2015-31492. Agency Information Collection Activities: Proposed Information Collection Revision; Comment Request (3064-0189)

AGENCY:

Federal Deposit Insurance Corporation (FDIC).

ACTION:

Notice and request for comment.

SUMMARY:

The Federal Deposit Insurance Corporation (“FDIC”) invites the general public and other Federal agencies to take this opportunity to comment on a revision of a continuing information collection, titled, “Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $50 Billion or More under the Dodd-Frank Wall Street Reform and Consumer Protection Act,” (3064-0189), as required by the Paperwork Reduction Act of 1995.

DATES:

Comments must be received by February 16, 2016.

ADDRESSES:

You may submit written comments by any of the following methods:

• Agency Web site: http://www.fdic.gov/​regulations/​laws/​federal/​. 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 “Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $50 Billion or More” on the subject line of the message.
• Mail: Gary A. Kuiper, Legal Division, Attention: Comments, FDIC, 550 17th Street NW., MB-3016, Washington, DC 20429.
• Hand Delivery/Courier: Guard station at the rear of the 550 17th Street Building (located on F Street) on business days between 7:00 a.m. and 5:00 p.m.
• Public Inspection: All comments received will be posted without change to http://www.fdic.gov/​regulations/​laws/​federal/​ including any personal information provided.

Additionally, you may send a copy of your comments: By mail to the U.S. Office of Management and Budget, 725 17th Street NW., #10235, Washington, DC 20503 or by facsimile to 202.395.6974, Attention: Federal Banking Agency Desk Officer.

FOR FURTHER INFORMATION CONTACT:

You can request additional information from Gary Kuiper, 202.898.3877, or Manny Cabeza, 202.898.3767, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW., MB-3016 Washington, DC 20429. In addition, copies of the templates referenced in this notice can be found on the FDIC's Web site (http://www.fdic.gov/​regulations/​laws/​federal/​).

SUPPLEMENTARY INFORMATION:

The FDIC is requesting comment on the following changes to the information collection:

Title: Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $50 Billion or More under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

OMB Control Number: 3064-0189.

Description: Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ^[1] (“Dodd-Frank Act”) requires certain financial companies, including state nonmember banks and state savings associations, to conduct annual stress tests ^[2] and requires the primary financial regulatory agency ^[3] of those financial companies to issue regulations implementing the stress test requirements.^[4] A state nonmember bank or state savings association is a “covered bank” and therefore subject to the stress test requirements if its total consolidated assets are more than $10 billion. Under section 165(i)(2), a covered bank is required to submit to the Board of Governors of the Federal Reserve System (“Board”) and to its primary financial regulatory agency a report at such time, in such form, and containing such information as the primary financial regulatory agency shall require.^[5]

On October 15, 2012, the FDIC published in the Federal Register a final rule implementing the section 165(i)(2) annual stress test requirement.^[6] The final rule requires covered banks to meet specific reporting requirements under section 165(i)(2). In 2012, the FDIC first implemented the reporting templates for covered banks with total consolidated assets of $50 billion or more and provided instructions for completing the reports.^[7] This information collection notice describes revisions by the FDIC to the relevant reporting templates and related instructions, as well as required information. The information contained in these information collections may be given confidential treatment to the extent allowed by law (5 U.S.C. 552(b)(4)).

Consistent with past practice, the FDIC intends to use the data collected to assess the reasonableness of the stress test results of covered banks and to provide forward-looking information to the FDIC regarding a covered institution's capital adequacy. The FDIC also may use the results of the stress tests to determine whether additional analytical techniques and exercises could be appropriate to identify, measure, and monitor risks at the covered bank. The stress test results are expected to support ongoing improvement in a covered bank's stress testing practices with respect to its internal assessments of capital adequacy and overall capital planning.

The FDIC recognizes that many covered banks with total consolidated assets of $50 billion or more are required to submit reports using the Board's Comprehensive Capital Analysis and Review (“CCAR”) reporting form, FR Y-14A. The FDIC also recognizes the Board has modified the FR Y-14A, and the FDIC will keep its reporting requirements as similar as possible with the Board's FR Y-14A in order to minimize burden on affected institutions. Therefore, the FDIC is revising its reporting requirements to remain consistent with the Board's FR Y-14A for covered banks with total consolidated assets of $50 billion or more.

Proposed Revisions to Reporting Templates for Institutions With $50 Billion or More in Assets; Other Reporting Template and Instruction Changes

The proposed revisions to the DFAST-14A reporting templates consist of clarifying instructions, adding data items, deleting data items, and redefining existing data items. The proposed revisions also include a shift of the as-of date in accordance with modifications to the FDIC's stress testing rule.^[8] These revisions also reflect the implementation of the final Basel III regulatory capital rule. On July 9, 2013, the FDIC approved an interim final rule that will revise and replace the FDIC's risk-based and leverage capital requirements to be consistent with agreements reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” (Basel III).^[9] The final rule was published in the Federal Register on April 14, 2014 (“Revised Capital Framework”).^[10] The revisions include implementation of a new definition of regulatory capital, a new common equity tier 1 minimum capital requirement, a higher minimum tier 1 capital requirement, and, for banking organizations subject to the Advanced Approaches capital rules, a supplementary leverage ratio that incorporates a broader set of exposures in the denominator measure. In addition, the rule will amend the methodologies for determining risk weighted assets. All banking organizations that are not subject to the Advanced Approaches Rule were required to comply with the Revised Capital Framework, as of January 1, 2015.

The proposed changes would (1) increase consistency between the DFAST-14A with the FR Y-14A, CALL Report, FFIEC 101, and FFIEC 102; (2) remove the requirement to calculate tier 1 common capital and the tier 1 common ratio; and (3) shift the as-of dates by one quarter in accordance with the modifications to the stress test rules. Furthermore, the FDIC understands that the Board is currently collecting information for the Summary Schedule via XML technology, and the FDIC would use a similar format to enhance consistency and reduce regulatory burden. Technical details on these forms would be provided separately.

Schedule A (Summary)—A.1.c.1 (General RWA)

This schedule would be removed in accordance with the proposed revisions to eliminate use of the tier 1 common ratio, effective for the 2016 DFAST submission.

Schedule A (Summary)—Revisions to Schedule A.1.c.2 (Standardized RWA)

This schedule would be modified to increase consistency with the FFIEC 102. Specifically, the items of the existing market risk-weighted asset portion would be replaced with the appropriate items from the FFIEC 102. These changes would be effective for the 2017 DFAST submission.

Schedule A (Summary)—Revisions to Schedule A.1.d (Capital)

The FDIC proposes removing certain items related to tier 1 common capital, effective for the 2016 DFAST submission. Additionally, the FDIC proposes adding one item that captures the aggregate non-significant investments in the capital of unconsolidated financial institutions in the form of common stock and breaking out two items related to deferred tax assets into the amount before valuation allowances and the associated valuation allowance. The additional information from these changes would result in two existing items converting to derived items based on the additional information.

Schedule A (Summary)—Revisions to Schedule A.2.b (Retail Repurchase)

This schedule would be removed to reduce reporting burden, effective for the 2017 DFAST submission.

Schedule A (Summary)—Deletion of Schedule A.2.c (ASC 310-30)

This schedule would be removed to reduce reporting burden, effective for the 2017 DFAST submission.

Schedule A (Summary)—Revisions to Schedule A.7.c (PPNR Metrics)

In order to fully align the schedule with the stress scenarios, the beta information would be collected according to the scenario instead of the current “normal environment” requirement, effective for the 2016 DFAST submission.

Counterparty Credit Risk Schedule

This schedule would be removed to reduce reporting burden effective for the 2016 DFAST submission. Aggregate counterparty credit risk information will continue to be obtained through the Summary Schedule (Schedule A).

Burden Estimates

The FDIC estimates the burden of this collection as follows:

Current

Number of Respondents: 4.

Annual Burden per Respondent: 1,040.

Total Annual Burden: 4,160.

Proposed

Estimated Number of Respondents: 4.

Annual Burden per Respondent: 1,114.

Estimated Total Annual Burden: 4,456 hours.

The FDIC recognizes that the Board has estimated 71,709 hours for bank holding companies to prepare the Summary, Macro scenario, Operational risk, Regulatory capital transitions, and Regulatory capital instruments for the FR Y-14A. The FDIC believes that the systems covered institutions use to prepare the FR Y-14A reporting templates will also be used to prepare the reporting templates described in this notice. Comments continue to be invited on:

(a) Whether the collection of information is necessary for the proper performance of the functions of the FDIC, including whether the information has practical utility;

(b) The accuracy of the FDIC's estimate of the burden of the collection of information;

(c) Ways to enhance the quality, utility, and clarity of the information to be collected;

(d) Ways to minimize the burden of the collection 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.

Dated at Washington, DC, this 10th day of December.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

Footnotes

1.  Public Law 111-203, 124 Stat. 1376 (July 21, 2010).

2.  12 U.S.C. 5365(i)(2)(A).

3.  12 U.S.C. 5301(12).

4.  12 U.S.C. 5365(i)(2)(C).

5.  12 U.S.C. 5365(i)(2)(B).

6.  77 FR 62417(October 15, 2012).

7.  77 FR 52719 (August 30, 2012) and 77 FR 70435 (November 26, 2012). The most recent revisions to the reporting templates and related instructions were made in 2014. See 79 FR 58780 (September 30, 2014) and 79 FR 75152 (December 17, 2014)

8.  See 79 FR 69365 (November 21, 2014).

9.  78 FR 55340 (September 10, 2013).

10.  79 FR 20754 (April 14, 2014).