[Federal Register Volume 60, Number 221 (Thursday, November 16, 1995)]
[Notices]
[Pages 57618-57621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28251]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Proposed Agency Information Collection Activities; Comment
AGENCIES: Office of the Comptroller of the Currency (OCC), Treasury;
Board of Governors of the Federal Reserve System (Board); and Federal
Deposit Insurance Corporation (FDIC).
ACTION: Notice and request for comment.
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BACKGROUND: In accordance with the requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and
the FDIC (the ``agencies'') may not conduct or sponsor, and the
respondent is not required to respond to, an information collection
that has been extended, revised, or implemented on or after October 1,
1995, unless it displays a currently valid Office of Management and
Budget (OMB) control number. Proposed revisions to the following
currently approved collections of information have received approval
from the Federal Financial Institutions Examination Council (FFIEC), of
which the agencies are members, and are hereby published for comment.
At the end of the comment period, the comments and recommendations
received will be analyzed to determine the extent to which the proposed
revisions should be modified prior to the agencies' submission of them
to OMB for review and approval. Comments are invited on: (a) Whether
the proposed revisions to the following collections of information are
necessary for the proper performance of the agencies' functions,
including whether the information has practical utility; (b) the
accuracy of the agencies' estimate of the burden of the information
collections as they are proposed to be revised, including the validity
of the methodology and assumptions used; (c) ways to enhance the
quality, utility, and clarity of the information to be collected; and
(d) ways to minimize the burden of information collection on
respondents, including through the use of automated collection
techniques or other forms of information technology.
DATES: Comments must be submitted on or before January 16, 1996.
ADDRESSES: Interested parties are invited to submit written comments to
any or all of the agencies. All comments, which should refer to the OMB
control number(s), will be shared among the agencies.
OCC: Written comments should be submitted to the Communications
Division, Ninth Floor, Office of the Comptroller of the Currency, 250 E
Street, S.W., Washington, D.C. 20219; Attention: Paperwork Docket No.
1557-0081 [FAX number (202) 874-5274; Internet address:
reg.comments@occ.treas.gov]. Comments will be available for inspection
and photocopying at that address.
Board: Written comments should be addressed to Mr. William W.
Wiles, Secretary, Board of Governors of the Federal Reserve System,
20th and C Streets, N.W., Washington, D.C. 20551, or delivered to the
Board's mail room between 8:45 a.m. and 5:15 p.m., and to the security
control room outside of those hours. Both the mail room and the
security control room are accessible from the courtyard entrance on
20th Street between Constitution Avenue and C Street, N.W. Comments
received may be inspected in room M-P-500 between 9:00 a.m. and 5:00
p.m., except as provided in section 261.8 of the Board's Rules
Regarding Availability of Information, 12 CFR 261.8(a).
FDIC: Written comments should be sent to Jerry L. Langley,
Executive Secretary, Attention: Room F-402, Federal Deposit Insurance
Corporation, 550 17th Street, N.W., Washington, D.C. 20429. Comments
may be hand-delivered to Room F-402, 1776 F Street, N.W., Washington,
D.C. 20429, on business days between 8:30 a.m. and 5:00 p.m. [FAX
number (202) 898-3838; Internet address: comments@fdic.gov]. Comments
will be available for inspection and photocopying in Room 7118, 550
17th Street, N.W., Washington, D.C. 20429, between 9:00 a.m. and 4:30
p.m. on business days.
A copy of the comments may also be submitted to the OMB desk
officer for the agencies: Milo Sunderhauf, Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 3208, Washington, D.C. 20503.
FOR FURTHER INFORMATION CONTACT: A copy of the proposed revisions to
the collections of information may be requested from any of the agency
clearance officers whose names appear below.
OCC: Jessie Gates, OCC Clearance Officer, (202) 874-5090, Office of
the Comptroller of the Currency, 250 E Street, SW., Washington, DC
20219.
Board: Mary M. McLaughlin, Board Clearance Officer, (202) 452-3829,
Division of Research and Statistics, Board of Governors of the Federal
Reserve System, 20th and C Streets, NW., Washington, DC 20551. For the
hearing impaired only, Telecommunications Device for the Deaf (TDD),
Dorothea Thompson, (202) 452-3544, Board of Governors of the Federal
Reserve System, 20th and C Streets, NW., Washington, DC 20551.
FDIC: Steven F. Hanft, FDIC Clearance Officer, (202) 898-3907,
Office of the Executive Secretary, Federal Deposit Insurance
Corporation, 550 17th Street NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION: Proposal to revise the following currently
approved collections of information:
Title: Consolidated Reports of Condition and Income.
Form Number: FFIEC 031, 032, 033, 034.
For OCC:
OMB Number: 1557-0081.
Frequency of Response: Quarterly.
Affected Public: National Banks.
Estimated Number of Respondents: 2,900 national banks.
Estimated Time per Response: 38.02 burden hours.
Estimated Total Annual Burden: 441,024 burden hours.
For Board:
OMB Number: 7100-0036.
Frequency of Response: Quarterly.
Affected Public: State Member Banks.
Estimated Number of Respondents: 1,002 state member banks.
Estimated Time per Response: 44.01 burden hours.
[[Page 57619]]
Estimated Total Annual Burden: 176,392 burden hours.
For FDIC:
OMB Number: 3064-0052.
Frequency of Response: Quarterly.
Affected Public: Insured State Nonmember Commercial and Savings Banks.
Estimated Number of Respondents: 7,011 insured state nonmember
commercial and savings banks.
Estimated Time per Response: 27.87 burden hours.
Estimated Total Annual Burden: 781,473 burden hours.
The estimated time per response varies by agency because of
differences in the composition of the banks under each agency's
supervision (e.g., size distribution of banks, types of activities in
which they are engaged, and number of banks with foreign offices).
General Description of Report: This information collection is
mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 324 (for state
member banks), and 12 U.S.C. 1817 (for insured state nonmember
commercial and savings banks). Except for select sensitive items, this
information collection is not given confidential treatment. Small
businesses (i.e., small banks) are affected.
Abstract: Consolidated Reports of Condition and Income are filed
quarterly with the agencies for their use in monitoring the condition
and performance of reporting banks and the industry as a whole. The
reports are also used by the FDIC to calculate banks' deposit insurance
assessments.
Current Actions: The new items that would be added to the Call
Report are necessary to enhance the supervisory process for monitoring
regulatory capital ratios, liquidity ratios, sales of assets, off-
balance sheet derivative contracts, and managed credit card
receivables. A number of items would be consolidated or deleted.
Type of Review: Revisitation.
The proposed revisions to the Consolidated Reports of Condition and
Income (Call Report) that are the subject of this notice have been
approved by the FFIEC for implementation as of the March 31, 1996,
report date. The proposed changes affect several existing Call Report
schedules. Unless otherwise indicated, the Call Report changes apply to
all four sets of report forms (FFIEC 031, 032, 033, and 034).
Nonetheless, as is customary for Call Report changes, banks are advised
that, for the March 31, 1996, report date, reasonable estimates may be
provided for any new or revised item for which the requested
information is not readily available.
On August 2, 1995, the agencies jointly published for a 60-day
public comment period a proposed Supervisory Policy Statement
Concerning A Supervisory Framework for Measuring and Assessing Banks'
Interest Rate Risk Exposure (60 FR 39495, August 2, 1995). That
proposal included proposed Call Report schedules and draft instructions
that would be implemented beginning with the March 31, 1996, report
date, except by small banks that meet certain exemption criteria.
Because comments were invited regarding the proposed Call Report
interest rate risk reporting requirements and their paperwork
implications, the proposed interest rate risk schedules are not covered
by this notice.
The proposed revisions are summarized as follows:
Deletions and Reductions in Detail
The level of detail would be reduced in two areas for banks that
file the FFIEC 031, 032, and 033 report forms (i.e., banks with $100
million or more in assets or with foreign offices). (Smaller banks that
file the FFIEC 034 report forms do not provide these detailed data.)
First, the breakdown of nontransaction accounts by type of depositor in
the deposit schedule (Schedule RC-E) would contain fewer categories.
The separate items for nontransaction accounts of ``U.S. branches and
agencies of foreign banks'' and ``Other commercial banks in the U.S.''
would be combined into a single item. Similarly, the separate items for
nontransaction accounts of ``Foreign branches of other U.S. banks'' and
``Other banks in foreign countries'' would be combined.
Second, a single income statement item for trading revenue would
replace the separate items for foreign exchange trading gains (losses)
and other trading gains (losses). The memorandum items providing a
four-way breakdown of trading revenue by risk exposure (interest rate,
foreign exchange, equity, and commodity and other), which were added in
March 1995, would continue to be collected. The sum of the memorandum
items would equal the new single income statement item.
Call Report items in the four following areas would be deleted:
(1) Memorandum items for total deposits, total demand deposits, and
total time and savings deposits (in domestic offices) that have been
collected in the deposit schedule for deposit insurance assessment
purposes (Schedule RC-E, Memorandum items 4, 4.a, and 4.b).
(2) A deposit schedule memorandum item for total deposits (in
domestic offices) denominated in foreign currencies (Schedule RC-E,
Memorandum item 1.d).
(3) An income statement memorandum item for foreign tax credits
(Schedule RI, Memorandum item 3). (This item has been completed only by
banks that file the FFIEC 031, 032, and 033 report forms, i.e., banks
with $100 million or more in assets or with foreign offices.)
(4) An income statement memorandum item for the taxable equivalent
adjustment to pretax income (Schedule RI, Memorandum item 4). (This
item has been applicable only to banks with foreign offices and $1
billion or more in assets that file the FFIEC 031 report forms.)
New Items
Call Report items in the following areas would be added:
(1) Capital and Asset Amounts Used in Calculating Regulatory Capital
Ratios
At present, the Call Report includes a variety of items in several
schedules which the agencies use to calculate the leverage and risk-
based capital ratios for individual banks. However, a comparison of the
agencies' regulatory capital standards to the information currently
reported in the Call Report reveals that the Call Report does not
collect all of the information that the agencies need to calculate each
bank's Tier 1, Tier 2, and total capital in strict accordance with the
definitions in the agencies' capital standards. Nevertheless, according
to informal input received from bankers, banks routinely calculate
their regulatory capital ratios at least quarterly for internal
management purposes.
Thus, rather than introducing new Call Report items for specific
elements of the regulatory capital ratio calculations that are not
currently reported so that further refinements can be made to the
banking agencies' formulas for calculating capital ratios, banks would
begin to report the end results of their own internal regulatory
capital analyses. Six new items would cover Tier 1 capital, Tier 2
capital, total risk-based capital, total risk-weighted assets (the
denominator of the risk-based capital ratio, i.e., net of deductions),
the excess amount of the allowance for loan and lease losses (if any),
and ``average total assets'' (the denominator of the leverage capital
ratio, i.e., net of deductions).
Banks would not be required to go to greater lengths to identify
and determine the amounts to be reported in the six new capital-related
items than they are currently doing when they calculate their capital
ratios for internal
[[Page 57620]]
management purposes. Beginning to collect the six regulatory capital
items in 1996 may provide a basis for eliminating at a later date some
items now reported in the Call Report solely for risk-based capital
calculation purposes. To assist banks in accurately reporting these
capital items, an optional regulatory capital worksheet would be
developed, provided regularly to banks, and updated as necessary.
In addition, the agencies understand that bankers and other
interested parties have found it difficult and time-consuming to
calculate the regulatory capital ratios for other banks using existing
Call Report data. Consequently, the addition of these six items should
simplify bankers' calculations of other banks' capital ratios as well
as calculations made by other public users of bank Call Reports.
(2) Short-Term Liabilities and Assets
The staffs of the agencies plan to revise the liquidity ratios in
the Uniform Bank Performance Report (UBPR) to focus on short-term and
total non-core liabilities (instead of so-called ``volatile
liabilities'') as well as short-term assets and liabilities. As a
result, changes would be made to the reporting of maturity and
repricing data for certain categories of liabilities and assets.
Accordingly, the following changes would be implemented:
(a) Other borrowed money--On the Call Report balance sheet, the
two-way breakdown of ``Other borrowed money'' based on the original
maturity of the borrowing would be changed to a two-way breakdown based
on remaining maturity (Schedule RC, item 16).
(b) Time deposits--A number of changes would be made in the
reporting of these data.
First, the maturity and repricing data for open-account time
deposits of $100,000 or more, which are currently included with the
maturity and repricing data for time deposits of less than $100,000 (in
Schedule RC-E, Memorandum item 5), would be switched so that these data
are included with the maturity and repricing data for time certificates
of deposit of $100,000 or more (in Schedule RC-E, Memorandum item 6).
(Schedule RC-E, Memorandum items 5 and 6 are not applicable to FDIC-
supervised savings banks that must complete the Call Report's
supplemental Schedule RC-J.)
Second, the maturity and repricing data for fixed rate and floating
rate time deposits of less than $100,000, which are currently reported
on a combined basis (in Schedule RC-E, Memorandum item 5), would be
split so that the remaining maturity of fixed rate time deposits of
less than $100,000 would be reported separately from the repricing
frequency of floating rate time deposits of less than $100,000. A new
time interval would also be added for these time deposits. Fixed rate
time deposits less than $100,000 would contain a maturity category of
over 12 months and floating rate time deposits of less than $100,000
would include a repricing interval of less frequently than annually.
(Schedule RC-E, Memorandum item 5 is not applicable to FDIC-supervised
savings banks that must complete the Call Report's supplemental
Schedule RC-J.)
Third, two new Memorandum items would be collected in the deposit
schedule for floating rate time deposits of $100,000 or more with a
remaining maturity of one year or less and for floating rate time
deposits of less than $100,000 with a remaining maturity of one year or
less. These items would be collected from commercial banks. For FDIC-
supervised savings banks, two new Memorandum items would be collected
in supplemental Schedule RC-J for time deposits of $100,000 or more
with a remaining maturity of one year or less and for time deposits of
less than $100,000 with a remaining maturity of one year or less.
(c) Brokered deposits and deposits in foreign offices--New
Memorandum items would be created for (i) Brokered deposits issued in
denominations of less than $100,000 with a remaining maturity of one
year or less, (ii) brokered deposits issued in denominations of
$100,000 or more with a remaining maturity of one year or less, and
(ii) for banks that file the FFIEC 031 version of the Call Report, time
deposits in foreign offices with a remaining maturity of one year or
less.
(d) Loans--For commercial banks, a single Memorandum item for
floating rate loans with a remaining maturity of one year or less would
be added to the loan schedule (Schedule RC-C). For FDIC-supervised
savings banks, a single Memorandum item for loans with a remaining
maturity of one year or less would be added to supplemental Schedule
RC-J.
(e) Debt securities--For FDIC-supervised savings banks, a single
Memorandum item for debt securities with a remaining maturity of one
year or less would be added to supplemental Schedule RC-J. Savings
banks would begin to complete this new item instead of an existing
Memorandum item in the securities schedule on floating rate debt
securities with a remaining maturity of one year or less (Schedule RC-
B, Memorandum item 6). Commercial banks would continue to complete
existing Memorandum item 6 in Schedule RC-B. In the new Memorandum item
for savings banks, held-to-maturity securities would be reported at
amortized cost and available-for-sale securities would be reported at
fair value, consistent with the method of reporting these two
categories of securities in the Schedule RC-B Memorandum item.
(3) Small Business Obligations Sold With Recourse
The agencies have issued rules to implement section 208 of the
Riegle Community Development and Regulatory Improvement Act of 1994.
(For OCC: 60 FR 47455, September 13, 1995. For Board: 60 FR 45612,
August 31, 1995. For FDIC: 60 FR 45606, August 31, 1995.) Section 208
provides that a qualifying insured depository institution that sells
small business loans and leases on personal property with recourse is
required to include only the amount of retained recourse in its risk-
weighted assets when calculating its risk-based capital ratios,
provided certain conditions are met. Section 208 also states that
qualifying institutions should report these transactions in accordance
with generally accepted accounting principles (GAAP) in the Call
Report.
To be a qualifying institution, a bank must be well capitalized
based on capital ratio calculations made without regard to the
preferential capital treatment that Section 208 authorizes for these
transactions. In addition, in general, for purposes of determining a
bank's capital category under the prompt corrective action rules, the
capital ratio calculations must be made without regard to the
preferential Section 208 treatment.
The Call Report instructions for ``sales of assets'' will be
revised to incorporate the GAAP reporting treatment for sales of small
business obligations with recourse by qualifying institutions.
Additionally, to enable the agencies to determine the capital ratios of
institutions that have engaged in transactions covered by Section 208
on the ``without regard to'' basis mentioned above, Call Report items
would be added for (i) the outstanding amount of small business
obligations sold with recourse and (ii) the amount of retained recourse
on such obligations.
(4) Credit Losses on Off-Balance Sheet Derivative Contracts
Banks that file the FFIEC 031 and 032 report forms (i.e., banks
with $300 million or more in assets or with foreign offices) began to
report information about past due derivatives in the Call
[[Page 57621]]
Report in 1994. However, some banks have incurred credit losses on
their derivative contracts, but the agencies cannot track these losses
for individual institutions or for the industry as a whole. Therefore,
a new item would be added in which those banks that are required to
report past due derivative data would also report their year-to-date
credit losses on derivatives.
On a related matter, the Call Report instructions for reporting
amounts associated with derivatives that are past due 90 days or more
would be revised so that banks would begin to also include information
about derivatives that, while not technically past due, are with
counterparties that are not expected to pay the full amounts owed to
the institution under the derivative contracts.
(5) Change in Frequency of Reporting on Securitized Credit Card
Receivables
In order to evaluate the financial performance of credit card banks
and other banks with credit card operations that have securitized and
sold credit card receivables, the volume of receivables on all of the
credit card accounts managed or serviced by a bank, both on and off of
the books, must be known. Banks that file the FFIEC 031 and 032 report
forms (i.e., banks with $300 million or more in assets or with foreign
offices) report annually as of September 30 the outstanding amount of
``Credit cards and related plans'' that have been securitized and sold
without recourse with servicing retained. In contrast, these banks
report the amount of ``Credit cards and related plans'' on their books
each quarter. Given the growth in the volume of bank credit card
securitizations, these banks would begin to report the outstanding
amount of securitized credit card receivables that they service on a
quarterly rather than annual basis.
Instructional Changes
The following changes, which may affect how some banks report
certain information in the Call Report, would be made to the
instructions.
(1) Reporting of low level recourse for risk-based capital
purposes--The three banking agencies amended their risk-based capital
standards earlier this year to incorporate the low level recourse rule.
(For OCC: 60 FR 17986, April 10, 1995. For Board: 60 FR 8177, February
13, 1995. For FDIC: 60 FR 15858, March 28, 1995.) Under this rule, when
a bank has transferred assets with recourse, the amount of risk-based
capital that must be maintained is limited to the bank's maximum
contractual exposure under the recourse agreement if this is less than
the amount of capital that would have to be held against the
outstanding amount of the transferred assets.
In the Call Report materials distributed to banks for the first
three quarters of this year, interim guidance has been provided on how
low level recourse transactions should be reported in the risk-based
capital schedule (Schedule RC-R). Under this interim guidance, a bank's
maximum contractual exposure in a low level recourse transaction is
multiplied by a factor that is a function of the risk weight category
applicable to the transferred assets. The resulting amount is then
reported in the Schedule RC-R item for the applicable risk weight and
would thereby be included in the bank's risk-weighted assets. This
interim guidance would now be formally incorporated into the Call
Report instructions.
(2) Reporting of quarterly averages in a quarter when push down
accounting has been applied--The instructions for the quarterly average
calculations in Schedule RC-K would be clarified to indicate that banks
acquired in push down transactions should calculate quarterly averages
using only amounts for the days since the acquisition in the numerator
and the number of days since the acquisition in the denominator.
(3) Instructions for Schedule RC-R, item 8, ``On-balance sheet
asset values excluded from the calculation of the risk-based capital
ratio''--Schedule RC-R, item 8, includes any positive fair values
carried on the balance sheet for interest rate, foreign exchange,
equity derivative, and commodity and other contracts that are treated
as off-balance sheet instruments for risk-based capital purposes.
Because the fair values of such contracts, if positive, are included in
the calculation of their credit equivalent amounts for risk-based
capital purposes, the reporting of these amounts in item 8 ensures that
they are not ``double counted'' when the agencies calculate a bank's
risk-weighted assets.
In contrast, the existing instructions indicate that accrued
receivables associated with off-balance sheet derivative contracts are
to be excluded from item 8 and assigned to the appropriate risk weight
category in the same manner as other on-balance sheet items. However,
consistent with GAAP, institutions may include accrued receivables
related to derivative contracts in the fair value of such contracts.
Thus, the instructions would be revised to permit institutions to
report accrued receivables in item 8 when these amounts are included in
a bank's credit equivalent amount calculations.
(4) Other--Instructions for mortgage servicing rights and trading
accounts would be revised to bring them into conformity with GAAP.
Clarifications or other conforming changes would also be made to
several other instructions.
Request for Comment
Comments submitted in response to this Notice will be shared among
the agencies and will be summarized or included in the agencies'
requests for OMB approval. All comments will become a matter of public
record. Written comments should address the accuracy of the burden
estimates and ways to minimize burden including the use of automated
collection techniques or the use of other forms of information
technology as well as other relevant aspects of the information
collection request.
Dated: November 8, 1995.
James F.E. Gillespie,
Director, Legislative and Regulatory Activities Division, Office of the
Comptroller of the Currency.
Board of Governors of the Federal Reserve System, November 7, 1995.
William W. Wiles,
Secretary of the Board.
Dated at Washington, DC, this 9th day of November 1995.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 95-28251 Filed 11-15-95; 8:45 am]
BILLING CODES OCC: 4810-33-P 1/3; Board: 6210-01-P 1/3; FDIC: 6714-01-P
1/3
