04-56. Voluntary Testing and Mandatory Enrollment for a New Method of Submitting the Consolidated Reports of Condition and Income

AGENCIES:

Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System; and Federal Deposit Insurance Corporation.

ACTION:

Notice.

SUMMARY:

The Federal Financial Institutions Examination Council (FFIEC), of which the agencies are members, has approved the agencies' publication of this notice announcing the voluntary testing and mandatory enrollment for a new method of submitting the Consolidated Reports of Condition and Income (Call Report; FFIEC 031 and 041). Testing will be conducted in three phases (a functional pilot, and end-to-end test, and a 100+ bank test), after which there will be mandatory global enrollment in the new system for all institutions that file the Call Report.

DATES:

TESTING TIMEFRAME: Second and third quarters 2004.

FOR FURTHER INFORMATION CONTACT:

OCC: John Ference, Acting OCC Clearance Officer, or Camille Dixon, [phone], Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.

Board: Cynthia M. Ayouch, Board Clearance Officer, [phone], Division of Research and Statistics, Board of Governors of the Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551. Telecommunications Device fort he Deaf (TDD) users may call [phone].

FDIC: Steven F. Hanft, [phone], Room MB-3064, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

Banks file Call Report data with the agencies each quarter for the agencies' use in monitoring the condition, performance, and risk profile of reporting banks and the industry as a whole. In addition, Call Report data provide the most current statistical data available for evaluating bank corporate applications such as mergers, for identifying areas of focus for both on-site and off-site examinations, and for monetary and other public policy purposes. Call Report data are also used to calculate all banks' deposit insurance and Financing Corporation assessments and national banks' semiannual assessment fees.

The FFIEC has contracted with the Unisys Corporation and its development team to build a Central Data Repository (CDR) for the collection, validation, and distribution of Call Report data submitted by banks. The FFIEC anticipates that implementation of the new CDR system will start with the Call Reports for September 30, 2004. Under this new system, all institutions will be required to file their Call Report data via the Internet using software that contains the FFIEC edits for validating Call Report data prior to submission. Call Report software vendors are currently modifying their software to incorporate these edits.

II. Testing and Global Enrollment

This notice announces the voluntary testing and mandatory enrollment for the new CDR System. As discussed below, the testing will be conducted in three phases (Functional Pilot, End-to-End Test, and 100+ Bank Test) and will be followed by a mandatory Global Enrollment phase.

• Functional Pilot: This testing phase would include fifteen banks beginning in approximately April 2004 and would use only test data (from the past five quarters). As part of this phase of testing each participating bank would be expected to sign a “Letter of Intent” signup system to set up user IDs and passwords. After enrollment the bank would work with its software vendor to install and test software that is compatible with the new CDR system. Simultaneously, the agencies would distribute testing instructions to each participating bank while the vendors distribute the new taxonomies and text data files to the banks. The banks would then prepare and submit their test Call Report data and subsequently participate in a validity edit failure resolution test. Finally, each bank would participate in feedback discussions regarding the results of the first phase of testing.
• End-to-End Test: This phase of testing would include thirty banks (the original fifteen banks plus fifteen additional banks) beginning in approximately May 2004, and would use both test data (from the past nine quarters) and a sample of the banks' actual data. The new banks would be required to complete the same procedures as the original banks in the Functional Pilot except for the enrollment portion, which would be completed through the Global Enrollment at a later time. At the commencement of phase two all thirty banks would have the new software release installed by the software. The banks would also participate in a test of the three helpdesks (software vendor helpdesks, CDR helpdesk, and Call Report Analyst assistance).
• 100+ Bank Test (Volume Test): This phase of testing would include 100 banks (the thirty banks from the End-to-End phase and seventy additional banks) beginning in approximately August 2004 and would use the banks' most recent quarter-end data. All participating banks would be required to complete the same procedures as were required in the first two test phases. In addition, this phase would require all participating banks to submit Call Report data twice, once via the legacy Electronic Data Systems Corporation process and once via the new CDR system. This type of testing is referred to as “side-by-side testing,” which enables the agencies to test whether identical and accurate results are received. Prior to the data transmission, banks will receive directions on the date and time for the submission of Call Report data to help ensure peak volume testing.* Global Enrollment: Enrollment will be available in approximately late August or early September 2004 for all banks. This phase is mandatory for all banks that file Call Report data with the agencies. (Only the original fifteen test banks that completed the enrollment process during the Functional Pilot will be fully exempt from the Global Enrollment.) Banks that participated in testing phases two and three would only be required to enroll (provide contact information and set up user IDs and passwords) via the CDR website. All other banks would be required to use the CDR website to enroll and download test data and would subsequently submit test Call Report data.

At the end of each testing phase the comments and recommendations received from the participating banks will be analyzed to determine the extent to which the FFIEC should modify the proposed testing and enrollment process.

[This signature page pertains to the joint notice]

Dated: December 15, 2003.

Mark J. Tenhundfeld,

Assistant Director, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency.

Board of Governors of the Federal Reserve System.

Dated: December 24, 2003.

Jennifer J. Johnson,

Secretary of the Board.

Dated: at Washington, DC, this 24th day of December, 2003.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.