The OCC regulates the fiduciary
activities of national banks and federal savings associations
(FSAs), including the administration of collective investment funds
(CIFs), pursuant to 12 U.S.C. 92a and 12 U.S.C. 1464(n),
respectively. Twelve CFR part 9 contains the regulations that
national banks must follow when conducting fiduciary activities and
12 CFR part 150 contains the regulations that FSAs must follow when
conducting fiduciary activities. Regulations adopted by the Office
of Thrift Supervision, now recodified as OCC rules pursuant to
title III of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, have long required FSAs to comply with the
requirements of the OCC’s CIF regulation. Thus, the OCC’s CIF
regulation in 12 CFR 9.18 governs CIFs managed by both national
banks and FSAs. Twelve CFR parts 9 and §§ 150.410 - 150.430 require
national banks and FSAs with fiduciary powers to retain all
fiduciary records relating to an account for a period of three
years after termination of the account or of related litigation.
These regulations also require that national banks and FSAs note
the results of fiduciary activities annually in the minutes of the
board of directors. Both of these requirements are needed to ensure
safety and soundness in fiduciary activities. Additionally, to
ensure that the OCC has current information on which national banks
and FSAs have fiduciary powers, parts 9 and 150 require a bank or
FSA to file a certified copy of a board resolution in order to
surrender fiduciary powers. This supporting statement is being
submitted pursuant to an interim final rule titled “Collective
Investment Funds: Prior Notice Period for Withdrawals.” The interim
final rule states that, with the OCC’s approval, a bank may
withdraw an account from a collective investment fund up to one
year after the end of the prior notice period. In addition, a bank
may request that the OCC approve an extension beyond the one-year
extension period. The OCC must determine that the bank has made a
good faith effort to satisfy withdrawal requests and has been
unable to do so without causing harm to participants due to
economic and market conditions. Extensions must be requested and
approved annually, for a maximum of two years after the initial
one-year extension period.
Emergency approval will
facilitate the OCC’s ability to ease the impact of current stressed
market conditions caused by the COVID-19 virus on the U.S. economy.
The rule would permit the OCC to approve extensions to withdrawal
requests on certain investment funds. Absent prompt publication of
this rule, OCC-regulated banks that administer these funds may be
required, under current OCC regulations, to sell fund assets at
“fire sale” prices, which may go against the interests of fund
investors.
US Code:
12
USC 92a Name of Law: The National Bank Act
US Code: 12
USC 1464(n) Name of Law: The Homeowners' Loan Act
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
1557-0140 Supporting Statement CIF 7-29-20.docx
12 CFR Part 9 Reporting, Recordkeeping and Disclosure Burden