46118 Federal Register / Vol. 63, No. 167 / Friday, August 28, 1998 / Rules and Regulations
1 Pub. L. 95–369, 92 Stat. 607.
2 Pub. L. 102–242, 105 Stat. 2286.
3 Pub. L. 104–208, 110 Stat. 3009 (section 2214 is
codified at 12 U.S.C. 3105(c)(1)).
4 Pub. L. 102–242, 105 Stat. 2236 (section 111 is
codified at 12 U.S.C. 1820(d)).
5 Pub. L. 103–325, 108 Stat. 2160.
6 Section 2221 is codified at 12 U.S.C.
1820(d)(10).
7 63 FR 16377 (April 2, 1998).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket No. 98–11]
RIN 1557–AB60
FEDERAL RESERVE SYSTEM
12 CFR Part 211
[Regulation K; Docket No. R–1012]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 347
RIN 3064–AC15
Extended Examination Cycle for U.S.
Branches and Agencies of Foreign
Banks
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Interim rule with request for
comment.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the Agencies) are issuing
this joint interim rule with request for
comment to implement the provisions
related to an extended examination
cycle for U.S. branches and agencies of
foreign banks set out in section 2214 of
the Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(EGRPRA). United States branches and
agencies of foreign banks with total
assets of $250 million or less are eligible
to be considered for the 18-month
examination cycle if they meet the
qualifying criteria set out in this interim
rule. The interim rule reduces the
regulatory burden associated with more
frequent on-site examinations for certain
small U.S. branches and agencies of
foreign banks.
DATES: This interim rule is effective
August 28, 1998. Comments must be
received by October 27, 1998.
ADDRESSES: Comments should be
directed to: OCC: Communications
Division, Office of the Comptroller of
the Currency, 250 E Street SW.,
Washington, DC 20219, Attention:
Docket No. 98–11. Comments will be
available for public inspection and
photocopying at the same location.
Comments may also be sent by facsimile
transmission to (202) 874–5274 or by
electronic mail to
regs.comments@occ.treas.gov.
Board: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551, and refer to Docket No. R–
1012. Comments addressed to Ms.
Johnson may also be delivered to the
Board’s mail room between 8:45 a.m.
and 5:15 p.m., and to the security
control room outside of those hours.
Both the mail room and the security
control room are accessible from the
courtyard entrance on 20th Street
between Constitution Avenue and C
Street, NW. Comments may be
inspected in room MP–500 between
9:00 a.m. and 5:00 p.m., except as
provided in Section 261.14 of the
Board’s Rules Regarding the Availability
of Information.
FDIC: Robert E. Feldman, Executive
Secretary, Attention: Comments/OES,
Federal Deposit Insurance Corporation,
550 17th Street, NW., Washington, DC
20429. Comments may be hand
delivered to the guard station at the rear
of the 550 17th Street Building (located
on F Street) on business days between
7:00 a.m. and 5:00 p.m. (Fax number
(202) 898–3838; Internet address:
comments@fdic.gov) Comments may be
inspected and photocopied in the FDIC
Public Information Center, Room 100,
801 17th Street, NW., Washington, DC
between 9:00 a.m. and 4:30 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Martha Clarke, Senior Attorney,
International Activities (202/874–0680);
or Howard Blacker, Senior International
Advisor, International Banking &
Finance (202/874–4730).
Board: Norah M. Barger, Assistant
Director (202/452–2402), or Joseph J.
Sciortino, Supervisory Financial
Analyst (202/452–2294), Division of
Banking Supervision and Regulation; or
Sandra Richardson, Managing Senior
Counsel (202/452–6406) or Jonathan D.
Stoloff, Senior Attorney (202/452–3269),
Legal Division.
FDIC: Karen Walter, Chief,
International, Division of Supervision
(202/898–3540); or Mark Mellon,
Counsel, Regulation and Legislation
Section, Legal Division (202/898–3854).
SUPPLEMENTARY INFORMATION:
Background
The International Banking Act of 1978
(the IBA),1 as amended by the Foreign
Bank Supervision Enhancement Act of
1991,2 subjected U.S. branches and
agencies of foreign banks to a 12-month
examination cycle. Section 2214 of the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(EGRPRA) 3 amended the IBA to provide
that U.S. branches and agencies of
foreign banks shall be subject to on-site
examination as frequently as a national
or state bank would be by its
appropriate federal banking agency.
In general, national and state banks
must be examined every 12 months.
However, section 111 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991 4 authorized
an 18-month examination cycle for
certain national and state banks with a
composite rating of 1 under the Uniform
Financial Institutions Rating System
(UFIRS) and total assets of $100 million
or less. Section 306 of the Riegle
Community Development and
Regulatory Improvement Act of 1994 5
expanded the availability of the 18-
month examination cycle to certain
national and state banks with a
composite rating of 1 under UFIRS and
total assets of $250 million or less, as
well as to certain national and state
banks with a composite rating of 2
under UFIRS and total assets of $100
million or less. Section 2221 of
EGRPRA 6 provided that anytime after
September 23, 1996, U.S. bank
supervisory agencies could extend the
18-month examination frequency cycle
to certain national and state banks with
a composite rating of 2 and total assets
of $250 million or less. Effective April
2, 1998, the Agencies issued a final rule
that extended the examination cycle to
18 months for certain national and state
banks that satisfy the requirements of
section 2221 of EGRPRA.7 To be eligible
for the extended cycle, the national or
state bank must:
(a) Have total assets of $250 million
or less;
(b) Be rated a composite 2 or better
under the UFIRS;
(c) Be well capitalized;
(d) Be well managed;
(e) Not be subject to a formal
enforcement action; and
(f) Not have experienced a change of
control during the preceding 12-month
period in which a full-scope, on-site
examination would have been required
but for the extended cycle.
1 Pub. L. 95–369, 92 Stat. 607.
2 Pub. L. 102–242, 105 Stat. 2286.
3 Pub. L. 104–208, 110 Stat. 3009 (section 2214 is
codified at 12 U.S.C. 3105(c)(1)).
4 Pub. L. 102–242, 105 Stat. 2236 (section 111 is
codified at 12 U.S.C. 1820(d)).
5 Pub. L. 103–325, 108 Stat. 2160.
6 Section 2221 is codified at 12 U.S.C.
1820(d)(10).
7 63 FR 16377 (April 2, 1998).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket No. 98–11]
RIN 1557–AB60
FEDERAL RESERVE SYSTEM
12 CFR Part 211
[Regulation K; Docket No. R–1012]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 347
RIN 3064–AC15
Extended Examination Cycle for U.S.
Branches and Agencies of Foreign
Banks
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Interim rule with request for
comment.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the Agencies) are issuing
this joint interim rule with request for
comment to implement the provisions
related to an extended examination
cycle for U.S. branches and agencies of
foreign banks set out in section 2214 of
the Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(EGRPRA). United States branches and
agencies of foreign banks with total
assets of $250 million or less are eligible
to be considered for the 18-month
examination cycle if they meet the
qualifying criteria set out in this interim
rule. The interim rule reduces the
regulatory burden associated with more
frequent on-site examinations for certain
small U.S. branches and agencies of
foreign banks.
DATES: This interim rule is effective
August 28, 1998. Comments must be
received by October 27, 1998.
ADDRESSES: Comments should be
directed to: OCC: Communications
Division, Office of the Comptroller of
the Currency, 250 E Street SW.,
Washington, DC 20219, Attention:
Docket No. 98–11. Comments will be
available for public inspection and
photocopying at the same location.
Comments may also be sent by facsimile
transmission to (202) 874–5274 or by
electronic mail to
regs.comments@occ.treas.gov.
Board: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551, and refer to Docket No. R–
1012. Comments addressed to Ms.
Johnson may also be delivered to the
Board’s mail room between 8:45 a.m.
and 5:15 p.m., and to the security
control room outside of those hours.
Both the mail room and the security
control room are accessible from the
courtyard entrance on 20th Street
between Constitution Avenue and C
Street, NW. Comments may be
inspected in room MP–500 between
9:00 a.m. and 5:00 p.m., except as
provided in Section 261.14 of the
Board’s Rules Regarding the Availability
of Information.
FDIC: Robert E. Feldman, Executive
Secretary, Attention: Comments/OES,
Federal Deposit Insurance Corporation,
550 17th Street, NW., Washington, DC
20429. Comments may be hand
delivered to the guard station at the rear
of the 550 17th Street Building (located
on F Street) on business days between
7:00 a.m. and 5:00 p.m. (Fax number
(202) 898–3838; Internet address:
comments@fdic.gov) Comments may be
inspected and photocopied in the FDIC
Public Information Center, Room 100,
801 17th Street, NW., Washington, DC
between 9:00 a.m. and 4:30 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Martha Clarke, Senior Attorney,
International Activities (202/874–0680);
or Howard Blacker, Senior International
Advisor, International Banking &
Finance (202/874–4730).
Board: Norah M. Barger, Assistant
Director (202/452–2402), or Joseph J.
Sciortino, Supervisory Financial
Analyst (202/452–2294), Division of
Banking Supervision and Regulation; or
Sandra Richardson, Managing Senior
Counsel (202/452–6406) or Jonathan D.
Stoloff, Senior Attorney (202/452–3269),
Legal Division.
FDIC: Karen Walter, Chief,
International, Division of Supervision
(202/898–3540); or Mark Mellon,
Counsel, Regulation and Legislation
Section, Legal Division (202/898–3854).
SUPPLEMENTARY INFORMATION:
Background
The International Banking Act of 1978
(the IBA),1 as amended by the Foreign
Bank Supervision Enhancement Act of
1991,2 subjected U.S. branches and
agencies of foreign banks to a 12-month
examination cycle. Section 2214 of the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(EGRPRA) 3 amended the IBA to provide
that U.S. branches and agencies of
foreign banks shall be subject to on-site
examination as frequently as a national
or state bank would be by its
appropriate federal banking agency.
In general, national and state banks
must be examined every 12 months.
However, section 111 of the Federal
Deposit Insurance Corporation
Improvement Act of 1991 4 authorized
an 18-month examination cycle for
certain national and state banks with a
composite rating of 1 under the Uniform
Financial Institutions Rating System
(UFIRS) and total assets of $100 million
or less. Section 306 of the Riegle
Community Development and
Regulatory Improvement Act of 1994 5
expanded the availability of the 18-
month examination cycle to certain
national and state banks with a
composite rating of 1 under UFIRS and
total assets of $250 million or less, as
well as to certain national and state
banks with a composite rating of 2
under UFIRS and total assets of $100
million or less. Section 2221 of
EGRPRA 6 provided that anytime after
September 23, 1996, U.S. bank
supervisory agencies could extend the
18-month examination frequency cycle
to certain national and state banks with
a composite rating of 2 and total assets
of $250 million or less. Effective April
2, 1998, the Agencies issued a final rule
that extended the examination cycle to
18 months for certain national and state
banks that satisfy the requirements of
section 2221 of EGRPRA.7 To be eligible
for the extended cycle, the national or
state bank must:
(a) Have total assets of $250 million
or less;
(b) Be rated a composite 2 or better
under the UFIRS;
(c) Be well capitalized;
(d) Be well managed;
(e) Not be subject to a formal
enforcement action; and
(f) Not have experienced a change of
control during the preceding 12-month
period in which a full-scope, on-site
examination would have been required
but for the extended cycle.
46119Federal Register / Vol. 63, No. 167 / Friday, August 28, 1998 / Rules and Regulations
8 The supervisory rating system for U.S. branches
and agencies of foreign banks is referred to as
ROCA. The four components of ROCA are: risk
management, operational controls, compliance, and
asset quality.
In view of the changes to the
examination frequency of national and
state banks, the Agencies are issuing an
interim rule that similarly extends the
examination cycle for certain U.S.
branches and agencies of foreign banks.
Accordingly, U.S. branches and
agencies of foreign banks with total
assets of $250 million or less may be
considered for an 18-month
examination cycle provided that they
meet the eligibility criteria described in
this interim rule. The Agencies are
seeking comment on any aspect of this
rule.
The Agencies believe that an
extended examination cycle for eligible
U.S. offices of foreign banks will permit
the Agencies to focus their resources on
those offices that present the most
immediate supervisory concern, while
concomitantly reducing the regulatory
burden on smaller offices that do not
pose a similar level of supervisory
concern. The Agencies will continue to
use off-site supervision techniques,
including the submission of regulatory
reports, to monitor the condition and
any changes in the risk profile of offices
scheduled to be examined on the
extended 18-month cycle. Each agency
retains authority to examine the offices
of a foreign bank as frequently as the
agency deems necessary.
Description of the Interim Rule
Under this interim rule, a U.S. branch
or agency of a foreign bank is eligible to
be considered for an 18-month
examination cycle if the office meets the
criteria listed below and if there are no
other factors that cause the appropriate
federal banking agency to examine the
branch or agency more frequently. To
qualify for an 18-month examination
cycle, the U.S. branch or agency of a
foreign bank must:
(a) Have total assets of $250 million
or less;
(b) Have received a composite ROCA
supervisory rating of 1 or 2 at its most
recent examination; 8
(c) Satisfy the requirements of either
the following paragraph (1) or (2):
(1) The foreign bank’s most recently
reported capital adequacy position
consists of, or is equivalent to, Tier 1
and risk-based capital ratios of at least
6 percent and 10 percent, respectively,
on a consolidated basis; or
(2) The branch or agency has
maintained on a daily basis over the
past three quarters, eligible assets
(determined consistent with applicable
federal and state law) in an amount not
less than 108 percent of the preceding
quarter’s average third party liabilities
and sufficient liquidity is currently
available to meet its obligations to third
parties;
(d) Not be subject to a formal
enforcement action or order by the
Board, FDIC or OCC; and
(e) Not have experienced a change in
control during the preceding 12-month
period in which a full-scope, on-site
examination would have been required
but for the extended cycle.
Each agency retains the authority to
examine a U.S. branch or agency of a
foreign bank as frequently as the agency
deems necessary. Factors that the
Agencies will consider when deciding
whether more frequent examinations are
necessary include, but are not limited
to, whether: (a) Any of the individual
components of the ROCA rating of the
U.S. office is rated 3 or worse; (b) the
results of any off-site supervision
indicate a deterioration in the condition
of the office; (c) the size, relative
importance, and role of a particular
office when reviewed in the context of
the foreign bank’s entire U.S. operations
otherwise necessitates an annual
examination (including, for example,
whether the office generates a
significant level of assets that are
booked elsewhere); and (d) the
condition of the foreign bank itself gives
rise to such a need. In general, the
Agencies will make their determination
whether to apply the 18-month
examination cycle to a particular U.S.
branch or agency based on the overall
risk assessment for that office, as well as
the factors noted herein.
Section 2214 of EGRPRA directs that
the U.S. branches and agencies of
foreign banks should be subject to on-
site examinations as often as U.S. banks.
The criteria for determining eligibility of
U.S. offices of a foreign bank for an
expanded examination cycle differ in
certain respects from the criteria
applicable to U.S. banks for this
purpose. These differences are
necessary to adjust for the obvious
structural differences that exist between
U.S. banks and U.S. offices of foreign
banks (e.g., the U.S. offices of foreign
banks often constitute only a small part
of foreign banks’ worldwide operations
and the role of the Agencies with regard
to the U.S. offices is limited to that of
host country supervisor), as well as the
supervisory implications that flow from
these basic structural differences.
The Agencies will use a number of
criteria as a proxy for the well-managed
criterion applicable to U.S. banks,
including the ROCA component and
composite ratings, the existence of any
formal enforcement action or order
issued by an agency, and the other
discretionary standards described
above. With regard to the well-
capitalized criterion applicable to U.S.
banks for these purposes, the Agencies
will take into account the foreign bank’s
capital adequacy ratios, as well as, in
appropriate circumstances, whether the
U.S. offices of the foreign bank have
sufficient eligible assets and liquidity to
meet their obligations to third parties.
The Agencies believe that evaluating the
U.S. branches and agencies of foreign
banks on the basis of the criteria
described above for purposes of
determining eligibility for an expanded
examination cycle is consistent with the
requirements of section 2214 of
EGRPRA.
Effective Date of Interim Rule
The Agencies find good cause for
issuing this interim rule without prior
notice and the opportunity for
comment, as well as for dispensing with
the 30-day delayed effective date
ordinarily prescribed by the
Administrative Procedure Act (APA), 5
U.S.C. 551 et seq. The interim rule
confers a benefit on certain small U.S.
branches and agencies of foreign banks
by reducing the regulatory burden
associated with more frequent on-site
examinations. Conversely, this interim
rule does not increase the frequency of
examinations or otherwise increase the
regulatory burden for any U.S. branch or
agency of a foreign bank. Such
institutions, therefore, are not adversely
affected by the interim rule. Under these
circumstances, the Agencies conclude
that prior notice and comment
procedures are unnecessary and would
be contrary to the public interest. 5
U.S.C. 553(b)(B).
In addition, the Agencies have
determined that this interim rule relates
to examination schedules, which are a
matter of internal agency procedure
rather than a rule of substantive effect
on bank activities and authority. See
Donovan v. Wollaston Alloys, Inc., 695
F.2d 1, 9 (1st Cir. 1982). Determining
when a regulated institution is to be
examined is based, in part, on examiner
availability, the Agencies’ need to plan
examiner time in advance, and other
issues relevant to the internal operations
of the Agencies. Therefore, this interim
rule is exempt from the APA’s public
notice requirement. 5 U.S.C.
553(b)(3)(A).
Regulatory Flexibility Act
An initial regulatory flexibility
analysis under the Regulatory
Flexibility Act is only required
whenever an agency is required to
8 The supervisory rating system for U.S. branches
and agencies of foreign banks is referred to as
ROCA. The four components of ROCA are: risk
management, operational controls, compliance, and
asset quality.
In view of the changes to the
examination frequency of national and
state banks, the Agencies are issuing an
interim rule that similarly extends the
examination cycle for certain U.S.
branches and agencies of foreign banks.
Accordingly, U.S. branches and
agencies of foreign banks with total
assets of $250 million or less may be
considered for an 18-month
examination cycle provided that they
meet the eligibility criteria described in
this interim rule. The Agencies are
seeking comment on any aspect of this
rule.
The Agencies believe that an
extended examination cycle for eligible
U.S. offices of foreign banks will permit
the Agencies to focus their resources on
those offices that present the most
immediate supervisory concern, while
concomitantly reducing the regulatory
burden on smaller offices that do not
pose a similar level of supervisory
concern. The Agencies will continue to
use off-site supervision techniques,
including the submission of regulatory
reports, to monitor the condition and
any changes in the risk profile of offices
scheduled to be examined on the
extended 18-month cycle. Each agency
retains authority to examine the offices
of a foreign bank as frequently as the
agency deems necessary.
Description of the Interim Rule
Under this interim rule, a U.S. branch
or agency of a foreign bank is eligible to
be considered for an 18-month
examination cycle if the office meets the
criteria listed below and if there are no
other factors that cause the appropriate
federal banking agency to examine the
branch or agency more frequently. To
qualify for an 18-month examination
cycle, the U.S. branch or agency of a
foreign bank must:
(a) Have total assets of $250 million
or less;
(b) Have received a composite ROCA
supervisory rating of 1 or 2 at its most
recent examination; 8
(c) Satisfy the requirements of either
the following paragraph (1) or (2):
(1) The foreign bank’s most recently
reported capital adequacy position
consists of, or is equivalent to, Tier 1
and risk-based capital ratios of at least
6 percent and 10 percent, respectively,
on a consolidated basis; or
(2) The branch or agency has
maintained on a daily basis over the
past three quarters, eligible assets
(determined consistent with applicable
federal and state law) in an amount not
less than 108 percent of the preceding
quarter’s average third party liabilities
and sufficient liquidity is currently
available to meet its obligations to third
parties;
(d) Not be subject to a formal
enforcement action or order by the
Board, FDIC or OCC; and
(e) Not have experienced a change in
control during the preceding 12-month
period in which a full-scope, on-site
examination would have been required
but for the extended cycle.
Each agency retains the authority to
examine a U.S. branch or agency of a
foreign bank as frequently as the agency
deems necessary. Factors that the
Agencies will consider when deciding
whether more frequent examinations are
necessary include, but are not limited
to, whether: (a) Any of the individual
components of the ROCA rating of the
U.S. office is rated 3 or worse; (b) the
results of any off-site supervision
indicate a deterioration in the condition
of the office; (c) the size, relative
importance, and role of a particular
office when reviewed in the context of
the foreign bank’s entire U.S. operations
otherwise necessitates an annual
examination (including, for example,
whether the office generates a
significant level of assets that are
booked elsewhere); and (d) the
condition of the foreign bank itself gives
rise to such a need. In general, the
Agencies will make their determination
whether to apply the 18-month
examination cycle to a particular U.S.
branch or agency based on the overall
risk assessment for that office, as well as
the factors noted herein.
Section 2214 of EGRPRA directs that
the U.S. branches and agencies of
foreign banks should be subject to on-
site examinations as often as U.S. banks.
The criteria for determining eligibility of
U.S. offices of a foreign bank for an
expanded examination cycle differ in
certain respects from the criteria
applicable to U.S. banks for this
purpose. These differences are
necessary to adjust for the obvious
structural differences that exist between
U.S. banks and U.S. offices of foreign
banks (e.g., the U.S. offices of foreign
banks often constitute only a small part
of foreign banks’ worldwide operations
and the role of the Agencies with regard
to the U.S. offices is limited to that of
host country supervisor), as well as the
supervisory implications that flow from
these basic structural differences.
The Agencies will use a number of
criteria as a proxy for the well-managed
criterion applicable to U.S. banks,
including the ROCA component and
composite ratings, the existence of any
formal enforcement action or order
issued by an agency, and the other
discretionary standards described
above. With regard to the well-
capitalized criterion applicable to U.S.
banks for these purposes, the Agencies
will take into account the foreign bank’s
capital adequacy ratios, as well as, in
appropriate circumstances, whether the
U.S. offices of the foreign bank have
sufficient eligible assets and liquidity to
meet their obligations to third parties.
The Agencies believe that evaluating the
U.S. branches and agencies of foreign
banks on the basis of the criteria
described above for purposes of
determining eligibility for an expanded
examination cycle is consistent with the
requirements of section 2214 of
EGRPRA.
Effective Date of Interim Rule
The Agencies find good cause for
issuing this interim rule without prior
notice and the opportunity for
comment, as well as for dispensing with
the 30-day delayed effective date
ordinarily prescribed by the
Administrative Procedure Act (APA), 5
U.S.C. 551 et seq. The interim rule
confers a benefit on certain small U.S.
branches and agencies of foreign banks
by reducing the regulatory burden
associated with more frequent on-site
examinations. Conversely, this interim
rule does not increase the frequency of
examinations or otherwise increase the
regulatory burden for any U.S. branch or
agency of a foreign bank. Such
institutions, therefore, are not adversely
affected by the interim rule. Under these
circumstances, the Agencies conclude
that prior notice and comment
procedures are unnecessary and would
be contrary to the public interest. 5
U.S.C. 553(b)(B).
In addition, the Agencies have
determined that this interim rule relates
to examination schedules, which are a
matter of internal agency procedure
rather than a rule of substantive effect
on bank activities and authority. See
Donovan v. Wollaston Alloys, Inc., 695
F.2d 1, 9 (1st Cir. 1982). Determining
when a regulated institution is to be
examined is based, in part, on examiner
availability, the Agencies’ need to plan
examiner time in advance, and other
issues relevant to the internal operations
of the Agencies. Therefore, this interim
rule is exempt from the APA’s public
notice requirement. 5 U.S.C.
553(b)(3)(A).
Regulatory Flexibility Act
An initial regulatory flexibility
analysis under the Regulatory
Flexibility Act is only required
whenever an agency is required to