Unknown. Final rule

6,591 words·~30 min read·/register/2022/01/13/2022-00503·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2022-01-13.xml --- 87 9 Thursday, January 13, 2022 Contents Agency Agency for International Development PROPOSED RULES Acquisition Regulation: Revised and Expanded Fringe Benefits for United States Personal Services Contracts with Individuals, 2104-2107 2021-27944 Agriculture Agriculture Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 2126 2022-00484 Antitrust Division Antitrust Division NOTICES Changes under the National Cooperative Research and Production Act:

Advanced Fluids for Electrified Vehicles, 2183-2184 2022-00596 Advanced Media Workflow Association, Inc., 2181 2022-00604 DVD Copy Control Association, 2183 2022-00597 Electrified Vehicle and Energy Storage Evaluation, 2182 2022-00605 IMS Global Learning Consortium, Inc., 2180-2181 2022-00610 Medical Technology Enterprise Consortium, 2178-2180 2022-00586 MLCommons Association, 2183 2022-00608 ODVA, Inc., 2177-2178 2022-00613 Open Source Imaging Consortium, Inc., 2181 2022-00580 PDF Association, Inc., 2183 2022-00578 Subcutaneous Drug Development and Delivery Consortium, Inc., 2182 2022-00591 The Integrated Photonics Institute for Manufacturing Innovation Operating under the Name of The American Institute for Manufacturing Integrated Photonics, 2178 2022-00581 The Open Group, LLC, 2181-2182 2022-00590 Consumer Financial Protection Bureau of Consumer Financial Protection NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 2144-2145 2022-00583 Centers Disease Centers for Disease Control and Prevention NOTICES Meetings: Advisory Committee to the Director, 2158-2159 2022-00565 Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model; Correction, 2058-2065 2022-00573 Updates to Lists Related to Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Conditions of Payment, 2051-2058 2022-00572 Children Children and Families Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Head Start Program Information Report, 2159 2022-00502 Civil Rights Civil Rights Commission NOTICES Meetings: South Carolina Advisory Committee, 2126-2127 2022-00493 Coast Guard Coast Guard RULES Safety Zones: Delaware River Dredging, Marcus Hook, PA, 2049-2051 2022-00560 Commerce Commerce Department See International Trade Administration See National Institute of Standards and Technology See National Oceanic and Atmospheric Administration Commodity Futures Commodity Futures Trading Commission RULES Annual Adjustment of Civil Monetary Penalties to Reflect Inflation—2022, 2033-2035 2022-00595 Corporation Corporation for National and Community Service NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Application Package for AmeriCorps Diversity Questionnaire Form, 2145-2146 2022-00474 Education Department Education Department NOTICES Effective Interventions to Improve Middle School Science Achievement and Mathematics Achievement: Grades 3 through 5 for Students with Disabilities, 2146-2148 2022-00627 Employment and Training Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Benefit Rights and Experience Report, 2185-2186 2022-00511 Energy Department Energy Department See Federal Energy Regulatory Commission Environmental Protection Environmental Protection Agency PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Kentucky; Jefferson County Emissions Statements Requirements for the 2015 8-Hour Ozone Standard Nonattainment Area, 2101-2104 2022-00027 Tennessee; Finding of Failure to Attain the 2010 Sulfur Dioxide Standard;

Sullivan County Nonattainment Area, 2095-2101 2022-00028 NOTICES Privacy Act; Systems of Records, 2152-2155 2022-00628 Farm Credit System Insurance Farm Credit System Insurance Corporation RULES Civil Monetary Penalty Inflation Adjustment, 2031-2032 2022-00577 Federal Aviation Federal Aviation Administration RULES Airspace Designations and Reporting Points: Covington, GA, 2032-2033 2022-00071 PROPOSED RULES Airspace Designations and Reporting Points: Bethel, AK, 2088-2090 2022-00005 Iuka, MS, 2090-2091 2022-00076 St.

Mary's, AK, 2091-2093 2022-00004 Airworthiness Directives: Airbus Helicopters, 2085-2088 2022-00127 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Financial Responsibility for Licensed Launch Activities, 2207-2208 2022-00606 Federal Bureau Federal Bureau of Investigation NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 2184 2022-00563 Federal Deposit Federal Deposit Insurance Corporation NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 2155-2157 2022-00574 Federal Energy Federal Energy Regulatory Commission RULES Civil Monetary Penalty Inflation Adjustment, 2036-2037 2022-00616 Managing Transmission Line Ratings, 2244-2307 2021-27735 NOTICES Combined Filings, 2150-2152 2022-00499 2022-00614 2022-00619 Effectiveness of Exempt Wholesale Generator Status: Route 66 Solar Energy Center, LLC, Cypress Creek Fund 7 Tenant, LLC, Cypress Creek Fund 6 Tenant, LLC, et al., 2148 2022-00618 Environmental Assessments;

Availability, etc.: Transcontinental Gas Pipe Line Company, LLC; Happytown Abandonment Project, 2148-2149 2022-00569 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Kennebec Lumber Co., 2149-2150 2022-00617 Reliability Technical Conference, 2150-2151 2022-00615 Technical Conference: Participation of Distributed Energy Resource Aggregations in Markets Operated by Regional Transmission Organizations and Independent System Operators, 2152 2022-00570 Federal Financial Federal Financial Institutions Examination Council PROPOSED RULES Appraisal Subcommittee;

Appraiser Regulation; Temporary Waiver Requests, 2079-2085 2022-00342 Federal Reserve Federal Reserve System RULES Federal Reserve Bank Capital Stock, 2027-2031 2022-00503 NOTICES Change in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 2158 2022-00593 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 2157-2158 2022-00447 Fish Fish and Wildlife Service PROPOSED RULES Endangered and Threatened Species: Listing of Graham's Beardtongue (Penstemon grahamii) and White River Beardtongue (Penstemon scariosus var. albifluvis) and Designation of Critical Habitat;

Withdrawal, 2107-2125 2022-00485 NOTICES Permits, Applications, Issuances, etc.: Endangered and Threatened Species, 2173-2174 2022-00622 Endangered and Threatened Species; Proposed Low-Effect Habitat Conservation Plan and Associated Documents; County of San Diego, CA, 2174-2176 2022-00623 Food and Drug Food and Drug Administration RULES French Dressing: Revocation of a Standard of Identity, 2038-2042 2022-00494 Procedures for the Announcement of Approvals and Denials of Premarket Approval Applications and Humanitarian Device Exemption Applications, 2042-2045 2022-00501 Revocation of the Regulations for Human Tissue Intended for Transplantation and Human Dura Mater, 2045-2049 2022-00492 PROPOSED RULES Scientific Data and Information Related to the Residue of Carcinogenic Concern for the New Animal Drug Carbadox, 2093-2095 2022-00475 NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Manufactured Food Regulatory Program Standards, 2162-2163 2022-00559 Registration of Food Facilities, 2159-2162 2022-00561 Emergency Use Authorization: In Vitro Diagnostic Devices for Detection and/or Diagnosis of COVID-19, 2163-2167 2022-00521 Foreign Assets Foreign Assets Control Office NOTICES Sanctions Actions, 2239-2240 2022-00576 Health and Human Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Children and Families Administration See Food and Drug Administration See National Institutes of Health RULES Federal Acquisition Regulation:

Buy Indian Act; Procedures for Contracting, 2067-2078 2021-28156 Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model; Correction, 2058-2065 2022-00573 Homeland Homeland Security Department See Coast Guard See U.S. Customs and Border Protection Interior Interior Department See Fish and Wildlife Service See National Indian Gaming Commission See Reclamation Bureau Internal Revenue Internal Revenue Service NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 2240 2022-00497 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Utility Scale Wind Towers from Indonesia, 2137-2138 2022-00633 Certain Approved 2022 Trade Missions, 2130-2137 2022-00220 Sales at Less Than Fair Value; Determinations, Investigations, etc.: Raw Honey from the Socialist Republic of Vietnam, 2127-2130 2022-00579 International Trade Com International Trade Commission NOTICES Investigations;

Determinations, Modifications, and Rulings, etc.: Certain Knitted Footwear, 2176-2177 2022-00600 Justice Department Justice Department See Antitrust Division See Federal Bureau of Investigation NOTICES Consent Decree: Clean Air Act, 2184-2185 2022-00624 Labor Department Labor Department See Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Occupational Safety and Health Onsite Consultation Agreements, 2186 2022-00515 Maritime Maritime Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Determination of Fair and Reasonable Rates for Carriage of Agriculture Cargoes on U.S. Commercial Vessels, 2228 2022-00555 Coastwise Endorsement Eligibility Determination for a Foreign-Built Vessel: Alokoy (Motor), 2226-2227 2022-00537 Althea (Sail), 2233-2234 2022-00549 Ami (Motor), 2225-2226 2022-00536 Anndrianna (Motor), 2215-2216 2022-00547 Bear (Motor), 2213-2214 2022-00553 Between the Sheets (Sail), 2219-2220 2022-00539 Beyond (Sail), 2212-2213 2022-00540 Chil (Motor), 2223-2224 2022-00550 Chillin' (Motor), 2227-2228 2022-00532 Delta Tango (Sail), 2230-2231 2022-00556 Hoya Saxa (Motor), 2217-2218 2022-00551 Hunky Dory (Motor), 2211-2212 2022-00531 Imagine (Sail), 2231-2232 2022-00557 Island Girl (Motor), 2222-2223 2022-00535 Kalei Kai (Sail), 2208-2209 2022-00545 Kismet (Motor), 2232-2233 2022-00543 Konklma (Motor), 2210-2211 2022-00541 Lil' Toot (Motor), 2221-2222 2022-00534 Lulu Queen (Sail), 2220-2221 2022-00533 Maria Elena (Motor), 2224-2225 2022-00544 Mirracle (Motor), 2216-2217 2022-00542 Padrino (Motor), 2234-2235 2022-00529 Penja (Motor), 2214-2215 2022-00546 Pergola (Motor), 2218-2219 2022-00554 Pink Bateau (Motor), 2229-2230 2022-00552 Wave Walker (Motor), 2209-2210 2022-00548 Zephyr (Motor), 2228-2229 2022-00530 National Endowment for the Arts National Endowment for the Arts RULES Civil Monetary Penalty Inflation Adjustment, 2065-2067 2022-00599 National Foundation National Foundation on the Arts and the Humanities See National Endowment for the Arts National Highway National Highway Traffic Safety Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery, 2235-2237 2022-00528 National Indian National Indian Gaming Commission PROPOSED RULES Facility License; Correction, 2095 2022-00625 National Institute National Institute of Standards and Technology NOTICES Requests for Nominations: Internet of Things Advisory Board, 2138-2139 2022-00419 National Institute National Institutes of Health NOTICES Meetings:

Center for Scientific Review, 2167-2168, 2171 2022-00525 2022-00526 National Institute of Allergy and Infectious Diseases, 2168-2169 2022-00527 National Institute of Diabetes and Digestive and Kidney Diseases, 2169-2170 2022-00477 2022-00481 National Institute of General Medical Sciences, 2170, 2172 2022-00482 2022-00523 National Institute of Mental Health, 2169-2170 2022-00524 National Institute on Aging, 2172 2022-00480 National Institute on Drug Abuse, 2169-2170 2022-00522 2022-00609 National Oceanic National Oceanic and Atmospheric Administration NOTICES Meetings:

New England Fishery Management Council, 2142-2143 2022-00611 North Pacific Fishery Management Council, 2143-2144 2022-00612 Taking or Importing of Marine Mammals: Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico, 2139-2142 2022-00460 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Hazardous Materials, 2238-2239 2022-00575 Hazardous Materials; Special Permits, 2237-2238 2022-00449 Postal Regulatory Postal Regulatory Commission NOTICES Mail Classification Schedule, 2186-2187 2022-00626 Railroad Retirement Railroad Retirement Board NOTICES Civil Monetary Penalty Inflation Adjustment, 2187 2022-00506 Reclamation Reclamation Bureau NOTICES Meetings:

Glen Canyon Dam Adaptive Management Work Group, 2176 2022-00507 Securities Securities and Exchange Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 2190-2191, 2197-2199 2022-00582 2022-00587 2022-00589 Application: John Hancock Exchange-Traded Fund Trust, et al., 2187-2189 2022-00598 Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc., 2193-2197 2022-00490 MEMX, LLC, 2191-2193 2022-00489 New York Stock Exchange, LLC, 2189-2190 2022-00491 2022-00500 Selective Selective Service System NOTICES Reasonable Accommodation, Religious Exception, and Medical Exception Health Records, 2199-2202 2022-00621 Small Business Small Business Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 2202-2203 2022-00517 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Evaluation, Research, and Evidence-Building, 2204-2205 2022-00564 Disaster Declaration: Arkansas, 2205-2206 2022-00510 Colorado, 2206 2022-00514 Kentucky, 2202-2204 2022-00512 2022-00516 2022-00519 2022-00520 Washington, 2203-2204 2022-00518 Meetings: Federal Advisory Committee, 2203 2022-00508 State Department State Department NOTICES Culturally Significant Objects Imported for Exhibition:

Traitor, Survivor, Icon: The Legacy of La Malinche, 2206 2022-00495 Meetings: Preparation for International Maritime Organization HTW 8 Meeting, 2206-2207 2022-00601 Transportation Department Transportation Department See Federal Aviation Administration See Maritime Administration See National Highway Traffic Safety Administration See Pipeline and Hazardous Materials Safety Administration Treasury Treasury Department See Foreign Assets Control Office See Internal Revenue Service NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Generic Clearance for Meaningful Access Information Collections, 2241 2022-00602 Increasing Equity in Procurement Spending Barrier Assessment, 2240-2241 2022-00473 Customs U.S. Customs and Border Protection NOTICES Argentina Beef Imports Approved for the Electronic Certification System, 2172-2173 2022-00462 U.S. China U.S.-China Economic and Security Review Commission NOTICES Hearing, 2241-2242 2022-00562 Separate Parts In This Issue Part II Energy Department, Federal Energy Regulatory Commission, 2244-2307 2021-27735 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription. 87 9 Thursday, January 13, 2022 Rules and Regulations FEDERAL RESERVE SYSTEM 12 CFR Part 209 [Regulation I; Docket No. R-1745] RIN 7100-AG13 Federal Reserve Bank Capital Stock AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule. SUMMARY: The Board of Governors (Board) is publishing a final rule that amends Regulation I to automate non-merger-related adjustments to member banks' subscriptions to Federal Reserve Bank (Reserve Bank) capital stock. The final rule also makes certain technical amendments to Regulation I and conforming revisions to the FR 2056 reporting form. DATES: Effective February 14, 2022. FOR FURTHER INFORMATION CONTACT: Evan Winerman, Senior Counsel (202-872-7578), Legal Division; or Kimberly Zaikov, Manager (202-452-2256), Reserve Bank Operations and Payments Systems Division.

You may also contact us by email via *https://www.federalreserve.gov/apps/ContactUs/feedback.aspx,* choose Staff Group: Regulations. SUPPLEMENTARY INFORMATION: I. Background Regulation I governs the issuance and cancellation of capital stock by the Reserve Banks. Under section 5 of the Federal Reserve Act and Regulation I, a member bank (other than a mutual savings bank) must subscribe to capital stock of the Reserve Bank of its district in an amount equal to 6 percent of the member bank's capital and surplus. 1 Similarly, under section 9 of the Federal Reserve Act and Regulation I, a member bank that is a mutual savings bank must subscribe to capital stock of the Reserve Bank of its district in an amount equal to six-tenths of 1 percent of its total deposit liabilities. 2 The member bank must pay for one-half of this subscription on the date that the Reserve Bank approves its application for capital stock, while the remaining half of the subscription shall be subject to call by the Board. 3 1 12 U.S.C. 287 and 12 CFR 209.4(a). 2 12 U.S.C. 333 and 12 CFR 209.4(b).

The Federal Reserve Act and Regulation I allow a mutual savings bank to maintain a temporary “deposit” with a Reserve Bank in lieu of obtaining capital stock if the mutual savings bank is not permitted to purchase Reserve Bank stock under state law. However, if the relevant state law is not amended at the first session of the legislature after the bank is admitted to authorize the purchase of Reserve Bank stock, or if the bank fails to purchase the stock within six months of such amendment, the Reserve Bank will terminate the membership of the mutual savings bank. 12 U.S.C. 333; 12 CFR 209.2(a) and 208.3(a)(1). 3 12 U.S.C. 287 and 12 CFR 209.4(c)(2).

Under section 7 of the Federal Reserve Act and Regulation I, smaller member banks (currently those with $11.229 billion or less in total consolidated assets) receive a 6 percent annual dividend on their Reserve Bank stock. 4 Other member banks receive a dividend at the lesser of

(i)the annual rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend and

(ii)an annual rate of 6 percent. 5 4 12 U.S.C. 289 and 12 CFR 209.4(e). Regulation I generally defines total consolidated assets by reference to the total assets reported on a member bank's most recent December 31 Call Report. 12 CFR 209.1(d)(3). 5 *Id.* A. Non-Merger-Related Adjustments to Reserve Bank Stock Subscriptions Regulation I requires that a member bank apply to adjust its stock subscription “promptly after filing” its December 31 report of condition (Call Report). 6 Additionally, a member bank must apply to adjust its stock subscription promptly after filing any other quarterly Call Report showing that the member bank has experienced an increase or decrease to its capital and surplus (or its total deposit liabilities for a mutual savings bank) requiring a change in excess of the lesser of 15 percent or 100 shares of Reserve Bank capital stock. 7 Member banks use the FR 2056 reporting form to apply for adjustments to their stock subscriptions. 8 6 12 CFR 209.4(a) and (b). 7 *Id.* 8 *See* Federal Reserve, Reporting Forms at *https://www.federalreserve.gov/reportforms/forms/FR_205620200115_f.pdf.* B. Merger-Related Adjustments to Reserve Bank Stock Subscriptions Regulation I provides that, when two member banks merge or consolidate, the appropriate Reserve Banks shall cancel shares of the nonsurviving bank and credit shares to the surviving bank. 9 In order to effectuate this requirement, the Reserve Banks direct surviving member banks to apply to adjust their stock subscriptions before they merge or consolidate with other member banks. Similarly, the Reserve Banks direct nonsurviving member banks to apply to cancel their stock subscriptions before they merge or consolidate with other member banks. 10 9 12 CFR 209.3(d)(1) and (2). If the surviving or nonsurviving bank is a mutual savings bank that is not permitted to purchase Reserve Bank stock under state law, Regulation I instead directs the Reserve Bank to transfer or increase the member bank's deposit obligation. *Id.* 10 Nonsurviving member banks use the FR 2086a reporting form to apply to cancel their stock subscriptions. *https://www.federalreserve.gov/reportforms/forms/FR_2086a20200115_f.pdf.* Regulation I does not expressly require that a surviving member bank apply to adjust its stock subscription before it merges or consolidates with a nonmember bank. In practice, however, the Reserve Banks request that surviving member banks apply to adjust their stock subscriptions before they merge or consolidate with nonmember banks. 11 This practice allows the Reserve Banks to make timely changes to the stock subscriptions of surviving member banks that merge or consolidate with nonmember banks. 11 The surviving bank applies to adjust its stock subscription based on its anticipated post-merger capital and surplus or, in the case of a member bank that is a mutual savings bank, its anticipated post-merger total deposit liabilities. When a surviving member bank applies to adjust its stock subscription, it must state whether its total consolidated assets exceed $11.229 billion. 12 This requirement ensures that a Reserve Bank receives timely and accurate notice of whether a merger has caused a surviving member bank's total consolidated assets to exceed $11.229 billion, which (as noted above) determines the dividend rate to which the member bank is entitled. 12 12 CFR 209.1(d)(3) and 209.3(d)(3). II. Description of the Final Rule On April 13, 2021, the Board published a proposal to automate non-merger-related adjustments to member banks' subscriptions to Reserve Bank capital stock. 13 The Board also proposed to clarify that a surviving member bank must apply to adjust its stock subscription before merging or consolidating with another bank. Finally, the Board proposed two technical amendments to Regulation I. 13 86 FR 19152 (April 13, 2021). The Board received no responsive comments on the proposal. The Board is finalizing the proposed amendments with certain technical clarifications. A. Automation of Non-Merger-Related Stock Adjustments As noted above, Regulation I currently requires that a member bank apply to adjust its stock subscription at least annually and sometimes quarterly. A member bank determines its required stock subscription based on its capital and surplus (or total deposit liabilities for a mutual savings bank) as reported in the member bank's most recent Call Report. The Reserve Banks have developed software that automatically pulls the information needed to calculate member banks' required stock subscriptions from Call Reports. The Board is therefore amending section 209.4 to automate the stock adjustment process. Specifically, the Reserve Banks will adjust a member bank's stock subscription each time the member bank files a Call Report. 14 This automated process will eliminate the need for member banks to file applications to adjust their stock subscriptions (except in the context of mergers, as described *infra* ). 14 Similarly, the Board is automating the process for adjusting the deposit obligation of a mutual savings bank that has a deposit with the appropriate Reserve Bank in lieu of Reserve Bank capital stock. The Board is also clarifying that, when a Reserve Bank issues stock to a member bank, the Reserve Bank will obtain payment for that stock by debit to an account on the Reserve Bank's books or by other form of settlement to which the Reserve Bank agrees. B. Merger-Related Stock Adjustments As noted above, before two member banks merge or consolidate, the Reserve Banks direct the surviving member bank to apply to adjust its stock subscription and the nonsurviving member bank to apply to cancel its stock subscription. Similarly, before a member bank merges or consolidates with a nonmember bank, the Reserve Banks request that the surviving member bank apply to adjust its stock subscription. The Board is amending section 209.3 to codify the Reserve Banks' current practice of requesting pre-merger stock adjustment applications. The amendments will expressly require a surviving member bank to apply to adjust its stock subscription before merging or consolidating with another member bank or nonmember bank. 15 16 This will ensure that the Reserve Banks make timely changes to the stock subscriptions of surviving member banks that merge or consolidate with other banks. 15 Similarly, if a surviving bank is a mutual savings bank that is not permitted to purchase Reserve Bank stock under state law, the final rule will require the surviving bank to apply to adjust its deposit obligation. 16 Regulation I expressly requires that a nonsurviving member bank apply to cancel its stock subscription when it “is merged or consolidated into a nonmember bank.” 12 CFR 209.3(a). The final rule will expressly require that a nonsurviving member bank apply to cancel its stock subscription (or, in the case of a mutual savings bank that is not permitted to purchase Reserve Bank stock, transfer its deposit obligation) before merging or consolidating with another member bank. This amendment is consistent with the existing requirement in Regulation I that a member bank apply to cancel its stock subscription when it “desires to withdraw from membership” or “voluntarily . . . ceases business.” 12 CFR 209.3(a). Relatedly, the Board is making conforming amendments to two provisions of Regulation I (current 12 CFR 209.1(d)(3) and 209.3(d)(3)) to clarify that, consistent with the existing text of Regulation I, a surviving member bank must state in its stock adjustment application whether its total consolidated assets exceed $11.229 billion. C. Technical Amendments The Board proposed two technical amendments and is finalizing these amendments with a non-substantive clarification. The Board is also adopting a third, related technical amendment. Section 209.1(c) recognizes that a bank located in a United States dependency or possession may apply for membership, and a footnote in section 209.1(c) explains that such a bank “should communicate with the Federal Reserve Bank with which it desires to do business.” The Board is amending this footnote to clarify that a bank located in the Virgin Islands or Puerto Rico should communicate with the Federal Reserve Bank of New York, while a bank located in Guam, American Samoa, or the Northern Mariana Islands should communicate with the Federal Reserve Bank of San Francisco. The amendment will make this footnote in Regulation I consistent with a provision in the Board's Regulation J that clarifies the Federal Reserve Districts in which banks from United States dependencies and possessions are deemed to be located. 17 17 *See* 12 CFR 210.2(i)(1)(A). Section 209.3(a) requires that any bank that desires to withdraw from membership in the Federal Reserve System promptly file with its Reserve Bank an application for cancellation of all its Reserve Bank stock. The Board proposed to amend section 209.3(a) to clarify that, consistent with the Board's current understanding, this requirement applies to any national bank that wants to convert into a “State nonmember bank.” The final rule clarifies that this requirement applies to a national bank that converts into any nonmember bank—not only a “State” nonmember bank. 18 18 For example, this requirement applies to a national bank that converts into a federal savings bank. Relatedly, section 209.3(c) specifies that when a member bank merges into, consolidates with, or converts into a “State nonmember bank,” the member bank's stock shall be cancelled on the effective date of the merger, consolidation, or conversion. The final rule clarifies that a member bank's stock shall be cancelled on the effective date of a member bank's merger into, consolidation with, or conversion into any nonmember bank—not only a State nonmember bank. IV. Regulatory Analysis A. Regulatory Flexibility Act The Regulatory Flexibility Act (“RFA”), 5 U.S.C. 601 *et seq.,* generally requires that an agency assess the impact a rule is expected to have on small entities. 19 The RFA requires an agency either to provide a regulatory flexibility analysis or to certify that the rule will not have a significant economic impact on a substantial number of small entities. 19 Under size standards established by the Small Business Administration, banks and other depository institutions are considered “small” if they have less than $600 million in assets. 13 CFR 121.201. The Board did not receive any comments on its initial regulatory flexibility analysis. The Board certifies that the final rule will not have a significant economic impact on a substantial number of small entities. As described in the information above, the final rule will reduce reporting requirements for member banks by automating non-merger-related stock adjustments. Additionally, the final rule will require that a surviving stockholder apply to adjust its stock subscription before merging or consolidating with another bank. 20 There are approximately 50 mergers each year in which the surviving stockholder is a member bank, and it will take a surviving stockholder approximately 30 minutes to complete the paperwork associated with an adjustment to its stock subscription. Accordingly, the final rule will not have a significant economic impact on a substantial number of small entities. 20 Consistent with the current text of Regulation I, a surviving member bank would need to report in its stock adjustment application whether its total consolidated assets exceed $11.229 billion. *See* n. 12, *supra.* Additionally, consistent with the current text of Regulation I, a nonsurviving member bank would need to apply to cancel its stock before merging or consolidating with another bank. *See* n. 15, *supra.* B. Paperwork Reduction Act Certain provisions of the final rule contain “collections of information” within the meaning of the Paperwork Reduction Act of 1995

(PRA)(44 U.S.C. 3501-3521). The Board may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget

(OMB)control number. The Board reviewed the final rule under the authority delegated to the Board by OMB. The Board did not receive any specific comments on the PRA. The final rule contains revisions to sections 209.3 and 209.4 that automate non-merger-related adjustments to member banks' subscriptions to Reserve Bank capital stock. Automating the adjustment process would reduce the frequency of reporting. To implement this requirement, the Board has extended for three years, with revision, the Federal Reserve Bank Stock Applications (FR 2030, FR 2030a, FR 2056, FR 2086, FR2086a, 2087; OMB No. 7100-0042). The revisions would affect only the FR 2056. Adopted Revision, With Extension, of the Following Information Collection *Report title:* Federal Reserve Bank Stock Applications. *Agency form numbers:* FR 2030; FR 2030a; FR 2056; FR 2086; FR 2086a; FR 2087. *OMB control number:* 7100-0042. *Frequency:* On occasion. *Respondents:* New national banks, non-member state banks converting into national banks, member banks, and member banks converting into or merging into member or nonmember banks. *Estimated number of respondents:* FR 2030, 4; FR 2030a, 7; FR 2056, 50; FR 2086, 10; FR 2086a, 86; FR 2087, 1. *Estimated average hours per response:* 0.5. *Estimated annual burden hours:* FR 2030, 2; FR 2030a, 3.5; FR 2056, 25; FR 2086, 5; FR 2086a, 43; FR 2087, 0.5. *General description of report:* Any national bank wanting to purchase stock in the Federal Reserve System, any member bank wanting to increase or decrease its Federal Reserve Bank stock holdings, or any bank wanting to cancel its stock holdings must file an application with the appropriate Federal Reserve Bank. The application forms for the initial subscription of Federal Reserve Bank stock filed by organizing national banks and nonmember state banks converting to national banks (FR 2030 and 2030a, respectively) and the application forms for the cancellation of Federal Reserve Bank stock filed by liquidating member banks, member banks merging or consolidating with nonmember banks, and insolvent member banks (FR 2086, FR 2086a, and FR 2087, respectively) require one or more of the following: A resolution by the applying bank's board of directors authorizing the transaction, an indication of the capital and surplus of the bank as of the date of application, a certification (by official signatures) of the resolution, and/or an indication of the number of shares and dollar amount of the Federal Reserve Bank stock to be purchased or cancelled. The application form for an interim adjustment in a member bank's holdings of Federal Reserve Bank stock (FR 2056) requires an indication of the capital and surplus of the bank (or total deposit liabilities for a mutual savings bank) as of the date of application and an indication of the number of shares held and the number of shares to be acquired or canceled. A member bank must submit a completed FR 2056 form to correct a discrepancy between the amount of Federal Reserve Bank stock required to be held and the amount actually held by the member bank. The latter is determined through information that the member bank reports quarterly on the Consolidated Reports of Condition and Income (Call Report) (FFIEC 031, FFIEC 041, and FFIEC 051; OMB No. 7100-0036). *Legal authorization and confidentiality:* The Federal Reserve Bank Stock Applications are authorized pursuant to sections 9 and 11(a) of the FRA (12 U.S.C. 321 and 248(a)). Additionally, the FR 2030 and FR 2030a are specifically authorized by section 2 of the FRA (12 U.S.C. 222 and 282), the FR 2056, FR 2086, and FR 2086a are authorized by section 5 of the FRA (12 U.S.C. 287), and the FR 2087 is authorized by section 6 of the FRA (12 U.S.C. 288). The FR 2030, FR 2030a, FR 2056, FR 2086, FR 2086a, and FR 2087 are mandatory. Individual respondents may request that information submitted to the Board in these applications be kept confidential on a case-by-case basis. Such applications may contain information related the business plans of the respondent. Under certain circumstances, this information may be withheld under exemption 4 of the Freedom of Information Act (FOIA), which protects privileged or confidential commercial or financial information (5 U.S.C. 552(b)(4)). These applications may also contain information of a personal nature the disclosure of which would result in a clearly unwarranted invasion of personal privacy, which may be protected under exemption 6 of the FOIA (5 U.S.C. 552(b)(6)). Additionally, exemption 8 of the FOIA (5 U.S.C. 552(b)(8)) may apply to the extent the reported information is contained in or related to examination reports. *Current actions:* The Board has adopted amendments to Regulation I that automate non-merger-related adjustments to member banks' subscriptions to Reserve Bank capital stock. Regulation I currently requires that a member bank apply to adjust its stock subscription at least annually and sometimes quarterly. A member bank determines its required stock subscription based on its capital and surplus (or total deposit liabilities for a mutual savings bank) as reported in the member bank's most recent Call Report. The Reserve Banks have developed software that automatically pulls the information needed to calculate member banks' required stock subscriptions from Call Reports. Accordingly, the Board adopted amendments to section 209.4 that will automate non-merger-related stock adjustments. The Board also adopted amendments to section 209.3(d) that would require a surviving stockholder to apply to adjust its stock subscription before merging with another bank. Consistent with these changes to Regulation I, the Board eliminated the requirement that member banks routinely submit FR 2056 reporting forms to adjust their stock subscriptions. The Board amended the FR 2056 reporting form to clarify that the form should be filed only by a surviving member bank that merges or consolidates with another bank. List of Subjects in 12 CFR Part 209 Banks and banking, Federal Reserve System, Reporting and recordkeeping requirements, Securities. Authority and Issuance For the reasons set forth in the preamble, the Board will amend Regulation I, 12 CFR part 209, as follows: PART 209—FEDERAL RESERVE BANK CAPITAL STOCK (REGULATION I) 1. The authority citation for part 209 continues to read as follows: Authority: 12 U.S.C. 12 U.S.C. 222, 248, 282, 286-288, 289, 321, 323, 327-328, and 466. 2. Revise the heading to part 209 to read as shown above. 3. Amend § 209.1 by revising paragraphs

(c)and (d)(3) to read as follows. § 209.1 Authority, purpose, scope, and definitions.

(c)*Scope.* This part applies to member banks of the Federal Reserve System, to national banks in process of organization, and to state banks applying for membership. National banks and locally-incorporated banks located in United States dependencies and possessions are eligible (with the consent of the Board) but not required to apply for membership under section 19(h) of the Federal Reserve Act, 12 U.S.C. 466. 1 1 A bank located in the Virgin Islands or Puerto Rico should communicate with the Federal Reserve Bank of New York regarding applications for membership under the provisions of section 19(h) of the Federal Reserve Act. A bank located in Guam, American Samoa, or the Northern Mariana Islands should communicate with the Federal Reserve Bank of San Francisco regarding applications for membership under the provisions of section 19(h) of the Federal Reserve Act.

(d)* * *

(3)*Total consolidated assets* means the total assets on the stockholder's balance sheet as reported by the stockholder on its Consolidated Report of Condition and Income (Call Report) as of the most recent December 31, except in the case of:

(i)A new member “total consolidated assets” means (until the next December 31 Call Report becomes available) the total consolidated assets of the new member at the time of its application for capital stock; and

(ii)A surviving stockholder after a merger “total consolidated assets” means (until the next December 31 Call Report becomes available) the total consolidated assets reported by that stockholder pursuant to § 209.3(d)(5). 4. Amend § 209.3 by: a. Revising the section heading; b. Revising paragraphs

(a)and

(c)and the paragraph

(d)subject heading; c. Redesignating paragraphs (d)(1), (2), and

(3)as paragraphs (d)(2), (3), and (5), respectively and adding new paragraph (d)(1) and paragraph (d)(4); and d. Revising newly redesignated paragraph (d)(5). The revisions and additions to read as follows: § 209.3 Cancellation of Reserve Bank stock; mergers involving member banks.

(a)*Application for cancellation.* Any bank that desires to withdraw from membership in the Federal Reserve System (including a national bank that wants to convert into a nonmember bank), voluntarily liquidates or ceases business, is merged or consolidated into a nonmember bank, or is involuntarily liquidated by a receiver or conservator or otherwise, shall promptly file with its Reserve Bank an application for cancellation of all its Reserve Bank stock (or withdrawal of its deposit, as the case may be) and payment therefor in accordance with § 209.4.

(c)*Effective date of cancellation.* Cancellation in whole of a bank's Reserve Bank capital stock shall be effective, in the case of:

(1)Voluntary withdrawal from membership by a state bank, as of the date of such withdrawal;

(2)Merger into, consolidation with, or (for a national bank) conversion into, a nonmember bank, as of the effective date of the merger, consolidation, or conversion; and

(3)Involuntary termination of membership, as of the date the Board issues the order of termination.

(d)*Exchange of stock on merger or change in location; stock adjustment upon merger with a nonmember bank; reporting of total consolidated assets following merger* —(1) *Applications.*

(i)Before a merger or consolidation of member banks, the nonsurviving member bank shall file an application with the appropriate Reserve Bank to cancel its shares of Reserve Bank stock (or in the case of a mutual savings bank not authorized to purchase Reserve Bank stock, shall file an application to transfer its deposit to the account of the surviving bank) and the surviving member bank shall file an application with the appropriate Reserve Bank for issue of a corresponding number of shares of Reserve Bank stock (or in the case of a mutual savings bank not authorized to purchase Reserve Bank stock, shall file an application to increase its deposit obligation).

(ii)Before a merger or consolidation of a member bank and a nonmember bank, a surviving member bank shall file an application with the appropriate Reserve Bank to adjust its Reserve Bank capital stock subscription to equal six percent of the member bank's anticipated post-merger capital and surplus, or, in the case of member bank that is a mutual savings bank, six-tenths of 1 percent of the member bank's anticipated post-merger total deposit liabilities. A mutual savings bank not authorized to purchase Reserve Bank stock shall file an application to adjust its deposit obligation in a like manner.

(4)*Merger with a nonmember bank.* Upon a merger or consolidation of a member bank and a nonmember bank, the Reserve Bank will adjust the surviving member bank's stock subscription to equal six percent of the member bank's capital and surplus, or, in the case of a member bank that is a mutual savings bank, six-tenths of 1 percent of the member bank's total deposit liabilities. If a mutual savings bank has a deposit with the appropriate Reserve Bank in lieu of Reserve Bank capital stock, its deposit obligation shall be adjusted in a like manner.

(5)*Statement of total consolidated assets.* When a member bank merges or consolidates with another bank and the surviving bank remains a Reserve Bank stockholder, the surviving stockholder must report whether its total consolidated assets exceed $11,229,000,000 in the application described in paragraph (d)(1) of this section. 5. Amend § 209.4 by: a. Revising paragraphs

(a)and

(b)and paragraph (c)(1) introductory text; b. Redesignating paragraphs (c)(2) and

(3)as paragraphs (c)(3) and (4), and adding a new paragraph (c)(2); and c. Revising paragraph (d)(1) introductory text. The revisions and addition read as follows: § 209.4 Amounts and payments for subscriptions and cancellations; timing and rate of dividends.

(a)*Amount of subscription.* The total subscription of a member bank (other than a mutual savings bank) shall equal six percent of its capital and surplus as shown on its most recent Call Report. After a member bank files a Call Report, the appropriate Reserve Bank will adjust the member bank's Reserve Bank capital stock subscription to equal six percent of the member bank's capital and surplus.

(b)*Mutual savings banks.* The total subscription of a member bank that is a mutual savings bank shall equal six-tenths of 1 percent of its total deposit liabilities as shown on its most recent Call Report. After a member bank that is a mutual savings bank files a Call Report, the appropriate Reserve Bank will adjust the member bank's Reserve Bank capital stock subscription to equal six-tenths of 1 percent of the member bank's total deposit liabilities. If a mutual savings bank has a deposit with the appropriate Reserve Bank in lieu of Reserve Bank capital stock, its deposit obligation shall be adjusted in a like manner.

(c)* * *

(1)When a Reserve Bank issues capital stock to a member bank (or accepts a deposit in lieu thereof), the member bank shall pay the Reserve Bank—

(2)A Reserve Bank shall obtain settlement for the payment described in paragraph (c)(1) of this section by debit to an account on the Reserve Bank's books or other form of settlement to which the Reserve Bank agrees.

(d)* * *

(1)When a Reserve Bank cancels Reserve Bank capital stock of a member bank, or (in the case of involuntary termination of membership) upon the effective date of cancellation specified in § 209.3(c)(3), the Reserve Bank shall— By order of the Board of Governors of the Federal Reserve System. Ann Misback, Secretary of the Board. [FR Doc. 2022-00503 Filed 1-12-22; 8:45 am]

Connectionstraces to 16

Traces to 16 documents

U.S. Code