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Federal Register / Vol. 86, No. 44 / Tuesday, March 9, 2021 / Rules and Regulations
not reasonable expenditures for staff development, reasonable performance incentives, or other similar reasonable measures conducted in the normal course of the ECIP recipients business operations: 1
Entertainment or events; 2 office and facility renovations; 3 aviation or other transportation services; 4 tax gross-ups; and 5 other similar items, activities, or events for which the ECIP recipient may reasonably anticipate incurring expenses, or reimbursing an employee for incurring expenses.
1 To facilitate compliance with this requirement, the Department of the Treasury is making available a model excessive or luxury expenditures policy. An ECIP
recipient may refer to this model policy for guidance in satisfying the requirement at 31
CFR 35.22c to adopt and maintain an excessive or luxury expenditures policy.
Alternatively, ECIP recipients may use other forms of, or existing policies relating to, excessive or luxury expenditures, provided that such other forms or policies satisfy all the requirements of the regulation at 31 CFR
35.22c.
2 An ECIP recipients luxury or excessive expenditure policy should be posted on the ECIP recipients website. Any material amendments to an ECIP recipients excessive or luxury expenditures policy must made in accordance with the provisions set forth in 31 CFR 35.22d Material changes in policies or procedures. If the ECIP recipient makes any material amendments to this policy, then the ECIP recipient must submit a copy of the amended policy to the Department of the Treasury and post the amended policy on the ECIP recipients website. ECIP recipients should refer to 31 CFR part 35, subpart B for additional information regarding definitions of terms used in the model policy, disclosure, material changes, certification, and other compliance requirements.
II. Model Excessive or Luxury Expenditures Policy
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A. Purpose The purpose of this policy is to establish parameters and internal controls governing the expenditures of NAME OF ECIP
RECIPIENT together with its subsidiaries and controlled affiliates, referred to hereafter as the Organization. Expenditures of the Organization should be customary, prudent, consistent with applicable laws and regulations, and reasonably related to the Organizations business objectives and needs.
This policy identifies expenditures that are excessive or luxury expenditures, creates processes that are reasonably designed to eliminate such expenditures, and establishes accountability for compliance. Routine operating expenses, capital expenditures, and other reasonable expenses are not prohibited by this policy.
B. Authority The Organization has authority to provide compensation and benefits that are reasonable. This policy establishes a prohibition on expenditures that are excessive or luxury expenditures as required by the Department of the Treasurys Emergency Capital Investment Program regulations 31 CFR part 35, and as may be required by other statutes and regulations.

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C. Responsibility This policy is the responsibility of the Organizations board of directors board. The board has approved this policy and will review compliance with this policy no less frequently than annually, and summary data on excessive or luxury expenditures will be reported to the board as part of the compliance review.
D. Scope This policy applies to all employees, officers, and directors of the Organization with regard to any expenditure of the Organization. In making any expenditure on behalf of the Organization, employees, officers, and directors should consider whether the expenditure is an excessive or luxury expenditure that is prohibited under this policy.
E. Excessive or Luxury Expenditures Excessive or luxury expenditures means excessive expenditures on any of the following to the extent not reasonable or appropriate expenditures for business development, staff development, reasonable performance incentives, or other similar reasonable measures conducted in the normal course of the Organizations business operations:
1 Entertainment or events. This category includes fees, dues, tickets costs related to social, athletic, artistic and dining clubs, activities, celebrations or other events, and similar expenditures. Expenditures for charitable contributions and charitable events are not prohibited under this policy.
Entertainment or events expenditures in an amount less than $lll per instance, and $lll on an annual aggregate basis per individual, are exempt from this policy.
2 Office and facility renovations. This category includes costs and allowances for office renovation, including expenditures related to furniture, art, office personalization, interior finishing, design and decoration, and similar expenditures.
Office and facility renovations expenditures in an amount less than $lll per instance, and $lll on an annual aggregate basis per individual, are exempt from this policy.
3 Aviation or other transportation services. i This category includes charter fees, tickets, slip or docking fees, vehicle installment payments, reservation and travel agent expenses, and similar expenditures associated with transportation services e.g., airline, train, rental cars, or vans. Mileage reimbursable according to current Internal Revenue Service mileage rates is exempt from this policy. Transportation services in an amount less than $lll per instance, and $lll on an annual aggregate basis per individual, are exempt from this policy.
ii The principal executive officer may establish or delegate to an appropriate executive officer the authority to establish processes for reimbursement of reasonable travel expenditures, which processes must be reviewed by executive management no less frequently than annually.
4 Tax gross-ups. This category includes any reimbursement of taxes owed with respect to any compensation. This category does not apply to tax equalization agreements
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for employees subject to tax from a non-U.S.
jurisdiction.
5 Other similar items, activities, or events for which the Organization may reasonably anticipate incurring expenses or reimbursing an employee for incurring expenses. i Expenditures related to other items not listed in the preceding categories are exempt from this policy in an amount less than $lll per instance, and together with all expenditures permitted under this policy, may not exceed $lll on an annual aggregate basis per individual.
ii For the avoidance of doubt, reasonable capital investments in technology, equipment, and similar items that expand the long-term capability of an ECIP recipient to provide products and services to its customers and community are not excessive or luxury expenditures.
iii The principal executive officer may establish or delegate to an appropriate executive officer the authority to establish processes for the evaluation and approval of expenditures in the preceding categories that are not luxury or excessive expenditures and that are not otherwise exempt from this policy. These processes must be reviewed by executive management no less frequently than annually, as well as any additional threshold expenditure amounts per item, activity, or event, or a threshold expenditure amount per employee receiving the item or participating in the activity or event under this policy. Such approvals must be reported to the board of directors which may be in an appropriate summary form no less frequently than annually.
F. Exceptions or Violations 1 Any exception or violation of this policy must be promptly reported to the Organizations i principal executive officer, ii officer with primary responsibility for the Organizations compliance function, or iii officer designated with primary responsibility for overseeing the administration, monitoring, and compliance with this policy. Exceptions and violations must be reported to the board of directors no less frequently than annually, or more frequently as the nature and severity of violation may warrant. All employees, officers, and directors of the Organization must adhere to this policy and will be held accountable for compliance. Any employee or officer who violates this policy may be subject to disciplinary action up to and including termination of employment.
2 Any employee or officer that is aware of any circumstance that may indicate a violation of this policy is required to report such circumstance to their supervisor or the Organizations principal compliance officer or compliance group. The Organization prohibits retaliation against any employee or officer for making a good faith report of actual or suspected violations of the Organizations code of conduct, laws, regulations, or other Organization policies, including this policy. A finding of retaliation against any such employee or officer may result in disciplinary action up to and including termination. Failure to promptly report known violations by others may also be deemed a violation of the Organizations code of conduct.

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