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Federal Register / Vol. 86, No. 100 / Wednesday, May 26, 2021 / Rules and Regulations ongoing severe market conditions, a bank has been unable to satisfy withdrawal requests during the one-year extension period without causing harm to participants, the bank may request OCC approval for up to two additional one-year extensions. The OCC may only approve each additional one-year extension if the OCC determines that the bank has made a good faith effort to satisfy withdrawal requests during the original extension period and the bank has been unable to satisfy such requests without causing harm to participants due to ongoing severe market conditions. The bank must also continue to satisfy the conditions described above.
By creating a limited exception to the standard withdrawal period, the IFR
permits a bank administering a covered CIF to take appropriate steps to satisfy account withdrawal requests during severe market conditions, while permitting an orderly liquidation of sufficient assets to raise cash through prudent and appropriate sales, as the return of more normal market conditions permit.
III. Comments Received The OCC received comment letters from two commentersa trade association and a law firmthat were relevant to the scope of the rulemaking.
Both commenters requested that the OCC revise the interim final rule to accommodate state-chartered banks that are required to comply with the OCCs regulations under 12 CFR 9.18, either by reason of the Internal Revenue Code, state law, or a CIFs written plan. In particular, the commenters expressed concern that state-chartered banks that are required to comply with 12 CFR 9.18
would be unable to comply with the requirement for OCC approval.
Accordingly, commenters suggested that the exception to the standard withdrawal period be revised to allow for notice or disclosure instead of requiring approval, provided the interim final rules enumerated conditions were satisfied. Alternatively, the commenters suggested the OCC clarify the application of the interim final rule to state-chartered banks.
The OCC uses the review and approval process to assess, among other things, current market conditions, the number and dollar amount of account withdrawals received, whether the bank satisfies the enumerated conditions, whether additional conditions are necessary or appropriate, and the banks efforts to satisfy withdrawal requests.
Accordingly, and because the OCC does not determine requirements for nonOCC-regulated institutions, the OCC is
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not revising the approval requirement in this final rule. However, the OCC
clarifies that it would not expect a statechartered bank to request OCC approval to extend its withdrawal period, nor does the OCC have the authority to approve a request received from a statechartered bank.
Commenters also objected to the requirement that, in order for a bank to receive an exception to the standard withdrawal period, the banks board of directors, or a committee authorized by the board of directors, must commit that the bank will act upon any withdrawal request as soon as practicable. In particular, commenters raised concerns that the term commit in this context was ambiguous and raised compliance concerns. In response to this comment, the OCC is revising this condition, as described in the subsequent section.
One commenter raised concerns with the requirement that the banks board of directors, or a committee authorized by the board of directors, determine that, due to unanticipated and severe market conditions for specific assets held by the fund, an extended withdrawal period is necessary in order to preserve the value of the funds assets for the benefit of fund participants. The commenter argued that the conditions set by the interim final rule should be aligned with past OCC guidance and that a bank should be able to avail itself of the exception to the standard withdrawal period if it has valid reasons or if the extension is in the best interest of the funds participants, rather than having to prove that the exception is necessary to preserve the value of the funds assets. The OCC believes that a narrower and more specific requirement is necessary to avoid ambiguity and that it provides more concrete support for the conclusion that an extension to the standard withdrawal period would be in the interest of fund participants.
Accordingly, the OCC is not revising this requirement.
This commenter also requested that the OCC clarify the number of submissions to the OCC required for the exception to the withdrawal period.
Namely, the commenter suggested that the OCC clarify that a bank may submit a single approval request to the OCC for a one-year extension to the standard withdrawal period that would cover any and all account withdrawal requests that the bank has received or may receive in the future in the given year.
The commenter suggested that a bank should be able to request additional extensions even if it has not yet received additional redemption requests.

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In response to this comment, the OCC
is clarifying that a bank may submit a single request for OCC approval covering any account withdrawal requests that were received prior to the banks submission to the OCC. A bank is not required to prepare different submissions for every account withdrawal request received. However, the OCC would not approve an application to extend the withdrawal period in connection with account withdrawal requests that have not yet been received by the bank. Under the standard withdrawal period, a bank may withdraw an account from a CIF up to one year after the date on which notice was required, if permitted by the CIFs written plan. Approving an application with respect to future withdrawal requests would require the OCC to make a determination, using incomplete information, as to an extended time horizon over which conditions may change.
IV. Final Rule This final rule adopts as final the changes made by the interim final rule, but revises, in response to comments received, one of the enumerated conditions for extending the standard withdrawal period. As described above, in order to receive an exception to the standard withdrawal period, a banks board of directors or a committee authorized by the board of directors must commit that the bank will act upon any withdrawal request as soon as practicable. Pursuant to this final rule, the OCC is revising this condition to read, The banks board of directors, or a committee authorized by the board of directors, represents that the bank will act upon any withdrawal request as soon as practicable and consistent with fiduciary duties. The OCC believes that the revised condition accomplishes its intended purpose without imposing unintended legal and compliance risk.
V. Administrative Law Matters A. Administrative Procedure Act Under 5 U.S.C. 553bB of the Administrative Procedure Act APA, an agency may, for good cause, find and incorporate the finding and a brief statement of reasons therefore in the rules issued that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. The OCC issued the August 13, 2020, interim final rule without notice and comment based on concerns that the disruption and stress in the real estate markets and other markets for not readily marketable assets resulting from the outbreak of the COVID19

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