[Federal Register Volume 64, Number 30 (Tuesday, February 16, 1999)]
[Notices]
[Pages 7689-7692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3620]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
Federal Reserve System
Federal Deposit Insurance Corporation
Agency Information Collection Activities: Submission for OMB
Review; Joint Comment Request
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: Submission for OMB review; joint agency comment request.
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SUMMARY: On October 1, 1998, the OCC, the Board, and the FDIC (the
agencies) requested public comment for 60 days on proposed revisions to
the Consolidated Reports of Condition and Income (Call Report), which
are currently approved collections of information. After considering
the comments received, the Federal Financial Institutions Examination
Council (FFIEC), of which the agencies are members, approved the
proposed revisions, including selecting one of two alternatives for one
proposed change. Therefore, in accordance with the requirements of the
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the agencies
hereby give notice that they plan to submit to the Office of Management
and Budget (OMB) requests for review of the Call Report collections of
information.
In accordance with the requirements of the Paperwork Reduction Act
of 1995, the OCC, the Board, and the FDIC 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.
Comments are invited on: (a) Whether the Call Report 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' estimates of the burden of the
information collections, 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
the collections on respondents, including through the use of automated
collection techniques or other forms of information technology; and (e)
estimates of capital or startup costs and costs of operation,
maintenance, and purchase of services to provide information.
DATES: Comments must be submitted on or before March 18, 1999.
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, Office of the Comptroller of the Currency, 250 E Street, SW,
Third Floor, Washington, DC 20219; Attention: Paperwork Docket No.
1557-0081 [Fax number (202) 874-5274; Internet address:
regs.comments@occ.treas.gov]. Comments will be available for inspection
and photocopying at the ODD's Public Reference Room, 250 E Street, SW,
Washington, DC 20219 between 9:00 a.m. and 5:00 p.m. on business days.
Appointments for inspection of comments may be made by calling (202)
874-5043.
Board: Written comments should be addressed to Jennifer J. Johnson,
Secretary, Board of Governors of the Federal Reserve System, 20th and C
Streets, NW, Washington, DC 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, NW. Comments received may be
inspected in room M-P-500 between 9:00 a.m. and 5:00 p.m., except as
provided in Sec. 261.12 of the Board's Rules Regarding Availability of
Information, 12 CFR 261.12(a).
FDIC: Written comments should be addressed to Robert E. Feldman,
Executive Secretary, Attention: Comments/OES, Federal Deposit Insurance
Corporation, 550 17th Street, NW, Washington, DC 20429. 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 7:00 a.m. and
5:00 p.m. (Fax number: (202) 898-3838; Internet address:
comments@fdic.gov). Comments may be inspected and photocopied in the
FDIC Public Information Center, Room, 100, 801 17th Street, NW,
Washington, DC, 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: Alexander T. Hunt, Office
[[Page 7690]]
of Information and Regulatory Affairs, Office of Management and Budget,
New Executive Office Building, room 3208, Washington, DC 20503.
for further information contact: Requests for additional information or
a copy of the submission may be obtained by contacting:
OCC: Jessie Gates, OCC Clearance Officer, or Camille Dixon,
Legislative and Regulatory Activities Division, (202) 874-5090, Office
of the Comptroller of the Currency, 250 E Street, SW, Washington, DC
20219.
Board: Mary M. West, Chief, Financial Reports Section, (202) 452-
3829, 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 contact Diane
Jenkins, (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: Request for OMB approval to extend, with
revision, the following currently approved collections of information:
Report Title: Consolidated Reports of Condition and Income (Call
Report).
Form Number: FFIEC 031, 032, 033, 034.\1\
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\28\ The FFIEC 031 report form is filed by banks with domestic
and foreign offices. The FFIEC 032 report form is filed by banks
with domestic offices only and total assets of $100 million or more
but less than $300 million. The FFIEC 034 report form is filed by
banks with domestic offices only and total assets of less than $100
million.
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Frequency of Response: Quarterly.
Affected Public: Business or other for-profit.
For OCC
OMB Number: 1557-0081.
Estimated Number of Respondents: 2,600 national banks.
Estimated Time per Response: 39.92 burden hours.
Estimated Total Annual Burden: 415,220 burden hours.
For Board
OMB Number: 7100-0036.
Estimated Number of Respondents: 994 state member banks.
Estimated Time per Response: 45.80 burden hours.
Estimated Total Annual Burden: 182,101 burden hours.
For FDIC
OMB Number: 3064-0052.
Estimated Number of Respondents: 5,985 insured state nonmember
banks.
Estimated Time per Response: 29.67 burden hours.
Estimated Total Annual Burden: 710,345 burden hours.
The estimated time per response is an average which varies by
agency because of differencies 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). The time per response for a bank is estimated to range from
15 to 400 hours, depending on individual circumstances.
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 business (i.e., small banks) are
affected.
Abstract
Banks file Call Reports with the agencies each quarter for the
agencies' use in monitoring the condition and performance of reporting
banks and the industry as a whole. In addition, Call Reports 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 Reports are also used to calculate all
banks' deposit insurance and Financing Corporation assessments and
national banks' semiannual assessment fees.
Current Actions
On October 1, 1998, the OCC, the Board, and the FDIC jointly
published a notice soliciting comments for 60 days on proposed
revisions to the Call Report (63 FR 52794). The notice described the
specific changes that the agencies, with the approval of the FFIEC,
were proposing to implement as of March 31, 1999.
The agencies initially proposed to revise the Call Report effective
March 31, 1999, by: deleting the existing items from the amortized cost
and fair value of high-risk mortgage securities and (on the FFIEC 034
report) for losses deferred pursuant to 12 U.S.C. 1823(j); adding new
items for accumulated net gains (losses) on cash flow hedges and for
the year-to-date change in this new component of equity capital in
response to the issuance of a new accounting standard for derivative
instruments and hedging activities; either adding a new item or
expanding the scope of an existing item in order to distinguish
nonmortgage servicing assets from other intangible assets; and making a
number of instructional changes, primarily to incorporate recent
changes in accounting standards, to further conform with generally
accepted accounting principles in other areas, and to improve the
reporting of certain regulatory capital information.
After considering the comments, the FFIEC and the agencies decided
to proceed with all of the proposed changes. With respect to
nonmortgage servicing assets, the FFIEC and the agencies selected the
proposed approach under which the scope of the existing item for
``purchased credit card relationships'' would be expanded to include
these servicing assets.
Comments
In response to this notice, the agencies collectively received two
comment letters, both of which were from bankers' associations. One
association supported the proposed reductions in detail, accepted the
new items proposed for accumulated net gains (losses) on cash flow
hedges, preferred the approach for reporting nonmortgage servicing
assets which the FFIEC and the agencies have decided to implement, and
supported the proposed instructional change affecting the reporting of
market risk equivalent assets. This association did not address the
other proposed instructional changes. The second association stated
that it ``generally concurs with the proposals'' and favored adding a
new item to the Call Report for nonmortgage servicing assets, an
approach that the FFIEC and the agencies decided not to take. This
association did not comment on any of the proposed instructional
changes. However, it recommended that ``unless there is an overriding
need for immediate implementation * * * any changes to the Call Report
be postponed until the March 31, 2000 report to avoid complicating Year
2000 systems compliance requirements.''
The FFIEC and the agencies believe that it may be less problematic
to implement the new cash flow hedge items and the nonmortgage
servicing assets reporting change in 1999 than to delay implementation
until the first quarter of 2000. Because of their fiscal years, some
banks must implement Financial Accounting Standards Board (FASB)
Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities (FAS 133), in the third or
[[Page 7691]]
fourth quarter of 1999. Other banks may choose to adopt FAS 133 earlier
than required at the beginning of any fiscal quarter in 1999, e.g., as
of January 1, 1999. The information to be reported in the new cash flow
hedge items is information that banks adopting FAS 133 in 1999 will be
required to report in financial statements prepared under generally
accepted accounting principles in 1999. Banks not required to adopt FAS
133 until the year 2000 will not have any amounts to report in the new
items during 1999. In addition, only a relatively small percentage of
banks hold freestanding derivatives that are subject to FAS 133. As of
September 30, 1998, approximately 500 of the more than 8,900 FDIC-
insured commercial banks reported having such derivatives. Some banks
may also hold financial instruments with embedded derivatives that may
be separated from the host contract and accounted for as a derivative
under FAS 133.
As for nonmortgage servicing assets, the regulatory capital
amendment which led the agencies to propose this reporting change took
effect on October 1, 1998. Banks with nonmortgage servicing assets that
wish to include these assets in regulatory capital, subject to the
limits set forth in the agencies' capital standards, have already
modified their internal regulatory capital calculation procedures for
this change and are already reporting regulatory capital information in
Call Report Schedule RC-R--Regulatory Capital in accordance with the
amended capital standards. Under these capital standards, nonmortgage
servicing assets must be combined with purchased credit card
relationships for purposes of applying a Tier 1 capital sublimit.
Therefore, revising the existing Call Report item for purchased credit
card relationships to include nonmortgage servicing assets (rather than
having separate items for each of these two types of intangibles, which
the agencies had also proposed as an alternative) is similar to the
approach taken in the capital standards. In addition, this Call Report
revision should affect only a small number of banks. Fewer than 100
reported that they had any purchased credit card relationships as of
September 30, 1998. Call Report data for that date also suggest that
fewer than 100 banks had any nonmortgage servicing assets.
In its comment letter, the first bankers' association also
commented that the agencies have not yet made significant progress in
satisfying the requirements of Section 307 of the Riegle Community
Development and Regulatory Improvement Act of 1994. Section 307
requires the four federal banking and thrift agencies to work jointly
to develop a single form for the filing of core information by banks,
savings associations, and bank holding companies. It also directs the
agencies to review the information they collect from these institutions
that supplements the core information and eliminate those reporting
requirements that are not warranted for safety and soundness or other
public purposes. In this regard, the FFIEC and the agencies regularly
review the existing Call Report requirements in order to identify items
that are no longer sufficiently useful to warrant their continued
collection. Since 1995 these reviews have led to the elimination of
numerous items and reductions in the level of detail in several areas.
In addition, the FFIEC and the agencies have, as part of their
Section 307 efforts, adopted generally accepted accounting principles
as the reporting basis for the Call Report; combined the four sets of
Call Report instructions into a single comprehensive set; developed an
index to the instructions; made the Call Report forms, instructions,
and data available on the Internet; and implemented an electronic
filing requirement for the Call Report. The FFIEC and the agencies are
currently surveying Call Report users within the agencies and are
continuing to review the uses of individual Call Report items in order
to ascertain their relative importance to the agencies. These actions
are part of the agencies' ongoing effort to eliminate information with
the least practical utility and to increase uniformity among regulatory
reports.
Summary of the Revisions to the Call Report
The revisions to the Call Report listed below, which have been
approved by the FFIEC, must be reviewed and approved by OMB. The
agencies expect to implement these changes as of the March 31, 1999,
report date. Unless otherwise indicated, the revisions will 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, 1999, report date, reasonable estimates may be
provided for any new or revised item for which the requested
information is not readily available.
Deletions
(1) In Schedule RC-B--Securities, the agencies are deleting
Memorandum items 8.a and 8.b for the amortized cost and fair value of
``High-risk mortgage securities.''
(2) The agencies are deleting the balance sheet items on the FFIEC
034 report forms for small banks relating to deferred agricultural loan
losses (Schedule RC, items 12.b, 12.c, 28.b, and 28.c).
New or Revised Items
(1) The agencies are adding a new item 26.c to the equity capital
section of Schedule RC--Balance Sheet for accumulated net gains
(losses) on cash flow hedges under FASB Statement No. 133, Accounting
for Derivative Instruments and Hedging Activities. The agencies also
are adding a new item 11.b to Schedule RI-A--Changes in Equity Capital
for the year-to-date change in these accumulated net gains (losses).
Existing item 11 on Schedule RI-A is renumbered as item 11.a.
(2) In Schedule RC-M--Memoranda, the agencies are expanding the
scope of item 6.b.(1), ``Purchased credit card relationships,'' to
cover ``Purchased credit card relationships and nonmortgage servicing
assets,'' with item 6.b.(2) covering the remaining ``All other
identifiable intangible assets.'' Through 1998, nonmortgage servicing
assets have been reported in item 6.b.(2).
Instructional Changes
(1) The agencies are revising the instructions to conform with
American Institute of Certified Public Accountants' Statements of
Position 98-1, Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use, and 98-5, Reporting on the Costs of
Start-Up Activities.
(2) The agencies are adding a new entry to the Glossary section of
the instructions which discusses the reporting of securities
activities, including descriptions of certain trading practices. These
practices were previously discussed in the agencies' 1992 Supervisory
Policy Statement on Securities Activities, which was replaced in April
1998 by a revised policy statement on investment securities that does
not address these reporting issues.
(3) The agencies are revising the Glossary entry for ``Allowance
for Loan and Lease Losses'' to indicate that the cost basis of a loan
or lease that has been reduced through a direct write-down may not be
increased at a later date by reversing the previous write-down.
(4) The agencies are revising the Glossary entry for ``Business
Combinations'' and the instructions for the Schedule RC-M, item 6.c,
``Goodwill,'' to clarify that goodwill cannot ordinarily be sold or
dividended
[[Page 7692]]
to a parent company or affiliate or charged off in the year of
acquisition.
(5) For banks subject to the market risk capital guidelines, the
agencies are revising the instructions for reporting ``Net risk-
weighted assets'' in item 3.d.(1) of Schedule RC-R--Regulatory Capital
so that the bank's ``Market risk equivalent assets'' are included in
this item. The caption for item 3.d.(2) of Schedule RC-R is modified to
read ``Market risk equivalent assets included in net risk-weighted
assets above.'' This makes the reporting of ``Net risk-weighted
assets'' in the Call Report consistent with the reporting of this item
in the FR Y-9C bank holding company report.
(6) The agencies are revising the instructions for reporting low
level recourse transactions in Schedule RC-R to explain how the
allowable amount of the allowance for loan and lease losses should be
calculated by banks that use the ``direct reduction method'' for these
transactions.
Dated: February 5, 1999.
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, February 8,
1999.
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 4th day of February, 1999.
Federal Deposit Insurance Corporation
Robert E. Feldman,
Executive Secretary.
[FR Doc. 99-3620 Filed 2-12-99; 8:45 am]
BILLING CODES 4810-33-M, 6210-01-M, 6714-01-M
