8098 Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations
1 12 CFR part 390, subpart O.
2 12 CFR 390.250.
3 12 CFR 390.251.
4 12 CFR 390.252.
5 12 CFR 390.253.
6 12 CFR 390.254.
7 12 CFR 390.255.
8 12 U.S.C. 1831e(a); 12 CFR part 362, subparts C
and D; 12 U.S.C. 1831n(a).
9 12 U.S.C. 5301 et seq.
10 12 U.S.C. 5411.
11 Id.
12 12 U.S.C. 5414(b).
13 12 U.S.C. 5414(c).
14 76 FR 39246 (July 6, 2011).
15 12 U.S.C. 5412(b)(2)(B)(i)(II).
16 12 U.S.C. 1811 et seq.
17 12 U.S.C. 5412(c)(1).
18 12 U.S.C. 1813(q).
Authority: 12 U.S.C. 1819.
Subpart Q also issued under 12 U.S.C.
1462; 1462a; 1463; 1464.
Subpart W also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w.
Subpart F—[Removed and Reserved]
■ 8. Remove and reserve subpart F,
consisting of §§ 390.100 through
390.135.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about
December 15, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020–28453 Filed 2–2–21; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 362 and 390
RIN 3064–AF37
Removal of Transferred OTS
Regulations Regarding Certain
Subordinate Organizations of State
Savings Associations
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Final rule.
SUMMARY: The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to rescind and
remove rules from the Code of Federal
Regulations (CFR) regulations titled
Subordinate Organizations that were
transferred to the FDIC from the Office
of Thrift Supervision (OTS) on July 21,
2011, in connection with the
implementation of Title III of the Dodd-
Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act)
regarding subordinate organizations of
State savings associations because the
FDIC has determined that the
requirements for State savings
association subordinate organizations
included therein are substantially
similar to the requirements for State
savings associations and their
subsidiaries set forth by certain sections
of the Federal Deposit Insurance Act
(FDI Act) and its implementing
regulations.
DATES: The final rule is effective on
March 5, 2021.
FOR FURTHER INFORMATION CONTACT:
Donald Hamm, Special Advisor, (202)
898–3528, dhamm@fdic.gov; or Shelli
Coffey, Review Examiner, (312) 382–
7539, scoffey@fdic.gov, Risk
Management and Applications, Division
of Risk Management Supervision;
Suzanne Dawley, Counsel, sudawley@
fdic.gov; or Karlyn J. Hunter, Counsel,
khunter@fdic.gov, Legal Division.
SUPPLEMENTARY INFORMATION:
I. Policy Objective
The policy objective of the final rule
is to simplify the FDIC’s regulations by
removing unnecessary regulations and
realigning existing regulations in order
to improve the public’s understanding
of the rules and to improve the ease of
the public’s reference to them. Thus, as
further detailed in this section, the FDIC
is rescinding and removing from the
CFR rules entitled Subordinate
Organizations (12 CFR part 390, subpart
O) applicable to State savings
associations.1 Pursuant to subpart O, the
FDIC may, at any time, limit a State
savings association’s investment in their
subordinate organizations, or may limit
or refuse to permit any activities of any
of these entities for supervisory, legal, or
safety and soundness reasons.2
Subpart O includes definitions related
to State savings association
subsidiaries,3 a requirement for the
parent State savings association and its
subsidiaries to maintain separate
corporate identities,4 a prior notice
requirement for a State savings
association seeking to establish or
acquire a new subsidiary or engage in
new activities through an existing
subsidiary,5 requirements related to the
issuance of securities by a subsidiary,6
and requirements for the exercise of
salvage power by a State savings
association.7
The FDIC has determined that the
requirements for State savings
association subordinate organizations
set forth in subpart O are substantially
similar to requirements of section 28 of
the FDI Act and its implementing
regulations, 12 CFR part 362 of the
FDIC’s Rules and Regulations; and
section 37 of the FDI Act.8 Therefore,
the FDIC is rescinding and removing
subpart O and will apply part 362,
subpart C and subpart D, as appropriate,
to achieve substantially similar
supervisory results for State savings
associations and subsidiaries as have
been obtained through the application
of subpart O.
II. Background
The Dodd-Frank Act,9 signed into law
on July 21, 2010, provided for a
substantial reorganization of the
regulation of State and Federal savings
associations and their holding
companies.10 Beginning July 21, 2011,
the transfer date established by section
311 of the Dodd-Frank Act,11 the
powers, duties, and functions formerly
performed by the OTS were divided
among the FDIC, as to State savings
associations; the Office of the
Comptroller of the Currency (OCC), as to
Federal savings associations; and the
Board of Governors of the Federal
Reserve System (FRB), as to savings and
loan holding companies. Section 316(b)
of the Dodd-Frank Act 12 provides the
manner of treatment of all orders,
resolutions, determinations, regulations,
and advisory materials that had been
issued, made, prescribed, or allowed to
become effective by the OTS. The
section provides that if such materials
were in effect on the day before the
transfer date, they continue in effect and
are enforceable by or against the
appropriate successor agency until they
are modified, terminated, set aside, or
superseded in accordance with
applicable law by such successor
agency, by any court of competent
jurisdiction, or by operation of law.
Pursuant to section 316(c) of the
Dodd-Frank Act,13 on June 14, 2011, the
FDIC’s Board of Directors approved a
‘‘List of OTS Regulations to be Enforced
by the OCC and the FDIC Pursuant to
the Dodd-Frank Wall Street Reform and
Consumer Protection Act.’’ This list was
published by the FDIC and the OCC as
a joint notice in the Federal Register on
July 6, 2011.14
Although section 312(b)(2)(B)(i)(II) of
the Dodd-Frank Act 15 granted the OCC
rulemaking authority relating to both
State and Federal savings associations,
nothing in the Dodd-Frank Act affected
the FDIC’s existing authority to issue
regulations under the FDI Act 16 and
other laws as the ‘‘appropriate Federal
banking agency’’ or under similar
statutory terminology. Section 312(c) of
the Dodd-Frank Act 17 revised the
definition of ‘‘appropriate Federal
banking agency’’ contained in section
3(q) of the FDI Act 18 to add State
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1 12 CFR part 390, subpart O.
2 12 CFR 390.250.
3 12 CFR 390.251.
4 12 CFR 390.252.
5 12 CFR 390.253.
6 12 CFR 390.254.
7 12 CFR 390.255.
8 12 U.S.C. 1831e(a); 12 CFR part 362, subparts C
and D; 12 U.S.C. 1831n(a).
9 12 U.S.C. 5301 et seq.
10 12 U.S.C. 5411.
11 Id.
12 12 U.S.C. 5414(b).
13 12 U.S.C. 5414(c).
14 76 FR 39246 (July 6, 2011).
15 12 U.S.C. 5412(b)(2)(B)(i)(II).
16 12 U.S.C. 1811 et seq.
17 12 U.S.C. 5412(c)(1).
18 12 U.S.C. 1813(q).
Authority: 12 U.S.C. 1819.
Subpart Q also issued under 12 U.S.C.
1462; 1462a; 1463; 1464.
Subpart W also issued under 12 U.S.C.
1462a; 1463; 1464; 15 U.S.C. 78c; 78l; 78m;
78n; 78p; 78w.
Subpart F—[Removed and Reserved]
■ 8. Remove and reserve subpart F,
consisting of §§ 390.100 through
390.135.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about
December 15, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020–28453 Filed 2–2–21; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Parts 362 and 390
RIN 3064–AF37
Removal of Transferred OTS
Regulations Regarding Certain
Subordinate Organizations of State
Savings Associations
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Final rule.
SUMMARY: The Federal Deposit
Insurance Corporation (FDIC) is
adopting a final rule to rescind and
remove rules from the Code of Federal
Regulations (CFR) regulations titled
Subordinate Organizations that were
transferred to the FDIC from the Office
of Thrift Supervision (OTS) on July 21,
2011, in connection with the
implementation of Title III of the Dodd-
Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act)
regarding subordinate organizations of
State savings associations because the
FDIC has determined that the
requirements for State savings
association subordinate organizations
included therein are substantially
similar to the requirements for State
savings associations and their
subsidiaries set forth by certain sections
of the Federal Deposit Insurance Act
(FDI Act) and its implementing
regulations.
DATES: The final rule is effective on
March 5, 2021.
FOR FURTHER INFORMATION CONTACT:
Donald Hamm, Special Advisor, (202)
898–3528, dhamm@fdic.gov; or Shelli
Coffey, Review Examiner, (312) 382–
7539, scoffey@fdic.gov, Risk
Management and Applications, Division
of Risk Management Supervision;
Suzanne Dawley, Counsel, sudawley@
fdic.gov; or Karlyn J. Hunter, Counsel,
khunter@fdic.gov, Legal Division.
SUPPLEMENTARY INFORMATION:
I. Policy Objective
The policy objective of the final rule
is to simplify the FDIC’s regulations by
removing unnecessary regulations and
realigning existing regulations in order
to improve the public’s understanding
of the rules and to improve the ease of
the public’s reference to them. Thus, as
further detailed in this section, the FDIC
is rescinding and removing from the
CFR rules entitled Subordinate
Organizations (12 CFR part 390, subpart
O) applicable to State savings
associations.1 Pursuant to subpart O, the
FDIC may, at any time, limit a State
savings association’s investment in their
subordinate organizations, or may limit
or refuse to permit any activities of any
of these entities for supervisory, legal, or
safety and soundness reasons.2
Subpart O includes definitions related
to State savings association
subsidiaries,3 a requirement for the
parent State savings association and its
subsidiaries to maintain separate
corporate identities,4 a prior notice
requirement for a State savings
association seeking to establish or
acquire a new subsidiary or engage in
new activities through an existing
subsidiary,5 requirements related to the
issuance of securities by a subsidiary,6
and requirements for the exercise of
salvage power by a State savings
association.7
The FDIC has determined that the
requirements for State savings
association subordinate organizations
set forth in subpart O are substantially
similar to requirements of section 28 of
the FDI Act and its implementing
regulations, 12 CFR part 362 of the
FDIC’s Rules and Regulations; and
section 37 of the FDI Act.8 Therefore,
the FDIC is rescinding and removing
subpart O and will apply part 362,
subpart C and subpart D, as appropriate,
to achieve substantially similar
supervisory results for State savings
associations and subsidiaries as have
been obtained through the application
of subpart O.
II. Background
The Dodd-Frank Act,9 signed into law
on July 21, 2010, provided for a
substantial reorganization of the
regulation of State and Federal savings
associations and their holding
companies.10 Beginning July 21, 2011,
the transfer date established by section
311 of the Dodd-Frank Act,11 the
powers, duties, and functions formerly
performed by the OTS were divided
among the FDIC, as to State savings
associations; the Office of the
Comptroller of the Currency (OCC), as to
Federal savings associations; and the
Board of Governors of the Federal
Reserve System (FRB), as to savings and
loan holding companies. Section 316(b)
of the Dodd-Frank Act 12 provides the
manner of treatment of all orders,
resolutions, determinations, regulations,
and advisory materials that had been
issued, made, prescribed, or allowed to
become effective by the OTS. The
section provides that if such materials
were in effect on the day before the
transfer date, they continue in effect and
are enforceable by or against the
appropriate successor agency until they
are modified, terminated, set aside, or
superseded in accordance with
applicable law by such successor
agency, by any court of competent
jurisdiction, or by operation of law.
Pursuant to section 316(c) of the
Dodd-Frank Act,13 on June 14, 2011, the
FDIC’s Board of Directors approved a
‘‘List of OTS Regulations to be Enforced
by the OCC and the FDIC Pursuant to
the Dodd-Frank Wall Street Reform and
Consumer Protection Act.’’ This list was
published by the FDIC and the OCC as
a joint notice in the Federal Register on
July 6, 2011.14
Although section 312(b)(2)(B)(i)(II) of
the Dodd-Frank Act 15 granted the OCC
rulemaking authority relating to both
State and Federal savings associations,
nothing in the Dodd-Frank Act affected
the FDIC’s existing authority to issue
regulations under the FDI Act 16 and
other laws as the ‘‘appropriate Federal
banking agency’’ or under similar
statutory terminology. Section 312(c) of
the Dodd-Frank Act 17 revised the
definition of ‘‘appropriate Federal
banking agency’’ contained in section
3(q) of the FDI Act 18 to add State
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8099Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations
19 76 FR 47652 (Aug. 5, 2011).
20 Id.
21 12 CFR part 390, subpart O.
22 85 FR 67684 (Oct. 26, 2020).
23 61 FR 66561, 66562 (Dec. 18, 1996).
24 12 CFR part 390, subpart O.
25 85 FR 67684, 67686 (Oct. 26, 2020).
26 12 U.S.C. 1831e(a), referencing 12 U.S.C. 1463
et seq.
27 12 U.S.C. 1828(m).
28 12 U.S.C. 1463 et seq.
29 12 CFR 362.9(a).
30 85 FR 67684 (Oct. 26, 2020).
31 The FDIC rescinded the control definition at
§ 391.41 as part of its 2015 Filing Requirements and
Processing Procedures for Changes in Control with
respect to State Nonmember Banks and State
Savings Associations rulemaking. 80 FR 65889 (Oct.
28, 2015).
32 12 CFR 391.41 (2015).
savings associations to the list of entities
for which the FDIC is designated as the
‘‘appropriate Federal banking agency.’’
As a result, when the FDIC is designated
as the ‘‘appropriate Federal banking
agency’’ (or under similar terminology)
for State savings associations, the FDIC
is authorized to issue, modify, and
rescind regulations involving such
associations.
As noted, on July 14, 2011, operating
pursuant to this authority, the FDIC’s
Board of Directors reissued and re-
designated certain transferring
regulations of the former OTS. These
transferred OTS regulations were
published as new FDIC regulations in
the Federal Register on August 5,
2011.19 When it republished the
transferred OTS regulations as new
FDIC regulations, the FDIC specifically
noted that its staff would evaluate the
transferred OTS rules and might later
recommend incorporating the
transferred OTS regulations into other
FDIC rules, amending them, or
rescinding them, as appropriate.20
The final rule adopts, without change,
the notice of proposed rulemaking
(NPR) published in the Federal Register
on October 26, 2020, which received no
comments.
III. The Proposed Rule
On October 26, 2020, the FDIC
published an NPR regarding the removal
of part 390, subpart O (formerly OTS’s
12 CFR part 559),21 which generally
addresses subordinate organizations of
State savings associations.22 The OTS
adopted part 559, titled Subordinate
Organizations, in 1996 to update and
streamline its regulations and
statements of policy concerning
subsidiaries and other subordinate
organizations in which savings
associations have ownership interests
(including operating subsidiaries and
service corporations) and equity
investments (including pass-through
investments).23 Part 559 consolidated
all OTS regulations affecting thrift
subsidiaries in order to make it easier
for savings associations to find and use
these regulations. The former OTS rule
was transferred to the FDIC with only
nominal changes and is found in the
FDIC’s rules at subpart O, entitled
Subordinate Organizations.24
The NPR proposed removing subpart
O, because, after careful review and
consideration, the FDIC believes it is
duplicative of substantially similar FDIC
statutory and regulatory provisions that
produce the same supervisory result for
an insured State savings association as
subpart O.25
Section 28 of the FDI Act prohibits a
State savings association from engaging
as principal in any type of activity, or
in any activity in an amount, that is not
permissible for a Federal savings
association unless the FDIC has
determined the activity would pose no
significant risk to the Deposit Insurance
Fund (DIF); and the State savings
association is, and continues to be, in
compliance with the capital standards
set forth in section 5(t) of the Home
Owners Loan Act (HOLA).26 Pursuant to
section 18(m) of the FDI Act, a State
savings association must file a notice
with the FDIC prior to establishing,
acquiring or engaging in new activities
of a subsidiary.27
The NPR proposed using 12 CFR part
362, Activities of Insured State Banks
and Insured Savings Associations, to
provide a substantially similar process
for an insured State savings association,
or its subsidiary, to apply for prior
consent from the FDIC to engage in
certain activities, that are not otherwise
prohibited by Federal or State law,
while reaching substantially the same
result as provided in subpart O without
the burden of referring to a duplicative
set of regulations. Part 362, which
includes subparts C and D, is issued
pursuant to several FDIC authorities,
including the FDIC’s general rulemaking
authority pursuant to section
9(a)(Tenth) and section 28 of the FDI
Act, the FDIC’s statutory authority over
the activities of State savings
associations and subsidiaries, that are
substantially similar to the authorizing
statutes pursuant to which subpart O
was issued.
Subpart C of part 362 governs the
activities of insured State savings
associations and implements section
28(a) of the FDI Act, which restricts and
prohibits insured State savings
associations and their service
corporations from engaging in activities
and investments of a type that are not
permissible for a Federal savings
association and their service
corporations. Subpart D of part 362
governs acquiring, establishing, or
conducting new activities through a
subsidiary by an insured State savings
association, and implements section
18(m) of the FDI Act, which requires
that prior notice be given to the FDIC
when an insured savings association
establishes or acquires a subsidiary or
engages in any new activity in a
subsidiary. In doing so it applies the
definitions of § 362.2 unless otherwise
indicated. The phrase ‘‘activity
permissible for a Federal savings
association’’ means any activity
authorized for a Federal savings
association under any statute including
HOLA,28 as well as activities recognized
as permissible for a Federal savings
association in regulations issued by the
OCC or in bulletins, orders or written
interpretations issued by the OCC, or by
the former OTS until modified,
terminated, set aside, or superseded by
the OCC.29
Rather than restate the rationale for
the rescission and removal of each
section of subpart O, the reader is
referred to the fulsome explanations for
the rescission and removal provided in
the NPR,30 which the FDIC references
here as the basis for finalizing the
regulations as proposed. The regulations
or statutes that the FDIC expects State
savings associations and subsidiaries to
refer to after the removal of subpart O
are briefly discussed below.
A. Section 390.251—Definitions
Section 390.251 is a definition section
related to subordinate organizations.
Included in the definitions section are:
Control, GAAP-consolidated subsidiary,
lower-tier entity, ownership interest,
subordinate organization, and,
subsidiary. The control definition is a
cross-reference to the removed OTS
§ 391.41 definition,31 which provided
that a controlling shareholder is any
person who, directly or indirectly, or
acting in concert with one or more
persons or companies, or together with
members of his or her immediate family,
owns, controls, or holds with power to
vote 10 percent or more of the voting
stock of a company, or controls in any
manner the election or appointment of
a majority of the company’s board of
directors.32 The FDIC proposed to apply
the § 362.2(e) control definition which
is consistent with the control definition
applicable to service companies of
Federal savings associations which
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19 76 FR 47652 (Aug. 5, 2011).
20 Id.
21 12 CFR part 390, subpart O.
22 85 FR 67684 (Oct. 26, 2020).
23 61 FR 66561, 66562 (Dec. 18, 1996).
24 12 CFR part 390, subpart O.
25 85 FR 67684, 67686 (Oct. 26, 2020).
26 12 U.S.C. 1831e(a), referencing 12 U.S.C. 1463
et seq.
27 12 U.S.C. 1828(m).
28 12 U.S.C. 1463 et seq.
29 12 CFR 362.9(a).
30 85 FR 67684 (Oct. 26, 2020).
31 The FDIC rescinded the control definition at
§ 391.41 as part of its 2015 Filing Requirements and
Processing Procedures for Changes in Control with
respect to State Nonmember Banks and State
Savings Associations rulemaking. 80 FR 65889 (Oct.
28, 2015).
32 12 CFR 391.41 (2015).
savings associations to the list of entities
for which the FDIC is designated as the
‘‘appropriate Federal banking agency.’’
As a result, when the FDIC is designated
as the ‘‘appropriate Federal banking
agency’’ (or under similar terminology)
for State savings associations, the FDIC
is authorized to issue, modify, and
rescind regulations involving such
associations.
As noted, on July 14, 2011, operating
pursuant to this authority, the FDIC’s
Board of Directors reissued and re-
designated certain transferring
regulations of the former OTS. These
transferred OTS regulations were
published as new FDIC regulations in
the Federal Register on August 5,
2011.19 When it republished the
transferred OTS regulations as new
FDIC regulations, the FDIC specifically
noted that its staff would evaluate the
transferred OTS rules and might later
recommend incorporating the
transferred OTS regulations into other
FDIC rules, amending them, or
rescinding them, as appropriate.20
The final rule adopts, without change,
the notice of proposed rulemaking
(NPR) published in the Federal Register
on October 26, 2020, which received no
comments.
III. The Proposed Rule
On October 26, 2020, the FDIC
published an NPR regarding the removal
of part 390, subpart O (formerly OTS’s
12 CFR part 559),21 which generally
addresses subordinate organizations of
State savings associations.22 The OTS
adopted part 559, titled Subordinate
Organizations, in 1996 to update and
streamline its regulations and
statements of policy concerning
subsidiaries and other subordinate
organizations in which savings
associations have ownership interests
(including operating subsidiaries and
service corporations) and equity
investments (including pass-through
investments).23 Part 559 consolidated
all OTS regulations affecting thrift
subsidiaries in order to make it easier
for savings associations to find and use
these regulations. The former OTS rule
was transferred to the FDIC with only
nominal changes and is found in the
FDIC’s rules at subpart O, entitled
Subordinate Organizations.24
The NPR proposed removing subpart
O, because, after careful review and
consideration, the FDIC believes it is
duplicative of substantially similar FDIC
statutory and regulatory provisions that
produce the same supervisory result for
an insured State savings association as
subpart O.25
Section 28 of the FDI Act prohibits a
State savings association from engaging
as principal in any type of activity, or
in any activity in an amount, that is not
permissible for a Federal savings
association unless the FDIC has
determined the activity would pose no
significant risk to the Deposit Insurance
Fund (DIF); and the State savings
association is, and continues to be, in
compliance with the capital standards
set forth in section 5(t) of the Home
Owners Loan Act (HOLA).26 Pursuant to
section 18(m) of the FDI Act, a State
savings association must file a notice
with the FDIC prior to establishing,
acquiring or engaging in new activities
of a subsidiary.27
The NPR proposed using 12 CFR part
362, Activities of Insured State Banks
and Insured Savings Associations, to
provide a substantially similar process
for an insured State savings association,
or its subsidiary, to apply for prior
consent from the FDIC to engage in
certain activities, that are not otherwise
prohibited by Federal or State law,
while reaching substantially the same
result as provided in subpart O without
the burden of referring to a duplicative
set of regulations. Part 362, which
includes subparts C and D, is issued
pursuant to several FDIC authorities,
including the FDIC’s general rulemaking
authority pursuant to section
9(a)(Tenth) and section 28 of the FDI
Act, the FDIC’s statutory authority over
the activities of State savings
associations and subsidiaries, that are
substantially similar to the authorizing
statutes pursuant to which subpart O
was issued.
Subpart C of part 362 governs the
activities of insured State savings
associations and implements section
28(a) of the FDI Act, which restricts and
prohibits insured State savings
associations and their service
corporations from engaging in activities
and investments of a type that are not
permissible for a Federal savings
association and their service
corporations. Subpart D of part 362
governs acquiring, establishing, or
conducting new activities through a
subsidiary by an insured State savings
association, and implements section
18(m) of the FDI Act, which requires
that prior notice be given to the FDIC
when an insured savings association
establishes or acquires a subsidiary or
engages in any new activity in a
subsidiary. In doing so it applies the
definitions of § 362.2 unless otherwise
indicated. The phrase ‘‘activity
permissible for a Federal savings
association’’ means any activity
authorized for a Federal savings
association under any statute including
HOLA,28 as well as activities recognized
as permissible for a Federal savings
association in regulations issued by the
OCC or in bulletins, orders or written
interpretations issued by the OCC, or by
the former OTS until modified,
terminated, set aside, or superseded by
the OCC.29
Rather than restate the rationale for
the rescission and removal of each
section of subpart O, the reader is
referred to the fulsome explanations for
the rescission and removal provided in
the NPR,30 which the FDIC references
here as the basis for finalizing the
regulations as proposed. The regulations
or statutes that the FDIC expects State
savings associations and subsidiaries to
refer to after the removal of subpart O
are briefly discussed below.
A. Section 390.251—Definitions
Section 390.251 is a definition section
related to subordinate organizations.
Included in the definitions section are:
Control, GAAP-consolidated subsidiary,
lower-tier entity, ownership interest,
subordinate organization, and,
subsidiary. The control definition is a
cross-reference to the removed OTS
§ 391.41 definition,31 which provided
that a controlling shareholder is any
person who, directly or indirectly, or
acting in concert with one or more
persons or companies, or together with
members of his or her immediate family,
owns, controls, or holds with power to
vote 10 percent or more of the voting
stock of a company, or controls in any
manner the election or appointment of
a majority of the company’s board of
directors.32 The FDIC proposed to apply
the § 362.2(e) control definition which
is consistent with the control definition
applicable to service companies of
Federal savings associations which
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