18618 Federal Register / Vol. 67, No. 73 / Tuesday, April 16, 2002 / Notices
from the Commission’s copy contractor,
Qualex International (202) 863–2893.
Oppositions to these petition must be
filed by May 1, 2002. See Section
1.4(b)(1) of the Commission’s rules (47
CFR 1.4(b)(1)). Replies to an opposition
must be filed within 10 days after the
time for filing oppositions has expired.
Subject: Implementation of the Pay
Telephone Reclassification and
Compensation Provisions of the
Telecommunications Act of 1996 (CC
Docket No. 96–128).
Number of Petitions Filed: 5.
William F. Caton,
Acting Secretary.
[FR Doc. 02–9225 Filed 4–15–02; 8:45 am]
BILLING CODE 6712 –01–M
FEDERAL DEPOSIT INSURANCE
CORPORATION
Policy Statement Regarding Minority
Depository Institutions
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final policy statement.
SUMMARY: The FDIC is adopting a final
Policy Statement Regarding Minority
Depository Institutions. The final Policy
Statement recognizes the importance of
minority depository institutions and the
unique challenges they often face in
serving their communities. This FDIC
Policy Statement complies with the
requirements of Section 308 of the
Financial Institutions Reform, Recovery
and Enforcement Act of 1989
(‘‘FIRREA’’) by implementing an
outreach program designed to preserve
and encourage minority ownership of
financial institutions. Based on
comments received by the agency, the
final Policy Statement amends the
proposed definition of minority-owned
institution, clarifies the types of
technical assistance available from the
FDIC, improves interagency
coordination and enhances
communications between the FDIC and
minority institutions.
EFFECTIVE DATE: April 16, 2002.
FOR FURTHER INFORMATION CONTACT:
Brett A. McCallister, Risk Management
and Applications Section, Division of
Supervision (202) 898–3803 or Grovetta
N. Gardineer, Counsel, Legal Division,
(202) 898–3728, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
On April 3, 1990, the Board of
Directors of the FDIC adopted a Policy
Statement on Encouragement and
Preservation of Minority Ownership of
Financial Institutions. The original
Policy Statement provided guidance to
the industry regarding the agency’s
efforts in achieving the goals of Section
308 of FIRREA. On December 20, 2001,
the FDIC Board of Directors approved a
new proposed Policy Statement
Regarding Minority-Owned Depository
Institutions for public comment. The
revised Policy Statement attempts to
provide a more structured framework
that sets forth initiatives of the FDIC to
promote and preserve the minority
ownership of depository institutions,
and to provide technical assistance,
training and educational programs to
minority depository institutions by
working with those institutions, their
trade associations and the other Federal
financial regulatory agencies. The
proposed Policy Statement was
published on January 2, 2002, and the
comment period ended on March 4,
2002.
II. Comments Received
The FDIC received eleven comment
letters in response to the proposed
Policy Statement that raised 23 issues.
The comments came from seven insured
financial institutions and four trade
associations. All of the commenters
expressed support for the FDIC’s
proposed Policy Statement; however,
each of the commenters recommended
specific changes to the final Policy
Statement. These comments and the
changes and additions made to the final
Policy Statement are discussed in detail
below. It should be noted that several
commenters raised issues that are not
related to the proposed Policy Statement
(i.e., CRA credit for assistance to
minority- and women-owned financial
institutions). These issues are being
addressed in other projects of the FDIC
and the other Federal financial
institution regulators. Since the issues
raised by those comments relate to other
initiatives, they are not specifically
discussed herein.
Four commenters suggested that the
FDIC develop a definition of ‘‘minority-
owned institution’’ consistent with that
used by other Federal agencies. Two
commenters suggested that the FDIC
change the term Black American to
African American. Another commenter
suggested that the definition of minority
include multi-racial individuals. One
commenter suggested that the definition
of minority-owned include institutions
owned by women. Three comments
suggested that the FDIC expand the
program to include legal residents of the
United States as opposed to only
citizens of the United States. The FDIC
received a number of comments relating
to whether an institution should
continue to be considered minority-
owned if it is merged with an institution
that is publicly traded and/or widely
held if the board of directors, account
holders and community that it serves
are predominantly minority. One
commenter vehemently disagreed with
expanding the definition to include
publicly traded and widely held
institutions under these circumstances,
stating that the expanded definition
would contradict the language and
intent of Section 308 of FIRREA. Two
commenters recommended expanding
the definition of minority-owned to
include any institution if a majority of
its board of directors, account holders,
and the community that it serves is
predominantly minority. Another
commenter suggested changing the
requirement to allow publicly traded
and widely held institutions to be
considered minority-owned if any one
of the three specified criteria were met.
Two commenters suggested the
definition of minority-owned be based
on ownership or control by minority
individuals. Another commenter
preferred eliminating the ownership
requirement entirely and basing the
definition on the customers and
community served. Several commenters
suggested that the FDIC be more
proactive and expeditious in identifying
and notifying qualified bidders in the
event a minority-owned institution
failed. The agency also received several
comments seeking further clarification
as to the level of technical assistance the
FDIC would provide. One commenter
suggested that the FDIC consider
hosting an annual conference designed
to promote and encourage the creation
of new minority-owned depository
institutions. One commenter suggested
that the return visit after examinations
to provide technical assistance be
available upon request rather than
routinely offered to the institutions. One
commenter recommended that the
FDIC’s national coordinator evaluate the
training needs of individual minority-
owned institutions. Two commenters
recommended that the FDIC form an
advisory board of minority-owned
institution bankers to provide additional
guidance in administering the program.
Two commenters suggested that the
content of the FDIC’s Webpage contain
information determined relevant by
conducting a survey of all the minority-
owned depository institutions and
contain information regarding the
FDIC’s rules and regulations. Finally,
three commenters suggested that the
FDIC reduce the reporting burden on
VerDate 11<MAY>2000 18:24 Apr 15, 2002 Jkt 197001 PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 E:\FR\FM\16APN1.SGM pfrm02 PsN: 16APN1
from the Commission’s copy contractor,
Qualex International (202) 863–2893.
Oppositions to these petition must be
filed by May 1, 2002. See Section
1.4(b)(1) of the Commission’s rules (47
CFR 1.4(b)(1)). Replies to an opposition
must be filed within 10 days after the
time for filing oppositions has expired.
Subject: Implementation of the Pay
Telephone Reclassification and
Compensation Provisions of the
Telecommunications Act of 1996 (CC
Docket No. 96–128).
Number of Petitions Filed: 5.
William F. Caton,
Acting Secretary.
[FR Doc. 02–9225 Filed 4–15–02; 8:45 am]
BILLING CODE 6712 –01–M
FEDERAL DEPOSIT INSURANCE
CORPORATION
Policy Statement Regarding Minority
Depository Institutions
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final policy statement.
SUMMARY: The FDIC is adopting a final
Policy Statement Regarding Minority
Depository Institutions. The final Policy
Statement recognizes the importance of
minority depository institutions and the
unique challenges they often face in
serving their communities. This FDIC
Policy Statement complies with the
requirements of Section 308 of the
Financial Institutions Reform, Recovery
and Enforcement Act of 1989
(‘‘FIRREA’’) by implementing an
outreach program designed to preserve
and encourage minority ownership of
financial institutions. Based on
comments received by the agency, the
final Policy Statement amends the
proposed definition of minority-owned
institution, clarifies the types of
technical assistance available from the
FDIC, improves interagency
coordination and enhances
communications between the FDIC and
minority institutions.
EFFECTIVE DATE: April 16, 2002.
FOR FURTHER INFORMATION CONTACT:
Brett A. McCallister, Risk Management
and Applications Section, Division of
Supervision (202) 898–3803 or Grovetta
N. Gardineer, Counsel, Legal Division,
(202) 898–3728, Federal Deposit
Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
On April 3, 1990, the Board of
Directors of the FDIC adopted a Policy
Statement on Encouragement and
Preservation of Minority Ownership of
Financial Institutions. The original
Policy Statement provided guidance to
the industry regarding the agency’s
efforts in achieving the goals of Section
308 of FIRREA. On December 20, 2001,
the FDIC Board of Directors approved a
new proposed Policy Statement
Regarding Minority-Owned Depository
Institutions for public comment. The
revised Policy Statement attempts to
provide a more structured framework
that sets forth initiatives of the FDIC to
promote and preserve the minority
ownership of depository institutions,
and to provide technical assistance,
training and educational programs to
minority depository institutions by
working with those institutions, their
trade associations and the other Federal
financial regulatory agencies. The
proposed Policy Statement was
published on January 2, 2002, and the
comment period ended on March 4,
2002.
II. Comments Received
The FDIC received eleven comment
letters in response to the proposed
Policy Statement that raised 23 issues.
The comments came from seven insured
financial institutions and four trade
associations. All of the commenters
expressed support for the FDIC’s
proposed Policy Statement; however,
each of the commenters recommended
specific changes to the final Policy
Statement. These comments and the
changes and additions made to the final
Policy Statement are discussed in detail
below. It should be noted that several
commenters raised issues that are not
related to the proposed Policy Statement
(i.e., CRA credit for assistance to
minority- and women-owned financial
institutions). These issues are being
addressed in other projects of the FDIC
and the other Federal financial
institution regulators. Since the issues
raised by those comments relate to other
initiatives, they are not specifically
discussed herein.
Four commenters suggested that the
FDIC develop a definition of ‘‘minority-
owned institution’’ consistent with that
used by other Federal agencies. Two
commenters suggested that the FDIC
change the term Black American to
African American. Another commenter
suggested that the definition of minority
include multi-racial individuals. One
commenter suggested that the definition
of minority-owned include institutions
owned by women. Three comments
suggested that the FDIC expand the
program to include legal residents of the
United States as opposed to only
citizens of the United States. The FDIC
received a number of comments relating
to whether an institution should
continue to be considered minority-
owned if it is merged with an institution
that is publicly traded and/or widely
held if the board of directors, account
holders and community that it serves
are predominantly minority. One
commenter vehemently disagreed with
expanding the definition to include
publicly traded and widely held
institutions under these circumstances,
stating that the expanded definition
would contradict the language and
intent of Section 308 of FIRREA. Two
commenters recommended expanding
the definition of minority-owned to
include any institution if a majority of
its board of directors, account holders,
and the community that it serves is
predominantly minority. Another
commenter suggested changing the
requirement to allow publicly traded
and widely held institutions to be
considered minority-owned if any one
of the three specified criteria were met.
Two commenters suggested the
definition of minority-owned be based
on ownership or control by minority
individuals. Another commenter
preferred eliminating the ownership
requirement entirely and basing the
definition on the customers and
community served. Several commenters
suggested that the FDIC be more
proactive and expeditious in identifying
and notifying qualified bidders in the
event a minority-owned institution
failed. The agency also received several
comments seeking further clarification
as to the level of technical assistance the
FDIC would provide. One commenter
suggested that the FDIC consider
hosting an annual conference designed
to promote and encourage the creation
of new minority-owned depository
institutions. One commenter suggested
that the return visit after examinations
to provide technical assistance be
available upon request rather than
routinely offered to the institutions. One
commenter recommended that the
FDIC’s national coordinator evaluate the
training needs of individual minority-
owned institutions. Two commenters
recommended that the FDIC form an
advisory board of minority-owned
institution bankers to provide additional
guidance in administering the program.
Two commenters suggested that the
content of the FDIC’s Webpage contain
information determined relevant by
conducting a survey of all the minority-
owned depository institutions and
contain information regarding the
FDIC’s rules and regulations. Finally,
three commenters suggested that the
FDIC reduce the reporting burden on
VerDate 11<MAY>2000 18:24 Apr 15, 2002 Jkt 197001 PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 E:\FR\FM\16APN1.SGM pfrm02 PsN: 16APN1
18619Federal Register / Vol. 67, No. 73 / Tuesday, April 16, 2002 / Notices
minority institutions as a result of the
program. The FDIC has responded to
these comments by defining the term
minority depository institution,
expanding the definition for purposes of
this policy statement to include those
institutions where its board of directors
and community that it serves are
predominantly minority, and providing
a better explanation of technical
assistance under the FDIC’s outreach
program. More specific discussions of
the FDIC’s particular responses to the
comments are found in the section-by-
section analysis.
III. Final Policy Statement—Section-by-
Section Analysis
Title
The FDIC is changing the title of the
statement to Policy Statement Regarding
Minority Depository Institutions to
reflect the change in the definition of
minority depository institution for
purposes of this policy statement.
Definition
The FDIC made a few technical
amendments to this section of the Policy
Statement. We reviewed the comments
relating to a change in the definition of
minority for purposes of this Policy
Statement. The FDIC used the definition
of minority as that term is defined in
section 308 of the Financial Institutions
Reform, Recovery, and Enforcement Act
(‘‘FIRREA’’). While we understand and
appreciate the sensitivity surrounding
the suggested changes to the definition
of minority, the FDIC has no authority
to change the statutory language, and
therefore the agency is using the exact
definition provided in the law.
Accordingly, the definition of minority
is unchanged in the Final Policy
Statement.
Three commenters suggested that the
FDIC expand its program under the
Policy Statement to include legal
residents of the United States. Section
308 of FIRREA does not address the
citizenship issue. Permanent legal
residents are legally accorded the
privilege of residing permanently in the
United States. The FDIC’s Minority
Depository Institutions Program is
centered on outreach, and institutions
do not receive any direct economic
benefit from participation. Therefore,
the Policy Statement has been changed
to include ownership by minority
individuals that are permanent legal
residents of the United States. Several
commenters discussed the suggested
criteria relating to board membership,
account holders and the community
served being predominantly minority to
determine whether mutual institutions,
publicly traded and widely held
institutions should be considered
minority-owned institutions. Based on
the comments received, the FDIC is
defining the term ‘‘minority depository
institution’’ as any Federally insured
depository institution where 51 percent
or more of the voting stock is owned by
minority individuals. In addition, for
purposes of this Policy Statement, the
FDIC is including in the definition of
minority depository institution,
institutions are not minority-owned but
a majority of its Board of Directors and
the community that it serves are
predominantly minority. The FDIC is
not including for consideration a
criterion that the majority of account
holders of an institution be
predominantly minority. The FDIC does
not intend to suggest that institutions
should collect information regarding the
race and national origin of their account
holders in order to be considered
minority depository institutions.
As a result, the term minority
depository institution is being used
throughout the policy statement in place
of the term minority-owned institution.
Identification of Minority Depository
Institutions
There are no changes to this section
of the Policy Statement.
Organizational Structure
A technical change to this section that
eliminates the requirement for the
national coordinator to consult with
officials from the FDIC’s Division of
Compliance and Consumer Affairs
merely reflects an internal change in the
FDIC’s organizational structure. The
FDIC is further clarifying the scope of its
program under the Policy Statement by
changing the final Policy Statement to
reflect that the agency’s regional
coordinators will contact minority
depository institutions directly
supervised by the FDIC on an annual
basis.
Technical Assistance
The proposed Policy Statement
clarified the meaning of technical
assistance and provided examples as to
the types of assistance that FDIC
employees could provide to minority
depository institutions. While the Policy
Statement cannot address every possible
action by which the FDIC could assist
an institution, the final Policy Statement
further clarifies that FDIC employees
can advise on risk management
procedures, accounting practices,
recruiting techniques, etc., but will not
actually perform tasks expected of bank
personnel. The final Policy Statement
also emphasizes that the return visits
are optional, and to be proactive, we feel
the return visits should be offered rather
than available upon request.
Training and Educational Programs
One of the goals specified in Section
308 of FIRREA is ‘‘promoting and
encouraging creation of new minority
depository institutions.’’ Therefore, the
final Policy Statement has been
amended to state that the national and
regional coordinators will work with
trade associations and other
organizations to attempt to identify
groups that may be interested in
establishing new minority depository
institutions. FDIC representatives will
be available to address such groups to
discuss the application process, the
requirements of becoming FDIC insured,
and the various programs geared toward
minority depository institutions. In
response to those comments regarding
the FDIC’s training and educational
programs, the final Policy Statement
emphasizes that we will work with
trade associations representing minority
depository institutions and other
regulatory agencies to periodically
assess the need for, and provide for,
training and educational opportunities.
The FDIC will partner with the trade
associations to offer these types of
programs during their annual
conferences and other regional
meetings. To address the specific needs
of each institution, the agency will offer
to have staff members return after
examinations of minority depository
institutions directly supervised by the
FDIC to provide technical assistance.
Failing Institutions
Several commenters suggested the
FDIC be proactive and expeditious in
identifying qualified interested bidders
in the case of a failing minority-owned
institution. The process of notifying
qualified minority depository
institutions is handled by the FDIC’s
Division of Resolutions and
Receiverships (‘‘DRR’’). This Division
already contacts all qualified minority-
owned institutions nationwide in the
case of a failing minority-owned
institution. The process is handled as
quickly as possible considering that the
FDIC must be relatively certain that an
institution will actually fail before
soliciting the interest of other
institutions. A technical amendment to
this section is being made to ensure that
the FDIC consults with all trade
associations that represent minority
depository institutions in maintaining a
list of qualified and interested bidders.
VerDate Mar<13>2002 13:36 Apr 15, 2002 Jkt 197001 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 E:\FR\FM\16APN1.SGM pfrm03 PsN: 16APN1
minority institutions as a result of the
program. The FDIC has responded to
these comments by defining the term
minority depository institution,
expanding the definition for purposes of
this policy statement to include those
institutions where its board of directors
and community that it serves are
predominantly minority, and providing
a better explanation of technical
assistance under the FDIC’s outreach
program. More specific discussions of
the FDIC’s particular responses to the
comments are found in the section-by-
section analysis.
III. Final Policy Statement—Section-by-
Section Analysis
Title
The FDIC is changing the title of the
statement to Policy Statement Regarding
Minority Depository Institutions to
reflect the change in the definition of
minority depository institution for
purposes of this policy statement.
Definition
The FDIC made a few technical
amendments to this section of the Policy
Statement. We reviewed the comments
relating to a change in the definition of
minority for purposes of this Policy
Statement. The FDIC used the definition
of minority as that term is defined in
section 308 of the Financial Institutions
Reform, Recovery, and Enforcement Act
(‘‘FIRREA’’). While we understand and
appreciate the sensitivity surrounding
the suggested changes to the definition
of minority, the FDIC has no authority
to change the statutory language, and
therefore the agency is using the exact
definition provided in the law.
Accordingly, the definition of minority
is unchanged in the Final Policy
Statement.
Three commenters suggested that the
FDIC expand its program under the
Policy Statement to include legal
residents of the United States. Section
308 of FIRREA does not address the
citizenship issue. Permanent legal
residents are legally accorded the
privilege of residing permanently in the
United States. The FDIC’s Minority
Depository Institutions Program is
centered on outreach, and institutions
do not receive any direct economic
benefit from participation. Therefore,
the Policy Statement has been changed
to include ownership by minority
individuals that are permanent legal
residents of the United States. Several
commenters discussed the suggested
criteria relating to board membership,
account holders and the community
served being predominantly minority to
determine whether mutual institutions,
publicly traded and widely held
institutions should be considered
minority-owned institutions. Based on
the comments received, the FDIC is
defining the term ‘‘minority depository
institution’’ as any Federally insured
depository institution where 51 percent
or more of the voting stock is owned by
minority individuals. In addition, for
purposes of this Policy Statement, the
FDIC is including in the definition of
minority depository institution,
institutions are not minority-owned but
a majority of its Board of Directors and
the community that it serves are
predominantly minority. The FDIC is
not including for consideration a
criterion that the majority of account
holders of an institution be
predominantly minority. The FDIC does
not intend to suggest that institutions
should collect information regarding the
race and national origin of their account
holders in order to be considered
minority depository institutions.
As a result, the term minority
depository institution is being used
throughout the policy statement in place
of the term minority-owned institution.
Identification of Minority Depository
Institutions
There are no changes to this section
of the Policy Statement.
Organizational Structure
A technical change to this section that
eliminates the requirement for the
national coordinator to consult with
officials from the FDIC’s Division of
Compliance and Consumer Affairs
merely reflects an internal change in the
FDIC’s organizational structure. The
FDIC is further clarifying the scope of its
program under the Policy Statement by
changing the final Policy Statement to
reflect that the agency’s regional
coordinators will contact minority
depository institutions directly
supervised by the FDIC on an annual
basis.
Technical Assistance
The proposed Policy Statement
clarified the meaning of technical
assistance and provided examples as to
the types of assistance that FDIC
employees could provide to minority
depository institutions. While the Policy
Statement cannot address every possible
action by which the FDIC could assist
an institution, the final Policy Statement
further clarifies that FDIC employees
can advise on risk management
procedures, accounting practices,
recruiting techniques, etc., but will not
actually perform tasks expected of bank
personnel. The final Policy Statement
also emphasizes that the return visits
are optional, and to be proactive, we feel
the return visits should be offered rather
than available upon request.
Training and Educational Programs
One of the goals specified in Section
308 of FIRREA is ‘‘promoting and
encouraging creation of new minority
depository institutions.’’ Therefore, the
final Policy Statement has been
amended to state that the national and
regional coordinators will work with
trade associations and other
organizations to attempt to identify
groups that may be interested in
establishing new minority depository
institutions. FDIC representatives will
be available to address such groups to
discuss the application process, the
requirements of becoming FDIC insured,
and the various programs geared toward
minority depository institutions. In
response to those comments regarding
the FDIC’s training and educational
programs, the final Policy Statement
emphasizes that we will work with
trade associations representing minority
depository institutions and other
regulatory agencies to periodically
assess the need for, and provide for,
training and educational opportunities.
The FDIC will partner with the trade
associations to offer these types of
programs during their annual
conferences and other regional
meetings. To address the specific needs
of each institution, the agency will offer
to have staff members return after
examinations of minority depository
institutions directly supervised by the
FDIC to provide technical assistance.
Failing Institutions
Several commenters suggested the
FDIC be proactive and expeditious in
identifying qualified interested bidders
in the case of a failing minority-owned
institution. The process of notifying
qualified minority depository
institutions is handled by the FDIC’s
Division of Resolutions and
Receiverships (‘‘DRR’’). This Division
already contacts all qualified minority-
owned institutions nationwide in the
case of a failing minority-owned
institution. The process is handled as
quickly as possible considering that the
FDIC must be relatively certain that an
institution will actually fail before
soliciting the interest of other
institutions. A technical amendment to
this section is being made to ensure that
the FDIC consults with all trade
associations that represent minority
depository institutions in maintaining a
list of qualified and interested bidders.
VerDate Mar<13>2002 13:36 Apr 15, 2002 Jkt 197001 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 E:\FR\FM\16APN1.SGM pfrm03 PsN: 16APN1