 400

7th Street SW, suite 3E–218,

Washington, DC 20219.

• Hand Delivery/Courier: 400 7th

Street, SW, suite 3E–218, Washington,

DC 20219.

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Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

• Fax: (571) 465–4326.

Instructions: You must include

‘‘OCC’’ as the agency name and ‘‘Docket

ID OCC–2020–0013’’ in your comment.

In general, the OCC will enter all

comments received into the docket and

publish the comments on the

Regulations.gov website without

change, including any business or

personal information provided such as

name and address information, email

addresses, or phone numbers.

Comments received, including

attachments and other supporting

materials, are part of the public record

and subject to public disclosure. Do not

include any information in your

comment or supporting materials that

you consider confidential or

inappropriate for public disclosure.

You may review comments and other

related materials that pertain to this

rulemaking action by any of the

following methods:

• Viewing Comments Electronically—

Regulations.gov Classic or

Regulations.gov Beta:

Regulations.gov Classic: Go to https://

www.regulations.gov/. Enter ‘‘Docket ID

OCC–2020–0013’’ in the Search box and

click ‘‘Search.’’ Click on ‘‘Open Docket

Folder’’ on the right side of the screen.

Comments and supporting materials can

be viewed and filtered by clicking on

‘‘View all documents and comments in

this docket’’ and then using the filtering

tools on the left side of the screen

gulations.gov Classic: Go to https://

www.regulations.gov/. Enter ‘‘Docket ID

OCC–2020–0013’’ in the Search box and

click ‘‘Search.’’ Click on ‘‘Open Docket

Folder’’ on the right side of the screen.

Comments and supporting materials can

be viewed and filtered by clicking on

‘‘View all documents and comments in

this docket’’ and then using the filtering

tools on the left side of the screen. Click

on the ‘‘Help’’ tab on the

Regulations.gov home page to get

information on using Regulations.gov.

The docket may be viewed after the

close of the comment period in the same

manner as during the comment period.

Regulations.gov Beta: Go to https://

beta.regulations.gov/ or click ‘‘Visit

New Regulations.gov Site’’ from the

Regulations.gov Classic homepage.

Enter ‘‘Docket ID OCC–2020–0013’’ in

the Search Box and click ‘‘Search.’’

Click on the ‘‘Comments’’ tab.

Comments can be viewed and filtered

by clicking on the ‘‘Sort By’’ drop-down

on the right side of the screen or the

‘‘Refine Results’’ options on the left side

of the screen. Supporting materials can

be viewed by clicking on the

‘‘Documents’’ tab and filtered by

clicking on the ‘‘Sort By’’ drop-down on

the right side of the screen or the

‘‘Refine Results’’ options on the left side

of the screen.’’ For assistance with the

Regulations.gov Beta site, please call

(877) 378–5457 (toll free) or (703) 454–

9859 Monday–Friday, 9 a.m.–5 p.m. ET

or email regulations@

erulemakinghelpdesk.com.

The docket may be viewed after the

close of the comment period in the same

manner as during the comment period.

Board: You may submit comments,

identified by Docket No. R–1718; RIN

7100–AF91, by any of the following

methods:

• Agency website: http://

www.federalreserve.gov. Follow the

instructions for submitting comments at

http://www.federalreserve.gov/apps/

foia/proposedregs.aspx.

• Email: regs.comments@

federalreserve.gov. Include docket and

RIN numbers in the subject line of the

message.

• FAX: (202) 452–3819 or (202) 452–

3102

tified by Docket No. R–1718; RIN

7100–AF91, by any of the following

methods:

• Agency website: http://

www.federalreserve.gov. Follow the

instructions for submitting comments at

http://www.federalreserve.gov/apps/

foia/proposedregs.aspx.

• Email: regs.comments@

federalreserve.gov. Include docket and

RIN numbers in the subject line of the

message.

• FAX: (202) 452–3819 or (202) 452–

3102.

• Mail: Ann E. Misback, Secretary,

Board of Governors of the Federal

Reserve System, 20th Street and

Constitution Avenue NW, Washington,

DC 20551.

All public comments will be made

available on the Board’s website at

http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm as

submitted, unless modified for technical

reasons or to remove personally

identifiable information at the

commenter’s request. Public comments

may also be viewed electronically or in

paper in Room 146, 1709 New York

Avenue NW, Washington, DC 20006,

between 9:00 a.m. and 5:00 p.m. on

weekdays. For security reasons, the

Board requires that visitors make an

appointment to inspect comments. You

may do so by calling (202) 452–3684.

FDIC: You may submit comments,

identified by RIN 3064–AF44, by any of

the following methods:

• Agency website: https://

www.fdic.gov/regulations/laws/federal.

Follow instructions for submitting

comments on the Agency website.

• Email: Comments@FDIC.gov.

Include ‘‘RIN 3064–AF44’’ on the

subject line of the message.

• Mail: Robert E. Feldman, Executive

Secretary, Attention: Comments/RIN

3064–AF44, Federal Deposit Insurance

Corporation, 550 17th Street NW,

Washington, DC 20429.

• Hand Delivery/Courier: Comments

may be hand delivered to the guard

station at the rear of the 550 17th Street

building (located on F Street) on

business days between 7 a.m. and 5 p.m.

All comments received must include the

agency name (FDIC) and RIN 3064–

AF44 and will be posted without change

to https://www.fdic.gov/regulations/

laws/federal, including any personal

information provided

Hand Delivery/Courier: Comments

may be hand delivered to the guard

station at the rear of the 550 17th Street

building (located on F Street) on

business days between 7 a.m. and 5 p.m.

All comments received must include the

agency name (FDIC) and RIN 3064–

AF44 and will be posted without change

to https://www.fdic.gov/regulations/

laws/federal, including any personal

information provided.

FOR FURTHER INFORMATION CONTACT:

OCC: Margot Schwadron, Director, or

Venus Fan, Risk Expert, Capital and

Regulatory Policy, (202) 649–6370; or

Carl Kaminski, Special Counsel, or

Chris Rafferty, Senior Attorney, Chief

Counsel’s Office, (202) 649–5490, for

persons who are deaf or hearing

impaired, TTY, (202) 649–5597, Office

of the Comptroller of the Currency, 400

7th Street SW, Washington, DC 20219.

Board: Anna Lee Hewko, Associate

Director, (202) 530–6360; Constance

Horsley, Deputy Associate Director,

(202) 452–5239; Elizabeth MacDonald,

Manager, (202) 475–6316; Sviatlana

Phelan, Lead Financial Institution

Policy Analyst, (202) 912–4306; or

Christopher Appel, Senior Financial

Institution Policy Analyst II, (202) 973–

6862, Division of Supervision and

Regulation; Benjamin McDonough,

Assistant General Counsel, (202) 452–

2036; Mark Buresh, Senior Counsel,

(202) 452–5270; Andrew Hartlage,

Counsel, (202) 452–6483; Jonah Kind,

Senior Attorney, (202) 452–2045; or

Jasmin Keskinen, Legal Assistant, (202)

475–6650, Legal Division, Board of

Governors of the Federal Reserve

System, 20th Street and Constitution

Avenue NW, Washington, DC 20551.

Users of Telecommunication Device for

Deaf (TDD) only, call (202) 263–4869.

FDIC: Bobby R

Senior Counsel,

(202) 452–5270; Andrew Hartlage,

Counsel, (202) 452–6483; Jonah Kind,

Senior Attorney, (202) 452–2045; or

Jasmin Keskinen, Legal Assistant, (202)

475–6650, Legal Division, Board of

Governors of the Federal Reserve

System, 20th Street and Constitution

Avenue NW, Washington, DC 20551.

Users of Telecommunication Device for

Deaf (TDD) only, call (202) 263–4869.

FDIC: Bobby R. Bean, Associate

Director, bbean@fdic.gov; Benedetto

Bosco, Chief, Capital Policy Section,

bbosco@fdic.gov; Noah Cuttler, Senior

Policy Analyst, ncuttler@fdic.gov;

regulatorycapital@fdic.gov; Capital

Markets Branch, Division of Risk

Management Supervision, (202) 898–

6888; or Michael Phillips, Counsel,

mphillips@fdic.gov; Catherine Wood,

Counsel, cawood@fdic.gov; Francis Kuo,

Counsel, fkuo@fdic.gov; Supervision

and Legislation Branch, Legal Division,

Federal Deposit Insurance Corporation,

550 17th Street NW, Washington, DC

20429. For the hearing impaired only,

Telecommunication Device for the Deaf

(TDD), (800) 925–4618.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. The Interim Final Rule

III. Impact Assessment

IV. Technical Amendments

V. Administrative Law Matters

A. Administrative Procedure Act

B. Congressional Review Act

C. Paperwork Reduction Act

D. Regulatory Flexibility Act

E. Riegle Community Development and

Regulatory Improvement Act of 1994

F. Use of Plain Language

G. Unfunded Mandates Act

I. Background

The spread of the coronavirus disease

2019 (COVID–19) has significantly and

adversely affected global financial

markets, including depository

institutions’ role as financial

intermediaries. In particular,

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Unfunded Mandates Act

I. Background

The spread of the coronavirus disease

2019 (COVID–19) has significantly and

adversely affected global financial

markets, including depository

institutions’ role as financial

intermediaries. In particular,

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1 See 84 FR 59230 (Nov. 1, 2019). Banking

organizations that are subject to Category II

standards include those with (1) at least $700

billion in total consolidated assets or (2) at least $75

billion in cross-jurisdictional activity and at least

$100 billion in total consolidated assets. Banking

organizations that are subject to Category III

standards include those with (1) at least $250

billion in average total consolidated assets or (2) at

least $100 billion in average total consolidated

assets and at least $75 billion in average total

nonbank assets, average weighted short-term

wholesale funding; or average off-balance sheet

exposure. See 12 CFR 217.2.

2 See 79 FR 24528 (May 1, 2014). The eSLR

standards, as adopted in 2014, applied to U.S. top-

tier bank holding companies with consolidated

assets over $700 billion or more than $10 trillion

in assets under custody, and depository institution

subsidiaries of holding companies that meet those

thresholds. The Board subsequently revised its

capital rule so that the applicability of the eSLR

standards is to bank holding companies identified

as U.S. GSIBs and their depository institution

subsidiaries. See 80 FR 49082 (August 14, 2015).

The banking organizations currently subject to the

eSLR standards are the same under either

applicability standard.

3 The agencies recently issued a final rule,

effective April 1, 2020, which implements section

402 of the Economic Growth, Regulatory Relief, and

Consumer Protection Act (EGRRCPA), 12 U.S.C

SIBs and their depository institution

subsidiaries. See 80 FR 49082 (August 14, 2015).

The banking organizations currently subject to the

eSLR standards are the same under either

applicability standard.

3 The agencies recently issued a final rule,

effective April 1, 2020, which implements section

402 of the Economic Growth, Regulatory Relief, and

Consumer Protection Act (EGRRCPA), 12 U.S.C.

1831o note, by amending the capital rule to allow

a banking organization that qualifies as a custodial

banking organization to exclude from total leverage

exposure deposits at qualifying central banks,

subject to limits (402 rule). 85 FR 4569 (January 27,

2020).

4 The Board recently issued an interim final rule

to revise, on a temporary basis for bank holding

companies, savings and loan holding companies,

and U.S. intermediate holding companies of foreign

banking organizations, the calculation of total

leverage exposure, the denominator of the

supplementary leverage ratio in the Board’s capital

rule, to exclude Treasuries and deposits at Federal

Reserve Banks. The exclusion will remain in effect

until March 31, 2021. 85 FR 20578 (April 14, 2020).

5 This scope is consistent with the Board’s recent

interim final rule to revise the supplementary

leverage ratio. See supra note 4.

6 An FDIC supervised institution must provide

this notice in writing to the appropriate FDIC

regional director of the FDIC Division of Risk

Management Supervision.

disruptions in financial markets, and

the resulting flight to liquid assets by

market participants, have caused

depository institutions’ balance sheets

to expand to accommodate inflows of

deposits. This balance sheet expansion

has contributed to depository

institutions making substantial deposits

in their accounts at Federal Reserve

Banks (deposits at Federal Reserve

Banks). In addition, customer draws on

credit lines and depository institutions’

holdings of significant amounts of U.S

have caused

depository institutions’ balance sheets

to expand to accommodate inflows of

deposits. This balance sheet expansion

has contributed to depository

institutions making substantial deposits

in their accounts at Federal Reserve

Banks (deposits at Federal Reserve

Banks). In addition, customer draws on

credit lines and depository institutions’

holdings of significant amounts of U.S.

Treasury securities (Treasuries) have

contributed to balance sheet expansion.

These trends are expected to continue

temporarily while depository

institutions and their customers respond

to disruptions in the financial markets.

For a depository institution subsidiary

of a U.S. global systemically important

bank holding company (GSIB), or a

depository institution subject to the

Category II or Category III capital

standards, the agencies’ regulatory

capital rule (capital rule) requires a

minimum supplementary leverage ratio

of 3 percent, measured as the ratio of a

depository institution’s tier 1 capital to

its total leverage exposure.1 Total

leverage exposure, the denominator of

the supplementary leverage ratio,

includes certain off-balance sheet

exposures in addition to on-balance

sheet assets.

GSIB depository institution

subsidiaries also are subject to enhanced

supplementary leverage ratio (eSLR)

standards established by the agencies in

2014.2 Under the eSLR standards, GSIB

depository institution subsidiaries must

maintain a 6-percent supplementary

leverage ratio to be considered ‘‘well

capitalized’’ under the prompt

corrective action (PCA) framework of

each agency.

In contrast to the risk-based capital

requirements in the capital rule, a

leverage ratio does not differentiate the

amount of capital required by the type

of exposure. Rather, a leverage ratio

places an upper bound on depository

institution leverage. A leverage ratio

protects against underestimating risk

and serves to complement the risk-based

capital requirements

mework of

each agency.

In contrast to the risk-based capital

requirements in the capital rule, a

leverage ratio does not differentiate the

amount of capital required by the type

of exposure. Rather, a leverage ratio

places an upper bound on depository

institution leverage. A leverage ratio

protects against underestimating risk

and serves to complement the risk-based

capital requirements. Under the

supplementary leverage ratio,

depository institutions include all on-

balance sheet assets, including

Treasuries and deposits at Federal

Reserve Banks, in their total leverage

exposure calculation.3

II. The Interim Final Rule

The ability of depository institutions

to hold certain assets, most notably

deposits at a Federal Reserve Bank and

Treasuries, is essential to market

functioning, financial intermediation,

and funding market activity,

particularly in periods of financial

uncertainty. In response to volatility

and market strains, the Federal Reserve

has taken a number of actions to support

market functioning and the flow of

credit to the economy. The response to

COVID–19 has notably increased the

size of the Federal Reserve’s balance

sheet and resulted in a large increase in

the amount of reserves in the banking

system. The agencies anticipate that the

Federal Reserve’s balance sheet may

continue to expand in the near term, as

customer deposits continue to expand,

and recently announced facilities to

support the flow of credit to households

and businesses begin or continue

operations. In addition, market

participants have liquidated a high

volume of assets, and customers have

drawn down credit lines and deposited

the cash proceeds with depository

institutions in recent weeks, further

increasing the size of depository

institutions’ balance sheets

and recently announced facilities to

support the flow of credit to households

and businesses begin or continue

operations. In addition, market

participants have liquidated a high

volume of assets, and customers have

drawn down credit lines and deposited

the cash proceeds with depository

institutions in recent weeks, further

increasing the size of depository

institutions’ balance sheets. Absent any

adjustments to the supplementary

leverage ratio, the resulting increase in

the size of depository institutions’

balance sheets may cause a sudden and

significant increase in the regulatory

capital needed to meet a depository

institution’s leverage ratio requirement.4

This is particularly the case for many of

the depository institutions subject to the

supplementary leverage ratio, which are

significant participants in financial

intermediation services, including as

clearing banks for dealers in the open

market operations of the Federal Open

Market Committee and as major

custodians of securities.

In order to facilitate depository

institutions’ significant increase in

reserve balances resulting from the

Federal Reserve’s asset purchases and

the establishment of various programs to

support the flow of credit to the

economy, as well as the need to

continue to accept exceptionally high

levels of customer deposits, the agencies

are issuing this interim final rule to

provide depository institutions subject

to the supplementary leverage ratio

(qualifying depository institutions) the

ability to exclude temporarily

Treasuries and deposits at Federal

Reserve Banks from total leverage

exposure through March 31, 2021

as well as the need to

continue to accept exceptionally high

levels of customer deposits, the agencies

are issuing this interim final rule to

provide depository institutions subject

to the supplementary leverage ratio

(qualifying depository institutions) the

ability to exclude temporarily

Treasuries and deposits at Federal

Reserve Banks from total leverage

exposure through March 31, 2021. For

example, depository institutions would

be able to exclude temporarily on-

balance sheet Treasuries that they hold,

including Treasuries that they have

borrowed and re-pledged in a repo-style

transaction, provided such Treasuries

are included in the depository

institution’s total leverage exposure

prior to the effect of the exclusion.5

Under the interim final rule, a

depository institution that opts into this

treatment (electing depository

institution) would be required to obtain

prior approval of distributions from its

primary Federal banking regulator. An

electing depository institution must

notify its primary Federal banking

regulator of its election within 30 days

after the interim final rule is effective.6

The primary Federal banking regulator

will consider a notice received from a

qualifying depository institution more

than 30 days after the effective date of

the interim final rule on a case-by-case

basis. The election will not affect the

electing depository institution’s ability

to pay distributions already declared or

to declare distributions for payment in

the second quarter of 2020. The prior

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the interim final rule on a case-by-case

basis. The election will not affect the

electing depository institution’s ability

to pay distributions already declared or

to declare distributions for payment in

the second quarter of 2020. The prior

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7 See 12 CFR 3.2 (defining ‘‘distribution’’) (OCC);

12 CFR 217.2 (defining ‘‘distribution’’) (Board); 12

CFR 324.2 (defining ‘‘distribution’’) (FDIC).

8 Additional limitations on distributions may

apply under 12 CFR part 3, subparts H and I; 12

CFR 5.46, 12 CFR part 5, subpart E; 12 CFR part

6; 12 CFR part 208, subparts A and D; 12 CFR part

303, subparts K and M. The restrictions set forth in

this interim final rule are in addition to, and

therefore do not supersede, any existing statutory or

regulatory limitations on making capital

distributions. For purposes of the FDIC’s PCA rules,

regarding capital distribution restrictions for

undercapitalized FDIC-supervised institutions, see

12 CFR 324.405.

9 Holding companies use dividends from their

subsidiaries for various purposes. For example,

dividends to the holding company can support the

efficient internal allocation of capital within a

holding company, allowing excess capital from one

subsidiary, such as the depository institution, to be

redeployed to other subsidiaries. As such, an

effective dividend strategy can both ensure the

safety and soundness of the depository institution

and promote the safety and soundness of the entire

banking organization.

10 Depository institutions that are required to

submit the OCC Reporting Form DFAST–14A on

April 6, 2021, or the FDIC DFAST–14A, have the

option to include these changes in their company-

run stress test results

uch, an

effective dividend strategy can both ensure the

safety and soundness of the depository institution

and promote the safety and soundness of the entire

banking organization.

10 Depository institutions that are required to

submit the OCC Reporting Form DFAST–14A on

April 6, 2021, or the FDIC DFAST–14A, have the

option to include these changes in their company-

run stress test results.

11 The instructions for Board’s FR Y–9C, Schedule

HC–R, Line Item 45 (Advanced approaches holding

companies only: Supplementary leverage ratio)

state that respondents must report the

supplementary leverage ratio from FFIEC 101

Schedule A, Table 2, Item 2.22. Therefore, revisions

to the FFIEC 101 regarding how to report the

supplementary leverage ratio would flow through to

the FR Y–9C. The Board plans to amend the

instructions for FR Y–9C as necessary.

12 This analysis takes into account the exclusion

of qualifying central bank deposits for custodial

banking organizations as provided under the capital

rule. As of April 1, 2020, custodial banking

organizations may exclude deposits with qualifying

foreign central banks, in addition to the exclusions

of deposits at Federal Reserve Banks provided

Continued

approval requirement applies to

distributions to be paid beginning in the

third quarter of 2020. The interim final

rule will terminate after March 31, 2021.

For purposes of reporting the

supplementary leverage ratio as of June

30, 2020, an electing depository

institution may reflect the exclusion of

Treasuries and deposits at Federal

Reserve Banks from total leverage

exposure as if this interim final rule had

been in effect for the entire second

quarter of 2020. Because the

supplementary leverage ratio is

calculated as an average over the

quarter, this will have the effect of

maximizing the effect of the exclusion

starting in the second quarter of 2020

n may reflect the exclusion of

Treasuries and deposits at Federal

Reserve Banks from total leverage

exposure as if this interim final rule had

been in effect for the entire second

quarter of 2020. Because the

supplementary leverage ratio is

calculated as an average over the

quarter, this will have the effect of

maximizing the effect of the exclusion

starting in the second quarter of 2020.

The agencies are not making similar

adjustments to risk-based capital ratios

because Treasuries and deposits at

Federal Reserve Banks are risk-weighted

at zero percent.

Under the interim final rule,

beginning in the third quarter of 2020,

an electing depository institution will

be required to obtain approval from its

primary Federal banking regulator

before making a distribution 7 or

creating an obligation to make such a

distribution so long as the temporary

exclusion is in effect. The primary

Federal banking regulator will endeavor

to respond within 14 days to the request

with an approval, disapproval, or

request for additional information. This

prior-approval requirement will help

support the objective of the interim final

rule to strengthen the ability of electing

depository institutions to continue

taking deposits, lending, and

conducting other financial

intermediation activities during this

period of stress.

When evaluating any such request,

the primary Federal banking regulator

will consider all relevant factors,

including whether any distribution

would be contrary to safety and

soundness and limitations on

distributions in the existing rules

applicable to the electing depository

institution.8 Factors that the primary

Federal banking regulator will take into

account include the depository

institution’s current earnings and

forecasts, the nature, purpose, and

extent of the request, and the particular

circumstances giving rise to the

request.9 For example, the primary

Federal banking regulator may consider

the expected future capital needs of the

depository institution a

ution.8 Factors that the primary

Federal banking regulator will take into

account include the depository

institution’s current earnings and

forecasts, the nature, purpose, and

extent of the request, and the particular

circumstances giving rise to the

request.9 For example, the primary

Federal banking regulator may consider

the expected future capital needs of the

depository institution and its ability to

meet capital requirements after the

temporary relief provided under this

interim final rule expires. The

requirement that a depository

institution request approval for

distributions is not intended to prohibit

electing depository institutions from

paying dividends in all cases. Rather,

the primary Federal banking regulator

will evaluate each request to ensure that

the electing depository institution will

be able to continue supporting the

economy by lending and accepting

deposits consistent with the goal of this

interim final rule.

The interim final rule revises the

measure of total leverage exposure on a

temporary basis for electing depository

institutions for the limited purposes of

the agencies’ capital rule. Depository

institutions subject to supplementary

leverage ratio requirements report their

supplementary leverage ratios on the

Consolidated Reports of Condition and

Income (Call Reports), Schedule RC–R

and Regulatory Capital Reporting for

Institutions Subject to the Advanced

Capital Adequacy Framework (FFIEC

101), Schedule A.10 The agencies expect

in the near future to make all necessary

revisions to the Call Reports and the

FFIEC 101, Schedule A to implement

the interim final rule’s revisions to the

supplementary leverage ratio for

electing depository institutions and to

require such institutions to disclose the

election publicly.11 In addition, the

interim final rule provides for the

necessary modifications of the

disclosure requirements of section 173

of the capital rule to reflect the optional

temporary exclusion provided by the

interim final rule

im final rule’s revisions to the

supplementary leverage ratio for

electing depository institutions and to

require such institutions to disclose the

election publicly.11 In addition, the

interim final rule provides for the

necessary modifications of the

disclosure requirements of section 173

of the capital rule to reflect the optional

temporary exclusion provided by the

interim final rule.

The agencies seek comment on all

aspects of this interim final rule.

Question 1: Discuss the advantages

and disadvantages of removing

temporarily Treasuries and deposits at

Federal Reserve Banks from total

leverage exposure for depository

institutions. How does the interim final

rule support the objectives of facilitating

financial intermediation by depository

institutions? How does the interim final

rule affect the concurrent objective of

safety and soundness? How would the

end date of March 31, 2021, for the

exclusion under the interim final rule be

consistent with the objectives of the

rule, or what earlier or later end date

should be used instead?

Question 2: What additional assets or

exposure types should the agencies

consider to exclude temporarily from

total leverage exposure in order to

achieve the interim final rule’s

objectives? For example, what

consideration should the agencies give

to excluding deposits at certain foreign

central banks, foreign sovereign debt

instruments, or exposures guaranteed by

the U.S. Federal Government and why?

Which specific repo-style transactions

that would support depository

institutions’ role serving as financial

intermediaries should the agencies

exclude, if any, and why?

III. Impact Assessment

The supplementary leverage ratio

requirement generally has not prevented

depository institutions from

accommodating customer deposit

inflows or serving as financial

intermediaries. However, as a result of

the spread of COVID–19, stress has

materialized in numerous financial

markets

serving as financial

intermediaries should the agencies

exclude, if any, and why?

III. Impact Assessment

The supplementary leverage ratio

requirement generally has not prevented

depository institutions from

accommodating customer deposit

inflows or serving as financial

intermediaries. However, as a result of

the spread of COVID–19, stress has

materialized in numerous financial

markets. Disruptions in financial

markets have resulted in expansion of

depository institutions’ balance sheets

to accommodate inflows of deposits. In

particular, using data from the fourth

quarter of 2019, the agencies expect that

the interim final rule would temporarily

decrease binding tier 1 capital

requirements by approximately $55

billion for depository institutions if all

depository institutions subject to the

supplementary leverage ratio elect to

opt in.12 In light of the exclusions under

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under this interim final rule. (See supra note 3.) In

addition, the analysis in this interim final rule uses

balances due from banks in foreign countries and

foreign central banks, as reported under line item

3 of Schedule RC–A of the Call Report. Line item

3 of Schedule RC–A may slightly overstate amounts

eligible for exclusion by custodial banking

organizations because it includes balances due from

banks in foreign countries and foreign central banks

that are not eligible for exclusion under this interim

final rule.

13 12 CFR 6.4(b) (OCC); 12 CFR 208.43(b) (Board);

12 CFR 324.403(b) (FDIC).

14 78 FR 62018 (Oct. 11, 2013).

15 5 U.S.C. 553.

16 5 U.S.C. 553(b)(B).

17 5 U.S.C. 553(b)(B); 553(d)(3).

18 5 U.S.C. 553(d).

19 5 U.S.C. 553(d)(1)

zations because it includes balances due from

banks in foreign countries and foreign central banks

that are not eligible for exclusion under this interim

final rule.

13 12 CFR 6.4(b) (OCC); 12 CFR 208.43(b) (Board);

12 CFR 324.403(b) (FDIC).

14 78 FR 62018 (Oct. 11, 2013).

15 5 U.S.C. 553.

16 5 U.S.C. 553(b)(B).

17 5 U.S.C. 553(b)(B); 553(d)(3).

18 5 U.S.C. 553(d).

19 5 U.S.C. 553(d)(1).

this interim final rule, this temporary

reduction in capital requirements is

expected to increase leverage exposure

capacity at depository institutions by

approximately $1.2 trillion. In

particular, the agencies expect that the

increase in leverage exposure capacity

will strengthen the depository

institutions’ ability to continue to accept

customer deposits, and therefore ensure

that depository institutions remain able

to fulfill this important function.

Depository institutions that opt into

the temporary exclusion of Treasuries

and deposits at Federal Reserve Banks

from the denominator of the

supplementary leverage ratio will likely

incur some costs associated with

making changes to internal systems or

processes for managing supplementary

leverage ratio compliance. However,

these costs are likely to be very small.

Aside from increases in balance

sheets caused by increases in customer

deposits, the balance sheets of

depository institutions also have

increased as households and businesses

draw down credit lines. If depository

institutions become constrained by

supplementary leverage ratio

requirements, this could adversely affect

their ability to intermediate in financial

markets and hamper their ability to

provide credit to households and

businesses. Therefore, the temporary

increase in leverage exposure capacity

could have countercyclical benefits as it

supports financial market liquidity and

increases depository institutions’

lending capacities in a time of economic

stress

irements, this could adversely affect

their ability to intermediate in financial

markets and hamper their ability to

provide credit to households and

businesses. Therefore, the temporary

increase in leverage exposure capacity

could have countercyclical benefits as it

supports financial market liquidity and

increases depository institutions’

lending capacities in a time of economic

stress.

Although a temporary increase in

leverage exposure capacity could lead to

an increase in overall leverage in the

banking system, the temporary

exclusion of Treasuries and deposits at

Federal Reserve Banks will help

alleviate ongoing stresses on the

financial system and the real economy

arising from COVID–19. The agencies

will closely monitor the balance sheets

of electing depository institutions in the

coming months while the exclusion is

in effect with a particular view toward

any resulting increase in risks in

conjunction with this interim final rule.

IV. Technical Amendments

Finally, the agencies are making

technical corrections and clarifications

to the Prompt Corrective Action

regulations. In their respective Prompt

Corrective Action regulations, the

agencies are correcting an unintentional

omission of ‘‘Category III’’ to clarify that

depository institutions subject to

Category III standards must meet their

minimum supplementary leverage ratio

requirement of 3 percent in order to be

considered ‘‘adequately capitalized.’’ 13

When the minimum supplementary

leverage ratio requirement was initially

added to the capital rule in 2013, the

term ‘‘advanced approaches’’ banking

organizations referred to all banking

organizations that were subject to the

supplementary leverage ratio.14

However, the tailoring rule that became

effective on December 31, 2019,

redefined ‘‘advanced approaches.’’

Under that rule, advanced approaches

banking organizations now include a

smaller group of banking organizations

(i.e., banking organizations subject to

Category I and II standards), while

certa

ed to all banking

organizations that were subject to the

supplementary leverage ratio.14

However, the tailoring rule that became

effective on December 31, 2019,

redefined ‘‘advanced approaches.’’

Under that rule, advanced approaches

banking organizations now include a

smaller group of banking organizations

(i.e., banking organizations subject to

Category I and II standards), while

certain banking organizations are no

longer defined as advanced approaches

but remain subject to the supplementary

leverage ratio requirements (i.e.,

banking organizations subject to

Category III standards). The agencies did

not intend to change the applicability of

the minimum supplementary leverage

ratio requirement in their respective

Prompt Corrective Action regulations.

Rather, the Prompt Corrective Action

requirement should continue to apply to

all banking organizations that are

required to calculate the supplementary

leverage ratio. Therefore, consistent

with the capital rule, the agencies are

now clarifying that the supplementary

leverage ratio provisions in their

respective Prompt Corrective Action

regulations apply to all banking

organizations subject to Category III

standards, in addition to banking

organizations subject to Category I and

II standards.

V. Administrative Law Matters

A. Administrative Procedure Act

The agencies are issuing the interim

final rule and its accompanying

technical edits without prior notice and

the opportunity for public comment and

the delayed effective date ordinarily

prescribed by the Administrative

Procedure Act (APA).15 Pursuant to

section 553(b)(B) of the APA, general

notice and the opportunity for public

comment are not required with respect

to a rulemaking when an ‘‘agency for

good cause finds (and incorporates the

finding and a brief statement of reasons

therefor in the rules issued) that notice

and public procedure thereon are

impracticable, unnecessary, or contrary

to the public interest.’’ 16

The agencies believe that the public

inte

A, general

notice and the opportunity for public

comment are not required with respect

to a rulemaking when an ‘‘agency for

good cause finds (and incorporates the

finding and a brief statement of reasons

therefor in the rules issued) that notice

and public procedure thereon are

impracticable, unnecessary, or contrary

to the public interest.’’ 16

The agencies believe that the public

interest is best served by implementing

the interim final rule immediately upon

publication in the Federal Register. As

discussed above, the spread of COVID–

19 has slowed economic activity in

many countries, including the United

States. Specifically, the disruptions in

financial markets have caused

depository institutions to receive

inflows of deposits—contributing to the

increase of deposits at Federal Reserve

Banks—and to hold significant amounts

of Treasuries. Notably, these deposits at

Federal Reserve Banks and holdings of

Treasuries are essential to the normal

functioning of the financial markets,

especially in times of stress. If

depository institutions cannot sustain

the rapid increase in deposits at Federal

Reserve Banks and holdings of

Treasuries, the financial markets would

experience a marked decline in

financial intermediation and a further

increase in general market volatility.

Because the interim final rule will

mitigate these potential negative effects,

the agencies find that there is good

cause consistent with the public interest

to issue the rule without advance notice

and comment.17 This final rule makes

additional technical edits and

corrections to more clearly articulate the

scope of the supplementary leverage

ratio requirements. Because the

additional technical edits and

corrections are not substantive, the

agencies find there is good cause to

issue the rule without advance notice

and comment

ublic interest

to issue the rule without advance notice

and comment.17 This final rule makes

additional technical edits and

corrections to more clearly articulate the

scope of the supplementary leverage

ratio requirements. Because the

additional technical edits and

corrections are not substantive, the

agencies find there is good cause to

issue the rule without advance notice

and comment.

The APA also requires a 30-day

delayed effective date, except for (1)

substantive rules which grant or

recognize an exemption or relieve a

restriction; (2) interpretative rules and

statements of policy; or (3) as otherwise

provided by the agency for good

cause.18 Because the interim final rule

will provide temporary capital relief,

the interim final rule is exempt from the

APA’s delayed effective date

requirement.19 Additionally, the

agencies find good cause to publish the

technical edits and corrections, which

clarify the scope of the supplementary

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20 5 U.S.C. 801 et seq.

21 5 U.S.C. 801(a)(3).

22 5 U.S.C. 804(2).

23 5 U.S.C. 808.

leverage ratio for purposes of the

Prompt Corrective Action regulations,

with an immediate effective date for the

same reasons set forth above under the

discussion of section 553(b)(B) of the

APA.

While the agencies believe that there

is good cause to issue this interim final

rule without advance notice and

comment and with an immediate

effective date, the agencies are

interested in the views of the public and

request comment on all aspects of the

interim final rule.

B

diate effective date for the

same reasons set forth above under the

discussion of section 553(b)(B) of the

APA.

While the agencies believe that there

is good cause to issue this interim final

rule without advance notice and

comment and with an immediate

effective date, the agencies are

interested in the views of the public and

request comment on all aspects of the

interim final rule.

B. Congressional Review Act

For purposes of Congressional Review

Act, the OMB makes a determination as

to whether a final rule constitutes a

‘‘major’’ rule.20 If a rule is deemed a

‘‘major rule’’ by the Office of

Management and Budget (OMB), the

Congressional Review Act generally

provides that the rule may not take

effect until at least 60 days following its

publication.21

The Congressional Review Act defines

a ‘‘major rule’’ as any rule that the

Administrator of the Office of

Information and Regulatory Affairs of

the OMB finds has resulted in or is

likely to result in (A) an annual effect

on the economy of $100,000,000 or

more; (B) a major increase in costs or

prices for consumers, individual

industries, Federal, State, or local

government agencies or geographic

regions, or (C) significant adverse effects

on competition, employment,

investment, productivity, innovation, or

on the ability of United States–based

enterprises to compete with foreign-

based enterprises in domestic and

export markets.22

For the same reasons set forth above,

the agencies are adopting the interim

final rule without the delayed effective

date generally prescribed under the

Congressional Review Act

adverse effects

on competition, employment,

investment, productivity, innovation, or

on the ability of United States–based

enterprises to compete with foreign-

based enterprises in domestic and

export markets.22

For the same reasons set forth above,

the agencies are adopting the interim

final rule without the delayed effective

date generally prescribed under the

Congressional Review Act. The delayed

effective date required by the

Congressional Review Act does not

apply to any rule for which an agency

for good cause finds (and incorporates

the finding and a brief statement of

reasons therefor in the rule issued) that

notice and public procedure thereon are

impracticable, unnecessary, or contrary

to the public interest.23 In light of

current market uncertainty, the agencies

believe that delaying the effective date

of the rule would be contrary to the

public interest.

As required by the Congressional

Review Act, the agencies will submit

the final rule and other appropriate

reports to Congress and the Government

Accountability Office for review.

C. Paperwork Reduction Act

The Paperwork Reduction Act of 1995

(44 U.S.C. 3501–3521) (PRA) states that

no agency may conduct or sponsor, nor

is the respondent required to respond

to, an information collection unless it

displays a currently valid OMB control

number. The interim final rule affects

the agencies’ current information

collections for the Call Reports (OCC

OMB No. 1557–0081; Board OMB No.

7100–0036; and FDIC OMB No. 3064–

0052) and the Regulatory Capital

Reporting for Institutions Subject to the

Advanced Capital Adequacy Framework

(FFIEC 101; OCC OMB No. 1557–0239;

Board OMB No. 7100–0319; and FDIC

OMB No. 3064–0159). The revisions to

the Call Reports and the FFIEC 101 will

be addressed in a separate Federal

Register notice

l Reports (OCC

OMB No. 1557–0081; Board OMB No.

7100–0036; and FDIC OMB No. 3064–

0052) and the Regulatory Capital

Reporting for Institutions Subject to the

Advanced Capital Adequacy Framework

(FFIEC 101; OCC OMB No. 1557–0239;

Board OMB No. 7100–0319; and FDIC

OMB No. 3064–0159). The revisions to

the Call Reports and the FFIEC 101 will

be addressed in a separate Federal

Register notice.

The interim final rule also introduces

a new notice opt-in requirement and a

requirement for prior approval for

distributions, which would affect the

agencies’ capital rule information

collections. The agencies believe that

these new requirements will amount to

12 burden hours per respondent (two

responses per respondent at six hours

per response).

OCC:

Title of Information Collection: Risk-

Based Capital Standards: Advanced

Capital Adequacy Framework.

OMB Control No.: 1557–0318.

Respondents for Interim Final Rule:

21.

Responses per Respondent: 2.

Burden per Response: 6 hours.

Burden for Interim Final Rule: 252

hours.

Total Burden for Collection: 66,333

hours.

FDIC:

Title of Information Collection:

Regulatory Capital Rules.

OMB Control No.: 3064–0153.

Respondents for Interim Final Rule: 7.

Responses per Respondent: 2.

Burden per Response: 6 hours.

Burden for Interim Final Rule: 84

hours.

Total Burden for Collection: 128,140

burden hours.

The agencies request comment on:

a. Whether the collections of

information are necessary for the proper

performance of the agencies’ functions,

including whether the information has

practical utility;

b. The accuracy of the agencies’

estimates of the burden of the

information collections, including the

validity of the methodology and

assumptions used;

c. Ways to enhance the quality,

utility, and clarity of the information to

be collected;

d. Ways to minimize the burden of

information collections on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

e

imates of the burden of the

information collections, including the

validity of the methodology and

assumptions used;

c. Ways to enhance the quality,

utility, and clarity of the information to

be collected;

d. Ways to minimize the burden of

information collections on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

e. Estimates of capital or startup costs

and costs of operation, maintenance,

and purchase of services to provide

information.

The Board has temporarily revised the

Financial Statements for Holding

Companies (FR Y–9C; OMB No. 7100–

0128) and the Recordkeeping and

Disclosure Requirements Associated

with Regulation Q (FR Q; OMB No.

7100–0313) information collections to

accurately reflect certain aspects of this

and other interim final rules. On June

15, 1984, OMB delegated to the Board

authority under the PRA to temporarily

approve a revision to a collection of

information without providing

opportunity for public comment if the

Board determines that a change in an

existing collection must be instituted

quickly and that public participation in

the approval process would defeat the

purpose of the collection or

substantially interfere with the Board’s

ability to perform its statutory

obligation. The Board’s delegated

authority requires that the Board, after

temporarily approving a collection,

solicit public comment to extend

information collections for a period not

to exceed three years. Therefore, the

Board is inviting comment to extend the

FR Q information collection for three

years, with the revisions discussed

below. The Board is not inviting

comment on the FR Y–9 information

collection for the reasons discussed

below.

The Board invites public comment on

the FR Q information collection, which

is being reviewed under authority

delegated by the OMB under the PRA.

Comments must be submitted on or

before July 31, 2020. Comments are

invited on the following:

a

years, with the revisions discussed

below. The Board is not inviting

comment on the FR Y–9 information

collection for the reasons discussed

below.

The Board invites public comment on

the FR Q information collection, which

is being reviewed under authority

delegated by the OMB under the PRA.

Comments must be submitted on or

before July 31, 2020. Comments are

invited on the following:

a. Whether the collections of information

are necessary for the proper performance of

the Board’s functions, including whether the

information has practical utility;

b. The accuracy of the Board’s estimate of

the burden of the information collections,

including the validity of the methodology

and assumptions used;

c. Ways to enhance the quality, utility, and

clarity of the information to be collected;

d. Ways to minimize the burden of

information collections on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

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24 An SLHC must file one or more of the FR Y–

9 series of reports unless it is: (1) A grandfathered

unitary SLHC with primarily commercial assets and

thrifts that make up less than 5 percent of its

consolidated assets; or (2) a SLHC that primarily

holds insurance-related assets and does not

otherwise submit financial reports with the SEC

pursuant to section 13 or 15(d) of the Securities

Exchange Act of 1934

le one or more of the FR Y–

9 series of reports unless it is: (1) A grandfathered

unitary SLHC with primarily commercial assets and

thrifts that make up less than 5 percent of its

consolidated assets; or (2) a SLHC that primarily

holds insurance-related assets and does not

otherwise submit financial reports with the SEC

pursuant to section 13 or 15(d) of the Securities

Exchange Act of 1934.

25 The Call Reports consist of the Consolidated

Reports of Condition and Income for a Bank with

Domestic Offices Only and Total Assets Less Than

$5 Billion (FFIEC 051), the Consolidated Reports of

Condition and Income for a Bank with Domestic

Offices Only (FFIEC 041) and the Consolidated

Reports of Condition and Income for a Bank with

Domestic and Foreign Offices (FFIEC 031).

26 Under certain circumstances described in the

FR Y–9C’s General Instructions, HCs with assets

under $3 billion may be required to file the FR Y–

9C.

27 A top-tier HC may submit a separate FR Y–9LP

on behalf of each of its lower-tier HCs.

e. Estimates of capital or startup costs and

costs of operation, maintenance, and

purchase of services to provide information.

At the end of the comment period, the

comments and recommendations

received will be analyzed to determine

the extent to which the Board should

modify the collections.

Final Approval Under OMB Delegated

Authority of the Temporary Revision of

the Following Information Collection

Report Title: Financial Statements for

Holding Companies.

Agency form number: FR Y–9C, FR Y–

9LP, FR Y–9SP, FR Y–9ES, and FR Y–

9CS.

OMB control number: 7100–0128.

Effective Date: March 31, 2020

Frequency: Quarterly, semiannually,

and annually.

Respondents: Bank holding

companies, savings and loan holding

companies,24 securities holding

companies, and U.S. intermediate

holding companies (collectively, HCs)

l Statements for

Holding Companies.

Agency form number: FR Y–9C, FR Y–

9LP, FR Y–9SP, FR Y–9ES, and FR Y–

9CS.

OMB control number: 7100–0128.

Effective Date: March 31, 2020

Frequency: Quarterly, semiannually,

and annually.

Respondents: Bank holding

companies, savings and loan holding

companies,24 securities holding

companies, and U.S. intermediate

holding companies (collectively, HCs).

Estimated number of respondents: FR

Y–9C (non-advanced approaches CBLR

HCs with less than $5 billion in total

assets): 7; FR Y–9C (non-advanced

approaches CBLR HCs with $5 billion or

more in total assets): 35; FR Y–9C (non-

advanced approaches, non CBLR, HCs

with less than $5 billion in total assets):

84; FR Y–9C (non-advanced approaches,

non CBLR HCs, with $5 billion or more

in total assets): 154; FR Y–9C (advanced

approaches HCs): 19; FR Y–9LP: 434; FR

Y–9SP: 3,960; FR Y–9ES: 83; FR Y–9CS:

236.

Estimated average hours per response:

Reporting

FR Y–9C (non-advanced approaches

CBLR HCs with less than $5 billion in

total assets): 29.14 hours; FR Y–9C (non-

advanced approaches CBLR HCs with

$5 billion or more in total assets): 35.11;

FR Y–9C (non-advanced approaches,

non CBLR HCs, with less than $5 billion

in total assets): 40.98; FR Y–9C (non-

advanced approaches, non CBLR, HCs

with $5 billion or more in total assets):

46.95 hours; FR Y–9C (advanced

approaches HCs): 48.59 hours; FR Y–

9LP: 5.27 hours; FR Y–9SP: 5.40 hours;

FR Y–9ES: 0.50 hours; FR Y–9CS: 0.50

hours.

Recordkeeping

FR Y–9C (non-advanced approaches

HCs with less than $5 billion in total

assets), FR Y–9C (non-advanced

approaches HCs with $5 billion or more

in total assets), FR Y–9C (advanced

approaches HCs), and FR Y–9LP: 1.00

hour; FR Y–9SP, FR Y–9ES, and

FR Y–9CS: 0.50 hours

s HCs): 48.59 hours; FR Y–

9LP: 5.27 hours; FR Y–9SP: 5.40 hours;

FR Y–9ES: 0.50 hours; FR Y–9CS: 0.50

hours.

Recordkeeping

FR Y–9C (non-advanced approaches

HCs with less than $5 billion in total

assets), FR Y–9C (non-advanced

approaches HCs with $5 billion or more

in total assets), FR Y–9C (advanced

approaches HCs), and FR Y–9LP: 1.00

hour; FR Y–9SP, FR Y–9ES, and

FR Y–9CS: 0.50 hours.

Estimated annual burden hours:

Reporting

FR Y–9C (non-advanced approaches

CBLR HCs with less than $5 billion in

total assets): 8,276 hours; FR Y–9C (non-

advanced approaches CBLR HCs with

$5 billion or more in total assets): 4,915;

FR Y–9C (non-advanced approaches

non CBLR HCs with less than $5 billion

in total assets): 13,769; FR Y–9C (non-

advanced approaches non CBLR HCs

with $5 billion or more in total assets):

28,921 hours; FR Y–9C (advanced

approaches HCs): 3,693 hours; FR Y–

9LP: 9,149 hours; FR Y–9SP: 42,768

hours; FR Y–9ES: 42 hours; FR Y–9CS:

472 hours.

Recordkeeping

FR Y–9C (non-advanced approaches

HCs with less than $5 billion in total

assets): 620 hours; FR Y–9C (non-

advanced approaches HCs with $5

billion or more in total assets): 756

hours; FR Y–9C (advanced approaches

HCs): 76 hours; FR Y–9LP: 1,736 hours;

FR Y–9SP: 3,960 hours; FR Y–9ES: 42

hours; FR Y–9CS: 472 hours.

General description of report: The FR

Y–9C consists of standardized financial

statements similar to the Call Reports

filed by commercial banks.25 The FR Y–

9C collects consolidated data from HCs

and is filed quarterly by top-tier HCs

with total consolidated assets of $3

billion or more.26

The FR Y–9LP, which collects parent

company only financial data, must be

submitted by each HC that files the FR

Y–9C, as well as by each of its

subsidiary HCs.27 The report consists of

standardized financial statements.

The FR Y–9SP is a parent company

only financial statement filed

semiannually by HCs with total

consolidated assets of less than $3

billion

sets of $3

billion or more.26

The FR Y–9LP, which collects parent

company only financial data, must be

submitted by each HC that files the FR

Y–9C, as well as by each of its

subsidiary HCs.27 The report consists of

standardized financial statements.

The FR Y–9SP is a parent company

only financial statement filed

semiannually by HCs with total

consolidated assets of less than $3

billion. In a banking organization with

total consolidated assets of less than $3

billion that has tiered HCs, each HC in

the organization must submit, or have

the top-tier HC submit on its behalf, a

separate FR Y–9SP. This report is

designed to obtain basic balance sheet

and income data for the parent

company, and data on its intangible

assets and intercompany transactions.

The FR Y–9ES is filed annually by

each employee stock ownership plan

(ESOP) that is also an HC. The report

collects financial data on the ESOP’s

benefit plan activities. The FR Y–9ES

consists of four schedules: A Statement

of Changes in Net Assets Available for

Benefits, a Statement of Net Assets

Available for Benefits, Memoranda, and

Notes to the Financial Statements.

The FR Y–9CS is a free-form

supplemental report that the Board may

utilize to collect critical additional data

deemed to be needed in an expedited

manner from HCs on a voluntary basis.

The data are used to assess and monitor

emerging issues related to HCs, and the

report is intended to supplement the

other FR Y–9 reports. The data items

included on the FR Y–9CS may change

as needed.

Legal authorization and

confidentiality: The Board has the

authority to impose the reporting and

recordkeeping requirements associated

with the Y–9 family of reports on bank

holding companies (‘‘BHCs’’) pursuant

to section 5 of the Bank Holding

Company Act (‘‘BHC Act’’), (12 U.S.C.

1844); on savings and loan holding

companies pursuant to section 10(b)(2)

and (3) of the Home Owners’ Loan Act,

(12 U.S.C. 1467a(b)(2) and (3)); on U.S.

intermediate holding companies (‘‘U.S

reporting and

recordkeeping requirements associated

with the Y–9 family of reports on bank

holding companies (‘‘BHCs’’) pursuant

to section 5 of the Bank Holding

Company Act (‘‘BHC Act’’), (12 U.S.C.

1844); on savings and loan holding

companies pursuant to section 10(b)(2)

and (3) of the Home Owners’ Loan Act,

(12 U.S.C. 1467a(b)(2) and (3)); on U.S.

intermediate holding companies (‘‘U.S.

IHCs’’) pursuant to section 5 of the BHC

Act, (12 U.S.C. 1844), as well as

pursuant to sections 102(a)(1) and 165

of the Dodd-Frank Wall Street Reform

and Consumer Protection Act (‘‘Dodd-

Frank Act’’), (12 U.S.C. 511(a)(1) and

5365); and on securities holding

companies pursuant to section 618 of

the Dodd-Frank Act, (12 U.S.C.

1850a(c)(1)(A)). The FR Y–9 series of

reports, and the recordkeeping

requirements set forth in the respective

instructions to each report, are

mandatory, except for the FR Y–9CS,

which is voluntary. With respect to the

FR Y–9C, Schedule HI’s memoranda

item 7(g), Schedule HC–P’s item 7(a),

and Schedule HC–P’s item 7(b) are

considered confidential commercial and

financial information under exemption

4 of the Freedom of Information Act

(‘‘FOIA’’), (5 U.S.C. 552(b)(4)), as is

Schedule HC’s memorandum item 2.b.

for both the FR Y–9C and FR Y–9SP

reports.

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m 7(b) are

considered confidential commercial and

financial information under exemption

4 of the Freedom of Information Act

(‘‘FOIA’’), (5 U.S.C. 552(b)(4)), as is

Schedule HC’s memorandum item 2.b.

for both the FR Y–9C and FR Y–9SP

reports.

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32987

Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

28 85 FR 20578 (April 14, 2020).

Aside from the data items described

above, the remaining data items on the

FR Y–9 reports are generally not

accorded confidential treatment. As

provided in the Board’s Rules Regarding

Availability of Information (12 CFR part

261), however, a respondent may

request confidential treatment for any

data items the respondent believes

should be withheld pursuant to a FOIA

exemption. The Board will review any

such request to determine if confidential

treatment is appropriate, and will

inform the respondent if the request for

confidential treatment has been denied.

To the extent that the instructions, to

the FR Y–9C, FR Y–9LP, FR Y–9SP, and

FR Y–9ES reports, each respectively

direct a financial institution to retain

the workpapers and related materials

used in preparation of each report, such

material would only be obtained by the

Board as part of the examination or

supervision of the financial institution.

Accordingly, such information may be

considered confidential pursuant to

exemption 8 of the FOIA (5 U.S.C.

552(b)(8)). In addition, the financial

institution’s workpapers and related

materials may also be protected by

exemption 4 of the FOIA, to the extent

such financial information is treated as

confidential by the respondent (5 U.S.C.

552(b)(4))

upervision of the financial institution.

Accordingly, such information may be

considered confidential pursuant to

exemption 8 of the FOIA (5 U.S.C.

552(b)(8)). In addition, the financial

institution’s workpapers and related

materials may also be protected by

exemption 4 of the FOIA, to the extent

such financial information is treated as

confidential by the respondent (5 U.S.C.

552(b)(4)).

Current Actions: On April 1, 2020, the

Board announced that it had

temporarily revised the instructions to

the FR Y–9C to accurately reflect the

calculation of the supplementary

leverage ratio pursuant to the Board’s

interim final rule (the ‘‘holding

company SLR IFR’’) that revised, on a

temporary basis for bank holding

companies, savings and loan holding

companies, and U.S. intermediate

holding companies of foreign banking

organizations, the calculation of total

leverage exposure, the denominator of

the supplementary leverage ratio in the

Board’s capital rule, to exclude the on-

balance sheet amounts of Treasuries and

deposits at Federal Reserve Banks.28

This temporary revision to the FR Y–9C

was necessary because holding

companies were previously instructed

to report their supplementary leverage

ratio as reported in the FFIEC 101;

because the FFIEC 101 was not revised

to account for the holding company SLR

IFR, retaining these instructions would

have resulted in inaccurate reporting by

holding companies on the FR Y–9C.

The agencies now intend to revise the

FFIEC 101 to account for this interim

final rule and the holding company SLR

IFR. Following such revisions, holding

companies would be able to report their

supplementary leverage ratio on the FR

Y–9C using the data reported on the

FFIEC 101, as they did previously.

Therefore, the temporary revisions to

the FR Y–9C to account for the holding

company SLR IFR, announced by the

Board on April 1, 2020, are no longer

necessary, and the Board has retracted

these revisions

R. Following such revisions, holding

companies would be able to report their

supplementary leverage ratio on the FR

Y–9C using the data reported on the

FFIEC 101, as they did previously.

Therefore, the temporary revisions to

the FR Y–9C to account for the holding

company SLR IFR, announced by the

Board on April 1, 2020, are no longer

necessary, and the Board has retracted

these revisions. The Board has

determined that this revision to the FR

Y–9C must be instituted quickly and

that public participation in the approval

process would defeat the purpose of the

collection of information, as delaying

the revisions would result in the

collection of inaccurate information,

and would interfere with the Board’s

ability to perform its statutory duties.

Because these revisions result

completely revert the temporary

revisions made by the Board to the FR

Y–9C in connection with the holding

company SLR IFR, the resulting

instructions regarding the

supplementary leverage ratio are

identical to those adopted following

notice and comment. Therefore, the

Board does not intend to request further

comment in order to retain these

instructions.

Final Approval Under OMB Delegated

Authority of the Temporary Revision of,

and Solicitation of Comment To Extend

for Three Years, With Revision, of the

Following Information Collections

Title of Information Collection:

Recordkeeping and Disclosure

Requirements Associated with

Regulation Q.

Agency form number: FR Q.

OMB control number: 7100–0313.

Frequency: Quarterly, annual.

Affected Public: Businesses or other

for-profit.

Respondents: State member banks

(SMBs), bank holding companies

(BHCs), U.S. intermediate holding

companies (IHCs), savings and loan

holding companies (SLHCs), and global

systemically important bank holding

companies (GSIBs).

Legal authorization and

confidentiality: This information

collection is authorized by section 38(o)

of the Federal Deposit Insurance Act (12

U.S.C

her

for-profit.

Respondents: State member banks

(SMBs), bank holding companies

(BHCs), U.S. intermediate holding

companies (IHCs), savings and loan

holding companies (SLHCs), and global

systemically important bank holding

companies (GSIBs).

Legal authorization and

confidentiality: This information

collection is authorized by section 38(o)

of the Federal Deposit Insurance Act (12

U.S.C. 1831o(c)), section 908 of the

International Lending Supervision Act

of 1983 (12 U.S.C. 3907(a)(1)), section

9(6) of the Federal Reserve Act (12

U.S.C. 324), and section 5(c) of the Bank

Holding Company Act (12 U.S.C.

1844(c)). The obligation to respond to

this information collection is

mandatory. If a respondent considers

the information to be trade secrets and/

or privileged such information could be

withheld from the public under the

authority of the Freedom of Information

Act (5 U.S.C. 552(b)(4)). Additionally, to

the extent that such information may be

contained in an examination report such

information could also be withheld from

the public (5 U.S.C. 552 (b)(8)).

Estimated number of respondents: 1,431

(of which 19 are advanced approaches

institutions).

Estimated average hours per response:

Minimum Capital Ratios

Recordkeeping (Ongoing)—16.

Standardized Approach

Recordkeeping (Initial setup)—122.

Recordkeeping (Ongoing)—20.

Disclosure (Initial setup)—226.25.

Disclosure (Ongoing quarterly)—131.25.

Advanced Approach

Recordkeeping (Initial setup)—460.

Recordkeeping (Ongoing)—540.77.

Recordkeeping (Ongoing quarterly)—20.

Disclosure (Initial setup)—328.

Disclosure (Ongoing)—5.78.

Disclosure (Ongoing quarterly)—41.

Disclosure (Table 13 quarterly)—5.

Risk-based Capital Surcharge for GSIBs

Recordkeeping (Ongoing)—0.5.

Reporting (Twice)—6.

Total estimated annual burden: 1,136

hours initial setup, 80,245 hours for

ongoing

itial setup)—460.

Recordkeeping (Ongoing)—540.77.

Recordkeeping (Ongoing quarterly)—20.

Disclosure (Initial setup)—328.

Disclosure (Ongoing)—5.78.

Disclosure (Ongoing quarterly)—41.

Disclosure (Table 13 quarterly)—5.

Risk-based Capital Surcharge for GSIBs

Recordkeeping (Ongoing)—0.5.

Reporting (Twice)—6.

Total estimated annual burden: 1,136

hours initial setup, 80,245 hours for

ongoing.

Current actions: The Board has

temporarily revised the FR Q

information collection to reflect a

revision to the disclosure requirements

contained in the Board’s Regulation Q.

Generally, § 217.173 of the Board’s

Regulation Q requires each advanced

approaches Board-regulated institution

and a Category III Board-regulated

institution that is required to publicly

disclose its supplementary leverage

ratio pursuant to § 217.172(d) of

Regulation Q to make certain

disclosures, which are listed in Table 13

of § 217.173. Pursuant to this interim

final rule, a Board-regulated institution

that is required to make such

disclosures will be required exclude the

balance sheet carrying value of U.S.

Treasury securities and funds on

deposit at a Federal Reserve Bank from

its disclosures under Table 13 of

§ 217.173. The interim final rule also

introduces a new notice opt-in

requirement and a requirement for prior

approval for distributions, which would

affect the agencies’ capital rule

information collections. The agencies

believe that these new requirements will

amount to 12 burden hours per

respondent (two responses per

respondent at six hours per response).

Additionally, the Board has

temporarily revised the FR Q

information collection to include the

notification that an electing depository

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s will

amount to 12 burden hours per

respondent (two responses per

respondent at six hours per response).

Additionally, the Board has

temporarily revised the FR Q

information collection to include the

notification that an electing depository

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32988

Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

29 5 U.S.C. 601 et seq.

30 Under regulations issued by the Small Business

Administration, a small entity includes a depository

institution, bank holding company, or savings and

loan holding company with total assets of $600

million or less and trust companies with total

average annual receipts of $41.5 million or less. See

13 CFR 121.201.

31 12 U.S.C. 4802(a).

32 12 U.S.C. 4802.

33 12 U.S.C. 4809.

institution must provide to its primary

Federal banking regulator, as well as the

request for approval that an electing

depository institution must submit to its

primary Federal banking regulator prior

to making certain capital distributions.

The Board has determined that these

revisions to the FR Q described above

must be instituted quickly and that

public participation in the approval

process would defeat the purpose of the

collection of information, as delaying

the revisions would result in the

collection of inaccurate information,

and would interfere with the Board’s

ability to perform its statutory duties.

The Board also invites comment on a

proposal to extend the FR Y–Q for three

years, with the revision described

above. This revision would be effective

for FR Q through March 31, 2021, the

date after which the exclusions in this

interim final rule will no longer be

effective.

D

ection of inaccurate information,

and would interfere with the Board’s

ability to perform its statutory duties.

The Board also invites comment on a

proposal to extend the FR Y–Q for three

years, with the revision described

above. This revision would be effective

for FR Q through March 31, 2021, the

date after which the exclusions in this

interim final rule will no longer be

effective.

D. Regulatory Flexibility Act

The Regulatory Flexibility Act

(RFA) 29 requires an agency to consider

whether the rules it proposes will have

a significant economic impact on a

substantial number of small entities.30

The RFA applies only to rules for which

an agency publishes a general notice of

proposed rulemaking pursuant to 5

U.S.C. 553(b). As discussed previously,

consistent with section 553(b)(B) of the

APA, the agencies have determined for

good cause that general notice and

opportunity for public comment is

unnecessary, and therefore the agencies

are not issuing a notice of proposed

rulemaking. Accordingly, the agencies

have concluded that the RFA’s

requirements relating to initial and final

regulatory flexibility analysis do not

apply.

Nevertheless, the agencies seek

comment on whether, and the extent to

which, the interim final rule would

affect a significant number of small

entities.

E. Riegle Community Development and

Regulatory Improvement Act of 1994

Pursuant to section 302(a) of the

Riegle Community Development and

Regulatory Improvement Act

(RCDRIA),31 in determining the effective

date and administrative compliance

requirements for new regulations that

impose additional reporting, disclosure,

or other requirements on IDIs, each

Federal banking agency must consider,

consistent with the principle of safety

and soundness and the public interest,

any administrative burdens that such

regulations would place on depository

institutions, including small depository

institutions, and customers of

depository institutions, as well as the

benefits of such regulations

eporting, disclosure,

or other requirements on IDIs, each

Federal banking agency must consider,

consistent with the principle of safety

and soundness and the public interest,

any administrative burdens that such

regulations would place on depository

institutions, including small depository

institutions, and customers of

depository institutions, as well as the

benefits of such regulations. In addition,

section 302(b) of RCDRIA requires new

regulations and amendments to

regulations that impose additional

reporting, disclosures, or other new

requirements on IDIs generally to take

effect on the first day of a calendar

quarter that begins on or after the date

on which the regulations are published

in final form, with certain exceptions,

including for good cause.32 For the

reasons described above, the agencies

find good cause exists under section 302

of RCDRIA to publish this interim final

rule with an immediate effective date.

As such, the final rule will be

effective on immediately. Nevertheless,

the agencies seek comment on RCDRIA.

F. Use of Plain Language

Section 722 of the Gramm-Leach-

Bliley Act 33 requires the Federal

banking agencies to use plain language

in all proposed and final rules

published after January 1, 2000. The

agencies have sought to present the

interim final rule in a simple and

straightforward manner. The agencies

invite comments on whether there are

additional steps it could take to make

the rule easier to understand

Section 722 of the Gramm-Leach-

Bliley Act 33 requires the Federal

banking agencies to use plain language

in all proposed and final rules

published after January 1, 2000. The

agencies have sought to present the

interim final rule in a simple and

straightforward manner. The agencies

invite comments on whether there are

additional steps it could take to make

the rule easier to understand. For

example:

• Have we organized the material to

suit your needs? If not, how could this

material be better organized?

• Are the requirements in the

regulation clearly stated? If not, how

could the regulation be more clearly

stated?

• Does the regulation contain

language or jargon that is not clear? If

so, which language requires

clarification?

• Would a different format (grouping

and order of sections, use of headings,

paragraphing) make the regulation

easier to understand? If so, what

changes to the format would make the

regulation easier to understand? What

else could we do to make the regulation

easier to understand?

G. Unfunded Mandates Reform Act of

1995

As a general matter, the Unfunded

Mandates Reform Act of 1995 (UMRA),

2 U.S.C. 1531 et seq., requires the

preparation of 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 in any one year.

However, the UMRA does not apply to

final rules for which a general notice of

proposed rulemaking was not

published. See 2 U.S.C. 1532(a).

Therefore, because the OCC has found

good cause to dispense with notice and

comment for this interim final rule, the

OCC has not prepared an economic

analysis of the rule under the UMRA.

List of Subjects

12 CFR Part 3

Administrative practice and

procedure, Capital, Federal savings

associations, National banks, Risk.

12 CFR Part 6

Federal savings associations, National

banks, Prompt corrective action

ause the OCC has found

good cause to dispense with notice and

comment for this interim final rule, the

OCC has not prepared an economic

analysis of the rule under the UMRA.

List of Subjects

12 CFR Part 3

Administrative practice and

procedure, Capital, Federal savings

associations, National banks, Risk.

12 CFR Part 6

Federal savings associations, National

banks, Prompt corrective action.

12 CFR Part 208

Accounting, Agriculture, Banks,

banking, Confidential business

information, Consumer protection,

Crime, Currency, Federal Reserve

System, Flood insurance, Insurance,

Investments, Mortgages, Reporting and

recordkeeping requirements, Securities.

12 CFR Part 217

Administrative practice and

procedure, Banks, banking, Federal

Reserve System, Holding companies,

Reporting and recordkeeping

requirements, Securities.

12 CFR Part 324

Administrative practice and

procedure, Banks, banking, Reporting

and recordkeeping requirements,

Savings associations, State non-member

banks.

Authority and Issuance

For the reasons stated in the joint

preamble, the Office of the Comptroller

of the Currency amends part 3 of

chapter I of title 12, Code of Federal

Regulations as follows:

PART 3—CAPITAL ADEQUACY

STANDARDS

■1. The authority citation for part 3

continues to read as follows:

Authority: 12 U.S.C. 93a, 161, 1462, 1462a,

1463, 1464, 1818, 1828(n), 1828 note, 1831n

note, 1835, 3907, 3909, 5412(b)(2)(B), and

Pub. L. 116–136, 134 Stat. 281.

■2. Section 3.304 is added to read as

follows:

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32989

Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

§ 3.304

Temporary exclusions from total

leverage exposure.

(a) In general. Subject to paragraphs

t. 281.

■2. Section 3.304 is added to read as

follows:

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32989

Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

§ 3.304

Temporary exclusions from total

leverage exposure.

(a) In general. Subject to paragraphs

(b) through (g) of this section, and

notwithstanding any other requirement

in this part, a national bank or Federal

savings association, when calculating

on-balance sheet assets as of each day of

a reporting quarter for purposes of

determining the national bank’s or

Federal savings association’s total

leverage exposure under § 3.10(c)(4),

may exclude the balance sheet carrying

value of the following items:

(1) U.S. Treasury securities; and

(2) Funds on deposit at a Federal

Reserve Bank.

(b) Opt-in period. Before applying the

relief provided in paragraph (a) of this

section, a national bank or Federal

savings association must first notify the

OCC before July 1, 2020.

(c) Calculation of relief. When

calculating on-balance sheet assets as of

each day of a reporting quarter, the

relief provided in paragraph (a) of this

section applies from the beginning of

the reporting quarter in which the

national bank or Federal savings

association filed an opt-in notice

through the termination date specified

in paragraph (d) of this section.

(d) Termination of exclusions. This

section shall cease to be effective after

the reporting period that ends March 31,

2021.

(e) Custody bank. A custody bank

must reduce the amount in

§ 3.10(c)(4)(ii)(J)(1) (to no less than zero)

by any amount excluded under

paragraph (a)(2) of this section.

(f) Disclosure. Notwithstanding Table

13 to § 3.173, a national bank or Federal

savings association that is required to

make the disclosures pursuant to § 3.173

must exclude the items excluded

pursuant to paragraph (a) of this section

from Table 13 to § 3.173.

educe the amount in

§ 3.10(c)(4)(ii)(J)(1) (to no less than zero)

by any amount excluded under

paragraph (a)(2) of this section.

(f) Disclosure. Notwithstanding Table

13 to § 3.173, a national bank or Federal

savings association that is required to

make the disclosures pursuant to § 3.173

must exclude the items excluded

pursuant to paragraph (a) of this section

from Table 13 to § 3.173.

(g) OCC approval for distributions.

During the calendar quarter beginning

on July 1, 2020, and until March 31,

2021, no national bank or Federal

savings association that has opted in to

the relief provided under paragraph (a)

of this section may make a distribution,

or create an obligation to make such a

distribution, without prior OCC

approval. When reviewing a request

under this paragraph (g), the OCC will

consider all relevant factors, including

whether the distribution would be

contrary to the safety and soundness of

the national bank or Federal savings

association; the nature, purpose, and

extent of the request; and the particular

circumstances giving rise to the request.

PART 6—PROMPT CORRECTIVE

ACTION

■3. The authority citation for part 6

continues to read as follows:

Authority: 12 U.S.C. 93a, 1831o,

5412(b)(2)(B).

■4. Amend § 6.4 by revising paragraphs

(b)(2)(iv)(B) and (b)(3)(iv)(B) to read as

follows:

§ 6.4

Capital measures and capital

categories.

*

*

*

*

*

(b) * * *

(2) * * *

(iv) * * *

(B) With respect to an advanced

approaches or Category III national bank

or advanced approaches or Category III

Federal savings association, the national

bank or Federal savings association has

a supplementary leverage ratio of 3.0

percent or greater; and

*

*

*

*

*

B) to read as

follows:

§ 6.4

Capital measures and capital

categories.

*

*

*

*

*

(b) * * *

(2) * * *

(iv) * * *

(B) With respect to an advanced

approaches or Category III national bank

or advanced approaches or Category III

Federal savings association, the national

bank or Federal savings association has

a supplementary leverage ratio of 3.0

percent or greater; and

*

*

*

*

*

(3) * * *

(iv) * * *

(B) With respect to an advanced

approaches or Category III national bank

or advanced approaches or Category III

Federal savings association, on January

1, 2018, and thereafter, the national

bank or Federal savings association has

a supplementary leverage ratio of less

than 3.0 percent.

*

*

*

*

*

Authority and Issuance

For the reasons stated in the joint

preamble, the Board of Governors of the

Federal Reserve System amends 12 CFR

chapter II as follows:

PART 208—MEMBERSHIP OF STATE

BANKING INSTITUTIONS IN THE

FEDERAL RESERVE SYSTEM

(REGULATION H)

■5. The authority citation for part 208

continues to read as follows:

Authority: 12 U.S.C. 24, 36, 92a, 93a,

248(a), 248(c), 321–338a, 371d, 461, 481–486,

601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12),

1818, 1820(d)(9), 1833(j), 1828(o), 1831,

1831o, 1831p–1, 1831r–1, 1831w, 1831x,

1835a, 1882, 2901–2907, 3105, 3310, 3331–

3351, 3905–3909, 5371, and 5371 note; 15

U.S.C. 78b, 78I(b), 78l(i), 780–4(c)(5), 78q,

78q-1, 78w, 1681s, 1681w, 6801, and 6805;

31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a,

4104b, 4106, and 4128.

■6. Section 208.43(b)(2)(iv)(B) and

(b)(3)(iv)(B) are revised to read as

follows:

§ 208.43

Capital measures and capital

categories.

*

*

*

*

*

1831x,

1835a, 1882, 2901–2907, 3105, 3310, 3331–

3351, 3905–3909, 5371, and 5371 note; 15

U.S.C. 78b, 78I(b), 78l(i), 780–4(c)(5), 78q,

78q-1, 78w, 1681s, 1681w, 6801, and 6805;

31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a,

4104b, 4106, and 4128.

■6. Section 208.43(b)(2)(iv)(B) and

(b)(3)(iv)(B) are revised to read as

follows:

§ 208.43

Capital measures and capital

categories.

*

*

*

*

*

(b) * * *

(2) * * *

(iv) * * *

(B) With respect to an advanced

approaches bank or bank that is a

Category III Board-regulated institution

(as defined in § 217.2 of this chapter),

the bank has a supplementary leverage

ratio of 3.0 percent or greater; and

*

*

*

*

*

(3) * * *

(iv) * * *

(B) With respect to an advanced

approaches bank or bank that is a

Category III Board-regulated institution

(as defined in § 217.2 of this chapter),

the bank has a supplementary leverage

ratio of less than 3.0 percent.

*

*

*

*

*

PART 217—CAPITAL ADEQUACY OF

BANK HOLDING COMPANIES,

SAVINGS AND LOAN HOLDING

COMPANIES, AND STATE MEMBER

BANKS (REGULATION Q)

■7. The authority citation for part 217

continues to read as follows:

Authority: 12 U.S.C. 248(a), 321–338a,

481–486, 1462a, 1467a, 1818, 1828, 1831n,

1831o, 1831p–1, 1831w, 1835, 1844(b), 1851,

3904, 3906–3909, 4808, 5365, 5368, 5371,

5371 note, and sec. 4012, Pub. L. 116–136,

134 Stat. 281.

Subpart G—Transition Provisions

■8. Revise § 217.303 to read as follows:

§ 217.303

Temporary exclusions from total

leverage exposure.

(a) In general. Subject to paragraphs

ity: 12 U.S.C. 248(a), 321–338a,

481–486, 1462a, 1467a, 1818, 1828, 1831n,

1831o, 1831p–1, 1831w, 1835, 1844(b), 1851,

3904, 3906–3909, 4808, 5365, 5368, 5371,

5371 note, and sec. 4012, Pub. L. 116–136,

134 Stat. 281.

Subpart G—Transition Provisions

■8. Revise § 217.303 to read as follows:

§ 217.303

Temporary exclusions from total

leverage exposure.

(a) In general. Subject to paragraphs

(b) through (g) of this section and

notwithstanding any other requirement

in this part, when calculating on-

balance sheet assets as of each day of a

reporting quarter for purposes of

determining the Board-regulated

institution’s total leverage exposure

under § 217.10(c)(4), a Board-regulated

institution that is a depository

institution holding company or a U.S.

intermediate holding company must,

and a Board-regulated institution that is

a state member bank may, exclude the

balance sheet carrying value of the

following items:

(1) U.S. Treasury securities; and

(2) Funds on deposit at a Federal

Reserve Bank.

(b) Opt-in period. Before applying the

relief provided in paragraph (a) of this

section, a state member bank must first

notify the Board before July 1, 2020.

(c) Calculation of relief. When

calculating on-balance sheet assets as of

each day of a reporting quarter, the

relief provided in paragraph (a) of this

section applies from the beginning of

the reporting quarter in which the state

member bank filed an opt-in notice

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32990

Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

through the termination date specified

in paragraph (d) of this section.

(d) Termination of exclusions. This

section shall cease to be effective after

the reporting period that ends March 31,

2021.

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32990

Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations

through the termination date specified

in paragraph (d) of this section.

(d) Termination of exclusions. This

section shall cease to be effective after

the reporting period that ends March 31,

2021.

(e) Custodial banking organizations. A

custodial banking organization must

reduce the amount in

§ 217.10(c)(4)(ii)(J)(1) (to no less than

zero) by any amount excluded under

paragraph (a)(2) of this section.

(f) Disclosure. Notwithstanding Table

13 to § 217.173, a Board-regulated

institution that is required to make the

disclosures pursuant to § 217.173 must

exclude the items excluded pursuant to

paragraph (a) of this section from Table

13 to § 217.173.

(g) Board approval for distributions.

During the calendar quarter beginning

on July 1, 2020, and until March 31,

2021, no state member bank that has

opted in to the relief provided under

paragraph (a) of this section may make

a distribution, or create an obligation to

make such a distribution, without prior

Board approval. When reviewing a

request under this paragraph (g), the

Board will consider all relevant factors,

including whether the distribution

would be contrary to the safety and

soundness of the state member bank; the

nature, purpose, and extent of the

request; and the particular

circumstances giving rise to the request.

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

For the reasons set forth in the joint

preamble, the Federal Deposit Insurance

Corporation amends chapter III of title

12 of the Code of Federal Regulations as

follows:

PART 324—CAPITAL ADEQUACY OF

FDIC–SUPERVISED INSTITUTIONS

■9. The authority citation for part 324

continues to read as follows:

Authority: 12 U.S.C

Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

For the reasons set forth in the joint

preamble, the Federal Deposit Insurance

Corporation amends chapter III of title

12 of the Code of Federal Regulations as

follows:

PART 324—CAPITAL ADEQUACY OF

FDIC–SUPERVISED INSTITUTIONS

■9. The authority citation for part 324

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; 5371; 5412; 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);

Pub. L. 111–203, 124 Stat. 1376, 1887 (15

U.S.C. 78o–7 note); Pub. L. 115–174; Pub. L.

116–136, 134 Stat. 281.

Subpart G—Transition Provisions

§ 324.304

[Redesignated as § 324.305]

■10. Redesignate § 324.304 as

§ 324.305.

■11. A new § 324.304 is added to read

as follows:

§ 324.304

Temporary exclusions from total

leverage exposure.

(a) In general. Subject to paragraphs

(b) through (g) of this section, and

notwithstanding any other requirement

in this part, an FDIC-supervised

institution, when calculating on-balance

sheet assets as of each day of a reporting

quarter for purposes of determining the

FDIC-supervised institution’s total

leverage exposure under § 324.10(c)(4),

may exclude the balance sheet carrying

value of the following items:

(1) U.S. Treasury securities; and

(2) Funds on deposit at a Federal

Reserve Bank.

(b) Opt-in period. Before applying the

relief provided in paragraph (a) of this

section, an FDIC-supervised institution

must first notify the appropriate

regional director of the FDIC Division of

Risk Management Supervision before

July 1, 2020.

lude the balance sheet carrying

value of the following items:

(1) U.S. Treasury securities; and

(2) Funds on deposit at a Federal

Reserve Bank.

(b) Opt-in period. Before applying the

relief provided in paragraph (a) of this

section, an FDIC-supervised institution

must first notify the appropriate

regional director of the FDIC Division of

Risk Management Supervision before

July 1, 2020.

(c) Calculation of relief. When

calculating on-balance sheet assets as of

each day of a reporting quarter, the

relief provided in paragraph (a) of this

section applies from the beginning of

the reporting quarter in which the FDIC-

supervised institution filed an opt-in

notice through the termination date

specified in paragraph (d) of this

section.

(d) Termination of exclusions. This

section shall cease to be effective after

the reporting period that ends March 31,

2021.

(e) Custody bank. A custody bank

must reduce the amount in

§ 324.10(c)(4)(ii)(J)(1) (to no less than

zero) by any amount excluded under

paragraph (a)(2) of this section.

(f) Disclosure. Notwithstanding Table

13 to § 324.173, an FDIC-supervised

institution that is required to make the

disclosures pursuant to § 324.173 must

exclude the items excluded pursuant to

paragraph (a) of this section from Table

13 to § 324.173.

(g) FDIC approval for distributions.

During the calendar quarter beginning

on July 1, 2020, and until March 31,

2021, no FDIC-supervised institution

that has opted in to the relief provided

under paragraph (a) of this section may

make a distribution, or create an

obligation to make such a distribution,

without prior FDIC approval. When

reviewing a request under this

paragraph (g), the FDIC will consider all

relevant factors, including whether the

distribution would be contrary to the

safety and soundness of the FDIC-

supervised institution; the nature,

purpose, and extent of the request; and

the particular circumstances giving rise

to the request.

Subpart H—Prompt Corrective Action

■12

ithout prior FDIC approval. When

reviewing a request under this

paragraph (g), the FDIC will consider all

relevant factors, including whether the

distribution would be contrary to the

safety and soundness of the FDIC-

supervised institution; the nature,

purpose, and extent of the request; and

the particular circumstances giving rise

to the request.

Subpart H—Prompt Corrective Action

■12. Section 324.403(b)(2)(vi) and

(b)(3)(v) are revised to read as follows:

§ 324.403

Capital measures and capital

categories definitions.

*

*

*

*

*

(b) * * *

(2) * * *

(vi) Beginning January 1, 2018, an

advanced approaches or Category III

FDIC–supervised institution will be

deemed to be ‘‘adequately capitalized’’

if it satisfies paragraphs (b)(2)(i) through

(v) of this section and has a

supplementary leverage ratio of 3.0

percent or greater, as calculated in

accordance with § 324.10.

(3) * * *

(v) Beginning January 1, 2018, an

advanced approaches or Category III

FDIC–supervised institution will be

deemed to be ‘‘undercapitalized’’ if it

has a supplementary leverage ratio of

less than 3.0 percent, as calculated in

accordance with § 324.10.

*

*

*

*

*

Brian P. Brooks,

First Deputy Comptroller of the Currency.

By order of the Board of Governors of the

Federal Reserve System.

Ann E. Misback,

Secretary of the Board.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, on or about May

14, 2020.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 2020–10962 Filed 5–29–20; 8:45 am]

BILLING CODE 4810–33–P

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