Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB

• Published date: 04 January 2021
• Citation: 86 FR 92
• Record Number: 2020-29028
• Section: Notices
• Court: Federal Reserve System

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Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices

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An SLHC must file one or more of the FR Y–

9 family of reports unless it is: (1) A grandfathered

unitary SLHC with primarily commercial assets and

thrifts that make up less than five percent of its

consolidated assets; or (2) a SLHC that primarily

holds insurance-related assets and does not

otherwise submit financial reports with the SEC

pursuant to section 13 or 15(d) of the Securities

Exchange Act of 1934.

Webinar registration page and provided

call-in information.

Joyce B. Stone,

Assistant Corporate Secretary.

[FR Doc. 2020–29156 Filed 12–30–20; 11:15 am]

BILLING CODE 6690–01–P

FEDERAL RESERVE SYSTEM

Change in Bank Control Notices;

Acquisitions of Shares of a Bank or

Bank Holding Company

The notificants listed below have

applied under the Change in Bank

Control Act (Act) (12 U.S.C. 1817(j)) and

§ 225.41 of the Board’s Regulation Y (12

CFR 225.41) to acquire shares of a bank

or bank holding company. The factors

that are considered in acting on the

applications are set forth in paragraph 7

of the Act (12 U.S.C. 1817(j)(7)).

The public portions of the

applications listed below, as well as

other related filings required by the

Board, if any, are available for

immediate inspection at the Federal

Reserve Bank(s) indicated below and at

the offices of the Board of Governors.

This information may also be obtained

on an expedited basis, upon request, by

contacting the appropriate Federal

Reserve Bank and from the Board’s

Freedom of Information Office at

https://www.federalreserve.gov/foia/

request.htm. Interested persons may

express their views in writing on the

standards enumerated in paragraph 7 of

the Act.

Comments regarding each of these

applications must be received at the

Reserve Bank indicated or the offices of

the Board of Governors, Ann E.

Misback, Secretary of the Board, 20th

Street and Constitution Avenue NW,

Washington, DC 20551–0001, not later

than January 19, 2021.

A. Federal Reserve Bank of Chicago

(Colette A. Fried, Assistant Vice

President) 230 South LaSalle Street,

Chicago, Illinois 60690–1414:

1. Timothy Schams, La Crosse,

Wisconsin; to acquire voting shares of

River Holding Company, Stoddard,

Wisconsin, and thereby indirectly

acquire voting shares of River Bank,

Stoddard, Wisconsin, and Wisconsin

River Bank, Sauk City, Wisconsin.

B. Federal Reserve Bank of

Minneapolis (Chris P. Wangen,

Assistant Vice President), 90 Hennepin

Avenue, Minneapolis, Minnesota

55480–0291:

1. Angela K. Rassas, Potomac Falls,

Virginia; Dianne K. Johnson, as a trustee

of the Dianne K. Johnson Trust and the

Mignon L. Johnson Trust, all of Forest

Lake, Minnesota; Scott C. Johnson,

individually and as trustee of the Edsel

F. Johnson Disclaimer Trust, both of

Stillwater, Minnesota; Jill E. King, Arden

Hills, Minnesota; and Mackenzie L.

Farrill, Hudson, Wisconsin; to join the

Johnson Family Group, a group acting in

concert, to retain voting shares of

Marine Bancshares, Inc., and thereby

indirectly retain voting shares of

Security State Bank of Marine, both of

Marine on St. Croix, Minnesota.

C. Federal Reserve Bank of Dallas

(Robert L. Triplett III, Senior Vice

President) 2200 North Pearl Street,

Dallas, Texas 75201–2272:

1. William Alexander O’Brien,

Amarillo, Texas; to acquire voting

shares of BOC Bank, McLean, Texas.

Board of Governors of the Federal Reserve

System, December 28, 2020.

Ann Misback,

Secretary of the Board.

[FR Doc. 2020–29030 Filed 12–31–20; 8:45 am]

BILLING CODE 6210–01–P

FEDERAL RESERVE SYSTEM

Agency Information Collection

Activities: Announcement of Board

Approval Under Delegated Authority

and Submission to OMB

AGENCY

: Board of Governors of the

Federal Reserve System.

SUMMARY

: The Board of Governors of the

Federal Reserve System (Board) is

adopting a proposal to extend for three

years, with revision, the Financial

Statements for Holding Companies (FR

Y–9 reports; OMB Control Number

7100–0128) and the Consolidated

Report of Condition and Income for

Edge and Agreement Corporations (FR

2886b; OMB Control Number 7100–

0086). The new revisions to these

reports are effective as of March 31,

2021. The Board is also finalizing the

following revisions that were previously

approved on an interim basis: Revisions

to the definition of ‘‘savings deposits’’

in the FR Y–9C and FR 2886b

instructions associated with the

amendments to the Board’s Regulation

D (Reserve Requirements of Depository

Institutions), collection of two new

temporary data items on loan

modifications consistent with section

4013(d)(2) of the Coronavirus Aid,

Relief and Economic Security (CARES)

Act, and collection of four new

temporary data items related to the an

interim final rule implementing the

Paycheck Protection Program Liquidity

Facility (PPPLF). These changes became

effective June 30, 2020.

FOR FURTHER INFORMATION CONTACT

:

Federal Reserve Board Clearance

Officer—Nuha Elmaghrabi—Office of

the Chief Data Officer, Board of

Governors of the Federal Reserve

System, Washington, DC 20551, (202)

452–3829.

Office of Management and Budget

(OMB) Desk Officer—Will Bestani—

Office of Information and Regulatory

Affairs, Office of Management and

Budget, New Executive Office Building,

Room 10235, 725 17th Street NW,

Washington, DC 20503, or by fax to

(202) 395–6974.

SUPPLEMENTARY INFORMATION

: On June

15, 1984, OMB delegated to the Board

authority under the PRA to approve and

assign OMB control numbers to

collections of information conducted or

sponsored by the Board. Board-

approved collections of information are

incorporated into the official OMB

inventory of currently approved

collections of information. The OMB

inventory, as well as copies of the PRA

Submission, supporting statements, and

approved collection of information

instrument(s) are available at https://

www.reginfo.gov/public/do/PRAMain.

These documents are also available on

the Federal Reserve Board’s public

website at https://

www.federalreserve.gov/apps/

reportforms/review.aspx or may be

requested from the agency clearance

officer, whose name appears above.

Final Approval Under OMB Delegated

Authority of the Extension for Three

Years, With Revision of the Following

Information Collections:

(1) Report title: Financial Statements

for Holding Companies.

Agency form numbers: FR Y–9C, FR

Y–9LP, FR Y–9SP, FR Y–9ES, and FR

Y–9CS.

OMB control number: 7100–0128.

Frequency: Quarterly, semiannually,

and annually.

Respondents: Bank holding

companies (BHCs), savings and loan

holding companies (SLHCs), securities

holding companies, and U.S.

intermediate holding companies (IHCs)

(collectively, holding companies).

1

Estimated number of respondents:

FR Y–9C (non-advanced approaches

holding companies) with less than $5

billion in total assets—124,

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12 U.S.C. 1844.

3

12 U.S.C. 5311(a)(1) and 5365; Section 165(b)(2)

of Title I of the Dodd-Frank Act, 12 U.S.C.

5365(b)(2), refers to ‘‘foreign-based bank holding

company.’’ Section 102(a)(1) of the Dodd-Frank Act,

12 U.S.C. 5311(a)(1), defines ‘‘bank holding

company’’ for purposes of Title I of the Dodd-Frank

Act to include foreign banking organizations that

are treated as bank holding companies under

section 8(a) of the International Banking Act, 12

U.S.C. 3106(a). The Board has required, pursuant to

section 165(b)(1)(B)(iv) of the Dodd-Frank Act, 12

U.S.C. 5365(b)(1)(B)(iv), certain foreign banking

organizations subject to section 165 of the Dodd-

Frank Act to form U.S. intermediate holding

companies. Accordingly, the parent foreign-based

organization of a U.S. IHC is treated as a BHC for

purposes of the BHC Act and section 165 of the

Dodd-Frank Act. Because section 5(c) of the BHC

Act authorizes the Board to require reports from

subsidiaries of BHCs, section 5(c) provides

additional authority to require U.S. IHCs to report

the information contained in the FR Y–9 series of

reports.

4

12 U.S.C. 1850a(c)(1)(A).

5

5 U.S.C. 552(b)(4).

6

5 U.S.C. 552(b)(8).

7

5 U.S.C. 552(b)(4).

8

See 12 U.S.C. 1464(v)(2).

9

Exemption 8 of the Freedom of Information Act

(FOIA) specifically exempts from disclosure

Continued

FR Y–9C (non advanced approaches

holding companies) with $5 billion or

more in total assets—218,

FR Y–9C (advanced approaches

holding companies)—9,

FR Y–9LP—416,

FR Y–9SP—3,739,

FR Y–9ES—78,

FR Y–9CS—236.

Estimated average hours per response:

Reporting

FR Y–9C (non advanced approaches

holding companies) with less than $5

billion in total assets—35.72;

FR Y–9C (non advanced approaches

holding companies) with $5 billion or

more in total assets—44.92;

FR Y–9C (advanced approaches

holding companies)—50.14;

FR Y–9LP—5.27;

FR Y–9SP—5.40;

FR Y–9ES—0.50;

FR Y–9CS—0.50.

Recordkeeping

FR Y–9C—1;

FR Y–9LP—1;

FR Y–9SP—0.50;

FR Y–9ES—0.50;

FR Y–9CS—0.50.

Estimated annual burden hours:

Reporting

FR Y–9C (non advanced approaches

holding companies) with less than $5

billion in total assets—17,715;

FR Y–9C (non advanced approaches

holding companies) with $5 billion or

more in total assets—39,166;

FR Y–9C (advanced approaches

holding companies)—1,805;

FR Y–9LP—8,769;

FR Y–9SP—40,381;

FR Y–9ES—39;

FR Y–9CS—472.

Recordkeeping

FR Y–9C—1,404;

FR Y–9LP—1,664;

FR Y–9SP—3,739;

FR Y–9ES—39;

FR Y–9CS—472.

General description of report: The FR

Y–9 family of reporting forms continues

to be the primary source of financial

data on holding companies that

examiners rely on in the intervals

between on-site inspections. The Board

requires holding companies to provide

standardized financial statements to

fulfill the Board’s statutory obligation to

supervise these organizations. Financial

data from these reporting forms are used

to detect emerging financial problems,

to review performance and conduct pre-

inspection analysis, to monitor and

evaluate capital adequacy, to evaluate

holding company mergers and

acquisitions, and to analyze a holding

company’s overall financial condition to

ensure the safety and soundness of its

operations. The FR Y–9C, FR Y–9LP,

and FR Y–9SP serve as standardized

financial statements for the holding

companies. The FR Y–9ES is a financial

statement for holding companies that

are Employee Stock Ownership Plans.

The Board uses the voluntary FR Y–9CS

(a free-form supplement) to collect

additional information deemed to be

critical and needed in an expedited

manner. Holding companies file the FR

Y–9C on a quarterly basis, the FR Y–9LP

quarterly, the FR Y–9SP semiannually,

the FR Y–9ES annually, and the FR Y–

9CS on a schedule that is determined

when this supplement is used.

Legal authorization and

confidentiality: The reporting and

recordkeeping requirements associated

with the FR Y–9 series of reports are

authorized for BHCs pursuant to section

5 of the Bank Holding Company Act

(‘‘BHC Act’’);

2

for SLHCs pursuant to

section 10(b)(2) and (3) of the Home

Owners’ Loan Act, 12 U.S.C. 1467a(b)(2)

and (3), as amended by sections 369(8)

and 604(h)(2) of the Dodd-Frank Wall

Street and Consumer Protection Act

(‘‘Dodd-Frank Act’’); for IHCs pursuant

to section 5 of the BHC Act, as well as

pursuant to sections 102(a)(1) and 165

of the Dodd-Frank Act;

3

and for

securities holding companies pursuant

to section 618 of the Dodd-Frank Act.

4

Except for the FR Y–9CS report, which

is expected to be collected on a

voluntary basis, the obligation to submit

the remaining reports in the FR Y–9

series of reports and to comply with the

recordkeeping requirements set forth in

the respective instructions to each of the

other reports, is mandatory.

With respect to the FR Y–9C report,

Schedule HI’s Memorandum item 7.g,

‘‘FDIC deposit insurance assessments,’’

Schedule HC–P’s item 7.a,

‘‘Representation and warranty reserves

for 1–4 family residential mortgage

loans sold to U.S. government agencies

and government sponsored agencies,’’

and Schedule HC–P’s item 7.b,

‘‘Representation and warranty reserves

for 1–4 family residential mortgage

loans sold to other parties’’ are

considered confidential commercial and

financial information. Such treatment is

appropriate under exemption 4 of the

Freedom of Information Act (‘‘FOIA’’),

5

because these data items reflect

commercial and financial information

that is both customarily and actually

treated as private by the submitter, and

which the Board has previously assured

submitters will be treated as

confidential. It also appears that

disclosing these data items may reveal

confidential examination and

supervisory information, and in such

instances, the information also would be

withheld pursuant to exemption 8 of the

FOIA,

6

which protects information

related to the supervision or

examination of a regulated financial

institution.

In addition, for both the FR Y–9C

report and the FR Y–9SP report,

Schedule HC’s Memorandum item 2.b,

the name and email address of the

external auditing firm’s engagement

partner, is considered confidential

commercial information and protected

by exemption 4 of the FOIA,

7

if the

identity of the engagement partner is

treated as private information by

holding companies. The Board has

assured respondents that this

information will be treated as

confidential since the collection of this

data item was proposed in 2004.

Additionally, items on the FR Y–9C,

Schedule HC–C regarding loans

modified under section 4013 of the

CARES Act (Memorandum item 16.a,

‘‘Number of Section 4013 loans

outstanding’’, and Memorandum item

16.b, ‘‘Outstanding balance of Section

4013 loans’’) are considered

confidential. While the Board generally

makes institution-level FR Y–9C report

data publicly available, the Board

believes the disclosure of these items at

the holding company level would not be

in the public interest.

8

Such information

is permitted to be collected on a

confidential basis, consistent with 5

U.S.C. 552(b)(8).

9

Holding companies

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information ‘‘contained in or related to

examination, operating, or condition reports

prepared by, on behalf of, or for the use of an

agency responsible for the regulation or supervision

of financial institutions.’’

10

The FR Y–9CS is a supplemental report that

may be utilized by the Board to collect additional

information that is needed in an expedited manner

from holding companies. The information collected

on this supplemental report is subject to change as

needed. Generally, the FR Y–9CS report is treated

as public. However, where appropriate, data items

on the FR Y–9CS report may be withheld under

exemptions 4 or 8 of the FOIA, 5 U.S.C. 552(b)(4)

and (8).

11

12 CFR part 261.

12

5 U.S.C. 552(b)(8).

13

5 U.S.C. 552(b)(4).

14

85 FR 40646 (July 7, 2020).

15

85 FR 63553 (October 8, 2020).

may be reluctant to offer modifications

under section 4013 if information on

these modifications are publicly

available, as analysts, investors, and

other users of public FR Y–9C report

information may penalize an institution

for using the relief provided by the

CARES Act.

Aside from the data items described

above, the remaining data items

collected on the FR Y–9C report and the

FR Y–9SP report are generally not

accorded confidential treatment. The

data items collected on FR Y–9LP, FR

Y–9ES, and FR Y–9CS

10

reports, are

also generally not accorded confidential

treatment. As provided in the Board’s

Rules Regarding Availability of

Information,

11

however, a respondent

may request confidential treatment for

any data items the respondent believes

should be withheld pursuant to a FOIA

exemption. The Board will review any

such request to determine if confidential

treatment is appropriate, and will

inform the respondent if the request for

confidential treatment has been granted

or denied.

To the extent the instructions to the

FR Y–9C, FR Y–9LP, FR Y–9SP, and FR

Y–9ES reports each respectively direct

the financial institution to retain the

workpapers and related materials used

in preparation of each report, such

material would only be obtained by the

Board as part of the examination or

supervision of the financial institution.

Accordingly, such information is

considered confidential pursuant to

exemption 8 of the FOIA.

12

In addition,

the workpapers and related materials

may also be protected by exemption 4

of the FOIA, to the extent such financial

information is treated as confidential by

the respondent.

13

(2) Report title: Consolidated Report

of Condition and Income for Edge and

Agreement Corporations.

Agency form number: FR 2886b.

OMB control number: 7100–0086.

Frequency: Quarterly and annually.

Reporters: Edge and agreement

corporations.

Estimated annual reporting hours:

Banking: Edge and agreement

corporations (quarterly): 586;

Banking: Edge and agreement

corporations (annually): 16;

Investment: Edge and agreement

corporations (quarterly): 1,034;

Investment: Edge and agreement

corporations (annually): 79.

Estimated average hours per response:

Banking: Edge and agreement

corporations (quarterly): 15.77;

Banking: Edge and agreement

corporations (annually): 15.87;

Investment: Edge and agreement

corporations (quarterly): 11.81;

Investment: Edge and agreement

corporations (annually): 10.82.

Number of respondents:

Banking: Edge and agreement

corporations (quarterly): 9;

Banking: Edge and agreement

corporations (annually): 1;

Investment: Edge and agreement

corporations (quarterly): 21;

Investment: Edge and agreement

corporations (annually): 7.

General description of report: The FR

2886b reporting form is filed quarterly

and annually by banking Edge and

agreement corporations and investment

(nonbanking) Edge and agreement

corporations (collectively, ‘‘Edges or

Edge corporations’’). The mandatory FR

2886b comprises a balance sheet, an

income statement, two schedules

reconciling changes in capital and

reserve accounts, and 11 supporting

schedules. The Board uses the FR 2886b

data to help plan and target the scope

of examinations of Edges and to

evaluate applications from Edge

corporations. Data from the FR 2886b

are also used to monitor aggregate

institutional trends, such as growth in

assets and the number of offices,

changes in leverage, and the types and

locations of customers and to monitor

and identify present and potential

problems with Edge corporations.

Legal authorization and

confidentiality: Sections 25 and 25A of

the Federal Reserve Act authorize the

Federal Reserve to collect the FR 2886b

(12 U.S.C. 602, 625). The obligation to

report this information is mandatory.

For Edge and Agreement corporations

engaged in banking, current Schedules

RC–M (with the exception of item 3)

and RC–V are held confidential

pursuant to exemption 4 of FOIA (12

U.S.C. 552(b)(4)). For Edge and

Agreement corporations not engaged in

banking, only information collected on

Schedule RC–M (with the exception of

item 3) are given confidential treatment

pursuant to exemption 4 of FOIA (12

U.S.C. 552(b)(4)).

Current actions: On July 7, 2020, the

Board published a notice

14

to

temporarily revise the FR Y–9C to

collect four new data items related to

Paycheck Protection Program (PPP)

loans and the PPPLF. Also, as part of

this notice, the Board temporarily

revised the FR Y–9C to collect two new

data items related to section 4013 of the

CARES act.

On October 8, 2020, the Board

published a separate notice

15

to

propose a number of revisions to the FR

Y–9C, FR Y–9LP, and FR Y–9SP related

to U.S. GAAP effective for reports with

a March 31, 2021, as-of date, except for

proposed revisions related to last-of-

layer hedging, which were proposed to

become effective following the adoption

and implementation of a final standard

by the Financial Accounting Standards

Board (FASB). For holding companies

that have adopted Accounting

Standards Codification (ASC) Topic

326, Financial Instruments—Credit

Losses, the Board proposed in the

October 2020 notice to add new

Memorandum item 7, ‘‘Provisions for

credit losses on off-balance sheet credit

exposures,’’ to Schedule HI–B, Part II,

Changes in allowances for Credit Losses.

This line item would have enhanced

transparency and differentiate between

the provisions attributable to on-and off-

balance sheet credit exposures reported

in item 4, ‘‘Provisions for loan and lease

losses’’ on the FR Y–9C income

statement. As part of the GAAP-related

changes, the Board also proposed new

Memorandum item 8 to Schedule HI–B,

Part II, ‘‘Changes in Allowances for

Credit Losses’’, to the FR Y–9C report.

The description of the memorandum

item would have been ‘‘Estimated

amount of expected recoveries of

amounts previously written off included

within the allowance for credit losses on

loans and leases held for investment

(included in item 7, column A, ‘Balance

end of current period,’ above).’’ In

proposing this reporting change, the

Board noted that, under ASC Topic 326,

holding companies could in some

circumstances reduce the amount of the

allowance for credit losses that would

otherwise be calculated for a pool of

assets with similar risk characteristics,

which includes charged-off assets, by

the estimated amount of expected

recoveries of amounts written off on

these assets.

In this same October notice, the Board

proposed to finalize, on an interim

basis, revisions to the definition of

‘‘savings deposits’’ in the FR Y–9C and

FR 2886b instructions that are

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16

85 FR 23445 (April 28, 2020).

17

85 FR 44361 (July 22, 2020).

associated with the amendments to the

Board’s Regulation D (Reserve

Requirements of Depository Institutions)

published April 28, 2020.

16

The

temporarily-approved revisions permit,

but do not require, depository

institutions to immediately suspend

enforcement of the six-transfer limit on

convenient transfers for savings deposits

and to allow their customers to make an

unlimited number of convenient

transfers and withdrawals from their

savings deposits. The General

Instructions for FR Y–9C Schedule HC–

E, Deposit Liabilities, and FR 2886b

Schedule RC–E, Deposit Liabilities,

were revised to state that if an

institution chooses to suspend

enforcement of the six-transfer limit on

a ‘‘savings deposit,’’ the institution may

continue to report that account as a

‘‘savings deposit’’ or may instead choose

to report that account as a ‘‘transaction

account’’ based on an assessment of

certain characteristics of the account.

Also as part of the October notice, the

Board proposed to revise the General

Instructions for FR Y–9C Schedule HC–

E and FR 2886b Schedule RC–E to state

that where the reporting institution has

suspended the enforcement of the six-

transfer limit rule on an account that

otherwise meets the definition of a

savings deposit, the institution must

report such deposits as a ‘‘savings

deposit’’ (and as a ‘‘nontransaction

account’’) or a ‘‘transaction account’’

based on an assessment of certain

criteria.

The comment period for the July 2020

notice ended on September 8, 2020. The

Board did not receive any comments on

this proposal, and the revisions will be

implemented as proposed, with the new

data items being collected through

December 31, 2021.

The comment period for the October

2020 notice expired on December 7,

2020. The Board received a comment

from a banker’s association on this

proposal. Comments were also received

on a comparable proposal involving the

Consolidated Reports of Condition and

Income (Call Report) (FFIEC 031, FFIEC

041and FFIEC 051; OMB Control

Number 7100–0036).

17

The Board has

taken the comments from the proposed

changes to the Call Report into

consideration in finalizing the proposed

FR Y–9C and FR 2886b changes. The

revisions to the FR Y–9C and FR 2886b

will be implemented as proposed, with

certain modifications described below.

The effective date of the proposed

revisions to the FR Y–9C and FR 2886b

instructions regarding the definition of

‘‘savings deposits’’ is December 31,

2020. The effective date for all other

changes is March 31, 2021.

Comments Received on Provision for

Credit Losses on Off-Balance Sheet

Credit Exposures

The lone commenter on the October

2020 notice noted the potential impact

on other reports beyond the FR Y–9C of

the GAAP change related to provision

for credit losses on off-balance sheet

credit exposures. These other reports

include the FR Y–7N (OMB Control

Number 7100–0125), FR Y–11 (OMB

Control Number 7100–0244), FR 2314

(OMB Control Number 7100–0073), FR

2886b (OMB Control Number 7100–

0086), and FR 2644 (OMB Control

Number 7100–0075).

The Board will consider conforming

changes to the forms and instructions

for the FR 2886b, FR Y–7N, FR Y–11,

and FR 2314 in the future. Any such

changes would be proposed by the

Board through a separate Federal

Register notice pursuant to the

Paperwork Reduction Act. The Board

does not intend to make conforming

changes to the FR 2644 since this report

is only comprised of balance sheet items

and this GAAP-related change only

impacts income statement items.

Comments Received on Final

Regulation D Reporting Revisions

The Board did not receive comments

on the proposal to finalize the

temporarily-approved revisions to the

FR Y–9C and FR 2886b instructions

regarding the definition of ‘‘savings

deposits’’ associated with the

amendments to the Board’s Regulation

D. The changes were effective as of June

30, 2020.

The commenter on the October 2020

notice raised several concerns with the

proposed changes related to the

definition of ‘‘savings deposits’’ and the

assessment criteria to remove certain

optional reporting, and requested a

clarification on the definition of ‘‘retail

sweep arrangements.’’ The commenter

recommended that the revisions be

consistent across reports. Specifically,

the commenter recommended that

savings deposits be classified

consistently as transaction or

nontransaction accounts across reports.

The commenter stated that the

differences in the treatment of savings

deposits would require firms to report

savings deposits as nontransaction

accounts on the Call Reports, FR Y–9C,

and FR 2886b, while the same deposits

would be classified as a transaction

account on the Report of Transaction

Accounts, Other Deposits and Vault

Cash (FR 2900; OMB Control Number

7100–0087). The commenter

recommended that the Board provide

clear and consistent definitions of

‘‘savings deposits,’’ ‘‘transaction

accounts,’’ and ‘‘nontransaction

accounts.’’ In response to the

commenter’s recommendation, the

Board will continue to maintain the

requirement to report ‘‘savings

deposits’’ as a component of

nontransaction accounts on the FR Y–

9C and FR 2886b in order to maintain

consistency with the Call Report. The

Board will also maintain the definition

of ‘‘transaction accounts’’ and

‘‘nontransaction accounts’’ as currently

stated in the FR Y–9C and FR 2886b

instructions, which is consistent with

the Call Report instructions. It is

important to note the Call Report and

FR Y–9C are principal sources of

financial data used for supervision and

regulation of the banking industry

whereas the primary purpose of the FR

2900 report is to collect data for the

construction of the monetary aggregates.

Secondly, regarding the proposed

changes to the assessment criteria for

‘‘savings deposits,’’ the commenter

recommended that a depositor’s

eligibility to hold a NOW account

should not be included in the criteria

assessment to determine the reporting

treatment for savings deposits for which

the numeric limits on transfers and

withdrawals have been removed. The

commenter noted that ‘‘if a firm does

not offer NOW accounts, they would be

required to report savings deposits as

NOW accounts, ATS accounts, or

telephone and preauthorized transfer

accounts (and as transaction accounts)

based on a depositor’s eligibility to hold

such account’’ and ‘‘for firms that do not

offer NOW accounts, the data necessary

to determine a depositor’s eligibility for

NOW accounts would not be readily

available.’’ In addition, the commenter

noted that this reporting treatment

would be inconsistent with the

Regulation D definition of savings

deposits, as NOW account eligibility is

not a component of the definition. The

commenter believed that gathering the

data necessary to distinguish these

depositors from other savings account

holders solely for regulatory reporting

purposes would create business and

systems challenges. The Board agrees

with the commenter that the depositor’s

eligibility to hold a NOW account

should not be included in the

assessment criteria for classification as a

‘‘savings deposit,’’ as such reporting

would not be consistent with the

Regulation D definition of savings

deposits. Therefore, the Board will

remove the depositor’s eligibility to

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Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices

18

85 FR 54577 (Nov. 2, 2020).

19

85 FR 74784.

hold a NOW account from the

assessment criteria. The Board and the

other federal banking agencies have

proposed comparable revisions to the

Call Report.

Additionally, the commenter

recommended that the effective date of

the proposed revisions to the FR Y–9C

and the FR 2886b definition of ‘‘savings

deposits’’ be delayed from December 31,

2020, until June 30, 2021, to better align

with the proposed effective dates of the

FR 2900

18

and the Report of Foreign

(Non-U.S.) Currency Deposits (FR 2915;

OMB Control Number 7100–0087). The

commenter noted that aligning the

timing of the revisions would give firms

additional time to implement any

further changes made by the Board and

other agencies in light of the comments

received. In response to the

commenter’s recommendation, the

Board has deferred the effective date of

the proposed revisions that requires a

depository institution to report each

account as a ‘‘savings deposit’’ or a

‘‘transaction account’’ based on the

institution’s assessment of account

characteristics and removes the

optionality in reporting savings deposits

as either a ‘‘savings deposit’’ or a

‘‘transaction account’’ if the institution

suspended the enforcement of the six-

transfer limit until March 31, 2021.

Choosing March 31, 2021 as the

proposed effective date will align the FR

Y–9C and FR 2886b Regulation D

revisions with the Call Report and will

provide institutions additional time to

implement any necessary changes. The

timing of the FR Y–9C changes was

chosen to match the Call Report to allow

for consistent quarterly reporting.

Lastly, the commenter requested

clarification on how institutions should

report the components of retail sweep

arrangements on the FR Y–9C report.

Specifically, the commenter asked

whether institutions should continue to

report the nontransaction components

of, or savings deposits in, retail sweep

arrangements as nontransaction

accounts. If not, the commenter asked

whether institutions should strictly

follow the proposed assessment criteria

for the treatment of accounts where the

transfer limit has been removed. In

response to the comment, the Board has

modified the description of retail sweep

arrangements in the FR Y–9C

instructions to remove references to

transaction and nontransaction

components. Further, the instructions

will indicate that institutions should not

follow the proposed assessment criteria

for the treatment of accounts for which

the transfer limit has been removed.

Instead, the instructions will note that

institutions that offer valid retail sweep

programs must report each component

of the retail sweep arrangement based

on the customer account agreement

established by the depository

institution. The instructions will also

note that two key criteria must be met

for a valid retail sweep program. These

criteria are: (1) A depository institution

must establish by agreement with its

customer two distinct, legally separate

accounts; and (2) the swept funds must

actually be moved between the

customer’s accounts on the depository

institution’s official books and records

as of the close of business on the day(s)

on which the depository institution

intends to report the funds as being in

separate accounts. These modifications

are consistent with modifications to the

Call Report instructions made in

response to a similar comment.

19

Modifications to Proposed

Memorandum Item 8 of Schedule HI–B,

Part II, ‘‘Changes in Allowances for

Credit Losses’’

As discussed above, the Board

proposed to add a new Memorandum

item 8 to Schedule HI–B, Part II, to

collect the estimated amount of

expected recoveries of amounts

previously written off included within

the allowance for credit losses on loans

and leases held for investment. The

Board did not receive any comments on

this aspect of the proposal, and will

adopt this revision. However, the Board

has decided to collect this new

Memorandum item only from holding

companies with $5 billion or more in

total consolidated assets. The Board

decided to limit this collection to such

holding companies in order to minimize

burden, consistent with a number of

other FR Y–9C items that are not

required from holding companies with

less than $5 billion in total assets.

Proposed Revisions Related to Last-of-

Layer Hedging

In the October 2020 notice, the Board

proposed to make certain revisions to

the FR Y–9C related to the last-of-layer

method of hedge accounting standards.

This proposal would have implemented

in the FR Y–9C revisions related to a

project added to the FASB agenda to

expand last-of-layer hedging to multiple

layers, thereby providing more

flexibility to entities when applying

hedge accounting to a closed portfolio of

prepayable assets. The Board proposed

for these revisions to become effective

following the adoption and

implementation of a final standard on

this matter by FASB.

Because FASB has not yet adopted a

final standard regarding last-of-layer

hedging, the Board has not adopted the

proposed FR Y–9C revisions associated

with this topic at this time. The Board

will consider whether to finalize the

proposed revisions related to last-of-

layer hedging when FASB adopts a final

standard.

Additional Instructional Matters

The agencies addressed several

additional instructional matters in the

final Call Report notice. The Board will

make comparable clarifying changes to

the FR Y–9 reports for consistency

purposes as discussed in detail below.

1. Uncollectible Accrued Interest

Receivable Under ASC Topic 326

In April 2019, the Financial

Accounting Standards Board (FASB)

issued ASU No. 2019–04, ‘‘Codification

Improvements to Topic 326, Financial

Instruments—Credit Losses, Topic 815,

Derivatives and Hedging, and Topic

825, Financial Instruments,’’ which

amended ASC Topic 326 to allow an

institution to make certain accounting

policy elections for accrued interest

receivable balances, including a

separate policy election, at the class of

financing receivable or major security-

type level, to charge off any

uncollectible accrued interest receivable

by reversing interest income,

recognizing credit loss expense (i.e.,

provision expense), or a combination of

both. The Glossary entry for ‘‘Accrued

Interest Receivable’’ in the FR Y–9C

report instructions currently references

the following accounting policy

elections in ASU 2019–04:

•Holding companies may elect to

separately present accrued interest

receivable from the associated financial

asset, and the accrued interest

receivable is presented net of an

allowance for credit losses (ACL), if any;

and

•Holding companies that charge off

uncollectible accrued interest receivable

in a timely manner, i.e., in accordance

with the Glossary entry for ‘‘Nonaccrual

Status,’’ may elect, at the class of

financing receivable or the major

security-type level, not to measure an

ACL for accrued interest receivable.

Although this Glossary entry does not

currently provide for the ASU’s separate

accounting policy election for the

charge-off of uncollectible accrued

interest receivable at the class of

financing receivable or major security-

type level, this election is specifically

addressed in the Interagency Policy

Statement on Allowances for Credit

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85 FR 32991 (June 1, 2020).

21

https://www.federalreserve.gov/reportforms/

supplemental/Final%20FR%20Y-9C%20September

%202020%20Supplemental%20Instructions.pdf.

Losses issued in May 2020.

20

Accordingly, as provided in the FR Y–

9C Supplemental Instructions for the

September 30, 2020, report date,

21

a

holding company that has adopted ASC

Topic 326 may make the charge-off

election for accrued interest receivable

balances in ASU 2019–04 separately

from the other elections for these

balances in the ASU for FR Y–9C

reporting purposes. A holding company

may also charge off uncollectible

accrued interest receivable against an

ACL for FR Y–9C reporting purposes.

The Board plans to update the FR Y–

9C Glossary entry for ‘‘Accrued Interest

Receivable’’ to align the instructions in

this entry with the elections permitted

under U.S. GAAP for institutions that

have adopted ASC 326, which also

would achieve consistency with the

discussion of accrued interest receivable

in the Interagency Policy Statement on

Allowances for Credit Losses.

2. Shared Fees and Commissions From

Securities-Related and Insurance

Activities

Holding companies with $5 billion or

more in total assets report income from

certain securities-related and insurance

activities in FR Y–9C report Schedule

HI, Income Statement, items 5.d.(1)

through (7), while holding companies

with less than $5 billion in total assets

report only items 5.d.(6) and 5.d.(7).

When an institution partners with, or

otherwise joins with, a third party to

conduct these securities-related or

insurance activities, and any fees and

commissions generated by these

activities are shared with the third

party, the Schedule HI instructions do

not currently address the reporting

treatment for these sharing

arrangements. Consequently, holding

companies may have reported the gross

fees and commissions from these

activities in the appropriate subitem of

Schedule HI, item 5, ‘‘Other noninterest

income,’’ and the third party’s share of

the fees and commissions separately as

expenses in Schedule HI, item 7.d,

‘‘Other noninterest expense.’’

Alternatively, holding companies may

have reported only their net share of the

fees or commissions in the appropriate

subitem of Schedule HI, item 5.

The Board believes that reporting

shared fees and commissions on a net

basis is preferable to gross reporting and

is analogous to how income from certain

other income-generating activities is

reported on the FR Y–9C income

statement, including securitization

income and servicing fee income, which

are currently reported net of specified

expenses and costs.

This net approach better represents an

institution’s income from a securities-

related or insurance activity engaged in

jointly with a third party than when the

third party’s share of the fees and

commissions is separately reported as a

noninterest expense in another income

statement data item. As a result, the

Board has clarified the existing

Schedule HI instructions to ensure

consistent reporting on a net basis of

fees and commissions from securities-

related and insurance activities that are

shared with third parties. Furthermore,

to avoid including repetitive language in

the instructions for the multiple

noninterest income items for income

from securities-related and insurance

activities in Schedule HI, a new non-

reportable item 5.d captioned ‘‘Income

from securities-related and insurance

activities’’ has been added before the

existing 5.d subitems on the FR Y–9C

report. The reporting treatment for

arrangements involving the sharing of

fees and commissions with third parties

arising from an institution’s securities

brokerage, investment banking,

investment advisory, securities

underwriting, insurance and annuity

sales, insurance underwriting, or any

other securities-related and insurance

activities is explained once in the new

item 5.d instructions.

3. Pledged Equity Securities

In January 2016, the FASB issued

ASU 2016–01, ‘‘Recognition and

Measurement of Financial Assets and

Financial Liabilities.’’ As one of its main

provisions, the ASU requires

investments in equity securities, except

those accounted for under the equity

method and those that result in

consolidation, to be measured at fair

value, with changes in fair value

recognized in net income. Thus, the

ASU eliminates the existing concept of

available-for-sale (AFS) equity

securities, which are measured at fair

value with changes in fair value

generally recognized in other

comprehensive income. As of December

31, 2020, all holding companies will

have been required to adopt ASU 2016–

01 and, as a consequence, must report

equity securities with readily

determinable fair values not held for

trading in Schedule HC, Balance Sheet,

item 2.c, ‘‘Equity securities with readily

determinable fair values not held for

trading,’’ instead of Schedule HC–B,

Securities, item 7, ‘‘Investments in

mutual funds and other equity securities

with readily determinable fair values.’’

Accordingly, Schedule HC–B, item 7,

will be removed effective December 31,

2020.

Holding companies report held-to-

maturity and AFS securities in Schedule

HC–B, items 1 through 7, and have long

reported in Schedule HC–B,

Memorandum item 1, ‘‘Pledged

securities’’ the amount of such

securities that are pledged to secure

deposits and for other purposes.

Considering that all institutions that

previously reported their AFS equity

securities in Schedule HC–B, item 7,

now report these securities in Schedule

HC, item 2.c, the Board is updating the

instructions for Schedule HC–B,

Memorandum item 1, and Schedule HC,

item 2.c, to indicate that holding

companies should include in

Memorandum item 1 the fair value of

pledged equity securities with readily

determinable fair values not held for

trading that are now reported in

Schedule HC, item 2.c. The wording of

existing footnote 1 to Memorandum

item 1 of Schedule HC–B on the FR Y–

9C forms will be similarly updated.

These instructional clarifications would

ensure that pledged equity securities

formerly reportable as AFS equity

securities would continue to be reported

in Memorandum item 1

notwithstanding the change in

accounting for equity securities under

U.S. GAAP. Information on pledged

securities is an important element of the

agencies’ analysis of an institution’s

liquidity risk. The existing footnote 1 to

Memorandum item 1, Schedule HC–B

on the FR Y–9C forms and the

instructions for PC–B Memoranda line

item 10, ‘‘Pledged securities’’, of the FR

Y–9LP and related footnote 1 reference

of this line item on the FR Y–9LP forms

will be similarly updated.

The FR Y–9C instructional

clarifications to the Glossary entry for

‘‘Accrued Interest Receivable’’ and

Schedule HC–B for pledged equity

securities will take effect December 31,

2020, while the instructional

clarifications to Schedule HI for shared

fees and commissions from securities-

related and insurance activities will take

effect March 31, 2021.

Board of Governors of the Federal Reserve

System, December 28, 2020.

Ann Misback,

Secretary of the Board.

[FR Doc. 2020–29028 Filed 12–31–20; 8:45 am]

BILLING CODE 6210–01–P

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