Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations and limited purpose trust banks should be subject to a level playing field, including subjecting the parent company to Federal consolidated supervision. Another commenter stated that it was not necessary to include credit card banks and trust companies in the scope of the rule because they are limited purpose institutions. Another commenter suggested that the rule may be appropriate for other kinds of banks whose owners are not subject to the BHCA, but cautioned that there may be unique issues related to those charters that should be considered before extending the rule to such institutions.
The FDIC has decided not to extend the scope of the final rule at this time to other types of banking institutions that have parent companies not subject to Federal consolidated supervision.
These other types of institutions credit card banks and limited purpose trust companies operate under a limited purpose charter, which narrows the range of services they may offer. As a result, the FDICs experience indicates these charter types have generally not presented the broad issues as presented by industrial banks.
Commenters also suggested additional terms for which definitions would be useful. The FDIC believes that the final rule is sufficiently clear that such additional definitions were not determined to be necessary, although section IV.B.5. of this Supplementary Information section provides examples of what will and will not be considered a material change to a business plan requiring prior FDIC approval.
3. Section 354.3Written Agreement This section of the proposed rule prohibited any industrial bank from becoming a subsidiary of a Covered Company unless the Covered Company enters into one or more written agreements with the FDIC and its subsidiary industrial bank. In such agreements, the Covered Company would make certain required commitments to the FDIC and the industrial bank, including those listed in paragraphs a1 through 8 of 354.4, the restrictions in 354.5, and such other provisions as the FDIC may deem appropriate in the particular circumstances. When two or more Covered Companies will control as the term control is defined in 354.2, directly or indirectly, the industrial bank, each such Covered Company would be required to execute such written agreements. This circumstance could occur, for example, i when two or more Covered Companies will each have the power to vote 10 percent or more of the voting stock of an industrial
VerDate Sep<11>2014

21:28 Feb 22, 2021

Jkt 253001

bank or of a company that controls an industrial bank, the stock of which is registered under section 12 of the Securities Exchange Act of 1934, or ii when one Covered Company will control another Covered Company that directly controls an industrial bank.
Section 354.3a of the final rule is unchanged from the proposal.
As discussed above, proposed 354.3b allowed the FDIC, in its sole discretion, to require, as a condition to the approval of or non-objection to a filing, that a controlling shareholder of a Covered Company join as a party to any written agreement required in 354.3. In such cases, the controlling shareholder would be required to cause the Covered Company to fulfill its obligations under the written agreement, through the voting of shares, or otherwise.
In addition to the written agreements, commitments, and restrictions of the final rule, the FDIC will condition an approval of an application or a nonobjection to a notice on one or more actions or inactions of the applicant or notificant, as deemed appropriate by the FDIC.111 The FDIC may enforce conditions imposed in writing in connection with any action on any application, notice, or other request by an industrial bank or a company that controls an industrial bank,112 so it is not necessary to include provisions regarding conditions in the proposed rule.
4. Section 354.4Required Commitments and Provisions of Written Agreement The FDIC historically has included conditions in deposit insurance approval orders for industrial banks that are intended to create a sufficient supervisory structure with respect to a Covered Company. The commitments that the FDIC has required industrial banks and their parent companies to undertake in written agreements have varied on a case-by-case basis, depending on the facts and circumstances and the particular concerns the FDIC has identified during the review of the application materials.
Section 354.4 of the proposed rule required each party to a written agreement to comply with paragraphs a1 through 8. These required commitments are intended to provide the safeguards and protections that the FDIC believes are prudent to impose to 111 See 12 CFR 303.11a The FDIC may approve, conditionally approve, deny, or not object to a filing after appropriate review and consideration of the record.. See 12 CFR 303.2bb for a list of standard conditions.
112 12 U.S.C. 1818b; 1831aaa.

PO 00000

Frm 00015

Fmt 4700

Sfmt 4700

10717

maintain the safety and soundness of industrial banks that are controlled by Covered Companies. These required commitments and other provisions are intended to establish a level of information reporting and parent company obligations similar to that which would be in place if the Covered Company were subject to Federal consolidated supervision. The requirements reflect commitments and additional provisions that, for the most part, the FDIC has previously required as a condition of granting deposit insurance to industrial banks. The FDIC
proposed to include these required commitments in the rule to provide transparency to current and potential industrial banks, the companies that control them, and the general public.
In order to provide the FDIC with more timely and more complete information about the activities, financial performance and condition, operations, prospects, and risk profile of each Covered Company and its subsidiaries, the proposed rule required that each Covered Company furnish to the FDIC an initial listing, with annual updates, of all of the Covered Companys subsidiaries commitment 1; consent to the FDICs examination of the Covered Company and each of its subsidiaries to monitor compliance with any written agreements, commitments, conditions, and certain provisions of law commitment 2; submit to the FDIC an annual report on the Covered Company and its subsidiaries, and such other reports as the FDIC may request commitment 3; maintain such records as the FDIC deems necessary to assess the risks to the industrial bank and to the DIF commitment 4; and cause an independent audit of each subsidiary industrial bank to be performed annually commitment 5.
In the NPR, the FDIC sought comment on whether the proposed commitments requiring examination and reporting serve the supervisory purpose of transparency and identifying any potential risks to the industrial bank and whether there was a better approach for supervising a Covered Company. As discussed above in section IV.A.2. of this Supplementary Information section, a number of commenters were generally critical of the proposed commitments as being inadequate and failing to achieve parity with the regime of consolidated supervision required for BHCs. The FDIC believes that the examination reviews envisioned under the final rule enhance the existing supervisory practices and allow for a more robust evaluation of the industrial banks affiliate relationships. In addition, the FDIC believes the enhanced reporting
E:FRFM23FER1.SGM

23FER1