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organization. The opportunity to settle (1) Arises out of the transaction or date of the DFA’s enactment, July 21, disputes by arbitration may in some occurrence that is the subject of the 2011. Section 343 of the DFA amended cases provide benefits to customers, retail forex customer’s claim or section 11(a)(1) of the Federal Deposit including the ability to obtain an grievance; and Insurance Act, 12 U.S.C. 1821(a)(1), to expeditious and final resolution of (2) Does not require for adjudication provide full insurance coverage for disputes without incurring substantial the presence of essential witnesses, depository institution noninterest- cost. Each customer must individually parties, or third persons over which the bearing transaction accounts from examine the relative merits of settlement process lacks jurisdiction. December 31, 2010, through December arbitration and consent to this 31, 2012. § 48.17 Reservation of authority. arbitration agreement must be In light of the prospective repeal of voluntary. The OCC may modify the disclosure, the demand deposit interest prohibition, By signing this agreement, you: (1) recordkeeping, capital and margin, the FDIC proposed to rescind 12 CFR May be waiving your right to sue in a reporting, business conduct, part 329, the regulation which court of law; and (2) are agreeing to be documentation, or other standards or implements that prohibition with bound by arbitration of any claims or requirements under this part for a respect to state-chartered, nonmember counterclaims that you or [insert name specific retail forex transaction or a (SNM) banks to be effective on the same of national bank] may submit to class of retail forex transactions if the date as the statutory repeal, July 21, arbitration under this agreement. In the OCC determines that the modification is 2011. 76 FR 21265 (Apr. 15, 2011) event a dispute arises, you will be consistent with safety and soundness (NPR). At the same time, however, a notified if [insert name of national bank] and the protection of retail forex regulatory definition of the term intends to submit the dispute to customers. ‘‘interest’’ would still be useful in arbitration. Dated: July 7, 2011. interpreting the requirements of section You need not sign this agreement to John Walsh, 343 of the DFA providing temporary, open or maintain a retail forex account unlimited deposit insurance coverage with [insert name of national bank]. Acting Comptroller of the Currency. [FR Doc. 2011–17514 Filed 7–13–11; 8:45 am] for noninterest-bearing transaction (b) Election of forum. accounts. For this reason, in the NPR BILLING CODE 4810–33–P (1) Within 10 business days after the FDIC also proposed to transfer the receipt of notice from the retail forex definition of ‘‘interest’’ found at 12 CFR customer that the customer intends to 329.1(c) to Part 330, specifically the FEDERAL DEPOSIT INSURANCE submit a claim to arbitration, the definitions section at 12 CFR 330.1. The CORPORATION national bank must provide the FDIC also specifically solicited customer with a list of persons qualified 12 CFR Parts 329 and 330 comment on whether other parts of Part in dispute resolution. 329 could also prove useful and (2) The customer must, within 45 RIN 3064–AD78 therefore should be moved into Part 330 days after receipt of such list, notify the as well. In addition, the FDIC sought national bank of the person selected. Interest on Deposits; Deposit comment on every other aspect of the The customer’s failure to provide such Insurance Coverage proposed rule.2 notice must give the national bank the AGENCY: right to select a person from the list. Federal Deposit Insurance II. Comment Summary and Discussion (c) Enforceability. A dispute Corporation (FDIC). The FDIC received eight comments on settlement procedure may require ACTION: Final rule. the NPR. Three were from community parties using the procedure to agree, SUMMARY: banks, one was from a large depository under applicable state law, submission The FDIC is issuing a final institution, two were from depository agreement, or otherwise, to be bound by rule amending its regulations to reflect institution trade groups, one from a an award rendered in the procedure if section 627 of the Dodd-Frank Wall financial consulting firm, and one was the agreement to submit the claim or Street Reform and Consumer Protection 1 from a legal representative for a money grievance to the procedure complies Act (the DFA), repealing the market fund. with paragraph (a) of this section or the prohibition against the payment of The chief points were: agreement to submit the claim or interest on demand deposit accounts 1. The FDIC should stop or delay grievance to the procedure was made effective July 21, 2011. repeal of the prohibition (four after the claim or grievance arose. Any DATES: The final rule is effective July 21, commenters); award so rendered by the procedure will 2011. 2. Community banks will be harmed be enforceable in accordance with FOR FURTHER INFORMATION CONTACT: by repeal of the prohibition (four applicable law. Martin Becker, Senior Consumer Affairs (d) Time limits for submission of Specialist, Division of Consumer and commenters); claims. The dispute settlement Depositor Protection, (703) 254–2233, 3. The FDIC should add the Part 329 procedure used by the parties may not Mark Mellon, Counsel, Legal Division, section concerning premiums to Part include any unreasonably short (202) 898–3884, Federal Deposit 330 (three commenters); and limitation period foreclosing submission Insurance Corporation, 550 17th Street, 4. The FDIC should adopt or of a customer’s claims or grievances or NW., Washington, DC 20429. incorporate all Federal Reserve interpretations and advisory opinions counterclaims. SUPPLEMENTARY INFORMATION: (e) Counterclaims. A procedure for the I. Background 2 In counterpart to this rulemaking, the Board of settlement of a retail forex customer’s Governors of the Federal Reserve System (the claims or grievances against a national Section 627 of the DFA repealed the Federal Reserve) have issued a notice of proposed bank or employee thereof may permit statutory prohibition against the rulemaking to repeal 12 CFR Part 217, Prohibition the submission of a counterclaim in the payment of interest on demand Against Payment of Interest on Demand Deposits (Regulation Q). See 76 Federal Register 20892 (Apr. procedure by a person against whom a deposits, effective one year from the 14, 2011). Regulation Q implements the prohibition claim or grievance is brought if the against the payment of interest on demand deposits counterclaim: 1 Public Law 111–203, 124 Stat. 1376. with respect to member banks.

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pertaining to Regulation Q (two depository institutions with heightened account the next morning. The commenters). risk due to repeal of the statutory institution pays interest on the funds prohibition; (c) stress tests should be while they are in the repo account. Repeal or Delay Prohibition performed on depository institutions Thus, for some institutions the repeal of Commenters opposed to immediate before they are allowed to pay interest the prohibition against paying interest implementation of the repeal of the on business checking accounts; (d) call on demand deposits will result in the prohibition made several arguments. All reports should be modified to provide replacement of indirect payments of four commenters stated that repeal for the reporting of interest rate risk; and interest on demand deposits with would result in increased deposit (e) reserve requirements should be explicit, direct interest-bearing demand volatility as depository institutions increased to reduce competition for deposit accounts. competed for an increased share of deposits. business deposits by offering Another commenter recommended Repeal of the prohibition might continually higher rates of interest. that the FDIC hold roundtables prior to directly benefit community banks by Three of the four contended this would the July 21, 2011, repeal date, urged the allowing them to attract more severely affect community banks. One FDIC and the Federal Reserve to work potentially stable deposits which could commenter called for delay until the together to clarify issues in connection reduce their need for higher-cost, more safety and soundness consequences of with the repeal, and requested that the volatile funding. This could lower repeal are understood, arguing that the FDIC provide more time for compliance community banks’ funding costs and FDIC and the Federal Reserve have the by depository institutions. This also allow them to plan business growth authority to issue a statement of policy commenter noted that while the FDIC more dependably and rigorously. that would prevent interest payments on has no authority to delay or to phase in Interest rates are currently at a historic deposits. Another commenter the statutory repeal, efforts still need to low. This should provide depository recommended a phase-in with be made to provide depository institutions with an adjustment period. immediate implementation of the repeal institutions with clarity. The commenter If the cost of funds should increase, followed by a twelve- to eighteen-month noted the need to revise call reports and depository institutions should have time grandfather for Federal Reserve thrift financial reports to indicate to make the necessary adjustments to interpretations and advisory opinions interest-bearing demand deposit protect profits and manage interest rate concerning Regulation Q. Another accounts. It also noted the need for risk through measures such as changes commenter stated that efforts to repeal clarity with respect to so-called ‘‘hybrid to fee structures and rates to balance out the prohibition should either cease or be products,’’ deposit accounts that both increased interest expense. With regard delayed until its impact is understood. pay interest and offer earnings credits. to interest rate risk and potential In response to these comments, the A third commenter urged that the liquidity issues, the FDIC and the other FDIC notes that, as previously observed, Financial Stability Oversight Council federal banking agencies have already pursuant to section 627 of the DFA, as (the FSOC) should address the systemic provided depository institutions with of July 21, 2011, the prohibition against threat which the upcoming repeal poses detailed guidance which those the payment of interest on demand to the ‘‘U.S. banking and financial institutions are expected to follow. deposits will be repealed by operation system and the economy as a whole.’’ 3 of statute, as a matter of law. After carefully considering these Add Part 329 Section on Premiums to comments, the FDIC has concluded that Part 330 Harm to Community Banks the commenters raise valid concerns Three commenters stated that the Part As noted previously, several about potential risks arising from the 329 section pertaining to premiums commenters contended repeal would repeal of the prohibition against paying should be added to Part 330 along with result in heightened competition for interest on demand deposits. Based on the definition of ‘‘interest.’’ Section deposits. They reasoned that large banks currently available information, 329.103 describes the circumstances will offer high rates of interest and lure however, there are also potential under which a depository institution’s away business depositors previously benefits which may balance out or provision of a premium to a depositor content to do business with community outweigh those risks. While it is true banks based on personal services that depository institutions may incur will not be considered a payment of (relationship deposits). Community added expense by offering interest interest. It is substantially identical to banks would then be pressured to offer payments to accounts where it was section 217.101 in Regulation Q. higher rates of interests in order to stay previously unavailable (such as Commenters contended that retaining competitive, further cutting already thin business checking), they may also save this section along with the definition of marginal rates of return. Increased funds by no longer having to waive interest might prove useful in deposits might also mean added expenses on such accounts (e.g., courier determining whether an account pressure for depository institutions to service), as an inducement to retain qualifies for unlimited insurance loan these new funds out, possibly accountholders. Moreover, many coverage as a noninterest-bearing leading to unsafe and unsound lending institutions offer products to business transaction account. and further weakening depository customers that serve as a substitute for In response to these comments, the institutions’ fiscal health. paying interest on demand deposit FDIC agrees that there would be utility As potential responses to these accounts. The most notable example is in importing section 329.103 into Part anticipated negative consequences, one a repo sweep account in which funds 330. The FDIC will therefore import commenter recommended that the FDIC are swept overnight from a demand section 329.103 into Part 330 as an take a number of steps: (a) The FDIC deposit account to a repo account and interpretive rule, to be designated as should consider issuing a statement of swept back to the demand deposit section 330.101. This step is also policy to warn depository institutions consistent with the FDIC’s decision, as about the need for interest rate risk 3 Created by section 111 of the DFA, the FSOC is explained in more detail below, to look management; (b) interest rate risk charged with identifying threats to the financial to Regulation Q and Federal Reserve stability of the U.S., promoting market discipline, should be quantified and an increased and responding to emerging risks to the stability of interpretations of that rule when capital charge should be imposed on the U.S. financial system. construing section 343.

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Retention of Federal Reserve Regulation The Riegle Community Development D. Small Business Regulatory Q Staff Opinions and Interpretive and Regulatory Improvement Act Enforcement Fairness Act Letters provides that any new regulations or The Office of Management and Budget Two commenters called for retention amendments to regulations prescribed (OMB) has determined that the final of Federal Reserve staff opinions and by a Federal banking agency that impose rule is not a ‘‘major rule’’ within the interpretive letters concerning additional reporting, disclosures, or meaning of the relevant sections of the Regulation Q. They stated that these other new requirements on insured Small Business Regulatory Enforcement materials would continue to be useful in depository institutions shall take effect Act of 1996 (SBREFA) (5 U.S.C. 801, et determining whether depository on the first day of a calendar quarter seq.). institutions may continue to rely on which begins on or after the date on As required by SBREFA, the FDIC practices established pursuant to these which the regulations are published in will file the appropriate reports with documents (one example given was final form, unless the agency Congress and the General Accounting third party payment programs). One determines, for good cause published Office so that the final rule may be commenter recommended that, as of with the rule, that the rule should reviewed. 4 July 21, 2011, the materials be retained become effective before such time. The E. The Treasury and General for a period of eighteen months or more. final rule does not impose any As noted previously, section 217.101 additional reporting, disclosures, or Government Appropriations Act, 1999— of Regulation Q is substantially other new requirements on insured Assessment of Federal Regulations and identical to section 329.103. Moreover, depository institutions. Policies on Families the FDIC, along with other federal The final rule is therefore effective The FDIC has determined that the banking agencies, has regularly upon July 21, 2011, the date when the final rule will not affect family well- interpreted issues arising from the statutory prohibition against the being within the meaning of section 654 prohibition against the payment of payment of interest on demand deposits of the Treasury and General interest on demand deposits in the same will be repealed under section 627 of Government Appropriations Act, manner as the Federal Reserve. In light the DFA. enacted as part of the Omnibus of this agency consistency and the B. Paperwork Reduction Act Consolidated and Emergency continued potential instrumental value No collections of information Supplemental Appropriations Act of of agency interpretations regarding this pursuant to the Paperwork Reduction 1999 (Pub. L. 105–277, 112 Stat. 2681). issue, the FDIC will continue to rely Act (44 U.S.C. Ch. 3501 et seq.) are F. Plain Language upon Regulation Q and Federal Reserve contained in the final rule. interpretations of that regulation for Section 722 of the Gramm-Leach- purposes of implementing temporary, C. Regulatory Flexibility Act Bliley Act, Public Law 106–102, 113 unlimited deposit insurance coverage The Regulatory Flexibility Act (RFA) Stat. 1338, 1471 (Nov. 12, 1999), pursuant to section 343 of the DFA. requires that each federal agency either requires the federal banking agencies to use plain language in all proposed and III. Final Rule certify that a proposed rule would not, if adopted in final form, have a final rules published after January 1, For the reasons set forth in the significant economic impact on a 2000. No commenter suggested that the preceding section, the FDIC is issuing substantial number of small entities or NPR was materially unclear, and the the final rule. prepare an initial regulatory flexibility FDIC believes that the final rule is substantively similar to the NPR. IV. Regulatory Analysis and Procedure analysis of the rule and publish the analysis for comment. For purposes of List of Subjects A. Effective Date the RFA analysis or certification, Absent a showing of ‘‘good cause,’’ financial institutions with total assets of 12 CFR Part 329 the Administrative Procedure Act (5 $175 million or less are considered to be Banks, Banking, Interest rates. U.S.C. 553(d)(3)) requires a 30-day ‘‘small entities.’’ The FDIC hereby 12 CFR Part 330 delayed effective date before a final rule certifies pursuant to 5 U.S.C. 605(b) that may become effective. The FDIC finds the final rule will not have a significant Bank deposit insurance, Banks, good cause for waiving this requirement economic impact on a substantial Banking, Reporting and recordkeeping because the final rule simply conforms number of small entities. This is requirements, Savings and loan the FDIC’s regulations to reflect the because the FDIC already applies the associations, Trusts and trustees. statutory repeal of the prohibition Part 329 definition of ‘‘interest’’ and the For the reasons set forth in the against the payment of interest on interpretive rule on premiums for preamble, under the authority of section demand deposit accounts. As discussed, purposes of determining whether an 627 of the Dodd-Frank Wall Street that statutory repeal becomes effective account qualifies for full deposit Reform and Consumer Protection Act, July 21, 2011. Delaying the effective insurance coverage as a noninterest- the FDIC amends chapter III of title 12 date of the final rule for thirty days bearing transaction account. The FDIC is of the Code of Federal Regulations as would result in a gap between the only transferring the definition from follows: effective date of the statutory repeal and Part 329 to Part 330 because the former the effective date of the amendments to regulation will become moot on July 21, PART 329—INTEREST ON DEPOSITS the FDIC’s regulations reflecting that 2011, pursuant to section 627 of the ■ 1. Part 329 is removed and reserved. statutory repeal. Also, the FDIC deems DFA and its repeal of the statutory ban it unnecessary to provide a delayed on the payment of interest on demand PART 330—DEPOSIT INSURANCE effective date for the final rule because deposits. There will therefore be no COVERAGE there are no actions SNM banks must significant economic impact on a take to implement the final rule; as substantial number of small entities as ■ 2. The authority citation for part 330 noted, the final rule simply conforms a result of this change. continues to read as follows: 12 U.S.C. the FDIC’s regulations to reflect a 1813(l), 1813(m), 1817(i), 1818(q), statutory change. 4 12 U.S.C. 4802. 1819(Tenth), 1820(f), 1821(a), 1822(c).

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■ 3. In § 330.1, paragraphs (k) through (b) The costs of premiums may not be 8–10 stage spool, uncontained engine (r) of § 330.1 are redesignated as averaged. failure, and damage to the airplane. paragraphs (l) through (s) respectively (c) A bank may not solicit funds for DATES: This AD is effective August 18, and new paragraph (k) is added to read deposit on the basis that the bank will 2011. as follows: divide the funds into several accounts ADDRESSES: For service information for the purpose of enabling the bank to § 330.1 Definitions. identified in this AD, contact GE– pay the depositor more than two Aviation M/D Rm. 285, One Neumann * * * * * premiums within a twelve-month Way, Cincinnati, OH 45215, phone: (k) Interest, with respect to a deposit, interval on the solicited funds. 513–552–3272; e-mail: means any payment to or for the (d) The bank must retain sufficient [email protected]. You may review account of any depositor as information for examiners to determine copies of the referenced service compensation for the use of funds that the requirements of this section information at the FAA, Engine & constituting a deposit. A bank’s have been satisfied. Propeller Directorate, 12 New England absorption of expenses incident to (e) Notwithstanding paragraph (a) of Executive Park, Burlington, MA. For providing a normal banking function or this section, any premium that is not, information on the availability of this its forbearance from charging a fee in directly or indirectly, related to or material at the FAA, call 781–238–7125. connection with such a service is not dependent on the balance in a demand considered a payment of interest. deposit account and the duration of the Examining the AD Docket * * * * * account balance shall not be considered You may examine the AD docket on ■ 4. In § 330.6, in the first sentence of the payment of interest on a demand the Internet at http:// paragraph (b) remove ‘‘§ 330.1(m)’’ and deposit account and shall not be subject www.regulations.gov; or in person at the add in its place ‘‘§ 330.1(n)’’. to the limitations in paragraph (a) of this Docket Management Facility between section. ■ 5. In § 330.9, in the first sentence of 9 a.m. and 5 p.m., Monday through paragraph (c)(1) remove ‘‘§ 330.1(k)’’ By order of the Board of Directors. Friday, except Federal holidays. The AD and add in its place ‘‘§ 330.1(l)’’. Dated at Washington, DC, this 6th day of docket contains this AD, the regulatory evaluation, any comments received, and ■ 6. In § 330.12: July 2011. other information. The address for the ■ a. In the first sentence of paragraph (a) Federal Deposit Insurance Corporation. Robert E. Feldman, Docket Office (phone: 800–647–5527) is remove ‘‘§ 330.1(p)’’ and add in its place Document Management Facility, U.S. ‘‘§ 330.1(q)’’. Executive Secretary. ■ Department of Transportation, Docket b. In the first sentence of paragraph [FR Doc. 2011–17686 Filed 7–13–11; 8:45 am] Operations, M–30, West Building (b)(1) remove ‘‘§ 330.1(o)’’ and add in its BILLING CODE 6714–01–P Ground Floor, Room W12–140, 1200 place ‘‘§ 330.1(p)’’. New Jersey Avenue SE., Washington, ■ 7. In § 330.13, in the first sentence of DC 20590. paragraph (a) remove ‘‘§ 330.1(l)’’ and DEPARTMENT OF TRANSPORTATION FOR FURTHER INFORMATION CONTACT: add in its place ‘‘§ 330.1(m)’’. In the last Jason Yang, Aerospace Engineer, Engine Federal Aviation Administration sentence of paragraph (a) remove Certification Office, FAA, 12 New ‘‘§ 330.1(q)’’ and add in its place England Executive Park, Burlington, MA 14 CFR Part 39 ‘‘§ 330.1(r)’’. 01803; phone: 781–238–7747; fax: 781– ■ 8. In § 330.16, in the first sentence of [Docket No. FAA–2010–1024; Directorate 238–7199; e-mail: [email protected]. paragraph (a) remove ‘‘§ 330.1(r)’’ and Identifier 2010–NE–34–AD; Amendment 39– SUPPLEMENTARY INFORMATION: add in its place ‘‘§ 330.1(s)’’. 16753; AD 2011–15–06] ■ 9. New § 330.101 is added to read as Discussion RIN 2120–AA64 follows: We issued a notice of proposed § 330.101 Premiums. Airworthiness Directives; General rulemaking (NPRM) to amend 14 CFR Electric Company GE90–76B; GE90– part 39 to include an airworthiness This interpretive rule describes 77B; GE90–85B; GE90–90B; and directive (AD) that would apply to the certain payments that are not deemed to GE90–94B Turbofan Engines specified products. That NPRM be ‘‘interest’’ as defined in § 330.1(k). published in the Federal Register on (a) Premiums, whether in the form of AGENCY: Federal Aviation December 22, 2010 (75 FR 80370). That merchandise, credit, or cash, given by a Administration (FAA), DOT. NPRM proposed to require initial and bank to the holder of a deposit will not ACTION: Final rule. repetitive FPIs and ECIs of the HPCR be regarded as ‘‘interest’’ as defined in 8–10 stage spool, P/Ns 1844M90G01 § 330.1(k) if: SUMMARY: We are adopting a new and 1844M90G02, for cracks between (1) The premium is given to the airworthiness directive (AD) for the the 9–10 stages, at each piece-part depositor only at the time of the products listed above. This AD requires exposure. opening of a new account or an addition initial and repetitive fluorescent to an existing account; penetrant inspections (FPIs) and eddy Comments (2) No more than two premiums per current inspections (ECIs) of the high- We gave the public the opportunity to deposit are given in any twelve-month pressure compressor rotor (HPCR) 8–10 participate in developing this AD. The interval; and stage spool, part numbers (P/Ns) following presents the comments (3) The value of the premium (in the 1844M90G01 and 1844M90G02, for received on the proposal and the FAA’s case of merchandise, the total cost to the cracks between the 9–10 stages at each response to each comment. bank, including shipping, warehousing, piece-part exposure. This AD was packaging, and handling costs) does not prompted by cracks discovered on one Request exceed $10 for a deposit of less than HPCR 8–10 spool between the 9–10 Two commenters, General Electric $5,000 or $20 for a deposit of $5,000 or stages in the weld joint. We are issuing Company and The Boeing Company, more. this AD to prevent failure of the HPCR requested that we remove the ‘‘Unsafe

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