Joint Interim Rule and Request for Public Comment on Alternative to Debt Requirements for Financial

Federal Reserve Bank Of Dallas

Informations

• Publié par: Aprea
• Nombre de lectures: 24
• Langue: English

Extrait

Federal Reserve Bank
ll★K
of Dallas
DALLAS, TEXAS
75265-5906
April 6, 2000
Notice 2000-23
TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Joint Interim Rule and
Request for Public Comment on Alternative to
Debt Requirement for Financial Subsidiaries
DETAILS
The Gramm-Leach-Bliley Act (GLBA) permits a national bank or state member bank
that is among the second 50 largest insured banks to own or control a financial subsidiary only if
the bank meets either of the following requirements:
• the eligible debt requirement in section 121 of the GLBA or
• alternative criteria established jointly by the Board of Governors of the Federal
Reserve System and the Department of the Treasury.
In an interim rule, the Board and the Treasury have established the alternative criteria and pro-
vided that a bank meets the criteria if it has a current long-term issuer credit rating from a nation-
ally recognized statistical rating organization that is within the three highest investment grade
rating categories used by the organization. The interim rule became effective March 14, 2000.
Comments on the interim rule must be received by May 15, 2000. Please address
comments to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System,
20th Street and Constitution Avenue, N.W., Washington, DC 20551. Also, you may mail com-
ments electronically to [e-mail]. All comments should refer to
Docket No. R-1066. In Notice 2000-19, Notice 2000-20, and Notice 2000-21, the e-mail address
for electronic comments was listed incorrectly. Please use the e-mail address in this notice for all
Board requests for comments.
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 [phone]; El Paso Branch Intrastate [phone], Interstate [phone];
Houston Branch Intrastate [phone], Interstate [phone]; San Antonio Branch Intrastate [phone].- 2 -
AT TACHMENT
A copy of the Board’s notice as it appears on pages 15050–52, Vol. 65, No. 54 of the
Federal Register dated March 20, 2000, is attached.
MORE INFORMATION
For more information, please contact Dorsey Davis, Banking Supervision Department,
[phone]. For additional copies of this Bank’s notice, contact the Public Affairs Department
at [phone] or access District Notices on our web site at
http://www.dallasfed.org/banking/notices/index.html.Monday,
March 20, 2000
Part III
Federal Reserve
System
Department of the
Treasury
12 CFR Parts 208 and 1501
Financial Subsidiaries; Interim Rule
VerDate 13<MAR>2000 15:44 Mar 17, 2000 Jkt 190000 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\20MRR2.SGM pfrm02 PsN: 20MRR215050 Federal Register/Vol. 65, No. 54/Monday, March 20, 2000/Rules and Regulations
also may be mailed electronically to issued jointly by Treasury and theFEDERAL RESERVE SYSTEM
[e-mail] or Board.) In addition, in order to acquire
12 CFR Part 208 delivered to the Board’s mail room control of a financial subsidiary, the
between the hours of 8:45 a.m. and 5:15 bank and each of its insured depository
[Regulation H; Docket No. R–1066]
p.m. and, outside of those hours, to the institution affiliates must have received
Board’s security control room. Both the a ‘‘satisfactory’’ or better rating at itsDEPARTMENT OF THE TREASURY
Board’s mail room and the security most recent examination under the
control room are accessible from the Community Reinvestment Act.Office of the Under Secretary for
Eccles Building courtyard entrance,Domestic Finance In addition, if the bank is one of the
located on 20th Street between 50 largest insured banks, as determined
Constitution Avenue and C Street, N.W.12 CFR Part 1501 by the bank’s consolidated total assets at
Members of the public may inspect the end of the most recent calendar year,RIN 1505–AA77 comments in Room SC 37 of the the bank must have at least one issue of
Treasury Department and in Room MP–Financial Subsidiaries outstanding eligible debt that is rated in
500 of the Martin Building between 9:00 one of the three highest rating categories
AGENCIES: The Department of the a.m. and 5:00 p.m. on weekdays. by a nationally recognized statistical
Treasury and the Board of Governors of FOR FURTHER INFORMATION CONTACT: rating organization (debt rating
the Federal Reserve System. Department of the Treasury: Joan requirement). If the bank is one of the
ACTION: Joint interim rule with request Affleck-Smith, Director, Office of second 50 largest insured banks, the
for comments. Financial Institutions Policy (202/622– bank must meet either this debt rating
2740); Matthew Green, Senior Financial requirement or such alternative criteria
SUMMARY: The Department of the Analyst (202/622–2740); or Gary W. that the Secretary of the Treasury and
Treasury (Treasury) and the Board of Sutton, Senior Banking Counsel (202/ the Board jointly determine by
Governors of the Federal Reserve 622–1976). regulation to be comparable to and
System (Board) are jointly issuing this Board of Governors: Kieran J. Fallon, consistent with the purpose of the rating
interim rule pursuant to section 121 of 1Senior Counsel, Legal Division (202/ requirement. This interim rule
the Gramm-Leach-Bliley Act (GLBA). 452–5270); or Mark S. Carey, Senior establishes such alternative criteria.
The GLBA permits a national bank or Economist, Division of Research &
state member bank that is among the Description of the Interim RuleStatistics (202/452–2784). For the
second 50 largest insured banks to own hearing impaired only, The interim rule provides that aor control a financial subsidiary only if Telecommunications Device for the Deaf national bank or state member bankthe bank meets either the eligible debt (TDD), Janice Simms (202/872–4984). within the second 50 largest insuredrequirement set forth in section 121 of
SUPPLEMENTARY INFORMATION: banks satisfies the alternative criteria ifthe Act or alternative criteria
the bank has a current long-term issuerestablished jointly by Treasury and the Background
credit rating from a nationallyBoard. This interim rule establishes the On November 12, 1999, the President recognized statistical rating organizationalternative criteria and provides that a signed the GLBA, Public Law 106–102, that is within the three highestbank meets the criteria if it has a current 113 Stat. 1338, which comprehensively investment grade rating categories usedlong-term issuer credit rating from a restructures the statutory framework by the rating organization. A long-termnationally recognized statistical rating that governs the financial services issuer credit rating is one that assessesorganization that is within the three industry. Section 121 of the Act the bank’s overall capacity andhighest investment grade rating authorizes national banks and state willingness to pay on a timely basis itscategories used by the organization. member banks to acquire control of, or 2unsecured financial obligations. Unlike
DATES: This interim rule is effective hold an interest in, a new type of debt ratings, an issuer credit rating does
March 14, 2000. Written comments subsidiary called a ‘‘financial not assess the bank’s ability and
must be submitted on or before May 15, subsidiary.’’ A financial subsidiary may, willingness to make payments on any
2000. with certain exceptions, engage in individual class or issue of debt, nor
ADDRESSES: Comments should refer to activities that have been determined to does it reflect priority or preference in
docket number R–1066 and should be be financial in nature or incidental to payment among financial obligations.
sent both: to Comparable Ratings financial activities in accordance with Ratings organizations may issue long-
Regulation, Office of Financial the GLBA, and in other activities that term or short-term issuer credit ratings
Institutions Policy, U.S. Department of the parent bank is permitted to conduct for the same bank and separate ratings
the Treasury, 1500 Pennsylvania directly. for dollar-denominated and foreign
Avenue, N.W., Room SC 37, In order for a national bank or state currency-denominated obligations. Only
Washington, D.C. 20220, and to Ms. member bank to control, or hold an long-term issuer credit ratings for dollar-
Jennifer J. Johnson, Secretary, Board of interest in, a financial subsidiary, the denominated obligations satisfy the
Governors of the Federal Reserve bank and each of its depository requirements of the rule. A long-term
System, 20th Street and Constitution institution affiliates must be ‘‘well- issuer credit rating is one that reflects
Avenue, N.W., Washington, D.C. 20551. capitalized’’ and ‘‘well-managed,’’ as the bank’s ability over a period of not
Comments addressed to the Treasury those terms are defined in the GLBA.
Department also may be mailed The aggregate consolidated total assets
1 A bank does not have to satisfy the debt rating
electronically to of all financial subsidiaries of the bank requirement or the alternative criteria established
[e-mail] or also may not exceed the lesser of 45 by this rule if the bank’s financial subsidiaries
engage in the newly authorized financial activitiesdelivered to the Treasury Department percent of the consolidated total assets
solel