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FIL-13-95 Attachment

[Federal Register: February 7, 1995 (Volume 60, Number 25)]

[Proposed Rules]

[Page 7139-7140]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]


 

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FEDERAL DEPOSIT INSURANCE CORPORATION


 

12 CFR Part 348


 

RIN 3064-AB30



 

Management Official Interlocks


 

AGENCY: Federal Deposit Insurance Corporation (FDIC).


 

ACTION: Withdrawal of proposed rulemaking.


 

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SUMMARY: The FDIC is withdrawing a proposed amendment to its

regulations that implement the Depository Institution Management

Interlocks Act. The proposal would have created limited exemptions to

the prohibition on management official interlocks for depository

institutions that control only a small percentage of the total deposits

in the community or relevant metropolitan statistical area in which the

institutions are located. Recent statutory changes have limited the

FDIC's authority to create such exemptions by regulation.


 

DATES: This withdrawal of the proposed rule is made on February 7,

1995.


 

FOR FURTHER INFORMATION CONTACT: Curtis Vaughn, Examination Specialist,

[[Page 7140]] Division of Supervision, (202) 898-6759; or Mark Mellon,

Senior Attorney, Regulation and Legislation Section, Legal Division,

(202) 898-3854, Federal Deposit Insurance Corporation, 550 17th Street,

NW., Washington, DC 20429.


 

SUPPLEMENTARY INFORMATION:


 

The Proposed Rule


 

On February 22, 1994, the Board of Directors of the FDIC approved

for public comment a proposed rule to amend Part 348 of FDIC

regulations, Management Official Interlocks, which implements the

Depository Institution Management Interlocks Act (the Interlocks Act).

The Interlocks Act generally prohibits certain management official

interlocks between unaffiliated depository institutions, depository

holding companies, and their affiliates. The proposed amendment,

undertaken as part of a joint initiative by the FDIC, the Board of

Governors of Federal Reserve Board and the Office of the Comptroller of

the Currency, would have created an exception to the bar on management

interlocks for depository institutions that control only a small

percentage of the total deposits in the community or relevant

metropolitan statistical area where the institutions are located (the

small market share exemption). The proposed rule was published in the

Federal Register on April 20, 1994 and the comment period expired on

June 20, 1994. 59 FR 18764.


 

The Riegle Community Development and Regulatory Improvement Act


 

On September 23, 1994, President Clinton signed the Riegle

Community Development and Regulatory Improvement Act of 1994 into law

(Pub. L. 103-325, 108 Stat. 2160) (the RCDRI Act).

Section 338 of the RCDRI Act modified the authority of the federal

banking agencies to create regulatory exceptions to the bar on

management interlocks. It provides that exemptions may be granted on a

case-by-case basis for: interlocks to improve the provision of credit

to low- and moderate-income areas, increase the competitive position of

minority- and women-owned institutions, or strengthen the management of

newly chartered institutions that are in an unsafe or unsound

condition. Federal banking agencies may establish a program to permit

such interlocks on a case-by-case basis for a period of two years, with

authorization to grant an additional extension of two more years.\1\


 

\1\Although the wording of these exemptions is slightly

different, in essence Congress codified the existing regulatory

exceptions that are available under Part 348 (with the exception of

Sec. 348.4(b)(5): ``Loss of management officials due to change in

circumstance'').

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Section 338 also amended the Interlocks Act in such a way as to

limit the authority of the federal banking agencies to create other

exceptions to the prohibition on management interlocks solely to a

case-by-case basis and then, only if a statutorily defined high

standard is met, may an exception be granted.\2\ Under the Interlocks

Act as amended, in order for an exception to be granted, the federal

banking agency must determine that (1) the service of the management

official is critical to safe and sound operations of the affected

depository institution, depository holding company or company; (2) the

service will not have an anticompetitive effect; and (3) any additional

requirements which the agency may impose have been satisfied. The board

of directors of the affected depository institution must also provide a

resolution to the appropriate federal banking agency indicating that no

other candidate who is willing to serve possesses the necessary

expertise.


 

\2\Prior to the RCDRI Act amendments, federal banking agencies

had the authority under section 209 of the Interlocks Act (12 U.S.C.

3207) to promulgate rules and regulations permitting service by a

management official which would otherwise be prohibited by the

Interlocks Act.

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Effect of Legislation on Proposal


 

It is the opinion of the Board of Directors of the FDIC that the

proposed amendment is not consistent with the limited authority to

create exceptions on a bank-specific and case-by-case basis given the

FDIC under the Interlocks Act as amended. Accordingly, the Board of

Directors of the FDIC hereby withdraws from active consideration the

proposed amendment to Part 348 of Title 12 of the Code of Federal

Regulations which was published on April 20, 1994 (59 FR 18764).


 

List of Subjects in 12 CFR Part 348


 

Antitrust, Banks, banking, Holding companies.


 

By order of the Board of Directors.


 

Dated at Washington, D.C., this 31st day of January, 1995.


 

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Acting Executive Secretary.

[FR Doc. 95-2857 Filed 2-6-95; 8:45 am]

BILLING CODE 6714-01-P

Last Updated: March 24, 2024