FRLL12_20201223_omb

Supporting Statement for the
Application for Exemption from Prohibited Service at
Savings and Loan Holding Companies (FR LL-12; OMB No. 7100-0338)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the Application for Exemption from Prohibited Service at Savings and Loan
Holding Companies (FR LL-12; OMB No. 7100-0338). The Federal Deposit Insurance (FDI)
Act and the Board’s Regulation LL - Savings and Loan Holding Companies (12 CFR Part 238)
prohibit individuals who have been convicted of certain criminal offenses or who have agreed to
enter into a pretrial diversion or similar program in connection with a prosecution for such
criminal offenses from participating in the affairs of a savings and loan holding company
(SLHC) or any of its subsidiaries without the written consent of the Board. Such an individual, or
the SLHC with which the individual seeks to participate, may apply for an exemption from this
prohibition.
The estimated total annual burden for the FR LL-12 is 720 hours. There is no formal
reporting form for this collection of information (the FR LL-12 designation is for internal
purposes only). An exemption request to the Board may be filed in a letter, or by using the
Federal Deposit Insurance Corporation (FDIC) form described in the Description of Information
Collection section.
Background and Justification
Pursuant to section 19 of the FDI Act (12 U.S.C. § 1829) and subpart I of Regulation LL
(12 CFR 238.81 et seq.), any person who has been convicted of any criminal offense involving
dishonesty or a breach of trust or money laundering, or has agreed to enter into a pretrial
diversion or similar program in connection with a prosecution for such an offense (prohibited
person), is prohibited from (1) becoming or continuing as an institution-affiliated party1 with
respect to any SLHC, (2) owning or controlling directly or indirectly any SLHC, or (3) otherwise
participating directly or indirectly in the conduct of the affairs of any SLHC. An SLHC may not
permit a prohibited person to engage in any conduct or continue any relationship prohibited by
section 19 of the FDI Act.
Pursuant to section 19 of the FDI Act, the Board may provide an exemption to a
prohibited person if such exemption is consistent with the purposes of section 19. In order for a
prohibited person to participate in the conduct of the affairs of any SLHC in a manner described
above, the SLHC or the individual must file with the Board, and the Board must approve, an
application seeking an exemption from the prohibitions of section 19 of the FDI Act and
subpart I of Regulation LL. The Board will use information provided by the applicant when
considering an exemption request concerning a prohibited person. Such considerations will
include, but are not limited to, whether the prohibited person would participate in the major
policymaking functions of the SLHC or would threaten the safety and soundness of any
1

12 U.S.C. § 1813(u) (defining institution-affiliated party).

subsidiary insured depository institution of the SLHC or the public confidence in the insured
depository institution.2 This information is not available from other sources.
Description of Information Collection
All prohibited persons and SLHCs that seek an exemption are subject to the application
requirements of subpart I of Regulation LL. An applicant must provide information regarding the
position at the SLHC held or to be held by the prohibited person, the prohibited person’s level of
ownership of the SLHC, the specific nature of the offense involved, evidence of rehabilitation,
and other relevant factors listed in section 238.88(b) of Regulation LL (12 CFR 238.88(b)). An
applicant may submit this information in a letter or by using the FDIC’s Application Pursuant to
Section 19 of the Federal Deposit Insurance Act (OMB No. 3064-0018). The SLHC or
prohibited person may seek an exemption only for a designated position (or positions) with
respect to an SLHC identified in the application.
Respondent Panel
The FR LL-12 panel comprises SLHCs and prohibited persons that seek to participate in
the affairs of an SLHC.
Time Schedule for Information Collection
The information is collected when an SLHC or a prohibited person applies for an
exemption. However, the SLHC or prohibited person may not file an application less than one
year after the latter of the date of a denial of the same exemption under Regulation LL.3
Public Availability of Data
No data collected by this information collection is published.
Legal Status
The FR LL-12 is authorized by section 19(e)(2) of the FDI Act, under which the “Board
… may provide exemptions [from the prohibition] by regulation or order … if the exemption is
consistent with the purposes of this subsection” (12 U.S.C. § 1829(e)(2)). The Board also has the
authority to require reports from savings and loan holding companies under 12 U.S.C. §
1467a(g). The FR LL-12 is required to obtain a benefit.
Individual respondents may request that information submitted to the Board through the
FR LL-12 be kept confidential. If a respondent requests confidential treatment, the Board will
determine whether the information is entitled to confidential treatment on a case-by-case basis.
Information collected through the FR LL-12 may be kept confidential under exemption 4 for the
Freedom of Information Act (FOIA), which protects privileged or confidential commercial or
financial information (5 U.S.C. § 552(b)(4)), or under FOIA exemption 6, which covers personal
2
3

12 CFR 238.88.
12 CFR 238.87(a)(3).

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information, the disclosure of which would constitute an unwarranted invasion of privacy
(5 U.S.C. § 552(b)(6)). Additionally, to the extent the FR LL-12 contains information gleaned
from examination reports, it may be withheld from disclosure under FOIA exemption 8, which
protects information “related to examination, operating, or condition reports” (5 U.S.C. §
552(b)(8)).
Consultation Outside the Agency
The Board consulted with the FDIC on the burden estimates and the use of their form for
Board submissions.
Public Comments
On August 21, 2020, the Board published an initial notice in the Federal Register
(85 FR 51718) requesting public comment for 60 days on the extension, without revision, of the
FR LL-12. The comment period for this notice expired on October 20, 2020. The Board did not
receive any comments. On December 14, 2020, the Board published a final notice in the Federal
Register (85 FR 80785).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR LL-12 is 720
hours. The number of respondents is based on the average annual number of FR LL-12 filings
received in the last three years. These reporting requirement represents less than 1 percent of the
Board’s total paperwork burden.
Estimated
number of
respondents4
43
2

FR LL-12
Individuals
Institutions
Total

4

Estimated
Annual
average hours
frequency
per response
1
16
1
16

Estimated
annual burden
hours
688
32
720

Of the respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $600 million in total assets), https://www.sba.gov/document/support--table-size-standards.

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The estimated total annual cost to the public for individuals is $18,576.5 The estimated
total annual cost to the public for institutions is $1,848,6 for a total of $20,424.
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing the
FR LL-12 is negligible.

5

The average consumer cost of $27 is estimated using data from the BLS Economic News Release (USDL-200300), https://www.bls.gov/news.release/archives/cewqtr_02202020.htm.
6
Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $20, 45% Financial Managers at
$71, 15% Lawyers at $70, and 10% Chief Executives at $93). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2019, published March 31, 2020, http://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Standard Occupational Classification System, http://www.bls.gov/soc/.

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