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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rules6145products offered by insured depositoryinstitutions. In addition, we invitecomment on the related issue of anypossible increased burden to insureddepository institutions that suchprovisions would entail versus thepotential benefits to be achieved.(c) Proposals Enhance Safety andSoundness of Insured DepositoryInstitutions and Consumer ProtectionIn testimony before the U.S. House ofRepresentatives’ Subcommittee onFinancial Institutions and ConsumerCredit 4 the Chairman of the Board ofDirectors of the FDIC indicated that inconducting its review of regulationspursuant to section 303 of CDRIA, theFDIC would consider, among otherthings, whether the regulations arenecessary to ensure a safe and soundbanking system and whether theregulations can be justified on strongpublic policy grounds related toconsumer protection. The FDIC believesthat the proposed rule meets thesecriteria. It is intended to promotestability and confidence in the bankingsystem and to minimize the possibilityof customer confusion with respect towhether they are dealing with an FDICinsured institution and whether theadvertised product is insured by theFDIC.(d) Statutory AuthorityThe FDIC has the statutory authorityto, by regulation, require all insureddepository institutions to use the officialstatement in advertising and to prohibitits use in the advertisement ofnondeposit investment products.Section 9 of the FDIA authorizes theFDIC to prescribe ‘‘such rules andregulations as it may deem necessary tocarry out the provisions of [the FDIA] orof any other law which it has theresponsibility of administering orenforcing’’. 12 U.S.C. 1819(a) Tenth.The Supreme Court has stated that‘‘[w]here the empowering provision of astatute states simply that the agencymay ‘make * * * such rules andregulations as may be necessary to carryout the provisions of this Act,’ * * * thevalidity of the regulation will besustained so long as it is ‘reasonablyrelated to the purposes of the enablinglegislation’ ’’. Mourning v. FamilyPublications Service, Inc., 411 U.S. 356,369 (1973) (quoting Thorp v. HousingAuthority of the City of Durham, 393U.S. 268, 280–281 (1969)). Congress, increating the FDIC, sought to instillpublic confidence in the bankingsystem, promote safe and sound banking4 Also reported in 60 FR 62345 (December 6,1995).practices, eliminate runs on banks bydepositors, and safeguard deposits. SeeFDIC v. Allen, 584 F. Supp. 386, 397(E.D. Tenn. 1984); Doherty v. UnitedStates, 94 F.2d 495, 497 (8th Cir. 1938);Weir v. United States, 92 F.2d 634, 636(7th Cir. 1937). The proposed rule seeksto promote stability and confidence inthe banking system and avoid runs onbanks by depositors. It is thereforereasonably related to the enablinglegislation. Similarly, in promoting theaforementioned goals, the use or nonuseof the official statement is related tothe safety and soundness of insureddepository institutions and is thereforesubject to regulation under section 8(a)of the FDIA, 12 U.S.C. 1818(a), andsection 9(a) of the FDIA, 12 U.S.C.1819(a) Tenth. See also FDIC v. SumnerFin. Corp., 451 F.2d 898, 903 (‘‘the FDIChas the power to make such rules as arereasonable and necessary to effectuatethe purposes of the act’’).(e) Clarification of Delegated AuthorityPart 328 provides that the non-Englishequivalent of the official advertisingstatement may be used in anyadvertisement, provided, that thetranslation has had the prior writtenapproval of the Corporation. 12 CFR328.3(e). The proposed rule clarifies thatthe Director, Division of Complianceand Consumer Affairs; the DeputyDirector, Division of Compliance andConsumer Affairs; and any RegionalDirector, Division of Compliance andConsumer Affairs, may provide suchapproval on behalf of the FDIC.C. Request for Comment—ElectronicBanking IssuesIn recent years, new and innovativemedia by which insured depositoryinstitutions may market their productsand transact business have developed.Such media include computer networkssuch as the Internet. Many financialinstitutions have established ‘‘worldwide web sites’’ 5 by which customersmay obtain information about aninstitution and, in certain cases, transactbusiness with the institution. Thisrecent proliferation of world wide websites gives rise to certain issuesconcerning whether and under whatcircumstances part 328 should applywith respect to the Internet or othercomputer networks. The FDIC is notcurrently proposing any changes to therule to address explicit questions arisingout of this new technology. However,these issues are discussed below and theFDIC is also soliciting comment for the5 The FDIC is aware of over 200 insureddepository institutions that have a presence on theInternet.purpose of gathering information fromthe public on such issues.Neither the proposed or existing ruledefine the term ‘‘advertisement’’. Thestaff is of the view that such term asused in the proposed and existing ruleis not limited to television, radio, orprint advertisements. Rather, such termwould include, but not be limited to,advertisements transmitted viacomputer networks such as the Internet.Consumers using the Internet maytypically view any one of aninstitution’s web pages 6 directly, or mayenter the institution’s top level or‘‘home page’’. The staff is of the viewthat every institution’s home page is tosome extent an advertisement andaccordingly should contain the officialstatement to the extent required by therule. 7 Whether subsidiary web pagescontain advertisements will varydepending upon the content of theinformation within the particular webpage. The staff is of the view that eachsuch subsidiary web page that containsan advertisement should include theofficial statement, unless suchadvertisement is subject to one of theexceptions in § 328.3(c).The FDIC also seeks comment onwhether and under what circumstancesit should require insured depositoryinstitutions to utilize the electronicequivalent of the official bank or savingsassociation sign in their world wide websites. Should such determination bedifferent with respect to world wideweb sites at which business may betransacted as opposed to sites whereonly information is conveyed?D. Paperwork Reduction ActThe proposed rule would notconstitute a ‘‘collection of information’’within the meaning of section 3502(3) ofthe Paperwork Reduction Act of 1995(44 U.S.C. 3501 et seq.). Accordingly,the procedural and analyticalrequirements prescribed by that Act donot apply to the proposed rule.E. Regulatory Flexibility ActCompliance with the proposed ruletakes only nominal advertising space ortime and does not add significantly tothe cost of advertisement. Insured bankshave complied with the identicalrequirement for over sixty years withoutsignificant expense. Accordingly, the6 Web pages vary in length and may in certaincases encompass several computer screens ofinformation.7 The staff’s view is with respect to part 328 only.We do not express an opinion as to whetherinstitutions’ home pages are advertisements forother purposes. Furthermore, staff’s views on thismatter would not preclude an institution fromdemonstrating that its home page does not containan advertisement for purposes of part 328.