Federal Register / Vol. 59. No. 37 / Thursday. February 24. 1994 Rules and Regulations U.S.C. 1441a(b)(4). The RTC is committed, wherever practicable and whenever consistent with those. statutory Cost Constraints, to preserving the ownership characteristics of historically minority-owned depository nstitutions, and to increasing the total number of minority-owned depository nstitutions. See, Strategic Plan for the Resolution Trust Corporation, 54 FR 46574, November 3, 1989. Section 21A(s) of the FHLBA permits the RTC to make available to an acquiror which is either a minority depository institution or a women's depository institution, on a rent-free lease basis for not less than 5 years, any branch of a failed institution which is located in a "predominantly minority neighborhood. Section 21A(w)(17) of the FHLBA. which was added by section 3(a) of the Resolution Trust Corporation Completion Act. Pub. L. 103–204 (the Act), provides that in considering offers to acquire any insured depository institution, or any branch thereof, located in a "predominantly minority neighborhood". (as defined in regulations prescribed under subsection (s)), the RTC shall give preference to an offer from a minority individual. minority-owned business, or a minority depository institution (Minority Acquiror), over any other offer that results in the same cost to the RTC as determined under section 13(c)(4)(A) of the FDIA.1 This interim rule defines "predominantly minority neighborhood" as used in sections 21A(s) and 21A(w)(17) of the FHLBA as a geographic area constituting a United States Postal Service 5-digit Zip Code (Zip Code) in which 50% or more of the persons residing therein are minorities, based upon the most recent census data, unless the RTC determines, in its sole discretion, that other reasonably reliable, readily accessible data indicates different neighborhood boundaries. The population data and the minority composition of these Zip This Act also provides, in connection with such an acquisition, the following additional preferences: (i) the Minority Acquiror shall be eligible for minority interim capital assistance under section 21A(u)(1) of the FHLBA. provided that such assistance is consistent with section 13(c)(4XA) of the FDIA: (ii) the RTC may provide to the Minority Acquiror performing assets under the RTC's control, in addition to those of the depository institution or branch to be acquired, in an amount not greater than the amount of the net liabilities carried on the books of the depository institution or branch and acquired by the Minority Acquiror; and (iii) such disposition of the performing assets of the failed depository institution or branch to the Minority Acquiror shall have a first priority over a disposition by the RTC of such assets for any other purpose Codes are determined using the most If the institution or a branch thereof There is no legislative history which One of the ordinary meanings of the statutory framework a neighborhood can The word "minority" is defined by 8843 interim rule provides a definition of the word "minority" which incorporates the statutory definition but permits the use of equivalent classifications used by the Census Bureau in collecting the Census Data. Among other categories, the Census Bureau collects and publishes population Census Data by State, County, County subdivision. Place. Zip Code (available on CD-rom or tape) Census Tract or block numbering area. the U.S. population provides data on the Block group, and Block. Each census of minority composition of those areas in a manner which corresponds with the statutory definition of "minority" in FIRREA. The population classifications utilized in the Census Data for the 1990 census are: Hispanic origin and the following racial categories: White; Black: American Indian. Eskimo, or Aleut; Asian or Pacific Islander; and Other Race. Bureau of the Census, Economics and Statistics Administration. U.S. Department of Commerce, 1990 CENSUS OF POPULATION, GENERAL POPULATION CHARACTERISTICS (1992). Since Census Data is readily available, its use to determine the minority composition of a particular geographic area is not only reasonable and efficient, but also consistent with the RTC's statutory Cost Constraints. The ordinary dictionary meaning of the word "neighborhood" is a district or area with distinctive characteristics. WEBSTER'S II NEW RIVERSIDE UNIVERSITY DICTIONARY 789 (1988). Neighborhoods vary in size and can be contained within each other. Since the only reasonably reliable population data which is readily available on a nationwide basis is Census Data, it is both reasonable and cost-efficient to define "neighborhood" in terms of the geographic areas utilized by the Census Bureau. Census Data, including minority composition, is available for specific geographic areas, including among others, State, County, County subdivision. Place. Zip Code. Census Tract, Block and Block group. Census Tracts and Zip Codes appear to be the only such categories which might approximate the size and characteristics of a "neighborhood" served by an "institution, or any branch" thereof.2 2 The RTC has found no indication that an extensive, customized survey and analysis of the demographics and other characteristics of the geographic area surrounding each branch of a failed institution would yield resuits significantly different from those obtained by using Census Data and Zip Codes or Census Tracts. In addition. reliable population data for individually determined areas is not readily available on a consistent nationwide basis. The nature of the RTC's statutory Cost Constraints in marketing and Continued 8844 Federal Register / Vol. 59, No. 37 Thursday, February 24, 1994 Rules and Regulations The United States Postal Service has subdivided the United States and its territories into discrete geographic areas for purposes of the distribution of mail, and has designated each such area with a 5-digit numeric Zip Code. See, U.S. Postal Service, 1993 NATIONAL FIVEDIGIT ZIP CODE & POST OFFICE DIRECTORY. The individual areas defined by the Zip Codes generally correspond to a district or area with distinctive characteristics. The Zip Code itself is one distinctive characteristic that ties the area and its residents together. Moreover, most Zip Code areas are further distinguished by the presence of a postal facility designed to service those neighborhoods. Accordingly, Zip Codes constitute an existing, comprehensive system for describing areas that generally approximate neighborhoods. Individual Census Tracts and Census Blocks, by their nature, do not appear to be reasonable alternatives to Zip Codes to utilize on a general basis. According to the Census Bureau, Census Blocks are small areas bounded on ail sides by visible features such as streets, roads, streams, and railroad tracks, and by invisible boundaries such as city, town, township, and county limits, property lines, and short, imaginary extensions of streets and roads. Bureau of the Census, Economics and Statistics Administration, U.S. Department of Commerce, 1990 CENSUS OF HOUSING, GENERAL HOUSING CHARACTERISTICS (1992). Individual Census Blocks because of their size appear to be inappropriate for determining the boundaries of a neighborhood served by a financial institution, or a branch thereof on a general basis. Census Tracts,3 although larger than Census Blocks, are small, relatively permanent statistical subdivisions of a country which usually have between 2,500 and 8.000 persons, and when first delineated, are designed to be homogeneous with respect to population characteristics, economic status, and living conditions. Bureau of the Census, Economics and Statistics Administration, U.S. Department of Commerce. 1990 CENSUS OF HOUSING, GENERAL HOUSING CHARACTERISTICS (1992). Individual Census Tracts or Census Blocks are generally impractical for use in defining the boundaries of a neighborhood served by a financial institution, or a branch thereof, on a generally uniform basis and are inconsistent with the spirit of the legislation. However, use of Census Tracts or Census Blocks on an individual or aggregate basis may be appropriate on an exception basis. The Act is intended to enhance opportunities for Minorities to acquire institutions and branches which primarily "serve" Minority residents. 139 Cong. Rec. H10899-900 (daily ed. November 22, 1993) (statement of Rep. Mfume). The people served by a depository institution or branch may be located over a relatively large geographic area, generally transcending Census Block boundaries and, most likely, Census Tract boundaries as well. Census Tracts and Census Blocks tend to be small areas, focused only on residences and are generally not focused on all residential neighborhoods served by a local financial institution, or a branch office thereof. The Zip Codes (and the boundaries thereof) of offices of a failed institution tend to be larger areas and are readily ascertainable both by RTC personnel and by potential bidders. Such is not the case for Census Tracts. The addresses of each of the offices of a failed institution already contain the Zip Code, and the boundaries of each Zip Code area are available at the local Post Office. Notwithstanding the obvious advantages of a definition based on fixed methodology, circumstances may arise where that approach fails to accurately reflect the reality of the relevant neighborhood. For example, if an institution or branch is physically located within Zip Code 00001, near the boundary with Zip Code 00002, a mechanical application of the Zip.Code approach would indicate that the branch serves customers in the neighborhood defined by Zip Code 00001. Or for example, a rigid application of the Zip Code approach to the individual offices of an institution might preclude the designation of the whole institution as being located in a >Starting with the 1990 Census those areas which predominantly minority neighborhood, selling a failed depository institution dictates that the identification of "predominantly minority neighborhoods" be accomplished with relative speed and minimal expense. The failed institutions the RTC resolves suffer significant operating losses on a daily basis. An increase in those operating losses due to a delay in the resolution of the institution caused by the implementation of a definition of "predominately minority neighborhood" which is difficult and time consuming to utilize is clearly inconsistent with the RTC's statutory duties. are not covered by Census Tracts have been subdivided into "Block Numbering Areas" (BNA's) These BNA's are essentially the equivalent of Census Tracts, except that they have been delineated by a State agency instead of a local committee. although other rational bases might exist for a determination that the institution as a whole is located in a predominantly minority neighborhood. Therefore, rather than rigidly applying the Zip Code approach, if the RTC determines, in its sole discretion and subject to its Cost Constraints, that other reasonably reliable information and data, that is readily accessible to it, indicates different boundaries which more accurately reflect the relevant neighborhood, the RTC may define the relevant neighborhood in terms of those different boundaries. Conclusion The RTC's definition of "predominantly minority neighborhood" is based on readily available, established and accepted information: Zip Codes and Census Data. A "predominantly minority neighborhood" can, therefore, be identified using existing, objective standards: (1) A Zip Code to define the geographic area which generally constitutes the neighborhood and (2) Census Data to determine the minority composition of that neighborhood. In the event that the RTC, in its sole discretion, determines that other reasonably reliable information and data, that is readily accessible to it, indicates more accurate boundaries for such neighborhood, the RTC will define such neighborhood using those more accurate boundaries. The proposed definition permits the RTC to quickly identify "predominantly minority neighborhoods" without delaying the resolution of an institution consistent with the RTC's statutory Cost Constraints. The methodology adopted by this interim rule constitutes a reasonable basis upon which to define "predominantly minority neighborhood" consistent with the purposes of sections 21A(s) and (w)(17) of the FHLBA and consistent with the RTC's duties in resolving failed institutions. Administrative Procedure Act The RTC is adopting this rule as an interim rule. It will be effective immediately upon publication in the Federal Register without the usual notice and comment period or delayed effective date as provided for in the Administrative Procedure Act, 5 U.S.C 553. These requirements may be waived for "good cause." The definition provided by the interim rule implements the Act. Promulgation of the rule on an expedited basis is necessary to permit the immediate implementation of the new statute in order to avoid the additional losses that would otherwise be incurred due to the delay in the resolution of failed institutions pending the usual delayed effective date. Thus, the RTC finds that the benefits to the public in adopting Federal Register / Vol. 59. No. 37 / Thursday, February 24. 1994 / Rules and Regulations the interim rule outweigh any possible harm resulting from not seeking comment on the proposed rule in advance of its effective date. The RTC actively solicits comment on this interim rule and will consider those comments in the adoption of the rule as final. Initial Regulatory Flexibility Analysis As required by the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., the following initial regulatory flexibility analysis is provided: 1. Reasons, objectives, and legal bases underlying the interim rule. These elements have been discussed above in the Supplementary Information section. 2. Small entities to which the rule would apply. This rule applies equally to acquiring institutions of all sizes inasmuch as the RTC has been given no discretion in this matter by Congress. 3. Impact of the interim rule on small businesses. There is no burden imposed on small businesses by this rule which merely defines, pursuant to Congressional direction, a term utilized in the statute. 4. Overlapping or conflicting federal rules. There are no known federal rules that overlap, duplicate, or conflict with the interim rule. 5. Alternatives to the interim rule. The RTC has not identified alternatives that would be less burdensome to small businesses and yet effectively accomplish the objectives of the rule because there is no burden imposed on small business. Request for Public Comment The RTC is issuing this interim rule in response to statutory direction to define "predominantly minority neighborhood." The RTC is, however, hereby requesting comment during a 30day comment period on all aspects of the interim rule. List of Subjects in 12 CFR Part 1630 For the reasons set out in the preamble, the RTC hereby adds part 1630 to title 12. chapter XVI of the Code of Federal Regulations, to read as follows: § 1630.1 Purpose and scope. The provisions of this part define "predominantly minority neighborhood" for the marketing, sale and resolution of depository institutions, and branches thereof, by the Resolution Trust Corporation (RTC) under the rent-free lease provisions of section 21A(s) of the Federal Home Loan Bank Act (FHLBA) and the minority preference provisions of section 21A(w)(17) of the FHLBA. § 1630.2 Definitions. (a) Branch means a domestic branch as defined in section 3(0) of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1813(0). (b) Census Bureau means the U.S. Department of Commerce, Economics and Statistics Administration, Bureau of the Census. (c) Census Data means the population data, including without limitation the composition by Race and Hispanic origin of each U.S. Postal Service Zip Code area, provided by the Census Bureau for the most recent Census of Population. (d) Minority means, any Black American, Native American. Hispanic American, or Asian American, as specified in section 1204(c)(3) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 as utilized in sections 21A(s) and (w)(17) of the Federal Home Loan Bank Act (12 U.S.C. 1441a) or such other equivalent classifications, as determined by the Resolution Trust Corporation, including, without limitation, those used by the Census Bureau for the most recent Census Data. (e) Race means a racial classification used by the Census Bureau pursuant to the guidelines in Federal Statistical Directive No. 15 issued by the Office of Management and Budget, which provides standards on ethnic and racial categories for statistical reporting to be used by all Federal agencies. The OMB directive is available from Office of Administration, EOP Publications, 725 17th Street, NW., room 2200, New EOB, Washington, DC 20503. (f) RTC means the Resolution Trust Corporation, in its corporate. conservatorship or receivership capacities, as applicable. (g) U.S. Postal Service Zip Code means a five-digit numeric code that identifies a specific geographic area within the United States and its territories which is used by the U.S. Postal Service for the distribution of mail. § 1630.3 Predominantly minority neighborhood. 8845 The phrase "predominantly minority neighborhood" as used in sections 21A(s), (w)(17) of the Federal Home Loan Bank Act. means an area delineated by the geographical boundaries of a U.S. Postal Service Zip Code, in which, according to the most recent Census Data. 50% or more of the residential population is Minority: unless a different geographic area has been determined by the RTC, in its sole discretion, based on readily accessible and reasonably reliable information and data, to more accurately represent an area having distinctive or shared characteristics, that is served by the institution, or Branch thereof. being marketed by the RTC, in which 50% or more of the population is Minority. By order of the Chief Executive Officer. Dated at Washington, DC, this 18th day of February 1994. Resolution Trust Corporation. [FR Doc. 94-4184 Filed 2-22-94: 11:32 ami BILLING CODE 6714-01-M DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. 92-CE-59-AD; Amendment 398837; AD 94-04-17] Airworthiness Directives: Twin Commander Aircraft Corporation 500, 520, 560, 680, 681, 685, 690, 695, and 720 Series Airplanes AGENCY: Federal Aviation SUMMARY: This amendment adopts a TO: FROM: SUBJECT: 1. All Divisions and Offices, Washington Field Office Vice Presidents Vice Presidents and/or Directors, Field Resolution offices J. Paul Ramey Vice President Division of Resolutions Implementation of "Predominantly Minority Neighborhood" Purpose. To issue instructions to be used by the Division 2. Scope. The provisions of this directive apply to all Total No. of Pages 6 RTC 1212/01(11-92) Control No. 94-014 Exhibit 4 offer from any minority individual, minority-owned business, or a minority depository institution, over any other offer that results in the same cost to the Corporation, as determined under section 13 (c) (4) of the Federal Deposit Insurance Act (FDIA]." (Hereinafter referred to as "the Bid Preference Provision".) The RTC's regulatory definition of "predominantly minority neighborhood," as contained in 12 CFR 1630.3, is based on readily available, established and reliable information from 5-digit zip codes and Census Data. a. A "predominantly minority neighborhood" can, therefore, usually be identified using existing, objective standards, such as: (1) a zip code to define the geographic area which generally constitutes the neighborhood, and (2) Census Data to determine the minority composition of that neighborhood. b. The definition also allows for the reasonable delineation by the RTC of any other local area having distinctive and shared characteristics that would meet the minority population threshold and qualify as a "predominantly minority neighborhood". The definition contained in 12 CFR 1630.3 permits the RTC to quickly identify "predominantly minority neighborhoods" without delaying the resolution of an institution consistent with the RTC's statutory cost constraints. 4. Determination of "Predominantly Minority Neighborhoods" a. For Whole Institutions. The whole institution is to be designated as being located in a "predominantly minority neighborhood," if: (1) Fifty percent or more of its individual branch offices are determined to be located in "predominantly minority neighborhoods" under paragraph 4b, below; or (2) Its home office, listed in the records of the Office of Thrift Supervision (CTS) on the date the RTC was placed in control of the failed institution, is determined by the RTC to be located in a "predominantly minority neighborhood" under paragraph 4b, below. However, if, on such date, that home office did not provide deposit-taking services to the neighborhood or |