41392 Federal Register / Vol. 76, No. 135 / Thursday, July 14, 2011 / Rules and Regulations 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. VerDate Mar<15>2010 14:53 Jul 13, 2011 Jkt 223001 PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 E:\FR\FM\14JYR1.SGM 14JYR1 wreier-aviles on DSKGBLS3C1PROD with RULES Federal Register / Vol. 76, No. 135 / Thursday, July 14, 2011 / Rules and Regulations 41393 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.