82 FR 17661 - Proposed Agency Information Collection Activities; Comment Request

FEDERAL RESERVE SYSTEM

Federal Register Volume 82, Issue 69 (April 12, 2017)

The Board of Governors of the Federal Reserve System (Board or Federal Reserve) invites comment on a proposal to extend for three years, with revision, the voluntary Survey of Terms of Lending (STL; FR 2028; OMB No. 7100-0061).

[Federal Register Volume 82, Number 69 (Wednesday, April 12, 2017)]
[Notices]
[Pages 17661-17663]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07408]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice, request for comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board or 
Federal Reserve) invites comment on a proposal to extend for three 
years, with revision, the voluntary Survey of Terms of Lending (STL; FR 
2028; OMB No. 7100-0061).

DATES: Comments must be submitted on or before June 12, 2017.

ADDRESSES: You may submit comments, identified by FR 2028A, FR 2028B, 
FR 2028S, or FR 2028D, by any of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include OMB 
number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Robert deV. Frierson, 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 
http://www.federalreserve.gov/apps/foia/proposedregs.aspx 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 form in Room 
3515, 1801 K Street (between 18th and 19th Streets NW.) Washington, DC 
20006 between 9:00 a.m. and 5:00 p.m. on weekdays.
    Additionally, commenters may send a copy of their comments to the 
OMB Desk Officer--Shagufta Ahmed--Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 10235 725 17th Street NW., Washington, DC 20503 or by 
fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: A copy of the PRA OMB submission, 
including the proposed reporting form and instructions, supporting 
statement, and other documentation will be placed into OMB's public 
docket files, once approved. These documents will also be made 
available on the Federal Reserve Board's public Web site at: http://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested 
from the agency clearance officer, whose name appears below.
    Federal Reserve Board Clearance Officer--Nuha Elmaghrabi--Office of 
the Chief Data Officer, Board of Governors of the Federal Reserve 
System, Washington, DC 20551, (202) 452-3829. Telecommunications Device 
for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors 
of the Federal Reserve System, Washington, DC 20551.

SUPPLEMENTARY INFORMATION: On June 15, 1984, the Office of Management 
and Budget (OMB) delegated to the Board authority under the Paperwork 
Reduction Act (PRA) to approve of and assign OMB control numbers to 
collection of information requests and requirements conducted or 
sponsored by the Board. In exercising this delegated authority, the 
Board is directed to take every reasonable step to solicit comment. In 
determining whether to approve a collection of information, the Board 
will consider all comments received from the public and other agencies.
    Request for comment on information collection proposal.
    The Board invites public comment on the following information 
collection, which is being reviewed under authority delegated by the 
OMB under the PRA. Comments are invited on the following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. The accuracy of the Federal Reserve's estimate of the burden of 
the proposed information collection, 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 collection on 
respondents,

[[Page 17662]]

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.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the Federal 
Reserve should modify the proposed revisions prior to giving final 
approval.
    Proposal to approve under OMB delegated authority the extension for 
three years, with revision, of the following report:
    Report Title: Survey of Small Business and Farm Lending.
    Agency Form Number: FR 2028B, FR 2028D, and FR 2028S.
    OMB Control Number: 7100-0061.
    Frequency: Quarterly.
    Respondents: Commercial banks.
    Estimated Number of Respondents: FR 2028B-250; FR 2028D-398; and FR 
2028S-250.
    Estimated Average Hours per Response: FR 2028B-1.4 hours; FR 2028D-
1.5 hours; FR 2028D (First Time only)-1.5 hours; and FR 2028S-0.1 
hours.
    Estimated Annual Burden Hours: 4,485 hours.
    General Description of Report: The STL collects unique information 
concerning price and certain nonprice terms of loans made to businesses 
and farmers during the first full business week of the mid-month of 
each quarter (February, May, August, and November). The FR 2028A and FR 
2028B collect detailed data on individual loans made during the survey 
week, and the FR 2028S collects the prime interest rate for each day of 
the survey from both FR 2028A and FR 2028B respondents. From these 
sample STL data, estimates of the terms of business loans and farm 
loans extended during the reporting week are constructed. The aggregate 
estimates for business loans are published in the quarterly E.2 
statistical release, Survey of Terms of Business Lending, and aggregate 
estimates for farm loans are published in the E.15 statistical release, 
Agricultural Finance Databook.
    Proposed revisions: The Federal Reserve proposes to (1) discontinue 
the FR 2028A, (2) create a new Small Business Lending Survey (FR 2028D) 
that would provide focused and enhanced information on small business 
lending including rates, terms, credit availability, and reasons for 
their changes (in contrast to the individual loan data collected on the 
FR 2028A, the FR 2028D would collect quarterly average quantitative 
data on terms of small business loans and qualitative information on 
changes and the reasons for changes in the terms of lending), and (3) 
the STL would be renamed the Survey of Small Business and Farm Lending 
(SSBFL) to more accurately describe the data collection. No changes are 
proposed to the FR 2028B and FR 2028S. The proposed final data 
collection for the FR 2028A would be for the May 2017 survey week, and 
the proposed first data collection for the FR 2028D would be in 
November 2017 for the September 30, 2017, as of date.

Survey of Terms of Business Lending (FR 2028A)

    The survey data are used to assess conditions and to track 
developments in business credit markets. For instance, during the 
credit market turmoil that began in the second half of 2007 and early 
2008, STL data showed a smaller increase in the spread of loan rates 
over banks' cost of funds than other indicators of business loan 
pricing suggested. Moreover, information about the date on which 
commitments were finalized or renewed has been important in 
understanding how loan rates evolved during the crisis, as it allowed 
the Federal Reserve to study the terms on new loan commitments 
separately from commitments written prior to the crisis. More broadly, 
the survey data have been useful for monitoring the changing role of 
the prime rate as a benchmark for business loan pricing and of shifts 
in the mix of fixed-rate and variable-rate lending as financial markets 
have changed. The STL microdata are not available to researchers 
outside the Federal Reserve, but have been used in a number of research 
papers.
    The FR 2028A data have limitations for assessing conditions and 
analyzing developments in nonfarm business credit markets. For example, 
it was noted in the memorandum for renewing the STL in June 2015 that 
``The STL is an important source of individual loan data used by those 
concerned with lending to small businesses, for which banks are one of 
the primary sources of credit.'' \1\ However, the data were 
insufficient for addressing questions about small business lending 
during the financial crisis, ensuing recession, or economic recovery. 
For example, the data could not answer questions on whether changes in 
the flow of credit to small businesses were due to supply issues, such 
as changes in bank lending standards or terms, or demand issues, such 
as changes in application rates, or both. Additionally, the FR 2028A 
data could not be used to answer questions regarding changes in the 
credit quality of applicants or identify potential underlying factors 
for observed changes in credit quality. For reasons such as these, the 
June 2015 memorandum stated ``The Federal Reserve is seeking 
alternative sources of detailed, disaggregated data on small business 
loans, but there are currently none available. Should a better source 
for this type of data become available, the Federal Reserve may revisit 
the need for this survey.''
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    \1\ See page 3 of the June 2015 OMB Supporting Statement for the 
FR 2028 at http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201505-7100-002.
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    The Federal Reserve System has conducted a study of alternative 
small business loan data sources to assess their usefulness for 
addressing policy questions on small business credit. The study 
identified and conducted an extensive analysis of 35 existing small 
business lending data collections and potentially new data collections. 
The data collections considered included, among others, data collected 
by the Board of Governors, private sector surveys such as the National 
Federation of Independent Business member survey, and a Dodd-Frank Act 
mandated data collection by the Consumer Financial Protection 
Bureau.\2\ The primary finding was that existing and new data 
collections under consideration would not meet the policy needs for 
understanding and addressing the relevant policy issues and questions.
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    \2\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Section 1071, Subtitle G--Regulatory Improvements, Sec. 1071--Small 
Business Data Collection.
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    The FR 2028D data collection is being proposed to address the gaps 
in existing and planned new surveys on small business lending. In 
addition, other Federal Reserve reports that have been developed in 
recent years provide information on large nonfarm business loans. As a 
result, the information used for assessing and analyzing developments 
in nonfarm business credit markets would be improved by combining the 
proposed FR 2028D data collection on the terms of small business loans 
with the existing reports on large business loans. For these reasons, 
the FR 2028A would be discontinued. The proposed final data collection 
for the FR 2028A would be for the May 2017 survey week.

Prime Rate Supplement to Survey of Terms of Lending (FR 2028S)

    The FR 2028S is completed by banks that file the FR 2028A or the FR 
2028B.

[[Page 17663]]

The prime rate, an administered rate, remains the base rate banks use 
to price a significant portion of the loans covered by the FR 2028A and 
FR 2028B.\3\ The prime rate is by far the most common base rate used to 
price variable rate business and farm loans at small and medium-sized 
banks. Even for large borrowers and the largest banks, the prime rate 
is a pricing option frequently available along with market-related 
rates. The FR 2028S imposes little burden and the information it 
provides is useful in interpreting movements in rates charged on 
business and farm loans, especially for small loans and for loans at 
smaller banks. It also provides valuable information about variations 
in the prime-lending rate across banks, which can be considerable. The 
FR 2028S will be renewed without revision and will be reported by FR 
2028B respondents. Information on base rates for small business loans 
will be included in the proposed FR 2028D.
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    \3\ The FR 2028S defines the prime rate to be, ``[T]he 
administered rate used [by the bank] for pricing business and other 
credit, which [is adjusted] from time to time in response to changes 
in market conditions. [The] institution may set this rate internally 
or may adopt as its own a published rate.''
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Proposed Small Business Lending Survey (FR 2028D)

    The FR 2028D would collect quantitative and qualitative information 
that the Federal Reserve can use to monitor developments in the 
availability of credit to small businesses. Bank lending to small 
businesses is critical for employment and economic growth at the local, 
regional, and national levels because it is a primary source of funding 
for these businesses. The FR 2028D was motivated by the inability to 
answer basic policy questions raised by Federal Reserve policymakers on 
small business credit during the recent financial crisis and subsequent 
recovery. It would also contribute to a better understanding of the 
role of community banks in providing loans to small businesses and on 
small business access to credit in local communities. The survey would 
be timed to make reports on developments in small business lending 
available for the second FOMC meeting of each quarter. The data would 
also be available for Federal Reserve System economists and other staff 
to use for research purposes. To get a complete understanding of the 
availability, terms, and market conditions of bank lending to small and 
large nonfarm businesses, the Federal Reserve would combine the 
information gathered from the FR 2028D with other Federal Reserve data 
collections that gather information on large business loans.
    The FR 2028D would improve the ability to assess and analyze 
developments in nonfarm small business credit markets and to answer 
policy questions in a timely manner. The proposed information to be 
collected is not available from existing or planned surveys conducted 
by either the private or public sectors. The survey would collect 
unique, quarterly quantitative and qualitative information on nonfarm 
small business lending that improves upon the information currently 
collected by the FR 2028A. The quantitative information is similar to 
the data in the FR 2028A, but the FR 2028D would collect quarterly 
amounts or average levels of the data items as opposed to individual 
loan information from a survey week. As a result, the quantitative 
information will be less costly to report and less impacted by 
idiosyncratic events. The qualitative questions will provide 
information on changes in loan demand, credit standards and terms, and 
credit quality of applicants and reasons for the changes. Information 
on the reasons for denying a small business loan application will also 
be collected.
    The FR 2028D would also improve upon current information on 
outstanding loans collected on the Report of Condition and Income 
(FFIEC 031 and FFIEC 041, as well as the anticipated FFIEC 051; OMB No. 
7100-0036) (Call Report), which collects data on loans less than a 
certain dollar amount rather than on loans to small businesses. The 
Call Report data may result in information distortions about the 
availability of credit to small businesses because not all small loans 
are made to small businesses.
    The FR 2028D would collect quantitative and qualitative information 
on loans to small businesses from a stratified sample of 398 banking 
institutions. The survey will be administered at a quarterly frequency 
and distributed during the second month of each quarter. Survey 
responses would be based on loan activity over the previous quarter. 
Quantitative information collected would include the aggregate number 
and dollar amount of outstanding loans and new loans extended by banks 
to small businesses each quarter, as well as line-of-credit drawdowns 
and the average interest rate and benchmark rate. Loans are separated 
into two categories: Term loans and lines of credit, with each category 
further separated into fixed rate and variable rate. Additionally, 
quantitative information on the number and dollar amount of small 
business loans with guarantees (Small Business Administration and 
other) would be collected, as well as information regarding loan 
maturity and the use of interest rate floors. The FR 2028D would also 
collect quantitative information on small business loan applications 
received and applications approved during the survey quarter, including 
information on applications from Low- and Moderate-Income tracts.
    Qualitative information collected by the FR 2028D would include 
questions to gauge changes in lending terms, loan demand, and credit 
standards for small business loans during the survey period.\4\ 
Furthermore, respondents will be asked to identify possible reasons for 
indicated changes in lending terms or credit standards. The survey 
would also include qualitative questions on the demand for small 
business loans, changes in credit line usage, and changes in the credit 
quality of small business loan applicants. Respondents would be asked 
to identify potential factors underlying a reported change in applicant 
credit quality (e.g. credit scores, quality of collateral) and to 
identify top reasons for denying small business loans during the survey 
quarter.
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    \4\ The inclusion of qualitative questions, which are the same 
as those in the Senior Loan Officer Opinion Survey on Bank Lending 
Practices (FR 2018; OMB No. 7100-0058), is meant to supplement the 
existing FR 2018 data to get a more comprehensive view of the 
availability of credit to businesses. Importantly, the definitions 
of a small business are different in the FR 2018 and proposed FR 
2028D. The FR 2018 covers lending to both small and large firms and 
defines small firms as those with annual sales of less than $50 
million, which is significantly larger than the $5 million threshold 
in the FR 2028D. Furthermore, the FR 2018 panel only includes large 
institutions while the FR 2028D panel will be a stratified sample of 
398 domestic banks and include institutions of all sizes. Therefore, 
not much overlap in the panels for the two data collections is 
expected.
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    Legal authorization and confidentiality: The Board's Legal Division 
has determined that these surveys are authorized by section 11(a)(2) of 
the Federal Reserve Act (12 U.S.C. 248(a)(2)) and are voluntary. 
Individual responses reported on the FR 2028A, FR 2028B, FR 2028D, and 
FR 2028S are regarded as confidential under the Freedom of Information 
Act (5 U.S.C. 552(b)(4)).

    Board of Governors of the Federal Reserve System, April 7, 2017.
Ann E. Misback
Secretary of the Board.
[FR Doc. 2017-07408 Filed 4-11-17; 8:45 am]
 BILLING CODE 6210-01-P