Modifications to the Community Bank Leverage Ratio Framework
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FDIC Financial Institution Letters › Modifications to the Community Bank Leverage Ratio Framework
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Federal Register / Vol. 85, No. 197 / Friday, October 9, 2020 / Rules and Regulations
(4) New conservation activities
initiated or implemented prior to
contract approval, unless NRCS granted
a waiver prior to the participant starting
the activity.
*
*
*
*
*
§ 1470.25
[Amended]
■6. In § 1470.25, amend paragraph (c)
by removing the cross reference
‘‘§ 1470.24(g)’’ and adding
‘‘§ 1470.24(h)’’ in its place.
■7. In § 1470.26, revise paragraphs (a)
and (c) to read as follows:
§ 1470.26
Contract renewal.
(a) During the first half of the fifth
year of the initial contract period, NRCS
may allow a participant to apply and
compete for the opportunity under
§ 1470.20 to renew the contract to
receive payments for an additional 5-
year period, subject to the availability of
funds, if the participant meets criteria
from paragraph (b) of this section.
*
*
*
*
*
(c) NRCS will determine a participant
ineligible for a new CSP contract on an
agricultural operation for 2 years
following expiration of their prior
contract if the participant does not enter
a renewal contract on the agricultural
operation at the end of the prior contract
period.
§ 1470.35
[Amended]
■8. In § 1470.35, amend paragraph (a)
by removing the words ‘‘7 CFR part
1403’’ and adding the words ‘‘part 3 of
this title’’ in their place.
Kevin Norton,
Acting Chief, Natural Resources Conservation
Service.
Robert Stephenson,
Executive Vice President, Commodity Credit
Corporation.
[FR Doc. 2020–22345 Filed 10–8–20; 8:45 am]
BILLING CODE 3410–16–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2020–0017]
RIN 1557–AE89
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q; Docket No
,
Acting Chief, Natural Resources Conservation
Service.
Robert Stephenson,
Executive Vice President, Commodity Credit
Corporation.
[FR Doc. 2020–22345 Filed 10–8–20; 8:45 am]
BILLING CODE 3410–16–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2020–0017]
RIN 1557–AE89
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q; Docket No. R–1711]
RIN 7100–AF85
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AF47
Regulatory Capital Rule: Temporary
Changes to and Transition for the
Community Bank Leverage Ratio
Framework
AGENCY: The Office of the Comptroller
of the Currency, Treasury; the Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Final rule.
SUMMARY: The Office of the Comptroller
of the Currency, the Board of Governors
of the Federal Reserve System, and the
Federal Deposit Insurance Corporation
are adopting as final the revisions to the
community bank leverage ratio
framework made under two interim
final rules issued in the Federal
Register on April 23, 2020. The final
rule adopts these interim final rules
with no changes. Under the final rule,
the community bank leverage ratio will
remain 8 percent through calendar year
2020, will be 8.5 percent through
calendar year 2021, and will be 9
percent thereafter. The final rule also
maintains a two-quarter grace period for
a qualifying community banking
organization whose leverage ratio falls
no more than 1 percentage point below
the applicable community bank leverage
ratio requirement.
DATES: The final rule is effective
November 9, 2020
through calendar year
2020, will be 8.5 percent through
calendar year 2021, and will be 9
percent thereafter. The final rule also
maintains a two-quarter grace period for
a qualifying community banking
organization whose leverage ratio falls
no more than 1 percentage point below
the applicable community bank leverage
ratio requirement.
DATES: The final rule is effective
November 9, 2020.
FOR FURTHER INFORMATION CONTACT:
OCC: Benjamin Pegg, Risk Expert, or
Jung Sup Kim, Risk Specialist, Capital
and Regulatory Policy, (202) 649–6370;
Carl Kaminski, Special Counsel, or
Daniel Perez, 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: Constance M. Horsley, Deputy
Associate Director, (202) 452–5239;
Elizabeth MacDonald, Manager, (202)
872–7526; Christopher Appel, Senior
Financial Institution Policy Analyst II,
(202) 973–6862; or Brendan Rowan,
Senior Financial Institution Policy
Analyst I, (202) 475–6685, Division of
Supervision and Regulation; or
Benjamin W. McDonough, Assistant
General Counsel, (202) 452–2036; Mark
Buresh, Senior Counsel, (202) 452–2877;
Andrew Hartlage, Counsel, (202) 452–
6483; or Jonah Kind, Senior Attorney,
(202) 452–2045, Legal Division, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue NW, Washington, DC 20551.
Users of Telecommunication Device for
the Deaf (TDD) only, call (202) 263–
4869.
FDIC: Bobby R
neral Counsel, (202) 452–2036; Mark
Buresh, Senior Counsel, (202) 452–2877;
Andrew Hartlage, Counsel, (202) 452–
6483; or Jonah Kind, Senior Attorney,
(202) 452–2045, Legal Division, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue NW, Washington, DC 20551.
Users of Telecommunication Device for
the 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; 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 on the Community Bank
Leverage Ratio Framework
II. Interim Final Rules
III. Final Rule
IV. Impact Analysis
V. Administrative Law Matters
A. Congressional Review Act
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Riegle Community Development and
Regulatory Improvement Act of 1994
E. Use of Plain Language
F. Unfunded Mandates Act
I. Background on the Community Bank
Leverage Ratio Framework
The community bank leverage ratio
framework provides a simple measure of
capital adequacy for community
banking organizations that meet certain
qualifying criteria. The community bank
leverage ratio framework implements
section 201 of the Economic Growth,
Regulatory Relief, and Consumer
Protection Act (EGRRCPA), which
requires the Office of the Comptroller of
the Currency (OCC), the Board of
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zations that meet certain
qualifying criteria. The community bank
leverage ratio framework implements
section 201 of the Economic Growth,
Regulatory Relief, and Consumer
Protection Act (EGRRCPA), which
requires the Office of the Comptroller of
the Currency (OCC), the Board of
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Federal Register / Vol. 85, No. 197 / Friday, October 9, 2020 / Rules and Regulations
1 Public Law 115–174, 132 Stat. 1296, 1306–07
(2018) (codified at 12 U.S.C. 5371 note). The
authorizing statutes use the term ‘‘qualifying
community bank,’’ whereas the regulation
implementing the statutes uses the term ‘‘qualifying
community banking organization.’’ The terms
generally have the same meaning. Section 201(a)(3)
of EGRRCPA provides that a qualifying community
bank is a depository institution or depository
institution holding company with total
consolidated assets of less than $10 billion that
satisfies such other factors, based on the banking
organization’s risk profile, that the agencies
determine are appropriate. This determination shall
be based on consideration of off-balance sheet
exposures, trading assets and liabilities, total
notional derivatives exposures, and any such
factors that the agencies determine appropriate.
2 84 FR 61776 (November 13, 2019).
3 Under existing prompt corrective action
requirements applicable to insured depository
institutions, to be considered ‘‘well capitalized’’ a
banking organization must demonstrate that it is not
subject to any written agreement, order, capital
directive, or as applicable, prompt corrective action
directive, to meet and maintain a specific capital
level for any capital measure. See 12 CFR
6.4(b)(1)(iv) (OCC); 12 CFR 208.43(b)(1)(v) (Board);
12 CFR 324.403(b)(1)(v) (FDIC). The same legal
requirements continue to apply under the
community bank leverage ratio framework
that it is not
subject to any written agreement, order, capital
directive, or as applicable, prompt corrective action
directive, to meet and maintain a specific capital
level for any capital measure. See 12 CFR
6.4(b)(1)(iv) (OCC); 12 CFR 208.43(b)(1)(v) (Board);
12 CFR 324.403(b)(1)(v) (FDIC). The same legal
requirements continue to apply under the
community bank leverage ratio framework.
4 A banking organization is an advanced
approaches banking organization if it is a global
systemically important bank holding company, is a
Category II banking organization, has elected to be
an advanced approaches banking organization, is a
subsidiary of a company that is an advanced
approaches banking organization, or has a
subsidiary depository institution that is an
advanced approaches banking organization. See 12
CFR 3.100 (OCC); 12 CFR 217.100 (Board); 12 CFR
324.100 (FDIC).
5 Public Law 116–136, 134 Stat. 281.
6 85 FR 22924 (April 23, 2020).
7 85 FR 22930 (April 23, 2020).
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the agencies) to establish a
community bank leverage ratio of not
less than 8 percent and not more than
10 percent for a qualifying community
banking organization.1 Under section
201(c) of EGRRCPA, a qualifying
community banking organization whose
leverage ratio exceeds the community
bank leverage ratio, as established by
the agencies, shall be considered to have
met the generally applicable risk-based
and leverage capital requirements in the
capital rule (generally applicable rule),
any other applicable capital or leverage
requirements, and, if applicable, the
‘‘well capitalized’’ capital ratio
requirements for purposes of section 38
of the Federal Deposit Insurance Act
k leverage ratio, as established by
the agencies, shall be considered to have
met the generally applicable risk-based
and leverage capital requirements in the
capital rule (generally applicable rule),
any other applicable capital or leverage
requirements, and, if applicable, the
‘‘well capitalized’’ capital ratio
requirements for purposes of section 38
of the Federal Deposit Insurance Act.
Section 201(b) of EGRRCPA also
requires the agencies to establish
procedures for the treatment of a
qualifying community banking
organization whose leverage ratio falls
below the community bank leverage
ratio requirement as established by the
agencies.
In November 2019, the agencies
issued a final rule establishing the
community bank leverage ratio
framework, which became effective
January 1, 2020 (2019 final rule).2 Under
the 2019 final rule, the agencies
established a community bank leverage
ratio of 9 percent using the existing
leverage ratio calculation. A qualifying
community banking organization that
maintained a leverage ratio of greater
than 9 percent and elected to use the
community bank leverage ratio
framework would have been considered
to have satisfied the generally
applicable rule, any other applicable
capital or leverage requirements, and, if
applicable, the capital ratio
requirements to be considered well
capitalized.3
Under the 2019 final rule, a qualifying
community banking organization is any
depository institution or depository
institution holding company that has
less than $10 billion in total
consolidated assets, off-balance sheet
exposures (excluding derivatives other
than sold credit derivatives and
unconditionally cancelable
commitments) of 25 percent or less of
total consolidated assets, and trading
assets and liabilities of 5 percent or less
of total consolidated assets
pository institution or depository
institution holding company that has
less than $10 billion in total
consolidated assets, off-balance sheet
exposures (excluding derivatives other
than sold credit derivatives and
unconditionally cancelable
commitments) of 25 percent or less of
total consolidated assets, and trading
assets and liabilities of 5 percent or less
of total consolidated assets. The banking
organization also cannot be an advanced
approaches banking organization.4
In addition, the 2019 final rule
established a two-quarter grace period
during which a qualifying community
banking organization that temporarily
failed to meet any of the qualifying
criteria, including the leverage ratio
requirement, generally would still have
been considered well capitalized so long
as the banking organization maintained
a leverage ratio of greater than 8 percent
during that grace period. A banking
organization that either failed to meet
all the qualifying criteria within the
grace period or failed to maintain a
leverage ratio of greater than 8 percent
would have been required to comply
with the generally applicable rule and
file the appropriate regulatory reports.
II. Interim Final Rules
On March 27, 2020, the Coronavirus
Aid, Relief, and Economic Security Act
(CARES Act) became law.5 Section 4012
of the CARES Act directs the agencies
to issue an interim final rule providing
that, for purposes of section 201 of
EGRRCPA, the community bank
leverage ratio shall be 8 percent, and a
qualifying community banking
organization whose leverage ratio falls
below the community bank leverage
ratio requirement established under the
CARES Act shall have a reasonable
grace period to satisfy that requirement
Act directs the agencies
to issue an interim final rule providing
that, for purposes of section 201 of
EGRRCPA, the community bank
leverage ratio shall be 8 percent, and a
qualifying community banking
organization whose leverage ratio falls
below the community bank leverage
ratio requirement established under the
CARES Act shall have a reasonable
grace period to satisfy that requirement.
Section 4012 of the CARES Act specifies
that the interim final rule is effective
during the period beginning on the date
on which the agencies issue the interim
final rule and ending on the sooner of
the termination date of the national
emergency concerning the coronavirus
disease (COVID–19) outbreak declared
by the President on March 13, 2020,
under the National Emergencies Act, or
December 31, 2020 (termination date).
Accordingly, the agencies issued an
interim final rule that implements a
temporary 8-percent community bank
leverage ratio requirement, as mandated
under section 4012 of the CARES Act
(statutory interim final rule).6 In
addition, under the statutory interim
final rule, a community banking
organization that temporarily fails to
meet any of the qualifying criteria,
including the 8-percent community
bank leverage ratio requirement,
generally will still be considered well
capitalized provided that the banking
organization maintains a leverage ratio
equal to 7 percent or greater. A banking
organization that fails to meet the
qualifying criteria after the end of the
grace period or reports a leverage ratio
of less than 7 percent must comply with
the generally applicable rule and file the
appropriate regulatory reports
generally will still be considered well
capitalized provided that the banking
organization maintains a leverage ratio
equal to 7 percent or greater. A banking
organization that fails to meet the
qualifying criteria after the end of the
grace period or reports a leverage ratio
of less than 7 percent must comply with
the generally applicable rule and file the
appropriate regulatory reports.
Since the statutory interim final rule
could cease to be effective at any time
before December 31, 2020, the agencies
issued a separate interim final rule
pursuant to section 201(b) of EGRRCPA
that provides a graduated transition
from the temporary 8-percent
community bank leverage ratio
requirement to the 9-percent community
bank leverage ratio requirement as
established under the 2019 final rule
(transition interim final rule).7
Specifically, the transition interim final
rule provides that, once the statutory
interim final rule ceases to apply, the
community bank leverage ratio will be
8 percent in the second quarter through
fourth quarter of calendar year 2020, 8.5
percent in calendar year 2021, and 9
percent thereafter. The transition
interim final rule also modifies the two-
quarter grace period for a qualifying
community banking organization to
account for the graduated increase in
the community bank leverage ratio
requirement. The interim final rules do
not make any changes to the other
qualifying criteria in the community
bank leverage ratio framework.
The transition interim final rule
extends the 8-percent community bank
leverage ratio through December 31,
2020, in the event the statutory interim
final rule terminates before December
31, 2020. Thus, even if the statutory
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eria in the community
bank leverage ratio framework.
The transition interim final rule
extends the 8-percent community bank
leverage ratio through December 31,
2020, in the event the statutory interim
final rule terminates before December
31, 2020. Thus, even if the statutory
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Federal Register / Vol. 85, No. 197 / Friday, October 9, 2020 / Rules and Regulations
8 While the statutory interim final rule is in effect,
a qualifying community banking organization that
temporarily fails to meet any of the qualifying
criteria, including the applicable community bank
leverage ratio requirement, generally would still be
deemed well capitalized so long as the banking
organization maintains a leverage ratio of 7 percent
or greater during a two-quarter grace period.
Similarly, while the statutory interim final rule is
in effect, a banking organization that fails to meet
the qualifying criteria by the end of the grace period
or reports a leverage ratio of less than 7 percent
must comply with the generally applicable rule and
file the appropriate regulatory reports.
9 The provisions under the final rule are effective
November 9, 2020. Banking organizations will
continue to be subject to the requirements under the
statutory interim final rule or transition interim
final rule for purposes of filing their Consolidated
Report of Condition and Income (Call Report) or
Form FR Y–9C, as applicable. A banking
organization’s compliance with capital
requirements for a quarter prior to the final rule’s
effective date shall be determined according to the
generally applicable rule unless the banking
organization has filed its Call Report or FR Y–9C
report, as applicable, for the prior quarter and has
indicated that it has elected to use the community
bank leverage ratio framework
plicable. A banking
organization’s compliance with capital
requirements for a quarter prior to the final rule’s
effective date shall be determined according to the
generally applicable rule unless the banking
organization has filed its Call Report or FR Y–9C
report, as applicable, for the prior quarter and has
indicated that it has elected to use the community
bank leverage ratio framework.
10 Consistent with the 2019 final rule, a banking
organization that ceases to satisfy the qualifying
criteria as a result of a business combination also
will receive no grace period and will be required
to comply with the generally applicable rule.
11 Prior to the termination date, a qualifying
community banking organization that temporarily
fails to meet any of the qualifying criteria, including
the applicable community bank leverage ratio
requirement, generally would still be deemed well
capitalized so long as the banking organization
maintains a leverage ratio of 7 percent or greater
during a two-quarter grace period. Similarly, prior
to the termination date, a banking organization that
fails to meet the qualifying criteria after the end of
the grace period or reports a leverage ratio of less
than 7 percent must comply with the generally
applicable rule and file the appropriate regulatory
reports.
interim final rule were to terminate
prior to December 31, 2020, the
community bank leverage ratio would
continue to be set at 8 percent for the
remainder of 2020. Section 201 of
EGRRCPA requires a qualifying
community banking organization to
exceed the community bank leverage
ratio established by the agencies in
order to be considered to have met the
generally applicable rule, any other
applicable capital or leverage
requirements, and, if applicable, the
‘‘well capitalized’’ capital ratio
requirements, whereas section 4012 of
the CARES Act requires that a
qualifying community banking
organization meet or exceed an 8
percent community bank leverage ratio
to be considered the same
the agencies in
order to be considered to have met the
generally applicable rule, any other
applicable capital or leverage
requirements, and, if applicable, the
‘‘well capitalized’’ capital ratio
requirements, whereas section 4012 of
the CARES Act requires that a
qualifying community banking
organization meet or exceed an 8
percent community bank leverage ratio
to be considered the same.
In the 2019 final rule, the agencies
adopted a 9-percent community bank
leverage ratio requirement on the basis
that this threshold, with complementary
qualifying criteria, generally maintains
the current level of regulatory capital
held by qualifying banking
organizations and supports the agencies’
goals of reducing regulatory burden
while maintaining safety and
soundness. The agencies intend for the
graduated approach under the transition
interim final rule to provide community
banking organizations with sufficient
time to meet a 9-percent community
bank leverage ratio requirement while
they also focus on supporting lending to
creditworthy households and
businesses. This latter goal is
particularly critical given the recent
strain on the U.S. economy caused by
COVID–19.
Consistent with section 201(c) of
EGRRCPA, under the transition interim
final rule, a qualifying community
banking organization that temporarily
fails to meet any of the qualifying
criteria, including the applicable
community bank leverage ratio
requirement, generally would still be
deemed well capitalized during a two-
quarter grace period so long as the
banking organization maintains a
leverage ratio of the following: Greater
than 7 percent in the second quarter
through fourth quarter of calendar year
2020, greater than 7.5 percent in
calendar year 2021, and greater than 8
percent thereafter.8 A banking
organization that fails to meet the
qualifying criteria by the end of the
grace period or reports a leverage ratio
of equal to or less than 7 percent in the
second through fourth quarters of
calendar year
er
than 7 percent in the second quarter
through fourth quarter of calendar year
2020, greater than 7.5 percent in
calendar year 2021, and greater than 8
percent thereafter.8 A banking
organization that fails to meet the
qualifying criteria by the end of the
grace period or reports a leverage ratio
of equal to or less than 7 percent in the
second through fourth quarters of
calendar year 2020, equal to or less than
7.5 percent in calendar year 2021, or
equal to or less than 8 percent
thereafter, would be required to comply
immediately with the generally
applicable rule and file the appropriate
regulatory reports.
The agencies adopted in the 2019
final rule a two-quarter grace period
with a leverage ratio requirement that is
1 percentage point below the
community bank leverage ratio on the
basis that this grace period would
appropriately mitigate potential
volatility in capital and associated
regulatory reporting requirements based
on temporary changes in a banking
organization’s risk profile from quarter
to quarter, while capturing more
permanent changes in a banking
organization’s risk profile. The agencies
maintained this approach in the interim
final rules because they believed that
this approach is appropriate and
provides a qualifying community
banking organization whose leverage
ratio falls below the applicable
community bank leverage ratio
requirement a reasonable amount of
time to once again satisfy that
requirement. This approach is
consistent with section 201(b)(2) of
EGRRCPA, which directs the agencies to
establish procedures for the treatment of
a qualifying community bank whose
leverage ratio falls below the
community bank leverage ratio
requirement as established by the
agencies.
The agencies received one public
comment that addressed the substance
of the interim final rules. The
commenter urged the agencies to revert
to a 9 percent community bank leverage
ratio by January 1, 2022, which is
consistent with the transition interim
final rule
mmunity bank whose
leverage ratio falls below the
community bank leverage ratio
requirement as established by the
agencies.
The agencies received one public
comment that addressed the substance
of the interim final rules. The
commenter urged the agencies to revert
to a 9 percent community bank leverage
ratio by January 1, 2022, which is
consistent with the transition interim
final rule. The agencies are adopting as
final the interim final rules with no
changes.
III. Final Rule
Under the final rule, a qualifying
community banking organization must
have a leverage ratio equal to or greater
than 8 percent beginning in the second
quarter of calendar year 2020. If the
national emergency is terminated during
2020, under the final rule, a qualifying
community banking organization must
have a leverage ratio greater than 8
percent for the remainder of calendar
year 2020. Subsequently, a qualifying
community banking organization must
have a leverage ratio greater than 8.5
percent through calendar year 2021 and
greater than 9 percent thereafter.9
The final rule also includes the
modified two-quarter grace period for a
qualifying community banking
organization to take into account the
graduated increase in the community
bank leverage ratio requirement.10
Specifically, a qualifying community
banking organization that temporarily
fails to meet any of the qualifying
criteria, including the applicable
community bank leverage ratio
requirement, will generally still be
deemed well capitalized during a two-
quarter grace period so long as the
banking organization maintains a
leverage ratio of the following: greater
than 7 percent in the second quarter
through fourth quarter of calendar year
2020, greater than 7.5 percent in
calendar year 2021, and greater than 8
percent thereafter.11
The final rule does not make any
changes to the other qualifying criteria
in the community bank leverage ratio
framework
period so long as the
banking organization maintains a
leverage ratio of the following: greater
than 7 percent in the second quarter
through fourth quarter of calendar year
2020, greater than 7.5 percent in
calendar year 2021, and greater than 8
percent thereafter.11
The final rule does not make any
changes to the other qualifying criteria
in the community bank leverage ratio
framework.
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Federal Register / Vol. 85, No. 197 / Friday, October 9, 2020 / Rules and Regulations
12 Based on data reported on Form FR Y–9C and
the Reports of Condition and Income (Call Reports).
13 5 U.S.C. 801 et seq.
14 5 U.S.C. 801(a)(3).
15 5 U.S.C. 804(2).
TABLE 1—SCHEDULE OF COMMUNITY
BANK LEVERAGE RATIO REQUIRE-
MENTS
Calendar year
Community
bank leverage
ratio
requirement
(percent)
Leverage
ratio
requirement
under the
applicable
grace period
(percent)
2020 ...................................
8
7
2021 ...................................
8.5
7.5
2022 and thereafter ...........
9
8
The agencies are maintaining the 2019
final rule’s requirement that the grace
period will begin as of the end of the
calendar quarter in which the electing
banking organization ceases to satisfy
any of the qualifying criteria (so long as
the banking organization maintains a
leverage ratio of greater than the
requirement for the applicable grace
period) and will end after two
consecutive calendar quarters. For
example, if an electing banking
organization, which had met all
qualifying criteria as of March 31, 2020,
no longer met one of the qualifying
criteria as of May 15, 2020, and still had
not met the criteria as of the end of that
quarter, the grace period for the banking
organization would have begun as of the
end of the quarter ending June 30, 2020
r two
consecutive calendar quarters. For
example, if an electing banking
organization, which had met all
qualifying criteria as of March 31, 2020,
no longer met one of the qualifying
criteria as of May 15, 2020, and still had
not met the criteria as of the end of that
quarter, the grace period for the banking
organization would have begun as of the
end of the quarter ending June 30, 2020.
The banking organization may continue
to use the community bank leverage
ratio framework as of September 30,
2020 (so long as the banking
organization maintains a leverage ratio
of greater than the requirement for the
applicable grace period), but would
need to comply fully with the generally
applicable rule and associated reporting
requirements as of December 31, 2020,
unless the banking organization once
again meets all qualifying criteria by
that date.
If an electing banking organization is
in the grace period when the
community bank leverage ratio
increases, the banking organization
would be subject, as of the date of the
change, to both the higher community
bank leverage ratio requirement and
higher grace period leverage ratio
requirement. For example, if the
electing banking organization that were
to meet all qualifying criteria as of
September 30, 2020, but reports a 7.2
percent leverage ratio as of December
31, 2020, and meets all the other
qualifying criteria, the grace period for
such a banking organization would
begin as of the end of the fourth quarter
2020. The banking organization may
continue to use the community bank
leverage ratio framework as of March 31,
2021, if the banking organization reports
a leverage ratio of greater than 7.5
percent, and would need to comply
fully with the generally applicable rule
and associated reporting requirements
as of June 30, 2021, unless the banking
organization reports a leverage ratio of
greater than 8.5 percent (and meets all
the other qualifying criteria) by that
date
e ratio framework as of March 31,
2021, if the banking organization reports
a leverage ratio of greater than 7.5
percent, and would need to comply
fully with the generally applicable rule
and associated reporting requirements
as of June 30, 2021, unless the banking
organization reports a leverage ratio of
greater than 8.5 percent (and meets all
the other qualifying criteria) by that
date. In this example, if the banking
organization has a leverage ratio equal
to or less than 7.5 percent as of March
31, 2021, it would not be eligible to use
the community bank leverage ratio
framework and would be subject to the
requirements of the generally applicable
rule and associated reporting
requirements as of March 31, 2021.
As mentioned above, the grace period
for an electing community banking
organization is limited to two
consecutive calendar quarters. For
example, if an electing banking
organization were to meet all qualifying
criteria as of June 30, 2021, but reports
a 8.3 percent leverage ratio (while
meeting all the other qualifying criteria)
as of the end of September 30, 2021, the
grace period for such a banking
organization would begin as of the end
of the third quarter 2021. The banking
organization may continue to use the
community bank leverage ratio
framework as of December 31, 2021, if
the banking organization reports a
leverage ratio of greater than 7.5
percent, and would need to comply
fully with the generally applicable rule
and associated reporting requirements
as of March 31, 2022, unless the banking
organization reports a leverage ratio of
greater than 9.0 percent (and meets all
the other qualifying criteria) by that
date.
IV. Impact Analysis
The final rule will affect all banking
organizations (i.e., depository
institutions and depository institution
holding companies) that qualify for the
community bank leverage ratio
framework and elect to adopt it
h 31, 2022, unless the banking
organization reports a leverage ratio of
greater than 9.0 percent (and meets all
the other qualifying criteria) by that
date.
IV. Impact Analysis
The final rule will affect all banking
organizations (i.e., depository
institutions and depository institution
holding companies) that qualify for the
community bank leverage ratio
framework and elect to adopt it. Based
on data as of March 31, 2020, there are
5,189 banking organizations with less
than $10 billion in total consolidated
assets.12 The agencies estimate that
approximately 96 percent of these
banking organizations qualify to use the
community bank leverage ratio
framework under the 8 percent
requirement in effect for the remainder
of calendar year 2020. As of March 31,
2020, the temporary reduction in the
community bank leverage ratio
requirement during the remainder of
calendar year 2020 from 9 percent to 8
percent will increase the scope of
qualifying community banks by
approximately 480 depository
institutions and approximately 20
depository institution holding
companies (holding companies).
As of March 31, 2020, approximately
39 percent of qualifying banking
organizations have elected to use the
community bank leverage ratio
framework. Approximately 92 percent
of these banking organizations have
total assets of less than $1 billion. As of
March 31, 2020, 1,709 depository
institutions have elected to use the
community bank leverage ratio
framework. As of the same period, 29
holding companies have elected to use
the community bank leverage ratio
framework. The agencies anticipate that
banking organizations that have elected
to use the community bank leverage
ratio framework should be able to
manage the transition in the leverage
ratio requirement under the final rule in
a prudent manner, given that the final
rule provides a graduated transition
back to a 9 percent leverage ratio
requirement by 2022.
V. Administrative Law Matters
A
mework. The agencies anticipate that
banking organizations that have elected
to use the community bank leverage
ratio framework should be able to
manage the transition in the leverage
ratio requirement under the final rule in
a prudent manner, given that the final
rule provides a graduated transition
back to a 9 percent leverage ratio
requirement by 2022.
V. Administrative Law Matters
A. Congressional Review Act
For purposes of the Congressional
Review Act, the Office of Management
and Budget (OMB) makes a
determination as to whether a final rule
constitutes a ‘‘major’’ rule.13 If a rule is
deemed a ‘‘major rule’’ by the OMB, the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.14
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.15
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.
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521) (PRA) states that
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uired 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.
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521) (PRA) states that
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Federal Register / Vol. 85, No. 197 / Friday, October 9, 2020 / Rules and Regulations
16 See 85 FR 44361 (May 22, 2020).
17 A savings and loan holding company (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.
18 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).
19 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.
20 A top-tier HC may submit a separate FR Y–9LP
on behalf of each of its lower-tier HCs.
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. This final rule does not contain
any information collection
requirements. However, in connection
with the transition interim final rule,
the Board temporarily revised the
Financial Statements for Holding
Companies (FR Y–9 reports; OMB No
may conduct or sponsor, nor
is the respondent required to respond
to, an information collection unless it
displays a currently valid OMB control
number. This final rule does not contain
any information collection
requirements. However, in connection
with the transition interim final rule,
the Board temporarily revised the
Financial Statements for Holding
Companies (FR Y–9 reports; OMB No.
7100–0128) and invited comment on a
proposal to extend that collection of
information for three years, with
revision. No comments were received
regarding this proposal under the PRA.
The Board has now extended, with
revision, the FR Y–9 reports, as
proposed, to align the reporting
instructions with this final rule. The
Board will submit information
collection burden estimates to OMB to
finalize the revisions. All of the updates
to the FR Y–9C noted in the transition
interim final rule should be minimal
and result in zero net change in hourly
burden.
Additionally, in connection with the
transition interim final rule, the
agencies made revisions to the Call
Reports (OCC OMB Control No. 1557–
0081; Board OMB Control No. 7100–
0036; and FDIC OMB Control No. 3064–
0052) and the FFIEC 101 (OCC OMB
Control No. 1557–0239; Board OMB
Control No. 7100–0319; FDIC OMB
Control No. 3064–0159). The final
changes to the Call Reports, the FFIEC
101, and their related instructions are
addressed in a separate Federal Register
notice.16
Revision, With Extension, of the
Following Information Collections
OMB Control No. 7100–
0036; and FDIC OMB Control No. 3064–
0052) and the FFIEC 101 (OCC OMB
Control No. 1557–0239; Board OMB
Control No. 7100–0319; FDIC OMB
Control No. 3064–0159). The final
changes to the Call Reports, the FFIEC
101, and their related instructions are
addressed in a separate Federal Register
notice.16
Revision, With Extension, of the
Following Information Collections
(1) 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: Currently effective.
Frequency: Quarterly, semiannually,
and annually.
Respondents: Bank holding
companies, savings and loan holding
companies,17 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): 71; 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): 29.17 hours; FR Y–9C (non-
advanced approaches CBLR HCs with
$5 billion or more in total assets): 35.14;
FR Y–9C (non-advanced approaches,
non CBLR HCs, with less than $5 billion
in total assets): 41.01; FR Y–9C (non-
advanced approaches, non CBLR, HCs
with $5 billion or more in total assets):
46.98 hours; FR Y–9C (advanced
approaches HCs): 48.80 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
s with
$5 billion or more in total assets): 35.14;
FR Y–9C (non-advanced approaches,
non CBLR HCs, with less than $5 billion
in total assets): 41.01; FR Y–9C (non-
advanced approaches, non CBLR, HCs
with $5 billion or more in total assets):
46.98 hours; FR Y–9C (advanced
approaches HCs): 48.80 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): 8,284 hours; FR Y–9C (non-
advanced approaches CBLR HCs with
$5 billion or more in total assets): 4,920;
FR Y–9C (non-advanced approaches
non CBLR HCs with less than $5 billion
in total assets): 13,779; FR Y–9C (non-
advanced approaches non CBLR HCs
with $5 billion or more in total assets):
28,940 hours; FR Y–9C (advanced
approaches HCs): 3,709 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: 1,452 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.18
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.19 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.20 The
report consists of standardized financial
statements
iled by commercial banks.18
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.19 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.20 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 FR Y 9 family of reports on
bank holding companies pursuant to
section 5 of the Bank Holding Company
Act of 1956 (BHC Act) (12 U.S.C
s 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 FR Y 9 family of reports on
bank holding companies pursuant to
section 5 of the Bank Holding Company
Act of 1956 (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)), as amended by
sections 369(8) and 604(h)(2) of the
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Federal Register / Vol. 85, No. 197 / Friday, October 9, 2020 / Rules and Regulations
21 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 annual
receipts of $41.5 million or less. See 13 CFR
121.201.
22 5 U.S.C. 604.
23 12 U.S.C. 4802(a).
24 12 U.S.C. 4802.
Dodd-Frank Wall Street and Consumer
Protection Act (Dodd-Frank Act); on
U.S. intermediate holding companies
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 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 obligation to
submit 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 report,
Schedule HI’s data item 7(g) ‘‘FDIC
deposit insurance assessments,’’
Schedule HC P’s data item 7(a)
‘‘Representation and warranty reserves
for 1 4 family residential mortgage loans
sold to U.S
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 report,
Schedule HI’s data item 7(g) ‘‘FDIC
deposit insurance assessments,’’
Schedule HC P’s data item 7(a)
‘‘Representation and warranty reserves
for 1 4 family residential mortgage loans
sold to U.S. government agencies and
government sponsored agencies,’’ and
Schedule HC P’s data item 7(b)
‘‘Representation and warranty reserves
for 1 4 family residential mortgage loans
sold to other parties’’ are considered
confidential commercial and financial
information. Such treatment is
appropriate under exemption 4 of the
Freedom of Information Act (FOIA) (5
U.S.C. 552(b)(4)) because these data
items reflect commercial and financial
information that is both customarily and
actually treated as private by the
submitter, and which the Board has
previously assured submitters will be
treated as confidential. It also appears
that disclosing these data items may
reveal confidential examination and
supervisory information, and in such
instances, this information would also
be withheld pursuant to exemption 8 of
the FOIA (5 U.S.C. 552(b)(8)), which
protects information related to the
supervision or examination of a
regulated financial institution.
In addition, for both the FR Y 9C
report, Schedule HC’s memorandum
item 2.b. and the FR Y 9SP report,
Schedule SC’s memorandum item 2.b.,
the name and email address of the
external auditing firm’s engagement
partner, is considered confidential
commercial information and protected
by exemption 4 of the FOIA (5 U.S.C.
552(b)(4)) if the identity of the
engagement partner is treated as private
information by HCs. The Board has
assured respondents that this
information will be treated as
confidential since the collection of this
data item was proposed in 2004
external auditing firm’s engagement
partner, is considered confidential
commercial information and protected
by exemption 4 of the FOIA (5 U.S.C.
552(b)(4)) if the identity of the
engagement partner is treated as private
information by HCs. The Board has
assured respondents that this
information will be treated as
confidential since the collection of this
data item was proposed in 2004.
Additionally, items on the FR Y–9C,
Schedule HC–C for loans modified
under Section 4013, data items
Memorandum items 16.a, ‘‘Number of
Section 4013 loans outstanding’’; and
Memorandum items 16.b, ‘‘Outstanding
balance of Section 4013 loans’’ are
considered confidential. While the
Board generally makes institution-level
FR Y–9C report data publicly available,
the Board is collecting Section 4013
loan information as part of condition
reports for the impacted HCs and the
Board considers disclosure of these
items at the HC level would not be in
the public interest. Such information is
permitted to be collected on a
confidential basis, consistent with 5
U.S.C. 552(b)(8). In addition, holding
companies may be reluctant to offer
modifications under Section 4013 if
information on these modifications
made by each holding company is
publicly available, as analysts,
investors, and other users of public FR
Y–9C report information may penalize
an institution for using the relief
provided by the CARES Act. The Board
may disclose Section 4013 loan data on
an aggregated basis, consistent with
confidentiality.
Aside from the data items described
above, the remaining data items on the
FR Y–9C report and the FR–Y 9SP
report are generally not accorded
confidential treatment. The data items
collected on FR Y–9LP, FR Y–9ES, and
FR Y–9CS reports, are also generally not
accorded confidential treatment
Board
may disclose Section 4013 loan data on
an aggregated basis, consistent with
confidentiality.
Aside from the data items described
above, the remaining data items on the
FR Y–9C report and the FR–Y 9SP
report are generally not accorded
confidential treatment. The data items
collected on FR Y–9LP, FR Y–9ES, and
FR Y–9CS reports, are also 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 the instructions to the
FR Y–9C, FR Y–9LP, FR Y–9SP, and FR
Y–9ES reports each respectively direct
the financial institution to retain the
work papers 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 is
considered confidential pursuant to
exemption 8 of the FOIA (5 U.S.C.
552(b)(8)). In addition, the financial
institution’s work papers 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)).
C
pervision of the financial institution.
Accordingly, such information is
considered confidential pursuant to
exemption 8 of the FOIA (5 U.S.C.
552(b)(8)). In addition, the financial
institution’s work papers 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)).
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
requires an agency to consider whether
the rules it proposes will have a
significant economic impact on a
substantial number of small entities.21
The RFA requires an agency to prepare
a final regulatory flexibility analysis
when it promulgates a final rule after
being required to publish a general
notice of proposed rulemaking.22 As
discussed previously, the agencies have
decided to adopt, without changes,
revisions to the community bank
leverage ratio framework made under
the statutory interim final rule and the
transition interim final rule. There is no
general notice of proposed rulemaking
associated with this final rule.
Accordingly, the agencies have
concluded that the RFA’s requirements
relating to initial and final regulatory
flexibility analysis do not apply to the
promulgation of this final rule.
D. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act
(RCDRIA),23 in determining the effective
date and administrative compliance
requirements for new regulations that
impose additional reporting, disclosure,
or other requirements on insured
depository institutions, 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
her requirements on insured
depository institutions, 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 insured depository
institutions 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.24 Each Federal banking agency
has determined that the final rule would
not impose additional reporting,
disclosure, or other requirements;
therefore the requirements of the
RCDRIA do not apply.
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25 12 U.S.C. 4809.
26 See 2 U.S.C. 1532(a).
E. Use of Plain Language
Section 722 of the Gramm-Leach-
Bliley Act 25 requires the Federal
banking agencies to use ‘‘plain
language’’ in all proposed and final
rules published after January 1, 2000. In
light of this requirement, the agencies
have sought to present the final rule in
a simple and straightforward manner.
The agencies did not receive any
comments on the use of plain language.
F. Unfunded Mandates Act
As a general matter, the Unfunded
Mandates 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
e.
F. Unfunded Mandates Act
As a general matter, the Unfunded
Mandates 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.26 Therefore, because
the OCC has found good cause to
dispense with notice and comment for
the final rule, the OCC concludes that
the requirements of UMRA do not apply
to this final rule.
Authority and Issuance
For the reasons set forth in the joint
preamble, the interim final rules which
were published at 85 FR 22924 and 85
FR 22930 on April 23, 2020, are adopted
as a final rule by the OCC, Board, and
FDIC without change.
Brian P. Brooks,
Acting Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about
August 21, 2020.
James P. Sheesley,
Acting Assistant Executive Secretary.
[FR Doc. 2020–19922 Filed 10–8–20; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2019–0989; Product
Identifier 2019–NM–097–AD; Amendment
39–21265; AD 2020–20–09]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
AGENCY: Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
SUMMARY: The FAA is superseding
Airworthiness Directives (ADs) 2015–
14–07, 2016–07–10, and 2016–24–09.
AD 2015–14–07 applied to certain The
Boeing Company Model 787–8
airplanes. AD 2016–07–10 and AD
2016–24–09 applied to all The Boeing
Company Model 787–8 and 787–9
airplanes
rectives; The Boeing
Company Airplanes
AGENCY: Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
SUMMARY: The FAA is superseding
Airworthiness Directives (ADs) 2015–
14–07, 2016–07–10, and 2016–24–09.
AD 2015–14–07 applied to certain The
Boeing Company Model 787–8
airplanes. AD 2016–07–10 and AD
2016–24–09 applied to all The Boeing
Company Model 787–8 and 787–9
airplanes. ADs 2015–14–07, 2016–07–
10, and 2016–24–09 required actions
related to certain flight control module
(FCM) software. This AD requires
installing flight control electronics
(FCE) common block point 5 (CBP5)
software, which terminates the
requirements of the ADs superseded by
this AD. This AD was prompted by
certain deficiencies in the FCM
software, including a report of an
unannunciated dual symmetric inboard
slat skew. The FAA is issuing this AD
to address the unsafe condition on these
products.
DATES: This AD is effective November
13, 2020.
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of November 13, 2020.
The Director of the Federal Register
approved the incorporation by reference
of a certain other publication listed in
this AD as of June 6, 2019 (84 FR 18707,
May 2, 2019).
The Director of the Federal Register
approved the incorporation by reference
of a certain other publication listed in
this AD as of December 2, 2016 (81 FR
86912, December 2, 2016).
The Director of the Federal Register
approved the incorporation by reference
of certain other publications listed in
this AD as of August 20, 2015 (80 FR
42014, July 16, 2015).
ADDRESSES: For service information
identified in this final rule, contact
Boeing Commercial Airplanes,
Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC
110–SK57, Seal Beach, CA 90740–5600;
telephone 562–797–1717; internet
https://www.myboeingfleet.com
by reference
of certain other publications listed in
this AD as of August 20, 2015 (80 FR
42014, July 16, 2015).
ADDRESSES: For service information
identified in this final rule, contact
Boeing Commercial Airplanes,
Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC
110–SK57, Seal Beach, CA 90740–5600;
telephone 562–797–1717; internet
https://www.myboeingfleet.com. You
may view this service information at the
FAA, Airworthiness Products Section,
Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For
information on the availability of this
material at the FAA, call 206–231–3195.
It is also available on the internet at
https://www.regulations.gov by
searching for and locating Docket No.
FAA–2019–0989.
Examining the AD Docket
You may examine the AD docket on
the internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2019–
0989; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this final rule,
any comments received, and other
information. The address for Docket
Operations is U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT:
Maureen G. Fallon, Aerospace Engineer,
Systems and Equipment Section, FAA,
Seattle ACO Branch, 2200 South 216th
St., Des Moines, WA 98198; phone and
fax: 206–231–3690; email:
maureen.g.fallon@faa.gov.
SUPPLEMENTARY INFORMATION:
Discussion
The FAA issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 to supersede the following ADs:
• AD 2015–14–07, Amendment 39–
18205 (80 FR 42014, July 16, 2015) (‘‘AD
2015–14–07’’). AD 2015–14–07 applied
to certain Model 787–8 airplanes.
• AD 2016–07–10, Amendment 39–
18455 (81 FR 18741, April 1, 2016)
(‘‘AD 2016–07–10’’). AD 2016–07–10
applied to all Model 787–8 and 787–9
airplanes
ued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 to supersede the following ADs:
• AD 2015–14–07, Amendment 39–
18205 (80 FR 42014, July 16, 2015) (‘‘AD
2015–14–07’’). AD 2015–14–07 applied
to certain Model 787–8 airplanes.
• AD 2016–07–10, Amendment 39–
18455 (81 FR 18741, April 1, 2016)
(‘‘AD 2016–07–10’’). AD 2016–07–10
applied to all Model 787–8 and 787–9
airplanes.
• AD 2016–24–09, Amendment 39–
18726 (81 FR 86912, December 2, 2016)
(‘‘AD 2016–24–09’’). AD 2016–24–09
applied to all Model 787–8 and 787–9
airplanes.
The NPRM published in the Federal
Register on January 2, 2020 (85 FR 23).
The NPRM was prompted by
deficiencies in the FCM software,
including reports that, in certain
weather conditions, erroneous low
airspeed data may be displayed to the
flightcrew before detection and
annunciation via engine-indicating and
crew alerting system (EICAS) messages,
a report indicating that all three FCMs
might simultaneously reset if
continuously powered on for 22 days,
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.