2012-27283. Agency Information Collection Activities: Submission for OMB Review; Joint Comment Request

AGENCY:

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 of information collection to be submitted to OMB for review and approval under the Paperwork Reduction Act of 1995.

SUMMARY:

In accordance with the requirements of the Paperwork Reduction Act (PRA) 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 unless it displays a currently valid Office of Management and Budget (OMB) control number. On November 21, 2011, the agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), requested public comment for 60 days on a proposal to extend, with revision, the Consolidated Reports of Condition and Income (Call Report), which are currently approved collections of information. After considering the comments received on the proposal, the FFIEC and the agencies announced their final decisions regarding certain proposed revisions on February 17, 2012. The agencies also announced they were continuing to evaluate two new proposed Call Report schedules (Schedule RI-C, Disaggregated Data on the Allowance for Loan and Lease Losses, and Schedule RC-U, Loan Origination Activity (in Domestic Offices)) in light of the comments received. The FFIEC and the agencies have completed their evaluation of Schedule RI-C and will proceed with a modified version of the schedule, which will be completed by institutions with $1 billion or more in total assets beginning March 31, 2013. However, the FFIEC and the agencies are continuing their evaluation of proposed Schedule RC-U. The FFIEC's and the agencies' decision regarding proposed Schedule RC-U will be addressed in a future Federal Register notice, and any resulting new reporting requirements for loan origination data will not take effect before the June 30, 2013, report date.

DATES:

Comments must be submitted on or before December 10, 2012.

ADDRESSES:

Interested parties are invited to submit written comments to any or all of the agencies on the revisions to the Call Report for which the agencies are requesting approval from OMB. All comments, which should refer to the OMB control number(s), will be shared among the agencies.

OCC: You should direct all written comments to: Communications Division, Office of the Comptroller of the Currency, Mailstop 2-3, Attention: 1557-0081, 250 E Street SW., Washington, DC 20219. In addition, comments may be sent by fax to [phone], or by electronic mail to [e-mail]. You may personally inspect and photocopy comments at the OCC, 250 E Street SW., Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling [phone]. Upon arrival, visitors will be required to present valid government-issued photo identification and to submit to security screening in order to inspect and photocopy comments.

Board: You may submit comments, which should refer to “Consolidated Reports of Condition and Income (FFIEC 031 and 041),” by any of the following methods:

• Agency Web Site: http://www.federalreserve.gov. Follow the instructions for submitting comments at: http://www.federalreserve.gov/​generalinfo/​foia/​ProposedRegs.cfm.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Email: [e-mail]. Include reporting form number in the subject line of the message.
• Fax: [phone] or [phone].
• Mail: Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW., Washington, DC 20551.

All public comments are available from the Board's Web site at www.federalreserve.gov/​generalinfo/​foia/​ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room MP-500 of the Board's Martin Building (20th and C Streets NW.) between 9:00 a.m. and 5:00 p.m. on weekdays.

FDIC: You may submit comments, which should refer to “Consolidated Reports of Condition and Income, 3064-0052,” by any of the following methods:

• Agency Web Site: http://www.fdic.gov/​regulations/​laws/​federal/​propose.html. Follow the instructions for submitting comments on the FDIC Web site.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Email: [e-mail]. Include “Consolidated Reports of Condition and Income, 3064-0052” in the subject line of the message.
• Mail: Gary A. Kuiper, Counsel, Attn: Comments, Room NYA-5046, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429.
• Hand Delivery: Comments may be hand delivered to the guard station at the rear of the 550 17th Street Building (located on F Street) on business days between 7 a.m. and 5 p.m.

Public Inspection: All comments received will be posted without change to http://www.fdic.gov/​regulations/​laws/​federal/​propose.html including any personal information provided. Comments may be inspected at the FDIC Public Information Center, Room E-1002, 3501 Fairfax Drive, Arlington, VA 22226, between 9 a.m. and 5 p.m. on business days.

Additionally, commenters may send a copy of their comments to the OMB desk officer for the agencies by mail to the Office of Information and Regulatory Affairs, U.S. Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503, or by fax to [phone].

FOR FURTHER INFORMATION CONTACT:

For further information about the revisions discussed in this notice, please contact any of the agency clearance officers whose names appear below. In addition, copies of the Call Report forms and instructions can be obtained at the FFIEC's Web site (http://www.ffiec.gov/​ffiec_​report_​forms.htm).

OCC: Mary Gottlieb, OCC Clearance Officer, [phone], Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street SW., Washington, DC 20219.

Board: Cynthia Ayouch, Federal Reserve 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 for the Deaf (TDD) users may call [phone].

FDIC: Gary A. Kuiper, Counsel, [phone], Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

The agencies are proposing to revise and extend for three years the Call Report, which is currently an approved collection of information for each agency. The burden estimates presented below are for the Call Report as it is proposed to be revised effective March 31, 2013.

Report Title: Consolidated Reports of Condition and Income (Call Report).

Form Number: Call Report: FFIEC 031 (for banks and savings associations with domestic and foreign offices) and FFIEC 041 (for banks and savings associations with domestic offices only).

Frequency of Response: Quarterly.

Affected Public: Insured banks and savings associations.

OCC

OMB Number: 1557-0081.

Estimated Number of Respondents: 1,909 national banks and federal savings associations.

Estimated Time per Response: 53.76 burden hours per quarter to file.

Estimated Total Annual Burden: 410,511 burden hours to file.

Board

OMB Number: 7100-0036.

Estimated Number of Respondents: 835 state member banks.

Estimated Time per Response: 55.66 burden hours per quarter to file.

Estimated Total Annual Burden: 185,904 burden hours to file.

FDIC

OMB Number: 3064-0052.

Estimated Number of Respondents: 4,531 insured state nonmember banks and state savings associations.

Estimated Time per Response: 40.56 burden hours per quarter to file.

Estimated Total Annual Burden: 735,109 burden hours to file.

The estimated time per response for the quarterly filings of the Call Report is an average that varies by agency because of differences in the composition of the institutions under each agency's supervision (e.g., size distribution of institutions, types of activities in which they are engaged, and existence of foreign offices). The average reporting burden for the filing of the Call Report is estimated to range from 17 to 710 hours per quarter, depending on an individual institution's circumstances.

Type of Review: Revision and extension of currently approved collections.

General Description of Reports

These information collections are mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 324 (for state member banks), 12 U.S.C. 1817 (for insured state nonmember commercial and savings banks), and 12 U.S.C. 1464 (for federal and state savings associations). At present, except for selected data items, these information collections are not given confidential treatment.

Abstract

Institutions submit Call Report data to the agencies each quarter for the agencies' use in monitoring the condition, performance, and risk profile of individual institutions and the industry as a whole. Call Report data provide the most current statistical data available for evaluating institutions' corporate applications, identifying areas of focus for on-site and off-site examinations, and monetary and other public policy purposes. The agencies use Call Report data in evaluating interstate merger and acquisition applications to determine, as required by law, whether the resulting institution would control more than ten percent of the total amount of deposits of insured depository institutions in the United States. Call Report data also are used to calculate institutions' deposit insurance and Financing Corporation assessments and national banks' and federal savings associations' semiannual assessment fees.

Current Actions

On November 21, 2011, the agencies, under the auspices of the FFIEC, requested comment on a limited number of proposed revisions to the Call Report (76 FR 72035) for implementation in 2012 that were focused primarily on institutions with $1 billion or more in total assets. After considering the comments received, on February 17, 2012, the agencies announced in the Federal Register (77 FR 9727) the implementation of reporting changes and instructional revisions that had been proposed to take effect March 31, 2012. The agencies also announced the implementation of revisions to two existing schedules proposed for implementation as of June 30, 2012. The FFIEC and the agencies further stated they were deferring the implementation of new Schedule RC-U, Loan Origination Activity (in Domestic Offices), and new Schedule RI-C, Disaggregated Data on the Allowance for Loan and Lease Losses (ALLL), both of which were originally proposed to be added to the Call Report effective June 30, 2012. The FFIEC and the agencies announced they were continuing to evaluate these proposed new schedules in light of the comments received.

The agencies collectively received comments from eight entities on their November 21, 2011, Federal Register notice initially proposing these revisions: four banking organizations, two bankers' associations, a commercial lending software company, and a news organization. Three banking organizations and the two bankers' associations addressed proposed Schedule RI-C, and all eight commenters addressed proposed Schedule RC-U.

Proposed Schedule RI-C—Commenters expressed the general concern that the proposed disaggregated ALLL data in Schedule RI-C are not aligned with the manner in which institutions estimate and maintain their ALLL. Although Financial Accounting Standards Board (FASB) Accounting Standards Update No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (ASU 2010-20), requires entities to disclose the ALLL at the portfolio segment level, institutions define segments differently than proposed for Schedule RI-C. According to the commenters, modifying systems to report ALLL information categorized as proposed would be costly and necessitate significant lead time, up to nine months, to implement. One commenter also recommended increasing the asset size threshold for institutions to report this schedule, proposed to be collected from institutions with $1 billion or more in total assets, to $5 billion or $10 billion in total assets.

Two commenters recommended a more streamlined approach requiring disclosure of fewer loan categories, thereby allowing the Agencies to achieve their stated objective and permit institutions to report data consistently with the business models and methodologies used to estimate their ALLL. One of these commenters recommended collapsing the proposed nine loan categories and collecting ALLL and the related recorded investment amounts by impairment measurement method for only three segments: consumer credit cards, all other consumer loans, and commercial loans. The second commenter recommended reporting ALLL and the related recorded investment amounts by impairment measurement method for five loan categories: commercial real estate, residential real estate, commercial, credit cards, and other consumer. The second commenter also favored retaining the reporting of any unallocated portion of the ALLL as had been proposed.^[1] Implicit in both of these commenters' recommendations is the concept that the definitions for the loan categories in Schedule RI-C should be those the reporting institution uses in its ALLL methodology rather than those specified in Call Report Schedule RC-C, part I, Loans and Leases.

After consideration of the comments received on the proposed disaggregation of ALLL information, the FFIEC and the agencies have decided to modify proposed Schedule RI-C to collect ALLL and the related recorded investment amounts by impairment measurement method for the loan categories (and any unallocated portion of the ALLL) based on the second approach described in the preceding paragraph, but with the addition of a loan category for real estate construction loans. The agencies consider it appropriate to segregate construction loans from other commercial real estate loans because the risk characteristics of the former differ significantly from those of the latter. The agencies believe this more streamlined approach to proposed Schedule RI-C, including its use of general loan categories rather than specifically defined categories, would be more consistent with the methodologies institutions currently employ in determining the appropriate level for their overall ALLL and meeting the disclosure requirements of ASU 2010-20. At the same time, the data that would be reported in Schedule RI-C, as modified, should be sufficient to enable the agencies to more finely focus their analyses related to the composition of an institution's ALLL and the changes therein over time. In this regard, to aid in evaluating the appropriateness of the reported level of an institution's ALLL (for example, in periods between examinations and when planning for examinations), the disaggregated ALLL data by loan category could be reviewed in conjunction with the past due and nonaccrual loan data used in general assessments of the credit quality of an institution's loan portfolio. These credit quality data are currently reported for broadly similar, but not identical, loan categories in Call Report Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets.

The FFIEC and the agencies have decided to retain the proposed $1 billion total asset threshold for Schedule RI-C, which exempts 91 percent of all institutions from this reporting requirement. Given that institutions with $1 billion or more in total assets hold nearly 91 percent of the ALLL balances held by all institutions as of June 30, 2012, retaining this reporting threshold as proposed will enable the agencies to perform a more comprehensive and decision-useful analysis of the depository institution system, particularly in providing a better understanding of how institutions' ALLL practices and allocations differ for particular loan categories as economic conditions change. Furthermore, all institutions with $1 billion or more in total assets are subject to regulations requiring them to prepare annual financial statements in accordance with U.S. generally accepted accounting principles.^[2] Accordingly, such institutions should have processes in place to develop the disaggregated ALLL data required to be disclosed by ASU 2010-20, which are comparable to the data specified by Schedule RI-C as modified in response to comments.

To allow institutions sufficient lead time to make any necessary adjustments to their data systems to report this modified disaggregation of their ALLL and the related recorded investment amounts by loan category and impairment measurement method, the agencies will delay implementation of new Schedule RI-C until the March 31, 2013, report date.

Consistent with longstanding practice, for the March 31, 2013, report date, institutions may provide reasonable estimates for any Call Report Schedule RI-C item for which the requested information is not readily available.

Proposed Schedule RC-U—The FFIEC and the agencies have not yet completed their evaluation of this proposed new schedule in light of the comments received. When the FFIEC and the agencies have decided whether and how to proceed with Schedule RC-U, their decision will be addressed in a future Federal Register notice and, if applicable, submissions by the agencies will be made to OMB. To allow sufficient lead time for affected institutions to prepare for any resulting new reporting requirements for loan origination data, the collection of such data would not take effect before the June 30, 2013, report date.

Request for Comment

Public comment is requested on all aspects of this joint notice. Comments are invited on:

(a) Whether the proposed revisions to the collections of information that are the subject of this notice are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;

(b) The accuracy of the agencies' estimates 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;

(d) Ways to minimize the burden of information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and

(e) Estimates of capital or start up costs and costs of operation, maintenance, and purchase of services to provide information.

Comments submitted in response to this joint notice will be shared among the agencies. All comments will become a matter of public record.

Dated: October 31, 2012.

Michele Meyer,

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

Board of Governors of the Federal Reserve System, November 2, 2012.

Robert deV. Frierson,

Secretary of the Board.

Dated at Washington, DC, this 31st day of October 2012.

Robert E. Feldman,

Executive Secretary. Federal Deposit Insurance Corporation.

Footnotes

1.  Another commenter stated that it fully supported this commenter's recommendations.

2.  12 CFR part 363, Annual Independent Audits and Reporting Requirements.