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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rules6147which branches are insured and whichbranches are not insured in all of itsadvertisements requiring the use of theofficial advertising statement.(b) Official advertising statement. Theofficial advertising statement shall be insubstance as follows: ‘‘Member of theFederal Deposit Insurance Corporation’’.The word ‘‘the’’ or the words ‘‘of the’’may be omitted. The words ‘‘This bankis a’’, ‘‘This savings association is a’’,‘‘This savings and loan is a’’, or thewords ‘‘This institution is a’’ or thename of the insured depositoryinstitution followed by the words ‘‘is a’’may be added before the word‘‘member.’’ The short title ‘‘Member ofFDIC’’ or ‘‘Member FDIC’’ or areproduction of the ‘‘symbol’’ may beused by insured depository institutionsat their option as the official advertisingstatement. The official advertisingstatement shall be of such size and printto be clearly legible. Where it is desiredto use the ‘‘symbol’’ of the Corporationas the official advertising statement, andthe ‘‘symbol’’ must be reduced to suchproportions that the small lines of typeand the Corporation seal therein areindistinct and illegible, the Corporationseal in the letter C and the two lines ofsmall type may be blocked out ordropped.(c) Types of advertisements which donot require the official advertisingstatement. The following types ofadvertisements need not include theofficial advertising statement:(1) Statements of condition andreports of condition of an insureddepository institution which arerequired to be published by state orfederal law;(2) Stationery (except when used forcircular letters), envelopes, depositslips, checks, drafts, signature cards,deposit passbooks, certificates ofdeposit, and other similar items;(3) Signs or plates in the bankingoffice or attached to the building orbuildings in which the banking officesare located;(4) Listings in directories;(5) Advertisements not setting forththe name of the insured depositoryinstitution;(6) Display advertisements indepository institution directory,provided the name of the depositoryinstitution is listed on any page in thedirectory with a symbol or otherdescriptive matter indicating it is amember of the Federal DepositInsurance Corporation;(7) Joint or group advertisements ofbanking services where the names ofinsured depository institutions andnoninsured institutions are listed andform a part of such advertisements;(8) Advertisements by radio ortelevision, other than displayadvertisements, which do not exceedthirty (30) seconds in time;(9) Advertisements which are of thetype or character making it impracticalto include thereon the officialadvertising statement including, but notlimited to, promotional items such ascalendars, matchbooks, pens, pencils,and key chains;(10) Advertisements which contain astatement to the effect that thedepository institution is a member ofthe Federal Deposit InsuranceCorporation, or that the depositoryinstitution is insured by the FederalDeposit Insurance Corporation, or thatits deposits or depositors are insured bythe Federal Deposit InsuranceCorporation to the maximum of$100,000 for each depositor;(11) Advertisements which do notrelate to insured deposit products orservices.(d) Prohibited use. (1) Except asprovided in paragraph (d)(2) of thissection, an insured depositoryinstitution may not include the officialadvertising statement or refer to eitherfederal deposit insurance or the FederalDeposit Insurance Corporation in anyadvertisement relating to nondepositinvestment products or similarnondeposit products.(2) In advertisements containinginformation about both insured depositsand nondeposit investment products orsimilar nondeposit products, theinformation concerning insureddeposits shall be clearly segregated fromthe information about nondepositinvestment products (or similarnondeposit products) and shall containeither the official statement, or anysimilar statement, including, but notlimited to, statements to the effect thatthe depository institution’s deposits ordepositors are insured by the FederalDeposit Insurance Corporation to themaximum of $100,000 for eachdepositor, or that specific depositproducts are insured by the FederalDeposit Insurance Corporation.(e) Billboard advertisements. Wherean insured depository institution hasbillboard advertisements in use as of[the effective date of the final rule]which are required to include theofficial advertising statement and theinsured depository institution has directcontrol of such advertisements either bypossession or under the terms of acontract, the institution shall, as soon asit can consistent with its contractualobligations, cause the officialadvertising statement to be includedtherein.(f) Official advertising statement innon-English language. The non-Englishequivalent of the official advertisingstatement may be used in anyadvertisement: Provided, That thetranslation has had the prior writtenapproval of the Corporation. Authorityto provide such approval on behalf ofthe Corporation is hereby delegated tothe Director, Division of Complianceand Consumer Affairs; the DeputyDirector, Division of Compliance andConsumer Affairs; and each RegionalDirector, Division of Compliance andConsumer Affairs.§ 328.4 [Removed]5. Section 328.4 is removed.By order of the Board of Directors.Dated at Washington, D.C., this 21st day ofJanuary, 1997.Federal Deposit Insurance Corporation.Jerry L. Langley,Executive Secretary.[FR Doc. 97–3319 Filed 2–10–97; 8:45 am]BILLING CODE 6714–01–PSMALL BUSINESS ADMINISTRATION13 CFR Part 107Small Business Investment CompaniesAGENCY: Small Business Administration.ACTION: Proposed rule.SUMMARY: In response to concernsexpressed by a number of smallbusiness investment companies (SBICs),SBA is proposing to modify theexamination fees charged to SBICs. SBAbelieves that the current fee scheduleplaces a disproportionate burden oncertain classes of licensees (particularlythose with the largest amount of totalassets) and, in some cases, results in feeassessments that exceed reasonablecharges based on the level of effort andtime associated with the examinationprocess.DATES: Comments must be submitted onor before March 13, 1997.ADDRESSES: Written comments shouldbe addressed to Don A. Christensen,Associate Administrator for Investment,U.S. Small Business Administration,409 3rd Street, SW., Suite 6300,Washington, DC 20416.FOR FURTHER INFORMATION CONTACT:Leonard W. Fagan, Investment Division,at (202) 205–7583.SUPPLEMENTARY INFORMATION: OnJanuary 31, 1996 the Small BusinessAdministration (SBA) published finalregulations which, among other things,increased the examination fees chargedto SBICs. See 61 FR 3177. Fees
6148 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Proposed Rulescontinued to be assessed based on totalassets of the licensee, but at higher rates.The new fee schedule was designed toproduce total revenue sufficient to coverthe current direct costs to SBA ofconducting examinations.Since the effective date andimplementation of this regulation(March 1, 1996), SBA has received anumber of comments regarding theimpact of the new fee schedule onlicensees in certain asset size groups. Inparticular, bank-owned SBICs argue thatthey are required to bear an unfairportion of the overall fees. In thisregard, they note that they generallyhave no federal funds at risk. However,because fees are based on total assetsand they generally have the largestamount of total assets, they are requiredto pay fees at levels which far exceedthe level of effort and risk associatedwith the examination process. Similarly,larger SBICs which are not bank-ownedand do rely on federal funds tosupplement private capital argue thatthe fees greatly exceed the amount theypay for financial audits and are notrepresentative of the level of effort andtime attributable to the process.Because of these comments, the SBAhas re-assessed its examination feeschedule and its impact on the variousclasses of licensees. Based on itsreassessment, the SBA has concludedthat the current fee schedule places adisproportionate burden on certainclasses of licensees and, in some cases,results in fee assessments that exceedreasonable charges based on the level ofeffort and time associated with theexamination process.To remedy this situation, the SBA isproposing revisions to § 107.692 toestablish fees that are more reasonablein relation to the level of effort andresources expended by the Agency. Theproposed fee schedule would establish‘‘base fees’’ for examinations. The basefee increases as a licensee’s total assetsincrease, but is capped at $14,000. Thebase fee would be adjusted upward incircumstances where the Agency incursadditional cost or burdens in theprocess because of circumstances solelyrelated to the licensee to be examined.Similarly, the base fee would beadjusted downward wherecircumstances solely related to thelicensee to be examined are such thatthe Agency’s level of effort and time areminimized. In SBA’s view, theseadjustments are incentives for thelicensees to adhere to programregulations and will serve to furtherenhance the safety and soundness of theSBIC program. The new fee schedulewould apply to examinations beginningafter the effective date of a final rule.Compliance With Executive Orders,12612, 12778, and 12866, theRegulatory Flexibility Act (5 U.S.C. 601,et seq.), and the Paperwork ReductionAct (44 U.S.C. Ch. 35)SBA certifies that this proposed rulewould not be a significant regulatoryaction for purposes of Executive Order12866 because it would not have anannual effect on the economy of morethan $100 million, and that it would nothave a significant economic impact ona substantial number of small entitieswithin the meaning of the RegulatoryFlexibility Act, 5 U.S.C. 601, et seq. Thepurpose of the proposed rule is tomodify the existing regulatory guidancerelated to SBIC examination fees. Theproposed regulations would provide formore reasonable and equitableexamination fees. The proposed feestructure would more properly reflectthe level of effort and Agency resourcesexpended to conduct an examination,would encourage continued compliancewith program regulations, and wouldcontinue to allow for efficient andeffective program administration.The proposed regulations would havesome economic effect. The base fee forexaminations would continue to bebased on total assets of a licensee and,for the most part, at the rates prescribedin current regulations. However, nolicensee would have a base fee greaterthan $14,000. The proposed regulationswould provide for discounts of the baseexamination fee for (1) licensees thathad no outstanding regulatory violationsat the time of the examination and therewere no violations noted as a result ofthe most recent prior examination; and(2) licensees that are cooperative withSBA examination personnel by beingfully responsive to the letter ofnotification of examination. Similarly,the proposed regulations would provideincreases to the base examination fee fora licensee that (1) is organized as apartnership or limited liabilitycompany; (2) is authorized to issueParticipating Securities; and/or (3)maintains its records/files in multiplelocations.The largest licensees, those with totalassets exceeding $60 million, wouldrealize substantial fee decreases. Theexamination base fee of all licenseespotentially could be increased ordecreased. Therefore, all licensees withtotal assets below $60 million mayexperience a 5% to 25% increase or a10% to 25% decrease in the cost of anannual examination. The economicimpact in either case is inconsequentialgiven the total number of licensees andthe base fees applicable to the majorityof the licensees. Further, even assumingthe maximum increases provided for inthe proposed regulations, most licenseeswith total assets greater than $60million would realize significantexamination fee reductions.For purposes of the PaperworkReduction Act, 44 U.S.C. Ch. 35, SBAcertifies that this proposed rule, ifadopted in final form, would contain nonew reporting or recordkeepingrequirements that have not already beenapproved by the Office of Managementand Budget.For purposes of Executive Order12612, SBA certifies that this rulewould not have any federalismimplications warranting the preparationof a Federalism Assessment.For purposes of Executive Order12778, SBA certifies that this rule isdrafted, to the extent practicable, inaccordance with the standards set forthin Section 2 of that Order.List of Subjects in 13 CFR Part 107Investment companies, Loanprograms-business, Reporting andrecordkeeping requirements, Smallbusinesses.For the reasons set forth above, SBAhereby proposes to amend Part 107 ofTitle 13 of the Code of FederalRegulations as follows:PART 107—SMALL BUSINESSINVESTMENT COMPANIES1. The authority citation for part 107is revised to read as follows:Authority: 15 U.S.C. 681 et seq., 683,687(c), 687b, 687d, 687g and 687m, Pub. L.104–208.2. Section 107.692 is revised to readas follows:§ 107.692 Examination fees.(a) General. SBA will assess fees forexaminations in accordance with this§ 107.692. Unless SBA determinesotherwise on a case by case basis, SBAwill not assess fees for specialexaminations to obtain specificinformation.(b) Base fee. A base fee will beassessed based on your total assets (atcost) as of the date of your latestcertified financial statement or a morerecent interim statement requested byand submitted to SBA in connectionwith the examination. The base fee tableis as follows:
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