[Federal Register: April 26, 1999 (Volume 64, Number 79)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
Rules and Regulations
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 303
Filing Procedures and Delegations of Authority
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The FDIC is amending its procedural regulations for mutual-to-
stock conversion notices to delegate authority from the FDIC's Board of
Directors to the Director and Deputy Director of the Division of
Supervision to act on certain requests for the waiver of the depositor
vote requirements in its mutual-to-stock conversion regulations.
Delegated authority is granted only with respect to requests for the
waiver of the depositor vote requirements involving mutual-to-stock
conversions in situations where applicable state law in effect as of
January 1, 1999, provided for voting by corporators as the only
depositor voting mechanism for mutual-to-stock conversions, or
prohibited proxy voting by depositors of state-chartered, cooperative
savings banks in mutual form. This amendment will expedite the FDIC's
final actions regarding such waiver requests.
EFFECTIVE DATE: May 26, 1999.
FOR FURTHER INFORMATION CONTACT: Division of Supervision: John M. Lane,
Assistant Director, (202) 898-3671; Calvin B. Riddick, Manager, (202)
898-6758; Scott S. Patterson, Review Examiner, (202) 898-6768; Legal
Division: Michael B. Phillips, Counsel, (202) 898-3581.
On November 30, 1994, the FDIC promulgated regulations governing
mutual-to-stock conversions of state nonmember banks. (59 FR 61233
(November 30, 1994)). Under the conversion regulations, as recodified
in 1998, a proposed conversion must be approved by a vote of at least a
majority of the bank's depositors. (12 CFR 333.4(c)(2)). Voting may be
in person or by proxy. Waivers of the requirements in Sec. 333.4 may be
granted by the FDIC's Board of Directors (the Board) for good cause
shown. (12 CFR 333.4(a)). Certain authority involving the FDIC's
conversion regulations is delegated; however, under 12 CFR 303.164(b),
the authority to act on depositor vote waiver requests is reserved to
Based on its experience with such waiver requests, the Board has
determined that sufficient precedent has been established to allow a
delegation of the authority to the Director or Deputy Director of the
Division of Supervision (DOS) to act on depositor vote waiver requests
when the requests involve state law in effect as of January 1, 1999,
regarding (i) voting by corporators as the only depositor voting
mechanism for conversions, or (ii) prohibitions under state law
regarding proxy voting by depositors of cooperative savings banks in
II. Final Amendment to Part 303
Since the promulgation of the conversion regulations in 1994, the
Board has approved many depositor waiver requests from mutual savings
banks in Massachusetts and other New England states which concerned (i)
corporator voting in lieu of voting by all eligible depositors or (ii)
prohibitions under state law (for mutual cooperative savings banks)
regarding proxy voting by depositors.
The FDIC Board has determined that sufficient precedent has been
established with respect to waiver requests in the above circumstances
to allow for a delegation of authority to the Director of DOS and
Deputy Director of DOS to approve or deny waiver requests. In its
review of waiver requests from mutual savings banks whose corporators
(not the broader set of eligible depositors) were authorized to vote on
mutual-to-stock conversions, the focus of the Board's inquiry has been
whether a sufficient number of independent corporators voted in favor
of the proposed conversion. This focus accords with the statement in
the preamble to the FDIC's conversion regulations that provides the
following criteria for such determinations: on a case-by-case basis,
the Board will consider waiving the depositor voting requirement if it
is demonstrated, to the Board's satisfaction, that the alternative
voting mechanism established under the applicable state law satisfies
the concerns expressed above regarding the need for a vote on the
conversion by parties that are not insiders and do not have a potential
conflict of interest in reviewing the proposed conversion. (59 FR
61233, 61238 (November 30, 1994)).
With respect to waiver requests based on state prohibitions on
proxy voting by depositors, the focus of inquiry by the Board has been,
among other factors, the efforts expended by the cooperative savings
bank to encourage in-person depositor voting and the number of
depositors with no apparent conflict of interest who attended the
special meeting held by the bank and voted for the conversion.
In order to recognize current state law regarding corporator voting
or prohibitions on proxy voting by depositors, the Board has decided to
only provide the delegation where the request is based upon applicable
state law in effect as of January 1, 1999.
III. Effective Date
This amendment to part 303 is being adopted without opportunity for
public comment in accordance with section 553(b)(A) of the
Administrative Procedure Act (APA) which exempts from required public
comment rules of agency organization, procedure, or practice. As this
amendment modifies a rule concerning internal delegations of authority,
section 553(b)(A) applies.
Section 302 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (CDRI) provides that rules imposing reporting,
disclosure or other new requirements may not be effective earlier than
the first day of the calendar quarter after adoption. This statutory
requirement does not apply to this amendment as there are no additional
reporting, disclosure or other new requirements imposed by this
amendment on insured depository institutions.
IV. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995, 44 U.S.C. 3501 et seq., the FDIC may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid Office
of Management and Budget (OMB) control number. Information collection
under the FDIC's mutual-to-stock conversion regulations is approved
under OMB control number 3064-0117 and is valid until July 31, 2000.
This rulemaking does not modify the collection approved by OMB. As this
amendment does not involve any additional recordkeeping or reporting
requirements, no Paperwork Reduction Act analysis is required.
V. Regulatory Flexibility Act
In accordance with section 603(a) of the Regulatory Flexibility
Act, 5 U.S.C. 601-612, no regulatory flexibility analysis is required
with respect to this amendment as the APA does not require that this
amendment be published for public comment.
VI. Assessment of Impact of Federal Regulation on Families
The FDIC has determined that this amendment will not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act of 1999 (Public Law 105-277).
VII. Small Business Regulatory Enforcement Fairness Act
No notice of a final rule is being provided to Congress regarding
this amendment under the Small Business Regulatory Enforcement Fairness
Act of 1996 (SBREFA), 5 U.S.C. 801. SBREFA provides generally for
agencies to report rules to Congress and for major rules not to take
effect until a certain period after the notice has been received.
However, section 251 of SBREFA provides that rules of agency practice
and procedure that do not substantially affect the rights or
obligations of non-agency parties are not subject to the reporting
requirement and may be made effective in accordance with the APA and
any other applicable law. This amendment pertains to the FDIC's
delegations of authority, is procedural in nature and does not
substantially affect the rights of any non-agency party.
List of Subjects in 12 CFR Part 303
Administrative practice and procedure, Authority delegations
(Government agencies), Bank deposit insurance, Banks, Banking, Bank
merger, Branching, Foreign branches, Foreign investments, Golden
parachute payments, Insured branches, Interstate branching, Reporting
and recordkeeping requirements, Savings associations.
For the reasons set forth in the preamble and under the authority
of 12 U.S.C. 1819(a)(Tenth), the FDIC Board of Directors hereby amends
12 CFR part 303 as follows:
PART 303--FILING PROCEDURES AND DELEGATIONS OF AUTHORITY
1. The authority citation for part 303 continues to read as
Authority: 12 U.S.C. 378, 1813, 1815, 1816, 1817, 1818,
1819(Seventh, and Tenth), 1820, 1823, 1828, 1831a, 1831e, 1831o,
1831p-1, 1835a, 3104, 3105, 3108, 3207; 15 U.S.C. 1601-1607.
2. Section 303.164 is amended by revising paragraph (b) to read as
Sec. 303.164 Delegation of authority.
* * * * *
(b) Authority to act on a waiver under Sec. 303.162 is retained by
the Board of Directors, except for requests to waive the depositor vote
requirements in Sec. 333.4(c)(2) of this chapter when the requests are
based on the need for the bank to comply with applicable state law in
effect as of January 1, 1999, that provides for voting by corporators
as the only depositor voting mechanism for state-chartered, mutual
savings banks, or prohibits depositors of state-chartered, cooperative
savings banks in mutual form from voting by proxy. Authority is
delegated to the Director and Deputy Director (DOS) to act on such
* * * * *
By Order of the Board of Directors.
Dated at Washington, D.C., this 20th day of April, 1999.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
[FR Doc. 99-10424 Filed 4-23-99; 8:45 am]
BILLING CODE 6714-01-P