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F ederal R eserv e Bank OF DALLAS ROBERT D. M c T E E R , J R . P R E S ID E N T AND C H IE F E X E C U T IV E O F F IC E R December 10, 1993 DALLA S , TEXAS 75 265-5906 Notice 93-122 TO: The C hief Executive O f f i c e r o f each member bank and o t h e r s concerned in t h e Eleventh Federal Reserve D i s t r i c t SUBJECT Extension on Interim Rule Establishing Higher Aggregate Lending Limit for Certain Small Banks Under Regulation 0 (Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks) DETAILS The Federal Reserve Board has announced approval o f a 90-day e x te n s io n of an in t e r i m pr o v is io n in R egul at i on 0 p e r m i t t i n g ad eq u at el y c a p i t a l i z e d small banks to r a i s e t h e i r l i m i t on ag g reg at e l end i n g t o i n s i d e r s from 100 p e rc e n t up to 200 p erc en t o f unimpaired c a p i t a l and s u r p l u s . The e x te ns io n i s made t o pro vid e Board s t a f f with a d d i t i o n a l time to review p u b li c comments on whether t h e i n t e r i m r u l e should be made permanent, m odif ied, or p e r m it t e d to e x p i r e . The ex te n si o n i s e f f e c t i v e from November 18, 1993, through February 18, 1994. ATTACHMENT A copy o f the Board’ s n o t i c e as i t appears on pages 61803-04, Vol 58, No. 224, of th e Federal R e g i s t e r dated November 23, 1993, i s a t t a c h e d . MORE INFORMATION For more in fo rm a tio n, p l e a s e c o n t a c t Jane Anne Schmoker a t (214) 922-5101. For a d d i t i o n a l copies o f t h i s Bank’ s n o t i c e , p l e a s e c o n t a c t t h e P ublic A f f a i r s Department a t (214) 922-5254. S i n c e r e l y y o u rs , For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) Federal Register / Vol. 58, No, 224 / Tuesday, November 23, 1993 / Rules and Regulations 61803 described above is considered. For the foregoing reasons, the Board for good cause finds that notice and public comment is impracticable, and that the interim rule should be effective SUPPLEMENTARY INFORMATION: immediately. See 5 U.S.C. 553(b)(B) and 553(d)(3). The effective date of this Background extension is November 18,1993. Section 22(h) of the Federal Reserve Resolutions adopted by small banks to Act (12 U.S.C. 375b), as amended by increase their aggregate lending limits section 306 of the Federal Deposit that by their terms expired on May 18, Insurance Corporation Improvement Act 1993, or will expire on November 18, of 1991 (FDICIA), imposes an aggregate 1993, will be considered by the Board limit on the amount a bank may lend to to remain in effect through February 18, its executive officers, directors, and 1994. principal shareholders (insiders) and their related interests as a class. In Initial Regulatory Flexibility Analysis general, the limit is equal to the bank's The Regulatory Flexibility Act (5 unimpaired capital and unimpaired U.S.C. 601-612) requires an agency to surplus, 12 U.S.C. 375b(5); 12 CFR publish an initial regulatory flexibility 215.4(d). Section 22(h) also authorizes the Board to set a higher limit for banks analysis. Two of the requirements of an initial regulatory flexibility analysis (5 with deposits of less than $100 million U.S.C. 603(b))—a description of the if the Board determines that the reasons why the action by the agency is exception is “important to avoid being considered and a statement of the constricting the availability of credit in small communities or t& attract directors objectives of, and legal basis for, the rulemaking—are contained in the of such banks.” The statute provides supplementary information above. that the higher limit for smaller banks Another requirement of an initial may not exceed 200 percent of the regulatory flexibility analysis is a bank’s unimpaired capital and description and, where feasible, an unimpaired surplus. estimate of the number of small entities Effective May 18,1992, the Board to which the interim rule will apply. adopted an interim rule permitting The interim rule imposes an additional adequately capitalized banks with reporting requirement upon small banks 12 CFR Part 215 deposits under $100 million to adopt a that elect to prepare the board of higher limit, not to exceed 200 percent [Regulation O; Docket No. R-0800] directors resolution required in order to of the bank’s unimpaired capital and establish a higher aggregate lending Loans to Executive Officers, Directors, unimpaired surplus. The interim rule limit for themselves. This resolution, and Principal Shareholders of Member was scheduled to expire May 18,1993. which sets forth the facts and reasoning See 57 FR 22420, May 28,1992. The Banks on which the board of directors bases its Board subsequently extended the AGENCY: Board o f Governors of the action, including the amount of the interim rule for six months, through bank’s lending to its insiders as a Federal Reserve System. November 18,1993, in order to obtain percentage of the bank’s unimpaired ACTION: Interim r u l e . public comments on whether the interim rule should be made permanent, capital and unimpaired surplus as of the SUMMARY: The Board i s extending modified, or permitted to expire. See 58 date of the resolution, must be through February 18,1994, an interim submitted to the appropriate federal FR 28492, May 14,1993. provision in Regulation O permitting banking agency (as defined in 12 U.S.C. In response to the notice of the adequately capitalized small banks to 1813(q)) with a copy to the Board. The extension of the interim rule, the Board raise their limit on aggregate lending to rulemaking does not duplicate, overlap, received 147 written comments. The insiders from 100 percent up to 200 or conflict with other relevant federal large majority of the comments were percent of unimpaired capital and rules. submitted by small banks subject to the surplus. The extension will prevent a interim rule. The Board also has Paperwork Reduction Act lapse in the availability of the interim received comments from state and rule while the Board considers In accordance with the Paperwork national banking associations, Federal comments about it. Reduction Act of 1980, the interim rule Reserve Banks, state banking EFFECTIVE DATE: November 18,1993. will be reviewed by the Board under superintendents, bank directors, bank FOR FURTHER INFORMATION CONTACT: authority delegated by the Office of holding companies, and law firms. In Gordon Miller, Attorney (202/452-2534), addition to written comments, the Board Management and Budget after Legal Division; William G. Spaniel, consideration of the comments received has reviewed the call reports of small Supervisory Financial Analyst (202/452- banks and received relevant information during the public comment period. 44 3469), or Mark Benton, Senior Financial from other governmental agencies. U.S.C. 3507; 5 CFR 1320.130. The Analyst (202/452-5205), Division of interim rule applies to any adequately The Board is hereby extending the Banking Supervision and Regulation, capitalized bank with deposits under interim rule for three months, through Board of Governors of the Federal February 18,1994. The Board finds that $100 million that chooses to adopt a Reserve System. For the hearing it is necessary to extend the interim rule higher aggregate lending limit. As of impaired only, Telecommunication December 31,1992, 8,643 banks were in order to prevent any lapse in its Device for the Deaf (TDD), Dorothea potentially subject to the interim rule. availability while the information Thompson (202/452-3544), Board of Governors of the Federal Reserve System, 20th & C Street, NW,, Washington, DC 20551. 61804 Federal Register / Vol. 58, No. 224 / Tuesday, November 23, 1993 / Rules and Regulations During the 18-month period in which the interim rule has been in effect, 48 banks have chosen to adopt this policy, and it is not expected that this number will change significantly over the next three months. For banks that choose to adopt a higher aggregate lending limit, the burden per respondent is estimated to be 0.75 hours. Therefore, the estimated aggregate burden is not deemed to be significant. List o f Subjects in 12 CFR Part 215 Credit, Penalties, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Board amends title 12 of the Code of Federal Regulations, part 215, subpart A, as follows: PART 215—LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL SHAREHOLDERS OF MEMBER BANKS (REGULATION O) 1. The authority citation for part 215 is revised to read as follows: Authority: 12 U.S.C. 248(i), 375a, 375b), 1817(k), and 1972(2)(G)(ii). 2. Section 215.4 is amended by removing from paragraph (d)(2) introductory text the phrase "18-month period ending November 18,1993” and adding in its place the phrase "21month period ending February 18, 1994.” By order of the Board of Governors of the Federal Reserve System, November 17,1993. W illiam W. Wiles, Secretary of the Board. [FR Doc. 93-28686 Filed 11-22-93; 8:45 am] BILLING CODE 6210-01-F
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