83 FR 58432 - Reduced Reporting for Covered Depository Institutions
DEPARTMENT OF TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION Federal Register Volume 83, Issue 223 (November 19, 2018)
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Federal Register Volume 83, Issue 223 (November 19, 2018)
| Page Range | 58432-58458 | |
| FR Document | 2018-24587 |
[Federal Register Volume 83, Number 223 (Monday, November 19, 2018)] [Proposed Rules] [Pages 58432-58458] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-24587] [[Page 58431]] Vol. 83 Monday, No. 223 November 19, 2018 Part III Department of Treasury ----------------------------------------------------------------------- Office of the Comptroller of the Currency Federal Reserve System ----------------------------------------------------------------------- Federal Deposit Insurance Corporation ----------------------------------------------------------------------- 12 CFR Parts 52, 208, and 304 Reduced Reporting for Covered Depository Institutions; Proposed Rule Federal Register / Vol. 83 , No. 223 / Monday, November 19, 2018 / Proposed Rules [[Page 58432]] ----------------------------------------------------------------------- DEPARTMENT OF TREASURY Office of the Comptroller of the Currency 12 CFR Part 52 [Docket ID OCC-2018-0032] RIN 1557-AE39 ----------------------------------------------------------------------- FEDERAL RESERVE SYSTEM 12 CFR Part 208 [Docket ID R-1618] RIN 7100-AF12 ----------------------------------------------------------------------- FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 304 RIN 3065-AE82 Reduced Reporting for Covered Depository Institutions 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 proposed rulemaking with request for public comment. ----------------------------------------------------------------------- SUMMARY: The OCC, the Board, and the FDIC (collectively, the agencies) are inviting comment on a proposed rule that would implement section 205 of the Economic Growth, Regulatory Relief, and Consumer Protection Act by: Expanding the eligibility to file the agencies' most streamlined report of condition, the FFIEC 051 Call Report, to include certain insured depository institutions with less than $5 billion in total consolidated assets that meet other criteria; and, establishing reduced reporting on the FFIEC 051 Call Report for the first and third reports of condition for a year. The OCC and Board also are proposing similar reduced reporting for certain uninsured institutions that they supervise with less than $5 billion in total consolidated assets that otherwise meet the same criteria. This Federal Register notice also includes a Paperwork Reduction Act notice to reduce the amount of data required to be reported on the FFIEC 051 Call Report for the first and third calendar quarters, and other related changes. DATES: Comments must be received by January 18, 2019. ADDRESSES: Comments should be directed to: OCC: You may submit comments to the OCC by any of the methods set forth below. Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title ``Reduced Reporting for Covered Depository Institutions'' to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:Federal eRulemaking Portal--``Regulations.gov'': Go to www.regulations.gov. Enter ``Docket ID OCC-2018-0032'' in the Search Box and click ``Search.'' Click on ``Comment Now'' to submit public comments. Click on the ``Help'' tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Email: [email protected]. Mail: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E- 218, Washington, DC 20219. Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, Washington, DC 20219. Instructions: You must include ``OCC'' as the agency name and ``Docket ID OCC-2018-0032'' in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information that you provide such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this rulemaking action by any of the following methods: Viewing Comments Electronically: Go to www.regulations.gov. Enter ``Docket ID OCC-2018-0032'' in the Search box and click ``Search.'' Click on ``Open Docket Folder'' on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on ``View all documents and comments in this docket'' and then using the filtering tools on the left side of the screen. Click on the ``Help'' tab on the Regulations.gov home page to get information on using Regulations.gov. The docket may be viewed after the close of the comment period in the same manner as during the comment period. Viewing Comments Personally: You may personally inspect comments at the OCC, 400 7th 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 (202) 649-6700 or, for persons who are deaf or hearing impaired, TTY, (202) 649-5597. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect comments. Board: When submitting comments, please consider submitting your comments by email or fax because paper mail in the Washington, DC area and at the Board may be subject to delay. You may submit comments, identified by Docket No. R-1618 and RIN 7100-AF12, by any of the following methods: Agency Website: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm. Email: [email protected]. Include docket and RIN numbers in the subject line of the message. FAX: (202) 452-3819 or (202) 452-3102. Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. All public comments will be made available on the Board's website at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove personally identifiable information at the commenter's request. Accordingly, comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room 3515, 1801 K Street NW (between 18th and 19th Streets NW), between 9:00 a.m. and 5:00 p.m. on weekdays. FDIC: You may submit comments, identified by FDIC RIN 3064-AE82, by any of the following methods: Agency Website: https://www.fdic.gov/regulations/laws/federal/. Follow instructions for submitting comments on the Agency website. Mail: Robert E. Feldman, Executive Secretary, Attention: Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. Hand Delivery/Courier: Comments may be hand-delivered to the guard [[Page 58433]] station at the rear of the 550 17th Street NW building (located on F Street) on business days between 7:00 a.m. and 5:00 p.m. Email: [email protected]. Comments submitted must include ``FDIC'' and ``RIN 3064-AE82'' on the subject line of the message. Public Inspection: All comments received must include ``FDIC'' and ``RIN 3064-AE82'' for this rulemaking. All comments received will be posted without change to http://www.fdic.gov/regulations/laws/federal/, including any personal information provided. Paper copies of public comments may be ordered from the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226, or by telephone at (877) 275-3342 or (703) 562-2200. FOR FURTHER INFORMATION CONTACT: OCC: Cady Codding, Senior Policy Accountant, Office of the Chief Accountant, (202) 649-5764; Kevin Korzeniewski, Counsel, Office of the Chief Counsel, (202) 649-5490; or for persons who are deaf or hearing impaired, TTY, (202) 649-5597. Board: Douglas Carpenter, Senior Supervisory Financial Analyst, Division of Supervision and Regulation, (202) 452-2205; Claudia Von Pervieux, Senior Counsel, (202) 452-2552, or Laura Bain, Senior Attorney, (202) 736-5546, Legal Division, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), (202) 263-4869, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. FDIC: Robert Storch, Chief Accountant, Division of Risk Management Supervision, (202) 898-8906, [email protected]; or Nefretete Smith, Counsel, Legal Division, (202) 898-6851, [email protected]; or Kathryn Marks, Counsel, Legal Division, (202) 898-3896, [email protected]. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction A. Summary of Proposed Rule B. Background II. Description of the Proposed Rule III. Expected Impact of the Proposed Rule IV. Alternatives Considered V. Related Agency-Specific Revisions VI. Regulatory Analyses A. Paperwork Reduction Act B. Regulatory Flexibility Act C. Plain Language D. Riegle Community Development and Regulatory Improvement Act of 1994 E. OCC Unfunded Mandates Reform Act of 1995 Appendix A: Proposed Changes in Frequency of Collection for the FFIEC 051 Appendix B: Data Items To Be Collected From Institutions With Total Assets Greater Than $1 Billion on the FFIEC 051 I. Introduction A. Summary of Proposed Rule The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) are inviting comment on this notice of proposed rulemaking (proposed rule) that would implement reduced reporting on the Consolidated Reports of Condition and Income (Call Report) \1\ for eligible small insured depository institutions, consistent with section 205 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA).\2\ The OCC and Board also are proposing to implement reduced reporting for eligible uninsured institutions. The proposed rule would expand the number of institutions that may file the FFIEC 051 Call Report, the most streamlined version of the Call Report, and would provide for reduced reporting in the FFIEC 051 Call Report. Through the included Paperwork Reduction Act (PRA) notice, the agencies are proposing to reduce the amount of data required to be reported on the FFIEC 051 Call Report for the first and third calendar quarters. --------------------------------------------------------------------------- \1\ The ``Call Report'' is the report of condition and income for most insured depository institutions. There currently are three versions of the Call Reports: The Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices (FFIEC 031), the Consolidated Report of Condition and Income for a Bank with Domestic Offices Only (FFIEC 041), and the Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only and Total Assets Less Than $1 Billion (FFIEC 051). \2\ Public Law 115-174, 132 Stat. 1296 (2018). --------------------------------------------------------------------------- The proposed reduced reporting would be available to smaller, non- complex institutions, with domestic offices only, that meet the definition of ``covered depository institution.'' That term generally is defined in the proposed rule to mean an institution that has less than $5 billion in total consolidated assets, has no foreign offices, is not required to or has not elected to use Subpart E (Internal Ratings-Based and Advanced Measurement Approaches) of the agencies' regulatory capital rules to calculate its risk-based capital requirements, and is not a large or highly complex institution for purposes of the FDIC's assessment regulations. The proposed rule would provide for reduced reporting by allowing covered depository institutions to file the FFIEC 051 Call Report, with fewer data items required in the reports for the first and third calendar quarters. For covered depository institutions, the principal areas of reduced reporting in the first and third calendar quarters generally would include data items related to categories of risk- weighting of various types of assets and other exposures under the agencies' regulatory capital rules, fiduciary and related services assets and income, and troubled debt restructurings by loan category. In addition, covered depository institutions that previously were ineligible to file the FFIEC 051 Call Report (i.e., those with total assets of $1 billion or more) would benefit from the FFIEC 051 Call Report's less detailed quarterly reporting as compared to other versions of the Call Report.\3\ --------------------------------------------------------------------------- \3\ As compared with other versions of the Call Report, the FFIEC 051 Call Report requires less detailed reporting for data items related to trading, mortgage banking, and securitization activities, as well as less detail for other lending and derivatives activities. --------------------------------------------------------------------------- B. Background In their statutory roles of chartering, licensing, supervising, or insuring institutions,\4\ the agencies principally rely on information obtained through on-site examinations of institutions, off-site supervisory activities between examinations, and information reported on an institution's report of condition. The report of condition is the Call Report for most insured depository institutions.\5\ Call Reports provide the most current financial and statistical data available for identifying areas of focus for supervision and for on-site and off-site examinations. The agencies use Call Report data in monitoring the condition, performance, and risk profile of individual institutions and the industry as a whole. Call Report data assist the agencies in their collective missions of promoting the safety and soundness of institutions and the financial system and the protection of consumer financial rights, as well as fulfilling agency-specific missions, such as conducting monetary policy, promoting financial stability, and [[Page 58434]] administering federal deposit insurance. The agencies also use Call Report data in evaluating institutions' applications, including interstate merger and acquisition applications. In addition, Call Report data are used by the appropriate agencies to calculate institutions' deposit insurance assessments as well as national banks' and federal savings associations' semiannual assessment fees. --------------------------------------------------------------------------- \4\ The OCC charters and supervises national banks and Federal savings associations, and licenses and supervises Federal branches and agencies of foreign banks; the Board supervises state member banks; the FDIC supervises state nonmember banks, state savings associations and state-licensed insured branches, and insures the deposits of all insured depository institutions. \5\ In addition, U.S. branches and agencies of foreign banks file the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002). --------------------------------------------------------------------------- The agencies recognize that institutions devote staffing and resources in order to complete and file Call Reports. In December 2014, the Federal Financial Institutions Examination Council (FFIEC), which is responsible for developing uniform reporting systems (including the Call Reports) for federally supervised financial institutions,\6\ started an initiative to reduce the reporting burden on small institutions. The FFIEC members developed the following guiding principles to evaluate potential additions and deletions of Call Report data items and other revisions to the Call Reports: (1) Data items serve a long-term regulatory or public policy purpose by assisting the FFIEC members in fulfilling their missions; (2) data items to be collected maximize practical utility and minimize, to the extent practicable and appropriate, burden on financial institutions; and (3) equivalent data items are not readily available through other means. --------------------------------------------------------------------------- \6\ See 12 U.S.C. 3305(c). The agencies are members of the FFIEC. The term ``financial institution'' in this context means a commercial bank, savings bank, trust company, savings association, building and loan association, homestead association, cooperative bank, or credit union. 12 U.S.C. 3302(3). --------------------------------------------------------------------------- As part of the FFIEC's Call Report burden-reduction initiative, FFIEC members conducted outreach with community banks and industry representatives to better understand what aspects of the Call Report process are significant sources of reporting burden for financial institutions; accelerated the statutorily mandated review of the Call Report; \7\ and evaluated the feasibility and merits of creating a more streamlined Call Report for eligible small institutions.\8\ Based on the response from community banks, trade associations, and public comments, as well as survey results of FFIEC member Call Report data users, in August 2016, the agencies invited public comment on a proposed streamlined version of the Call Report, the FFIEC 051 Call Report.\9\ --------------------------------------------------------------------------- \7\ See 12 U.S.C. 1817(a)(11). The agencies are statutorily mandated to conduct a review of the information and schedules in the Call Reports every five years, and reduce or eliminate any information or schedules for which the agencies determine continued collection is not required by law and no longer necessary or appropriate. https://www.ffiec.gov/pdf/2017_Interagency_Review_Consolidated_Reports_Condition_Income.pdf. \8\ The FFIEC published a series of Federal Register notices pursuant to the Paperwork Reduction Act of 1995. See 80 FR 56539 (September 18, 2015) (principles); 81 FR 45357 (July 13, 2016) (burden reduction); 82 FR 2444 (January 9, 2017) (burden reduction and implementation of FFIEC 051); 83 FR 939 (January 8, 2018) (burden reduction); 83 FR 15678 (April 11, 2018) (burden reduction). \9\ 81 FR 54190 (August 15, 2016). --------------------------------------------------------------------------- The FFIEC 051 Call Report first took effect as of March 31, 2017, and contained approximately 40 percent fewer data items than were included in the FFIEC 041 Call Report, which is the Call Report filed by institutions that have $1 billion or more in total assets, only have domestic offices, and are not branches of foreign banks. In addition, the initial FFIEC 051 Call Report collected approximately 4 percent of data items less frequently than the FFIEC 041 Call Report in effect at that time. In June and November 2017, the agencies proposed further reductions to the FFIEC 051 Call Report based on public comments and additional feedback from Call Report data users from the FFIEC members.\10\ The agencies also reviewed suggestions for streamlining the Call Reports provided in comment letters submitted during the public notice and comment period for the agencies' review of regulations required by the Economic Growth and Regulatory Paperwork Reduction Act.\11\ As a result of the further reductions that took effect as of the June 30, 2018, report date, the FFIEC 051 Call Report represents a reduction of approximately 43 percent of the data items and provides for reduced reporting frequency of approximately 6 percent of the data items, as compared to the FFIEC 041 Call Report in use immediately before the implementation of the FFIEC 051 Call Report. Currently, only institutions that have less than $1 billion in total assets, have only domestic offices, are not branches of foreign banks, and are not required or have not elected to use Subpart E of the agencies' regulatory capital rules (applicable to advanced approaches institutions) to calculate their risk-based capital requirements \12\ may use the FFIEC 051 Call Report. --------------------------------------------------------------------------- \10\ See 82 FR 29147 (June 27, 2017), 82 FR 51908 (November 8, 2017). These Federal Register notices also contained proposals to reduce data items in the FFIEC 031 and FFIEC 041 Call Reports. \11\ See 12 U.S.C. 3311. \12\ See 12 CFR part 3, subpart E (OCC); 12 CFR part 217, subpart E (Board); 12 CFR part 324, subpart E (FDIC). Generally, an institution is an advanced approaches institution if it has consolidated assets of at least $250 billion or if it has consolidated on-balance sheet foreign exposures of at least $10 billion, or if it is a subsidiary of a depository institution, bank holding company, savings and loan holding company, or intermediate holding company that is an advanced approaches banking organization. --------------------------------------------------------------------------- II. Description of the Proposed Rule Section 205 of EGRRCPA amended section 7(a) of the Federal Deposit Insurance Act (FDI Act) and requires the agencies to issue regulations that allow for a reduced reporting requirement for a covered depository institution when the institution makes the first and third report of condition for a calendar year. Section 205 of EGRRCPA defines ``covered depository institution'' as an insured depository institution ``that-- (i) has less than $5 billion in total consolidated assets; and (ii) satisfies such other criteria as the [agencies] determine appropriate.'' \13\ --------------------------------------------------------------------------- \13\ 12 U.S.C. 1817(a)(12)(B). --------------------------------------------------------------------------- The proposed rule would implement section 205 of EGRRCPA by expanding the number of insured depository institutions eligible to file the FFIEC 051 Call Report and establishing the reduced reporting in the FFIEC 051 Call Report permissible for such institutions for the first and third reports of condition for a year.\14\ The OCC and Board also are proposing to establish reduced reporting for certain uninsured institutions under their supervision that meet the proposed criteria. --------------------------------------------------------------------------- \14\ Under the proposed rule, ``report of condition'' means the FFIEC 031, FFIEC 041, or FFIEC 051 versions of the Consolidated Reports of Condition and Income (Call Report) or the FFIEC 002 report (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks), as applicable, and as they may be amended or superseded from time to time in accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35. --------------------------------------------------------------------------- As discussed below, the agencies propose to implement reduced reporting by expanding the scope of institutions permitted to file the FFIEC 051 Call Report every quarter through the definition of ``covered depository institution.'' As noted, the FFIEC 051 Call Report is the most streamlined version of the Call Report and is familiar to institutions and their Call Report service providers and, therefore could be readily used by covered depository institutions for reduced reporting in the first and third calendar quarters.\15\ In particular, because the FFIEC 051 Call [[Page 58435]] Report uses the same definitions for data items as other Call Report versions, as well as the same data item identifiers used by the Call Report preparation software products, the agencies anticipate that newly eligible covered depository institutions would be able to file the FFIEC 051 Call Report without the need to make significant changes to their Call Report preparation processes or incur significant cost.\16\ Finally, as discussed below in the PRA section, to implement section 205 of EGRRCPA the agencies are proposing to reduce the number of existing FFIEC 051 Call Report data items required to be reported in the first and third calendar quarters by approximately 37 percent. Accordingly, for all covered depository institutions, filing the FFIEC 051 Call Report would provide an immediate reduction in required reporting without substantial administrative costs. --------------------------------------------------------------------------- \15\ Based on June 30, 2018, Call Report data, of the 5,357 institutions with reported total assets below the statutory $5 billion asset threshold, 4,810 or almost 90 percent of those institutions reported less than $1 billion in total assets and are currently eligible to file the FFIEC 051 Call Report based on asset size. Approximately 77 percent of the 4,810 institutions with total assets below $1 billion already file the FFIEC 051 Call Report, and thus would face little to no administrative costs to obtain reduced reporting for the first and third calendar quarters of a year. \16\ Based on June 30, 2018 Call Report data, 547 institutions that reported total assets of $1 billion or more, but less than $5 billion, could be eligible to file the FFIEC 051 Call Report in 2019 under the proposed rule. --------------------------------------------------------------------------- The agencies expect to propose additional reductions to the FFIEC 051 Call Report in connection with the implementation of section 201 of EGRRCPA. Section 201 of EGRRCPA requires the agencies to adopt a community bank leverage ratio in place of the existing regulatory capital rules for qualifying community banks,\17\ which the agencies expect would lead to a reduction in the number of regulatory capital data items that would need to be reported by such institutions. The agencies also will continue to review the data collected on the FFIEC 051 Call Report and seek to reduce the reporting frequency of data items from quarterly to semi-annual where practicable. --------------------------------------------------------------------------- \17\ A qualifying community bank is defined as a depository institution or depository holding company with total consolidated assets of less than $10 billion and a risk profile deemed appropriate by the agencies. Under section 201, the agencies may determine whether a community bank qualifies based on consideration of certain risk factors. --------------------------------------------------------------------------- A. Covered Depository Institution Section 205 of EGRRCPA defines ``covered depository institution'' as an insured depository institution ``that-- (i) has less than $5 billion in total consolidated assets; and (ii) satisfies such other criteria as the [agencies] determine appropriate.'' \18\ The proposed rule would define ``covered depository institution'' as an institution that meets all the following criteria: Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding calendar year; has no foreign offices; is not required to or has not elected to use Subpart E of the agencies' regulatory capital rules to calculate its risk-based capital requirements; and is not a large or highly complex institution for purposes of the FDIC's assessment regulations. The OCC's definition would also scope out institutions that file the FFIEC 002 report of condition. In addition, the FDIC's definition would exclude state- licensed insured branches of foreign banks. These other non-asset-size criteria are identical to the current eligibility criteria for institutions with less than $1 billion in total assets to file the FFIEC 051 Call Report except for the criterion related to whether the institution is large or highly complex under the FDIC's assessment regulations. --------------------------------------------------------------------------- \18\ 12 U.S.C. 1817(a)(12)(B). --------------------------------------------------------------------------- The agencies would allow reduced reporting for ``insured depository institutions'', as such term is defined in section 3 of the FDI Act, 12 U.S.C. 1813, and as required by section 205 of EGRRCPA. The OCC and Board also would extend reduced reporting to certain uninsured institutions that they supervise and that would otherwise meet the same criteria.\19\ Greater parity in the reporting of insured and uninsured national banks and state member banks would be appropriate in light of the similarities between the information used to review the activities of such insured and uninsured institutions. In addition, some uninsured institutions with total assets of less than $1 billion currently file the FFIEC 051 Call Report and, therefore, may continue to use this version of the Call Report under the proposed rule. --------------------------------------------------------------------------- \19\ The FDIC only supervises insured state nonmember banks, insured state savings associations, and insured state-licensed branches. Currently, no uninsured Board-regulated institution is eligible to file the FFIEC 051 Call Report, but under the proposal one uninsured Board-regulated institution would meet the proposed criteria for eligibility to file the FFIEC 051 Call Report. The OCC supervises 49 uninsured institutions that currently are eligible to file the FFIEC 051 Call Report, which would increase to 50 under the proposed rule. --------------------------------------------------------------------------- Asset Threshold The proposed rule would define ``total consolidated assets'' as total assets as reported in an institution's report of condition. An institution would determine whether it meets the asset-size criterion and is eligible to file the FFIEC 051 Call Report based on the total assets it reported in its report of condition (Schedule RC, Item 12 in the Call Reports), which is calculated on a consolidated basis, in the institution's report of condition for the second calendar quarter of the previous calendar year. This approach is consistent with the current FFIEC 051 Call Report instructions for determining eligibility to file the FFIEC 051 Call Report based on asset size.\20\ --------------------------------------------------------------------------- \20\ See FFIEC 051 instructions, available at https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC051_201806_i.pdf. --------------------------------------------------------------------------- This approach should allow an institution sufficient time to address any accounting or reporting systems changes or other preparation process changes that may be needed if the institution wants to take advantage of, or is no longer eligible for, filing the FFIEC 051 Call Report with its reduced reporting in the following calendar year. For example, an institution that meets the asset-size criterion based on its report of condition as of June 30, 2018, may be eligible to file the FFIEC 051 Call Report for the entire 2019 calendar year, even if its assets increase to $5 billion or more later in 2018 or 2019, provided it also continues to meet the non-asset-size criteria discussed below. If the same institution reports $5 billion or more in total assets on its Call Report as of June 30, 2019, the institution could continue to file the FFIEC 051 Call Report for report dates through December 31, 2019 (based on its total assets as of June 30, 2018), including reduced reporting in the third calendar quarter of 2019 as long as it continued to meet the non-asset-size criteria. However, because the institution exceeded the asset-size criterion as of June 30, 2019, the institution would be ineligible to file the FFIEC 051 Call Report in the 2020 calendar year. Question 1: What are the advantages and disadvantages of institutions measuring total assets using the approach discussed above? Should the agencies use average total assets over a specified period rather than total assets on a single reporting date? Is another methodology more appropriate to measure total assets for purposes of the asset-size criterion? If so, what methodology is more appropriate and why? Question 2: The agencies are not proposing to immediately disqualify an institution from using reduced reporting if it exceeds $5 billion in total assets, regardless of how the institution crossed the asset threshold, including through a merger or acquisition. Is this appropriate and why? Other Eligibility Criteria The agencies are also proposing that an institution satisfy other criteria to be eligible for reduced reporting, consistent with section 205. These other criteria are based on an institution's [[Page 58436]] international activities, its treatment under the agencies' regulatory capital rules, and its treatment under the FDIC's deposit insurance assessment regulations. These non-asset-size criteria are identical to the current eligibility criteria for institutions with less than $1 billion in total assets to file the FFIEC 051 Call Report with the exception of the criterion related to treatment under the FDIC's assessment regulations. Unlike the asset-size criterion, which is determined as of the report of condition filed for the second calendar quarter (as of June 30) of the prior calendar year, an institution would determine in each calendar quarter whether it meets all of these non-asset-size criteria. If in any calendar quarter an institution no longer meets all of these other criteria, then the institution would become ineligible to file the FFIEC 051 Call Report beginning the quarter in which the institution failed to meet one of the non-asset- size criteria. In contrast to failing the asset-size criterion, failing to meet the non-asset-size criteria often reflects a significant change in the operations of an institution as a result of deliberate planning, such as opening a foreign branch or becoming subject to a different approach under the agencies' regulatory capital rules. Therefore, in contrast to the asset-size criterion, the proposed rule does not include a grace period for non-asset-size criteria. International Activities. The proposal would exclude from the definition of ``covered depository institution'' an institution that has foreign offices or that is an insured branch of a foreign bank. These criteria are identical to the current eligibility criteria that exclude these institutions from being eligible to file the FFIEC 051 Call Report. Foreign offices would be defined as: Branches or consolidated subsidiaries in foreign countries \21\ unless located on a U.S. military facility; international banking facilities as defined under 12 CFR 204.8; majority-owned Edge Act and Agreement \22\ subsidiaries; and branches or consolidated subsidiaries in U.S. territories if the bank is chartered or headquartered in a U.S. state or the District of Columbia. Insured branches of foreign banks would be those branches defined in section 3(s) of the FDI Act, 12 U.S.C. 1813(s), which file the FFIEC 002 version of the report of condition. The agencies believe it is appropriate to exclude these institutions from the proposal because the nature of these international activities requires more comprehensive and detailed financial information to effectively supervise and monitor them.\23\ This comprehensive information related to foreign activities is required to be reported in the FFIEC 002 report of condition. For example, institutions that have foreign offices may present risks, such as currency risk and country- specific risks, for which supervisors require additional financial information to ensure appropriate monitoring and supervision. Permitting these institutions to receive reduced reporting on the FFIEC 051 Call Report would impair the agencies' existing supervision of these institutions. --------------------------------------------------------------------------- \21\ The proposed rule would define ``foreign country'' to refer to one or more foreign nations, and include the overseas territories, dependencies, and insular possessions of those nations and of the United States. This definition also is used in the Board's Regulation K, 12 CFR part 211. \22\ 12 CFR 211.1(c)(2) and (3). \23\ Depository institutions with foreign offices are currently required to file the FFIEC 031 Call Report and thus are not currently eligible to file the FFIEC 051. Branches of foreign banks (both Federally and State-licensed), are required to file the FFIEC 002 version of the report of condition. --------------------------------------------------------------------------- Advanced Approaches Institutions. The proposal would exclude from the definition of ``covered depository institution'' an institution that is required to, or has elected to, use Subpart E of the agencies' regulatory capital rules to calculate its risk-based capital requirements (advanced approaches institution). In general, an advanced approaches institution is an institution that has consolidated total assets equal to $250 billion or more, has consolidated total on-balance sheet foreign exposure equal to $10 billion or more, or is a subsidiary of a depository institution or holding company that uses the advanced approaches to calculate its total-risk weighted assets.\24\ Advanced approaches institutions currently are precluded from filing the FFIEC 051 Call Report. Advanced approaches institutions generally must calculate their regulatory capital requirements under the advanced approaches, which relies in part on internal models and complex formulas, and are subject to additional requirements such as the supplementary leverage ratio.\25\ While advanced approaches holding companies typically have total assets of more than $250 billion, their depository institution subsidiaries also generally are subject to the advanced approaches, some of which may have total assets of less than $5 billion. Some of these subsidiaries often engage in specialized or highly complex activities that require more comprehensive and detailed financial information to ensure effective supervision and monitoring. --------------------------------------------------------------------------- \24\ See 12 CFR 3.100(b) (OCC); 217.100(b) (Board); 324.100(b) (FDIC). \25\ See 12 CFR part 3, subpart E and 12 CFR 3.10(c)(4) (OCC); 12 CFR part 217, subpart E and 12 CFR 217.10(c)(4) (Board); 12 CFR part 324, subpart E and 12 CFR 324.10(c)(4) (FDIC). --------------------------------------------------------------------------- Institutions Assessed as Large or Highly Complex by the FDIC. Finally, the agencies propose to exclude from the definition of ``covered depository institution'' an insured depository institution that is assessed as a ``large institution'' or ``highly complex institution,'' as defined in the FDIC's deposit insurance assessment regulations.\26\ --------------------------------------------------------------------------- \26\ See 12 CFR 327.8(e), (f), (g) and (s). For the purposes of the FDIC's assessment regulations, a ``small institution'' generally is an insured depository institution with less than $10 billion in total assets. Generally, a ``large institution'' is an insured depository institution with more than $10 billion in total assets or that is treated as a large institution for assessment purposes under section 327.16(f). Generally, a ``highly complex institution'' is: (i) An insured depository institution (excluding a credit card bank) that has had $50 billion or more in total assets for at least four consecutive quarters, is controlled by a U.S. parent holding company that has had $500 billion or more in total assets for four consecutive quarters, or is controlled by one or more intermediate U.S. parent holding companies that are controlled by a U.S. holding company that has had $500 billion or more in assets for four consecutive quarters; or (ii) a processing bank or trust company. However, an institution with assets between $5 billion and $10 billion may request treatment for deposit insurance assessments as a large institution, and few institutions have made this request to date. See 12 CFR 327.16(f). --------------------------------------------------------------------------- Under the FDIC's assessment regulations, large and highly complex institutions are assessed using combined CAMELS \27\ ratings and certain forward-looking financial measures to assess the risks such institutions pose to the Deposit Insurance Fund.\28\ The FDIC uses the data reported by a large or highly complex institution on either the FFIEC 031 or FFIEC 041 Call Report, as appropriate, to calculate the institution's assessment rate. For example, the FDIC uses data on Schedule RC-O regarding higher-risk assets, which are not reported on the FFIEC 051 Call Report, to calculate financial ratios used to determine a large or highly complex institution's assessment rate. --------------------------------------------------------------------------- \27\ A financial institution is assigned a ``CAMELS'' composite rating based on an evaluation and rating of six essential components of an institution's financial condition and operations. These component factors address the: Adequacy of capital (C); quality of assets (A); capability of management (M); quality and level of earnings (E); adequacy of liquidity (L); and sensitivity to market risk (S). \28\ See 12 CFR 327.16(b) and (c); 76 FR 10672, 10688-10698 (February 25, 2011). --------------------------------------------------------------------------- Under the FDIC's assessments regulations, an institution that increases or decreases in asset size is reclassified as a small institution, large institution, or highly complex institution generally after such institution reports assets of less than $10 billion, $10 billion or more, or more than $50 billion, [[Page 58437]] respectively, for four consecutive quarters.\29\ Because reclassification requires that the institution report above or below a certain asset-based threshold for four consecutive quarters, there may be a period of time in which an institution would otherwise be eligible for reduced reporting by filing the FFIEC 051 Call Report because it met the asset-size criterion, but is assessed as a large or highly complex institution. Although this situation is likely to be rare, without this criterion such institution would be eligible to file the FFIEC 051 Call Report with its reduced reporting under the proposed rule. For example, an institution that had been reporting more than $10 billion in assets and was assessed as a ``large institution'' as of March 31, 2018, could decrease in size such that its total assets, as of June 30, 2018, were below $5 billion. If that institution met the other non-asset-size criteria discussed above, then that institution could be eligible to file the FFIEC 051 Call Report in the 2019 calendar year, including reduced reporting in the first and third calendar quarters of 2019. However, such an institution would continue to be assessed as a large institution and would not be reclassified as a ``small institution'' for deposit insurance assessments until it reported total assets below $10 billion for four consecutive quarters. Therefore, as long as the institution continues to be assessed as a ``large institution,'' it would be ineligible to file the FFIEC 051 Call Report, including its reduced reporting, until it was reclassified for deposit insurance assessments and assessed as a ``small institution'' (i.e., beginning with the third calendar quarter in 2019). --------------------------------------------------------------------------- \29\ Under the FDIC's assessment regulations, an insured depository institution can be reclassified as a highly complex institution because they meet the definition of a ``processing bank or trust company.'' Under that definition, an insured depository institution would need to, among other things, have total assets of $10 billion or more for at least four consecutive quarters. See 12 CFR 327.8(s). --------------------------------------------------------------------------- This proposed eligibility criterion ensures that an institution that meets the asset-size criterion based on its report of condition for the second calendar quarter of a previous year, but is treated as a large or highly complex institution for assessment purposes, will continue to file the FFIEC 031 or FFIEC 041 Call Report, as appropriate, which contain the data items required by the FDIC to calculate the institution's assessment rate. Question 3: Do the other criteria proposed by the agencies set an appropriate scope for institutions eligible for reduced reporting? Are there additional institutions or classes of institutions meeting the asset-size criterion that the agencies should consider making eligible to use reduced reporting and, if so, why? Are there additional institutions or classes of institutions that the agencies should consider making ineligible for reduced reporting and, if so, why? B. Reduced Reporting The agencies propose to implement the reduced reporting required by section 205 of EGRRCPA by first allowing the broader group of covered depository institutions to file the FFIEC 051 Call Report each calendar quarter. The proposed rule would extend eligibility to file the FFIEC 051 Call Report to all covered depository institutions with $1 billion or more, but less than $5 billion, in total assets and that meet the non-asset-size criteria. As discussed in the PRA section below, the agencies propose revising the eligibility criteria for filing the FFIEC 051 Call Report to match the criteria to qualify as a covered depository institution under the proposal. As a result, this approach would provide significant relief through reduced reporting to covered depository institutions that currently are required to file the FFIEC 041 Call Report. For example, the current version of the FFIEC 051 Call Report includes 1,147 reportable data items in each of the first and third calendar quarters, compared with 2,029 reportable data items required on the FFIEC 041 Call Report in those calendar quarters, which is the version of the Call Report currently completed by most institutions with total assets of $1 billion or more, but less than $5 billion. Under the proposal, covered depository institutions with total assets between $1 billion and less than $5 billion would be eligible to file the FFIEC 051 Call Report in each calendar quarter of a calendar year (provided that they continue to meet the non-asset-size eligibility criteria), which would provide substantial reporting relief for these institutions compared to the FFIEC 041 Call Report currently used by most of those institutions. In addition to expanding the number of institutions eligible to file the FFIEC 051 Call Report, the agencies propose to implement the reduced reporting required by section 205 of EGRRCPA by further reducing the reporting required on the FFIEC 051 Call Report for all covered depository institutions in the first and third calendar quarters. The agencies propose to achieve this by reducing the frequency of reporting in the FFIEC 051 Call Report for approximately 37 percent of the existing data items in this report--from quarterly to semiannual--as described in the PRA section below. The principal areas of reduced reporting in the first and third quarters include data items related to categories of risk-weighting of various types of assets and other exposures under the agencies' regulatory capital rules, fiduciary and related services assets and income, and troubled debt restructurings by loan category. This reduction in frequency for certain data items would provide all covered depository institutions, including those with less than $1 billion in total assets that currently file the FFIEC 051 Call Report, with further reduced reporting in the first and third calendar quarters. Question 4: Is the agencies' proposal to implement reduced reporting by expanding eligibility to file the FFIEC 051 Call Report appropriate? If not, what would be a more appropriate way to implement Section 205's reduced reporting requirement, and why? C. Reservation of Authority The proposed rule includes a reservation of authority that would allow the appropriate Federal banking agency, in consultation with the applicable state chartering authority, and on an institution-specific basis, to require a covered depository institution to file the FFIEC 041 Call Report, or any successor thereto, in any calendar quarter or quarters in which the covered depository institution would otherwise be eligible to file the FFIEC 051 Call Report, based on the appropriate Federal banking agency's determination that such filing is necessary for supervisory purposes. In making such a determination, the appropriate Federal banking agency may consider criteria including whether the institution is significantly engaged in one or more complex, specialized, or other higher-risk activities, such as those for which limited information is reported in the FFIEC 051 Call Report compared to the FFIEC 041 Call Report. For example, if a covered depository institution has a considerable concentration of either trading assets or mortgage banking activities, the appropriate Federal banking agency may seek additional information from that institution by requiring the institution to file the FFIEC 041 Call Report. Generally, a covered depository institution's safety and soundness, size, complexity, activities, risk profile, and other factors, such as an increase in a covered depository institution's asset size resulting from a merger or acquisition, also may be taken into consideration. If, after considering such factors, the appropriate Federal banking agency determines that the covered depository institution should be required to file the [[Page 58438]] FFIEC 041 Call Report, the appropriate Federal banking agency would provide written notice to the covered depository institution prior to the filing requirement's becoming effective. Any covered depository institution eligible to file the FFIEC 051 Call Report, but that is required by its appropriate Federal banking agency to file the FFIEC 041 Call Report under the reservation of authority, would be required to continue to file the FFIEC 041 Call Report until the appropriate Federal banking agency provides written notice to the covered depository institution that it is no longer required to file the FFIEC 041 Call Report. The justification for use of the reservation and its terms will also be provided in the notice. This authority would provide the agencies with the flexibility to require an institution to report and disclose additional Call Report data if warranted by an institution's individual circumstances and risk profile. Consistent with current supervisory practices and experience, the exercise of the reservation of authority generally would be a decision made by a member of the appropriate agency's senior management and would not be at the discretion of examination staff. III. Expected Impact of the Proposed Rule The proposed rule is expected to broaden the number of institutions that may file the FFIEC 051 Call Report and be eligible for reduced reporting in the first and third calendar quarters.\30\ Based on June 30, 2018, Call Report data, 5,357 institutions reported total assets of less than $5 billion. Of these, 547 institutions reported total assets of $1 billion or more, but less than $5 billion, and are currently ineligible to file the FFIEC 051 Call Report in 2019, but would meet the definition of ``covered depository institution'' under the proposed rule. For 533 of these 547 institutions, this would mark the first time such institution is eligible to file the FFIEC 051 Call Report.\31\ Overall, each of the 5,357 institutions that reported less than $5 billion in total assets in their Call Report as of June 30, 2018, and that would qualify as a ``covered depository institution'' under the proposed rule, could file the FFIEC 051 Call Report and report approximately 37 percent fewer data items in the first and third calendar quarters than in the current FFIEC 051 Call Report. --------------------------------------------------------------------------- \30\ The proposed rule allows reduced reporting for covered depository institutions, but does not mandate that any institution file the FFIEC 051 Call Report. Based on June 30, 2018, Call Report data, approximately 77 percent of currently eligible institutions that reported total assets of less than $1 billion elected to file the FFIEC 051 Call Report. \31\ Fourteen institutions currently file the FFIEC 051 Call Report, but reported assets of $1 billion or more, but less than $5 billion on their Call Report as of June 30, 2018. Under the current Call Report instructions, these institutions would not be eligible to file the FFIEC 051 Call Report in 2019. However, under the proposed rule, these institutions would meet the definition of ``covered depository institution'' and, therefore, could continue to file the FFIEC 051 Call Report in 2019 (assuming they continue to meet the non-asset-size criteria). --------------------------------------------------------------------------- The agencies estimate the average quarterly reporting burden hours per institution for the current FFIEC 041 and FFIEC 051 Call Reports are 64.49 hours and 52.31 hours, respectively, for institutions that would become eligible to file the FFIEC 051 Call Report in 2019. Thus, each covered depository institution that switches from filing the current FFIEC 041 Call Report to the FFIEC 051 Call Report (amended as proposed in the PRA section) is expected to save, on average, 12.18 hours per quarter. Assuming that newly eligible covered depository institutions would file the FFIEC 051 Call Report at the same rate as currently eligible institutions file the FFIEC 051 Call Report (77 percent), the agencies estimate a total reporting burden reduction of 5,130 hours per quarter for these institutions.\32\ --------------------------------------------------------------------------- \32\ Calculated as 12.18 burden hours multiplied by 77 percent of 547 institutions that would be eligible under the proposed rule. Covered depository institutions could file the FFIEC 051 Call Report at a higher rate than the current 77 percent participation level, particularly due to the opportunity under the proposed rule to obtain additional reporting relief in the first and third calendar quarters. --------------------------------------------------------------------------- The proposed rule also provides for reduced reporting in the first and third calendar quarters for covered depository institutions. As discussed below in the PRA section, the agencies are proposing to remove approximately 37 percent of data items from being reported in the FFIEC 051 Call Report for covered depository institutions in the first and third calendar quarters. The principal areas of reduced reporting in the first and third calendar quarters include data items related to categories of risk-weighting of various types of assets and other exposures under the agencies' regulatory capital rules, fiduciary and related service assets and income, and troubled debt restructurings by loan category. These data items are currently collected every calendar quarter on the FFIEC 051 Call Report. Every covered depository institution that files the FFIEC 051 Call Report would experience a reduction in reporting for the first and third calendar quarters as a result of this aspect of the proposed rule. The agencies estimate that the proposed removal of approximately 37 percent of data items from the reporting requirements of covered depository institutions in the first and third calendar quarters would reduce the average quarterly reporting burden by 1.18 hours for the 3,714 institutions that filed the FFIEC 051 Call Report for the June 30, 2018, report date. This represents a total estimated burden reduction of 4,383 hours per quarter for these institutions.\33\ --------------------------------------------------------------------------- \33\ 1.18 hours * 3,714 FFIEC 051 Call Report filers for the report dated June 30, 2018. --------------------------------------------------------------------------- As also discussed below in the PRA section, the agencies are proposing to add certain data items to the FFIEC 051 Call Report for covered depository institutions with $1 billion or more, but less than $5 billion, in total assets. Based on Call Report data as of June 30, 2018, 533 institutions with $1 billion or more, but less than $5 billion, currently file the FFIEC 041 Call Report, but would meet the definition of ``covered depository institution'' under the proposed rule. Because these 533 institutions already report these data items on the FFIEC 041 Call Report, the proposed addition of these data items to the FFIEC 051 Call Report for these institutions would not represent an increase in reporting burden as these institutions would experience an overall net decrease in reporting burden by switching to the FFIEC 051 Call Report. Furthermore, only one of these items would be collected quarterly; the other items would be collected semiannually or annually. In addition, these data items would not be required to be completed by institutions with less than $1 billion in total assets that file the FFIEC 041 or FFIEC 051 Call Reports, so institutions that are currently eligible to file the FFIEC 051 Call Report would not be affected by the addition of these items. Based on the agencies' total hourly wage rate for Call Report preparation of $117 and the reduction in reporting hours resulting from the proposed reduced reporting discussed in the PRA section, it is estimated that reporting costs could be $600,210 less each quarter, on average, for the 547 eligible institutions that reported $1 billion or more, but less than $5 billion, in total assets on their June 30, 2018, Call Report.\34\ Also, the agencies estimate that reporting costs could be $512,811 less each quarter, on average, for the 3,714 institutions that filed the FFIEC 051 Call Report for June 30, 2018.\35\ In sum, the proposed changes to the FFIEC 051 Call Report that are discussed below [[Page 58439]] in the PRA section could reduce annual reporting costs by an estimated $4,452,084, or 0.008 percent of total annualized non-interest expenses, for institutions that reported total assets of less than $5 billion on the Call Report as of the June 30, 2018, and either filed the FFIEC 051 Call Report, or filed the FFIEC 041 Call Report but are expected to file the FFIEC 051 Call Report, under the proposed rule beginning in 2019.\36\ --------------------------------------------------------------------------- \34\ $117 per hour * 5,130 hours per quarter. \35\ $117 per hour * 4,383 hours per quarter. \36\ $117 per hour * [5,130 hours per quarter + 4,383 hours per quarter] * 4 quarters per year. --------------------------------------------------------------------------- Finally, the proposed rule could impose some minor additional regulatory costs, in the first year of implementation, that are associated with changes to internal systems or processes for affected institutions that are not currently eligible for, or do not currently file, the FFIEC 051 Call Report. The agencies expect that these additional costs should be relatively low as the FFIEC 051 Call Report shares defined terms and data item identifiers with the other Call Reports, so institutions that switch to the FFIEC 051 Call Report should not necessitate significant reporting system changes. However, these costs are also difficult to estimate accurately with available information because they depend upon the individual characteristics of each institution, its recordkeeping and reporting systems, and the decisions of its senior management. Question 5: The agencies invite comments on all aspects of the information provided in this Expected Impact section. In particular, would this proposal have any significant effects on institutions that the agencies have not identified? Question 6: Are there other factors or aspects of regulatory reporting that the agencies should consider in assessing the impact of the proposed rule? IV. Alternatives Considered The agencies recognize that while the statutory mandate is to allow for reduced reporting in the first and third calendar quarters for covered depository institutions, the implementation of section 205 of EGRRCPA presents an additional opportunity to provide broader regulatory relief to smaller, less complex institutions that are currently required to file the FFIEC 041 Call Report because they have $1 billion or more in total assets. In developing the proposal, the agencies sought to reduce the reporting burden on institutions with total consolidated assets of less than $5 billion, consistent with the mandate in section 205, while also ensuring that the agencies' data needs for institutions in the size range would continue to be met. The agencies considered two alternative approaches to implementing section 205 as part of the development of the proposed rule. In considering these alternatives, the agencies reviewed prior PRA notices in which Call Report changes were discussed and comments were addressed. Additionally, the agencies considered comments received on the Call Report burden reduction initiative announced in December 2014 that resulted in the creation of the FFIEC 051 Call Report. The agencies note that the FFIEC Call Report burden-reduction initiative involved significant outreach to community banks and to users of Call Report data and that the guiding principles developed as part of the initiative informed the development of the approach taken in this proposal. Alternative 1: Identify data items for reduced reporting on the FFIEC 041 and FFIEC 051 Call Reports. The agencies considered reviewing the FFIEC 041 and FFIEC 051 Call Reports to identify data items that could be reported on a less frequent basis by institutions with less than $5 billion in total assets. A possible advantage to this approach is that it might have been easier to present the various items proposed for reduced reporting. However, the agencies also recognized that the existing FFIEC 051 Call Report in its entirety already requires the reporting of significantly fewer data items than the FFIEC 041 Call Report. Therefore, expanding institutions' eligibility to file the FFIEC 051 Call Report was determined to be the more beneficial approach with respect to institutions with total assets of $1 billion or more, but less than $5 billion, because it would provide those institutions with immediate and significant reductions in the overall number of data items reported. In addition, re-reviewing every data item on the FFIEC 041 Call Report would require significantly more time and would delay the implementation of reduced reporting in comparison to proposing to use the existing FFIEC 051 Call Report. Alternative 2: Create a new, separate Call Report form for ``covered depository institutions.'' The agencies also considered creating a new, separate Call Report for covered depository institutions that would provide for reduced reporting in the first and third calendar quarters. The agencies believed that, while such an approach may appear simple to do, creating an entirely separate form only two years after the implementation of the new FFIEC 051 Call Report could lead to confusion about which form to file, especially because the criteria for filing the form likely would have been very similar to the current eligibility criteria for filing the FFIEC 051 Call Report. Also, this approach could result in institutions having to reorganize their reporting systems and processes to accommodate their use of a new form and incur costs and administrative burden in doing so. Because the proposed rule is intended to reduce burden on smaller, less complex institutions, the agencies determined that producing a new Call Report would not be the most efficient option. Additionally, the agencies recognized that they would require significant time to develop and publish an entirely new Call Report form, which would delay the regulatory reporting relief proposed in the rule. V. Related Agency-Specific Revisions A. Board The Board does not currently have a rule that sets forth the report of condition filing requirements of state-chartered banks that are members of the Federal Reserve System (state member banks), and instead relies on its statutory authority under section 9 of the Federal Reserve Act (FRA) and section 7(a)(3) of the FDI Act to require state member banks to provide reports of condition. In light of section 205 of EGRRCPA's requirement that the Board issue a rule that allows for reduced reporting by certain eligible Board-supervised insured depository institutions, the Board proposes to add a new subpart to Regulation H, which governs the membership of state banking institutions in the Federal Reserve System. The Board proposes to add new subpart K to Regulation H, which will incorporate the rule text implementing section 205. In addition to insured state member banks, the Board also supervises uninsured state member banks, such as nondepository trust companies. The Board requires such institutions to use the Call Report to submit financial data. The Board's proposed rule also would extend the use of the reduced reporting requirement to uninsured state member banks if they meet the criteria for covered depository institutions identified in the rule. The Board also proposes to include in new subpart K, pursuant to its statutory authority under section 9 of the FRA and section 7(a)(3) of the FDI Act, subsection 208.122 that will set forth the general requirement that all state member banks file consolidated reports of condition and income in accordance with the instructions for these reports. Question 7: Is the proposed extension of the reduced reporting requirement to [[Page 58440]] include uninsured state member banks that meet the same eligibility criteria appropriate? Would any of the proposed exclusionary criteria for covered depository institutions be problematic for uninsured state member banks? B. FDIC The FDIC proposes to amend Part 304 of its Rules and Regulations, by restructuring the regulation and creating a ``Subpart A'' and ``Subpart B.'' In Subpart A, the FDIC would put the current text of Part 304, with limited technical, non-substantive changes. The technical, non-substantive changes include: (1) Updating the address and contact information in section 304.2; (2) clarifying that sections 304.3(a) and (b) apply to insured depository institutions; (3) updating references in section 304.3(a) to the various Call Reports to include the recently implemented FFIEC 051 Call Report; and (4) updating the references to FDIC divisions to reflect changes in nomenclature. In Subpart B, the FDIC proposes to include the regulatory text implementing Section 205. The FDIC believes that the proposed approach to restructuring Part 304 will incorporate the entirety of the new, substantive text of the proposed rule that implements Section 205 of the EGRRCPA with minimal effect to the current text. Thus, a state nonmember bank or state savings association that believes it qualifies as a covered depository institution would be able to make that determination based on the regulatory text contained in Subpart B. Question 8: Is the proposed restructuring of Part 304 helpful and clear for users to understand? Why or why not? C. OCC Insured depository institutions identified in section 205 include insured Federal branches of foreign banks, as defined under section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)). While these insured Federal branches are included in the statute, they currently file the FFIEC 002 report of condition. The FFIEC 002 is used by insured and uninsured state and Federal branches and agencies of foreign banks and contains a significant amount of information relating to the operations and foreign connections of these entities. As described above in the International Activities section, this additional information is necessary for the OCC to supervise insured Federal branches, and a reduced reporting option would not be appropriate given the nature of their activities. Therefore, the OCC's proposed rule would include a criterion excluding institutions that file the FFIEC 002 report of condition from being eligible for reduced reporting. In addition to insured depository institutions, which are specifically identified in section 205, the OCC also supervises a number of uninsured national banks, such as trust banks. The OCC has permitted some of these institutions to use the Call Report to submit financial data and to use the existing FFIEC 051 if they meet the current eligibility requirements for filing that Call Report. Therefore, the OCC's proposed rule would also extend the use of the reduced reporting requirement to uninsured national banks if they meet the criteria for covered depository institutions identified in the rule. Question 9: Is the proposed extension of the reduced reporting requirement to include uninsured national banks supervised by the OCC appropriate? Would any of the proposed exclusionary criteria for covered depository institutions be problematic for uninsured national banks supervised by the OCC? VI. Regulatory Analyses A. Paperwork Reduction Act Certain provisions of the proposed rule affect ``collections of information'' within the meaning of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The agencies reviewed the proposed rule, including the changes to the FFIEC 051 Call Report that are discussed in this PRA section, and determined that it would result in changes to certain reporting requirements that have been previously cleared by the OMB under various control numbers. The proposed rule would expand the eligibility to file the FFIEC 051 Call Report to certain institutions with $1 billion or more, but less than $5 billion, in total assets that meet other eligibility criteria. In addition to the expanded eligibility to file this report, the agencies also are proposing other revisions to the FFIEC 051 Call Report, as discussed under Current Actions below. These revisions to the FFIEC 051 Call Report are proposed to take effect as of the March 31, 2019, report date. The agencies are proposing to extend for three years, with revision, these information collections. Current Actions Overview First, as described above, the agencies are proposing to revise the criteria for determining whether an institution is eligible to file the FFIEC 051 Call Report to match the criteria in the proposed rule. While the proposed rule provides for reduced reporting on reports filed for the first and third calendar quarters, the agencies also propose to revise the eligibility criteria to extend to all eligible institutions with less than $5 billion in total assets that meet other criteria in the rule the option to file the FFIEC 051 Call Report for all four calendar quarters. Therefore, if an institution is eligible to file the FFIEC 051 Call Report for the first and third calendar quarters pursuant to the rule, the institution also could file the FFIEC 051 Call Report for the second and fourth calendar quarters provided the institution continues to meet the non-asset-size criteria. The revisions to the filing eligibility would be made in the General Instructions section of the Call Report instructions and would include the increase in the asset-size threshold to less than $5 billion in total assets as well as the addition of a criterion to exclude institutions that are treated as large or highly complex institutions for deposit insurance assessment purposes. The Call Report instructions currently provide that, beginning with the first quarterly report date following the effective date of a business combination, a transaction between entities under common control, or a branch acquisition that is not a business combination involving an institution and one or more other depository institutions, the resulting institution, regardless of its size prior to the transaction, must file the FFIEC 041 Call Report if its consolidated total assets after the consummation of the transaction are $1 billion or more. The agencies are proposing to remove this provision from the instructions, but the resulting institution may be required to file the FFIEC 041 Call Report consistent with the reservation of authority in the rule. All of the proposed FFIEC 051 Call Report eligibility criteria, along with justifications, are provided above in section II.A. of the Supplementary Information section (``Covered Depository Institution''). Based on June 30, 2018, Call Report data, there were 547 institutions with $1 billion or more, but less than $5 billion in total assets that likely would meet the definition of ``covered depository institution'' in the proposed rule. Second, the agencies are proposing to revise the reporting frequency and [[Page 58441]] applicability of certain data items in the FFIEC 051 Call Report. Specifically, the agencies are proposing to reduce the reporting frequency of certain existing data items in the FFIEC 051 Call Report from quarterly to semiannual reporting. This proposal would reduce reporting in the first and third calendar quarters by 502 data items \37\ or a reduction of approximately 37 percent of the data items included in the June 30, 2018, FFIEC 051 Call Report. --------------------------------------------------------------------------- \37\ This number includes 69 data items collected on Schedule RC-T, Fiduciary and Related Services, that are only reported by certain institutions with fiduciary powers that have fiduciary activity to report. --------------------------------------------------------------------------- Third, for covered depository institutions with total assets of $1 billion or more, but less than $5 billion, the agencies are proposing to add to the FFIEC 051 Call Report certain data items that these institutions currently report on the FFIEC 041 Call Report, but generally with reduced reporting frequency. The agencies are proposing to add these items to meet the agencies' data needs and assist the agencies in fulfilling their missions of ensuring the safety and soundness of depository institutions and the financial system, as well as the protection of consumer financial rights and providing deposit insurance. Changes to the Frequency of Data Collection in the FFIEC 051 Call Report The agencies are proposing, for the reasons explained below, to reduce the frequency of the following items on the FFIEC 051 Call Report from quarterly to semiannual (i.e., these items would be reported in the June 30 and December 31 Call Reports only): Schedule RI, Income Statement, Memorandum item 14. Institutions currently report the amount of other-than-temporary impairment losses on certain debt securities that are recognized through earnings in this Memorandum item. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide this amount on a quarterly basis, as most of these institutions are not currently reporting losses in this item given current economic conditions. The agencies note that changes in the accounting for credit losses will eliminate the need for this item for an ever increasing percentage of institutions through year-end 2022. In the interim, the agencies can review other-than-temporary impairment information for the first and third calendar quarters, as necessary, as part of on-site examinations or through other periodic monitoring. Schedule RC-C, Part I, Loans and Leases, Memorandum items 1.a through 1.f, and Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets, Memorandum items 1.a through 1.f. Institutions currently report breakdowns of troubled debt restructurings by loan category, separately for those restructurings in compliance with their modified terms in Schedule RC-C and those restructurings that are past due 30 days or more or in nonaccrual status in Schedule RC-N. Institutions would still be required to report the totals for their troubled debt restructurings in Schedule RC-C, Part I, Memorandum item 1.g, and Schedule RC-N, Memorandum item 1.g, on a quarterly basis. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide the breakdowns of troubled debt restructurings on a quarterly basis. The agencies can review information on troubled debt restructurings by loan category for the first and third quarters as part of on-site examinations or through other periodic monitoring, as necessary. Schedule RC-E, Deposit Liabilities, Memorandum item 1.a. Institutions currently report the total amount of Individual Retirement Account and Keogh plan deposits in this Memorandum item. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide these amounts on a quarterly basis as this item generally does not fluctuate significantly between quarters for most eligible institutions. The agencies can review information on these deposits for the first and third quarters as part of on-site examinations or through other periodic monitoring, as necessary. Schedule RC-E, Memorandum item 5. Institutions currently report whether they offer consumer deposit products in this Memorandum item. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide this information on a quarterly basis, as this item does not change frequently for most eligible institutions. Schedule RC-M, Memoranda, items 8.a through 8.c. In these items, institutions currently report their primary internet website address, addresses for other websites used to solicit deposits, and alternate trade names used by the institutions. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide this information on a quarterly basis as these items do not change frequently for most eligible institutions. Schedule RC-R, Part II, Regulatory Capital Risk-Weighted Assets, items 1 through 25, columns A through S. In these items, institutions currently report detailed information about the risk- weighting of various types of assets and other exposures under the agencies' regulatory capital rules. Institutions still would need to calculate risk-weighted assets, maintain appropriate documentation for this calculation, and report items 26 through 31 of Part II, if applicable, on a quarterly basis. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide the details of their risk-weighting allocations and calculations in Schedule RC-R, Part II, on a quarterly basis as the agencies can adequately review regulatory capital calculations for the first and third calendar quarters as part of on-site examinations or through other types of periodic monitoring, as necessary. Schedule RC-R, Part II, Memorandum items 1 through 3, including all subitems and columns. Institutions currently report detailed information in these items about derivative exposures that are elements of the risk-weighting process for these exposures. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to report these amounts on a quarterly basis. Generally, institutions eligible to file the FFIEC 051 Call Report do not have a significant amount of derivatives contracts, and the agencies can review information about institutions' risk- weighting calculations for derivative exposures for the first and third calendar quarters, as necessary, as part of on-site examinations or through other periodic monitoring. Schedule RC-T, Fiduciary and Related Services, items 4 through 13, columns A through D; items 14 through 22; and Memorandum items 3.a through 3.h, for institutions with total fiduciary assets greater than $250 million but less than or equal to $1 billion, and gross fiduciary and related services income less than or equal to 10 percent of total revenue.\38\ Items 4 through 13 collect breakdowns for managed and non-managed accounts of the assets and number of accounts by type of fiduciary account. Fiduciary and related services income by type of fiduciary account is reported in items 14 and 22. Memorandum item 3 is used for reporting on the number and market [[Page 58442]] value of collective investment funds. Currently, institutions with total fiduciary assets greater than $250 million or with fiduciary income greater than 10 percent of total revenue must report these items on a quarterly basis. The proposed change would reduce the reporting of these items to semiannual for institutions with total fiduciary assets greater than $250 million but less than or equal to $1 billion and with fiduciary income less than or equal to 10 percent of total revenue. Institutions with total fiduciary assets less than or equal to $250 million that do not meet the fiduciary income test already have reduced reporting for these items (either through an exemption or annual reporting). The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report with total fiduciary assets greater than $250 million but less than or equal to $1 billion that do not meet the fiduciary income test to continue to provide managed and non-managed account data and collective investment fund information on a quarterly basis, as these items generally do not fluctuate significantly between quarters for institutions with fiduciary assets in this size range. In addition, when quarter-to- quarter and year-over-year comparisons of an institution's year-to-date income from fiduciary activities, as reported in the Call Report income statement, raise supervisory concerns, the agencies can review information on the composition of fiduciary income for the first and third calendar quarters as part of on-site examinations or through other periodic monitoring. --------------------------------------------------------------------------- \38\ Total fiduciary assets are measured as of the preceding December 31. Gross fiduciary and related services income is measured as a percentage of revenue (net interest income plus noninterest income) for the preceding calendar year. --------------------------------------------------------------------------- Detail for each affected data item described above is shown in Appendix A. Addition of Data Items to the FFIEC 051 Call Report for Institutions With Total Assets of $1 Billion or More The agencies are proposing to add certain data items to the FFIEC 051 Call Report that would apply only to covered depository institutions with total assets of $1 billion or more. These items are currently reported by institutions with total assets of $1 billion or more that file the FFIEC 031 or FFIEC 041 Call Report, but they are not required to be completed by institutions with less than $1 billion in total assets that file the FFIEC 031, FFIEC 041, or FFIEC 051 Call Reports. Therefore, the additional data items would not represent new data items for covered depository institutions with total assets of $1 billion or more, but rather are items carried over from the FFIEC 041 version of the Call Report, generally using the same definitions and calculations and with reduced reporting frequency. Schedule RI, Memorandum items 15.a. through 15.d. These items provide data on the three key categories of service charges on certain deposit accounts: Overdraft-related service charges on consumer accounts, monthly maintenance charges on consumer accounts, and consumer ATM fees. The agencies and the Bureau of Consumer Financial Protection (Bureau) propose to collect these items on an annual reporting frequency as they provide the only comprehensive data source from which supervisors and policymakers can estimate or evaluate the composition of consumer deposit account-related fees and how they affect consumers and a depository institution's earnings stability. The addition of these items to the Call Report in 2015 has supported the agencies and the Bureau in monitoring these types of transactional costs incurred by consumers. The data specific to overdraft-related fees is particularly pertinent for supervisors and policymakers because they compose the majority of consumer deposit service charges (and for many institutions, of total deposit service charges). Continuing to collect these data on an annual basis from covered depository institutions with $1 billion or more in total assets will support the agencies and the Bureau in monitoring these activities and informing any potential future rulemaking. The agencies are proposing to add these items to the FFIEC 051 on an annual basis (December 31) for covered depository institutions with total assets of $1 billion or more that respond affirmatively to the screening question (Schedule RC-E, Memorandum item 5, regarding whether an institution offers a consumer deposit account product), while institutions with total assets less than $1 billion will not need to report these items regardless of their response to the screening question. Institutions with total assets between $1 billion and less than $5 billion that file the FFIEC 041 Call Report currently report this information quarterly, so the proposed annual reporting would represent a frequency reduction for institutions filing the FFIEC 051 Call Report, while still meeting the agencies' need for this information. Schedule RI-C, Disaggregated Data on the Allowance for Loan and Lease Losses (ALLL). The agencies are proposing to add a condensed version of the existing FFIEC 041 Schedule RI-C to the FFIEC 051 Call Report and reduce the reporting frequency of this condensed schedule from quarterly to semiannual (i.e., reported in the June 30 and December 31 Call Reports only). The existing six columns in which institutions report the ``recorded investment'' and ``related allowance'' by loan category and allowance measurement method in Schedule RI-C in the FFIEC 041 Call Report would be combined into two columns in the FFIEC 051 Call Report, one for total recorded investment by loan category (sum of existing Columns A, C, and E) and the other for the total related allowance by loan category (sum of existing Columns B, D, and F) and any unallocated allowance. Consistent with the agencies' proposed revisions to the Call Report to address the changes in the accounting for credit losses resulting from the Financial Accounting Standards Board's Accounting Standards Update 2016-13,\39\ effective for the June 30, 2021, report date, text referencing ``recorded investment'' and ``allowance for loan and lease losses'' in the condensed version of the FFIEC 041 Schedule RI-C that would be added to the FFIEC 051 reporting form would be changed to ``amortized cost'' and ``allowance for credit losses'' (ACL), respectively.\40\ From June 30, 2019, through December 31, 2020, the condensed allowance- related information on the FFIEC 051 Call Report and the related instructions would include guidance stating that institutions that have adopted ASU 2016-13 should report the amortized cost and related ACL by loan category (and any unallocated ACL). For the transition period from June 30, 2021, through December 31, 2022, the reporting form and instructions for this condensed allowance-related information would be updated to include guidance stating that institutions that have not adopted ASU 2016-13 should report the ``recorded investment'' and the ``allowance for loan and lease losses,'' as applicable, in these items. In addition, consistent with the proposed revisions to address the changes in accounting for credit losses, the agencies also propose adding data items for institutions to report the disaggregated allowance balances for each category of held-to-maturity (HTM) securities to the FFIEC 051. The agencies believe the condensed semiannual information on the composition of ALLL (allowance for credit losses after adoption of ASU 2016-13) in relation to the total [[Page 58443]] recorded investment (amortized cost after adoption of ASU 2016-13) for each loan category, and disaggregated information on HTM securities allowances, is necessary to adequately supervise covered depository institutions with total assets of $1 billion or more but less than $5 billion. The information collected in Schedule RI-C as it is proposed to be included in the FFIEC 051 Call Report will support the agencies' analyses of the allowance and credit risk management. The data on allowance allocations by loan category, when reviewed in conjunction with the past due and nonaccrual data reported by loan category in Schedule RC-N, which will continue to be reported on a quarterly basis, assist the agencies in assessing an institution's credit risk exposures and evaluating the appropriateness of the overall level of its ALLL and its allocations by loan category. If changes in the quarterly past due and nonaccrual data by loan category at individual institutions in quarters when the disaggregated allowance data would not be reported in the FFIEC 051 Call Report raise questions about the composition of the allowance, supervisory follow-up can be undertaken on a case-by-case basis. The agencies note that many institutions with $1 billion or more but less than $5 billion in total assets do not publicly release quarterly financial statements, which makes the Call Report data the only information regularly available to the agencies on the composition of the allowance. By providing this detail in the FFIEC 051 Call Report, which supports the identification of changes in the ALLL over time, examiners can better perform off-site monitoring of activity within the ALLL in periods between examinations and when planning for examinations. --------------------------------------------------------------------------- \39\ See 83 FR 49160 (September 28, 2018). \40\ The amortized cost amounts to be reported would exclude any accrued interest receivable that is reported in ``Other assets'' on the Call Report balance sheet. --------------------------------------------------------------------------- Schedule RC-E, Memorandum items 6 and 7, including all subitems. Institutions report disaggregated data on balances in consumer and non-consumer deposit accounts in these items. These items are critical to the agencies' and the Bureau's consumer deposit product monitoring and rulemaking mandates for several reasons. As noted in the agencies' 2013 notice \41\ proposing the addition of these items to the Call Report, surveys indicate that over 90 percent of U.S. households maintain at least one deposit account. However, there are no other reliable sources from which to calculate the amount of funds held in consumer accounts. The data now reported in these items on the Call Report significantly enhances the ability of the agencies and the Bureau to monitor how different tiers of banks serve consumers and, specifically, consumer use of deposit accounts as transactional, savings, and investment vehicles. These data also permit the agencies to conduct improved assessments of institutional liquidity risk and significantly enhance the agencies' ability to assess institutional funding stability. The agencies are proposing to add these items to the FFIEC 051 on an annual basis (December 31) for institutions with total assets of $1 billion or more but less than $5 billion that respond affirmatively to the screening question (Schedule RC-E, Memorandum item 5, regarding whether an institution offers a consumer deposit account product), while banks with total assets less than $1 billion will not need to report these items regardless of their response to the screening question. Institutions with total assets of $1 billion or more but less than $5 billion that file the FFIEC 041 currently report this information quarterly, so the proposed annual reporting would represent a frequency reduction for institutions filing the FFIEC 051, while still meeting the agencies' need for this information. --------------------------------------------------------------------------- \41\ 78 FR 12141 (February 21, 2013). --------------------------------------------------------------------------- Schedule RC-O, Other Data for Deposit Insurance and FICO Assessments, Memorandum item 2, ``Estimated amount of uninsured deposits, including related interest accrued and unpaid.'' The agencies are proposing to add this data item on a quarterly basis for institutions with total assets of $1 billion or more but less than $5 billion. The FDIC uses this data item for the calculation of estimated insured deposits, which is the denominator of the Deposit Insurance Fund (DIF) reserve ratio. (The numerator is the balance of the DIF.) The DIF reserve ratio is a key measure in assessing the adequacy and viability of the fund and is a driving force behind setting deposit insurance assessment rate schedules. For example, the FDIC evaluates whether assessment rates are likely to be sufficient to meet statutory requirements related to the minimum reserve ratio.\42\ The FDIC also has established a long-term DIF management plan that adjusts assessment rate schedules as the reserve ratio reaches certain levels.\43\ Given that assessment regulations depend on the DIF reserve ratio, it is important that the best information be used in estimating insured deposits. This item is necessary for a more accurate calculation of the DIF reserve ratio and to implement related statutory requirements. This information is also important for safety and soundness purposes. Uninsured deposit data are used to monitor liquidity in a stress event. The higher the percentage of uninsured deposits to available liquidity sources, the greater the liquidity risk to an institution as uninsured depositors are more likely to quickly move funds at risk as a result of negative publicity or other adverse information about the institution. --------------------------------------------------------------------------- \42\ See e.g., 12 U.S.C. 1817 note. Generally, the FDIC shall take such steps as may be necessary for the reserve ratio of the DIF to reach 1.35 percent of estimated insured deposits by September 30, 2020. \43\ See 12 CFR 327.10. --------------------------------------------------------------------------- Detail for each affected data item described above is shown in Appendix B. The revisions to the FFIEC 051 Call Report described above are proposed to take effect as of the March 31, 2019, report date. The less than $5 billion asset-size test for determining eligibility to file the FFIEC 051 Call Report beginning March 31, 2019, would be based on the total assets reported on an institution's June 30, 2018, Call Report. An institution eligible to file the FFIEC 051 Call Report also has the option to file the FFIEC 041 Call Report. For an institution with less than $5 billion in total assets that qualifies to use the FFIEC 051 Call Report for the first time as a result of the agencies' proposal to increase the asset reporting threshold for the FFIEC 051 Call Report from less than $1 billion to less than $5 billion, and that desires to use that report form but is unable to do so for the March 31, 2019, Call Report date, the institution may begin reporting on the FFIEC 051 Call Report as of the June 30, 2019, report date or in a subsequent calendar quarter of 2019. Alternatively, the institution could wait until March 31, 2020, to begin reporting on the FFIEC 051 Call Report, assuming it meets the asset-size threshold for eligibility as of June 30, 2019, and meets the non-asset-size criteria as of March 31, 2020. Beginning in 2020, an institution should file whichever version of the Call Report it was both eligible and chose to file in the first quarter of that year for the remainder of that year if it continues to meet the non-asset-size criteria. Proposed Revision, With Extension, of the Following Information Collections Report Title: Consolidated Reports of Condition and Income (Call Report). Form Number: FFIEC 051 (for eligible small institutions). Frequency of Response: Quarterly. Affected Public: Business or other for-profit. Type of Review: Revision and extension of currently approved collections. [[Page 58444]] Timing The proposed changes in this notice would be effective beginning with the March 31, 2019, Call Report. OCC: OMB Control No.: 1557-0081. Estimated Number of Respondents: 876 national banks and federal savings associations. Estimated Average Burden per Response: 38.29 burden hours per quarter to file. Estimated Total Annual Burden: 134,168 burden hours to file. Board: OMB Control No.: 7100-0036. Estimated Number of Respondents: 563 state member banks. Estimated Average Burden per Response: 41.75 burden hours per quarter to file. Estimated Total Annual Burden: 94,021 burden hours to file. FDIC: OMB Control No.: 3064-0052. Estimated Number of Respondents: 2,685 insured state nonmember banks and state savings associations. Estimated Average Burden per Response: 39.60 burden hours per quarter to file. Estimated Total Annual Burden: 425,304 burden hours to file. When the estimates are calculated across the agencies considering all expected filers of the FFIEC 051 Call Report under this proposal, the estimated average burden hours per calendar quarter for this report are 39.95. The burden hours for current FFIEC 051 Call Report filers are 39.39. The proposed revisions to the FFIEC 051 Call Report in this notice would represent a reduction in estimated average burden hours per quarter of 1.18 hours to 38.21 hours for the current FFIEC 051 Call Report filers. For newly eligible filers, the average burden hours would decrease from approximately 64.49 hours to 52.31 hours, a reduction of 12.18 hours per quarter. The estimated burden 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). Request for Comments Public comment is requested on all aspects of this joint notice. Comment is specifically invited on: a. Whether institutions would find the proposal to reduce the reporting frequency of the risk-weighting data for the various types of assets and other exposures that are reported in Schedule RC-R, Part II, items 1 through 25, columns A through S, to be beneficial in terms of reducing some of the reporting burden associated with the Call Report even though institutions would still need to calculate, maintain appropriate documentation for, and report the total amount of their risk-weighted assets in Schedule RC-R, Part II. How would semiannual reporting of these risk-weighting data in Schedule RC-R, Part II affect an institution's ability to determine its compliance each calendar quarter with the prompt corrective action requirements in 12 CFR part 6 (OCC); 12 CFR part 208 (Board); 12 CFR 324, subpart H (FDIC)? b. Whether the data items that the agencies propose for reduced reporting for covered depository institutions are appropriate. Why or why not? c. The agencies are proposing to discontinue the treatment in the current FFIEC 051 Call Report instructions for institutions with less than $1 billion in total assets that immediately disqualifies the institution from filing the FFIEC 051 Call Report if it exceeds the asset-size criterion due to a merger or acquisition. Is this appropriate and why? Comments also are invited on: d. Whether the collection of information is necessary for the proper performance of the agencies' functions, including whether the information has practical utility; e. The accuracy or the estimate of the burden of the information collections, including the validity of the methodology and assumptions used; f. Ways to enhance the quality, utility, and clarity of the information to be collected; g. Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and h. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information. B. Regulatory Flexibility Act Analysis The Regulatory Flexibility Act \44\ (RFA) requires an agency to either provide an initial regulatory flexibility analysis with a proposed rule for which general notice of proposed rulemaking is required or to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities. The U.S. Small Business Administration (SBA) establishes size standards that define which entities are small businesses for purposes of the RFA.\45\ Under regulations issued by the SBA, the size standard to be considered a small business for banking entities subject to the proposed rule is $550 million or less in consolidated assets.\46\ --------------------------------------------------------------------------- \44\ 5 U.S.C. 601 et seq. \45\ U.S. SBA, Table of Small Business Size Standards Matched to North American Industry Classification System Codes, available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. \46\ See 13 CFR 121.201. --------------------------------------------------------------------------- OCC: The RFA requires an agency, in connection with a proposed rule, to prepare an Initial Regulatory Flexibility Analysis describing the impact of the rule on small entities (defined by the SBA for purposes of the RFA to include commercial banks and savings institutions with total assets of $550 million or less and trust companies with total revenue of $38.5 million or less) or to certify that the proposed rule would not have a significant economic impact on a substantial number of small entities. As of December 31, 2017, the OCC supervised 886 small entities. The rule would expand eligibility to file the FFIEC 051 version of the Call Report to institutions with total assets of between $1 billion and less than $5 billion. None of these newly eligible institutions would be considered small entities as defined by the SBA. Therefore, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities. Board: In accordance with section 603(a) of the RFA, the Board is publishing an initial regulatory flexibility analysis for the proposed rule. The RFA requires an agency to prepare an initial regulatory flexibility analysis, which must contain (1) a description of the reasons why action by the agency is being considered; (2) a succinct statement of the objectives of, and legal basis for, the proposed rule; (3) a description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply; (4) a description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule; (5) an identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap or conflict with the proposed rule; and (6) a description of significant alternatives to the proposed rule which accomplish its stated objectives.\47\ --------------------------------------------------------------------------- \47\ 5 U.S.C. 603. --------------------------------------------------------------------------- The Board has considered the potential impact of the proposed rule on small entities in accordance with the RFA. Based on its analysis and for the [[Page 58445]] reasons stated below, the Board believes that this proposed rule will not have a significant economic impact on a substantial number of small entities. Nevertheless, the Board is publishing and inviting comment on this initial regulatory flexibility analysis. A final regulatory flexibility analysis will be conducted after comments received during the public comment period have been considered. 1. Reasons for the Proposal As discussed in the Supplementary Information, the agencies are proposing to implement section 205 of EGRRCPA, which requires the agencies to allow for a reduced reporting requirement for a ``covered depository institution'' when an institution files the first and third Call Reports for a year. The proposal would define ``covered depository institution'' and establish the reduced reporting permissible for such institutions in the Call Report for the first and third calendar quarters of a year. In connection with the implementation of reduced reporting mandated by section 205, the Board is proposing to set forth the general requirement that all state member banks must file consolidated reports of condition pursuant to its statutory authority under section 9 of the FRA and section 7(a)(3) of the FDIA. 2. Statement of Objectives and Legal Basis As discussed above, the agencies' objectives in proposing this rule are to reduce the reporting burden for covered depository institutions by allowing them to file the FFIEC 051 Call Report in the first and third quarters of a calendar year. The Board has explicit authority under section 7 of the FDI Act, 12 U.S.C. 1817(a)(3) and (12), and section 9 of the Federal Reserve Act, 12 U.S.C. 324, to establish reporting requirements and eligibility criteria to file a reduced report of condition for state member banks. 3. Description of Small Entities to Which the Regulation Applies The Board's proposal would apply to state member banks. Under regulations issued by the SBA, a small entity includes a state member bank with total assets of $550 million or less. As of June 30, 2018, there were approximately 533 state member banks that qualified as small entities. The requirement set forth in section 208.122 of the Board's proposed rule requiring state member banks to file reports of condition would apply to all state member banks, regardless of size. However, proposed section 208.122 does not establish a new requirement, but only implements in Board regulation a statutory requirement to which state member banks were already subject. Section 208.123 of the Board's proposed rule would allow state member banks that qualify as covered depository institutions to file reduced reporting in first and third calendar quarters of the year, which would apply to approximately 533 state member banks that qualify as small entities. However, proposed section 208.123 would allow but not require these small state member banks to file reduced reporting. Accordingly, the proposed rule would not have a significant economic impact on a substantial number of small entities. 4. Projected Reporting, Recordkeeping, and Other Compliance Requirements The proposed rule would not impose any new reporting, recordkeeping, or other compliance requirements on small state member banks. First, state member banks are already required to file reports of condition each quarter of the calendar year in accordance with the instructions of such reports. Second, the proposed rule would allow small state member banks that qualify as covered depository institutions to reduce their reporting, recordkeeping, and compliance burden by filing the FFIEC 051 Call Report, the shortest version of the Call Report, with further reduced reporting in the first and third calendar quarters. As a result, the Board expects that the proposed rule will reduce the reporting and associated recordkeeping and compliance costs for the majority of small state member banks. 5. Identification of Duplicative, Overlapping, or Conflicting Federal Regulations The Board has not identified any likely duplication, overlap and/or potential conflict between the proposed rule and any Federal rule. 6. Discussion of Significant Alternatives The Board believes the proposed rule will not have a significant economic impact on small state member banks and, as discussed in Supplementary Information IV, does not believe there are any significant alternatives to the proposal that would reduce the impact of the proposal. FDIC: The RFA requires that, in connection with a notice of proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities.\48\ However, a regulatory flexibility analysis is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities, and publishes its certification and a short explanatory statement in the Federal Register together with the rule. The SBA has defined ``small entities'' to include banking organizations with total assets of less than or equal to $550 million.\49\ --------------------------------------------------------------------------- \48\ 5 U.S.C. 601 et seq. \49\ The SBA defines a small banking organization as having $550 million or less in assets, where ``a financial institution's assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year.'' See 13 CFR 121.201 (as amended, effective December 2, 2014). ``SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates.'' See 13 CFR 121.103. Following these regulations, the FDIC uses a covered entity's affiliated and acquired assets, averaged over the preceding four quarters, to determine whether the covered entity is ``small'' for the purposes of RFA. --------------------------------------------------------------------------- As of June 30, 2018 Call Report data, the FDIC supervises 3,575 insured depository institutions, of which 2,763 are considered small entities for the purposes of RFA. For the reasons described below, the FDIC certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities. As the agencies discussed in the Supplementary Information section above, the proposed rule would implement section 205 of EGRRCPA by defining ``covered depository institution'' to, among other things, expand eligibility for filing the FFIEC 051 Call Report to insured depository institutions with $1 billion or more, but less than $5 billion in total assets. Through a related PRA notice, the agencies are proposing to reduce the reporting frequency for more than 400 data items on the FFIEC 051 Call Report for the first and third reports of condition for a year, and to add certain data items to the FFIEC 051 Call Report that would apply only to covered depository institutions with total assets of $1 billion or more. Out of the additional data items, only 1 would be required to be reported every quarter, while the remaining only would be required semiannually or annually (i.e., in the second and fourth quarters, or only the fourth quarter). The FDIC estimates that under the proposed definition of ``covered depository institution,'' 295 FDIC-supervised depository institutions that reported total assets of $1 billion or more, but less than $5 billion, could be eligible to file the FFIEC 051 Call Report assuming they meet the other non-asset- [[Page 58446]] size criteria under the proposed rule. However, because this aspect of the rule only affects institutions with $1 billion or more, but less than $5 billion in total assets, it will not affect any small, FDIC- supervised institutions. As the agencies discussed in the PRA section, the FDIC is proposing to reduce the reporting frequency of more than 400 data items on the FFIEC 051 Call Report for the first and third calendar quarters. These data items are currently collected every calendar quarter on the FFIEC 051 Call Report. Every covered depository institution with less than $5 billion in total assets that files the FFIEC 051 Call Report would experience a reduction in reporting for the first and third calendar quarters as a result of this proposal. The FDIC estimates that the proposed reduction in reporting frequency of more than 400 data items for covered depository institutions in the first and third calendar quarters would reduce the average quarterly burden hours by 1.18 hours per institution. For the 2,221 small, FDIC-supervised depository institutions that filed the FFIEC 051 Call Report for the June 30, 2018 report date, this represents a total estimated burden reduction of 2,621 hours per quarter.\50\ While the proposed reduced reporting could affect a substantial number of small, FDIC-supervised depository institutions, it would not result in a significant economic impact. --------------------------------------------------------------------------- \50\ 1.18 hours * 2,221 institutions. --------------------------------------------------------------------------- Based on the agencies' total hourly wage rate of $117 for Call Report preparation, and the reduction in reporting hours resulting from the proposed reduced reporting frequency of certain items in the FFIEC 051 Call Report discussed in the PRA section, it is estimated that annual reporting costs could be $1,226,628 less for small, FDIC- supervised insured depository institutions that file the FFIEC 051 Call Report, or 0.011 percent of total annualized non-interest expenses.\51\ --------------------------------------------------------------------------- \51\ $117 per hour * 2,621 hours per quarter * 4 quarters per year. FDIC Call Report Data June 30th, 2018. --------------------------------------------------------------------------- The proposed rule could pose some additional regulatory costs for small, FDIC-supervised depository institutions that file the FFIEC 051 Call Report that are associated with changes to internal systems or processes. The FDIC anticipates that costs associated with either switching to file the FFIEC 051 Call Report, or reprogramming for reduced reporting in the first and third calendar quarters, would be one-time costs. However, these costs are difficult to estimate accurately with available information because they depend upon the individual characteristics of each insured depository institution, their recordkeeping and reporting systems, and the decisions of senior management. Based on the information above, the FDIC certifies that the proposed rule would not have a significant economic impact, although a substantial number of small entities would be affected. The FDIC invites comments on all aspects of the supporting information provided in this RFA section. In particular, would this rule have any significant effects on small entities that the FDIC has not identified? C. Plain Language Section 722 of the Gramm-Leach-Bliley Act requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The agencies have sought to present the proposed rule in a simple and straightforward manner, and invite comment on the use of plain language. For example: Have the agencies organized the material to suit your needs? If not, how could they present the rule more clearly? Are the requirements in the rule clearly stated? If not, how could the rule be more clearly stated? Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification? Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that? Is this section format adequate? If not, which of the sections should be changed and how? What other changes can the agencies incorporate to make the regulation easier to understand? D. Riegle Community Development and Regulatory Improvement Act of 1994 The Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on IDIs, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.\52\ --------------------------------------------------------------------------- \52\ 12 U.S.C. 4802. --------------------------------------------------------------------------- Because the proposal would not impose additional reporting, disclosure, or other requirements on IDIs, section 302 of the RCDRIA therefore does not apply. Nevertheless, the requirements of RCDRIA will be considered as part of the overall rulemaking process. In addition, the agencies also invite any other comments that further will inform the agencies' consideration of RCDRIA. E. OCC Unfunded Mandates Reform Act of 1995 The OCC analyzed the proposed rule under the factors set forth in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted for inflation). There are 123 national banks and Federal savings associations with total assets between $1 billion and less than $5 billion that could be eligible for reduced reporting under the proposed rule. The OCC estimates that each of these institutions that switches to the FFIEC 051 could save approximately $6,000 per year. Savings may be less during the first year of implementation due to costs associated with updating systems and processes, but these costs are not expected to exceed the estimated savings. Therefore, the OCC has determined that this proposed rule would not result in expenditures by State, local, and Tribal governments, or the private sector, of $100 million or more in any one year. Accordingly, the OCC has not prepared a written statement to accompany this proposal. Appendix A: Proposed Reductions in Frequency of Collection for the FFIEC 051 The following data items are currently collected on the FFIEC 051 quarterly. The data items are proposed to be collected semiannually in the June and December reports only. [[Page 58447]] ------------------------------------------------------------------------ Schedule Item Item name MDRM No.(s) ------------------------------------------------------------------------ RI................... M.14........... Other-than- RIADJ321. temporary impairment losses on held- to-maturity and available- for-sale debt securities recognized in earnings. RC-C, Part I......... M.1.a.(1)...... Loans RCONK158. restructured in troubled debt restructurings (TDRs) that are in compliance with their modified terms: 1-4 family residential construction loans. RC-C, Part I......... M.1.a.(2)...... Loans RCONK159. restructured in TDRs that are in compliance with their modified terms: Other construction loans and all land development and other land loans. RC-C, Part I......... M.1.b.......... Loans RCONF576. restructured in TDRs that are in compliance with their modified terms: Loans secured by 1-4 family residential properties. RC-C, Part I......... M.1.c.......... Loans RCONK160. restructured in TDRs that are in compliance with their modified terms: Secured by multifamily (5 or more) residential properties. RC-C, Part I......... M.1.d.(1)...... Loans RCONK161. restructured in TDRs that are in compliance with their modified terms: Loans secured by owner-occupied nonfarm nonresidential properties. RC-C, Part I......... M.1.d.(2)...... Loans RCONK162. restructured in TDRs that are in compliance with their modified terms: Loans secured by other nonfarm nonresidential properties. RC-C, Part I......... M.1.e.......... Loans RCONK256. restructured in TDRs that are in compliance with their modified terms: Commercial and industrial loans. RC-C, Part I......... M.1.f.......... Loans RCONK165. restructured in TDRs that are in compliance with their modified terms: All other loans (include loans to individuals for household, family, and other personal expenditures). RC-C, Part I......... M.1.f.(1)...... Loans RCONK166. restructured in TDRs that are in compliance with their modified terms: Loans secured by farmland. RC-C, Part I......... M.1.f.(4).(a).. Loans RCONK098. restructured in TDRs that are in compliance with their modified terms: Credit cards. RC-C, Part I......... M.1.f.(4).(b).. Loans RCONK203. restructured in TDRs that are in compliance with their modified terms: Automobile loans. RC-C, Part I......... M.1.f.(4).(c).. Loans RCONK204. restructured in TDRs that are in compliance with their modified terms: Other (includes revolving credit plans other than credit cards and other consumer loans). RC-C, Part I......... M.1.f.(5)...... Loans RCONK168. restructured in TDRs that are in compliance with their modified terms: Loans to finance agricultural production and other loans to farmers included in Schedule RC-C, part I, Memorandum item 1.f, above. RC-E................. M.1.a.......... Total RCON6835. Individual Retirement Accounts (IRAs) and Keogh Plan accounts. RC-E................. M.5............ Does your RCONP752. institution offer one or more consumer deposit account products, i.e., transaction account or nontransaction savings account deposit products intended primarily for individuals for personal, household, or family use?. [[Page 58448]] RC-M................. 8.a............ Uniform TEXT4087. Resource Locator (URL) of the reporting institution's primary Internet Web site (home page), if any (Example: www.examplebank.com). RC-M................. 8.b............ URLs of all TE01N528, other public- TE02N528, facing TE03N528, Internet TE04N528, websites that TE05N528, the reporting TE06N528, institution TE07N528, uses to accept TE08N528, or solicit TE09N528, deposits from TE10N528. the public, if any. RC-M................. 8.c............ Trade names TE01N529, other than the TE02N529, reporting TE03N529, institution's TE04N529, legal title TE05N529, used to TE06N529. identify one or more of the institution's physical offices at which deposits are accepted or solicited from the public, if any. RC-N................. M.1.a.(1)...... Loans RCONK105, restructured RCONK106, in troubled RCONK107. debt restructurings (TDRs) included in Schedule RC-N, items 1 through 7, above: 1-4 family residential construction loans. RC-N................. M.1.a.(2)...... Loans RCONK108, restructured RCONK109, in TDRs RCONK110. included in Schedule RC-N, items 1 through 7, above: Other construction loans and all land development and other land loans. RC-N................. M.1.b.......... Loans RCONF661, restructured RCONF662, in TDRs RCONF663. included in Schedule RC-N, items 1 through 7, above: Loans secured by 1-4 family residential properties. RC-N................. M.1.c.......... Loans RCONK111, restructured RCONK112, in TDRs RCONK113. included in Schedule RC-N, items 1 through 7, above: Secured by multifamily (5 or more) residential properties. RC-N................. M.1.d.(1)...... Loans RCONK114, restructured RCONK115, in TDRs RCONK116. included in Schedule RC-N, items 1 through 7, above: Loans secured by owner-occupied nonfarm nonresidential properties. RC-N................. M.1.d.(2)...... Loans RCONK117, restructured RCONK118, in TDRs RCONK119. included in Schedule RC-N, items 1 through 7, above: Loans secured by other nonfarm nonresidential properties. RC-N................. M.1.e.......... Loans RCONK257, restructured RCONK258, in TDRs RCONK259. included in Schedule RC-N, items 1 through 7, above: Commercial and industrial loans. RC-N................. M.1.f.......... Loans RCONK126, restructured RCONK127, in TDRs RCONK128. included in Schedule RC-N, items 1 through 7, above: All other loans (include loans to individuals for household, family, and other personal expenditures). RC-N................. M.1.f.(1)...... Loans RCONK130, restructured RCONK131, in TDRs RCONK132. included in Schedule RC-N, items 1 through 7, above: Loans secured by farmland. RC-N................. M.1.f.(4)(a)... Loans RCONK274, restructured RCONK275, in TDRs RCONK276. included in Schedule RC-N, items 1 through 7, above: Credit cards. RC-N................. M.1.f.(4)(b)... Loans RCONK277, restructured RCONK278, in TDRs RCONK279. included in Schedule RC-N, items 1 through 7, above: Automobile loans. RC-N................. M.1.f.(4)(c)... Loans RCONK280, restructured RCONK281, in TDRs RCONK282. included in Schedule RC-N, items 1 through 7, above: Other (includes revolving credit plans other than credit cards and other consumer loans). [[Page 58449]] RC-N................. M.1.f.(5)...... Loans RCONK138, restructured RCONK139, in TDRs RCONK140. included in Schedule RC-N, items 1 through 7, above: Loans to finance agricultural production and other loans to farmers. RC-R, Part II........ 1.............. Cash and RCOND957, balances due RCOND958, from RCOND959, depository RCOND960, institutions. RCONS396, RCONS397, RCONS398. RC-R, Part II........ 2.a............ Held-to- RCOND961, maturity RCOND962, securities. RCOND963, RCOND964, RCOND965, RCONHJ74, RCONHJ75, RCONS399, RCONS400. RC-R, Part II........ 2.b............ Available-for- RCOND967, sale RCOND968, securities. RCOND969, RCOND970, RCONH271, RCONH272, RCONHJ76, RCONHJ77, RCONJA21, RCONS402, RCONS403, RCONS405, RCONS406. RC-R, Part II........ 3.a............ Federal funds RCOND971, sold. RCOND972, RCOND973, RCOND974, RCONS410, RCONS411. RC-R, Part II........ 3.b............ Securities RCONH171, purchased RCONH172. under agreements to resell. RC-R, Part II........ 4.a............ Loans and RCONH173, leases held RCONH273, for sale: RCONH274, Residential RCONS413, mortgage RCONS414, exposures. RCONS415, RCONS416, RCONS417. RC-R, Part II........ 4.b............ Loans and RCONH174, leases held RCONH175, for sale: High RCONH176, volatility RCONH177, commercial RCONH275, real estate RCONH276, exposures. RCONS419, RCONS420, RCONS421. RC-R, Part II........ 4.c............ Loans and RCONH277, leases held RCONH278, for sale: RCONHJ78, Exposures past RCONHJ79, due 90 days or RCONS423, more or on RCONS424, nonaccrual. RCONS425, RCONS426, RCONS427, RCONS428, RCONS429. RC-R, Part II........ 4.d............ Loans and RCONH279, leases held RCONH280, for sale: All RCONHJ80, other RCONHJ81, exposures. RCONS431, RCONS432, RCONS433, RCONS434, RCONS435, RCONS436, RCONS437. RC-R, Part II........ 5.a............ Loans and RCONH178, leases held RCONH281, for RCONH282, investment: RCONS439, Residential RCONS440, mortgage RCONS441, exposures. RCONS442, RCONS443. RC-R, Part II........ 5.b............ Loans and RCONH179, leases held RCONH180, for RCONH181, investment: RCONH182, High RCONH283, volatility RCONH284, commercial RCONS445, real estate RCONS446, exposures. RCONS447. RC-R, Part II........ 5.c............ Loans and RCONH285, leases held RCONH286, for RCONHJ82, investment: RCONHJ83, Exposures past RCONS449, due 90 days or RCONS450, more or on RCONS451, nonaccrual. RCONS452, RCONS453, RCONS454, RCONS455. RC-R, Part II........ 5.d............ Loans and RCONH287, leases held RCONH288, for RCONHJ84, investment: RCONHJ85, All other RCONS457, exposures. RCONS458, RCONS459, RCONS460, RCONS461, RCONS462, RCONS463. RC-R, Part II........ 6.............. LESS: Allowance RCON3123 for loan and (column A), lease losses. RCON3123 (column B). [[Page 58450]] RC-R, Part II........ 7.............. Trading assets. RCOND976, RCOND977, RCOND978, RCOND979, RCOND980, RCONH186, RCONH187, RCONH290, RCONH291, RCONH292, RCONHJ86, RCONHJ87, RCONS466, RCONS467. RC-R, Part II........ 8.............. All other RCOND981, assets. RCOND982, RCOND983, RCOND984, RCOND985, RCONH185, RCONH188, RCONH294, RCONH295, RCONHJ88, RCONHJ89, RCONS469, RCONS470, RCONS471. RC-R, Part II........ 8.a............ Separate RCONH296, account bank- RCONH297. owned life insurance. RC-R, Part II........ 8.b............ Default fund RCONH298, contributions RCONH299. to central counterparties. RC-R, Part II........ 9.a............ On-balance RCONS475, sheet RCONS476, securitization RCONS477, exposures: RCONS478, Held-to- RCONS479. maturity securities. RC-R, Part II........ 9.b............ On-balance RCONS480, sheet RCONS481, securitization RCONS482, exposures: RCONS483, Available-for- RCONS484. sale securities. RC-R, Part II........ 9.c............ On-balance RCONS485, sheet RCONS486, securitization RCONS487, exposures: RCONS488, Trading assets. RCONS489. RC-R, Part II........ 9.d............ On-balance RCONS490, sheet RCONS491, securitization RCONS492, exposures: All RCONS493, other on- RCONS494. balance sheet securitization exposures. RC-R, Part II........ 10............. Off-balance RCONS495, sheet RCONS496, securitization RCONS497, exposures. RCONS498, RCONS499. RC-R, Part II........ 11............. Total balance RCON2170, sheet assets. RCOND987, RCOND988, RCOND989, RCOND990, RCONH300, RCONHJ90, RCONHJ91, RCONS500, RCONS503, RCONS505, RCONS506, RCONS507, RCONS510. RC-R, Part II........ 12............. Financial RCOND991, standby RCOND992, letters of RCOND993, credit. RCOND994, RCOND995, RCOND996, RCONHJ92, RCONHJ93, RCONS511. RC-R, Part II........ 13............. Performance RCOND997, standby RCOND998, letters of RCOND999, credit and RCONG603, transaction- RCONG604, related RCONG605, contingent RCONS512. items. RC-R, Part II........ 14............. Commercial and RCONG606, similar RCONG607, letters of RCONG608, credit with an RCONG609, original RCONG610, maturity of RCONG611, one year or RCONHJ94, less. RCONHJ95, RCONS513. RC-R, Part II........ 15............. Retained RCONG612, recourse on RCONG613, small business RCONG614, obligations RCONG615, sold with RCONG616, recourse. RCONG617, RCONS514. RC-R, Part II........ 16............. Repo-style RCONH301, transactions. RCONH302, RCONS515, RCONS516, RCONS517, RCONS518, RCONS519, RCONS520, RCONS521, RCONS522, RCONS523. RC-R, Part II........ 17............. All other off- RCONG618, balance sheet RCONG619, liabilities. RCONG620, RCONG621, RCONG622, RCONG623, RCONS524. [[Page 58451]] RC-R, Part II........ 18.a........... Unused RCONH303, commitments: RCONH304, Original RCONHJ96, maturity of RCONHJ97, one year or RCONS525, less. RCONS526, RCONS527, RCONS528, RCONS529, RCONS530, RCONS531. RC-R, Part II........ 18.b........... Unused RCONG624, commitments: RCONG625, Original RCONG626, maturity RCONG627, exceeding one RCONG628, year. RCONG629, RCONH307, RCONH308, RCONHJ98, RCONHJ99, RCONS539. RC-R, Part II........ 19............. Unconditionally RCONS540, cancelable RCONS541. commitments. RC-R, Part II........ 20............. Over-the- RCONH309, counter RCONH310, derivatives. RCONHK00, RCONHK01, RCONS542, RCONS543, RCONS544, RCONS545, RCONS546, RCONS547, RCONS548. RC-R, Part II........ 21............. Centrally RCONS549, cleared RCONS550, derivatives. RCONS551, RCONS552, RCONS554, RCONS555, RCONS556, RCONS557. RC-R, Part II........ 22............. Unsettled RCONH191, transactions RCONH193, (failed RCONH194, trades). RCONH195, RCONK196, RCONH197, RCONH198, RCONH199, RCONH200. RC-R, Part II........ 23............. Total assets, RCONG630, derivatives, RCONG631, off-balance RCONG632, sheet items, RCONG633, and other RCONS558, items subject RCONS559, to risk RCONS560, weighting by RCONS561, risk-weight RCONS563, category. RCONS564, RCONS565, RCONS566, RCONS567, RCONS568. RC-R, Part II........ 25............. Risk-weighted RCONG634, assets by risk- RCONG635, weight RCONG636, category. RCONG637, RCONS569, RCONS570, RCONS571, RCONS572, RCONS574, RCONS575, RCONS576, RCONS577, RCONS578, RCONS579. RC-R, Part II........ M.1............ Current credit RCONG642. exposure across all derivative contracts covered by the regulatory capital rules. RC-R, Part II........ M.2.a.......... Notional RCONS582, principal RCONS583, amounts of RCONS584. over-the- counter derivative contracts: Interest rate. RC-R, Part II........ M.2.b.......... Notional RCONS585, principal RCONS586, amounts of RCONS587. over-the- counter derivative contracts: Foreign exchange rate and gold. RC-R, Part II........ M.2.c.......... Notional RCONS588, principal RCONS589, amounts of RCONS590. over-the- counter derivative contracts: Credit (investment grade reference asset). RC-R, Part II........ M.2.d.......... Notional RCONS591, principal RCONS592, amounts of RCONS593. over-the- counter derivative contracts: Credit (non- investment grade reference asset). RC-R, Part II........ M.2.e.......... Notional RCONS594, principal RCONS595, amounts of RCONS596. over-the- counter derivative contracts: Equity. RC-R, Part II........ M.2.f.......... Notional RCONS597, principal RCONS598, amounts of RCONS599. over-the- counter derivative contracts: Precious metals (except gold). RC-R, Part II........ M.2.g.......... Notional RCONS600, principal RCONS601, amounts of RCONS602. over-the- counter derivative contracts:. RC-R, Part II........ M.3.a.......... Notional RCONS603, principal RCONS604, amounts of RCONS605. centrally cleared derivative contracts: Interest rate. [[Page 58452]] RC-R, Part II........ M.3.b.......... Notional RCONS606, principal RCONS607, amounts of RCONS608. centrally cleared derivative contracts: Foreign exchange rate and gold. RC-R, Part II........ M.3.c.......... Notional RCONS609, principal RCONS610, amounts of RCONS611. centrally cleared derivative contracts: Credit (investment grade reference asset). RC-R, Part II........ M.3.d.......... Notional RCONS612, principal RCONS613, amounts of RCONS614. centrally cleared derivative contracts: Credit (non- investment grade reference asset). RC-R, Part II........ M.3.e.......... Notional RCONS615, principal RCONS616, amounts of RCONS617. centrally cleared derivative contracts: Equity. RC-R, Part II........ M.3.f.......... Notional RCONS618, principal RCONS619, amounts of RCONS620. centrally cleared derivative contracts: Precious metals (except gold). RC-R, Part II........ M.3.g.......... Notional RCONS621, principal RCONS622, amounts of RCONS623. centrally cleared derivative contracts: Other. ------------------------------------------------------------------------ The following data items on Schedule RC-T are currently collected on the FFIEC 051 quarterly for institutions with total fiduciary assets greater than $250 million (as of the preceding December 31) or with gross fiduciary and related services income greater than 10 percent of revenue (net interest income plus noninterest income) for the preceding calendar year. The data items are proposed to be collected semiannually in the June and December reports only for institutions with total fiduciary assets greater than $250 million but less than or equal to $1 billion (as of the preceding December 31) that do not meet the fiduciary income test for quarterly reporting. ------------------------------------------------------------------------ Schedule Item Item name MDRM No.(s) ------------------------------------------------------------------------ RC-T................. 4.............. Fiduciary and RCONB868, Related RCONB869, Assets: RCONB870, Personal trust RCONB871. and agency accounts. RC-T................. 5.a............ Fiduciary and RCONB872, Related RCONB873, Assets: RCONB874, Employee RCONB875. benefit--defin ed contribution. RC-T................. 5.b............ Fiduciary and RCONB876, Related RCONB877, Assets: RCONB878, Employee RCONB879. benefit--defin ed benefit. RC-T................. 5.c............ Fiduciary and RCONB880, Related RCONB881, Assets: Other RCONB882, employee RCONB883. benefit and retirement- related accounts. RC-T................. 6.............. Fiduciary and RCONB884, Related RCONB885, Assets: RCONC001, Corporate RCONC002. trust and agency accounts. RC-T................. 7.............. Fiduciary and RCONB886, Related RCONB888, Assets: RCONJ253, Investment RCONJ254. management and investment advisory agency accounts. RC-T................. 8.............. Fiduciary and RCONJ255, Related RCONJ256, Assets: RCONJ257, Foundation and RCONJ258. endowment trust and agency accounts. RC-T................. 9.............. Fiduciary and RCONB890, Related RCONB891, Assets: Other RCONB892, fiduciary RCONB893. accounts. RC-T................. 10............. Fiduciary and RCONB894, Related RCONB895, Assets: Total RCONB896, fiduciary RCONB897. accounts. RC-T................. 11............. Fiduciary and RCONB898, Related RCONB899. Assets: Custody and safekeeping accounts. RC-T................. 13............. Fiduciary and RCONJ259, Related RCONJ260, Assets: RCONJ261, Individual RCONJ262. Retirement Accounts, Health Savings Accounts, and other similar accounts (included in items 5.c and 11). RC-T................. 14............. Fiduciary and RIADB904. Related Services Income: Personal trust and agency accounts. RC-T................. 15.a........... Fiduciary and RIADB905. Related Services Income: Employee benefit--defin ed contribution. RC-T................. 15.b........... Fiduciary and RIADB906. Related Services Income: Employee benefit--defin ed benefit. RC-T................. 15.c........... Fiduciary and RIADB907. Related Services Income: Other employee benefit and retirement- related accounts. [[Page 58453]] RC-T................. 16............. Fiduciary and RIADA479. Related Services Income: Corporate trust and agency accounts. RC-T................. 17............. Fiduciary and RIADJ315. Related Services Income: Investment management and investment advisory agency accounts. RC-T................. 18............. Fiduciary and RIADJ316. Related Services Income: Foundation and endowment trust and agency accounts. RC-T................. 19............. Fiduciary and RIADA480. Related Services Income: Other fiduciary accounts. RC-T................. 20............. Fiduciary and RIADB909. Related Services Income: Custody and safekeeping accounts. RC-T................. 21............. Fiduciary and RIADB910. Related Services Income: Other fiduciary and related services income. RC-T................. 22............. Fiduciary and RIAD4070. Related Services Income: Total gross fiduciary and related services income. RC-T................. M.3.a.......... Collective RCONB931, investment RCONB932. funds and common trust funds: Domestic equity. RC-T................. M.3.b.......... Collective RCONB933, investment RCONB934. funds and common trust funds: International/ Global equity. RC-T................. M.3.c.......... Collective RCONB935, investment RCONB936. funds and common trust funds: Stock/ Bond blend. RC-T................. M.3.d.......... Collective RCONB937, investment RCONB938. funds and common trust funds: Taxable bond. RC-T................. M.3.e.......... Collective RCONB939, investment RCONB940. funds and common trust funds: Municipal bond. RC-T................. M.3.f.......... Collective RCONB941, investment RCONB942. funds and common trust funds: Short- term investments/ Money market. RC-T................. M.3.g.......... Collective RCONB943, investment RCONB944. funds and common trust funds: Specialty/ Other. RC-T................. M.3.h.......... Collective RCONB945, investment RCONB946. funds and common trust funds: Total collective investment funds. ------------------------------------------------------------------------ Appendix B: Data Items To Be Collected From Institutions With $1 Billion or More in Total Assets on the FFIEC 051. The following data item is currently collected on the FFIEC 041 from institutions with $1 billion or more in total assets. The data item is proposed to be reported quarterly by institutions with $1 billion or more in total assets on the FFIEC 051. ------------------------------------------------------------------------ Schedule Item Item name MDRM No. ------------------------------------------------------------------------ RC-O................. M.2............ Estimated RCON5597. amount of uninsured deposits, including related interest accrued and unpaid. ------------------------------------------------------------------------ The following data items are currently collected quarterly on the FFIEC 041 from institutions with $1 billion or more in total assets. The data items are proposed to be reported on the FFIEC 051 by institutions with $1 billion or more in total assets with a reduction in the frequency of collection. Semiannual Reporting (June and December only) ------------------------------------------------------------------------ Schedule Item Item name MDRM No.(s) ------------------------------------------------------------------------ RI-C *............... 1.a............ Construction TBD (2 New MDRM loans. Numbers) RI-C *............... 1.b............ Commercial real TBD (2 New MDRM estate loans. Numbers) RI-C *............... 1.c............ Residential TBD (2 New MDRM real estate Numbers) loans. RI-C *............... 2.............. Commercial TBD (2 New MDRM loans. Numbers) RI-C *............... 3.............. Credit cards... TBD (2 New MDRM Numbers) RI-C *............... 4.............. Other consumer TBD (2 New MDRM loans. Numbers) RI-C *............... 5.............. Unallocated, if TBD (1 New MDRM any. Number) [[Page 58454]] RI-C *............... 6.............. Total.......... TBD (2 New MDRM Numbers) ------------------------------------------------------------------------ * The FFIEC 041 Schedule RI-C collects disaggregated data on the allowance for loan and lease losses by loan category and the related recorded investment based on whether the reported allowance relates to loans that are individually impaired, purchased credit-impaired, or collectively evaluated for impairment in six columns. The proposed Schedule RI-C for the FFIEC 051 will consolidate the disaggregated data into two columns: ``Recorded Investment'' (column A) and ``Allowance Balance'' (column B). Effective June 30, 2021, the column captions would be changed to ``Amortized Cost'' (column A) and ``Allowance for Credit Losses'' (ACL) (column B). From June 30, 2019, through December 31, 2020, institutions that have adopted Accounting Standards Update No. 2016- 13, ``Financial Instruments--Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments'' (ASU 2016-13) would report the amortized cost and related ACL by loan category in columns A and B, respectively. From June 30, 2021, through December 31, 2022, institutions that have not adopted ASU 2016-13 would report the recorded investment and related allowance balance by loan category in columns A and B, respectively. Annual Reporting (December only) ------------------------------------------------------------------------ Schedule Item Item name MDRM No.(s) ------------------------------------------------------------------------ RI **................ M.15.a......... Consumer RIADH032. overdraft- related service charges levied on those transaction account and nontransaction savings account deposit products intended primarily for individuals for personal, household, or family use. RI **................ M.15.b......... Consumer RIADH033. account periodic maintenance charges levied on those transaction account and nontransaction savings account deposit products intended primarily for individuals for personal, household, or family use. RI **................ M.15.c......... Consumer RIADH034. customer automated teller machine (ATM) fees levied on those transaction account and nontransaction savings account deposit products intended primarily for individuals for personal, household, or family use. RI **................ M.15.d......... All other RIADH035. service charges on deposit accounts. RC-E **.............. M.6.a.......... Total deposits RCONP753. in those noninterest- bearing transaction account deposit products intended primarily for individuals for personal, household, or family use. RC-E **.............. M.6.b.......... Total deposits RCONP754. in those interest- bearing transaction account deposit products intended primarily for individuals for personal, household, or family use. RC-E **.............. M.7.a.(1)...... Total deposits RCONP756. in those MMDA deposit products intended primarily for individuals for personal, household, or family use. RC-E **.............. M.7.a.(2)...... Deposits in all RCONP757. other MMDAs of individuals, partnerships, and corporations. RC-E **.............. M.7.b.(1)...... Total deposits RCONP758. in those other savings deposit account deposit products intended primarily for individuals for personal, household, or family use. RC-E **.............. M.7.b.(2)...... Deposits in all RCONP759. other savings deposit accounts of individuals, partnerships, and corporations. ------------------------------------------------------------------------ ** Items are to be completed by institutions with $1 billion or more in total assets that answered ``Yes'' to Schedule RC-E, Memorandum item 5. The following data items are currently being proposed to be collected quarterly on the FFIEC 041 by those institutions with $1 billion or more in total assets that have adopted ASU 2016-13.\53\ --------------------------------------------------------------------------- \53\ See 83 FR 49160 (September 28, 2018). --------------------------------------------------------------------------- For this proposal, the data items are proposed to be reported on the FFIEC 051 by institutions with $1 billion or more in total assets that have adopted ASU 2016-13 with a reduction in the frequency of collection. Semiannual Reporting (June and December only) [[Page 58455]] ------------------------------------------------------------------------ Schedule Item Item name MDRM No.(s) ------------------------------------------------------------------------ RI-C................. 7.............. Held-to- TBD (1 New MDRM Maturity: Number). Securities issued by states and political subdivisions in the U.S.. RI-C................. 8.a............ Held-to- TBD (1 New MDRM Maturity: Number). Mortgage- backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies. RI-C................. 8.b............ Held-to- TBD (1 New MDRM Maturity: Number). Other mortgage- backed securities. RI-C................. 9.............. Held-to- TBD (1 New MDRM Maturity: Number). Asset-backed securities and structured financial products. RI-C................. 10............. Held-to- TBD (1 New MDRM Maturity: Number). Other debt securities. RI-C................. 11............. Held-to- TBD (1 New MDRM Maturity: Number). Total. ------------------------------------------------------------------------ List of Subjects 12 CFR Part 52 Banks, banking, Reporting and recordkeeping requirements. 12 CFR Part 208 Accounting, Agriculture, Banks, banking, Confidential business information, Consumer protection, Currency, Insurance, Investments, Mortgages, Reporting and recordkeeping requirements, Securities 12 CFR Part 304 Bank deposit insurance, Banks, banking, Freedom of information, Reporting and recordkeeping requirements. Office of the Comptroller of the Currency 0 For the reasons set out in the joint preamble, the OCC proposes to add 12 CFR part 52 as follows: PART 52--REGULATORY REPORTING Sec. 52.1 Authority and purpose. Sec. 52.2 Definitions. Sec. 52.3 Reduced reporting. Sec. 52.4 Reservation of authority. Authority: 12 U.S.C. 93a, 161, 1463(a), 1464(v), and 1817(a)(12). Sec. 52.1 Authority and purpose. (a) Authority. This part is issued pursuant to 12 U.S.C. 93a, 161, 1463(a), 1464(v), and 1817(a)(12). (b) Purpose. This part establishes a reduced reporting requirement for a covered depository institution making its reports of condition for the first and third calendar quarters of a year. Sec. 52.2 Definitions. Covered depository institution means: A national bank, Federal savings association, or insured Federal branch that meets the following criteria: (1) Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding year; (2) Has no foreign offices, as defined in this subpart; (3) Is not required to or has not elected to use 12 CFR part 3, subpart E (for advanced approaches banks) to calculate its risk-based capital requirements; (4) Is not a large institution or highly complex institution, as such terms are defined in 12 CFR 327.8, or treated as a large institution, as requested under 12 CFR 327.16(f); and (5) Is not subject to the filing requirements for the FFIEC 002 report of condition. Foreign country refers to one or more foreign nations, and includes the overseas territories, dependencies, and insular possessions of those nations and of the United States. Foreign office means: (1) A branch or consolidated subsidiary in a foreign country, unless the branch is located on a U.S. military facility; (2) An international banking facility as such term is defined in 12 CFR 204.8; (3) A majority-owned Edge Act or Agreement subsidiary as defined in 12 CFR 28.2, including both its U.S. and its foreign offices; and (4) For an institution chartered or headquartered in any U.S. state or the District of Columbia, a branch or consolidated subsidiary located in a U.S. territory or possession. Report of condition means the FFIEC 031, FFIEC 041, or FFIEC 051 versions of the Consolidated Report of Condition and Income (Call Report) or the FFIEC 002 (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks), as applicable, and as they may be amended or superseded from time to time in accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35. Total consolidated assets means total assets as reported in an institution's report of condition. Sec. 52.3 Reduced reporting. A covered depository institution may file the FFIEC 051 version of the Call Report, or any successor thereto, to satisfy its requirement to file a report of condition for the first and third calendar quarters of a year. Sec. 52.4 Reservation of authority. The OCC may determine that a covered depository institution shall not use the reduced reporting in Sec. 52.3. In making this determination, the OCC will consider whether the institution is significantly engaged in complex, specialized, or higher risk activities, for which a reduced reporting requirement would not provide sufficient information. The institution has 30 days following notification from the OCC to inform the OCC, in writing, of why it should continue to be eligible to use reduced reporting or cannot cease using reduced reporting in the OCC's proposed timeframe. The OCC will make a final decision after reviewing any response. Nothing in this part shall be construed to limit the OCC's authority to obtain information from a covered depository institution. FEDERAL RESERVE SYSTEM Authority and Issuance For the reasons set forth in the joint preamble, the Board proposes to amend 12 CFR part 208 as follows: PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL RESERVE SYSTEM (REGULATION H) 0 1. The authority citation of part 208 is amended to read as follows: Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12), [[Page 58456]] 1818, 1820(d)(9), 1833(j), 1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1831w, 1831x, 1835a, 1882, 2901-2907, 3105, 3310, 3331-3351, 3905- 3909, and 5371; 15 U.S.C. 78b, 78I(b), 78l(i), 780-4(c)(5), 78q, 78q-1, and 78w, 1681s, 1681w, 6801, and 6805; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106 and 4128. 0 2. Add new subpart K to part 208 to read as follows: Subpart K--Forms, Instructions and Reports Sec. Sec. 208.120 Authority, Purpose, and Scope Sec. 208.121 Definitions Sec. 208.122 Reporting Sec. 208.123 Reduced Reporting Sec. 208.124 Reservation of Authority Subpart K--Forms, Instructions and Reports Sec. 208.120 Authority, Purpose, and Scope (a) Authority. Subpart K of Regulation H (12 CFR part 208, subpart K) is issued by the Board under section 7 of the Federal Deposit Insurance Act, 12 U.S.C. 1817(a)(3) and (12), and section 9 of the Federal Reserve Act, 12 U.S.C. 324. (b) Purpose and scope. This subpart informs a state member bank where it may obtain forms and instructions for reports of conditions and implements 12 U.S.C. 1817(a)(12) to allow reduced reporting for a covered depository institution when such institution makes its reports of condition for the first and third calendar quarters of a year. Sec. 208.121 Definitions Covered depository institution means: a state member bank that meets all of the following criteria: (1) Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding year; (2) Has no foreign offices, as defined in this subpart; (3) Is not required to or has not elected to use 12 CFR part 217, subpart E to calculate its risk-based capital requirements; and (4) Is not a large institution or highly complex institution, as such terms are defined in 12 CFR 327.8, or treated as a large institution, as requested under 12 CFR 327.16(f). Foreign country refers to one or more foreign nations, and includes the overseas territories, dependencies, and insular possessions of those nations and of the United States. Foreign office means: (1) A branch or consolidated subsidiary in a foreign country, unless the branch is located on a U.S. military facility; (2) An international banking facility as such term is defined in 12 CFR 204.8; (3) A majority-owned Edge Act or Agreement subsidiary including both its U.S. and its foreign offices; and (4) For an institution chartered or headquartered in any U.S. state or the District of Columbia, a branch or consolidated subsidiary located in a U.S. territory or possession. Report of condition means the FFIEC 031, FFIEC 041, or FFIEC 051 versions of the Consolidated Report of Condition and Income (Call Report) or the FFIEC 002 (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks), as applicable, and as they may be amended or superseded from time to time in accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35. Total consolidated assets means total assets as reported in a state member bank's report of condition. Sec. 208.122 Reporting (a) A state member bank is required to file the report of condition (Call Report) in accordance with the instructions for these reports. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of, the Call Report. The Board uses Call Report data to monitor the condition, performance, and risk profile of individual state member banks and the banking industry. Reporting state member banks must also submit annually such information on small business and small farm lending as the Board may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from Federal Reserve District Banks or through the website of the Federal Financial Institutions Examination Council, http://www.ffiec.gov/. (b) Every insured U.S. branch of a foreign bank is required to file the FFIEC 002 version of the report of condition (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks) in accordance with the instructions for the report. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of the report. The Board uses the reported data to monitor the condition, performance, and risk profile of individual insured branches and the banking industry. Insured branches must also submit annually such information on small business and small farm lending as the Board may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from Federal Reserve District Banks or through the website of the Federal Financial Institutions Examination Council, http://www.ffiec.gov/. Sec. 208.123 Reduced Reporting A covered depository institution may file the FFIEC 051 version of the report of condition, or any successor thereto, which shall provide for reduced reporting for the reports of condition for the first and third calendar quarters for a year. Sec. 208.124 Reservation of Authority (a) Notwithstanding Sec. 208.123, the Board in consultation with the applicable state chartering authority may require an otherwise eligible covered depository institution to file the FFIEC 041 version of the report of condition, or any successor thereto, based on an institution-specific determination. In making this determination, the Board may consider criteria including, but not limited to, whether the institution is significantly engaged in one or more complex, specialized, or other higher risk activities, such as those for which limited information is reported in the FFIEC 051 version of the report of condition compared to the FFIEC 041 version of the report of condition. Nothing in this part shall be construed to limit the Board's authority to obtain information from a state member bank. (b) Nothing in this subpart limits the authority of the Board under any other provision of law or regulation to take supervisory or enforcement action, including action to address unsafe or unsound practices or conditions or violations of law. Federal Deposit Insurance Corporation 12 CFR CHAPTER III Authority and Issuance 0 For the reasons set forth in the preamble, the Federal Deposit Insurance Corporation proposes to amend 12 CFR part 304 to read as follows: PART 304--FORMS, INSTRUCTIONS, AND REPORTS Contents Subpart A--In General Sec. 304.1 Purpose. Sec. 304.2 Where to obtain forms and instructions. Sec. 304.3 Reports. Sec. 304.4-304.10 [Reserved]. Subpart B--Implementation of Reduced Reporting Requirement Sec. 304.11 Authority, purpose and scope. Sec. 304.12 Definitions. Sec. 304.13 Reduced reporting. [[Page 58457]] Sec. 304.14 Reservation of authority. Authority: 5 U.S.C. 552; 12 U.S.C. 1464, 1817, 1831, 1867. Subpart A--In General Sec. 304.1 Purpose. Part 304 informs the public where it may obtain forms and instructions for reports, applications, and other submittals used by the FDIC, and also describes certain forms that are not described elsewhere in FDIC regulations. Sec. 304.2 Where to obtain forms and instructions. Forms and instructions used in connection with applications, reports, and other submittals used by the FDIC can be obtained by contacting the FDIC Public Information Center (550 17th Street NW, Washington, DC 20429; telephone: (877) 275-3342 or (703) 562-2200), except as noted below in Sec. 304.3. In addition, many forms and instructions can be obtained from FDIC regional offices. A list of FDIC regional offices can be obtained from the FDIC Public Information Center, or found at the FDIC's website at http://www.fdic.gov, or in the directory of FDIC Law, Regulations, Related Acts published by the FDIC. Sec. 304.3 Reports. (a) Consolidated Reports of Condition and Income, Forms FFIEC 031, 041, and 051. Pursuant to section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)) and other applicable law, every insured depository institution is required to file Consolidated Reports of Condition and Income (also known as the Call Report) in accordance with the instructions for these reports. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of, the Call Report. The FDIC uses Call Report data from all insured depository institutions to calculate deposit insurance assessments and monitor the condition, performance, and risk profile of individual banks and the banking industry. Reporting banks must also submit annually such information on small business and small farm lending as the FDIC may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from the Division of Insurance and Research (DIR), FDIC, 550 17th Street NW, Washington, DC 20429 or through the website of the Federal Financial Institutions Examination Council, http://www.ffiec.gov/. (Approved by the Office of Management and Budget under control number 3064-0052) (b) Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks, Form FFIEC 002. Pursuant to section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)) and other applicable law, every insured U.S. branch of a foreign bank is required to file a Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks in accordance with the instructions for the report. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of the report. The FDIC uses the reported data to calculate deposit insurance assessments and monitor the condition, performance, and risk profile of individual insured branches and the banking industry. Insured branches must also submit annually such information on small business and small farm lending as the FDIC may need to assess the availability of credit to these sectors of the economy. Because the Board of Governors of the Federal Reserve System collects and processes this report on behalf of the FDIC, the report forms and instructions can be obtained from Federal Reserve District Banks or through the website of the Federal Financial Institutions Examination Council, http://www.ffiec.gov/. (Approved by the Office of Management and Budget under control number 7100-0032) (c) Summary of Deposits, Form FDIC 8020/05. Form 8020/05 is a report on the amount of deposits for each authorized office of an insured depository institution with branches; institutions with only a main office are exempt from reporting. Reports as of June 30 of each year must be submitted no later than the immediately succeeding July 31. The report forms and the instructions for completing the reports will be furnished to all such banks by, or may be obtained upon request from, the Division of Insurance and Research (DIR), FDIC, 550 17th Street NW, Washington, DC 20429. (Approved by the Office of Management and Budget under control number 3064-0061) (d) Notification of Performance of Bank Services, Form FDIC 6120/ 06. Pursuant to Section 7 of the Bank Service Company Act (12 U.S.C. 1867), as amended, FDIC-supervised banks must notify the agency about the existence of a service relationship within thirty days after the making of the contract or the performance of the service, whichever occurs first. Form FDIC 6120/06 may be used to satisfy the notice requirement. The form contains identification, location and contact information for the bank, the servicer, and a description of the services provided. In lieu of the form, notification may be provided by letter. Either the form or the letter containing the notice information must be submitted to the regional director--Division of Risk Management Supervision (RMS) of the region in which the bank's main office is located. (Approved by the Office of Management and Budget under control number 3064-0029) Subpart B--Implementation of Reduced Reporting Requirement Authority: 12 U.S.C. 1464(v), 1817(a), and 1819 Tenth. Sec. 304.11 Authority, purpose, and scope. (a) Authority. This subpart is issued pursuant to 12 U.S.C. 1464(v), and sections 7 (12 U.S.C. 1817(a)(12)) and section 9 (12 U.S.C. 1819 Tenth) of the Federal Deposit Insurance Act. (b) Purpose. This subpart implements 12 U.S.C. 1817(a)(12) to allow reduced reporting for a covered depository institution when such institution makes its reports of condition for the first and third calendar quarters of a year. (c) Scope. This subpart applies to an insured depository institution, as that term is defined in section 3(c) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(c), that meets the definition of a covered depository institution under section 304.12. (d) Preservation of authority. Nothing in this subpart in any way limits the authority of the Corporation under other provisions of applicable law and regulation. Sec. 304.12 Definitions. (a) Covered depository institution means an insured depository institution, as such term is defined in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. 1813, for which the Corporation is the appropriate Federal banking agency and that meets all of the following criteria: (1) Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding year; (2) Has no foreign offices, as defined in this subpart; (3) Is not required to or has not elected to use 12 CFR part 324, subpart E to calculate its risk-based capital requirements; (4) Is not a large institution or highly complex institution, as such terms are [[Page 58458]] defined in 12 CFR 327.8, or treated as a large institution, as requested under 12 CFR 327.16(f); and (5) Is not a state-licensed insured branch of a foreign bank, as such terms are defined in section 3(s) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(s). (b) Foreign country refers to one or more foreign nations, and includes the overseas territories, dependencies, and insular possessions of those nations and of the United States. (c) Foreign office means: (1) A branch or consolidated subsidiary in a foreign country, unless the branch is located on a U.S. military facility; (2) An international banking facility as such term is defined in 12 CFR 204.8; (3) A majority-owned Edge Act or Agreement subsidiary including both its U.S. and its foreign offices; and (4) For an institution chartered or headquartered in any U.S. state or the District of Columbia, a branch or consolidated subsidiary located in a U.S. territory or possession. (d) Report of condition means the FFIEC 031, FFIEC 041, or FFIEC 051 versions of the Consolidated Report of Condition and Income (Call Report) or the FFIEC 002 (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks), as applicable, and as they may be amended or superseded from time to time in accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35. (e) Total consolidated assets means total assets as reported in an insured depository institution's report of condition. Sec. 304.13 Reduced reporting. A covered depository institution may file the FFIEC 051 version of the report of condition, or any successor thereto, which shall provide for reduced reporting for the reports of condition for the first and third calendar quarters for a year. Sec. 304.14 Reservation of authority. Notwithstanding Sec. 304.13, the Corporation, in consultation with the applicable state chartering authority, may require an otherwise eligible covered depository institution to file the FFIEC 041 version of the report of condition, or any successor thereto, based on an institution-specific determination. In making this determination, the Corporation may consider criteria including, but not limited to, whether the institution is significantly engaged in one or more complex, specialized, or other higher-risk activities, such as those for which limited information is reported in the FFIEC 051 version of the report of condition compared to the FFIEC 041 version of the report of condition. Nothing in this part shall be construed to limit the Corporation's authority to obtain information from insured depository institutions. Dated: November 5, 2018. Joseph M. Otting, Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System, October 30, 2018. Ann E. Misback, Secretary of the Board. Dated at Washington, DC, on October 17, 2018. By order of the Board of Directors. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2018-24587 Filed 11-16-18; 8:45 am] BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P
![58432 Federal Register / Vol. 83, No. 223 / Monday, November 19, 2018 / Proposed Rules
DEPARTMENT OF TREASURY OCC: You may submit comments to The docket may be viewed after the
the OCC by any of the methods set forth close of the comment period in the same
Office of the Comptroller of the below. Commenters are encouraged to manner as during the comment period.
Currency submit comments through the Federal • Viewing Comments Personally: You
eRulemaking Portal or email, if possible. may personally inspect comments at the
12 CFR Part 52 Please use the title ‘‘Reduced Reporting OCC, 400 7th Street SW, Washington,
[Docket ID OCC–2018–0032] for Covered Depository Institutions’’ to DC 20219. For security reasons, the OCC
facilitate the organization and requires that visitors make an
RIN 1557–AE39 distribution of the comments. You may appointment to inspect comments. You
submit comments by any of the may do so by calling (202) 649–6700 or,
following methods: for persons who are deaf or hearing
FEDERAL RESERVE SYSTEM • Federal eRulemaking Portal— impaired, TTY, (202) 649–5597. Upon
‘‘Regulations.gov’’: Go to arrival, visitors will be required to
12 CFR Part 208 www.regulations.gov. Enter ‘‘Docket ID present valid government-issued photo
[Docket ID R–1618] OCC–2018–0032’’ in the Search Box and identification and submit to security
click ‘‘Search.’’ Click on ‘‘Comment screening in order to inspect comments.
RIN 7100–AF12 Now’’ to submit public comments. Board: When submitting comments,
• Click on the ‘‘Help’’ tab on the please consider submitting your
Regulations.gov home page to get comments by email or fax because paper
FEDERAL DEPOSIT INSURANCE information on using Regulations.gov, mail in the Washington, DC area and at
CORPORATION including instructions for submitting the Board may be subject to delay.
public comments. You may submit comments, identified
12 CFR Part 304 • Email: regs.comments@ by Docket No. R–1618 and RIN 7100–
occ.treas.gov. AF12, by any of the following methods:
RIN 3065–AE82
• Mail: Legislative and Regulatory • Agency Website: http://
Reduced Reporting for Covered Activities Division, Office of the www.federalreserve.gov. Follow the
Depository Institutions Comptroller of the Currency, 400 7th instructions for submitting comments at
Street SW, Suite 3E–218, Washington, http://www.federalreserve.gov/
AGENCY: Office of the Comptroller of the DC 20219. generalinfo/foia/ProposedRegs.cfm.
Currency (OCC), Treasury; Board of • Hand Delivery/Courier: 400 7th • Email: regs.comments@
Governors of the Federal Reserve Street SW, Suite 3E–218, Washington, federalreserve.gov. Include docket and
System (Board); and Federal Deposit DC 20219. RIN numbers in the subject line of the
Insurance Corporation (FDIC). Instructions: You must include message.
ACTION: Notice of proposed rulemaking ‘‘OCC’’ as the agency name and ‘‘Docket • FAX: (202) 452–3819 or (202) 452–
with request for public comment. ID OCC–2018–0032’’ in your comment. 3102.
In general, the OCC will enter all • Mail: Ann E. Misback, Secretary,
SUMMARY: The OCC, the Board, and the comments received into the docket and Board of Governors of the Federal
FDIC (collectively, the agencies) are publish the comments on the Reserve System, 20th Street and
inviting comment on a proposed rule Regulations.gov website without Constitution Avenue NW, Washington,
that would implement section 205 of the change, including any business or DC 20551.
Economic Growth, Regulatory Relief, personal information that you provide All public comments will be made
and Consumer Protection Act by: such as name and address information, available on the Board’s website at
Expanding the eligibility to file the email addresses, or phone numbers. http://www.federalreserve.gov/
agencies’ most streamlined report of Comments received, including generalinfo/foia/ProposedRegs.cfm as
condition, the FFIEC 051 Call Report, to attachments and other supporting submitted, unless modified for technical
include certain insured depository materials, are part of the public record reasons or to remove personally
institutions with less than $5 billion in and subject to public disclosure. Do not identifiable information at the
total consolidated assets that meet other include any information in your commenter’s request. Accordingly,
criteria; and, establishing reduced comment or supporting materials that comments will not be edited to remove
reporting on the FFIEC 051 Call Report you consider confidential or any identifying or contact information.
for the first and third reports of inappropriate for public disclosure. Public comments may also be viewed
condition for a year. The OCC and You may review comments and other electronically or in paper in Room 3515,
Board also are proposing similar related materials that pertain to this 1801 K Street NW (between 18th and
reduced reporting for certain uninsured rulemaking action by any of the 19th Streets NW), between 9:00 a.m. and
institutions that they supervise with less following methods: 5:00 p.m. on weekdays.
than $5 billion in total consolidated • Viewing Comments Electronically: FDIC: You may submit comments,
assets that otherwise meet the same Go to www.regulations.gov. Enter identified by FDIC RIN 3064–AE82, by
criteria. This Federal Register notice ‘‘Docket ID OCC–2018–0032’’ in the any of the following methods:
also includes a Paperwork Reduction Search box and click ‘‘Search.’’ Click on • Agency Website: https://
Act notice to reduce the amount of data ‘‘Open Docket Folder’’ on the right side www.fdic.gov/regulations/laws/federal/.
khammond on DSK30JT082PROD with PROPOSALS2
required to be reported on the FFIEC of the screen. Comments and supporting Follow instructions for submitting
051 Call Report for the first and third materials can be viewed and filtered by comments on the Agency website.
calendar quarters, and other related clicking on ‘‘View all documents and • Mail: Robert E. Feldman, Executive
changes. comments in this docket’’ and then Secretary, Attention: Comments/Legal
using the filtering tools on the left side ESS, Federal Deposit Insurance
DATES: Comments must be received by of the screen. Corporation, 550 17th Street NW,
January 18, 2019. • Click on the ‘‘Help’’ tab on the Washington, DC 20429.
ADDRESSES: Comments should be Regulations.gov home page to get • Hand Delivery/Courier: Comments
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VerDate Sep<11>2014 17:32 Nov 16, 2018 Jkt 247001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\19NOP2.SGM 19NOP2](https://thefederalregister.org/doc/83_FR_58655/page/1.svg)
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administering federal deposit insurance. the response from community banks, II. Description of the Proposed Rule
The agencies also use Call Report data trade associations, and public Section 205 of EGRRCPA amended
in evaluating institutions’ applications, comments, as well as survey results of section 7(a) of the Federal Deposit
including interstate merger and FFIEC member Call Report data users, in Insurance Act (FDI Act) and requires the
acquisition applications. In addition, August 2016, the agencies invited agencies to issue regulations that allow
Call Report data are used by the public comment on a proposed for a reduced reporting requirement for
appropriate agencies to calculate streamlined version of the Call Report,
a covered depository institution when
institutions’ deposit insurance the FFIEC 051 Call Report.9
the institution makes the first and third
assessments as well as national banks’ The FFIEC 051 Call Report first took
effect as of March 31, 2017, and report of condition for a calendar year.
and federal savings associations’
contained approximately 40 percent Section 205 of EGRRCPA defines
semiannual assessment fees.
The agencies recognize that fewer data items than were included in ‘‘covered depository institution’’ as an
institutions devote staffing and the FFIEC 041 Call Report, which is the insured depository institution ‘‘that— (i)
resources in order to complete and file Call Report filed by institutions that has less than $5 billion in total
Call Reports. In December 2014, the have $1 billion or more in total assets, consolidated assets; and (ii) satisfies
Federal Financial Institutions only have domestic offices, and are not such other criteria as the [agencies]
Examination Council (FFIEC), which is branches of foreign banks. In addition, determine appropriate.’’ 13
responsible for developing uniform the initial FFIEC 051 Call Report The proposed rule would implement
reporting systems (including the Call collected approximately 4 percent of section 205 of EGRRCPA by expanding
Reports) for federally supervised data items less frequently than the the number of insured depository
financial institutions,6 started an FFIEC 041 Call Report in effect at that institutions eligible to file the FFIEC 051
initiative to reduce the reporting burden time. Call Report and establishing the reduced
on small institutions. The FFIEC In June and November 2017, the reporting in the FFIEC 051 Call Report
members developed the following agencies proposed further reductions to permissible for such institutions for the
guiding principles to evaluate potential the FFIEC 051 Call Report based on first and third reports of condition for a
additions and deletions of Call Report public comments and additional year.14 The OCC and Board also are
data items and other revisions to the feedback from Call Report data users proposing to establish reduced reporting
Call Reports: (1) Data items serve a long- from the FFIEC members.10 The for certain uninsured institutions under
term regulatory or public policy purpose agencies also reviewed suggestions for their supervision that meet the proposed
by assisting the FFIEC members in streamlining the Call Reports provided criteria.
fulfilling their missions; (2) data items in comment letters submitted during the As discussed below, the agencies
to be collected maximize practical public notice and comment period for propose to implement reduced reporting
utility and minimize, to the extent the agencies’ review of regulations by expanding the scope of institutions
practicable and appropriate, burden on required by the Economic Growth and permitted to file the FFIEC 051 Call
financial institutions; and (3) equivalent Regulatory Paperwork Reduction Act.11 Report every quarter through the
data items are not readily available As a result of the further reductions that definition of ‘‘covered depository
through other means. took effect as of the June 30, 2018, institution.’’ As noted, the FFIEC 051
As part of the FFIEC’s Call Report report date, the FFIEC 051 Call Report Call Report is the most streamlined
burden-reduction initiative, FFIEC represents a reduction of approximately version of the Call Report and is familiar
members conducted outreach with 43 percent of the data items and to institutions and their Call Report
community banks and industry provides for reduced reporting service providers and, therefore could
representatives to better understand frequency of approximately 6 percent of be readily used by covered depository
what aspects of the Call Report process the data items, as compared to the institutions for reduced reporting in the
are significant sources of reporting FFIEC 041 Call Report in use first and third calendar quarters.15 In
burden for financial institutions; immediately before the implementation particular, because the FFIEC 051 Call
accelerated the statutorily mandated of the FFIEC 051 Call Report. Currently,
review of the Call Report; 7 and only institutions that have less than $1 has consolidated on-balance sheet foreign
evaluated the feasibility and merits of exposures of at least $10 billion, or if it is a
billion in total assets, have only subsidiary of a depository institution, bank holding
creating a more streamlined Call Report domestic offices, are not branches of company, savings and loan holding company, or
for eligible small institutions.8 Based on foreign banks, and are not required or intermediate holding company that is an advanced
have not elected to use Subpart E of the approaches banking organization.
6 See 12 U.S.C. 3305(c). The agencies are 13 12 U.S.C. 1817(a)(12)(B).
agencies’ regulatory capital rules 14 Under the proposed rule, ‘‘report of condition’’
members of the FFIEC. The term ‘‘financial
institution’’ in this context means a commercial
(applicable to advanced approaches means the FFIEC 031, FFIEC 041, or FFIEC 051
bank, savings bank, trust company, savings institutions) to calculate their risk-based versions of the Consolidated Reports of Condition
association, building and loan association, capital requirements 12 may use the and Income (Call Report) or the FFIEC 002 report
homestead association, cooperative bank, or credit FFIEC 051 Call Report. (Report of Assets and Liabilities of U.S. Branches
union. 12 U.S.C. 3302(3). and Agencies of Foreign Banks), as applicable, and
7 See 12 U.S.C. 1817(a)(11). The agencies are as they may be amended or superseded from time
statutorily mandated to conduct a review of the 051); 83 FR 939 (January 8, 2018) (burden to time in accordance with the Paperwork
information and schedules in the Call Reports every reduction); 83 FR 15678 (April 11, 2018) (burden Reduction Act of 1995, 44 U.S.C. chapter 35.
five years, and reduce or eliminate any information reduction). 15 Based on June 30, 2018, Call Report data, of the
9 81 FR 54190 (August 15, 2016).
khammond on DSK30JT082PROD with PROPOSALS2
or schedules for which the agencies determine 5,357 institutions with reported total assets below
10 See 82 FR 29147 (June 27, 2017), 82 FR 51908
continued collection is not required by law and no the statutory $5 billion asset threshold, 4,810 or
longer necessary or appropriate. https:// (November 8, 2017). These Federal Register notices almost 90 percent of those institutions reported less
www.ffiec.gov/pdf/2017_Interagency_Review_ also contained proposals to reduce data items in the than $1 billion in total assets and are currently
Consolidated_Reports_Condition_Income.pdf. FFIEC 031 and FFIEC 041 Call Reports. eligible to file the FFIEC 051 Call Report based on
8 The FFIEC published a series of Federal 11 See 12 U.S.C. 3311.
asset size. Approximately 77 percent of the 4,810
Register notices pursuant to the Paperwork 12 See 12 CFR part 3, subpart E (OCC); 12 CFR institutions with total assets below $1 billion
Reduction Act of 1995. See 80 FR 56539 (September part 217, subpart E (Board); 12 CFR part 324, already file the FFIEC 051 Call Report, and thus
18, 2015) (principles); 81 FR 45357 (July 13, 2016) subpart E (FDIC). Generally, an institution is an would face little to no administrative costs to obtain
(burden reduction); 82 FR 2444 (January 9, 2017) advanced approaches institution if it has reduced reporting for the first and third calendar
(burden reduction and implementation of FFIEC consolidated assets of at least $250 billion or if it quarters of a year.
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![Federal Register / Vol. 83, No. 223 / Monday, November 19, 2018 / Proposed Rules 58435
Report uses the same definitions for has no foreign offices; is not required to calendar year. This approach is
data items as other Call Report versions, or has not elected to use Subpart E of consistent with the current FFIEC 051
as well as the same data item identifiers the agencies’ regulatory capital rules to Call Report instructions for determining
used by the Call Report preparation calculate its risk-based capital eligibility to file the FFIEC 051 Call
software products, the agencies requirements; and is not a large or Report based on asset size.20
anticipate that newly eligible covered highly complex institution for purposes This approach should allow an
depository institutions would be able to of the FDIC’s assessment regulations. institution sufficient time to address any
file the FFIEC 051 Call Report without The OCC’s definition would also scope accounting or reporting systems changes
the need to make significant changes to out institutions that file the FFIEC 002 or other preparation process changes
their Call Report preparation processes report of condition. In addition, the that may be needed if the institution
or incur significant cost.16 Finally, as FDIC’s definition would exclude state- wants to take advantage of, or is no
discussed below in the PRA section, to licensed insured branches of foreign longer eligible for, filing the FFIEC 051
implement section 205 of EGRRCPA the banks. These other non-asset-size Call Report with its reduced reporting in
agencies are proposing to reduce the criteria are identical to the current the following calendar year. For
number of existing FFIEC 051 Call eligibility criteria for institutions with example, an institution that meets the
Report data items required to be less than $1 billion in total assets to file asset-size criterion based on its report of
reported in the first and third calendar the FFIEC 051 Call Report except for the condition as of June 30, 2018, may be
quarters by approximately 37 percent. criterion related to whether the eligible to file the FFIEC 051 Call Report
Accordingly, for all covered depository institution is large or highly complex for the entire 2019 calendar year, even
institutions, filing the FFIEC 051 Call under the FDIC’s assessment if its assets increase to $5 billion or
Report would provide an immediate regulations. more later in 2018 or 2019, provided it
reduction in required reporting without The agencies would allow reduced also continues to meet the non-asset-
substantial administrative costs. reporting for ‘‘insured depository size criteria discussed below. If the
The agencies expect to propose institutions’’, as such term is defined in same institution reports $5 billion or
additional reductions to the FFIEC 051 section 3 of the FDI Act, 12 U.S.C. 1813, more in total assets on its Call Report as
Call Report in connection with the and as required by section 205 of of June 30, 2019, the institution could
implementation of section 201 of EGRRCPA. The OCC and Board also continue to file the FFIEC 051 Call
EGRRCPA. Section 201 of EGRRCPA would extend reduced reporting to Report for report dates through
requires the agencies to adopt a certain uninsured institutions that they December 31, 2019 (based on its total
community bank leverage ratio in place supervise and that would otherwise assets as of June 30, 2018), including
of the existing regulatory capital rules meet the same criteria.19 Greater parity reduced reporting in the third calendar
for qualifying community banks,17 in the reporting of insured and quarter of 2019 as long as it continued
which the agencies expect would lead to uninsured national banks and state to meet the non-asset-size criteria.
a reduction in the number of regulatory member banks would be appropriate in However, because the institution
capital data items that would need to be light of the similarities between the exceeded the asset-size criterion as of
reported by such institutions. The information used to review the activities June 30, 2019, the institution would be
agencies also will continue to review of such insured and uninsured ineligible to file the FFIEC 051 Call
the data collected on the FFIEC 051 Call institutions. In addition, some Report in the 2020 calendar year.
Report and seek to reduce the reporting uninsured institutions with total assets Question 1: What are the advantages
frequency of data items from quarterly of less than $1 billion currently file the and disadvantages of institutions
to semi-annual where practicable. FFIEC 051 Call Report and, therefore, measuring total assets using the
may continue to use this version of the approach discussed above? Should the
A. Covered Depository Institution
Call Report under the proposed rule. agencies use average total assets over a
Section 205 of EGRRCPA defines specified period rather than total assets
‘‘covered depository institution’’ as an Asset Threshold
on a single reporting date? Is another
insured depository institution ‘‘that— (i) The proposed rule would define methodology more appropriate to
has less than $5 billion in total ‘‘total consolidated assets’’ as total measure total assets for purposes of the
consolidated assets; and (ii) satisfies assets as reported in an institution’s asset-size criterion? If so, what
such other criteria as the [agencies] report of condition. An institution methodology is more appropriate and
determine appropriate.’’ 18 The would determine whether it meets the why?
proposed rule would define ‘‘covered asset-size criterion and is eligible to file Question 2: The agencies are not
depository institution’’ as an institution the FFIEC 051 Call Report based on the proposing to immediately disqualify an
that meets all the following criteria: Has total assets it reported in its report of institution from using reduced reporting
less than $5 billion in total consolidated condition (Schedule RC, Item 12 in the if it exceeds $5 billion in total assets,
assets as reported in its report of Call Reports), which is calculated on a regardless of how the institution crossed
condition for the second calendar consolidated basis, in the institution’s the asset threshold, including through a
quarter of the preceding calendar year; report of condition for the second merger or acquisition. Is this
calendar quarter of the previous appropriate and why?
16 Based on June 30, 2018 Call Report data, 547
institutions that reported total assets of $1 billion 19 The FDIC only supervises insured state Other Eligibility Criteria
khammond on DSK30JT082PROD with PROPOSALS2
or more, but less than $5 billion, could be eligible nonmember banks, insured state savings
to file the FFIEC 051 Call Report in 2019 under the associations, and insured state-licensed branches. The agencies are also proposing that
proposed rule. Currently, no uninsured Board-regulated institution an institution satisfy other criteria to be
17 A qualifying community bank is defined as a
is eligible to file the FFIEC 051 Call Report, but eligible for reduced reporting, consistent
depository institution or depository holding under the proposal one uninsured Board-regulated
company with total consolidated assets of less than
with section 205. These other criteria
institution would meet the proposed criteria for
$10 billion and a risk profile deemed appropriate eligibility to file the FFIEC 051 Call Report. The are based on an institution’s
by the agencies. Under section 201, the agencies OCC supervises 49 uninsured institutions that
may determine whether a community bank qualifies currently are eligible to file the FFIEC 051 Call 20 See FFIEC 051 instructions, available at https://
based on consideration of certain risk factors. Report, which would increase to 50 under the www.ffiec.gov/pdf/FFIEC_forms/
18 12 U.S.C. 1817(a)(12)(B). proposed rule. FFIEC051_201806_i.pdf.
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![Federal Register / Vol. 83, No. 223 / Monday, November 19, 2018 / Proposed Rules 58439
in the PRA section could reduce annual for institutions in the size range would because the criteria for filing the form
reporting costs by an estimated continue to be met. likely would have been very similar to
$4,452,084, or 0.008 percent of total The agencies considered two the current eligibility criteria for filing
annualized non-interest expenses, for alternative approaches to implementing the FFIEC 051 Call Report. Also, this
institutions that reported total assets of section 205 as part of the development approach could result in institutions
less than $5 billion on the Call Report of the proposed rule. In considering having to reorganize their reporting
as of the June 30, 2018, and either filed these alternatives, the agencies reviewed systems and processes to accommodate
the FFIEC 051 Call Report, or filed the prior PRA notices in which Call Report their use of a new form and incur costs
FFIEC 041 Call Report but are expected changes were discussed and comments and administrative burden in doing so.
to file the FFIEC 051 Call Report, under were addressed. Additionally, the Because the proposed rule is intended
the proposed rule beginning in 2019.36 agencies considered comments received to reduce burden on smaller, less
Finally, the proposed rule could on the Call Report burden reduction complex institutions, the agencies
impose some minor additional initiative announced in December 2014 determined that producing a new Call
regulatory costs, in the first year of that resulted in the creation of the Report would not be the most efficient
implementation, that are associated FFIEC 051 Call Report. The agencies option. Additionally, the agencies
with changes to internal systems or note that the FFIEC Call Report burden- recognized that they would require
processes for affected institutions that reduction initiative involved significant significant time to develop and publish
are not currently eligible for, or do not outreach to community banks and to an entirely new Call Report form, which
currently file, the FFIEC 051 Call users of Call Report data and that the would delay the regulatory reporting
Report. The agencies expect that these guiding principles developed as part of relief proposed in the rule.
additional costs should be relatively low the initiative informed the development
of the approach taken in this proposal. V. Related Agency-Specific Revisions
as the FFIEC 051 Call Report shares
Alternative 1: Identify data items for A. Board
defined terms and data item identifiers
reduced reporting on the FFIEC 041 and
with the other Call Reports, so The Board does not currently have a
FFIEC 051 Call Reports. The agencies
institutions that switch to the FFIEC 051 rule that sets forth the report of
considered reviewing the FFIEC 041 and
Call Report should not necessitate condition filing requirements of state-
FFIEC 051 Call Reports to identify data
significant reporting system changes. chartered banks that are members of the
items that could be reported on a less
However, these costs are also difficult to Federal Reserve System (state member
frequent basis by institutions with less
estimate accurately with available banks), and instead relies on its
than $5 billion in total assets. A possible
information because they depend upon statutory authority under section 9 of
advantage to this approach is that it
the individual characteristics of each might have been easier to present the the Federal Reserve Act (FRA) and
institution, its recordkeeping and various items proposed for reduced section 7(a)(3) of the FDI Act to require
reporting systems, and the decisions of reporting. However, the agencies also state member banks to provide reports
its senior management. recognized that the existing FFIEC 051 of condition. In light of section 205 of
Question 5: The agencies invite Call Report in its entirety already EGRRCPA’s requirement that the Board
comments on all aspects of the requires the reporting of significantly issue a rule that allows for reduced
information provided in this Expected fewer data items than the FFIEC 041 reporting by certain eligible Board-
Impact section. In particular, would this Call Report. Therefore, expanding supervised insured depository
proposal have any significant effects on institutions’ eligibility to file the FFIEC institutions, the Board proposes to add
institutions that the agencies have not 051 Call Report was determined to be a new subpart to Regulation H, which
identified? the more beneficial approach with governs the membership of state
Question 6: Are there other factors or respect to institutions with total assets banking institutions in the Federal
aspects of regulatory reporting that the of $1 billion or more, but less than $5 Reserve System. The Board proposes to
agencies should consider in assessing billion, because it would provide those add new subpart K to Regulation H,
the impact of the proposed rule? institutions with immediate and which will incorporate the rule text
significant reductions in the overall implementing section 205. In addition
IV. Alternatives Considered
number of data items reported. In to insured state member banks, the
The agencies recognize that while the addition, re-reviewing every data item Board also supervises uninsured state
statutory mandate is to allow for on the FFIEC 041 Call Report would member banks, such as nondepository
reduced reporting in the first and third require significantly more time and trust companies. The Board requires
calendar quarters for covered depository would delay the implementation of such institutions to use the Call Report
institutions, the implementation of reduced reporting in comparison to to submit financial data. The Board’s
section 205 of EGRRCPA presents an proposing to use the existing FFIEC 051 proposed rule also would extend the use
additional opportunity to provide Call Report. of the reduced reporting requirement to
broader regulatory relief to smaller, less Alternative 2: Create a new, separate uninsured state member banks if they
complex institutions that are currently Call Report form for ‘‘covered meet the criteria for covered depository
required to file the FFIEC 041 Call depository institutions.’’ The agencies institutions identified in the rule.
Report because they have $1 billion or also considered creating a new, separate The Board also proposes to include in
more in total assets. In developing the Call Report for covered depository new subpart K, pursuant to its statutory
khammond on DSK30JT082PROD with PROPOSALS2
proposal, the agencies sought to reduce institutions that would provide for authority under section 9 of the FRA
the reporting burden on institutions reduced reporting in the first and third and section 7(a)(3) of the FDI Act,
with total consolidated assets of less calendar quarters. The agencies believed subsection 208.122 that will set forth
than $5 billion, consistent with the that, while such an approach may the general requirement that all state
mandate in section 205, while also appear simple to do, creating an entirely member banks file consolidated reports
ensuring that the agencies’ data needs separate form only two years after the of condition and income in accordance
implementation of the new FFIEC 051 with the instructions for these reports.
36 $117 per hour * [5,130 hours per quarter + Call Report could lead to confusion Question 7: Is the proposed extension
4,383 hours per quarter] * 4 quarters per year. about which form to file, especially of the reduced reporting requirement to
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![58456 Federal Register / Vol. 83, No. 223 / Monday, November 19, 2018 / Proposed Rules
1818, 1820(d)(9), 1833(j), 1828(o), 1831, (3) A majority-owned Edge Act or from Federal Reserve District Banks or
1831o, 1831p–1, 1831r–1, 1831w, 1831x, Agreement subsidiary including both its through the website of the Federal
1835a, 1882, 2901–2907, 3105, 3310, 3331– U.S. and its foreign offices; and Financial Institutions Examination
3351, 3905–3909, and 5371; 15 U.S.C. 78b, (4) For an institution chartered or
78I(b), 78l(i), 780–4(c)(5), 78q, 78q–1, and
Council, http://www.ffiec.gov/.
78w, 1681s, 1681w, 6801, and 6805; 31
headquartered in any U.S. state or the
District of Columbia, a branch or § 208.123 Reduced Reporting
U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b,
4106 and 4128. consolidated subsidiary located in a A covered depository institution may
■ 2. Add new subpart K to part 208 to U.S. territory or possession. file the FFIEC 051 version of the report
read as follows: Report of condition means the FFIEC of condition, or any successor thereto,
031, FFIEC 041, or FFIEC 051 versions which shall provide for reduced
Subpart K—Forms, Instructions and
of the Consolidated Report of Condition reporting for the reports of condition for
Reports
and Income (Call Report) or the FFIEC the first and third calendar quarters for
Sec. 002 (Report of Assets and Liabilities of a year.
§ 208.120 Authority, Purpose, and Scope
U.S. Branches and Agencies of Foreign
§ 208.121 Definitions § 208.124 Reservation of Authority
§ 208.122 Reporting Banks), as applicable, and as they may
§ 208.123 Reduced Reporting be amended or superseded from time to (a) Notwithstanding § 208.123, the
§ 208.124 Reservation of Authority time in accordance with the Paperwork Board in consultation with the
Reduction Act of 1995, 44 U.S.C. applicable state chartering authority
Subpart K—Forms, Instructions and chapter 35. may require an otherwise eligible
Reports Total consolidated assets means total covered depository institution to file the
assets as reported in a state member FFIEC 041 version of the report of
§ 208.120 Authority, Purpose, and Scope condition, or any successor thereto,
bank’s report of condition.
(a) Authority. Subpart K of Regulation based on an institution-specific
H (12 CFR part 208, subpart K) is issued § 208.122 Reporting determination. In making this
by the Board under section 7 of the (a) A state member bank is required to determination, the Board may consider
Federal Deposit Insurance Act, 12 file the report of condition (Call Report) criteria including, but not limited to,
U.S.C. 1817(a)(3) and (12), and section in accordance with the instructions for whether the institution is significantly
9 of the Federal Reserve Act, 12 U.S.C. these reports. All assets and liabilities, engaged in one or more complex,
324. including contingent assets and specialized, or other higher risk
(b) Purpose and scope. This subpart liabilities, must be reported in, or activities, such as those for which
informs a state member bank where it otherwise taken into account in the limited information is reported in the
may obtain forms and instructions for preparation of, the Call Report. The FFIEC 051 version of the report of
reports of conditions and implements 12 Board uses Call Report data to monitor condition compared to the FFIEC 041
U.S.C. 1817(a)(12) to allow reduced the condition, performance, and risk version of the report of condition.
reporting for a covered depository profile of individual state member banks Nothing in this part shall be construed
institution when such institution makes and the banking industry. Reporting to limit the Board’s authority to obtain
its reports of condition for the first and state member banks must also submit information from a state member bank.
third calendar quarters of a year. annually such information on small (b) Nothing in this subpart limits the
§ 208.121 Definitions
business and small farm lending as the authority of the Board under any other
Board may need to assess the provision of law or regulation to take
Covered depository institution means: availability of credit to these sectors of
a state member bank that meets all of supervisory or enforcement action,
the economy. The report forms and including action to address unsafe or
the following criteria: instructions can be obtained from
(1) Has less than $5 billion in total unsound practices or conditions or
Federal Reserve District Banks or violations of law.
consolidated assets as reported in its
through the website of the Federal
report of condition for the second Federal Deposit Insurance Corporation
Financial Institutions Examination
calendar quarter of the preceding year;
(2) Has no foreign offices, as defined Council, http://www.ffiec.gov/. 12 CFR CHAPTER III
(b) Every insured U.S. branch of a
in this subpart; Authority and Issuance
(3) Is not required to or has not foreign bank is required to file the
elected to use 12 CFR part 217, subpart FFIEC 002 version of the report of ■ For the reasons set forth in the
E to calculate its risk-based capital condition (Report of Assets and preamble, the Federal Deposit Insurance
requirements; and Liabilities of U.S. Branches and Corporation proposes to amend 12 CFR
(4) Is not a large institution or highly Agencies of Foreign Banks) in part 304 to read as follows:
complex institution, as such terms are accordance with the instructions for the
defined in 12 CFR 327.8, or treated as report. All assets and liabilities, PART 304—FORMS, INSTRUCTIONS,
a large institution, as requested under including contingent assets and AND REPORTS
12 CFR 327.16(f). liabilities, must be reported in, or
Contents
Foreign country refers to one or more otherwise taken into account in the
foreign nations, and includes the preparation of the report. The Board Subpart A—In General
overseas territories, dependencies, and uses the reported data to monitor the § 304.1 Purpose.
khammond on DSK30JT082PROD with PROPOSALS2
insular possessions of those nations and condition, performance, and risk profile § 304.2 Where to obtain forms and
of the United States. of individual insured branches and the instructions.
Foreign office means: banking industry. Insured branches § 304.3 Reports.
(1) A branch or consolidated must also submit annually such § 304.4–304.10 [Reserved].
subsidiary in a foreign country, unless information on small business and small Subpart B—Implementation of Reduced
the branch is located on a U.S. military farm lending as the Board may need to Reporting Requirement
facility; assess the availability of credit to these § 304.11 Authority, purpose and scope.
(2) An international banking facility sectors of the economy. The report § 304.12 Definitions.
as such term is defined in 12 CFR 204.8; forms and instructions can be obtained § 304.13 Reduced reporting.
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![58458 Federal Register / Vol. 83, No. 223 / Monday, November 19, 2018 / Proposed Rules
defined in 12 CFR 327.8, or treated as Liabilities of U.S. Branches and limited to, whether the institution is
a large institution, as requested under Agencies of Foreign Banks), as significantly engaged in one or more
12 CFR 327.16(f); and applicable, and as they may be amended complex, specialized, or other higher-
(5) Is not a state-licensed insured or superseded from time to time in risk activities, such as those for which
branch of a foreign bank, as such terms accordance with the Paperwork limited information is reported in the
are defined in section 3(s) of the Federal Reduction Act of 1995, 44 U.S.C. FFIEC 051 version of the report of
Deposit Insurance Act, 12 U.S.C. chapter 35. condition compared to the FFIEC 041
1813(s). (e) Total consolidated assets means version of the report of condition.
(b) Foreign country refers to one or total assets as reported in an insured
more foreign nations, and includes the Nothing in this part shall be construed
depository institution’s report of
overseas territories, dependencies, and to limit the Corporation’s authority to
condition.
insular possessions of those nations and obtain information from insured
of the United States. § 304.13 Reduced reporting. depository institutions.
(c) Foreign office means: A covered depository institution may Dated: November 5, 2018.
(1) A branch or consolidated file the FFIEC 051 version of the report
Joseph M. Otting,
subsidiary in a foreign country, unless of condition, or any successor thereto,
the branch is located on a U.S. military which shall provide for reduced Comptroller of the Currency.
facility; reporting for the reports of condition for
(2) An international banking facility the first and third calendar quarters for By order of the Board of Governors of the
as such term is defined in 12 CFR 204.8; a year. Federal Reserve System, October 30, 2018.
(3) A majority-owned Edge Act or Ann E. Misback,
Agreement subsidiary including both its § 304.14 Reservation of authority.
Secretary of the Board.
U.S. and its foreign offices; and Notwithstanding § 304.13, the
(4) For an institution chartered or Corporation, in consultation with the
applicable state chartering authority, Dated at Washington, DC, on October 17,
headquartered in any U.S. state or the
may require an otherwise eligible 2018.
District of Columbia, a branch or
consolidated subsidiary located in a covered depository institution to file the By order of the Board of Directors.
U.S. territory or possession. FFIEC 041 version of the report of Federal Deposit Insurance Corporation.
(d) Report of condition means the condition, or any successor thereto, Robert E. Feldman,
FFIEC 031, FFIEC 041, or FFIEC 051 based on an institution-specific Executive Secretary.
versions of the Consolidated Report of determination. In making this
[FR Doc. 2018–24587 Filed 11–16–18; 8:45 am]
Condition and Income (Call Report) or determination, the Corporation may
BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P
the FFIEC 002 (Report of Assets and consider criteria including, but not
khammond on DSK30JT082PROD with PROPOSALS2
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Document Created: 2018-11-17 02:46:28
Document Modified: 2018-11-17 02:46:28
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking with request for public comment. | |
| Dates | Comments must be received by January 18, 2019. | |
| Contact | OCC: Cady Codding, Senior Policy Accountant, Office of the Chief Accountant, (202) 649-5764; Kevin Korzeniewski, Counsel, Office of the Chief Counsel, (202) 649-5490; or for persons who are deaf or hearing impaired, TTY, (202) 649-5597. | |
| FR Citation | 83 FR 58432 | |
| RIN Number | 1557-AE39, 7100-AF12 and 3065-AE82 | |
| CFR Citation | 12
CFR
208 12 CFR 304 12 CFR 52 | |
| CFR Associated | Accounting; Agriculture; Confidential Business Information; Consumer Protection; Currency; Insurance; Investments; Mortgages; Securities; Bank Deposit Insurance; Freedom of Information; Banks; Banking and Reporting and Recordkeeping Requirements |
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