Interagency Interim Final Rule Provides Regulatory Relief to Institutions Experiencing Temporary Asset Growth in Connection with COVID-19-Related Programs

This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations

Federal Register

77345

Vol. 85, No. 232

Wednesday, December 2, 2020

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Parts 3, 4, and 52

[Docket ID OCC–2020–0044]

RIN 1557–AF06

FEDERAL RESERVE SYSTEM

12 CFR Parts 208, 211, 212, 217, 225,

235, and 238

[Docket No. R–1731]

RIN 7100–AG01

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Parts 304, 324, 337, 347, and

348

RIN 3064–AF67

Temporary Asset Thresholds

AGENCY: Office of the Comptroller of the

Currency, Treasury (OCC); Board of

Governors of the Federal Reserve

System (Board); and Federal Deposit

Insurance Corporation (FDIC).

ACTION: Interim final rule, request for

public comment.

SUMMARY: To mitigate temporary

transition costs on banking

organizations related to the coronavirus

disease 2019 (COVID event), the OCC,

Board, and the FDIC (together, the

agencies) are issuing an interim final

rule to permit national banks, savings

associations, state banks, bank holding

companies, savings and loan holding

companies, and U.S. branches and

agencies of foreign banking

organizations with under $10 billion in

total assets as of December 31, 2019,

(community banking organizations) to

use asset data as of December 31, 2019,

in order to determine the applicability

of various regulatory asset thresholds

during calendar years 2020 and 2021.

For the same reasons, the Board is

temporarily revising the instructions to

a number of its regulatory reports to

provide that community banking

organizations may use asset data as of

December 31, 2019, in order to

determine reporting requirements for

reports due in calendar years 2020 or

2021

the applicability

of various regulatory asset thresholds

during calendar years 2020 and 2021.

For the same reasons, the Board is

temporarily revising the instructions to

a number of its regulatory reports to

provide that community banking

organizations may use asset data as of

December 31, 2019, in order to

determine reporting requirements for

reports due in calendar years 2020 or

2021.

DATES:

Effective date: This rule is effective on

December 2, 2020.

Comment date: Comments must be

received on or before February 1, 2021.

ADDRESSES: Comments should be

directed to:

OCC: You may submit comments to

the OCC by any of the methods set forth

below. Commenters are encouraged to

submit comments through the Federal

eRulemaking Portal, if possible. Please

use the title ‘‘Temporary Asset

Thresholds’’ to facilitate the

organization and distribution of the

comments. You may submit comments

by any of the following methods:

• Federal eRulemaking Portal—

Regulations.gov Classic or

Regulations.gov Beta.

Regulations.gov Classic: Go to https://

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OCC–2020–0044’’ in the Search Box and

click ‘‘Search.’’ Click on ‘‘Comment

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Regulations.gov classic homepage. Enter

‘‘Docket ID OCC–2020–0044’’ in the

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comments can be submitted via the

‘‘Comment’’ box below the displayed

document information or click on the

document title and click the

‘‘Comment’’ box on the top-left side of

the screen

o to https://

beta.regulations.gov/ or click ‘‘Visit

New Regulations.gov Site’’ from the

Regulations.gov classic homepage. Enter

‘‘Docket ID OCC–2020–0044’’ in the

Search Box and click ‘‘Search.’’ Public

comments can be submitted via the

‘‘Comment’’ box below the displayed

document information or click on the

document title and click the

‘‘Comment’’ box on the top-left side of

the screen. For help with submitting

effective comments, please click on

‘‘Commenter’s Checklist.’’ For

assistance with the Regulations.gov Beta

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

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

9 a.m.–5 p.m. ET or email to

regulations@erulemakinghelpdesk.com.

• Mail: Chief Counsel’s Office, Attn:

Comment Processing, Office of the

Comptroller of the Currency, 400 7th

Street SW, Suite 3E–218, Washington,

DC 20219.

• Hand Delivery/Courier: 400 7th

Street SW, Suite 3E–218, Washington,

DC 20219.

Instructions: You must include

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

ID OCC–2020–0044’’ in your comment.

In general, the OCC will enter all

comments received into the docket and

publish the comments on the

Regulations.gov website without

change, including any business or

personal information provided such as

name and address information, email

addresses, or phone numbers.

Comments received, including

attachments and other supporting

materials, are part of the public record

and subject to public disclosure. Do not

include any information in your

comment or supporting materials that

you consider confidential or

inappropriate for public disclosure.

You may review comments and other

related materials that pertain to this

rulemaking action by the following

methods:

• Regulations.gov Classic or

Regulations.gov Beta:

Regulations.gov Classic: Go to https://

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

OCC–2020–0044’’ in the Search box and

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

Folder’’ on the right side of the screen

or public disclosure.

You may review comments and other

related materials that pertain to this

rulemaking action by the following

methods:

• Regulations.gov Classic or

Regulations.gov Beta:

Regulations.gov Classic: Go to https://

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

OCC–2020–0044’’ in the Search box and

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

Folder’’ on the right side of the screen.

Comments and supporting materials can

be viewed and filtered by clicking on

‘‘View all documents and comments in

this docket’’ and then using the filtering

tools on the left side of the screen. Click

on the ‘‘Help’’ tab on the

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information on using Regulations.gov.

The docket may be viewed after the

close of the comment period in the same

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Regulations.gov Beta: Go to https://

beta.regulations.gov/ or click ‘‘Visit

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Regulations.gov classic homepage. Enter

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the ‘‘Comments’’ tab. Comments can be

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Supporting Materials can be viewed by

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filtered by clicking on the ‘‘Sort By’’

drop-down on the right side of the

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n the

‘‘Sort By’’ drop-down on the right side

of the screen or the ‘‘Refine Results’’

options on the left side of the screen.

Supporting Materials can be viewed by

clicking on the ‘‘Documents’’ tab and

filtered by clicking on the ‘‘Sort By’’

drop-down on the right side of the

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77346

Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

1 See ‘‘Supervisory and Regulatory Actions in

Response to COVID–19,’’ available at https://

www.federalreserve.gov/supervisory-regulatory-

action-response-covid-19.htm.; ‘‘COVID–19

(Coronavirus),’’ available at https://occ.gov/topics/

supervision-and-examination/bank-operations/

covid-19-information/convid-19-info-index.html;

‘‘Coronavirus (COVID–19) Information for Bankers

and Consumers,’’ available at https://www.fdic.gov/

coronavirus/. See also ‘‘The FDIC Approves Interim

Final Rule to Provide Temporary Relief from Part

363 Audit and Reporting Requirements,’’ available

at https://www.fdic.gov/news/financial-institution-

letters/2020/fil20099.html and Final Rule

Mitigating the Deposit Insurance Assessment Effect

of Participation in the Paycheck Protection Program

(PPP), the PPP Liquidity Facility, and the Money

Market Mutual Fund Liquidity Facility at https://

www.fdic.gov/news/financial-institution-letters/

2020/fil20063.html.

2 The SBA’s PPP was created under the

Coronavirus Aid, Relief, and Economic Security Act

(CARES Act) in response to market distress caused

by the COVID–19 event. Public Law 116–136, 134

Stat. 281.

3 ‘‘Revised Interagency Statement on Loan

Modifications by Financial Institutions Working

with Customers Affected by the Coronavirus’’ (Apr.

7, 2020), available at https://www.occ.gov/news-

issuances/news-releases/2020/nr-ia-2020-50a.pdf

navirus Aid, Relief, and Economic Security Act

(CARES Act) in response to market distress caused

by the COVID–19 event. Public Law 116–136, 134

Stat. 281.

3 ‘‘Revised Interagency Statement on Loan

Modifications by Financial Institutions Working

with Customers Affected by the Coronavirus’’ (Apr.

7, 2020), available at https://www.occ.gov/news-

issuances/news-releases/2020/nr-ia-2020-50a.pdf.

4 Data derived from the Consolidated Reports of

Condition and Income (Call Report) and Financial

screen or the ‘‘Refine Results’’ options

on the left side of the screen. For

assistance with the Regulations.gov Beta

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

or (703) 454–9859 Monday–Friday, 9

a.m.–5 p.m. ET or email regulations@

erulemakinghelpdesk.com. The docket

may be viewed after the close of the

comment period in the same manner as

during the comment period.

Board: You may submit comments,

identified by Docket No. R–1731 and

RIN No. 7100–AG01, by any of the

following methods:

• Agency Web Site: http://

www.federalreserve.gov. Follow the

instructions for submitting comments at

https://www.federalreserve.gov/apps/

foia/proposedregs.aspx.

• E-mail: regs.comments@

federalreserve.gov. Include docket

number and RIN in the subject line of

the message.

• Fax: (202) 452–3819 or (202) 452–

3102.

• Mail: Ann E. Misback, Secretary,

Board of Governors of the Federal

Reserve System, 20th Street and

Constitution Avenue NW, Washington,

DC 20551.

All public comments are available

from the Board’s website at http://

www.federalreserve.gov/generalinfo/

foia/ProposedRegs.cfm as submitted,

unless modified for technical reasons or

to remove sensitive PII at the

commenter’s request. Public comments

may also be viewed electronically or in

paper form in Room 146, 1709 New

York Avenue NW, Washington, DC

20006, between 9:00 a.m. and 5:00 p.m.

on weekdays

ents are available

from the Board’s website at http://

www.federalreserve.gov/generalinfo/

foia/ProposedRegs.cfm as submitted,

unless modified for technical reasons or

to remove sensitive PII at the

commenter’s request. Public comments

may also be viewed electronically or in

paper form in Room 146, 1709 New

York Avenue NW, Washington, DC

20006, between 9:00 a.m. and 5:00 p.m.

on weekdays.

FDIC: You may submit comments on

the notice of proposed rulemaking using

any of the following methods:

• Agency Website: https://

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

Follow the instructions for submitting

comments on the agency website.

• Email: comments@fdic.gov. Include

RIN 3064–AF67 on the subject line of

the message.

• Mail: Robert E. Feldman, Executive

Secretary, Attention: Comments, Federal

Deposit Insurance Corporation, 550 17th

Street NW, Washington, DC 20429.

• Hand Delivery: Comments may be

hand delivered to the guard station at

the rear of the 550 17th Street NW

building (located on F Street) on

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

• Public Inspection: All comments

received, including any personal

information provided, will be posted

generally without change to https://

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

FOR FURTHER INFORMATION CONTACT:

OCC: Alison MacDonald, Special

Counsel, or Kevin Korzeniewski,

Counsel, Chief Counsel’s Office, (202)

649–5490.

Board: Juan Climent, Assistant

Director, (202) 872–7526, Eric Kennedy,

Assistant Director, (202) 263–4887,

Nancy J

ing any personal

information provided, will be posted

generally without change to https://

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

FOR FURTHER INFORMATION CONTACT:

OCC: Alison MacDonald, Special

Counsel, or Kevin Korzeniewski,

Counsel, Chief Counsel’s Office, (202)

649–5490.

Board: Juan Climent, Assistant

Director, (202) 872–7526, Eric Kennedy,

Assistant Director, (202) 263–4887,

Nancy J. Oakes, Manager, (202) 452–

3413, Teresa Scott, Manager, (202) 973–

6114, Naima Jefferson, Lead Financial

Institution Policy Analyst, (202) 912–

4613, Daniel Newman, Senior Data

Governance Analyst, (202) 973–7409,

Senait Kahsay, Senior Financial

Institution Policy Analyst II, (202) 245–

4209, Joseph Willcox, Senior Financial

Institution Policy Analyst II, (202) 452–

3663, Division of Supervision and

Regulation; Laurie Schaffer, Deputy

General Counsel (202) 452–2272,

Benjamin McDonough, Associate

General Counsel, (202) 973–7432, Jonah

Kind, Counsel (202) 452–2045, Justyna

Bolter, Senior Attorney (202) 452–2686,

Christopher Danello, Attorney, (202)

736–1960, Legal Division, Board of

Governors of the Federal Reserve

System, 20th and C Streets NW,

Washington, DC 20551. For users of

Telecommunication Device for the Deaf

(TDD), (202) 263–4869.

FDIC: Rae-Ann Miller, Associate

Director, Risk Management Policy, (202)

898–3898, Bobby R. Bean, Associate

Director, Capital Markets, (202) 898–

6705; William Piervincenzi, Supervisory

Counsel, (202) 898–6957, Nefretete A.

Smith, Counsel, (202) 898–6851,

Michael B. Phillips, Counsel, (202) 898–

3581, Jennifer M. Jones, Counsel, (202)

898–6768, jennjones@fdic.gov,

Supervision and Legislation Branch,

Legal Division, Federal Deposit

Insurance Corporation, 550 17th Street

NW, Washington, DC 20429. For the

hearing impaired only,

Telecommunication Device for the Deaf

(TDD), (800) 925–4618.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Discussion

A. Interim Final Rule

B. Reservation of Authority

C

202)

898–6768, jennjones@fdic.gov,

Supervision and Legislation Branch,

Legal Division, Federal Deposit

Insurance Corporation, 550 17th Street

NW, Washington, DC 20429. For the

hearing impaired only,

Telecommunication Device for the Deaf

(TDD), (800) 925–4618.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Discussion

A. Interim Final Rule

B. Reservation of Authority

C. Regulatory Reporting Changes

III. Request for Comment

IV. Administrative Law Matters

A. Administrative Procedure Act

B. Congressional Review Act

C. Paperwork Reduction Act

D. Regulatory Flexibility Act

E. Riegle Community Development and

Regulatory Improvement Act of 1994

F. Unfunded Mandates Reform Act of 1995

G. Use of Plain Language

I. Background

In light of strains in economic

conditions related to the COVID event

and stress in U.S. financial markets, the

agencies have taken a number of actions

intended to: (i) Restore market

functioning and support the flow of

credit to households, businesses, and

communities and (ii) increase flexibility

and reduce regulatory reporting burden.

Among those actions, the agencies have

issued a number of rules and

supervisory guidance communications

designed to mitigate the consequences

of the COVID event and to facilitate the

safe and effective operations of banking

organizations.1

Community banking organizations

have played an instrumental role in the

nation’s financial response to the

COVID event, and many have

experienced significant balance sheet

growth as a result of the COVID event

and the policy response to the event

ations

designed to mitigate the consequences

of the COVID event and to facilitate the

safe and effective operations of banking

organizations.1

Community banking organizations

have played an instrumental role in the

nation’s financial response to the

COVID event, and many have

experienced significant balance sheet

growth as a result of the COVID event

and the policy response to the event.

Policies encouraging banks to work with

their customers, such as the Small

Business Administration’s (SBA’s)

Paycheck Protection Program (PPP) 2

and the interagency statement

encouraging financial institutions to

work with borrowers affected by the

COVID event,3 have resulted in much-

needed emergency liquidity being

offered to small businesses, including,

but not limited to, individuals operating

sole proprietorships or acting as

independent contractors, certain

franchisees, nonprofit corporations,

veterans organizations, Tribal

businesses, and households. As a result,

during the COVID event many

community banking organizations have

experienced an unexpected and sharp

increase in assets, swelling their balance

sheets in some cases by more than 25

percent.4 Much of this growth,

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

Statements for Holding Companies (FR Y–9C) data

December 31, 2019 to June 30, 2020.

5 See https://www.federalreserve.gov/newsevents/

pressreleases/monetary20200409a.htm.

6 See Paycheck Protection Program Liquidity

Facility Term Sheet, available at https://

www.federalreserve.gov/newsevents/pressreleases/

files/monetary20200728a7.pdf.

7 U.S. Small Business Administration, ‘‘Notice:

Paycheck Protection Program closed August 8,

2020,’’ available at https://www.sba.gov/funding-

programs/loans/coronavirus-relief-options/

paycheck-protection-program#section-header-0.

8 U.S

eck Protection Program Liquidity

Facility Term Sheet, available at https://

www.federalreserve.gov/newsevents/pressreleases/

files/monetary20200728a7.pdf.

7 U.S. Small Business Administration, ‘‘Notice:

Paycheck Protection Program closed August 8,

2020,’’ available at https://www.sba.gov/funding-

programs/loans/coronavirus-relief-options/

paycheck-protection-program#section-header-0.

8 U.S. Small Business Administration, ‘‘SBA and

Treasury Announce Simpler PPP Forgiveness for

Loans of $50,000 or Less’’, October 8, 2020 available

at https://www.sba.gov/article/2020/oct/08/sba-

treasury-announce-simpler-ppp-forgiveness-loans-

50000-or-less.

9 U.S. Small Business Administration, ‘‘Paycheck

Protection Program (PPP) Report: Approvals

through 08/08/2020,’’ available at https://

home.treasury.gov/system/files/136/SBA-Paycheck-

Protection-Program-Loan-Report-Round2.pdf.

10 As of the June 30, 2020, approximately 80

percent of depository institutions with assets less

than $10 billion reported PPP loans on their Call

Report.

11 The agencies recognize there are some

guidance documents that include asset-based

thresholds of $10 billion or below. In these

instances, the agencies are confirming that these

thresholds are exemplary only and not suggestive

of requirements. For the reasons discussed above,

the agencies will take the same perspective on

asset-based thresholds in guidance as they are

taking with regard to asset-based regulatory

thresholds.

12 Based on data as of June 30, 2020, the agencies

estimate that around 44 holding companies and 582

community banks crossed a regulatory threshold set

at $10 billion or less.

particularly that related to participation

in PPP, is expected to be temporary.

PPP loans are a special asset class of

government-guaranteed assets designed

to incentivize businesses to keep

workers on payroll

lds.

12 Based on data as of June 30, 2020, the agencies

estimate that around 44 holding companies and 582

community banks crossed a regulatory threshold set

at $10 billion or less.

particularly that related to participation

in PPP, is expected to be temporary.

PPP loans are a special asset class of

government-guaranteed assets designed

to incentivize businesses to keep

workers on payroll. To encourage

lending to small businesses through the

SBA’s PPP, the Board established the

PPP Liquidity Facility on April 9, 2019.5

Under the PPP Liquidity Facility, each

of the Federal Reserve Banks may

extend non-recourse loans to banking

organizations that pledge PPP loans,

which continue to be assets on the

balance sheets of banking organizations,

as collateral.6 The last day for lenders to

make a PPP loan was August 8, 2020,7

and depending on SBA determinations,

a significant amount of PPP debt

forgiveness may occur in the fourth

calendar quarter of 2020 or early in the

first calendar quarter of 2021. However,

as a result of the PPP loan forgiveness

process, many PPP-related assets remain

on community banking organizations’

balance sheets. The SBA recently

released a simpler loan forgiveness

application for PPP loans of $50,000 or

less, which will likely result in PPP-

related assets being removed from

community banking organization’s

balance sheets at a faster rate.8

According to SBA statistics,

collectively all lenders with less than

$10 billion in assets originated

2,745,204 PPP loans totaling $233.7

billion, which buttressed the paychecks

of more than 26 million American

workers and represented more than 52.6

percent of the number of loans

originated under the program.9 This

data suggests that the percentage of PPP

loans originated by community banking

organizations far exceeds those

organizations’ market share as a

percentage of total banking system

assets illustrating the outsized impact

that participation in the PPP has had on

community banking organizations.10

Co

presented more than 52.6

percent of the number of loans

originated under the program.9 This

data suggests that the percentage of PPP

loans originated by community banking

organizations far exceeds those

organizations’ market share as a

percentage of total banking system

assets illustrating the outsized impact

that participation in the PPP has had on

community banking organizations.10

Community banking organizations are

subject to a wide range of statutory

requirements, regulations, and reporting

requirements predicated on their risk

profile and asset size.11 Due to their

response to the COVID event, many

community banking organizations have

been, or may soon be, pushed over an

asset threshold that could subject them

to additional regulation or to additional

reporting requirements.12 In the absence

of regulatory burden relief, complying

with these new or more stringent

regulatory standards, especially if the

community banking organization’s

assets are expected to be above a

threshold for a limited time, would

impose significant transition and

compliance costs on community

banking organizations. This interim

final rule gives community banking

organizations more time to either reduce

their balance sheets by shedding

temporary growth, or to prepare for

higher regulatory and reporting

standards.

II. Discussion

A. Interim Final Rule

A number of regulations contain

asset-based thresholds that determine

whether a banking organization is

required to comply with a given

regulatory requirement or provide a

mandatory regulatory report, or whether

a banking organization is otherwise

eligible for a particular regulatory

treatment. Asset-based regulatory

thresholds are meant to ensure that the

regulatory requirements applicable to a

banking organization are appropriate,

given the banking organization’s likely

risk profile and, in some cases, the

potential risk that the banking

organization poses to U.S. financial

stability

whether

a banking organization is otherwise

eligible for a particular regulatory

treatment. Asset-based regulatory

thresholds are meant to ensure that the

regulatory requirements applicable to a

banking organization are appropriate,

given the banking organization’s likely

risk profile and, in some cases, the

potential risk that the banking

organization poses to U.S. financial

stability.

As discussed above, many community

banking organizations have experienced

an unexpected and sharp increase in

assets since the beginning of the COVID

event. This rapid growth has caused the

assets of certain community banking

organizations to rise above certain asset-

based thresholds in the agencies’

regulations, and may cause other

community banking organizations to do

so in the near future. As noted, much of

this growth, especially growth related to

PPP lending, is likely to be temporary,

and the increase in assets currently held

by a community banking organization

may not reflect a change in the

organization’s longer-term risk profile.

In the absence of regulatory burden

relief, community banking organizations

that experience an increase in assets

above one or more regulatory thresholds

would face significant transition costs

necessary to comply with new or more

stringent regulatory and reporting

standards. Given the rapid and

unexpected nature of community

banking organization asset growth in

2020, many community banking

organizations are unlikely to have

planned for these transition costs.

Further, to the extent this asset growth

is temporary, it does not reflect changes

in community banking organizations’

risk profiles, and many community

banking organizations that cross above

asset-based regulatory thresholds could

fall back below the thresholds

rganization asset growth in

2020, many community banking

organizations are unlikely to have

planned for these transition costs.

Further, to the extent this asset growth

is temporary, it does not reflect changes

in community banking organizations’

risk profiles, and many community

banking organizations that cross above

asset-based regulatory thresholds could

fall back below the thresholds.

Additionally, community banking

organizations that are approaching

certain asset thresholds in the agencies’

regulations may become reluctant to

continue lending if this would subject

them to new or more stringent

regulatory and reporting standards.

Therefore, the agencies believe it is

appropriate to provide temporary

regulatory burden relief to community

banking organizations that have risen

above, or will rise above, certain asset-

based regulatory thresholds. The relief

should promote further lending and

avoid potentially temporary, but

significant, transition costs that

community banking organizations

would otherwise face to comply with

new standards.

In order to provide this regulatory

burden relief, the agencies are issuing

this interim final rule to temporarily

change, for a number of asset-based

regulatory thresholds, the date as of

when a community banking

organization measures its assets for the

purpose of determining whether it

exceeds the threshold (referred to as the

‘‘measurement date’’). Specifically, the

interim final rule will permit

community banking organizations,

through December 31, 2021, to

determine the applicability of certain

asset-based regulatory thresholds using

asset data as of December 31, 2019, if

the organization’s assets as of that date

were less than its assets on the date as

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will permit

community banking organizations,

through December 31, 2021, to

determine the applicability of certain

asset-based regulatory thresholds using

asset data as of December 31, 2019, if

the organization’s assets as of that date

were less than its assets on the date as

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

13 This interim final rule does not address the

exemption in the Board’s Regulation H from certain

flood insurance escrow requirements for qualifying

state member banks (less than $1 billion in assets

as of December 31 of either of the two prior

calendar years, provided other conditions are also

met), 12 CFR 208.25(e)(3), or the provision in the

Board’s Regulation BB defining small bank and

intermediate small bank for purposes of

determining applicable Community Reinvestment

Act evaluation procedures. As currently defined in

Regulation BB: a small bank is a bank that, as of

December 31 of either of the prior two calendar

years, had assets of less than $1.305 billion; an

intermediate small bank is a small bank with assets

of at least $326 million as of December 31 of both

of the prior two calendar years and less than $1.305

billion as of December 31 of either of the prior two

calendar years; and a large bank is a bank with

assets of at least $1.305 billion as of December 31

of both of the prior two calendar years, 12 CFR

228.12(u)(1). As indicated, the asset-based

thresholds in these provisions take into account

assets as of the end of the two previous calendar

years. Therefore, the earliest that a bank with assets

that did not exceed one of these thresholds as of

December 31, 2019, could exceed the threshold is

January 1, 2022. As a result, consistent with this

interim final rule, asset growth in 2020 or 2021 will

not trigger new regulatory requirements until

January 1, 2022, at the earliest

ount

assets as of the end of the two previous calendar

years. Therefore, the earliest that a bank with assets

that did not exceed one of these thresholds as of

December 31, 2019, could exceed the threshold is

January 1, 2022. As a result, consistent with this

interim final rule, asset growth in 2020 or 2021 will

not trigger new regulatory requirements until

January 1, 2022, at the earliest. For similar reasons,

the interim final rule does not adjust thresholds in

the OCC and the FDIC’s flood insurance escrow rule

at 12 CFR 22.5(c) (OCC) and 12 CFR 339.5(c) (FDIC)

and Community Reinvestment Act regulatory

thresholds for small banks and intermediate banks

at 12 CFR part 25 (OCC) and 12 CFR 345 (FDIC).

The OCC also is not adjusting thresholds for

depository institution management interlocks at 12

CFR part 26, as this part already permits any

affected bank to request a waiver related to

unanticipated asset growth.

14 This interim final rule only provides

temporary relief with regard to the measurement

date of assets. Other criteria that apply to certain

of the affected regulatory provisions remain in

effect, and the measurement date for other

quantities has not been changed by this interim

final rule.

of which the applicability of a given

threshold would normally be

determined. This means that asset

growth in 2020 or 2021 will not trigger

new regulatory requirements for these

community banking organizations until

January 1, 2022, at the earliest. This

temporary regulatory burden relief

reflects that much of the asset growth

since the start of the COVID event,

especially growth related to PPP

lending, is generally expected to be

temporary in nature and therefore likely

does not reflect changes in community

banking organizations’ risk profile.

The agencies are limiting the

regulatory burden relief in this interim

final rule to banking organizations that

had less than $10 billion in assets as of

December 31, 2019

ce the start of the COVID event,

especially growth related to PPP

lending, is generally expected to be

temporary in nature and therefore likely

does not reflect changes in community

banking organizations’ risk profile.

The agencies are limiting the

regulatory burden relief in this interim

final rule to banking organizations that

had less than $10 billion in assets as of

December 31, 2019. Banking

organizations with under $10 billion in

assets likely have fewer resources

available to prepare and comply with

previously unanticipated regulatory

requirements, especially during a time

of economic uncertainty and disruption.

Further, as discussed above, community

banking organizations have originated a

disproportionately large percentage of

PPP loans, as compared with the

organizations’ market share; therefore,

as compared to larger organizations, a

larger portion of any increase in asset

size at community banking

organizations is likely to be temporary,

and is therefore less likely to reflect a

change in an organization’s risk profile

or business activities.

This temporary regulatory burden

relief applies to the following asset-

based regulatory thresholds: 13

Regulation

Regulatory threshold

effect

Asset-based threshold 14

Rule location

Asset measurement date

(prior to January 1, 2022)

Asset measurement date

(for requirements in

2022)

OCC: Capital Adequacy

Standards (Part 3).

Board: Capital Adequacy

of Bank Holding Com-

panies, Savings and

Loan Holding Compa-

nies, and State Mem-

ber Banks (Regulation

Q).

FDIC: Capital Adequacy

of FDIC- Supervised

Institutions.

Eligibility for community

bank leverage ratio

framework.

$10 billion in total con-

solidated assets.

OCC: 12 CFR 3.12 .........

Board: 12 CFR 217.12

FDIC: 12 CFR 324.12

December 31, 2019, or

the end of the most re-

cent calendar quarter,

whichever results in a

lower amount.

End of the most recent

calendar quarter.

Board: Debit Card Inter-

change Fees and

Routing (Regulation II)

itutions.

Eligibility for community

bank leverage ratio

framework.

$10 billion in total con-

solidated assets.

OCC: 12 CFR 3.12 .........

Board: 12 CFR 217.12

FDIC: 12 CFR 324.12

December 31, 2019, or

the end of the most re-

cent calendar quarter,

whichever results in a

lower amount.

End of the most recent

calendar quarter.

Board: Debit Card Inter-

change Fees and

Routing (Regulation II).

Exemption for small

issuers.

$10 billion in assets ........

Board: 12 CFR 235.5(a)

December 31, 2019, or

December 31, 2020,

whichever results in a

lower amount.

December 31, 2021.

Board: Management Offi-

cial Interlocks (Regula-

tion L).

FDIC: Management Offi-

cial Interlocks.

Exemption from prohibi-

tion on service as a

‘‘management official’’

of multiple institutions.

$10 billion in total assets

Board: 12 CFR 212.3(c)

FDIC: 12 CFR 348.3(c)

December 31, 2019, or

the end of the deposi-

tory organization’s

most recent fiscal year,

whichever results in a

lower amount.

End of the most recent

fiscal year.

Exemption for honorary

or advisory directors

from definition of

‘‘management official’’.

$100 million in total as-

sets.

Board: 12 CFR

212.2(j)(1)

FDIC: 12 CFR

348.2(k)(1).

Exemption from relevant

metropolitan statistical

area prohibition.

$50 million in total assets

Board: 12 CFR 212.3(b)

FDIC: 12 CFR 348.3(b).

Board: Savings and Loan

Holding Companies

(Regulation LL).

Interlocks—Major asset

prohibition.

$10 billion .......................

Board: 12 CFR 238.93(c)

December 31, 2019, or

the end of the organi-

zation’s most recent

fiscal year, whichever

results in a lower

amount.

End of the most recent

fiscal year.

Audit requirement for

safety and soundness

purposes.

$500 million ....................

Board: 12 CFR 238.5(b)

December 31, 2019, or

end of the organiza-

tion’s most recent fis-

cal year, whichever re-

sults in a lower amount.

End of the most recent

fiscal year.

Informational require-

ments for acquisition of

a company.

$150 million ...................

t.

End of the most recent

fiscal year.

Audit requirement for

safety and soundness

purposes.

$500 million ....................

Board: 12 CFR 238.5(b)

December 31, 2019, or

end of the organiza-

tion’s most recent fis-

cal year, whichever re-

sults in a lower amount.

End of the most recent

fiscal year.

Informational require-

ments for acquisition of

a company.

$150 million ....................

Board: 12 CFR 238.53(c)

(2)(iii)–(iv).

December 31, 2019, or

the end of the most re-

cent calendar quarter,

whichever results in a

lower amount.

End of the most recent

calendar quarter.

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15 12 CFR 235.5(a).

16 See 12 CFR 3.12(c) (OCC); 12 CFR 217.12(c)

(Board); 12 CFR 324.12(c) (FDIC) (community bank

leverage ratio framework); 12 CFR 235.5(a)(3) (rules

regarding debit card interchange fees and routing).

Regulation

Regulatory threshold

effect

Asset-based threshold 14

Rule location

Asset measurement date

(prior to January 1, 2022)

Asset measurement date

(for requirements in

2022)

Interlocks—Exemption for

honorary or advisory

directors from definition

of ‘‘management offi-

cial’’.

$100 million ....................

Board: 12 CFR

238.92(j)(1)

December 31, 2019, or

the end of the organi-

zation’s most recent

fiscal year, whichever

results in a lower

amount.

End of the most recent

fiscal year.

Interlocks—Exemption

from relevant metro-

politan statistical area

prohibition.

$50 million ......................

Board: 12 CFR 238.93(b)

December 31, 2019, or

the end of the organi-

zation’s most recent

fiscal year, whichever

results in a lower

amount.

End of the most recent

fiscal year.

OCC: Regulatory Report-

ing (Part 52)

ults in a lower

amount.

End of the most recent

fiscal year.

Interlocks—Exemption

from relevant metro-

politan statistical area

prohibition.

$50 million ......................

Board: 12 CFR 238.93(b)

December 31, 2019, or

the end of the organi-

zation’s most recent

fiscal year, whichever

results in a lower

amount.

End of the most recent

fiscal year.

OCC: Regulatory Report-

ing (Part 52).

Board: Membership of

State Banking Institu-

tions in the Federal

Reserve System (Reg-

ulation H)

FDIC: Forms, Instruc-

tions, and Reports

Eligibility for reduced re-

porting of the Consoli-

dated Reports of Con-

dition and Income (Call

Report).

$5 billion .........................

OCC: 12 CFR 52.2

Board: 12 CFR

208.122(b)

FDIC: 12 CFR 304.12(a)

December 31, 2019, or

June 30, 2020, which-

ever results in a lower

amount.

June 30, 2021.

OCC: Organization and

Functions (Part 4, Sub-

part A).

Board: Membership of

State Banking Institu-

tions in the Federal

Reserve System (Reg-

ulation H).

FDIC: Unsafe and Un-

sound Bank Practices.

Eligibility for 18-month

examination cycle.

$3 billion .........................

OCC: 12 CFR 4.6(b) ......

Board: 12 CFR 208.64(b)

FDIC: 12 CFR 337.12(b)

December 31, 2019, or

the end of the most re-

cent calendar quarter,

whichever results in a

lower amount.

End of most recent cal-

endar quarter.

Board: Membership of

State Banking Institu-

tions in the Federal

Reserve System (Reg-

ulation H).

Eligibility for streamlined

method of compliance

with the reporting re-

quirements of the Se-

curities and Exchange

Commission.

$150 million ....................

12 CFR 208.36(b) ...........

December 31, 2019, or

the end of the bank’s

most recent fiscal year,

whichever results in a

lower amount.

End of the most recent

fiscal year.

Bank Holding Companies

and Change in Bank

Control (Regulation Y)

ity for streamlined

method of compliance

with the reporting re-

quirements of the Se-

curities and Exchange

Commission.

$150 million ....................

12 CFR 208.36(b) ...........

December 31, 2019, or

the end of the bank’s

most recent fiscal year,

whichever results in a

lower amount.

End of the most recent

fiscal year.

Bank Holding Companies

and Change in Bank

Control (Regulation Y).

Various thresholds in the

Board’s rules regarding

bank holding compa-

nies and change in

bank control (Regula-

tion Y) concerning fil-

ing requirements and

permissible activities.

$3 billion, $300 million,

$150 million, and $50

million.

12 CFR 225.4(b)(2)

(iii)(A)–(B),

225.14(a)(1)(v)(A)(1)–

(2), 225.14(a)(1)(vi),

224.14(c)(6)(ii),

225.17(a)(6),

225.23(a)(1)(iii)(A)(1)–

(2), 225.23(c)(5)(ii),

225.24(a)(2)(iv)–(v),

225.28(b)(11)(vi), and

Appendix C.

December 31, 2019, or

the end of the most re-

cent calendar quarter,

whichever results in a

lower amount.

Normally applicable asset

measurement date.

OCC: Organization and

Functions (Part 4, Sub-

part A).

Board: International

Banking Operations

(Regulation K).

FDIC: International Bank-

ing.

Eligibility for an 18-month

examination cycle for

U.S. branches and

agencies of foreign

banks.

$3 billion .........................

OCC: 12 CFR 4.7(b) ......

Board: 12 CFR

211.26(c)(2)

FDIC: 12 CFR

347.211(b)

December 31, 2019, or

the end of the most re-

cent calendar quarter,

whichever results in a

lower amount.

End of most recent cal-

endar quarter.

As a result of this temporary

regulatory burden relief, a community

banking organization that was below

one of the above-listed asset thresholds

as of December 31, 2019, generally will

be deemed to remain below that

threshold through the end of 2021, plus

any applicable transition period

provided by the regulation

hichever results in a

lower amount.

End of most recent cal-

endar quarter.

As a result of this temporary

regulatory burden relief, a community

banking organization that was below

one of the above-listed asset thresholds

as of December 31, 2019, generally will

be deemed to remain below that

threshold through the end of 2021, plus

any applicable transition period

provided by the regulation. For

example, the Board’s rules regarding

debit card interchange fees and routing

include an exemption for small issuers,

which provides that a debit card issuer

is not required to comply with certain

requirements with respect to an

electronic debit transaction if the issuer

holds the account that is debited and

the issuer, together with its affiliates,

has assets of less than $10 billion as of

the end of the calendar year preceding

the date of the electronic debit

transaction.15 Pursuant to this interim

final rule, an issuer that, together with

its affiliates, had assets of $9.9 billion as

of December 31, 2019, $10.1 billion as

of December 30, 2020, and $10.1 billion

as of December 31, 2021, would be

deemed to remain below the $10 billion

threshold for purposes of this rule

through the end of 2021, at which point

the six-month transition period

provided by 12 CFR 235.5(a)(3) would

begin. Therefore, this issuer would not

be required to comply with the Board’s

rules regarding debit card interchange

fees and routing until July 1, 2022.

The temporary regulatory burden

relief provided by this interim final rule

applies through the end of 2021, so that

a community banking organization

within the scope of the temporary

regulatory burden relief will not be

required to comply with the regulatory

or reporting requirements covered by

this interim final rule until the

beginning of 2022 (plus any applicable

transition period),16 at the earliest,

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king organization

within the scope of the temporary

regulatory burden relief will not be

required to comply with the regulatory

or reporting requirements covered by

this interim final rule until the

beginning of 2022 (plus any applicable

transition period),16 at the earliest,

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17 12 CFR 44.2(c) (OCC); 12 CFR 248.2(c) (Board);

12 CFR 324.12(c) (FDIC).

18 12 CFR 44.2(r) (OCC); 12 CFR 248.2(r)(2)

(Board); 12 CFR 351.2(r)(2) (FDIC). The Economic

Growth, Regulatory Relief, and Consumer

Protection Act (EGRRCPA), enacted on May 24,

2018, amended section 13 of the BHC Act by

modifying the definition of ‘‘banking entity,’’ to

exclude certain small firms from section 13’s

restrictions. EGRRCPA, Public Law 115–174,

section 203 (May 24, 2018). This amendment was

effective upon EGRRCPA’s enactment.

19 Pursuant to sections (c)(2) and (c)(6) of the

Volcker Rule (12 U.S.C. 1851(c)(2) and (c)(6)), the

Board has sole authority to issue rules to implement

the Volcker Rule conformance period.

20 See 12 CFR 225.181(a)(2), (3).

21 Although the conformance regulation refers to

a requirement that a company was not a banking

entity as of July 21, 2010, EGRRCPA’s change to the

definition of ‘‘banking entity’’ means that a firm

that was below the asset threshold as of July 21,

2010, regardless of whether it was subject to the

Volcker Rule at the time, is eligible for the

conformance period if it becomes a banking entity

due to exceeding the asset threshold.

22 With respect to the exemption for small issuers

from the Board’s rules regarding debit card

interchange fees and routing, the reservation of

authority will concern a determination related to

the issuer’s asset profile, rather than its risk profile,

due to differences in the relevant statutory

framework

nformance period if it becomes a banking entity

due to exceeding the asset threshold.

22 With respect to the exemption for small issuers

from the Board’s rules regarding debit card

interchange fees and routing, the reservation of

authority will concern a determination related to

the issuer’s asset profile, rather than its risk profile,

due to differences in the relevant statutory

framework.

23 The interim final rule does not include a new

reservation of authority in connection with the

temporary relief provided with respect to the $3

billion threshold in the agencies’ rules that

determines, in part, a depository institution’s

eligibility for an 18-month examination cycle,

because the rules already contain a reservation of

authority pursuant to which each agency may

examine any depository institution that it

supervises as frequently as the agency deems

necessary. 12 CFR 4.6(c) and 4.7(c) (OCC); 12 CFR

208.64(c) (Board); 12 CFR 337.12(c) and 12 CFR

347.211(c) (FDIC). Amendments to the agencies’

capital regulations governing eligibility for use of

the community bank leverage ratio framework and

regulations affecting the prohibition on certain

management official interlocks each include a

reservation of authority. The agencies may exercise

this reservation of authority to determine that such

relief provisions shall not apply to a supervised

institution if the relevant agency determines that

such relief would not be commensurate with the

risk posed by the institution. Amendments to the

regulations governing eligibility to use the FFIEC

051 do not include new reservations of authority

because the existing reservations of authority would

continue to apply. The existing Call Reports rules

reserve the authority of each agency to require a

depository intuition otherwise eligible for reduced

reporting to file the FFIEC 041 version of the report

of condition. 12 CFR 52.4 (OCC); 12 CFR 304.14

(FDIC)

eligibility to use the FFIEC

051 do not include new reservations of authority

because the existing reservations of authority would

continue to apply. The existing Call Reports rules

reserve the authority of each agency to require a

depository intuition otherwise eligible for reduced

reporting to file the FFIEC 041 version of the report

of condition. 12 CFR 52.4 (OCC); 12 CFR 304.14

(FDIC).

24 The temporary regulatory burden relief

provided by this interim final rule does not

eliminate any existing authority of the Board to

apply a regulatory standard, such as a standard

related to application processing, to a community

banking organization that, due to its asset size,

would otherwise not qualify for the standard. For

example, a bank holding company that meets

certain characteristics, including asset-size limits,

may be eligible for streamlined application

processing. However, the Board or its delegatee may

in its discretion notify such organizations that a full

application is required in order to permit a closer

assuming that the organization remains

above the relevant threshold.

The agencies have determined not to

amend in this interim final rule a

provision in the agencies’ regulations

regarding section 13 of the Bank

Holding Company Act (BHC Act)

(commonly known as the Volcker Rule).

The Volcker Rule generally applies to

‘‘banking entities,’’ which include

insured depository institutions, their

affiliates, and any company that

controls an insured depository

institution, among other companies.17

For purposes of the Volcker Rule, the

definition of ‘‘insured depository

institution’’ excludes an insured

depository institution if the insured

depository institution, and every entity

that controls it, has total consolidated

assets equal to or less than $10 billion,

as long as the total consolidated trading

assets and liabilities of the insured

depository institution, and every entity

that controls it, are equal to or less than

five percent of the insured depository

ins

excludes an insured

depository institution if the insured

depository institution, and every entity

that controls it, has total consolidated

assets equal to or less than $10 billion,

as long as the total consolidated trading

assets and liabilities of the insured

depository institution, and every entity

that controls it, are equal to or less than

five percent of the insured depository

institution’s total consolidated assets.18

The agencies have determined that it

is not necessary to amend the Volcker

Rule regulations in order to provide

temporary regulatory burden relief to a

bank or any of its subsidiaries or

affiliates that become a ‘‘banking entity’’

for purposes of the Volcker Rule

because the assets of the bank or any

entity that controls it increase above the

$10 billion asset threshold. Under

section 13 of the BHC Act and the

Board’s rule implementing the

conformance period in the Volcker

Rule,19 an entity that newly becomes a

‘‘banking entity’’ for purposes of the

Volcker Rule has two years to come into

compliance with the requirements of the

Volcker Rule, and may seek an

extension of the conformance period

from the Board.20 A banking entity that

ceases to be a banking entity during that

period—for example by virtue of

reducing its asset size—would no longer

be subject to the Volcker Rule.

The regulation implementing the

statutory Volcker Rule conformance

period have not yet been updated to

account for the change in the definition

of ‘‘banking entity’’ implemented by

EGRRCPA

ormance period

from the Board.20 A banking entity that

ceases to be a banking entity during that

period—for example by virtue of

reducing its asset size—would no longer

be subject to the Volcker Rule.

The regulation implementing the

statutory Volcker Rule conformance

period have not yet been updated to

account for the change in the definition

of ‘‘banking entity’’ implemented by

EGRRCPA. However, the Board notes

that because the changes EGRRCPA

made to the Volcker Rule were effective

immediately upon enactment, the

conformance period regulation should

be read in a way that is consistent with

EGRRCPA and takes into account the

amendments it made to the definition of

‘‘banking entity.’’ Under this

interpretation, a company may become

a new banking entity by virtue of

crossing the $10 billion asset threshold

under the definition of ‘‘banking

entity,’’ as amended by EGRRCPA.

Therefore, for the sake of clarification,

the Board confirms that a company that

was not a banking entity, or a subsidiary

or affiliate of a banking entity, and then

becomes a banking entity for purposes

of the Volcker Rule because it, or any

subsidiary or affiliate, exceeds $10

billion in assets, will qualify for the

conformance period described in the

Volcker Rule and the Board’s

implementing regulations.21 This

interpretation covers any company that

crossed the $10 billion asset threshold

after the enactment of EGRRCPA on

May 24, 2018, including a company that

crossed the threshold after December 31,

2019.

A. Reservation of Authority

The temporary regulatory burden

relief described above is generally

available to community banking

organizations that meet the

requirements described above. However,

there may be limited instances in which

such regulatory burden relief would be

inappropriate

t of EGRRCPA on

May 24, 2018, including a company that

crossed the threshold after December 31,

2019.

A. Reservation of Authority

The temporary regulatory burden

relief described above is generally

available to community banking

organizations that meet the

requirements described above. However,

there may be limited instances in which

such regulatory burden relief would be

inappropriate. In order to address

certain such situations, the agencies

may use existing reservations of

authority in their respective regulations

to require a community banking

organization to comply with a given

regulatory requirement that would

otherwise not be applicable to the

organization pursuant to the relief

provided by this interim final rule.

Additionally, with respect to each of the

asset-based regulatory thresholds that

did not previously include a reservation

of authority, the interim final rule

creates a new reservation of authority

pursuant to which an agency may

determine that a community banking

organization is not eligible to use the

relief provision with respect to one or

more of the asset thresholds covered by

the rule if the relevant agency makes an

institution-specific determination that

permitting the institution to determine

its assets in accordance with that relief

provision would not be appropriate

based on the organization’s risk

profile.22 23 When making any such

determination, the agencies would

consider all relevant factors, including

the extent of asset growth of the

community banking organization since

December 31, 2019; the causes of such

growth, including whether growth

occurred as a result of mergers or

acquisitions; whether such growth is

likely to be temporary or permanent;

whether the community banking

organization has become involved in

any additional activities since December

31, 2019, and, if so, the risk of such

activities; the asset size of any parent

companies; and the type of assets held

by the community banking

organization.24

VerDate Sep<11>2

urred as a result of mergers or

acquisitions; whether such growth is

likely to be temporary or permanent;

whether the community banking

organization has become involved in

any additional activities since December

31, 2019, and, if so, the risk of such

activities; the asset size of any parent

companies; and the type of assets held

by the community banking

organization.24

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review of the proposal. Nothing in this interim final

rule affects the Board’s authority to exercise such

discretion, to request information that is needed to

analyze the relevant statutory factors for an

application or notice, or to consider the ability of

a community banking organization that files a

notice or application with the Board to comply with

statutory or regulatory requirements that may be

applicable to the organization upon expiration of

the relief provided by this interim final rule.

Certain provisions of the Board’s Regulation Y

include asset-based thresholds of $10 billion or

below that are based on the pro forma consolidated

assets of a bank holding company or the

consolidated risk-weighted assets of a bank holding

company immediately following consummation of

a proposed transaction. With regard to these

thresholds, the interim final rule permits bank

holding companies, through 2021, to calculate pro

forma assets by adding together the assets that each

company involved in a business combination had

as of December 31, 2019. However, the calculation

of pro forma or combined assets must also include

the December 31, 2019, assets of any company with

which any company that is party to a proposed

business combination has itself combined with

since December 31, 2019

ugh 2021, to calculate pro

forma assets by adding together the assets that each

company involved in a business combination had

as of December 31, 2019. However, the calculation

of pro forma or combined assets must also include

the December 31, 2019, assets of any company with

which any company that is party to a proposed

business combination has itself combined with

since December 31, 2019.

In particular, in determining that the

community banking organization is not

eligible to use a regulatory burden relief

provision, the relevant agency will

consider whether a community banking

organization crossed an asset-based

regulatory threshold due to a merger or

acquisition that significantly increases

the community banking organization’s

asset size. Asset growth that occurs as

a result of a merger or acquisition is

planned, unlike the growth that many

community banking organizations have

experienced since the beginning of the

COVID event. Community banking

organizations crossing a regulatory

threshold as a result of a merger or

acquisition therefore have had the

opportunity to prepare for the change in

regulatory requirements. Additionally,

asset growth caused by a merger or

acquisition is generally expected to be

permanent and therefore not impose

transition costs for a requirement

expected to be temporary. The

reservations of authority included in

this interim final rule are not limited to

situations in which there has been a

merger or acquisition because, even in

the absence of a merger or acquisition

transaction, significant asset growth at a

community banking organization may

reflect a material change in the business

model, risk profile, or complexity of the

community banking organization

e

reservations of authority included in

this interim final rule are not limited to

situations in which there has been a

merger or acquisition because, even in

the absence of a merger or acquisition

transaction, significant asset growth at a

community banking organization may

reflect a material change in the business

model, risk profile, or complexity of the

community banking organization.

Nonetheless, the agencies expect to

apply the reservation of authority only

in limited circumstances, such as when

there is significant growth due to a

merger or acquisition or when there is

a material change in the business model,

risk profile, or complexity of the

community banking organization.

B. Regulatory Reporting Changes

Similar to the Board’s regulations, a

number of the Board’s regulatory reports

contain asset-based thresholds that

determine whether a banking

organization is required to report certain

information. For the same reason that

the Board is providing the regulatory

burden relief discussed above with

regard to determining the applicability

of asset-based thresholds contained in

the Board’s regulations, the Board is

temporarily revising certain of its

regulatory reports that contain asset-

based reporting thresholds set at $10

billion or less pursuant to the Board’s

authority to temporarily revise a

collection of information without

providing the opportunity for public

comment. This regulatory burden relief

applies to reports with as-of dates up to

and including December 31, 2021.

Specifically, with regard to each of the

regulatory reports discussed below,

through December 31, 2021, a banking

organization will be permitted to

determine the applicability of asset-

based reporting thresholds set at $10

billion or less using asset data as of

December 31, 2019, if the organization’s

assets as of that date were less than its

assets on the date as of which the

applicability of a given threshold would

normally be determined

ports discussed below,

through December 31, 2021, a banking

organization will be permitted to

determine the applicability of asset-

based reporting thresholds set at $10

billion or less using asset data as of

December 31, 2019, if the organization’s

assets as of that date were less than its

assets on the date as of which the

applicability of a given threshold would

normally be determined. The revisions

to the affected reports do not affect the

substantive reporting instructions for

any item, schedule, or report. Rather,

they merely affect which banking

organizations are required to report

certain items, schedules, or reports.

As with regard to asset-based

regulatory thresholds, and for the same

reasons, the Board will retain a

reservation of authority with regard to

each of the affected reports, pursuant to

which the Board would retain the

authority to require a banking

organization to use an asset

measurement date other than December

31, 2019, to determine compliance with

a reporting threshold. The Board will

use the same factors in determining

whether to exercise its reservation of

authority with regard to reporting

thresholds as with regard to regulatory

thresholds.

The regulatory burden relief

discussed above applies to the following

information collections:

• Financial Statements for Holding

Companies (FR Y–9 Reports; OMB No.

7100–0128);

• Statements of U.S. Nonbank

Subsidiaries of U.S. Holding Companies

(FR Y–11 and FR Y–11S; 7100–0244);

• Reports of Foreign Banking

Organizations (FR Y–7N, FR Y–7NS,

and FR Y–7Q; 7100–0125); and

• Statements of Foreign Subsidiaries

of U.S. Banks (FR 2314 and FR 2314S;

OMB No. 7100–0073).

The agencies plan to publish a

separate Federal Register notice that

will address corresponding changes to

the Call Reports.

The following chart summarizes the

manner in which banking organizations

will be required to determine the

applicability of various reporting

thresholds through the end of 2021 and

afterwards

n Subsidiaries

of U.S. Banks (FR 2314 and FR 2314S;

OMB No. 7100–0073).

The agencies plan to publish a

separate Federal Register notice that

will address corresponding changes to

the Call Reports.

The following chart summarizes the

manner in which banking organizations

will be required to determine the

applicability of various reporting

thresholds through the end of 2021 and

afterwards.

TABLE 1—REPORTING REQUIREMENTS FOR AFFECTED FEDERAL RESERVE REPORTS UNDER THE INTERIM FINAL RULE AND

AFTER REGULATORY BURDEN RELIEF ENDS 1

Information collection

Reporting applicability for 2020–2021

Filers use assets as of these dates to

determine reporting requirement for 2022 2

FR Y–9C (quarterly)—Consolidated Financial

Statements for Holding Companies.

Report filing not required for holding company

below the $3 billion asset threshold using

the lesser of most current filing applicable

date or 12/31/2019 as-of-date.

Use 06/30/2021 total assets to determine re-

porting applicability for reports with 2022 as-

of dates.

FR Y–9LP (quarterly)—Parent Company Only

Financial Statements for Large Holding

Companies.

Report filing not required for holding company

below the $3 billion asset threshold using

the lesser of most current filing applicable

date or 12/31/2019 as-of-date.

Use 06/30/2021 total assets to determine re-

porting applicability for reports with 2022 as-

of dates.

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Companies.

Report filing not required for holding company

below the $3 billion asset threshold using

the lesser of most current filing applicable

date or 12/31/2019 as-of-date.

Use 06/30/2021 total assets to determine re-

porting applicability for reports with 2022 as-

of dates.

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77352

Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

TABLE 1—REPORTING REQUIREMENTS FOR AFFECTED FEDERAL RESERVE REPORTS UNDER THE INTERIM FINAL RULE AND

AFTER REGULATORY BURDEN RELIEF ENDS 1—Continued

Information collection

Reporting applicability for 2020–2021

Filers use assets as of these dates to

determine reporting requirement for 2022 2

FR Y–11 (quarterly)—Financial Statements of

U.S. Nonbank Subsidiaries of U.S. Bank

Holding Companies.

Quarterly report filing not required if nonbank

subsidiary had assets of at least $500 mil-

lion but less than $1 billion using the lesser

of most current filing applicable date or 12/

31/2019 as-of-date and does not meet any

the other criteria to file quarterly.

Use 06/30/2021 total assets to determine eli-

gibility for reports with 2022 as-of dates.

FR Y–11 (annual)—Financial Statements of

U.S. Nonbank Subsidiaries of U.S. Bank

Holding Companies.

Annual report filing not required if nonbank

subsidiary has assets of less than $500 mil-

lion using the lesser of most current filing

applicable date or 12/31/2019 as-of-date.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

FR Y–11S (annual)—Abbreviated Financial

Statements of U.S. Nonbank Subsidiaries of

U.S. Holding Co.

Report filing not required if nonbank sub-

sidiary was not greater than $250 million

and less than $500 million using the lesser

of most current filing applicable date or 12/

31/2019 as-of-date and does not meet the

other filing criteria

e

(12/31/2022) to determine reporting applica-

bility.

FR Y–11S (annual)—Abbreviated Financial

Statements of U.S. Nonbank Subsidiaries of

U.S. Holding Co.

Report filing not required if nonbank sub-

sidiary was not greater than $250 million

and less than $500 million using the lesser

of most current filing applicable date or 12/

31/2019 as-of-date and does not meet the

other filing criteria.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

FR Y–7N (quarterly)—Financial Statements of

U.S. Nonbank Subsidiaries Held by Foreign

Banking Organizations.

Quarterly report filing not required if nonbank

subsidiary was below the $1 billion asset

threshold using the lesser of most current

filing applicable date or 12/31/2019 as-of-

date and does not meet any other filing cri-

teria.

Use total assets as of the reporting as-of date

to determine reporting applicability.

FR Y–7N (annual)—Financial Statements of

U.S. Nonbank Subsidiaries Held by Foreign

Banking Organizations.

Report filing not required if nonbank sub-

sidiary was not greater than $500 million

and less than $1 billion using lesser of most

current filing applicable date or 12/31/2019

as-of-date and does not meet any other fil-

ing criteria.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

FR Y–7NS (annual)—Abbreviated Financial

Statements of U.S. Nonbank Subsidiaries

Held by Foreign Banking Organizations.

Report filing not required if nonbank sub-

sidiary was not greater than $250 million

and less than $500 million using the lesser

of most current filing applicable date or 12/

31/2019 as-of-date and does not meet the

other filing criteria.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

FR 2314 (quarterly)—Financial Statements of

Foreign Subsidiaries of U.S. Banking Organi-

zations

sidiary was not greater than $250 million

and less than $500 million using the lesser

of most current filing applicable date or 12/

31/2019 as-of-date and does not meet the

other filing criteria.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

FR 2314 (quarterly)—Financial Statements of

Foreign Subsidiaries of U.S. Banking Organi-

zations.

Quarterly report filing not required if nonbank

subsidiary has assets less than $1 billion

using the lesser of most current filing appli-

cable date or 12/31/2019 as-of-date and

does not meet any of other criteria to file

quarterly.

Use 06/30/2021 total assets to determine eli-

gibility for reports with 2022 as-of dates.

FR 2314 (annual)—Financial Statements of

Foreign Subsidiaries of U.S. Banking Organi-

zations.

Report filing not required if nonbank was not

greater than $500 million and less than $1

billion in total assets using lesser of most

current filing applicable date or 12/31/2019

as-of-date.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

FR 2314S (annual)—Abbreviated Financial

Statements of Foreign Subsidiaries of U.S.

Banking Org.

Report filing not required if nonbank was not

greater than $250 million and less than

$500 million in total asset using the lesser

of most current filing applicable date or 12/

31/2019 as-of-date.

Use total assets as of the reporting as-of date

(12/31/2022) to determine reporting applica-

bility.

1 During 2020–2021, applicability of new reporting requirements would be based on the December 31, 2019 data. For example, a holding com-

pany that does not currently file the FR Y–9C will not use its June 2020 total consolidated assets (TCA) to determine the March 31, 2021, filing

requirement, and would not be required to file the FR Y–9C report until March 21, 2022

e reporting applica-

bility.

1 During 2020–2021, applicability of new reporting requirements would be based on the December 31, 2019 data. For example, a holding com-

pany that does not currently file the FR Y–9C will not use its June 2020 total consolidated assets (TCA) to determine the March 31, 2021, filing

requirement, and would not be required to file the FR Y–9C report until March 21, 2022. After the regulatory burden relief ends, the institution

would use June 30, 2021, TCA to determine initial filing for the March 31, 2022, reporting period.

2 Beginning January 1, 2022, asset measurement for applicability of reporting will revert-back to how institutions determined applicability prior

to the reporting relief.

II. Request for Comment

The agencies seek comment on all

aspects of this interim final rule. In

particular, the agencies seek comment

on the duration of the temporary

regulatory burden relief and on the

following specific question:

(1): What are the advantages and

disadvantages of requiring community

banking organizations subject to this

interim final rule to determine

compliance with regulatory thresholds

using the lesser of an organization’s

assets as of December 31, 2019, and its

assets on the date as of which the

applicability of a given threshold would

normally be determined? What would

be the advantages and disadvantages of

an alternative measurement date?

Commenters are invited to describe

other dates and the advantages and

disadvantages of any such dates.

III. Administrative Law Matters

A. Administrative Procedure Act

The agencies are issuing the interim

final rule without prior notice and the

opportunity for public comment and

without the 30-day delayed effective

date ordinarily prescribed by the

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advantages of any such dates.

III. Administrative Law Matters

A. Administrative Procedure Act

The agencies are issuing the interim

final rule without prior notice and the

opportunity for public comment and

without the 30-day delayed effective

date ordinarily prescribed by the

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

25 5 U.S.C. 553.

26 5 U.S.C. 553(b)(B).

27 5 U.S.C. 553(d).

28 5 U.S.C. 801 et seq.

29 5 U.S.C. 801(a)(3).

30 5 U.S.C. 804(2).

31 44 U.S.C. 3501–3521.

Administrative Procedure Act (APA).25

Pursuant to section 553(b)(B) of the

APA, general notice and the opportunity

for public comment are not required

with respect to a rulemaking when an

‘‘agency for good cause finds (and

incorporates the finding and a brief

statement of reasons therefor in the

rules issued) that notice and public

procedure thereon are impracticable,

unnecessary, or contrary to the public

interest.’’ 26

As discussed above, the interim final

rule provides temporary regulatory

burden relief to community banking

organizations crossing regulatory and

reporting asset thresholds in 2020 and

2021. Many community banking

organizations have experienced

dramatic and unexpected increases in

their assets as a result of their efforts to

support the economy during the

ongoing COVID event. As noted, a

significant portion of this asset growth

can be traced to participation by

community banking organizations in

emergency lending programs sponsored

by the U.S. government, other lending

related to the COVID event, and an

unexpected surge in deposits. The

interim final rule facilitates the ability

of community banking organizations to

temporarily defer the implementation of

regulatory and reporting thresholds that

would not have been applicable had

they not experienced this growth in

assets

ns in

emergency lending programs sponsored

by the U.S. government, other lending

related to the COVID event, and an

unexpected surge in deposits. The

interim final rule facilitates the ability

of community banking organizations to

temporarily defer the implementation of

regulatory and reporting thresholds that

would not have been applicable had

they not experienced this growth in

assets. Therefore, the interim final rule

benefits community banking

organizations from the above referenced

regulations and reports by providing

temporary regulatory burden relief. The

interim final rule does not impose any

requirements on any covered

community banking organizations.

The agencies believe that the public

interest is best served by making the

interim final rule effective immediately

upon publication in the Federal

Register. The agencies believe that

issuing the interim final rule will ensure

that community banking organizations

will not be unnecessarily required to

comply with threshold-based regulatory

standards that may not be appropriate

given the organizations’ likely long-term

risk profile and activities after the

reversal of any temporary growth. The

interim final rule also will allow

community banking organizations to

avoid the costs of temporarily

complying with regulatory

requirements, allowing the banking

organizations to continue to focus on

the provision of credit during this time

of economic stress. In addition, the

agencies believe that providing a notice

and comment period prior to issuance of

the interim final rule is impracticable,

as community banking organizations

may start incurring transition costs prior

to the end of 2020 in anticipation of

needing to comply with additional

requirements starting as early as

December 31, 2020. For these reasons,

the agencies find there is good cause

consistent with the public interest to

issue the interim final rule without

advance notice and comment

inal rule is impracticable,

as community banking organizations

may start incurring transition costs prior

to the end of 2020 in anticipation of

needing to comply with additional

requirements starting as early as

December 31, 2020. For these reasons,

the agencies find there is good cause

consistent with the public interest to

issue the interim final rule without

advance notice and comment.

The APA also requires a 30-day

delayed effective date, except for (1)

substantive rules which grant or

recognize an exemption or relieve a

restriction; (2) interpretative rules and

statements of policy; or (3) as otherwise

provided by the agency for good

cause.27 The agencies find good cause to

publish the interim final rule with an

immediate effective date for the same

reasons set forth above under the

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

APA.

While the agencies believe there is

good cause to issue the interim final

rule without advance notice and

comment and with an immediate

effective date, the agencies are

requesting comment on all aspects of

the interim final rule.

B. Congressional Review Act

For purposes of Congressional Review

Act (CRA), OMB makes a determination

as to whether a final rule constitutes a

‘‘major’’ rule.28 If a rule is deemed a

‘‘major rule’’ by the OMB, the CRA

generally provides that the rule may not

take effect until at least 60 days

following its publication.29

The CRA 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 (1) an annual

effect on the economy of $100,000,000

or more; (2) a major increase in costs or

prices for consumers, individual

industries, Federal, State, or local

government agencies or geographic

regions, or (3) 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 an

economy of $100,000,000

or more; (2) a major increase in costs or

prices for consumers, individual

industries, Federal, State, or local

government agencies or geographic

regions, or (3) 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.30

For the same reasons set forth above,

the agencies are adopting the interim

final rule without the delayed effective

date generally prescribed under the

CRA. The delayed effective date

required by the CRA does not apply to

any rule for which an agency for good

cause finds (and incorporates the

finding and a brief statement of reasons

therefor in the rule issued) that notice

and public procedure thereon are

impracticable, unnecessary, or contrary

to the public interest. In light of current

market uncertainty and because

community banking organizations may

start incurring transition costs prior to

the end of 2020 in anticipation of

needing to comply with additional

requirements starting as early as

December 31, 2020, the agencies believe

that delaying the effective date of the

rule would be contrary to the public

interest.

As required by the CRA, the agencies

will submit the final rule and other

appropriate reports to Congress and the

Government Accountability Office for

review.

C. Paperwork Reduction Act

The Paperwork Reduction Act of 1995

(PRA) states that no agency may

conduct or sponsor, nor is a respondent

required to respond to, an information

collection unless it displays a currently

valid OMB control number.31 The

interim final rule affects the agencies’

current information collections for the

Call Reports (FFIEC 031, FFIEC 041, and

FFIEC 051). The OMB control numbers

for the Call Reports of the agencies are:

OCC OMB No. 1557–0081; Board OMB

No. 7100–0036; and FDIC OMB No.

3064–0052

nt

required to respond to, an information

collection unless it displays a currently

valid OMB control number.31 The

interim final rule affects the agencies’

current information collections for the

Call Reports (FFIEC 031, FFIEC 041, and

FFIEC 051). The OMB control numbers

for the Call Reports of the agencies are:

OCC OMB No. 1557–0081; Board OMB

No. 7100–0036; and FDIC OMB No.

3064–0052.

For purposes of the Call Reports, any

change resulting from the relief

provided by this interim final rule

should be minimal and result in a zero

net change in hourly burden under the

agencies’ information collections.

Submissions will, however, be made by

the agencies to OMB. The changes to the

instructions of the Call Reports will be

addressed in a separate Federal Register

notice.

In addition, this interim final rule

does not introduce any new information

collections. It does, however,

temporarily impact the following

information collections: FR Y–9

Reports; FR Y–11; FR Y–11S; FR Y–7N;

FR Y–7NS; FR 2314; and FR 2314S. The

Board has reviewed this interim final

rule pursuant to authority delegated by

the OMB. The Board has temporarily

revised the instructions for these

information collections to reflect

changes made in the interim final rule.

On June 15, 1984, OMB delegated to

the Board authority under the PRA to

approve a temporary revision to a

collection of information without

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The Board has temporarily

revised the instructions for these

information collections to reflect

changes made in the interim final rule.

On June 15, 1984, OMB delegated to

the Board authority under the PRA to

approve a temporary revision to a

collection of information without

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

providing opportunity for public

comment if the Board determines that a

change in an existing collection must be

instituted quickly and that public

participation in the approval process

would defeat the purpose of the

collection or substantially interfere with

the Board’s ability to perform its

statutory obligation.

The Board’s delegated authority

requires that the Board, after

temporarily approving a collection,

solicit public comment on a proposal to

extend the temporary collection for a

period not to exceed three years.

Therefore, the Board is inviting

comment on a proposal to extend these

information collections for three years

with such revisions. The Board invites

public comment on the information

collections, which are being reviewed

under authority delegated by the OMB

under the PRA. Comments are invited

on the following:

a. Whether the collections of

information are necessary for the proper

performance of the Board’s functions,

including whether the information has

practical utility;

b. The accuracy of the Board’s

estimate of the burden of the proposed

information collections, including the

validity of the methodology and

assumptions used;

c. Ways to enhance the quality,

utility, and clarity of the information to

be collected;

d. Ways to minimize the burden of

information collection on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

e

f the burden of the proposed

information collections, including the

validity of the methodology and

assumptions used;

c. Ways to enhance the quality,

utility, and clarity of the information to

be collected;

d. Ways to minimize the burden of

information collection on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

e. Estimates of capital or startup costs

and costs of operation, maintenance,

and purchase of services to provide

information.

Comments must be submitted on or

before February 1, 2021. At the end of

the comment period, the comments and

recommendations received will be

analyzed to determine the extent to

which the Board should modify the

information collection.

Approval Under OMB Delegated

Authority of the Temporary Revision of,

and Proposal To Extend for Three Years,

With Revision, 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: December 2, 2020.

Frequency: Quarterly, semiannually,

and annually.

Respondents: Bank holding

companies, savings and loan holding

companies, securities holding

companies, and U.S. intermediate

holding companies (collectively,

holding companies).

Estimated number of respondents: FR

Y–9C (non-advanced approaches

community bank leverage ratio holding

companies with less than $5 billion in

total assets): 71; FR Y–9C (non-

advanced approaches community bank

leverage ratio holding companies with

$5 billion or more in total assets): 35; FR

Y–9C (non-advanced approaches, non-

community bank leverage ratio, holding

companies with less than $5 billion in

total assets): 84; FR Y–9C (non-

advanced approaches, non-community

bank leverage ratio holding companies,

with $5 billion or more in total assets):

154; FR Y–9C (advanced approaches

holding companies): 19; FR Y–9LP: 434;

FR Y–9SP: 3,960; FR

n or more in total assets): 35; FR

Y–9C (non-advanced approaches, non-

community bank leverage ratio, holding

companies with less than $5 billion in

total assets): 84; FR Y–9C (non-

advanced approaches, non-community

bank leverage ratio holding companies,

with $5 billion or more in total assets):

154; FR Y–9C (advanced approaches

holding companies): 19; FR Y–9LP: 434;

FR Y–9SP: 3,960; FR Y–9ES: 83; FR Y–

9CS: 236.

Estimated annual burden hours:

Reporting

FR Y–9C (non-advanced approaches

community bank leverage ratio holding

companies with less than $5 billion in

total assets): 8,284 hours; FR Y–9C (non-

advanced approaches community bank

leverage ratio holding companies with

$5 billion or more in total assets): 4,920;

FR Y–9C (non-advanced approaches

non community bank leverage ratio

holding companies with less than $5

billion in total assets): 13,779; FR Y–9C

(non-advanced approaches non-

community bank leverage ratio holding

companies with $5 billion or more in

total assets): 28,940 hours; FR Y–9C

(advanced approaches holding

companies): 3,747 hours; FR Y–9LP:

9,149 hours; FR Y–9SP: 42,768 hours;

FR Y–9ES: 42 hours; FR Y–9CS: 472

hours.

Recordkeeping

FR Y–9C (non-advanced approaches

holding companies with less than $5

billion in total assets): 620 hours; FR Y–

9C (non-advanced approaches holding

companies with $5 billion or more in

total assets): 756 hours; FR Y–9C

(advanced approaches holding

companies): 76 hours; FR Y–9LP: 1,736

hours; FR Y–9SP: 3,960 hours; FR Y–

9ES: 42 hours; FR Y–9CS: 472 hours.

General description of report: The FR

Y–9 family of reporting forms continues

to be the primary source of financial

data on holding companies that

examiners rely on in the intervals

between on-site inspections

ore in

total assets): 756 hours; FR Y–9C

(advanced approaches holding

companies): 76 hours; FR Y–9LP: 1,736

hours; FR Y–9SP: 3,960 hours; FR Y–

9ES: 42 hours; FR Y–9CS: 472 hours.

General description of report: The FR

Y–9 family of reporting forms continues

to be the primary source of financial

data on holding companies that

examiners rely on in the intervals

between on-site inspections. Financial

data from these reporting forms are used

to detect emerging financial problems,

to review performance and conduct pre-

inspection analysis, to monitor and

evaluate capital adequacy, to evaluate

holding company mergers and

acquisitions, and to analyze a holding

company’s overall financial condition to

ensure the safety and soundness of its

operations. The FR Y–9C, FR Y–9LP,

and FR Y–9SP serve as standardized

financial statements for the consolidated

holding company. The Board requires

holding companies to provide

standardized financial statements to

fulfill the Board’s statutory obligation to

supervise these organizations. The FR

Y–9ES is a financial statement for

holding companies that are Employee

Stock Ownership Plans. The Board uses

the voluntary FR Y–9CS (a free-form

supplement) to collect additional

information deemed to be critical and

needed in an expedited manner.

Holding companies file the FR Y–9C

quarterly, the FR Y–9LP quarterly, the

FR Y–9SP semiannually, the FR Y–9ES

annually, and the FR Y–9CS on a

schedule that is determined when this

supplement is used.

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 BHC Act, (12 U.S.C.

1844); on savings and loan holding

companies pursuant to section 10(b)(2)

and (3) of the Home Owners’ Loan Act,

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

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 BHC Act, (12 U.S.C.

1844); on savings and loan holding

companies pursuant to section 10(b)(2)

and (3) of the Home Owners’ Loan Act,

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

intermediate holding companies

pursuant to section 5 of the BHC Act,

(12 U.S.C 1844), as well as pursuant to

sections 102(a)(1) and 165 of the Dodd-

Frank Wall Street Reform and Consumer

Protection Act (Dodd-Frank Act), (12

U.S.C. 511(a)(1) and 5365); and on

securities holding companies pursuant

to section 618 of the Dodd-Frank Act,

(12 U.S.C. 1850a(c)(1)(A)). The FR Y–9

series of reports, and the recordkeeping

requirements set forth in the respective

instructions to each report, are

mandatory, except for the FR Y–9CS,

which is voluntary.

With respect to the FR Y–9C,

Schedule HI Memoranda item 7.g,

Schedule HC–P item 7.a, and Schedule

HC–P item 7.b are considered

confidential commercial and financial

information under exemption 4 of the

Freedom of Information Act (FOIA), (5

U.S.C. 552(b)(4)), as is Schedule HC

Memoranda item 2.b for both the FR Y–

9C and FR Y–9SP reports. Such

treatment is appropriate under

exemption 4 of the 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

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emoranda item 2.b for both the FR Y–

9C and FR Y–9SP reports. Such

treatment is appropriate under

exemption 4 of the 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

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

32 See 12 U.S.C. 1464(v)(2).

33 Exemption 8 of the Freedom of Information Act

(FOIA) specifically exempts from disclosure

information ‘‘contained in or related to

examination, operating, or condition reports

prepared by, on behalf of, or for the use of an

agency responsible for the regulation or supervision

of financial institutions.’’

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 and the FR Y–9SP report,

Schedule HC Memoranda 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

holding companies. The Board has

assured respondents that this

information will be treated as

confidential since the collection of this

data item was proposed in 2004

iting 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

holding companies. 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 regarding loans

modified under Section 4013

(Memoranda item 16.a, ‘‘Number of

Section 4013 loans outstanding’’, and

Memoranda item 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 believes the disclosure of

these items at the holding company

level would not be in the public

interest.32 Such information is

permitted to be collected on a

confidential basis, consistent with 5

U.S.C. 552(b)(8).33 Holding companies

may be reluctant to offer modifications

under Section 4013 if information on

these modifications 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.

Aside from the data items described

above, the remaining data items on the

FR Y–9 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

s Regarding Availability

of Information (12 CFR part 261),

however, a respondent may request

confidential treatment for any data

items the respondent believes should be

withheld pursuant to a FOIA

exemption. The Board will review any

such request to determine if confidential

treatment is appropriate, and will

inform the respondent if the request for

confidential treatment has been denied.

To the extent that the instructions to

the FR Y–9C, FR Y–9LP, FR Y–9SP, and

FR Y–9ES reports each respectively

direct a financial institution to retain

the workpapers and related materials

used in preparation of each report, such

material would only be obtained by the

Board as part of the examination or

supervision of the financial institution.

Accordingly, such information may be

considered confidential pursuant to

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

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

institution’s workpapers and related

materials may also be protected by

exemption 4 of the FOIA, to the extent

such financial information is treated as

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

552(b)(4)).

2. Report Title: Financial Statements of

U.S. Nonbank Subsidiaries of U.S.

Holding Companies and Abbreviated

Financial Statements of U.S Nonbank

Subsidiaries of U.S. Holding Companies

Agency form number: FR Y–11 and

FR Y–11S.

OMB control number: 7100–0244.

Effective date: December 2, 2020.

Frequency: Quarterly and annually.

Respondents: Domestic bank holding

companies, savings and loan holding

companies, securities holding

companies, and intermediate holding

companies.

Estimated number of respondents: FR

Y–11 (quarterly): 445; FR Y–11

(annually): 189; FR Y–11S: 273.

Estimated annual burden hours: FR

Y–11 (quarterly): 13,528 hours; FR Y–11

(annually): 1,436 hours; FR Y–11S: 273

hours.

General description of report: The FR

Y–11 family of reports collects financial

information for individual U.S

ies holding

companies, and intermediate holding

companies.

Estimated number of respondents: FR

Y–11 (quarterly): 445; FR Y–11

(annually): 189; FR Y–11S: 273.

Estimated annual burden hours: FR

Y–11 (quarterly): 13,528 hours; FR Y–11

(annually): 1,436 hours; FR Y–11S: 273

hours.

General description of report: The FR

Y–11 family of reports collects financial

information for individual U.S. nonbank

subsidiaries of domestic holding

companies, which is essential for

monitoring the subsidiaries’ potential

impact on the condition of the holding

company or its subsidiary banks.

Holding companies file the FR Y–11 on

a quarterly or annual basis or the FR Y–

11S on an annual basis, predominantly

based on whether the organization

meets certain asset size thresholds.

Legal authorization and

confidentiality: The Board has the

authority to require bank holding

companies and any subsidiary thereof,

savings and loan holding companies

and any subsidiary thereof, and

securities holding companies and any

affiliate thereof to file the FR Y–11

pursuant to, respectively, section 5(c) of

the BHC Act (12 U.S.C. 1844(c)), section

10(b) of the Homeowners’ Loan Act (12

U.S.C. 1467a(b)), and section 618 of the

Dodd-Frank Act (12 U.S.C. 1850a).

Information collected in these reports

generally is not considered confidential.

However, because the information is

collected as part of the Board’s

supervisory process, certain information

may be afforded confidential treatment

pursuant to exemption 8 of the FOIA (5

U.S.C. 552(b)(8)). Individual

respondents may request that certain

data be afforded confidential treatment

pursuant to exemption 4 of the FOIA if

the data has not previously been

publically disclosed and the release of

the data would likely cause substantial

harm to the competitive position of the

respondent (5 U.S.C. 552(b)(4))

nfidential treatment

pursuant to exemption 8 of the FOIA (5

U.S.C. 552(b)(8)). Individual

respondents may request that certain

data be afforded confidential treatment

pursuant to exemption 4 of the FOIA if

the data has not previously been

publically disclosed and the release of

the data would likely cause substantial

harm to the competitive position of the

respondent (5 U.S.C. 552(b)(4)).

Additionally, individual respondents

may request that personally identifiable

information be afforded confidential

treatment pursuant to exemption 6 of

the FOIA if the release of the

information would constitute a clearly

unwarranted invasion of personal

privacy (5 U.S.C. 552(b)(6)). The

applicability of the FOIA exemptions 4

and 6 would be determined on a case-

by-case basis.

3. Report Title: The Financial

Statements of U.S. Nonbank

Subsidiaries Held by Foreign Banking

Organizations, Abbreviated Financial

Statements of U.S. Nonbank

Subsidiaries Held by Foreign Banking

Organizations, and the Capital and

Asset Report of Foreign Banking

Organizations

Agency form number: FR Y–7N, FR

Y–7NS, and FR Y–7Q.

OMB control number: 7100–0125.

Effective date: December 2, 2020.

Frequency: Quarterly and annually.

Respondents: Foreign banking

organizations.

Estimated number of respondents: FR

Y–7N (quarterly): 35; FR Y–7N

(annually): 19; FR Y–7NS: 22; FR Y–7Q

(quarterly): 130; FR Y–7Q (annually):

29.

Estimated annual burden hours: FR

Y–7N (quarterly): 1,064 hours; FR Y–7N

(annually): 144 hours; FR Y–7NS: 22

hours; FR Y–7Q (quarterly): 1,560 hours;

FR Y–7Q (annually): 44 hours.

General description of report: The FR

Y–7N and the FR Y–7NS are used to

assess a foreign banking organization’s

ability to be a continuing source of

strength to its U.S. nonbank operations

and to determine compliance with U.S.

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erly): 1,560 hours;

FR Y–7Q (annually): 44 hours.

General description of report: The FR

Y–7N and the FR Y–7NS are used to

assess a foreign banking organization’s

ability to be a continuing source of

strength to its U.S. nonbank operations

and to determine compliance with U.S.

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

laws and regulations. Foreign banking

organizations file the FR Y–7N quarterly

or annually, or the FR Y–7NS annually,

predominantly based on asset size

thresholds. The FR Y–7Q is used to

assess consolidated regulatory capital

and asset information from all foreign

banking organizations. The FR Y–7Q is

filed quarterly by foreign banking

organizations that have effectively

elected to become or be treated as a U.S.

financial holding company and by

foreign banking organizations that have

total consolidated assets of $50 billion

or more, regardless of financial holding

company status. All other foreign

banking organizations file the FR Y–7Q

annually.

Legal authorization and

confidentiality: With respect to foreign

banking organizations and their

subsidiary intermediate holding

companies, section 5(c) of the BHC Act,

in conjunction with section 8 of the

International Banking Act (12 U.S.C.

3106), authorizes the board to require

foreign banking organizations and any

subsidiary thereof to file the FR Y–7N

reports, and the FR Y–7Q. Information

collected in these reports generally is

not considered confidential. However,

because the information is collected as

part of the Board’s supervisory process,

certain information may be afforded

confidential treatment pursuant to

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

552(b)(8))

foreign banking organizations and any

subsidiary thereof to file the FR Y–7N

reports, and the FR Y–7Q. Information

collected in these reports generally is

not considered confidential. However,

because the information is collected as

part of the Board’s supervisory process,

certain information may be afforded

confidential treatment pursuant to

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

552(b)(8)). Individual respondents may

request that certain data be afforded

confidential treatment pursuant to

exemption 4 of the FOIA if the data has

not previously been publicly disclosed

and the release of the data would likely

cause substantial harm to the

competitive position of the respondent

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

individual respondents may request that

personally identifiable information be

afforded confidential treatment

pursuant to exemption 6 of the FOIA if

the release of the information would

constitute a clearly unwarranted

invasion of personal privacy (5 U.S.C.

552(b)(6)). The applicability of the FOIA

exemptions 4 and 6 would be

determined on a case-by-case basis.

4. Report Title: Financial Statements of

Foreign Subsidiaries of U.S. Banking

Organizations and the Abbreviated

Financial Statements of Foreign

Subsidiaries of U.S. Banking

Organizations

Agency form number: FR 2314 and FR

2314S.

OMB control number: 7100–0073.

Effective date: December 2, 2020.

Frequency: Quarterly and annually.

Respondents: U.S. state member

banks, bank holding companies, savings

and loan holding companies,

intermediate holding companies, and

Edge or agreement corporations.

Estimated number of respondents: FR

2314 (quarterly): 439; FR 2314

(annually): 239; FR 2314S: 300.

Estimated annual burden hours: FR

2314 (quarterly): 12,643 hours; FR 2314

(annually): 1,768 hours; FR 2314S: 300

hours

lly.

Respondents: U.S. state member

banks, bank holding companies, savings

and loan holding companies,

intermediate holding companies, and

Edge or agreement corporations.

Estimated number of respondents: FR

2314 (quarterly): 439; FR 2314

(annually): 239; FR 2314S: 300.

Estimated annual burden hours: FR

2314 (quarterly): 12,643 hours; FR 2314

(annually): 1,768 hours; FR 2314S: 300

hours.

General description of report: The FR

2314 family of reports is the only source

of comprehensive and systematic data

on the assets, liabilities, and earnings of

the foreign nonbank subsidiaries of U.S.

banking organizations, and the data are

used to monitor the growth,

profitability, and activities of these

foreign companies. The data help the

Board identify present and potential

problems of these companies, monitor

their activities in specific countries, and

develop a better understanding of

activities within the industry and

within specific institutions. Parent

organizations (state member banks, Edge

and agreement corporations, or holding

companies) file the FR 2314 on a

quarterly or annual basis, or the FR

2314S on an annual basis,

predominantly based on whether the

organization meets certain asset size

thresholds.

Legal authorization and

confidentiality: The Board has the

authority to require bank holding

companies and any subsidiary thereof,

savings and loan holding companies

and any subsidiary thereof, and

securities holding companies and any

affiliate thereof to file the FR 2314

pursuant to, respectively, section 5(c) of

the BHC Act (12 U.S.C. 1844(c)), section

10(b) of the Homeowners’ Loan Act (12

U.S.C. 1467a(b)), and section 618 of the

Dodd-Frank Act (12 U.S.C. 1850a). The

Board has the authority to require state

member banks, agreement corporations,

and Edge corporations to file the FR

2314 pursuant to, respectively, sections

9(6), 25(7), and 25A(17) of the Federal

Reserve Act (12 U.S.C. 324, 602, and

625)

C Act (12 U.S.C. 1844(c)), section

10(b) of the Homeowners’ Loan Act (12

U.S.C. 1467a(b)), and section 618 of the

Dodd-Frank Act (12 U.S.C. 1850a). The

Board has the authority to require state

member banks, agreement corporations,

and Edge corporations to file the FR

2314 pursuant to, respectively, sections

9(6), 25(7), and 25A(17) of the Federal

Reserve Act (12 U.S.C. 324, 602, and

625). With respect to foreign banking

organizations and their subsidiary

intermediate holding companies,

section 5(c) of the BHC Act, in

conjunction with section 8 of the

International Banking Act (12 U.S.C.

3106), authorizes the board to require

foreign banking organizations and any

subsidiary thereof to file the FR 2314

reports. These reports are mandatory.

Information collected in these reports

generally is not considered confidential.

However, because the information is

collected as part of the Board’s

supervisory process, certain information

may be afforded confidential treatment

pursuant to exemption 8 of the FOIA (5

U.S.C. 552(b)(8)). Individual

respondents may request that certain

data be afforded confidential treatment

pursuant to exemption 4 of the FOIA if

the data has not previously been

publically disclosed and the release of

the data would likely cause substantial

harm to the competitive position of the

respondent (5 U.S.C. 552(b)(4)).

Additionally, individual respondents

may request that personally identifiable

information be afforded confidential

treatment pursuant to exemption 6 of

the FOIA if the release of the

information would constitute a clearly

unwarranted invasion of personal

privacy (5 U.S.C. 552(b)(6)). The

applicability of the FOIA exemptions 4

and 6 would be determined on a case-

by-case basis

52(b)(4)).

Additionally, individual respondents

may request that personally identifiable

information be afforded confidential

treatment pursuant to exemption 6 of

the FOIA if the release of the

information would constitute a clearly

unwarranted invasion of personal

privacy (5 U.S.C. 552(b)(6)). The

applicability of the FOIA exemptions 4

and 6 would be determined on a case-

by-case basis.

Current actions: The interim final rule

adjusts for community banking

organizations the measurement dates for

certain total asset thresholds that would

otherwise trigger additional information

collection requirements for the

remainder of calendar years 2020

through the end of 2021. The temporary

relief applies only to filing requirements

associated with asset-based reporting

thresholds of $10 billion or less. Table

1 of the interim final rule contains a

summary of affected reports, reporting

applicability for 2020–2021, and the

dates for determining reporting

requirements for 2022.

To implement the interim final rule,

the Board is temporarily revising the

instructions for the following reports:

FR Y–9C, FR Y–9LP, FR Y–11, FR Y–

11S, FR Y–7N, FR Y–7NS, FR 2314, and

FR 2314S. The revised instructions

instruct community banking

organizations to use the lesser of total

assets as of December 31, 2019, or the

most recent applicable measurement

period to determine the applicability of

asset-based filing thresholds for the

remainder of calendar years 2020

through the end of 2021. All reporting

eligibility criteria for these information

collections, besides the temporarily

revised total assets measurement date,

continue to apply. Financial institutions

must revert back to normal rules for

determining applicability of the

reporting requirements in calendar year

2022, as summarized in Table 1

resholds for the

remainder of calendar years 2020

through the end of 2021. All reporting

eligibility criteria for these information

collections, besides the temporarily

revised total assets measurement date,

continue to apply. Financial institutions

must revert back to normal rules for

determining applicability of the

reporting requirements in calendar year

2022, as summarized in Table 1.

The Board believes the changes to the

measurement dates for the total asset

thresholds used to determine additional

reporting requirements will not result in

a change in the burden estimates

currently approved by OMB. Therefore,

the burden estimates for these reports

remain unchanged by the interim final

rule.

The FR Y–9C instructions currently

contain filing thresholds of $5 billion

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

and $10 billion that trigger the reporting

of additional schedules and the

reporting of certain data items at a

higher frequently. These thresholds

would be impacted by the changes in

the interim final rule. Whether

additional FR Y–9C requirements apply

would normally be based on total

consolidated assets as of June 30 of the

prior year. With the revisions in the

interim final rule, community banking

organizations may instead use the lesser

of total consolidated assets as of

December 31, 2019, or June 30, 2020, to

determine whether additional filing

requirements are applicable

im final rule. Whether

additional FR Y–9C requirements apply

would normally be based on total

consolidated assets as of June 30 of the

prior year. With the revisions in the

interim final rule, community banking

organizations may instead use the lesser

of total consolidated assets as of

December 31, 2019, or June 30, 2020, to

determine whether additional filing

requirements are applicable.

Specifically, the additional filing

requirements for the FR Y–9C that

would otherwise be triggered by the $5

billion and $10 billion threshold are as

follows:

• The $5 billion threshold requires

these holding companies to report

Schedule HI–C, Part I, Disaggregated

Data on the Allowance for Loan and

Lease Losses; Schedule HC–D, Trading

Assets and Liabilities; Schedule HC–P,

1–4 Family Residential Mortgage

Banking Activities in Domestic Offices;

Schedule HC–Q, Assets and Liabilities

Measured at Fair Value; Schedule HC–

S, Servicing, Securitization, and Asset

Sale Activities; and Schedule HC–V,

Variable Interest Entities.

• The $5 billion threshold requires

these holding companies to report

Schedule HI item 1.e, interest income

from trading assets; Schedule HI item

2.c, interest on trading liabilities and

other borrowed money; Schedule HI

item 2.d, interest on subordinated notes

and debentures and on mandatory

convertible securities; Schedule HI item

5.c, trading revenue; Schedule HI items

5.d.(1) through 5.d.(5), related to various

fees and commissions on securities

brokerage investments, investment

banking, and insurance; Schedule HI

item 5.e, venture capital revenue;

Schedule HI item 5.g, net securitization

income; Schedule HI Memoranda item

1, net interest income on a fully taxable

equivalent basis; Schedule HI

Memoranda item 2, net income before

applicable income taxes, and

discontinued operations; Schedule HI

Memoranda items 8.a.(1) through

8.b.(2), discontinued operations and

applicable income tax effect; Schedule

HI Memoranda items 9.a through 9.e,

related to trading r

securitization

income; Schedule HI Memoranda item

1, net interest income on a fully taxable

equivalent basis; Schedule HI

Memoranda item 2, net income before

applicable income taxes, and

discontinued operations; Schedule HI

Memoranda items 8.a.(1) through

8.b.(2), discontinued operations and

applicable income tax effect; Schedule

HI Memoranda items 9.a through 9.e,

related to trading revenue; Schedule HI

Memoranda item 11, credit losses on

derivatives; Schedule HI Memoranda

items 12.a through 12.c, detail

pertaining to income from the sale and

servicing of mutual funds and annuities

(in domestic offices); Schedule HI

Memoranda items 14.a. through 14.b.(1),

related to net gains (losses) recognized

in earnings on assets and liabilities that

are reported at fair value under a fair

value option; Schedule HI Memoranda

item 15, stock-based employee

compensation expense; Schedule HI–B,

Part I, items 4.a and 4.b, columns A and

B, commercial and industrial loans;

Schedule HI–B, Part I, item 6, columns

A and B, loans to foreign governments

and official institutions; Schedule HI–B,

Part I, items 8.a and 8.b, lease finance

receivables; Schedule HI–B, Part I,

Memoranda item 2, columns A and B,

loans secured by real estate to non-U.S.

addressees; Schedule HI–B, Part I,

Memoranda item 3, uncollectible retail

credit card fees and finance charges

reversed against income; Schedule HI–

B, Part II, Memoranda item 1, allocated

transfer risk reserve; Schedule HI–B,

Part II, Memoranda item 2, separate

valuation allowance for uncollectible

retail credit card fees and finance

charges; Schedule HI–B, Part II,

Memoranda item 3, allowance for loan

and lease losses attributable to retail

credit card fees and finance charges;

Schedule HI–B, Part II, Memoranda item

4, allowance for post-acquisition credit

losses on purchased credit-impaired

loans; Schedule HC–B, items 4.a.(1)

through 4.a.(3), residential pass-through

securities; Schedule HC–C, items 4.a

and 4.b, commercial and industrial

l

rt II,

Memoranda item 3, allowance for loan

and lease losses attributable to retail

credit card fees and finance charges;

Schedule HI–B, Part II, Memoranda item

4, allowance for post-acquisition credit

losses on purchased credit-impaired

loans; Schedule HC–B, items 4.a.(1)

through 4.a.(3), residential pass-through

securities; Schedule HC–C, items 4.a

and 4.b, commercial and industrial

loans; Schedule HC–C, items 9.b.(1)

through 9.b.(2), column A and B, loans

for purchasing or carrying securities and

all other loans; Schedule HC–C, items

10.a and 10.b, column A, lease financing

receivables; Schedule HC–C Memoranda

items 1.e.(1) and 1.e.(2), commercial and

industrial loans; Schedule HC–C

Memoranda item 3, loans secured by

real estate to non-U.S. addressees;

Schedule HC–C Memoranda item 4,

outstanding credit card fees and finance

charges; Schedule HC–C Memoranda

items 12.a through 12.d, loans and

leases held for investment (not subject

to the requirements of FASB ASC 310–

30) that are acquired in business

combinations with acquisition dates in

the current calendar year; Schedule HC–

K, item 4.a, trading assets; Schedule

HC–L item 1.b.(1), unused consumer

credit card lines; Schedule HC–L 1.b.(2),

other unused credit card lines; Schedule

HC–L item 1.d, securities underwriting;

Schedule HC–L items 2.a and 3.a,

financial and performance standby

letters of credit conveyed to others;

Schedule HC–L items 7.a through

7.d.(2)(b), related to credit derivatives;

Schedule HC–L items 11.a through

14.b.(2), pertaining to derivatives

positions; Schedule HC–M items

6.a.(1)(a)(1) through 6.d, pertaining to

assets covered by loss-sharing

agreements with the Federal Deposit

Insurance Corporation; Schedule HC–N,

items 8.a and 8.b, columns A, B, and C;

Schedule HC–N items 12.a.(1)(a)

through 12.f, pertaining to loans and

leases which are covered by loss-sharing

agreements with the Federal Deposit

Insurance Corporation; Schedule HC–N

Memoranda items 1.e.(1) and 1.e.(2),

columns A, B,

ining to

assets covered by loss-sharing

agreements with the Federal Deposit

Insurance Corporation; Schedule HC–N,

items 8.a and 8.b, columns A, B, and C;

Schedule HC–N items 12.a.(1)(a)

through 12.f, pertaining to loans and

leases which are covered by loss-sharing

agreements with the Federal Deposit

Insurance Corporation; Schedule HC–N

Memoranda items 1.e.(1) and 1.e.(2),

columns A, B, and C, commercial and

industrial loans; and Schedule HC–N

Memoranda item 6, fair value of

derivative contract amounts carried as

assets.

• The $5 billion threshold requires

these holding companies to report

quarterly rather than annual Schedule

HI Memoranda items 6.a through 6.j,

other noninterest income; Schedule HI

Memoranda items 7.a through 7.p, other

noninterest expense; and Schedule HI

Memoranda 16, noncash income from

negative amortization on closed-end

loans secured by 1–4 family residential

properties; and quarterly rather than

semi-annual, Schedule HI Memoranda

item 17, other-than-temporary

impairment losses on held-to-maturity

and available-for-sale debt securities

recognized in earnings; Schedule HI–C,

Part II, items 7 through 11,

disaggregated data on the allowance for

credit losses; Schedule HC–C

Memoranda items 1.a.(1) through

1.f.(3)(c), pertaining to loans

restructured in troubled debt

restructurings that are in compliance

with their modified terms; Schedule

HC–N Memoranda items 1.a.(1) through

1.d.(2) and 1.e.(3) through 1.f.(3)(c),

related to loans restructured in troubled

debt restructurings that are in

compliance with their modified terms;

Schedule HC–R, Part II, items 1 through

25, columns A through U, risk-weighted

assets; Schedule HC–R, Part II

Memoranda item 1, current credit

exposure across all derivative contracts;

Schedule HC–R, Part II Memoranda item

2, columns A, B, and C, notional

principal amounts of over-the-counter

derivative contracts; and Schedule HC–

R, Part II, Memoranda item 3, columns

A, B, and C, notional principal amounts

of centrally

ough

25, columns A through U, risk-weighted

assets; Schedule HC–R, Part II

Memoranda item 1, current credit

exposure across all derivative contracts;

Schedule HC–R, Part II Memoranda item

2, columns A, B, and C, notional

principal amounts of over-the-counter

derivative contracts; and Schedule HC–

R, Part II, Memoranda item 3, columns

A, B, and C, notional principal amounts

of centrally cleared derivatives

contracts.

• The $10 billion threshold requires

these holding companies to report

Schedule HI Memoranda items 10.a and

10.b, related to net gains/losses on

credit derivatives; Schedule HC–B

Memoranda items 5.a through 5.f,

related to asset-backed securities;

Schedule HC–B Memoranda items 6.a

through 6.g, related to structured

financial products by underlying

collateral or reference assets; Schedule

HC–L item 15, pertaining to the

additional information on over-the-

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34 5 U.S.C. 601 et seq.

35 Under regulations issued by the Small Business

Administration, a small entity includes a depository

institution, bank holding company, or savings and

loan holding company with total assets of $600

million or less and trust companies with total assets

of $41.5 million or less. See 13 CFR 121.201.

36 12 U.S.C. 4802(a).

37 12 U.S.C. 4802.

38 Public Law 106–102, 113 Stat. 1338, 1471, 12

U.S.C. 4809.

counter derivatives; and Schedule HC–

S items 6 and 10, and Schedule HC–S

Memoranda item 3, related to

securitization activity. Holding

companies that cross the $10 billion

threshold would be ineligible to opt-in

into the community bank leverage ratio

framework and would be required to file

the additional Schedule HC–R, Part I

and HC–R, Part II line items

at. 1338, 1471, 12

U.S.C. 4809.

counter derivatives; and Schedule HC–

S items 6 and 10, and Schedule HC–S

Memoranda item 3, related to

securitization activity. Holding

companies that cross the $10 billion

threshold would be ineligible to opt-in

into the community bank leverage ratio

framework and would be required to file

the additional Schedule HC–R, Part I

and HC–R, Part II line items.

The Board has determined that the

temporary revisions to these collections

of information must be instituted

quickly and that public participation in

the approval process would defeat the

purpose of the collections. Delaying the

revisions would cause public harm if

firms were adversely affected due to

participating in the PPP or had to bear

temporary compliance costs.

In addition, the Board proposes to

extend the collections of information for

three years with the revisions discussed

above.

D. Regulatory Flexibility Act

The Regulatory Flexibility Act

(RFA) 34 requires an agency to consider

whether the rules it proposes will have

a significant economic impact on a

substantial number of small entities.35

The RFA applies only to rules for which

an agency publishes a general notice of

proposed rulemaking pursuant to 5

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

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

APA, the agencies have determined for

good cause that general notice and

opportunity for public comment is

unnecessary, and therefore the agencies

are not issuing a notice of proposed

rulemaking. Accordingly, the agencies

have concluded that the RFA’s

requirements relating to initial and final

regulatory flexibility analysis do not

apply.

Nevertheless, the agencies seek

comment on whether, and the extent to

which, the interim final rule would

affect a significant number of small

entities.

E

unnecessary, and therefore the agencies

are not issuing a notice of proposed

rulemaking. Accordingly, the agencies

have concluded that the RFA’s

requirements relating to initial and final

regulatory flexibility analysis do not

apply.

Nevertheless, the agencies seek

comment on whether, and the extent to

which, the interim final rule would

affect a significant number of small

entities.

E. Riegle Community Development and

Regulatory Improvement Act of 1994

Pursuant to section 302(a) of the

Riegle Community Development and

Regulatory Improvement Act of 1994

(RCDRIA) 36 requires that each Federal

banking agency, 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

principles of safety and soundness and

the public interest, any administrative

burdens that 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.37 The agencies have

determined that the final rule would not

impose additional reporting, disclosure,

or other requirements; therefore, the

requirements of the RCDRIA do not

apply.

F. Unfunded Mandates Reform Act of

1995

As a general matter, the Unfunded

Mandates Reform Act of 1995 (UMRA),

2 U.S.C

er that begins on or after the date

on which the regulations are published

in final form.37 The agencies have

determined that the final rule would not

impose additional reporting, disclosure,

or other requirements; therefore, the

requirements of the RCDRIA do not

apply.

F. Unfunded Mandates Reform Act of

1995

As a general matter, the Unfunded

Mandates Reform Act of 1995 (UMRA),

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

preparation of a budgetary impact

statement before promulgating a rule

that includes a Federal mandate that

may result in the expenditure by State,

local, and tribal governments, in the

aggregate, or by the private sector, of

$100 million or more in any one year.

However, the UMRA does not apply to

final rules for which a general notice of

proposed rulemaking was not

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

Therefore, because the OCC has found

good cause to dispense with notice and

comment for this interim final rule, the

OCC has not prepared an economic

analysis of the rule under the UMRA.

G. Use of Plain Language

Section 722 of the Gramm-Leach-

Bliley Act 38 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 interim final rule

in a simple and straightforward manner

and invite comment on the use of plain

language. For example:

• Is the material organized to suit

your needs? If not, how could the

agencies present the interim final rule

more clearly?

• Are the requirements in the interim

final rule clearly stated? If not, how

could the interim final rule be more

clearly stated?

• Does the interim final rule contain

technical language or jargon that is not

clear? If so, which language requires

clarification?

• Would a different format (grouping

and order of sections, use of headings,

paragraphing) make the interim final

rule easier to understand? If so, what

changes would achieve that?

• Is this section format adequa

e interim final rule be more

clearly stated?

• Does the interim final rule contain

technical language or jargon that is not

clear? If so, which language requires

clarification?

• Would a different format (grouping

and order of sections, use of headings,

paragraphing) make the interim final

rule easier to understand? If so, what

changes would achieve that?

• Is this section format adequate? If

not, which of the sections should be

changed and how?

• What other changes can the

agencies incorporate to make the

interim final rule easier to understand?

List of Subjects

12 CFR Part 3

Administrative practice and

procedure, Capital, Federal savings

associations, National banks, Risk.

12 CFR Part 4

Administrative practice and

procedure, Freedom of information,

Individuals with disabilities, Minority

businesses, Organization and functions

(Government agencies), Reporting and

recordkeeping requirements, Women.

12 CFR Part 52

Banks, Banking, Reporting and

recordkeeping requirements.

12 CFR Part 208

Accounting, Agriculture Banks,

Banking, Confidential business

information, Consumer protection,

Crime Currency, Federal Reserve

System, Flood insurance, Insurance,

Investments, Mortgages, Reporting and

recordkeeping requirements, Securities.

12 CFR Part 211

Exports, Federal Reserve System,

Foreign banking, Holding companies,

Investments.

12 CFR Part 212

Antitrust, Banks, Banking, Holding

companies.

12 CFR Part 217

Administrative practice and

procedure, Banks, Banking, Federal

Reserve System, Holding companies,

Investments, National banks, Reporting

and recordkeeping requirements,

Securities.

12 CFR Part 225

Administrative practice and

procedure, Banks, Banking, Capital

planning, Holding companies, Reporting

and recordkeeping requirements,

Securities, Stress testing.

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ng companies,

Investments, National banks, Reporting

and recordkeeping requirements,

Securities.

12 CFR Part 225

Administrative practice and

procedure, Banks, Banking, Capital

planning, Holding companies, Reporting

and recordkeeping requirements,

Securities, Stress testing.

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

12 CFR Part 235

Accounting, Banks, Banking.

12 CFR Part 238

Administrative practice and

procedure, Banks, Banking, Federal

Reserve System, Reporting and

recordkeeping requirements, Securities.

12 CFR Part 304

Bank deposit insurance, Banks,

Banking, Freedom of information,

Reporting and recordkeeping

requirements.

12 CFR Part 324

Administrative practice and

procedure, Banks, Banking, Capital,

Capital adequacy, Reporting and

recordkeeping requirements, State non-

member banks, Savings associations.

12 CFR Part 337

Banks, Banking, Reporting and

recordkeeping requirements, Savings

associations.

12 CFR Part 347

Authority delegations (Government

agencies), Bank deposit insurance,

Banks, Banking, Credit, Foreign

banking, Investments, Reporting and

recordkeeping requirements, U.S.

investments abroad.

12 CFR Part 348

Antitrust, Banks, Banking, Holding

companies, Savings associations.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Chapter I

Authority and Issuance

For the reasons stated in the joint

preamble, the Office of the Comptroller

of the Currency amends chapter I of

Title 12 of the Code of Federal

Regulations as follows:

PART 3—CAPITAL ADEQUACY

STANDARDS

■1. The authority citation for part 3

continues to read as follows:

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

1462a, 1463, 1464, 1818, 1828(n), 1828 note,

1831n note, 1835, 3907, 3909, 5412(b)(2)(B),

and Pub. L. 116–136, 134 Stat. 281.

■2

he Office of the Comptroller

of the Currency amends chapter I of

Title 12 of the Code of Federal

Regulations as follows:

PART 3—CAPITAL ADEQUACY

STANDARDS

■1. The authority citation for part 3

continues to read as follows:

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

1462a, 1463, 1464, 1818, 1828(n), 1828 note,

1831n note, 1835, 3907, 3909, 5412(b)(2)(B),

and Pub. L. 116–136, 134 Stat. 281.

■2. Section 3.12 is amended by adding

paragraph (a)(4) to read as follows:

§ 3.12

Community bank leverage ratio

framework.

(a) * * *

(4)(i) Temporary relief. From

December 2, 2020 through December 31,

2021, except as provided in paragraph

(a)(4)(ii) of this section, the total

consolidated assets of a national bank or

Federal savings association for purposes

of paragraph (a)(2)(ii) of this section

shall be the lesser of:

(A) The total consolidated assets

reported by the national bank or Federal

savings association in its Call Report as

of December 31, 2019; and

(B) The total consolidated assets of

the national bank or Federal savings

association calculated in accordance

with the reporting instructions to the

Call Report as of the end of the most

recent calendar quarter.

(ii) Reservation of authority. The

temporary relief provided under

paragraph (a)(4)(i) of this section does

not apply to a national bank or Federal

savings association if the OCC

determines that permitting the

institution to determine its assets in

accordance with that paragraph would

not be commensurate with the risk

posed by the institution

the end of the most

recent calendar quarter.

(ii) Reservation of authority. The

temporary relief provided under

paragraph (a)(4)(i) of this section does

not apply to a national bank or Federal

savings association if the OCC

determines that permitting the

institution to determine its assets in

accordance with that paragraph would

not be commensurate with the risk

posed by the institution. When making

this determination, the OCC will

consider all relevant factors, including

the extent of asset growth of the national

bank or Federal savings association

since December 31, 2019; the causes of

this growth, including whether this

growth occurred as a result of a merger

or acquisition; whether such growth is

likely to be temporary or permanent;

whether the national bank or Federal

savings association has become

involved in any additional activities

since December 31, 2019; and the type

of assets held by the national bank or

Federal savings association. The OCC

will notify a national bank or Federal

savings association of a determination

under this paragraph. A national bank

or Federal savings association may, not

later than 30 days after the date of a

determination by the OCC, inform the

OCC, in writing, of why the national

bank or Federal savings association

should be eligible for the temporary

relief. The OCC will make a final

determination after reviewing any

response.

*

*

*

*

*

PART 4—ORGANIZATION AND

FUNCTIONS, AVAILABILITY AND

RELEASE OF INFORMATION,

CONTRACTING OUTREACH

PROGRAM, POST-EMPLOYMENT

RESTRICTIONS FOR SENIOR

EXAMINERS

SUBPART A—Organization and

Functions

■3. The authority citation for part 4

continues to read as follows: Authority:

5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161,

481, 482, 484(a), 1442, 1462a, 1463,

1464 1817(a), 1818, 1820, 1821, 1831m,

1831p–1, 1831o, 1833e, 1867, 1951 et

seq., 2601 et seq., 2801 et seq., 2901 et

seq., 3101 et seq., 3401 et seq., 5321,

5412, 5414; 15 U.S.C. 77uu(b), 78q(c)(3);

18 U.S.C. 641, 1905, 1906; 29 U.S.C

. The authority citation for part 4

continues to read as follows: Authority:

5 U.S.C. 301, 552; 12 U.S.C. 1, 93a, 161,

481, 482, 484(a), 1442, 1462a, 1463,

1464 1817(a), 1818, 1820, 1821, 1831m,

1831p–1, 1831o, 1833e, 1867, 1951 et

seq., 2601 et seq., 2801 et seq., 2901 et

seq., 3101 et seq., 3401 et seq., 5321,

5412, 5414; 15 U.S.C. 77uu(b), 78q(c)(3);

18 U.S.C. 641, 1905, 1906; 29 U.S.C.

1204; 31 U.S.C. 5318(g)(2), 9701; 42

U.S.C. 3601; 44 U.S.C. 3506, 3510; E.O.

12600 (3 CFR, 1987 Comp., p. 235).

■4. Section 4.6 is amended by adding

paragraph (d) to read as follows:

§ 4.6

Frequency of examination of national

banks and Federal savings associations.

*

*

*

*

*

(d) Through December 31, 2021, for

purposes of determining eligibility for

the 18-month rule described in

paragraph (b) of this section, the OCC

may determine the total assets of a

national bank or Federal savings

association by reference to the total

assets of the national bank or Federal

savings association as reported by the

national bank or Federal savings

association in its Call Report as of

December 31, 2019.

■5. Section 4.7 is amended by adding

paragraph (d) to read as follows:

§ 4.7

Frequency of examination of Federal

agencies and branches.

*

*

*

*

*

(d) Through December 31, 2021, for

purposes of determining eligibility for

the 18-month rule described in

paragraph (b) of this section, the OCC

may determine total assets of a Federal

branch or agency by reference to the

total assets of the Federal branch or

agency as reported by the Federal

branch or agency as of December 31,

2019.

PART 52—REGULATORY REPORTING

■6. The authority citation for part 52

continues to read as follows:

Authority: 12 U.S.C. 93a, 161, 1463(a),

1464(v), and 1817(a)(12).

■7. Add § 52.5 to read as follows:

§ 52.5

Temporary relief

s of a Federal

branch or agency by reference to the

total assets of the Federal branch or

agency as reported by the Federal

branch or agency as of December 31,

2019.

PART 52—REGULATORY REPORTING

■6. The authority citation for part 52

continues to read as follows:

Authority: 12 U.S.C. 93a, 161, 1463(a),

1464(v), and 1817(a)(12).

■7. Add § 52.5 to read as follows:

§ 52.5

Temporary relief.

In determining whether it meets the

asset threshold in paragraph (1) of the

definition of ‘‘covered depository

institution’’ in § 52.5 of this part, for

purposes of a report required to be

submitted for calendar year 2021, a

national bank, Federal savings

association, or insured Federal branch

may refer to the lesser of its total

consolidated assets as reported in its

report of condition as of December 31,

2019, and its total consolidated assets as

reported in its report of condition for

the second calendar quarter of 2020.

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Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations

Board of Governors of the Federal

Reserve System

12 CFR Chapter I

Authority and Issuance

For the reasons stated in the joint

preamble, chapter II of title 12 of the

Code of Federal Regulations is amended

as follows:

PART 208—MEMBERSHIP OF STATE

BANKING INSTITUTIONS IN THE

FEDERAL RESERVE SYSTEM

(REGULATION H)

■8. The authority citation for part 208

continues to read as follows:

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

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

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

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

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

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

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

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

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

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

4104b, 4106, and 4128

321–338a, 371d, 461, 481–486,

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

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

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

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

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

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

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

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

4104b, 4106, and 4128.

Subpart C—Bank Securities and

Securities-Related Activities

■9. Amend § 208.36 by adding

paragraph (b)(3) to read as follows:

§ 208.37

Reporting requirements for State

member banks subject to the Securities

Exchange Act of 1934.

*

*

*

*

*

(b) * * *

(3) Notwithstanding paragraph (b)(1)

of this section, a member bank may,

from December 2, 2020, through

December 31, 2021, make the election

described in paragraph (b)(1) of this

section if it has no foreign offices and

had total assets of $150 million or less,

determined based on the lesser of total

assets as of December 31, 2019, and total

assets as of the end of the bank’s most

recent fiscal year. The relief provided

under this paragraph (b)(3) of this

section does not apply to a member

bank if the Board determines that

permitting the member bank to

determine its assets in accordance with

that paragraph would not be

commensurate with the risk profile of

the member bank. When making this

determination, the Board will consider

all relevant factors, including the extent

of asset growth of the member bank

since December 31, 2019; the causes of

such growth, including whether growth

occurred as a result of mergers or

acquisitions; whether such growth is

likely to be temporary or permanent;

whether the member bank has become

involved in any additional activities

since December 31, 2019; the asset size

of any parent companies; and the type

of assets held by the member bank

of the member bank

since December 31, 2019; the causes of

such growth, including whether growth

occurred as a result of mergers or

acquisitions; whether such growth is

likely to be temporary or permanent;

whether the member bank has become

involved in any additional activities

since December 31, 2019; the asset size

of any parent companies; and the type

of assets held by the member bank. In

making a determination pursuant to this

paragraph (b)(3), the Board will apply

notice and response procedures in the

same manner and to the same extent as

the notice and response procedures in

12 CFR 263.202.

*

*

*

*

*

Subpart D—Miscellaneous

Requirements

■10. Amend § 208.64 by adding

paragraph (d) to read as follows:

§ 208.64

Frequency of examination.

*

*

*

*

*

(d)(1) Except as provided in paragraph

(c) of this section, from December 2,

2020, through December 31, 2021, for

purposes of determining eligibility for

the extended examination cycle

described in paragraph (b) of this

section, the total assets of a member

bank shall be determined based on the

lesser of:

(i) The assets of the member bank as

of December 31, 2019; and

(ii) The assets of the member bank as

of the end of the most recent calendar

quarter.

(2) Nothing in paragraph (d)(1) of this

section limits the authority of the

Federal Reserve to examine any member

bank as frequently as the agency deems

necessary pursuant to paragraph (c) of

this section.

*

*

*

*

*

Subpart K—Forms, Instructions and

Reports

■11. Amend § 208.121 by revising the

definition of ‘‘Covered depository

institution’’ to read as follows:

§ 208.121

Definitions.

*

*

*

*

*

Covered depository institution means

a state member bank that meets all of

the following criteria:

k as frequently as the agency deems

necessary pursuant to paragraph (c) of

this section.

*

*

*

*

*

Subpart K—Forms, Instructions and

Reports

■11. Amend § 208.121 by revising the

definition of ‘‘Covered depository

institution’’ to read as follows:

§ 208.121

Definitions.

*

*

*

*

*

Covered depository institution means

a state member bank that meets all of

the following criteria:

(1) Has less than $5 billion in total

consolidated assets as reported in its

report of condition for the second

calendar quarter of the preceding year,

except that, during the calendar year

2021, a state member bank shall

determine whether it meets the

requirement in paragraph (1) of this

section by using the lesser of its total

consolidated assets as reported in its

report of condition as of December 31,

2019, and its total consolidated assets as

reported in its report of condition for

the second calendar quarter of 2020.

The relief provided under this

paragraph (1) of this section does not

apply to a state member bank if the

Board determines that permitting the

state member bank to determine its

assets in accordance with that paragraph

would not be commensurate with the

risk profile of the state member bank.

When making this determination, the

Board will consider all relevant factors,

including the extent of asset growth of

the state member bank since December

31, 2019; the causes of such growth,

including whether growth occurred as a

result of mergers or acquisitions;

whether such growth is likely to be

temporary or permanent; whether the

state member bank has become involved

in any additional activities since

December 31, 2019; the asset size of any

parent companies; and the type of assets

held by the state member bank. In

making a determination pursuant to this

paragraph (1), the Board will apply

notice and response procedures in the

same manner and to the same extent as

the notice and response procedures in

12 CFR 263.202.

member bank has become involved

in any additional activities since

December 31, 2019; the asset size of any

parent companies; and the type of assets

held by the state member bank. In

making a determination pursuant to this

paragraph (1), the Board will apply

notice and response procedures in the

same manner and to the same extent as

the notice and response procedures in

12 CFR 263.202.

(2) Has no foreign offices, as defined

in this section;

(3) Is not required to or has not

elected to use 12 CFR part 217, subpart

E, to calculate its risk-based capital

requirements; and

(4) Is not a large institution or highly

complex institution, as such terms are

defined in 12 CFR 327.8, or treated as

a large institution, as requested under

12 CFR 327.16(f).

*

*

*

*

*

PART 211—INTERNATIONAL

BANKING OPERATIONS

(REGULATION K)

■12. The authority citation for part 211

continues to read as follows:

Authority: 12 U.S.C. 221 et seq., 1818,

1835a, 1841 et seq., 3101 et seq., 3901 et seq.,

and 5101 et seq.; 15 U.S.C. 1681s, 1681w,

6801 and 6805.

Subpart B—Foreign Banking

Organizations

■13. Amend § 211.26 by adding

paragraph (c)(2)(iii) to read as follows:

§ 211.26

Examination of offices and

affiliates of foreign banks.

*

*

*

*

*

(c) * * *

(2) * * *

(iii)(A) Except as provided in

paragraph (c)(2)(iii)(B) of this section,

from December 2, 2020 through

December 31, 2021, for purposes of

determining eligibility for the extended

examination cycle described in

paragraph (c)(2) of this section, the total

assets of a branch or agency shall be

determined based on the lesser of:

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(1) The total assets of the branch or

agency as of December 31, 2019; and

(c)(2) of this section, the total

assets of a branch or agency shall be

determined based on the lesser of:

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(1) The total assets of the branch or

agency as of December 31, 2019; and

(2) The total assets of the branch or

agency as of the end of the most recent

calendar quarter.

(B) The relief provided under

paragraph (c)(2)(iii)(A) of this section

does not apply to a branch or agency if

the Board determines that permitting

the branch or agency to determine its

assets in accordance with that paragraph

would not be commensurate with the

risk profile of the branch or agency.

When making this determination, the

Board will consider all relevant factors,

including the extent of asset growth of

the branch or agency since December

31, 2019; the causes of such growth,

including whether growth occurred as a

result of mergers or acquisitions;

whether such growth is likely to be

temporary or permanent; whether the

branch or agency has become involved

in any additional activities since

December 31, 2019; the asset size of any

parent companies; and the type of assets

held by the branch or agency. In making

a determination pursuant to this

paragraph (c)(2)(iii)(B), the Board will

apply notice and response procedures in

the same manner and to the same extent

as the notice and response procedures

in 12 CFR 263.202.

*

*

*

*

*

PART 212—MANAGEMENT OFFICIAL

INTERLOCKS

■14. The authority citation for part 212

continues to read as follows:

Authority: 12 U.S.C. 3201–3208; 15 U.S.C.

19.

■15. Amend § 212.2 by adding

paragraph (o)(3) to read as follows:

§ 212.2

Definitions.

*

*

*

*

*

(o) * * *

(3)(i) Notwithstanding paragraph

same extent

as the notice and response procedures

in 12 CFR 263.202.

*

*

*

*

*

PART 212—MANAGEMENT OFFICIAL

INTERLOCKS

■14. The authority citation for part 212

continues to read as follows:

Authority: 12 U.S.C. 3201–3208; 15 U.S.C.

19.

■15. Amend § 212.2 by adding

paragraph (o)(3) to read as follows:

§ 212.2

Definitions.

*

*

*

*

*

(o) * * *

(3)(i) Notwithstanding paragraph

(o)(1) of this section, and except as

provided in paragraph (o)(3)(ii) of this

section, from December 2, 2020, through

December 31, 2021, the term total

assets, with respect to a depository

organization, means the lesser of assets

of the depository organization reported

on a consolidated basis as of December

31, 2019, and assets reported as of the

end of the depository organization’s

most recent fiscal year on a consolidated

basis as of December 31, 2020.

(ii) The relief provided under

paragraph (o)(3)(i) of this section does

not apply to a depository organization if

the Board determines that permitting

the depository organization to

determine its assets in accordance with

that paragraph would not be

commensurate with the risk profile of

the depository organization. When

making this determination, the Board

will consider all relevant factors,

including the extent of asset growth of

the depository organization since

December 31, 2019; the causes of such

growth, including whether growth

occurred as a result of mergers or

acquisitions; whether such growth is

likely to be temporary or permanent;

whether the depository organization has

become involved in any additional

activities since December 31, 2019; the

asset size of any parent companies; and

the type of assets held by the depository

organization. In making a determination

pursuant to this paragraph (o)(3)(ii), the

Board will apply notice and response

procedures in the same manner and to

the same extent as the notice and

response procedures in 12 CFR 263.202

n has

become involved in any additional

activities since December 31, 2019; the

asset size of any parent companies; and

the type of assets held by the depository

organization. In making a determination

pursuant to this paragraph (o)(3)(ii), the

Board will apply notice and response

procedures in the same manner and to

the same extent as the notice and

response procedures in 12 CFR 263.202.

*

*

*

*

*

PART 217—CAPITAL ADEQUACY OF

BANK HOLDING COMPANIES,

SAVINGS AND LOAN HOLDING

COMPANIES, AND STATE MEMBER

BANKS (REGULATION Q)

■16. The authority citation for part 217

continues to read as follows:

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

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

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

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

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

134 Stat. 281.

Subpart B—Capital Ratio

Requirements and Buffers

■17. Amend § 217.12 by adding

paragraph (a)(4) to read as follows:

§ 217.12

Community bank leverage ratio

framework.

(a) * * *

(4) Temporary relief for 2020 and

2021. (i) Except as provided in

paragraph (a)(4)(ii) of this section, from

December 2, 2020, through December

31, 2021, for purposes of determining

whether a Board-regulated institution

satisfies the criterion in paragraph

(a)(2)(ii) of this section, the total

consolidated assets of a Board-regulated

institution for purposes of paragraph

(a)(2)(ii) of this section shall be

determined based on the lesser of:

(A) The total consolidated assets

reported by the institution in the Call

Report, FR Y–9C, or FR Y–9SP, as

applicable, as of December 31, 2019;

and

(B) The total consolidated assets

calculated in accordance with the

reporting instructions to the Call Report

or to Form FR Y–9C, as applicable, as

of the end of the most recent calendar

quarter.

shall be

determined based on the lesser of:

(A) The total consolidated assets

reported by the institution in the Call

Report, FR Y–9C, or FR Y–9SP, as

applicable, as of December 31, 2019;

and

(B) The total consolidated assets

calculated in accordance with the

reporting instructions to the Call Report

or to Form FR Y–9C, as applicable, as

of the end of the most recent calendar

quarter.

(ii) The relief provided under this

paragraph (a)(4)(i) does not apply to a

Board-regulated institution if the Board

determines that permitting the Board-

regulated institution to determine its

assets in accordance with that paragraph

would not be commensurate with the

risk profile of the Board-regulated

institution. When making this

determination, the Board will consider

all relevant factors, including the extent

of asset growth of the Board-regulated

institution since December 31, 2019; the

causes of such growth, including

whether growth occurred as a result of

mergers or acquisitions; whether such

growth is likely to be temporary or

permanent; whether the Board-regulated

institution has become involved in any

additional activities since December 31,

2019; the asset size of any parent

companies; and the type of assets held

by the Board-regulated institution. In

making a determination pursuant to this

paragraph (a)(4)(ii), the Board will apply

notice and response procedures in the

same manner and to the same extent as

the notice and response procedures in

12 CFR 263.202.

*

*

*

*

*

PART 225—BANK HOLDING

COMPANIES AND CHANGE IN BANK

CONTROL (REGULATION Y)

■18. The authority citation for part 225

continues to read as follows:

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

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

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

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

6801 and 6805.

Subpart A—General Provisions

■19. Add § 225.10 to subpart A to read

as follows:

§ 225.10

Temporary relief for 2020 and

2021.

(a) Except as provided in paragraph

or part 225

continues to read as follows:

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

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

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

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

6801 and 6805.

Subpart A—General Provisions

■19. Add § 225.10 to subpart A to read

as follows:

§ 225.10

Temporary relief for 2020 and

2021.

(a) Except as provided in paragraph

(c) of this section and subject to the

provisions of paragraph (d) of this

section, from December 2, 2020, through

December 31, 2021, the consolidated

assets, consolidated risk-weighted

assets, total consolidated assets, and

total assets of a bank holding company

for purposes of §§ 225.4(b)(2)(iii)(A) and

(B), 225.14(a)(1)(v)(A)(1) and (2),

225.14(a)(1)(vi), 225.23(a)(1)(iii)(A)(1)

and (2), 225.24(a)(2)(iv) and (v), and

225.28(b)(11)(vi) shall be determined

based on the lesser of each such amount

as of December 31, 2019, and as of the

otherwise applicable asset measurement

date of the relevant paragraph.

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(b) Except as provided in paragraph

(c) of this section and subject to the

provisions of paragraph (d) of this

section, from December 2, 2020, through

December 31, 2021, for purposes of

determining the applicability of

§§ 224.14(c)(6)(ii), 225.17(a)(6), and

225.23(c)(5)(ii) of this part and appendix

C to this part, the pro forma

consolidated assets of a bank holding

company and the consolidated risk-

weighted assets of a bank holding

company immediately following

consummation of a transaction each

shall be calculated as the lesser of:

(1) Such amount calculated as the

sum of the assets of each company

involved in the proposed business

combination, as well as any company

with which any such company has

combined since December 31, 2019, as

of December 31, 2019; and

consolidated risk-

weighted assets of a bank holding

company immediately following

consummation of a transaction each

shall be calculated as the lesser of:

(1) Such amount calculated as the

sum of the assets of each company

involved in the proposed business

combination, as well as any company

with which any such company has

combined since December 31, 2019, as

of December 31, 2019; and

(2) Such amount calculated as the

sum of the assets of each company

involved in the proposed business

combination as of the end of the most

recent calendar quarter.

(c) The relief provided under

paragraphs (a) and (b) of this section

does not apply to a bank holding

company if the Board determines that

permitting the bank holding company to

determine its assets in accordance with

that paragraph would not be

commensurate with the risk profile of

the bank holding company. When

making this determination, the Board

will consider all relevant factors,

including the extent of asset growth of

the bank holding company since

December 31, 2019; the causes of such

growth, including whether growth

occurred as a result of mergers or

acquisitions; whether such growth is

likely to be temporary or permanent;

whether the bank holding company has

become involved in any additional

activities since December 31, 2019; the

asset size of any parent companies; and

the type of assets held by the bank

holding company. In making a

determination pursuant to this section,

the Board will apply notice and

response procedures in the same

manner and to the same extent as the

notice and response procedures in 12

CFR 263.202.

olding company has

become involved in any additional

activities since December 31, 2019; the

asset size of any parent companies; and

the type of assets held by the bank

holding company. In making a

determination pursuant to this section,

the Board will apply notice and

response procedures in the same

manner and to the same extent as the

notice and response procedures in 12

CFR 263.202.

(d) Nothing in this section limits the

discretion of the Board or its delegatee

to disallow the use of any expedited

action process, require the submission

of additional information in connection

with a notice or application, or consider

the ability of a bank holding company

filing a notice or application under this

part to comply with any statutory or

regulatory requirements that may be

applicable to the bank holding company

upon expiration of the relief provided

by this section.

PART 235—DEBIT CARD

INTERCHANGE FEES AND ROUTING

(REGULATION II)

■20. The authority citation for part 235

continues to read as follows:

Authority: 15 U.S.C. 1693o–2.

■21. The heading for part 235 is revised

to read as set forth above.

■22. Amend § 235.5 by adding

paragraph (a)(4) to read as follows:

§ 235.5

Exemptions.

*

*

*

*

*

(a) * * *

(4)(i) Temporary relief for 2020 and

2021. Except as provided in paragraph

(a)(4)(ii) of this section, for purposes of

determining eligibility for the

exemption for small issuers described in

paragraph (a)(1) of this section, issuer

asset size that is calculated as of the end

of the calendar year 2020 shall be

determined based on the lesser of:

(A) The assets of the issuer, together

with its affiliates, as of the end of the

calendar year 2019; and

(B) The assets of the issuer, together

with its affiliates, as of the end of the

calendar year 2020.

r small issuers described in

paragraph (a)(1) of this section, issuer

asset size that is calculated as of the end

of the cale

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