Proposed Revisions to Statement of Policy Regarding Minority Depository Institutions

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1 Public Law 101–73, title III, § 308, Aug. 9, 1989,

103 Stat. 353, as amended by Public Law 111–203,

title III, § 367(4), July 21, 2010, 124 Stat. 1556,

codified at 12 U.S.C. 1463 note.

shall request and retain the monitoring

information required by Regulation B of

the Bureau of Consumer Financial

Protection (12 CFR part 1002).

§ 338.8

Compilation of loan data in register

format.

FDIC-supervised institutions and

other lenders required to file a Home

Mortgage Disclosure Act loan

application register (LAR) with the

Federal Deposit Insurance Corporation

shall collect, record and report such

LAR in accordance with Regulation C of

the Bureau of Consumer Financial

Protection (12 CFR part 1003).

§ 338.9

Mortgage lending of a controlled

entity.

Any bank which refers any applicants

to a controlled entity and which

purchases any covered loan as defined

in Regulation C of the Bureau of

Consumer Financial Protection (12 CFR

part 1003) originated by the controlled

entity, as a condition to transacting any

business with the controlled entity,

shall require the controlled entity to

enter into a written agreement with the

bank. The written agreement shall

provide that the entity shall:

(a) Comply with the requirements of

§§ 338.3, 338.4, and 338.7, and, if

otherwise subject to Regulation C of the

Bureau of Consumer Financial

Protection (12 CFR part 1003), § 338.8;

(b) Open its books and records to

examination by the Federal Deposit

Insurance Corporation; and

ty to

enter into a written agreement with the

bank. The written agreement shall

provide that the entity shall:

(a) Comply with the requirements of

§§ 338.3, 338.4, and 338.7, and, if

otherwise subject to Regulation C of the

Bureau of Consumer Financial

Protection (12 CFR part 1003), § 338.8;

(b) Open its books and records to

examination by the Federal Deposit

Insurance Corporation; and

(c) Comply with all instructions and

orders issued by the Federal Deposit

Insurance Corporation with respect to

its home loan practices.

PART 390—REGULATIONS

TRANSFERRED FROM THE OFFICE OF

THRIFT SUPERVISION

■2. The authority citation for part 390

is revised to read as follows:

Authority: 12 U.S.C. 1819.

Subpart F also issued under 5 U.S.C. 552;

559; 12 U.S.C. 2901 et seq.

Subpart O also issued under 12 U.S.C.

1828.

Subpart Q also issued under 12 U.S.C.

1462; 1462a; 1463; 1464.

Subpart W also issued under 12 U.S.C.

1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;

78n; 78p; 78w.

Subpart Y also issued under 12 U.S.C.

1831o.

Subpart G—[Removed and Reserved]

■3. Remove and reserve subpart G,

consisting of §§ 390.140 through

390.150.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, on August 21,

2020.

James P. Sheesley,

Acting Assistant Executive Secretary.

[FR Doc. 2020–18813 Filed 9–24–20; 8:45 am]

BILLING CODE 6714–01–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Chapter III

RIN 3064–ZA19

Statement of Policy Regarding Minority

Depository Institutions

AGENCY: Federal Deposit Insurance

Corporation (FDIC).

ACTION: Proposed revisions to statement

of policy; request for comment.

SUMMARY: The FDIC is proposing to

revise its Statement of Policy Regarding

Minority Depository Institutions.

Section 308 of the Financial Institutions

Reform, Recovery and Enforcement Act

of 1989 established several goals related

to encouraging, assisting, and preserving

minority depository institutions

ation (FDIC).

ACTION: Proposed revisions to statement

of policy; request for comment.

SUMMARY: The FDIC is proposing to

revise its Statement of Policy Regarding

Minority Depository Institutions.

Section 308 of the Financial Institutions

Reform, Recovery and Enforcement Act

of 1989 established several goals related

to encouraging, assisting, and preserving

minority depository institutions. The

FDIC has long recognized the unique

role and importance of minority

depository institutions and has

historically taken steps to preserve and

encourage minority-owned and

minority-led financial institutions. The

revised Statement of Policy updates,

strengthens, and clarifies the agency’s

policies and procedures related to

minority depository institutions.

DATES: Written comments must be

received on or before November 24,

2020.

ADDRESSES: Interested parties are

encouraged to submit written

comments. Commenters are encouraged

to use the title ‘‘Statement of Policy

Regarding Minority Depository

Institutions’’ to facilitate the

organization and distribution of

comments. You may submit comments,

identified by RIN 3064–ZA19, by any of

the following methods:

• Agency Website: https://

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

Follow the instructions for submitting

comments on the FDIC’s website.

• Email: comments@fdic.gov. Include

RIN 3064–ZA19 in the subject line of

the message.

• Mail: Robert E. Feldman, Executive

Secretary, Attention: Comments/Legal

ESS, Federal Deposit Insurance

Corporation, 550 17th Street NW,

Washington, DC 20429.

Instructions: Comments submitted

must include ‘‘FDIC’’ and ‘‘RIN 3064–

ZA19.’’ Comments received will be

posted without change to https://

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

including any personal information

provided

ssage.

• Mail: Robert E. Feldman, Executive

Secretary, Attention: Comments/Legal

ESS, Federal Deposit Insurance

Corporation, 550 17th Street NW,

Washington, DC 20429.

Instructions: Comments submitted

must include ‘‘FDIC’’ and ‘‘RIN 3064–

ZA19.’’ Comments received will be

posted without change to https://

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

including any personal information

provided.

FOR FURTHER INFORMATION CONTACT:

Misty Mobley, Senior Review Examiner,

Division of Risk Management and

Supervision, (202) 898–3771,

mimobley@fdic.gov; Lauren Whitaker,

Senior Attorney, Legal Division, (202)

898–3872, lwhitaker@fdic.gov; or

Gregory Feder, Counsel, Legal Division,

(202) 898–8724, gfeder@fdic.gov,

Federal Deposit Insurance Corporation,

550 17th Street NW, Washington, DC

20429. For the hearing impaired only,

TDD users may contact (202) 925–4618.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Revisions to the Proposed Statement of

Policy

III. Proposed Statement of Policy Regarding

Minority Depository Institutions

IV. Administrative Matters

I. Background

Section 308 of the Financial

Institutions Reform, Recovery, and

Enforcement Act of 1989 (FIRREA) 1

established several goals related to

minority depository institutions (MDIs):

(1) Preserving the number of MDIs; (2)

preserving the minority character in

cases of merger or acquisition; (3)

providing technical assistance to

prevent insolvency of institutions not

now insolvent; (4) promoting and

encouraging creation of new MDIs; and

eform, Recovery, and

Enforcement Act of 1989 (FIRREA) 1

established several goals related to

minority depository institutions (MDIs):

(1) Preserving the number of MDIs; (2)

preserving the minority character in

cases of merger or acquisition; (3)

providing technical assistance to

prevent insolvency of institutions not

now insolvent; (4) promoting and

encouraging creation of new MDIs; and

(5) providing for training, technical

assistance, and education programs.

On April 3, 1990, the Board of

Directors of the Federal Deposit

Insurance Corporation (FDIC Board and

FDIC, respectively) adopted the Policy

Statement on Encouragement and

Preservation of Minority Ownership of

Financial Institutions (1990 Policy

Statement). The framework for the 1990

Policy Statement resulted from key

provisions contained in Section 308 of

FIRREA. The 1990 Policy Statement

provided information to the public and

minority banking industry regarding the

agency’s efforts in achieving the goals of

Section 308.

During the 1990s, many MDIs

continued to underperform industry

averages for profitability and experience

failure rates that were significantly

higher than those of the industry

overall. In order to discuss the

challenges that MDIs faced, and identify

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s, many MDIs

continued to underperform industry

averages for profitability and experience

failure rates that were significantly

higher than those of the industry

overall. In order to discuss the

challenges that MDIs faced, and identify

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Federal Register / Vol. 85, No. 187 / Friday, September 25, 2020 / Proposed Rules

2 67 FR 18618 (Apr. 16, 2002).

3 See FDIC MDI research study, published June

2019, Minority Depository Institutions: Structure,

Performance, and Social Impact, https://

www.fdic.gov/regulations/resources/minority/2019-

mdi-study/full.pdf.

4 See Chairman Jelena McWilliams Keynote

Remarks, MDI and Community Development

Financial Institution bank conference, Focus on the

Future: Prospering in a Changing Industry, https://

www.youtube.com/watch?v=o0H6Ko00qTk&

feature=youtu.be.

best practices and possible ways the

regulatory agencies could promote and

preserve MDIs, the FDIC and other

banking regulatory agencies—with

assistance from several minority bank

trade associations—invited officers from

156 MDIs to participate in a ‘‘Bankers

and Supervisors Regulatory Forum’’

held in March of 2001. Approximately

70 bankers attended.

The FDIC also formed an

Interdivisional Working Group to

consider measures to modernize the

policies and procedures related to MDIs.

The working group incorporated many

suggestions from the March 2001 forum

into a revised Policy Statement

Regarding Minority Depository

Institutions, issued by the FDIC, after

notice and comment, in April of 2002

(2002 Policy Statement).2 The FDIC

issued the 2002 Policy Statement to

provide additional information

regarding the FDIC’s initiatives related

to Section 308

s related to MDIs.

The working group incorporated many

suggestions from the March 2001 forum

into a revised Policy Statement

Regarding Minority Depository

Institutions, issued by the FDIC, after

notice and comment, in April of 2002

(2002 Policy Statement).2 The FDIC

issued the 2002 Policy Statement to

provide additional information

regarding the FDIC’s initiatives related

to Section 308. The 2002 Policy

Statement provided a more structured

framework that set forth initiatives of

the FDIC to promote the preservation of,

as well as to provide technical

assistance, training, and educational

programs for, MDIs by working with

those institutions, their trade

associations, and the other federal

financial regulatory agencies.

Over the years, the FDIC has

continued to modify and enhance its

MDI Program to better carry out the

FDIC’s efforts to meet the goals in

Section 308 of FIRREA. The revisions in

the proposed Statement of Policy are

intended, in part, to strengthen and

improve the various aspects of the MDI

Program and how each component of

the MDI Program is carried out by

various responsible entities that are part

of the MDI Program. The proposed

revisions to the 2002 Policy Statement

reflected in the proposed Statement of

Policy describe the FDIC’s enduring and

strengthened commitment to, and

engagement with, MDIs in furtherance

of its goal of preserving and promoting

MDIs.

In 2019, the FDIC established a new

MDI Subcommittee of the Advisory

Committee on Community Banking

(CBAC). The MDI Subcommittee held its

inaugural meeting in December 2019.

There are nine executives serving as

members of the MDI Subcommittee,

representing African American, Native

American, Hispanic American, and

Asian American MDIs across the

country. The MDI Subcommittee

provides recommendations regarding

the FDIC’s MDI Program to the CBAC for

consideration

ttee on Community Banking

(CBAC). The MDI Subcommittee held its

inaugural meeting in December 2019.

There are nine executives serving as

members of the MDI Subcommittee,

representing African American, Native

American, Hispanic American, and

Asian American MDIs across the

country. The MDI Subcommittee

provides recommendations regarding

the FDIC’s MDI Program to the CBAC for

consideration. The MDI Subcommittee

serves as a source of feedback with

regard to the FDIC’s efforts to fulfill its

statutory goals to preserve and promote

MDIs; provides a platform for MDIs to

promote collaboration, partnerships,

and best practices; and identifies ways

to highlight the work of MDIs in their

communities.

The FDIC published, also in 2019, an

MDI research study, which explores

changes in MDIs, their role in the

financial services industry, and their

impact on the communities they serve.3

The study period covered 2001 to 2018

and looked at the demographics,

structural change, geography, financial

performance, and social impact of MDIs.

Additionally, to discuss the

challenges that MDIs face, provide

information on best practices, and

collaborate on possible ways the

regulatory agencies can promote and

preserve MDIs, in June of 2019, the

FDIC hosted the Interagency MDI and

Community Development Financial

Institution (CDFI) Bank Conference,

Focus on the Future: Prospering in a

Changing Industry, in collaboration

with the Office of the Comptroller of

Currency and the Board of Governors of

the Federal Reserve System. More than

80 MDI and CDFI bankers, representing

61 banks, attended the two-day

conference.4

All of these various efforts by the

FDIC to enhance its MDI Program have

informed the proposed revisions to the

Statement of Policy. The FDIC has

received suggestions from bankers at

outreach and trade association meetings

as well as feedback from the June 2019

conference

Federal Reserve System. More than

80 MDI and CDFI bankers, representing

61 banks, attended the two-day

conference.4

All of these various efforts by the

FDIC to enhance its MDI Program have

informed the proposed revisions to the

Statement of Policy. The FDIC has

received suggestions from bankers at

outreach and trade association meetings

as well as feedback from the June 2019

conference. The MDI Subcommittee has

also provided feedback to the CBAC for

consideration and recommendation to

the FDIC. Many of these suggestions and

feedback have been incorporated into

the revised Statement of Policy. The

following section summarizes the

significant changes from the 2002 Policy

Statement.

II. Revisions to the Policy Statement

The FDIC is proposing to revise its

MDI Policy Statement in the following

areas:

Technical assistance and other

engagement. The proposed Statement of

Policy clarifies that technical assistance

is not a supervisory activity and is not

intended to present additional

regulatory burden. Further, the

proposed Statement of Policy states that

examination teams will not view

requests for, or acceptance of, technical

assistance negatively when evaluating

institution performance or assigning

ratings.

FDIC outreach. The proposed

Statement of Policy was updated to

provide additional outreach

opportunities, including with the

Chairman’s office and the National

Director for Minority and Community

Development Banking.

MDI Subcommittee. The proposed

Statement of Policy describes the newly

established FDIC MDI Subcommittee of

the CBAC, which serves as source of

feedback on FDIC strategies to fulfill

statutory goals to preserve and promote

MDIs. The MDI Subcommittee may also

make recommendations or offer ideas to

the CBAC for consideration and

presentation to the FDIC. The MDI

Subcommittee provides a platform for

MDIs to promote collaboration,

partnerships, and best practices

tablished FDIC MDI Subcommittee of

the CBAC, which serves as source of

feedback on FDIC strategies to fulfill

statutory goals to preserve and promote

MDIs. The MDI Subcommittee may also

make recommendations or offer ideas to

the CBAC for consideration and

presentation to the FDIC. The MDI

Subcommittee provides a platform for

MDIs to promote collaboration,

partnerships, and best practices. The

MDI Subcommittee also identifies ways

to highlight the work of MDIs in their

communities.

1. The FDIC requests comment on

other methods to identify and provide

engagement opportunities that would be

beneficial to MDIs.

Definitions. The proposed Statement

of Policy adds definitions for terms used

in the MDI Program: Technical

assistance, training and education, and

outreach. Technical assistance is

defined as individual assistance that a

regulator will provide to a MDI in

response to an institution’s request for

assistance in addressing specific areas of

concern. The proposed Statement of

Policy also notes that technical

assistance is a tool to provide on-going

support to institutions in an effort to

facilitate timely implementation of

recommendations, full understanding of

regulatory requirements, and in some

instances, the viability of the institution.

Training and education programs

consist of instruction designed to impart

proficiency or skills related to a

particular job, process, or regulatory

policy. This training and education can

be provided in person, through

webinars or conference calls, or in a

conference setting. Outreach consists of

FDIC representatives meeting with

financial institutions with a primary

focus of building relationships and open

communication and providing

information and resources. Outreach is

generally offered by the FDIC and can

include meetings between financial

institution management and senior FDIC

management

through

webinars or conference calls, or in a

conference setting. Outreach consists of

FDIC representatives meeting with

financial institutions with a primary

focus of building relationships and open

communication and providing

information and resources. Outreach is

generally offered by the FDIC and can

include meetings between financial

institution management and senior FDIC

management.

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2. The FDIC invites comment on the

definitions assigned to technical

assistance, training and education, and

outreach.

Reporting. The proposed Statement of

Policy updates the reporting

requirements of the FDIC’s MDI

Program, including the Annual Report

to Congress on the Preservation and

Promotion of Minority Depository

Institutions pursuant to Section 367 of

the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010 and

Section 308 of FIRREA. The Section 367

requirements were enacted since the

Statement of Policy was last updated in

2002.

3. The FDIC invites the public to

comment on the types of information

that would be helpful and beneficial to

include in annual reports or the MDI

Program website regarding the MDI

Program.

Measurement of effectiveness. The

proposed Statement of Policy also

establishes new requirements to

measure the effectiveness of the MDI

Program. The National Director and the

regional office staff will routinely solicit

feedback from MDIs to assess the

effectiveness of the FDIC’s technical

assistance, training and education, and

outreach efforts and the MDI Program in

general

Program.

Measurement of effectiveness. The

proposed Statement of Policy also

establishes new requirements to

measure the effectiveness of the MDI

Program. The National Director and the

regional office staff will routinely solicit

feedback from MDIs to assess the

effectiveness of the FDIC’s technical

assistance, training and education, and

outreach efforts and the MDI Program in

general. The FDIC will track instances of

technical assistance, training and

education, and outreach and solicit

feedback on the effectiveness of these

activities by administering periodic

surveys and holding discussions with

bank management.

4. The FDIC invites the public to

comment on other methods to identify

and provide technical assistance,

outreach, and training and education

resources that would be beneficial to

MDIs.

Examinations. The proposed

Statement of Policy adds a description

of how the FDIC applies rating systems

at examinations of MDIs. Specifically,

the proposed Statement of Policy

describes how the Uniform Financial

Rating System (UFIRS) and the Uniform

Interagency Consumer Compliance

Rating System (UICCR) are designed to

reflect an assessment of the individual

institution, including its size and

sophistication, the nature and

complexity of its business activities, and

its risk profile rather than a comparison

to peer institutions

5. The FDIC invites comment on

whether this approach to incorporate

specific considerations when examining

MDIs is clear and understandable.

III. Proposed Statement of Policy

Regarding Minority Depository

Institutions

The text of the proposed Statement of

Policy follows:

The FDIC has long recognized the

importance of minority depository

institutions in the financial system and

their unique role in promoting the

economic viability of minority and

under-served communities. The FDIC

historically has implemented programs

to preserve and promote these financial

institutions

nority Depository

Institutions

The text of the proposed Statement of

Policy follows:

The FDIC has long recognized the

importance of minority depository

institutions in the financial system and

their unique role in promoting the

economic viability of minority and

under-served communities. The FDIC

historically has implemented programs

to preserve and promote these financial

institutions. This Statement of Policy

describes the framework the FDIC has

put into place and the initiatives the

FDIC will undertake to fulfill its

statutory goals with respect to minority

depository institutions (MDI Program).

Statutory Framework

In August 1989, Congress enacted the

Financial Institutions Reform, Recovery,

and Enforcement Act of 1989 (FIRREA).

Section 308 of FIRREA established the

following goals:

• Preserve the number of minority

depository institutions;

• Preserve the minority character in

cases of merger or acquisition;

• Provide technical assistance to

prevent insolvency of institutions not

now insolvent;

• Promote and encourage creation of

new minority depository institutions;

and

• Provide for training, technical

assistance, and educational programs.

Definitions

Section 308 of FIRREA defines

‘‘minority depository institution’’ as any

Federally insured depository institution

where 51 percent or more of the voting

stock is owned by one or more ‘‘socially

and economically disadvantaged

individuals.’’ ‘‘Minority,’’ as defined by

Section 308 of FIRREA, means any

‘‘Black American, Native American,

Hispanic American, or Asian

American.’’ Therefore, for the purposes

of this Statement of Policy, ‘‘minority

depository institution’’ is defined as any

Federally insured depository institution

where 51 percent or more of the voting

stock is owned by minority individuals.

This includes institutions collectively

owned by a group of minority

individuals, such as a Native American

Tribe. Ownership must be by U.S.

citizens or permanent legal U.S

r the purposes

of this Statement of Policy, ‘‘minority

depository institution’’ is defined as any

Federally insured depository institution

where 51 percent or more of the voting

stock is owned by minority individuals.

This includes institutions collectively

owned by a group of minority

individuals, such as a Native American

Tribe. Ownership must be by U.S.

citizens or permanent legal U.S.

residents to be counted in determining

minority ownership. In addition to the

institutions that meet the ownership

test, for the purposes of this Statement

of Policy, institutions will be considered

minority depository institutions if a

majority of the Board of Directors is

minority and the community that the

institution serves is predominantly

minority.

Identification of Minority Depository

Institutions

To ensure that all minority depository

institutions are able to participate in the

MDI Program, the FDIC will maintain a

list of Federally insured minority

depository institutions. Institutions that

are not already identified as minority

depository institutions can request to be

designated as such by certifying that

they meet the above definition. For

institutions supervised directly by the

FDIC, examiners will review the

appropriateness of their inclusion on

the list during the examination process.

In addition, case managers in regional

offices will note changes to the list

while processing deposit insurance

applications, merger applications,

change of control notices, or failures of

minority depository institutions. The

FDIC will work closely with the other

Federal banking regulators to ensure

that institutions not directly supervised

by the FDIC are accurately captured on

the list. In addition, the FDIC will

periodically provide the list to relevant

trade associations and seek input

regarding the accuracy of the list.

Inclusion in the FDIC’s MDI Program is

voluntary

inority depository institutions. The

FDIC will work closely with the other

Federal banking regulators to ensure

that institutions not directly supervised

by the FDIC are accurately captured on

the list. In addition, the FDIC will

periodically provide the list to relevant

trade associations and seek input

regarding the accuracy of the list.

Inclusion in the FDIC’s MDI Program is

voluntary. Any minority depository

institution not wishing to participate in

the MDI Program will be removed from

the official list upon request.

Organizational Structure

The FDIC has designated a national

director for the FDIC’s MDI Program in

the Washington Office and a regional

coordinator in each Regional Office. The

national director will consult with

officials from the following FDIC

Divisions to ensure appropriate

personnel are involved and resources

are made available with regard to MDI

Program initiatives: Division of Risk

Management Supervision, Division of

Depositor and Consumer Protection,

Division of Resolutions and

Receiverships, Division of Insurance

and Research, Legal Division, and the

Office of Minority and Women

Inclusion. The national director will

also consult with other organizations

within the FDIC as appropriate.

As the primary Federal regulator for

State nonmember banks and State

savings associations, the FDIC will focus

its efforts on minority depository

institutions with those charters.

However, the national director will meet

periodically with the other Federal

banking regulators to discuss each

agency’s outreach efforts, to share ideas,

and to identify opportunities where the

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sitory

institutions with those charters.

However, the national director will meet

periodically with the other Federal

banking regulators to discuss each

agency’s outreach efforts, to share ideas,

and to identify opportunities where the

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Federal Register / Vol. 85, No. 187 / Friday, September 25, 2020 / Proposed Rules

agencies can work together to assist

minority depository institutions.

Representatives of other divisions and

offices may participate in these

meetings.

Engagement With Minority Depository

Institutions

The FDIC’s MDI Program will provide

for continual engagement with minority

depository institutions through ongoing

interaction with the Washington,

Regional, and Field Office staff. This

interaction includes providing technical

assistance to share information and

expertise on supervisory topics,

outreach initiatives to provide

opportunities for open dialogue with

senior FDIC staff, and training

initiatives to offer opportunities to gain

additional knowledge about specific

regulatory requirements.

Further, trade associations affiliated

with minority depository institutions

serve as a significant resource in

identifying specific interests or concerns

for those institutions. The national

director will regularly contact minority

depository institution trade associations

to seek feedback on the FDIC’s efforts

under the MDI Program, discuss

possible training initiatives, and explore

options for promoting and preserving

minority depository institutions. The

national director and the regional

coordinators also will solicit

information from trade associations and

other organizations about groups that

may be interested in establishing new

minority depository institutions

back on the FDIC’s efforts

under the MDI Program, discuss

possible training initiatives, and explore

options for promoting and preserving

minority depository institutions. The

national director and the regional

coordinators also will solicit

information from trade associations and

other organizations about groups that

may be interested in establishing new

minority depository institutions. FDIC

representatives will be available to

address such groups to discuss the

application process, the requirements of

becoming FDIC insured, and the various

programs supporting minority

depository institutions. The regional

coordinators will contact all new

minority state nonmember banks and

state savings associations identified

through insurance applications, merger

applications, or change in control

notices to familiarize the institutions

with the resources available through the

MDI Program.

Technical Assistance

Technical assistance, as defined by

the FDIC’s MDI Program, is individual

assistance that a regulator will provide

to a minority depository institution in

response to an institution’s request for

assistance in understanding supervisory

topics or findings. At any time, the FDIC

will share information and expertise

with bank management on various

topics including, but not limited to,

understanding bank regulations, FDIC

policies, examination procedures,

accounting practices, supervisory

recommendations, risk management

procedures, and compliance

management procedures. In providing

technical assistance, FDIC staff will not

actually perform tasks expected of an

institution’s management or employees.

For example, FDIC staff may explain

Call Report instructions as they relate to

specific accounts, but will not assist in

preparing an institution’s Call Report.

FDIC staff may provide information on

community reinvestment opportunities,

but will not recommend a specific

transaction

ssistance, FDIC staff will not

actually perform tasks expected of an

institution’s management or employees.

For example, FDIC staff may explain

Call Report instructions as they relate to

specific accounts, but will not assist in

preparing an institution’s Call Report.

FDIC staff may provide information on

community reinvestment opportunities,

but will not recommend a specific

transaction.

An institution can contact its field

office representatives, case manager, or

review examiner to request technical

assistance. In addition, the regional

coordinators and the institution’s

assigned case manager and review

examiner are knowledgeable about

minority bank issues and are available

to answer questions or to direct

inquiries to the appropriate FDIC office

or staff member with expertise on the

subject for response. Case managers can

explain the application process and the

type of analysis and information

required for different applications. Field

office representatives also serve as a

significant resource to minority

depository institutions by readily

answering examination related

questions and explaining regulatory

requirements. Other staff members

within the FDIC with expertise in

various regulatory topics will also be

available to share knowledge to assist

minority depository institutions in

complying with regulations or

implementing supervisory

recommendations.

During examinations, the FDIC

expects examiners to fully explain

supervisory recommendations and offer

to help management understand

satisfactory methods to address such

recommendations. At the conclusion of

each examination of a minority

depository institution directly

supervised by the FDIC, the FDIC will

be available to return to the institution

to provide technical assistance by

reviewing areas of concern or topics of

interest to the institution. The purpose

of return visits is to assist management

in understanding and implementing

examination recommendations, not to

identify new problems

ach examination of a minority

depository institution directly

supervised by the FDIC, the FDIC will

be available to return to the institution

to provide technical assistance by

reviewing areas of concern or topics of

interest to the institution. The purpose

of return visits is to assist management

in understanding and implementing

examination recommendations, not to

identify new problems.

Technical assistance is a tool to

provide on-going support to institutions

in an effort to ensure timely

implementation of recommendations,

full understanding of regulatory

requirements, and in some instances,

the viability of the institution. Technical

assistance is not a supervisory activity

and is not intended to present

additional regulatory burden. Further,

examination teams will not view

requests for, or acceptance of, technical

assistance negatively when evaluating

institution performance or assigning

ratings.

Outreach

Outreach, as defined by the FDIC’s

MDI Program, consists of FDIC

representatives meeting with financial

institutions with a primary focus of

building relationships and open

communication and providing

information and resources. Outreach is

generally offered by the FDIC and can

include meetings between financial

institution management and senior FDIC

management.

The FDIC maintains an MDI

Subcommittee of its Advisory

Committee on Community Banking

(CBAC) comprised of executives of

minority depository institutions. The

MDI Subcommittee serves as a source of

feedback on FDIC strategies to fulfill

statutory goals to preserve and promote

minority depository institutions. The

MDI Subcommittee may also make

recommendations or offer ideas to the

CBAC for consideration and

presentation to the FDIC. The MDI

Subcommittee provides a platform for

minority depository institutions to

promote collaboration, partnerships,

and best practices. The Subcommittee

will also identify ways to highlight the

work of minority depository institutions

in their communities

ions. The

MDI Subcommittee may also make

recommendations or offer ideas to the

CBAC for consideration and

presentation to the FDIC. The MDI

Subcommittee provides a platform for

minority depository institutions to

promote collaboration, partnerships,

and best practices. The Subcommittee

will also identify ways to highlight the

work of minority depository institutions

in their communities.

Executives and staff in the FDIC’s

regional offices will communicate

regularly with each minority depository

institution to outline the FDIC’s efforts

to promote and preserve minority

depository institutions; will offer

annually to have a member of regional

management meet with the institution’s

board of directors to discuss issues of

interest, including through roundtable

discussions and training sessions; and

will seek input regarding any training or

other technical assistance the institution

may desire.

The FDIC will explore opportunities

to facilitate collaboration and partnering

initiatives among minority depository

institutions or between minority

depository institutions and non-

minority depository institutions. The

FDIC recognizes that by facilitating

these collaborative relationships,

institutions can have opportunities to

better meet the needs of their

communities.

Training and Educational Programs

Training and educational programs, as

defined by the FDIC’s MDI program,

consist of instruction designed to impart

proficiency or skills related to a

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ies to

better meet the needs of their

communities.

Training and Educational Programs

Training and educational programs, as

defined by the FDIC’s MDI program,

consist of instruction designed to impart

proficiency or skills related to a

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60406

Federal Register / Vol. 85, No. 187 / Friday, September 25, 2020 / Proposed Rules

5 44 U.S.C. 3501, et seq.

particular job, process, or regulatory

policy. The FDIC will work with other

banking regulatory agencies and trade

associations representing minority

depository institutions to periodically

assess the need for, and provide for,

training and educational opportunities.

The FDIC will partner with other

Federal banking agencies and trade

associations to offer training programs.

This training and education can be

provided in person, through webinars or

conference calls, or in a conference

setting.

Reporting

The regional coordinators will report

regional office activities related to the

MDI Program to the national director

quarterly. The national director will

develop a comprehensive report on all

MDI Program activities and submit the

report quarterly to the Chairman. The

FDIC’s efforts to preserve and promote

minority depository institutions will

also be highlighted in the FDIC’s

Annual Report and the Annual Report

to Congress on the Preservation and

Promotion of Minority Depository

Institutions pursuant to Section 367 of

the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010 and

Section 308 of FIRREA.

Measuring Program Effectiveness

The national director and the regional

office staff will routinely solicit

feedback from minority depository

institutions to assess the effectiveness of

the FDIC’s technical assistance,

outreach, and training/education efforts

and the MDI Program in general

of

the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010 and

Section 308 of FIRREA.

Measuring Program Effectiveness

The national director and the regional

office staff will routinely solicit

feedback from minority depository

institutions to assess the effectiveness of

the FDIC’s technical assistance,

outreach, and training/education efforts

and the MDI Program in general. The

FDIC will track instances of technical

assistance, outreach, and training and

education and solicit feedback on the

effectiveness of these activities by

administering periodic surveys and

holding discussions with bank

management.

Examinations

All insured institutions must be

operated in a safe and sound manner, in

accordance with FDIC’s regulations.

Likewise, all examinations must be

conducted within the parameters of

FDIC exam policies and should

consistently measure the risk an

institution poses to the FDIC’s deposit

insurance fund. Notwithstanding, and

consistent with the Uniform Financial

Institutions Rating System (UFIRS) and

the Uniform Interagency Consumer

Compliance Rating System (UICCR),

examiners are expected to recognize the

distinctive characteristics and

differences in core objectives of each

financial institution and to consider

those unique factors when evaluating an

institution’s financial condition and risk

management practices.

Under the UFIRS and UICCR, each

financial institution is assigned a

composite rating based on an evaluation

of specific components, which are also

rated. For UFIRS, these component

ratings reflect an institution’s capital

adequacy, asset quality, management

capabilities, earnings sufficiency,

liquidity position, and sensitivity to

market risk (commonly referred to as the

CAMELS ratings). Likewise, the UICCR

is organized under broad components

that assess the institution’s board and

management oversight, compliance

program, and violations of law and

consumer harm

t

ratings reflect an institution’s capital

adequacy, asset quality, management

capabilities, earnings sufficiency,

liquidity position, and sensitivity to

market risk (commonly referred to as the

CAMELS ratings). Likewise, the UICCR

is organized under broad components

that assess the institution’s board and

management oversight, compliance

program, and violations of law and

consumer harm. The uniform rating

systems and evaluation and rating

criteria are specific to the examination

types performed. Further, the

assignment of the rating is based solely

on the subject institution’s individual

performance under the specific

components.

Management practices, particularly as

they relate to risk management, vary

considerably among financial

institutions depending on size and

sophistication, the nature and

complexity of business activities, and

risk profile. Each institution must

properly manage risks and have

appropriate policies, processes, or

practices in place that management

follows and uses. Activities undertaken

in a less complex institution engaging in

less sophisticated risk-taking activities

may only need basic management and

control systems compared to the

detailed and formalized systems and

controls used for the broader and more

complex range of activities undertaken

at a larger and more complex

institution.

Peer comparison data are not

included in the rating systems. The

principal reason is to avoid over

reliance on statistical comparisons to

justify the component rating being

assigned. This is very important when

evaluating minority depository

institutions due to their unique

characteristics. For example, many

minority depository institutions were

established to serve an otherwise under-

served market. High profitability may

not be as essential to the organizers and

shareholders of the institution

statistical comparisons to

justify the component rating being

assigned. This is very important when

evaluating minority depository

institutions due to their unique

characteristics. For example, many

minority depository institutions were

established to serve an otherwise under-

served market. High profitability may

not be as essential to the organizers and

shareholders of the institution. Instead,

community development, improving

consumer services, and promoting

banking services to the unbanked or

under-banked segment of its community

may drive many of the organization’s

decisions. The UFIRS allows for

consideration of the characteristics by

considering not only the level of an

institution’s earnings, but also the trend

and stability of earnings, the ability to

provide for adequate capital, the quality

and sources of earnings, and the

adequacy of budgeting systems.

Examiners are instructed to consider

all relevant factors when assigning a

component rating. The rating systems

are designed to reflect an assessment of

the individual institution, including its

size and sophistication, the nature and

complexity of its business activities, and

risk profile.

Failing Institutions

The FDIC will attempt to preserve the

minority character of failing institutions

during the resolution process. In the

event of a potential failure of a minority

depository institution, the Division of

Resolutions and Receiverships will

contact all minority depository

institutions nationwide that qualify to

bid on failing institutions. The Division

of Resolutions and Receiverships will

solicit qualified minority depository

institutions’ interest in the failing

institution, discuss the bidding process,

and offer to provide technical assistance

regarding completion of the bid forms

on of

Resolutions and Receiverships will

contact all minority depository

institutions nationwide that qualify to

bid on failing institutions. The Division

of Resolutions and Receiverships will

solicit qualified minority depository

institutions’ interest in the failing

institution, discuss the bidding process,

and offer to provide technical assistance

regarding completion of the bid forms.

In addition, the Division of Resolutions

and Receiverships, with assistance from

the Office of Minority and Women

Inclusion, will maintain a list of

minority individuals and nonbank

entities that have expressed an interest

in acquiring failing minority depository

institutions and have been pre-approved

by the Division of Risk Management

Supervision and the chartering

authority for access to the FDIC’s virtual

data room for online due diligence.

Internet Site

The FDIC will maintain a website to

promote the MDI Program. Among other

things, the website will describe the

tools and resources available under the

program. The website will include the

name, phone number, and email address

of the national director, each regional

coordinator, and additional staff. The

website will also contain links to the list

of minority depository institutions,

pertinent trade associations, and other

Federal agency programs. The FDIC will

also explore the feasibility and

usefulness of posting other items to the

page, such as statistical information and

comparative data for minority

depository institutions. Visitors will

have the opportunity to provide

feedback regarding the FDIC’s program

and the usefulness of the website.

IV. Administrative Law Matters

The Paperwork Reduction Act of 1995

(PRA) 5 states that no agency may

conduct or sponsor, nor is the

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ave the opportunity to provide

feedback regarding the FDIC’s program

and the usefulness of the website.

IV. Administrative Law Matters

The Paperwork Reduction Act of 1995

(PRA) 5 states that no agency may

conduct or sponsor, nor is the

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60407

Federal Register / Vol. 85, No. 187 / Friday, September 25, 2020 / Proposed Rules

6 5 CFR 1320.3(b)(2).

1 In accordance with Appendix T to 40 CFR part

50, the 1-hour primary SO2 NAAQS is met at an

ambient air quality monitoring site when the valid

1-hour primary standard design value is less than

or equal to 75 parts per billion (ppb). 40 CFR

50.17(b).

2 June 30, 2020 Letter from Toby Baker, Executive

Director of TCEQ to Ken McQueen, Regional

Administrator of EPA Region 6, subject: ‘‘Sulfur

Dioxide Clean Data Determination Request for

Portions of Freestone, Anderson, and Titus

Counties in Texas’’ included in the docket for this

action.

3 Monitoring data must be reported, quality

assured, and certified in accordance with the

requirements set forth in 40 CFR part 58.

respondent required to respond to, an

information collection unless it displays

a currently valid Office of Management

and Budget (OMB) control number.

The proposed Statement of Policy

Regarding Minority Depository

Institutions does not create any new or

revise any existing information

collections pursuant to the PRA. Rather,

any reporting, recordkeeping, or

disclosure activities mentioned in the

proposed Statement of Policy Regarding

Minority Depository Institutions are

usual and customary and should occur

in the normal course of business as

defined in the PRA.6 Consequently, no

submissions will be made to the OMB

for review.

6

new or

revise any existing information

collections pursuant to the PRA. Rather,

any reporting, recordkeeping, or

disclosure activities mentioned in the

proposed Statement of Policy Regarding

Minority Depository Institutions are

usual and customary and should occur

in the normal course of business as

defined in the PRA.6 Consequently, no

submissions will be made to the OMB

for review.

6. The agencies request comment on

its conclusion that this aspect of the

proposed Statement of Policy Regarding

Minority Depository Institutions does

not create any new or revise any existing

information collections.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, on August 21,

2020.

James P. Sheesley,

Acting Assistant Executive Secretary.

[FR Doc. 2020–18816 Filed 9–24–20; 8:45 am]

BILLING CODE 6714–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[EPA–R06–OAR–2020–0434; FRL–10014–

56–Region 6]

Approval of Texas Air Quality Plans;

Clean Data Determination for the 2010

1-Hour Primary Sulfur Dioxide National

Ambient Air Quality Standard;

Anderson and Freestone Counties and

Titus County Nonattainment Areas

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: The Environmental Protection

Agency (EPA) is proposing to determine

that the Anderson and Freestone

Counties and the Titus County

nonattainment areas, in Texas, have

attained the 2010 1-hour primary Sulfur

Dioxide (SO2) National Ambient Air

Quality Standard (NAAQS) per the

EPA’s Clean Data Policy. The primary

sources of SO2 emissions in these

counties have permanently shut down

and as a result air quality in these areas

is now meeting the NAAQS for SO2.

This proposed determination is

supported by monitoring data from

within or near to the nonattainment

areas, emissions data and an evaluation

of previous modeling.

DATES: Comments must be received on

or before October 26, 2020.

ADDRESSES: Submit your comments,

identified by Docket ID No

ave permanently shut down

and as a result air quality in these areas

is now meeting the NAAQS for SO2.

This proposed determination is

supported by monitoring data from

within or near to the nonattainment

areas, emissions data and an evaluation

of previous modeling.

DATES: Comments must be received on

or before October 26, 2020.

ADDRESSES: Submit your comments,

identified by Docket ID No. EPA–R06–

OAR–2020–0434, to https://

www.regulations.gov. Follow the online

instructions for submitting comments.

Once submitted, comments cannot be

edited or removed from Regulations.gov.

The EPA may publish any comment

received to its public docket. Do not

submit electronically any information

you consider to be Confidential

Business Information (CBI) or other

information whose disclosure is

restricted by statute. Multimedia

submissions (audio, video, etc.) must be

accompanied by a written comment.

The written comment is considered

the official comment and should

include discussion of all points you

wish to make. The EPA will generally

not consider comments or comment

contents located outside of the primary

submission (i.e., on the web, cloud, or

other file sharing system). For

additional submission methods, please

contact Robert Imhoff, (214) 665–7262,

Imhoff.Robert@epa.gov. For, the full

EPA public comment policy,

information about CBI or multimedia

submissions, and general guidance on

making effective comments, please visit

https://www.epa.gov/dockets/

commenting-epa-dockets.

Docket: The index to the docket for

this action is available electronically at

www.regulations.gov. While all

documents in the docket are listed in

the index, some information may not be

publicly available due to docket file size

restrictions or content (e.g., CBI).

FOR FURTHER INFORMATION CONTACT:

Robert Imhoff, EPA Region 6 Office, SO2

and Regional Haze Branch, (214) 665–

7262, or by email at Imhoff.Robert@

epa.gov

t for

this action is available electronically at

www.regulations.gov. While all

documents in the docket are listed in

the index, some information may not be

publicly available due to docket file size

restrictions or content (e.g., CBI).

FOR FURTHER INFORMATION CONTACT:

Robert Imhoff, EPA Region 6 Office, SO2

and Regional Haze Branch, (214) 665–

7262, or by email at Imhoff.Robert@

epa.gov. Out of an abundance of caution

for members of the public and our staff,

the EPA Region 6 office will be closed

to the public to reduce the risk of

transmitting COVID–19. We encourage

the public to submit comments via

https://www.regulations.gov, as there

will be a delay in processing mail and

no courier or hand deliveries will be

accepted. Please call or email the

contact listed above if you need

alternative access to material indexed

but not provided in the docket.

SUPPLEMENTARY INFORMATION:

Throughout this document ‘‘we,’’ ‘‘us,’’

and ‘‘our’’ refer to the EPA.

Table of Contents

I. What action is the EPA proposing?

II. What is the background of this action?

A. Nonattainment Designation

B. Clean Data Policy

C. How does a nonattainment area achieve

‘‘clean data’’ for the 2010 1-hour primary

SO2 NAAQS?

D. What information did Texas provide

that demonstrates that the area attained

the NAAQS?

i. Primary Source Shutdowns

ii. Monitoring Data

E. What is the EPA’s rationale for

proposing this action?

III. What is the EPA’s analysis?

A. Modeling Data and Supplemental 2016–

2019 Emissions Information Evaluation

B. Ambient Air Quality Monitoring Data

Evaluation

C. EPA’s Proposed Clean Data

Determination

IV. What would be the effects of this action,

if promulgated?

V. Statutory and Executive Order Reviews

I

ii. Monitoring Data

E. What is the EPA’s rationale for

proposing this action?

III. What is the EPA’s analysis?

A. Modeling Data and Supplemental 2016–

2019 Emissions Information Evaluation

B. Ambient Air Quality Monitoring Data

Evaluation

C. EPA’s Proposed Clean Data

Determination

IV. What would be the effects of this action,

if promulgated?

V. Statutory and Executive Order Reviews

I. What action is the EPA proposing?

The EPA is proposing to determine

that portions of Anderson and Freestone

Counties and Titus County (hereby

referred to as ‘‘the nonattainment

areas’’), in Texas, have attained the 2010

1-hour primary SO2 NAAQS.1 This

proposed determination of attainment is

in response to a June 30, 2020 request

from the state 2 that the EPA consider

information—including quality assured

and certified ambient air monitoring

data 3 from the 2017–2019 monitoring

period and the permanent and

enforceable shutdown of the primary

sources of SO2 emissions in these areas,

Big Brown Power Plant (Big Brown) and

Monticello Steam Electric Station

(Monticello), that were the key

contributors to the violations of the

standard—which both support our

proposed finding that the nonattainment

areas have attained the 2010 1-hour

primary SO2 NAAQS. The primary basis

for the state’s request is that the primary

sources of SO2 emissions in these

nonattainment areas have permanently

shut down. These sources were located

in rural areas with few other sources.

EPA has reviewed the Texas

Commission on Environmental Quality

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