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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations
As of June 30, 2020, the FDIC
supervises 3,270 institutions, of which 2,492 are defined as small institutions by the terms of the RFA.142 Of these 3,270 institutions, 23 are industrial banks.
As previously discussed, a currently chartered industrial bank would be subject to the final rule, as would its parent company that is not subject to Federal consolidated supervision, if such a parent company acquired control of the grandfathered industrial bank pursuant to a change in bank control transaction that closes after the effective date of the final rule, or if the grandfathered industrial bank is the surviving institution in a merger transaction that closes after the effective date of the final rule.
Of the 23 existing industrial banks, eight reported total assets less than $600
million, indicating that they could be small entities. However, to determine whether an institution is small for the purposes of the RFA, the SBA requires consideration of the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates.143 The FDIC conducted an analysis to determine whether each industrial banks parent company was small, according to the SBA size standards applicable to each particular parent company.144 Of the eight industrial banks that reported total assets less than $600 million, the FDIC
was able to determine that three of these potentially small industrial banks were owned by holding companies which were not small for purposes of the RFA.
However, the FDIC currently lacks information necessary to determine whether the remaining five industrial banks are small. Therefore, of the 23
existing industrial banks, 18 are not small entities for purposes of the RFA, but no more than five, or about 22
percent, may be small entities.
Additionally, the FDIC has received three change in control notices relating to industrial banks since 2010. Of those three, only one was from an industrial bank that could possibly be small for purposes of the RFA.
Therefore, given that no more than five of the 23 existing industrial banks are small entities for the purposes of the RFA, and that no more than one change in control notice received by the FDIC

since 2010 may be from a small entity, the FDIC believes the aspects of the final rule relating to change in control notices or merger applications involving industrial banks is not likely to affect a substantial number of small entities among existing industrial banks.
As previously discussed, the final rule applies to industrial banks that, as of the effective date, become subsidiaries of companies that are Covered Companies, as such term is defined in 354.2. It is difficult for the FDIC to estimate the volume of future applications from entities who seek to own and operate an insured industrial bank, or whether those entities would be considered small according to the terms of RFA, with the information currently available to the FDIC. Such estimates would require detailed information on the particular business models of institutions, prevailing economic and financial conditions, the decisions of senior management, and the demand for financial services, among other things.
However, the FDIC reviewed the firms with industrial bank applications pending before the FDIC as of December 31, 2019. Each publically traded applicant had a market capitalization of at least $1 billion as of March 6, 2020.
Each applicant operates either nationally within the United States, or operates worldwide, and none appear likely to be small for purposes of the RFA. Therefore, the FDIC believes that the aspects of the final rule relating to entities who seek to own and operate an insured industrial bank is not likely to affect a substantial number of small entities among existing industrial banks.
Therefore, based on the preceding information, the FDIC certifies that the final rule does not significantly affect a substantial number of small entities.

142 FDIC Call Report Data, September 30, 2019. In order to determine whether an entity is small for purposes of the Regulatory Flexibility Act, the FDIC
uses its affiliated and acquired assets as described in the immediately preceding footnote.
The latest available bank and thrift holding company reports, which the FDIC uses to determine
an entitys affiliated and acquired assets, are as of September 30, 2019.
143 12 CFR 121.103.
144 For example, if a particular industrial banks parent company was a motorcycle manufacturer, then the size standards applicable to motorcycle manufacturers were used.

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B. Paperwork Reduction Act In accordance with the requirements of the PRA,145 the FDIC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget OMB control number.
As discussed above, the final rule imposes PRA reporting and recordkeeping requirements for each industrial bank subject to the rule and its Covered Company. In particular, each industrial bank, and each Covered
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Company that directly or indirectly controls the industrial bank, must i agree to furnish the FDIC an initial listing, with annual updates, of all of the Covered Companys subsidiaries; ii submit to the FDIC an annual report on the Covered Company and its subsidiaries, and such other reports as the FDIC may request; 146 iii maintain such records as the FDIC deems necessary to assess the risks to the industrial bank and to the DIF; and iv in the event that the FDIC has concerns about a complex organizational structure or based on other circumstances presented by a particular filing, the FDIC may condition the approval of an application or the nonobjection to a noticein each case that would result in an industrial bank being controlled, directly or indirectly, by a Covered Companyon the Covered Company and industrial bank committing to providing to the FDIC, and thereafter adopting and implementing, a contingency plan that sets forth, at a minimum, one or more strategies for recovery actions and the orderly disposition of such industrial bank, without the need for the appointment of a receiver or conservator.
The FDIC submitted its request to OMB for review and approval under section 3507d of the PRA 44 U.S.C.
3507d and 1320.11 of OMBs implementing regulations 5 CFR part 1320 at the proposed rule stage. OMB
filed a comment assigning the FDIC
OMB control number 30640213 and indicated that OMB would re-review the PRA submission once the proposed rule was finalized. The FDIC did not receive any comments on the PRA. In addition, as stated above, because the final rule has been constructed to enable affected parties to comply with the various reporting commitments by relying on established and ongoing reports and records, the FDIC believes that the enhanced reporting commitment should have no effect on the PRA burden listed at the proposed rule stage.
Information Collection Title: Industrial Banks and Industrial Loan Companies.
OMB Number: 30640213.
Affected Public: Prospective parent companies of industrial banks and industrial loan companies.
145 44

U.S.C. 3501 et seq.
final rule requires additional reporting by Covered Companies regarding systems for protecting the security, confidentiality, and integrity of consumer and nonpublic personal information as part of the annual report.
146 The
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