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Federal Register / Vol. 59. No. 37 | Thursday. February 24. 1994 / Rules and Regulations


U.S.C 1441ab)(4). The RTC is

Codes are determined using the most interim rule provides a definition of the committed, wherever practicable and recent (currently 1990 data) Census of word “minority" which incorporates the whenever consistent with those.

Population data (Census Data) collected statutory definition but permits the use statutory Cost Constraints, to preserving and published by the U.S. Department of equivalent classifications used by the the ownership characteristics of

of Commerce, Economics and Statistics Census Bureau in collecting the Census historically minority. wned depository Administration, Bureau of the Census Data. Among other categories, the nstitutions, and to increasing the total (Census Bureau).

Census Bureau collects and publishes number of minority-owned depository If the institution or a branch thereof

population Census Data by State. institutions. See, Strategic Plan for the is located in a Zip Code area for which County. County subdivision. Place. Zip Resolution Trust Corporation, 54 FR no significant Census Data is available Code (available on CD-rom or tape) 46574, November 3, 1989. (e.g., a business district or office

Census Tract or block numbering area. Section 21A(s) of the FHLBA permits building) the Zip Code of a nearby Block group, and Block. Each census of the RTC to make available to an acquiror geographic area served by the institution the U.š. population provides data on the which is either a minority depository or branch, for which such Census Data

minority composition of those areas in institution or a women's depository is available, will be used as its Zip Code a manner which corresponds with the institution, on a rent-free lease basis for for purposes of this rule. If the RTC

statutory definition of "minority" in not less than 5 years, any branch of a determines, in its sole discretion, based FIRREA. The population classifications failed institution which is located in a upon other reasonably reliable and utilized in the Census Data for the 1990 "predominanty minority

readily accessible data, and subject to consus are: Hispanic origin and the neighborhood."

RTC's Cost Constraints, that a different following racial categories: White: Section 21A(w)(17) of the FHLBA, delineation would more accurately Black: American Indian, Eskimo, or which was added by section 3(a) of the reflect the area served by the financial Aleut; Asian or Pacific Islander: and Resolution Trust ation

institu on or branch to be marketed. the Other Race. Bureau of the Census, Completion Act. Pub. L. 103–204 (the RTC will use such delineation as the Economics and Statistics Act). provides that in considering offers boundaries for the relevant

Administration. U.S. Department of to acquire any insured depository neighborhood.

Commerce, 1990 CENSUS OF institution, or any branch thereof.

There is no legislative history which POPULATION, GENERAL located in a "predominantly minority might provide clear guidance in

POPULATION CHARACTERISTICS neighborhood". (as defined in developing a definition of

(1992). Since Census Data is readily regulations prescribed under subsection "predominantly minority

available, its use to determine the (s)), the RTC shall give preference to an

neighborhood. Consequently, except minority composition of a particular offer from a minority individual.

for the word “minority" which is geographic area is not only reasonable minority-owned business, or a minority statutorily defined. the definition of and efficient, but also consistent with depository institution (Minority "predominantly minority

the RTC's statutory Cost Constraints. Acquiror), over any other offer that neighborhood" was, therefore,

The ordinary dictionary meaning of results in the same cost to the RTC as developed based upon the common or the word "neighborhood" is a district or determined under section 13(c)(4)(A) of ordinary meanings of the individual area with distinctive characteristics. the FDLA."

words comprising the phrase, the WEBSTER'S O NEW RIVERSIDE This interim rule defines

statutory context in which they have UNIVERSITY DICTIONARY 789 (1988). "predominantly minority

been used, and based upon readily Neighborhoods vary in size and can be Deighborhood" as used in sections available data.

contained within each other. Since the 21A(s) and 21A(w)(17) of the FHLBA as One of the ordinary meanings of the only reasonably reliable population data a goograpbic area constituting a United word "predominant" is "the most which is readily available on a States Postal Service 5-digit Zip Code common." WEBSTER'S II NEW

nationwide basis is Census Data, it is (Zip Code) in which 50% or more of the

RIVERSIDE UNIVERSITY DICTIONARY both reasonable and cost-efficient to persons residing therein are minorities, 927 (1988). Since in the context of this

define "neighborhood" in terms of the based upon the most recent census data. statutory framework a neighborhood can geographic areas utilized by the Census unless the RTC determines, in its sole only be either a minority neighborhood Bureau. Consus Data, including discretion, that other reasonably or a non-minority neighborhood, the

minority composition, is available for reliablo, readily accessible data most common or prevalent of two

specific geographic areas, including indicates different neighborhood categories means a majority or more

among others. State. County. County boundaries. The population data and than half. Moreover, consistent with the

subdivision, Place, Zip Code. Census the minority composition of these Zip

legislative purpose of preserving and Tract, Block and Block group. Census promoting minority ownership and

Tracts and Zip Codes appear to be the service, in the case of any exact 50% This Act also provides in connection with such

only such categories which might un acquisition. the following additional preferences: split between the two categories.

approximate the size and characteristics (I) tbe Minority Acquiror shall be eligible for minorities should be viewed as

of a "neighborhood" served by an minority interim capital assistana undar section

predominant. Therefore, if half or more 21A/uX1) of the FHLBA. provided that such

"institution, or any branch" thereof.2 of the residents of a neighborhood are assistanca is consistent with section 13(c)(AXA) of the FDIA: (ii) the RTC may provide to the Minority minorities, that neighborhood is

2 The RTC has found no indication that an Acqutror performing assets under the RTC's control. predominantly minority.

extensive, customized survey and analysis of the in addition to those of the depository institution or The word “minority' is defined by demographics and other characteristics of the brunch to be acquired. in an amount not greater statute to have the meaning given such

geographic are surrounding each branch of a failed then the umount of the net liabilities carried on the

institution would yield results significantly bootus of the depository institution or branch and term in section 1204(c)(3) of FIRREA.

different from those obtained by using Census Data acquired by the Minority Acquiror, and (iii) such Sections 21A(s) & 21A(w)(17) of the and Zip Codes or Census Tracts. In addition. disposition of the performing assets of the failed FHLBA. Section 1204(c)(3) of FIRREA reliable population data for individually depository institution or branch to the Minority defines "minority" to mean "any Black

determined arou is not roudily available on a Acquiror sball bave a first priority over a

consistent nationwide besis. The nature of the disposition by the RTC of such assets for any other American. Native American, Hispanic

RTC's statutory Cost Constraints in marketing and purpo American, or Asian American." This



Federal Register / Vol. 59, No. 37 | Thursday, February 24, 1994 / Rules and Regulations

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The United States Postal Service has status, and living conditions. Bureau of Code approach, if the RTC determines, subdivided the United States and its the Census. Economics and Statistics in its sole discretion and subject to its territories into discrete geographic areas Administration. U.S. Department of

Cost Constraints, that other reasonably for purposes of the distribution of mail, Commerce. 1990 CENSUS OF

reliable information and data, that is
and has designated each such area with HOUSING, GENERAL HOUSING readily accessible to it, indicates
a 5-digit numeric Zip Code. See, U.S. CHARACTERISTICS (1992).

different boundaries which more
Postal Service, 1993 NATIONAL FTVE- Individual Census Tracts or Census accurately relled the relevant
DIGIT ZIP CODE & POST OFFICE Blocks are generally impractical for use neighborhood, the RTC may define the
DIRECTORY. The individual areas in defining the boundaries of a

relevant neighborhood in terms of those
defined by the Zip Codes generally neighborhood served by a înancial different boundaries.
correspond to a district or area with insutution, or a branch thereof, on a

Conclusion distinctive characteristics. The Zip Code generally uniform basis and are itself is one distinctive characteristic inconsistent with the spirit of the

The RTC's definition of that ties the area and its residents legislation. However, use of Census "predominantly minority together. Moreover, most Zip Code areas Tracts or Census Blocks on an

neighborhood" is based on readily are further distinguished by the individual or aggregate basis may be

available, established and accepted presence of a postal facility designed to appropriate on an exception basis. The information: Zip Codes and Cansus service those neighborhoods. Act is intended to enhance

Data. A "predominantly minority Accordingly. Zip Codes constitute an opportunities for Minorities to acquire neighborhood" can, therefore, be existing. comprehensive system for institutions and branches which

identified using existing. objective describing areas that generally

primarily “serve" Minority residents. standards: (1) A Zip Code to define the approximate neighborhoods.

139 Cong. Rec. H10899 900 (daily od. geographic area which generally Individual Census Tracts and Census November 22, 1993) (statement of Rep. constitutes the neighborhood and (2) Blocks, by their nature, do not appear to Mfume). The people served by a

Census Data to determine the minority be reasonable alternatives to Zip Codes depository institution or branch may be composition of that neighborbood. In to utilize on a general basis. According located over a relatively large

the event that the RTC, in its sole to the Census Bureau. Census Blocks are geographic area. generally transcending discretion, determines that other small areas bounded on ail sides by Census Block boundaries and, most reasonably reliable information and visible features such as streets, roads, likely. Census Tract boundaries as well. data, that is readily accessible to it, streams, and railroad tracks, and by Census Tracts and Cansus Blocks tend indicates more accurate boundaries for invisible boundaries such as city, town, to be small areas, focused only on such neighborbood, the RTC will define township, and county limits, property residences and are generally not focused such neighborhood using those more lines, and short, imaginary extensions of on all residential neighborhoods served accurate boundaries. The proposed streets and roads. Bureau of the Census, by a local financial institution, or a definition permits the RTC to quickly Economics and Statistics branch office thereof.

identify "predominantly minority Administration, U.S. Department of

The Zip Codes (and the boundaries neighborboods" without delaying the Commerce, 1990 CENSUS OF

thereof) of offices of a failed institution resolution of an institution consistent HOUSING, GENERAL HOUSING

tend to be larger areas and are readily with the RTC's statutory Cost CHARACTERISTICS (1992). Individual

ascertainable both by RTE personnel Constraints. The methodology adopted Census Blocks because of their size

and by potent bidde Such is not the by this interim rule constitutes a appear to be inappropriate for

case for Census Tracts. The addresses of reasonable basis upon which to define determining the boundaries of a

each of the offices of a failed institution "predominantly minority neighborhood served by a financial already contain the Zip Code, and the neighborhood" consistent with the institution, or a branch thereof one

boundaries of each Zip Code area are purposes of sections 21A(s) and (w)(17) general basis. Census Tracts, although available at the local Post Office.

of the FHLBA and consistent with the larger than Census Blocks, are small.


the obvious RTC's duties in resolving failed relatively permanent statistical

advantages of a definition based on institutions. subdivisions of a country which usually arise where that approach fails to fixed methodology, circumstances may

Administrative Procedure Ad have between 2,500 and 8.000 persons, and when first delineated, are designed

accurately refleci cho reality of the The RTC is adopting this rule as an to be homogeneous with respect to

relevant neighborhood. For example, if interim rulo. It will be effective population characteristics, economic

an institution or branch is physically immediately upon publication in the

located within Zip Code 00001, near the Federal Register without the usual selling a faiied depository institution dicutes that

boundary with Zip Code 00002, a notice and comment period or delayed the identification of "predominantly minority

mechanical application of the Zip.Codo effective date as provided for in the neighborhoods" be accomplisbed witb relative approach would indicate that the Administrative Procedure Act. 5 U.S.C. speed and minimal expense The failed institutions branch serves customers in the

553. These requirements may be waived the RTC resolves suffer significant operating losses

neighborhood defined by Zip Code for "good cause. " The definition on a daily basis. An increase in those operating

00001. Or for example, a rigid losses due to delay in the resolution of the

provided by the interim rule institution caused by the implementation of a application of the Zip Code approach to implements the Act. Promulgation of definition of "predominately minority

the individual offices of an institution the rule on an expedited basis is neighborhood which is dificult and time consuming to utilize is clexsty Inconsistent with the might proclude the designation of the

necessary to permit the immediate RTC s statutory duties.

whale institution as being located in a implementation of the new statute in Starting with the 1990 Census thou urons which predominantly minority neighborhood. order to avoid the additional losses that are not covered by Census Tracts have been although other rational bases might exist would otherwise be incurred due to the subdivided into "Block Numbering Arvas" (BNA'SL for a determination that the institution These BNA's an essentially tbe equivalent of

delay in the resolution of failed Census Tracts, except that they have been

as a whole is located in a predominantly institutions pending the usual delayed delineated by a State agency instead of a local

minority neighborhood. Therefore, effective date. Thus, the RTC linds that comitted

rather than rigidly applying the Zip the benefits to the public in adopting

Pederal 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
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

Savings associations.

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.

$ 1630.3 Predominantly minority

The provisions of this part define
"predominanty minority

The phrase "predominantly minority neighborhood" for the marketing, sale

neighborhood" as used in sections and resolution of depository

21A(s). (w)(17) of the Federal Home

Loan Bank Act. means an area
institutions, and branches thereof, by
the Resolution Trust Corporation (RTC)

delineated by the geographical
under the rent-free lease provisions of

boundaries of a U.S. Postal Service Zip

Code, in which, according to the most section 21A(s) of the Federal Home

recent Census Data, 50% or more of the Loan Bank Act (FHLBA) and the minority preference provisions of

residential population is Minority:

unless a different geographic area has section 21A(w)(17) of the FHLBA.

been determined by the RTC. in its sole 61630.2 Definitions

discretion, based on readily accessible

and reasonably reliable information and (a) Branch means a domestic branch

data, to more accurately represent an as defined in section 3(o) of the Federal

area having distinctive or shared Deposit Insurance Act, as amended, 12

characteristics, that is served by the U.S.C. 1813(0).

institution, or Branch thereof. being (b) Census Bureau means the U.S. marketed by the RTC. in which 50% or Department of Commerce, Economics more of the population is Minority. and Statistics Administration, Bureau of

By order of the Chief Executive Officer. the Census.

Dated at Washington, DC. this 18th day of
(c) Census Data means the population February 1994.
data, including without limitation the Resolution Trust Corporation.
composition by Race and Hispanic John M. Buckley, Jr.,
origin of each U.S. Postal Service Zip Secretary
Code area, provided by the Census (FR Doc. 94-4184 Filed 2-22-94: 11:32 am)
Bureau for the most recent Census of

BILUNG COot m401-

(d) Minority means, any Black
American. Native American. Hispanic DEPARTMENT OF TRANSPORTATION
American, or Asian American, as
specified in section 1204(c)(3) of the

Foderal Aviation Administration
Financial Institutions Reform, Recovery
and Enforcement Act of 1989 as utilized

14 CFR Part 39
in sections 21A(s) and (w)(17) of the (Docket No. 92-CE-59- AD; Amendment 39-
Federal Home Loan Bank Act (12 U.S.C. 8837; AD 94-04-17)
1441a) or such other equivalent
classifications, as determined by the

Alnworthiness Directves: Twin
Resolution Trust Corporation.

Commander Aircraft Corporation 500, including, without limitation, those

520, 560, 680, 681, 685, 690, 695, and used by the Census Bureau for the most

720 Series Airplanes recent Census Data.

AGENCY: Federal Aviation
(e) Race means a racial classification Administration. DOT.
used by the Census Bureau pursuant to

ACTION: Final rule.
the guidelines in Federal Statistical
Directive No. 15 issued by the Office of

SUMMARY: This amendment adopts a
Management and Budget, which

new airworthiness directive (AD) that provides standards on ethnic and racial

applies to Twin Commander Aircraft categories for statistical reporting to be

Corporation (Twin Commander) 500. used by all Federal agencies. The OMB

520, 560, 680, 681, 685, 690. 695. and directive is available from Office of

720 series airplanes. This action Administration, EOP Publications, 725

requires inspecting the flap system for

cables with broken wires or pulleys 17th Street, NW., room 2200, New EOB.

with womn cable clips, replacing any Washington, DC 20503.

damaged parts, and replacing the master (A) RTC means the Resolution Trust pulley and cable with new parts of Corporation, in its corporate,

improved design. Reports of cable conservatorship or receivership

fatigue, particularly the master pulley capacities, as applicable.

cable, on several of the affected (8) U.S. Postal Service Zip Code airplanes prompted this action. The means a five-digit numeric code that actions specified by this AD are identifies a specific geographic area intended to prevent flap system failure within the United States and its

caused by cable fatigue, which could territories which is used by the U.S. result in loss of control of the airplane. Postal Service for the distribution of DATES: Effective April 15, 1994. The mail.

incorporation by reference of certain


1630.1 Purpose and scope.
1630.2 Definitions
1630.3 Predominanty minority

Authority: 12 U.S.C 1441afb)(11). (s) and

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All Divisions and offices, Washington
Field office Vice Presidents
Vice Presidents and/or Directors, Field Resolution


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Implementation of "Predominantly Minority Neighborhood"
Resolution Provisions of Section 21A (W) (17) (A) of the
Federal Home Loan Bank Act


Purpose. To issue instructions to be used by the Division
of Resolutions personnel in connection with the resolution
process, as referenced under section 21A (W) (17) of the Federal
Home Loan Bank Act (FHLBA), for institutions and branches thereof
located in "predominantly minority neighborhoods." These
instructions provide general operating procedures for the
implementation of the definition of "predominantly minority
neighborhood" in 12 CFR 1630.3, and for the implementation of the
bid "preference" provisions of section 21A (W) (17) (A) of the
FHLBA. The procedures contained in these instructions are to be
used by RTC personnel in conjunction with the provisions of 12
CFR Part 1630 (including all relevant definitions), and section
21A (W) (17) (A) of the FHLBA.

2. Scope. The provisions of this directive apply to all
Resolutions personnel in all RTC offices, and any other RTC
personnel who communicate with potential bidders or acquiring
institutions regarding a resolution involving an institution or
any branch located in a "predominantly minority neighborhood."

3. Background. Section 21A (W) (17) of the FHLBA provides,
among other things, that "lijn considering offers to acquire any
insured depository institution, or any branch of an insured
depository institution, located in a predominantly minority
neighborhood (as defined in regulations prescribed under
subsection (s)), the corporation shall give preference to an

Total No. of Pages


Control No.


RTC 1212/01(11-92)

offer from any ainority individuai, ainority-owned business, or a ainority depository institucion, over any other offer that results in the sane 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 ainority 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 "predcninantly ainority 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 neighbornood, and (2) Census Data to determine che ainority composition of that neighbornood.

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 ainority neighborhoods" without delaying the resolution of an institution consistent with the RTC's statutory cost constraints.

Deterzination of "Predominantly Minority Neighborhoods"


for whole Institutions. The whole institution is to designated as being located in a "predominantly sinority 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 (OTS) on the date the RTC was placed in control of the failed institution, is determined by the RTC CO 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


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