Reduced Reporting for Covered Depository Institutions
| Citation | 84 FR 29039 |
| Record Number | 2019-12985 |
| Published date | 21 June 2019 |
| Section | Rules and Regulations |
| Court | Federal Deposit Insurance Corporation,The Comptroller Of The Currency Office |
Federal Register, Volume 84 Issue 120 (Friday, June 21, 2019)
[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Rules and Regulations]
[Pages 29039-29053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12985]
[[Page 29039]]
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DEPARTMENT OF THE 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 3064-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: Final rule.
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SUMMARY: The OCC, the Board, and the FDIC (collectively, the agencies)
are issuing a final rule to 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 finalizing 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 document also includes a Paperwork Reduction Act notice
to further 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. The agencies are committed to exploring further
burden reduction and are actively evaluating further revisions to the
FFIEC 051 Call Report, consistent with guiding principles developed by
the FFIEC. The agencies also are considering ways to simplify the Call
Report forms and instructions.
DATES: This rule is effective July 22, 2019.
FOR FURTHER INFORMATION CONTACT:
OCC: Cady Codding, Senior Policy Accountant, Office of the Chief
Accountant, (202) 649-5764; Kevin Korzeniewski, Counsel, Chief
Counsel's Office, (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.
FDIC: Robert Storch, Chief Accountant, Division of Risk Management
Supervision, (202) 898-8906, [email protected]; or Andrew Overton,
Examination Specialist, Division of Risk Management Supervision, (202)
898-8922, [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. Background and Overview of the Proposed Rule
II. Comments Received
III. Summary of the Final Rule
IV. Section-by-Section Analysis of the Final Rule
A. Covered Depository Institution
B. Reduced Reporting
C. Reservation of Authority
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
I. Background and Overview of the Proposed Rule
On November 19, 2018, the agencies published a notice of proposed
rulemaking (proposal or proposed rule) and associated Paperwork
Reduction Act (PRA) notice that would provide reduced reporting on the
Consolidated Reports of Condition and Income (Call Reports) \1\ for
eligible smaller depository institutions for the first and third
calendar quarters, to implement section 205 of the Economic Growth,
Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA).\2\
Section 205 of EGRRCPA (section 205) 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 defines
``covered depository institution'' as an insured depository institution
``that-- (i) has less than $5,000,000,000 in total consolidated assets;
and (ii) satisfies such other criteria as the [agencies] determine
appropriate.'' \3\
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\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 Reports 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\ 83 FR 58432. The EGRRCPA was enacted on May 24, 2018. Public
Law 115-174, 132 Stat. 1296 (2018).
\3\ 12 U.S.C. 1817(a)(12)(B).
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Under the proposal, the agencies would have made reduced reporting
available to small, non-complex institutions, with domestic offices
only, that meet the definition of ``covered depository institution.''
The proposed rule generally would have defined ``covered depository
institution'' 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 (i.e., is not an
advanced approaches institution), and is not a large or highly complex
institution for purposes of the FDIC's deposit insurance assessment
regulations. The proposed rule would have provided reduced reporting by
offering covered depository institutions the option to file a more
streamlined FFIEC 051 Call Report, which is already the most
streamlined version of the Call Report, with fewer data items required
for the first and third calendar quarters compared to the current FFIEC
031, FFIEC 041, or FFIEC 051 Call Reports.
The proposed rule also would have included a reservation of
authority, consistent with the current General Instructions to the
FFIEC 051 Call Report, which would permit an agency, in consultation
with the applicable state chartering authority, for supervisory
purposes and on an institution-specific basis, to require an
institution to file a different version of the Call Report in any
calendar quarter(s) in which it otherwise would be eligible to file the
FFIEC 051 Call Report, based on the agency's determination that more
[[Page 29040]]
information is needed for supervisory purposes.
II. Comments Received
The comment period on the proposal closed on January 18, 2019. The
agencies collectively received 1,018 comments, including 21 unique
comments and 997 nearly identical comments using one of two templates.
Commenters included individuals, banks and bank personnel, industry
trade associations, industry analysts, and members of Congress.
Commenters generally expressed the view that the reductions
proposed by the agencies did not go far enough in providing reduced
reporting in the first and third calendar quarters to eligible
institutions. Many commenters questioned the agencies' selection of the
FFIEC 051 Call Report to provide reporting burden reduction and
criticized the sufficiency of the proposed burden-reducing revisions to
the FFIEC 051 Call Report. Other commenters expressed concerns that the
proposal would reduce the amount of publicly-available information on
eligible institutions and increase burden on analysts and other members
of the public who would have to obtain information directly from banks.
These comments and the agencies' responses are discussed in the summary
and section-by-section analysis of the final rule that follows.
In addition, a few commenters suggested technical revisions to the
FFIEC 051 Call Report schedules. Comments related to the associated
Call Report collection, including the additional revisions proposed to
the existing FFIEC 051 Call Report to further streamline it for reduced
reporting, are discussed in the PRA section of the SUPPLEMENTARY
INFORMATION.
III. Summary of the Final Rule
After carefully considering the comments received, the agencies are
adopting the final rule as proposed.
The final rule implements section 205 by prescribing the criteria
that the agencies have determined to be appropriate for insured
depository institutions to qualify as covered depository institutions,
offering the expanded group of covered depository institutions the
option to file the FFIEC 051 Call Report each calendar quarter, 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. The OCC's and Board's final rules also permit
certain uninsured institutions under their supervision that otherwise
meet the same criteria to qualify as covered depository institutions.
The agencies' final rule includes a reservation of authority that
allows the appropriate Federal banking agency of an institution, in
connection with the state chartering authority, if applicable, to
prohibit an otherwise eligible institution from using the FFIEC 051
Call Report.
Through the related PRA notice, the agencies are further reducing
the items required to be reported by all covered depository
institutions eligible to file the FFIEC 051 Call Report, as defined in
the final rule, for the first and third reports of condition for a year
beyond the existing level of reduced reporting in these two quarters.
As discussed further in Section IV.B. of the SUPPLEMENTARY
INFORMATION section, the agencies anticipate further reductions to the
Call Report. In particular, the agencies recently proposed additional
reductions to the FFIEC 051 Call Report in connection with a proposal
to simplify regulatory capital requirements for certain community
banking organizations. The agencies are committed to exploring further
burden reduction and are actively evaluating further revisions to the
FFIEC 051 Call Report, consistent with guiding principles developed by
the FFIEC.\4\ The agencies also are considering ways to simplify the
Call Report forms and instructions. The agencies would take into
account whether revisions can be made to the FFIEC 051 Call Report
without violating compliance with existing laws and regulations,
jeopardizing safety and soundness supervision and monitoring, or
impairing the Board's ability to conduct monetary policy or the FDIC's
ability to calculate deposit insurance assessments.
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\4\ See 83 FR 58434 ((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).
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IV. Section-by-Section Analysis of the Final Rule
A. Covered Depository Institution
The proposal would have defined ``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 (i.e., is not an advanced
approaches institution); and is not a large or highly complex
institution for purposes of the FDIC's deposit insurance assessment
regulations. The OCC's definition also would have excluded institutions
that file the FFIEC 002 report of condition. The FDIC's definition also
would have excluded state-licensed insured branches of foreign banks.
The agencies note that adopting these criteria under the final rule
would not exclude any institutions that currently file the FFIEC 051
Call Report. The agencies did not receive comment on these proposed
criteria.
The agencies proposed to offer reduced reporting to an ``insured
depository institution'' as such term is defined in section 3 of the
Federal Deposit Insurance Act (FDI Act), 12 U.S.C. 1813, and as
required by section 205. The OCC and Board also proposed extending
eligibility to qualify as a covered depository institution to uninsured
institutions that they supervise that otherwise meet the same
criteria.\5\ Parity in reporting by insured and uninsured national
banks and state member banks is appropriate in light of the
similarities between the information used to review the activities of
such insured and uninsured institutions. The agencies received one
comment that opposed allowing uninsured institutions to qualify as
covered depository institutions. The commenter expressed concern that
uninsured institutions pose a greater risk to depositors and U.S.
taxpayers than insured institutions. The agencies note that uninsured
institutions cannot accept deposits from retail customers and thus the
agencies do not believe these institutions pose a greater risk to
depositors or taxpayers than insured institutions. In addition, certain
OCC and Board supervised uninsured institutions with total assets of
less than $1 billion already file the FFIEC 051 Call Report.
Accordingly, the OCC and Board are finalizing the extension of
eligibility to certain uninsured depository institutions as proposed.
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\5\ The FDIC supervises only 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 final rule
one uninsured Board-regulated institution would meet the 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
final rule.
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Asset Threshold
As mandated by section 205, the proposal would have defined a
covered
[[Page 29041]]
depository institution as one with less than $5 billion in total
consolidated assets. The proposal would have defined ``total
consolidated assets'' as total assets as reported in an institution's
report of condition. Under the proposal, an institution would have
determined whether it meets the asset-size criterion and is eligible to
file the FFIEC 051 Call Report based on the total consolidated assets
reported in its report of condition (Schedule RC, Balance Sheet, Item
12) 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.\6\
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\6\ See FFIEC 051 instructions, https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC051_201903_i.pdf.
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The agencies continue to believe that establishing the asset
threshold in this manner 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 becomes no longer eligible for, filing
the FFIEC 051 Call Report in the following calendar year. The agencies
did not receive comment on this aspect of the proposal and are
finalizing as proposed.
Other Eligibility Criteria
Consistent with section 205, the proposal would have prescribed
other eligibility criteria that an institution with total assets of
less than $5 billion must meet in order to qualify as a covered
depository institution. These other proposed criteria are based on an
institution's international activities, its treatment under the
agencies' regulatory capital rules, and its treatment under the FDIC's
deposit insurance 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,
the proposal would have required an institution to determine in each
calendar quarter whether it meets all of these non-asset-size criteria.
If an institution ceases to meet any of these other criteria during a
calendar quarter, then beginning that same quarter the institution
would have become ineligible to file the FFIEC 051 Call Report. 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, the proposal
did not include a grace period for non-asset-size criteria. The
agencies did not receive comment on the proposed non-asset-size
criteria and are finalizing as proposed.
International Activities. The proposal would have excluded from the
definition of ``covered depository institution'' an institution that
has foreign offices or that is an insured branch of a foreign bank.
Under the proposal, foreign offices would have been defined as:
Branches or consolidated subsidiaries in foreign countries \7\ unless
located on a U.S. military facility; international banking facilities
as defined under 12 CFR 204.8; majority-owned Edge Act and Agreement
\8\ 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. Under the proposal, insured branches of
foreign banks would have been 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 continue to believe it is appropriate
to exclude these institutions from reduced reporting because the nature
of these international activities requires more comprehensive and
detailed financial information to effectively supervise and monitor
them than would be available on the FFIEC 051 Call Report.\9\ The
agencies did not receive comment on this proposed criterion and are
finalizing as proposed.
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\7\ The final rule defines ``foreign country'' to refer to one
or more foreign nations, and includes 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.
\8\ 12 CFR 211.1(c)(2) and (3).
\9\ 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 Call Report. U.S. branches
of foreign banks (both federally and State-licensed) are required to
file the FFIEC 002 version of the report of condition.
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Advanced Approaches Institutions. The proposal would have excluded
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 (i.e., is an 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.\10\ 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.\11\
While advanced approaches holding companies typically have total assets
of more than $250 billion, their depository institution subsidiaries,
some of which may have total assets of less than $5 billion, also
generally are subject to the advanced approaches. Some of these
subsidiaries may engage in specialized or highly complex activities
that require more comprehensive and detailed financial information to
ensure effective supervision and monitoring, and thus are excluded from
being eligible to file the FFIEC 051 Call Report and receive reduced
reporting in the final rule.\12\ The agencies did not receive comment
on this proposed criterion and are finalizing as proposed.
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\10\ See 12 CFR 3.100(b) (OCC); 217.100(b) (Board); 324.100(b)
(FDIC). The agencies have invited comment on a proposed rule that
would revise the framework for determining the applicability of the
advanced approaches capital requirements for U.S. banking
organizations. See Proposed Changes to Applicability Thresholds for
Regulatory Capital and Liquidity Requirements, 83 FR 66024 (December
21, 2018).
\11\ 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).
\12\ If an institution has received an exemption from the
application of subpart E of the agencies' regulatory capital rules,
the exclusion under this criterion would not apply.
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Institutions Assessed as Large or Highly Complex by the FDIC. The
proposal also would have excluded 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.\13\
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\13\ For the purposes of the FDIC's deposit insurance assessment
regulations, a ``small institution'' generally is an insured
depository institution with less than $10 billion in total assets.
See 12 CFR 327.8(e). Generally, a ``large institution'' is an
insured depository institution with more than $10 billion in total
assets. See 12 CFR 327.8(f). However, an institution with assets
between $5 billion and $10 billion may request treatment as a large
institution for deposit insurance assessments, and few institutions
have made this request to date. See 12 CFR 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. See 12 CFR 327.8(g) and (s).
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[[Page 29042]]
Under the FDIC's deposit insurance assessment regulations, large
institutions and highly complex institutions are assessed using CAMELS
ratings \14\ combined with certain forward-looking financial measures
that reflect the risks such institutions pose to the Deposit Insurance
Fund.\15\ The FDIC uses the data reported by a large institution or a
highly complex institution on either the FFIEC 031 or FFIEC 041 Call
Report, as appropriate, to calculate the institution's deposit
insurance 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 a highly complex institution's deposit insurance assessment
rate.
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\14\ 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).
\15\ See 12 CFR 327.16(b); 76 FR 10672, 10688-10698 (February
25, 2011).
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The agencies did not receive comment on this proposed criterion and
are finalizing as proposed. This 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 deposit insurance
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 deposit insurance assessment
rate. As long as an institution continues to be assessed as a large or
highly complex institution, it is ineligible under the final rule to
file the FFIEC 051 Call Report, including its reduced reporting, until
it is reclassified for deposit insurance assessments and assessed as a
``small institution.''
B. Reduced Reporting
The proposal would have implemented the reduced reporting required
by section 205 by allowing covered depository institutions to file the
FFIEC 051 Call Report, as it is the most streamlined version of the
Call Report and already provides significant reduced reporting in the
first and third calendar quarters. The agencies, in the PRA section of
the proposal, also proposed further reducing the reporting required on
the FFIEC 051 Call Report in the first and third calendar quarters, by
changing reporting of certain items from quarterly to semiannual or
annual. The final rule implements the reduced reporting required by
section 205 by allowing covered depository institutions to file the
FFIEC 051 Call Report; the agencies, through the PRA section of the
SUPPLEMENTARY INFORMATION, also are further reducing the reporting
required on the FFIEC 051 Call Report in the first and third calendar
quarters.
The majority of comments received by the agencies on the proposal
related to the agencies' proposed use of the FFIEC 051 Call Report.
Commenters expressed the view that using the FFIEC 051 Call Report to
allow reduced reporting in the first and third calendar quarters would
not provide sufficient reporting relief, and cited the agencies' burden
estimates under the PRA for the proposed changes to the FFIEC 051 Call
Report in support of their views. Many of these commenters recommended
an alternate version of the Call Report for the first and third
calendar quarters that consists only of an institution's basic
financial statements, such as a balance sheet, income statement, and
statement of changes in shareholders' equity. One commenter suggested
offering this simplified reporting to a smaller subset of institutions
that meet more stringent eligibility criteria, such as being well
managed. Another commenter suggested that the agencies should tailor
the scope of regulatory reporting to each institution based on that
institution's characteristics. One commenter proposed including a
schedule for regulatory capital in addition to the basic financial
statements, while another commenter requested a Call Report that was no
longer than 10 pages.
Other commenters, particularly investment analysts evaluating the
banking industry, raised concerns about a reduction in publicly-
available information from institutions that adopt reduced reporting.
These commenters indicated they would need to supplement the publicly-
available information by making specific information requests to the
institutions they analyze. Another commenter pointed out that some
items that would be reported less frequently are used as part of
regulatory and investor offsite monitoring processes, and that limiting
this information may result in increased information requests or review
of certain items during examinations due to the more limited
information on the Call Reports. According to the commenter, these
reductions to the Call Report may create greater burden on an
institution than the relief provided by filing a more limited Call
Report two times per year.
Section 205 allows the agencies to establish the criteria for
reduced reporting. The agencies' proposal sought to further reduce
reporting for covered depository institutions in the first and third
calendar quarters while still collecting the data necessary to meet the
agencies' statutory mandates and missions, ensuring continued receipt
of appropriate information to monitor safety and soundness and striking
a balance between reducing reporting burden and obtaining sufficient
information for supervisory purposes, including on-site examinations
and off-site monitoring of covered depository institutions.
The agencies are implementing the reduced reporting required by
section 205 first by offering an expanded group of institutions the
option to file the FFIEC 051 Call Report each calendar quarter. The
agencies elected to use the FFIEC 051 Call Report as the version of the
report of condition to implement reduced reporting primarily because:
It is the Call Report that collects the least information; reduced
reporting in the reports for the first and third quarters was one of
the primary objectives when the FFIEC 051 Call Report was first
implemented in 2017 and revised in 2018; and it is already being used
by the majority of institutions with total assets below the $5 billion
statutory threshold set by section 205. The FFIEC 051 Call Report
previously was developed to enable institutions with total assets of
less than $1 billion to report less information, and contains 882 fewer
data items than the FFIEC 041 Call Report, which is the agencies'
standard version of the Call Report.\16\ The final rule extends
eligibility to file the FFIEC 051 Call Report from certain institutions
with less than $1 billion in total assets to certain institutions with
less than $5 billion in total assets. As a result, this approach
provides significant reporting relief by offering covered depository
institutions of between $1 billion and less than $5 billion in total
assets that currently are required to file the FFIEC 041 Call Report
the option to file the FFIEC 051 Call Report. Under the final rule,
covered depository institutions
[[Page 29043]]
with total assets between $1 billion and less than $5 billion are
eligible to file the FFIEC 051 Call Report in each calendar quarter of
a calendar year, not just in the first and third quarters, which will
provide additional reporting relief for these institutions compared to
the FFIEC 041 Call Report. Overall, the agencies estimate that the
burden hours for institutions with total assets between $1 billion and
less than $5 billion would decline 12.73 hours per quarter, from 63.69
hours filing the FFIEC 041 to 50.96 hours filing the FFIEC 051.
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\16\ 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.
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In addition to increasing the number of institutions eligible to
file the FFIEC 051 Call Report every quarter, as discussed in the PRA
section of the SUPPLEMENTARY INFORMATION, the agencies are further
reducing the reporting required on the FFIEC 051 Call Report in the
first and third calendar quarters. The agencies are reducing the
frequency of reporting of approximately 37 percent of the existing data
items in this report \17\ from quarterly to semiannual. 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 services assets and income, and
troubled debt restructurings by loan category. This reduction in
reporting frequency for certain data items provides all covered
depository institutions that currently file the FFIEC 051 Call Report,
including those with less than $1 billion in total assets, with
additional reduced reporting in the first and third calendar quarters.
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\17\ This percentage is relative to the FFIEC 051 Call Report
filed as of June 30, 2018.
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The agencies recognize that the reduction in reporting frequency
offered for certain data items as described in the PRA section below
may not provide as much of a burden reduction for every covered
depository institution, because some of those data items are not
relevant to or completed by every covered depository institution due to
different asset portfolios and activities. However, the final rule
expediently provides all covered depository institutions the option of
reduced reporting in the first and third calendar quarters. For
institutions with total assets of less than $1 billion that file the
current version of the FFIEC 051 Call Report, implementing the further
streamlined FFIEC 051 Call Report should require less cost and fewer
systems changes than switching to a completely new version of a
regulatory report. To align with the implementation of the final rule,
the agencies are issuing the accompanying PRA notice to implement
changes to the FFIEC 051 Call Report consistent with the rule.
In response to commenters' requests that the agencies implement a
Call Report comprised only of basic financial statements, the agencies
note that, by law, they must collect certain data items on a quarterly
basis, including items that are not typically found on basic financial
statements.\18\ In addition to information the agencies are required to
collect on a quarterly basis by statute, the agencies need other
information to effectively monitor the safety and soundness of
institutions and the financial system, as well as to monitor compliance
with consumer financial protection laws and regulations and to fulfill
agency-specific missions. With respect to commenters' concerns that the
reporting reductions may result in industry analysts or investors not
being able to obtain as much information from an institution through
its Call Report, the agencies note that an institution is not required
to switch to the FFIEC 051 Call Report, and the final rule does not
restrict an institution from providing additional financial information
to the public that would otherwise not be required to be reported in
the first and third calendar quarters.
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\18\ For example, certain data collection and reporting
requirements are satisfied through the collection of data on the
various Call Report schedules: 12 U.S.C. 1817(a)(4) and (6) require
reporting of deposit liabilities (Schedules RC-E); 12 U.S.C.
1817(a)(3) and (c) requires four Call Reports annually that serve as
the basis for determining an institution's deposit insurance
assessment (Schedule RC-O, and certain items on Schedules RI, RC,
RC-C, RC-E, RC-N, and RC-R); 12 U.S.C. 1831n(a)(3)(C) requires that
off-balance sheet items be reported or taken into account in any
report of condition (Schedule RC-L); 12 U.S.C. 1831o and its
implementing regulations address prompt corrective action
requirements (12 CFR part 6 (OCC); 12 CFR part 208, subpart D
(Board); and 12 CFR part 324, subpart H (FDIC)) and rely on
reporting of regulatory capital quarterly (Schedule RC-R)).
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As the agencies explained when issuing the proposal, Call Report
data provides critical information necessary for the agencies'
effective supervision of depository institutions.\19\ In their
statutory roles of chartering, licensing, supervising, or insuring
institutions, 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. Consistent with the
FFIEC's mandate, Call Reports collect the most current financial and
statistical data available in a standardized format to identify
uniformly areas of focus for supervision, including for on-site and
off-site examinations.\20\ 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 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. In the
absence of data collected through a standardized format, such as the
Call Report, the agencies likely would need to rely on significantly
more ad hoc data requests to individual institutions. A lack of
information also increases the risk of missing new or significantly
changed activities when the agencies plan on-site examinations, which
could require the agencies to spend additional time on-site reviewing
risk areas for which bank data was not submitted in the Call Report.
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\19\ See 83 FR 58433-58434.
\20\ See e.g., 12 U.S.C. 3301.
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The agencies remain mindful, however, of the impact that collecting
Call Report data may have on covered depository institutions. As
discussed in the proposal, the agencies (through the FFIEC) started an
initiative to reduce the reporting burden on all institutions,
especially community banks, in December 2014.\21\ The result of the
agencies' multi-year effort was a meaningful reduction in reporting for
all institutions that filed the FFIEC 041 Call Report at the start of
the effort. As compared with the FFIEC 041 Call Report in use
immediately before the implementation of the FFIEC 051 Call Report, the
current FFIEC 041 Call Report now reflects a reduction of approximately
11 percent of the data items and provides for reduced reporting
frequency of approximately 3 percent of the data items. The smallest
institutions (with less than $1 billion in total assets) received an
even greater reduction in reporting with the
[[Page 29044]]
implementation of the FFIEC 051 Call Report for the March 31, 2017,
reporting date. The FFIEC 051 Call Report now 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 as of December 31, 2016,
immediately before the implementation of the FFIEC 051 Call Report.
Thus, the implementation of the FFIEC 051 Call Report provides a
significant reduction in reporting burden for institutions that choose
to file this version of the Call Report.
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\21\ See 83 FR 58484.
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In the interest of making reduced reporting available to covered
depository institutions expediently, particularly for institutions with
total assets of between $1 billion and less than $5 billion, the
agencies are finalizing this rule as proposed. The agencies also
anticipate further reductions to the Call Report. In particular, the
agencies have proposed additional reductions to the FFIEC 051 Call
Report \22\ in connection with the proposal \23\ that was issued by the
agencies in February of 2019 to simplify regulatory capital
requirements for qualifying community banking organizations, as
required by section 201 of the EGRRCPA, which the agencies estimate
would further reduce the average FFIEC 051 Call Report burden from
39.77 hours to 33.65 hours, a reduction of 6.12 hours per quarter.\24\
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\22\ 84 FR 16560 (April 19, 2019).
\23\ 84 FR 3062 (February 8, 2019).
\24\ 84 FR 16563.
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The agencies are committed to exploring further burden reduction
and are actively evaluating further revisions to the FFIEC 051 Call
Report, consistent with guiding principles developed by the FFIEC.\25\
The agencies also are considering ways to simplify the Call Report
forms and instructions. The agencies would take into account whether
revisions can be made to the FFIEC 051 Call Report without violating
compliance with existing laws and regulations, jeopardizing safety and
soundness supervision and monitoring, or impairing the Board's ability
to conduct monetary policy or the FDIC's ability to calculate deposit
insurance assessments.
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\25\ See 83 FR 58434.
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C. Reservation of Authority
Consistent with the agencies' authorities and current practices,
the final rule includes a reservation of authority that allows the
appropriate Federal banking agency, in consultation with the relevant
state chartering authority, if applicable, and on an institution-
specific basis, to require a covered depository institution under the
agency's supervision 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 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 agency determines that a
covered depository institution should be required to file the FFIEC 041
Call Report, the agency would provide notice to the covered depository
institution prior to the filing requirement's becoming effective. The
reservation's terms also would be provided in the notice. Any covered
depository institution required by its appropriate Federal banking
agency under the reservation of authority to file the FFIEC 041 Call
Report in lieu of the FFIEC 051 would be required to continue to file
the FFIEC 041 Call Report until the appropriate Federal banking agency
provides notice to the covered depository institution that it is no
longer required to file the FFIEC 041 Call Report.
This authority provides 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. The agencies
received no comment on this aspect of the proposed rule and are
finalizing it as proposed.
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's
requirement that the Board issue a rule that allows for reduced
reporting by certain eligible Board-supervised insured depository
institutions, the Board proposed to add a new subpart K to Regulation
H,\26\ which would incorporate the rule text implementing section 205.
The Board received no comments on the proposed rule and is finalizing
it as proposed. 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. As previously discussed in
SUPPLEMENTARY INFORMATION section IV.A., the Board's final rule extends
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.
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\26\ The Board's Regulation H governs the membership of state
banking institutions in the Federal Reserve System. 12 CFR part 208.
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The Board also proposed 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, Sec. 208.122 that would 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. The Board received no comments on Sec. 208.122 and is
finalizing the subsection as proposed.
B. FDIC
The FDIC amends part 304 of its Rules and Regulations, by
restructuring the regulation and creating a ``subpart A'' and ``subpart
B.'' Subpart A now contains 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
[[Page 29045]]
Sec. 304.2; (2) clarifying that Sec. 304.3(a) and (b) apply to
insured depository institutions; (3) updating references in Sec.
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 includes the regulatory text implementing section 205.
The FDIC believes that this approach to restructuring part 304 will
incorporate the entirety of the new, substantive text of the final 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.
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
final rule includes a criterion excluding institutions that file the
FFIEC 002 report of condition from being eligible for reduced
reporting. The OCC received no comments on this provision and will
finalize as proposed.
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 rule extends the use of the reduced reporting
requirement to uninsured national banks if they meet the criteria for
covered depository institutions identified in the rule. As discussed
earlier, the OCC received one comment objecting to permitting uninsured
institutions to use reduced reporting. For the reasons discussed
earlier, the OCC does not agree with the commenter and is finalizing
this provision as proposed.
VI. Regulatory Analyses
A. Paperwork Reduction Act
Certain provisions of the final rule affect a ``collection 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 have reviewed the final 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 the reporting
requirements associated with the FFIEC 051 Call Report, which have been
previously cleared by the OMB. The agencies made submissions to the OMB
at the proposed rule stage. The OMB instructed the agencies to resubmit
the notice at the final rule stage addressing any comments received and
analyzing the expected burden reduction associated with the final rule.
The final rule expands 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 making other revisions to the FFIEC 051 Call Report, as
discussed under Current Actions below. With the OMB approval, these
revisions to the FFIEC 051 Call Report are proposed to take effect as
of the September 30, 2019, report date. The agencies are proposing to
extend for three years, with revision, the reporting requirements
associated with the Call Report.
Current Actions
Overview
First, as described above, the agencies are revising the criteria
for determining whether an institution is eligible to file the FFIEC
051 Call Report to match the criteria in the final rule. While the
final rule provides for reduced reporting on reports filed for the
first and third calendar quarters, the agencies are revising the
eligibility criteria to extend to all eligible institutions with less
than $5 billion in total assets that meet other criteria in the final
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
eligibility criteria for filing the FFIEC 051 Call Report 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 to the existing non-
asset-size criteria 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 removing 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 final FFIEC 051 Call Report eligibility
criteria, along with justifications, are provided above in section
IV.A. of the SUPPLEMENTARY INFORMATION section (``Covered Depository
Institution''). Based on Call Report data as of June 30, 2018, 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 final rule.
Second, the agencies are revising the reporting frequency and
applicability of certain data items in the FFIEC 051 Call Report.
Specifically, the agencies are reducing the reporting frequency of
certain existing data items in the FFIEC 051 Call Report from quarterly
to semiannual reporting. The agencies are reducing reporting in the
first and third calendar quarters by 502 data items \27\ or
[[Page 29046]]
a reduction of approximately 37 percent of the data items included in
the June 30, 2018, FFIEC 051 Call Report.
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\27\ 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.
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Third, for covered depository institutions with total assets of $1
billion or more, but less than $5 billion, the agencies are adding 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 adding 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 administering federal deposit insurance.
As described above, the agencies received 1,018 comments on the
combination proposed rule and PRA revision. A majority of those
comments addressed the proposed rule, particularly the agencies'
proposal to use the FFIEC 051 Call Report to establish reduced
reporting in the first and third quarters. Comments on the proposed
revisions to the FFIEC 051 Call Report itself are discussed and
addressed under the relevant headings below.
Changes to the Frequency of Data Collection in the FFIEC 051 Call
Report
As explained in more detail in the initial PRA section in the
proposed rule, the agencies are reducing 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.
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.
Schedule RC-E, Deposit Liabilities, Memorandum items 1.a
and 5.
Schedule RC-M, Memoranda, items 8.a through 8.c.
Schedule RC-R, Part II, Regulatory Capital Risk-Weighted
Assets, items 1 through 25, columns A through U, as applicable, and
Memorandum items 1 through 3, including all subitems and columns.
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.\28\
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\28\ 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.
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The agencies received a number of comments on the proposed
reductions in frequency. One commenter objected to the proposal,
stating that the changes increase the burden associated with making
systems changes and increase the risk of errors if data is only
reconciled and reported semiannually instead of quarterly. Several
commenters stated that the frequency reductions on Schedule RC-T would
not provide a burden reduction for them, because many of the data items
already are not reported by many small banks. Two commenters stated
that the frequency reductions on Schedule RC-R are meaningless, either
because institutions must still calculate total risk weighted assets on
Schedule RC-R, Part II, or that the agencies' proposed rulemaking on a
simplified leverage ratio for community banks (CBLR proposal) \29\
would make the existing Schedule RC-R irrelevant for most institutions.
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\29\ 84 FR 3062 (February 8, 2019).
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The agencies are implementing the frequency reductions as proposed.
The agencies note that the proposal is only reducing the minimum
frequency for items reported in the FFIEC 051 Call Report. Covered
depository institutions may still elect to submit data on a quarterly
basis; the Central Data Repository, which the agencies use to receive
and store data on the Call Reports, will still accept quarterly data
submissions for items even if those items are only required
semiannually. Therefore, an institution that wishes to continue
submitting these items to the agencies on a quarterly basis may do so.
Regarding Schedule RC-R, currently, institutions must continue to
calculate and report total risk-weighted assets. However, there is some
burden reduction associated with eliminating the reporting of the data
item components to calculate total risk-weighted assets (inputs) in the
first and third quarters. In calculating total risk-weighted assets in
the first and third quarters, institutions may be able to use more
efficient methods to collect the inputs rather than using the template
provided by the agencies, and would not need to validate each input
reported on Schedule RC-R, Part II, which would save the institutions
review time in preparing that schedule. In addition, as another
commenter noted, the agencies' CBLR proposal would make Schedule RC-R,
Part II, irrelevant for qualifying community banking organizations. The
agencies note that if the CBLR proposal is implemented as proposed,
institutions that qualify would experience additional burden reduction
in the Call Report compared to preparing the existing reporting on
Schedule RC-R. The estimated average burden hours for the FFIEC 051
Call Report is currently 39.77,\30\ which would decrease to 33.65 under
the CBLR proposal. Therefore, the CBLR proposal would represent a
reduction in estimated average burden hours per quarter of 6.12 (or
15.39 percent) for the FFIEC 051 Call Report for institutions.\31\ The
agencies have opted to pursue burden relief now and have proposed to
provide additional relief in the future on this schedule.
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\30\ 84 FR 4131 (February 14, 2019).
\31\ 84 FR 16560 (April 19, 2019).
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Addition of Data Items to the FFIEC 051 Call Report for Institutions
With Total Assets of $1 Billion or More
The agencies are adding 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.
Furthermore, all but one of these items would be reported less
frequently in the FFIEC 051 Call Report than they are currently
reported in the FFIEC 041 Call Report. More detailed information on
these items can be found in the PRA section of the agencies' proposed
rule.\32\
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\32\ 83 FR 58442-58443.
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Schedule RI, Memorandum items 15.a. through 15.d. These
items currently are required quarterly in the FFIEC 041 Call Report and
only would be required annually as of December 31 in the FFIEC 051 Call
Report from institutions with $1 billion or more, but less than $5
billion in total assets.
Schedule RI-C, Disaggregated Data on the Allowance for
Loan and Lease Losses (ALLL). The agencies are adding a condensed
version of the existing FFIEC 041 Schedule RI-C, Part I, to the
[[Page 29047]]
FFIEC 051 Call Report as Schedule RI-C and reducing the reporting
frequency of this condensed schedule from quarterly to semiannual
(i.e., reported in the June 30 and December 31 Call Reports only) for
institutions with $1 billion or more, but less than $5 billion, in
total assets. Consistent with the agencies' proposed and final
revisions to the FFIEC 041 Call Report related to implementation of the
current expected credit losses (CECL) methodology,\33\ institutions in
this size range that have adopted CECL would also report disaggregated
data on the allowance for credit losses on held-to-maturity securities
on Schedule RI-C on a semiannual basis.
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\33\ See 83 FR 49160 (September 28, 2018) and 84 FR 4131
(February 14, 2019).
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Schedule RC-E, Memorandum items 6 and 7, including all
subitems. These items currently are required quarterly in the FFIEC 041
Call Report and only will be required annually as of December 31 in the
FFIEC 051 Call Report from institutions with $1 billion or more, but
less than $5 billion in total assets.
Schedule RC-O, Other Data for Deposit Insurance and FICO
Assessments, Memorandum item 2. This item is required quarterly in the
FFIEC 041 Call Report, and will continue to be required quarterly in
the FFIEC 051 Call Report from institutions with $1 billion or more,
but less than $5 billion in total assets.
The agencies received five comments on the items proposed to be
added to the FFIEC 051 Call Report. Four comments objected to adding
the data items on Schedules RI and RC-E. These data items relate to
consumer deposit accounts and deposit account fees, and the commenters
stated that this information should not be collected in the Call
Report. One comment requested that the agencies retain the items to be
added to the FFIEC 051 Call Report on the same schedules and in the
same locations in the FFIEC 051 Call Report as they are reported in the
FFIEC 041 Call Report, to minimize the burden of making systems changes
to implement the revisions.
These data items, including the items on Schedules RI and RC-E, are
necessary for the agencies to supervise and monitor consumer deposit
account activity at institutions with total assets of $1 billion or
more, but less than $5 billion that file the FFIEC 051 Call Report. The
agencies also note that the items on Schedules RI and RC-E would be
collected annually instead of quarterly, which would provide a
reduction in burden for these institutions in the other three quarters.
Regarding the comment on the location of these items, the agencies
agree with the commenter's recommendation and will retain the items
that were proposed to be moved from Schedules RI, RI-C, and RC-E on
their existing schedules rather than including them in Schedule SU,
Supplemental Information.
Additional Comments on the Call Report
The agencies also received one comment suggesting that they propose
revisions to the FFIEC 031 and FFIEC 041 versions of the Call Report
for institutions with total assets of less than $5 billion that either
are not eligible for the reduced reporting or choose not to use reduced
reporting in the FFIEC 051 Call Report. While the agencies may consider
proposing burden-reducing revisions to the FFIEC 031 or 041 versions of
the Call Report in the future, the agencies are not prepared to propose
any specific revisions to these versions of the Call Report at this
time. If an institution does not meet the criteria to use the FFIEC 051
Call Report, then reporting on the existing FFIEC 031 or FFIEC 041 Call
Report is appropriate.
Effective Date
Subject to OMB approval, the revisions to the FFIEC 051 Call Report
described above would take effect as of the September 30, 2019, report
date. The less than $5 billion asset-size test for determining
eligibility to file the FFIEC 051 Call Report in 2019 would be based on
the total assets reported on an institution's Call Report as of June
30, 2018. 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' increase in the asset-size 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
September 30, 2019, Call Report date, the institution may begin
reporting on the FFIEC 051 Call Report as of the December 31, 2019,
report date. Beginning in 2020, an institution should file whichever
version of the Call Report for which it is both eligible and chooses to
file in the first quarter of that year, for the remainder of that year
if it meets the asset-size threshold for eligibility as of June 30,
2019, and continues to meet the non-asset-size criteria.
Proposed Revision, With Extension for Three Years, of the Following
Information Collections
Report Title: Consolidated Reports of Condition and Income (Call
Report).
Form Number: FFIEC 031, FFIEC 041, and 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.
OCC:
OMB Control No.: 1557-0081.
Estimated Number of Respondents: 1,178 national banks and federal
savings associations.
Estimated Average Burden per Response: 44.45 burden hours per
quarter to file.
Estimated Total Annual Burden: 209,448 burden hours to file.
Board:
OMB Control No.: 7100-0036.
Estimated Number of Respondents: 794 state member banks.
Estimated Average Burden per Response: 48.42 burden hours per
quarter to file.
Estimated Total Annual Burden: 153,782 burden hours to file.
FDIC:
OMB Control No.: 3064-0052.
Estimated Number of Respondents: 3,483 insured state nonmember
banks and state savings associations.
Estimated Average Burden per Response: 43.44 burden hours per
quarter to file.
Estimated Total Annual Burden: 605,206 burden hours to file.
When the estimates are calculated across the agencies considering
all expected filers of the FFIEC 051 Call Report, the estimated average
burden hours per calendar quarter for this report are 40.27 hours. The
burden hours for filers of the currently approved FFIEC 051 Call Report
are 39.77 hours (using September 30, 2018, data). The increase in the
overall average for the FFIEC 051 reflects that newly eligible
institutions (with total assets between $1 billion and less than $5
billion) generally have amounts to report in more items on that report
than current filers (with total assets of less than $1 billion). For
the current FFIEC 051 Call Report filers, the revisions to the FFIEC
051 Call Report described in this document would decrease average
burden hours per quarter from approximately 40.11 hours to 39.08 hours,
a reduction of 1.03 hours per quarter (using December 31, 2018, data).
For newly eligible filers, the average
[[Page 29048]]
burden hours would decrease from approximately 63.69 hours to 50.96
hours, a reduction of 12.73 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). In addition, the estimates of the
average burden per response for FFIEC 051 Call Report filers are
averages across the Call Reports for these filers for all four quarters
of the year. As a consequence, the estimated average burden blends the
effects of reduced reporting in the first and third quarters with the
reporting that occurs in all four quarters. Estimates of the average
burden hours solely for completing the FFIEC 051 Call Report in the
first or the third quarter would be less than the overall average per
response.
Comments on the Burden Estimate
The agencies received two comments specifically about the burden
calculation. One commenter stated that the reductions in frequency
would save his institution approximately 2 hours per quarter. The
commenter's estimate is consistent with the agencies' estimate of a
savings of 1.03 hours per quarter. A second commenter stated that
preparing the Call Report requires approximately 120 hours per quarter
at his institution. For an institution that relies primarily on manual
processes to complete the Call Report, the agencies' supervisory
experiences indicate that 60-80 hours may be more typical. The agencies
recognize that institutions may use unique approaches for preparing the
Call Report that rely on varying degrees of manual and automated
processes that are tailored to their individual circumstances, and the
burden estimate reflects averages that take into consideration such a
wide range of practices. However, increased use of automated systems
generally results in greater efficiencies and lower manual intervention
for institutions. The agencies note that their estimate of
approximately 40 hours per quarter is consistent with an average across
all institutions, including institutions that use automated systems and
those that do not. While in some cases the set-up and operating costs
of integrating general ledger and core systems with Call Report
software as a means to substantially automate the Call Report
preparation process may be significantly lower than the recurring cost
of employees using manual or less automated processes, the agencies
recognize institutions' prerogatives to make their own business
decisions regarding the use of automation for the Call Report process.
B. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act \34\ (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.\35\ 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.\36\
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\34\ 5 U.S.C. 601 et seq.
\35\ 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.
\36\ See 13 CFR 121.201.
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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, if finalized, would not have a significant
economic impact on a substantial number of small entities. As of
December 31, 2018, the OCC supervised 758 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 final 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,\37\ the Board
published an initial regulatory flexibility analysis (IRFA) for the
proposal.\38\ The Board solicited public comment on the effect of the
proposal on small entities and on any significant alternatives that
would reduce the regulatory burden on small entities. The Board did not
receive any comment on the IRFA.
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\37\ 5 U.S.C. 603.
\38\ 83 FR 58432 (November 19, 2018).
---------------------------------------------------------------------------
The RFA requires an agency to prepare a final regulatory
flexibility analysis (FRFA) unless the agency certifies that the rule
will not, if promulgated, have a significant economic impact on a
substantial number of small entities. The FRFA must contain (1) a
statement of the need for, and objectives of, the proposed rule; (2) a
statement of the significant issues raised by the public comments in
response to the IRFA, a statement of the agency's assessment of such
issues, and a statement of any changes made in the proposed rule as a
result of such comments; (3) the response of the agency to any comments
filed by the Chief Counsel for Advocacy of the Small Business
Administration in response to the proposed rule, and a detailed
statement of any changes made to the proposed rule in the final rule as
a result of the comments; (4) a description of an estimate of the
number of small entities to which the rule will apply or an explanation
of why no such estimate is available; (5) a description of the
projected reporting, recordkeeping and other compliance requirements of
the rule, including an estimate of the classes of small entities which
will be subject to the requirement and type of professional skills
necessary for preparation of the report or record; and (6) a
description of the steps the agency has taken to minimize the
significant economic impact on small entities, including a statement
for selecting or rejecting the other significant alternatives to the
rule considered by the agency. In accordance with section 604 of the
RFA, the Board has reviewed the final rule.
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 Sec. 208.122
of the Board's proposed rule requiring state member banks to file
reports of condition applies to all state member banks, regardless of
size. However, Sec. 208.122 does not establish a new requirement, but
only implements in Board regulation a statutory requirement to which
state member banks already were subject.
Section 208.123 of the Board's final rule allows state member banks
that qualify as covered depository institutions to file reduced
reporting in first and third calendar quarters of the year, which
applies to approximately 533 state member banks that qualify as
[[Page 29049]]
small entities. However, Sec. 208.123 allows but does not require
these small state member banks to file reduced reporting. Accordingly,
the final rule will not have a significant economic impact on a
substantial number of small entities.
Based on its analysis and for the reasons stated below, the Board
believes that this final rule will not have a significant economic
impact on a substantial number of small entities.
1. Statement of the need for, and objectives of, the application of
the final rule.
As discussed in the SUPPLEMENTARY INFORMATION, section 205 of
EGRRCPA 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
agencies' goal is to implement section 205 and to reduce the reporting
burden for covered depository institutions by offering them the option
to file the FFIEC 051 Call Report in the first and third quarters of a
calendar year.
In connection with the implementation of reduced reporting mandated
by section 205, the Board is setting 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
section7(a)(3) of the FDIA.
2. Significant issues raised by the public comments in response to
the IRFA, a statement of the Board's assessment of such issues, and a
statement of any changes made in the rule as a result of such comments.
As noted above, the Board did not receive any comments on the IRFA.
3. Response to any comments filed by the Chief Counsel for Advocacy
of the Small Business Administration in response to the proposed rule,
and detailed statement of any changes made to the proposed rule in the
final rule as a result of the comments.
The Chief Counsel for Advocacy of the Small Business Administration
did not file any comments in response to the proposal.
4. Description and estimate of the number of small entities to
which the rule will apply.
The final rule will apply to approximately 563 state member banks,
of which 533 state member banks have $550 million or less in total
consolidated assets.
5. Description of the projected reporting, recordkeeping and other
compliance requirements of the rule, including an estimate of small
entities which will be subject to the requirement and the type of
professional skills necessary for preparation of the report or record.
The final rule does 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 final rule allows 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 final rule will reduce the reporting
and associated recordkeeping and compliance costs for the majority of
small state member banks.
6. Description of the steps taken to minimize the economic impact
on small entities, including a statement for selecting or rejecting the
other significant alternatives to the rule considered by the agency.
As noted, the final rule does not impose any new requirements on
small state member banks and instead allows small state member banks
that qualify as covered depository institutions the option to reduce
their reporting burden. In light of the foregoing, the Board does not
believe the final rule will have a significant economic impact on small
state member banks.
FDIC: The RFA requires that, in connection with a final rule, an
agency prepare and make available for public comment a final regulatory
flexibility analysis that describes the impact of the final rule on
small entities.\39\ 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.\40\ Generally, the FDIC
considers a significant effect to be a quantified effect in excess of 5
percent of total annual salaries and benefits per institution, or 2.5
percent of total noninterest expenses. The FDIC believes that effects
in excess of these thresholds typically represent significant effects
for FDIC-supervised institutions.
---------------------------------------------------------------------------
\39\ 5 U.S.C. 601 et seq.
\40\ 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.
---------------------------------------------------------------------------
Based on December 31, 2018, Call Report data, the FDIC supervises
3,489 insured depository institutions, of which 2,674 are considered
small entities for the purposes of RFA. For the reasons described
below, the FDIC certifies that the final 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 final rule implements section 205 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 reducing 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 one 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 revised definition of ``covered
depository institution'' in the final rule, 295 FDIC-supervised
depository institutions that reported total assets of $1 billion or
more, but less than $5 billion as of June 30, 2018, could be eligible
to file the FFIEC 051 Call Report assuming they meet the other non-
asset-size criteria under the final rule. However, because this aspect
of the final 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 and the
other agencies are reducing 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.
[[Page 29050]]
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 burden for the first and third calendar quarters
as a result of this final rule. The FDIC estimates that the reduction
in reporting frequency of more than 400 data items in the FFIEC 051
Call Reports for the first and third calendar quarters would reduce the
average quarterly burden hours for current FFIEC 051 Call Report filers
by 1.03 hours per institution. For the 2,158 small, FDIC-supervised
depository institutions that filed the FFIEC 051 Call Report for the
December 31, 2018, report date, this represents a total estimated
burden reduction of 2,223 hours per quarter.\41\ While the reduced
reporting could affect a substantial number of small, FDIC-supervised
depository institutions, it would not result in a significant economic
impact.
---------------------------------------------------------------------------
\41\ 1.03 hours * 2,158 institutions.
---------------------------------------------------------------------------
Based on the agencies' total estimated hourly wage rate of $117 for
Call Report preparation, and the reduction in reporting hours resulting
from the 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 $1,040,364 less for small, FDIC-supervised
insured depository institutions that file the FFIEC 051 Call Report, or
0.010 percent of total annualized noninterest expenses.\42\
---------------------------------------------------------------------------
\42\ $117 per hour * 2,223 hours per quarter * 4 quarters per
year. Call Report Data as of December 31, 2018.
---------------------------------------------------------------------------
The final 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 (for institutions with $1
billion or more, but less than $5 billion in total assets), or
reprogramming for reduced reporting in the first and third calendar
quarters, would be one-time costs (for all covered depository
institutions). 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 final
rule will not have a significant economic impact, although a
substantial number of small entities will be affected.
In the proposal, the FDIC invited comment on all aspects of the
supporting information provided in this RFA section but did not receive
any comments.
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 final rule in a simple and straightforward manner, and did not
receive any comments on the use of plain language.
D. Effective Date Under the Administrative Procedure Act and Riegle
Community Development and Regulatory Improvement Act of 1994
The Administrative Procedure Act (APA) requires that a final rule
be published in the Federal Register no less than 30 days before its
effective date unless, among other exceptions, the final rule relieves
a restriction.
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (``RCDRIA''), in determining the effective
date and administrative compliance requirements for a new regulation
that imposes additional reporting, disclosure, or other requirements on
insured depository institutions, each Federal banking agency must
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, section 302(b) of RCDRIA
requires new regulations and amendments to regulations that impose
additional reporting, disclosure, or other new requirements on insured
depository institutions generally to 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.
The final rule reduces reporting and disclosure requirements on
insured depository institutions. Because the final rule does not impose
additional reporting, disclosure, or other requirements on insured
depository institutions, section 302 of the RCDRIA does not apply. The
agencies are adopting July 22, 2019, as the effective date so as to
provide a minimum of 30 days under the APA.
E. OCC Unfunded Mandates Reform Act of 1995
The OCC analyzed the final 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 final 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). The OCC
estimates there are 120 national banks and Federal savings associations
with total assets between $1 billion and less than $5 billion that
would be eligible for reduced reporting under the final 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 final 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 final rule.
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 CONTROLLER OF THE CURRENCY
0
For the reasons set out in the joint preamble, the OCC is adding 12 CFR
part 52 to read as follows:
PART 52--REGULATORY REPORTING
Sec.
52.1 Authority and purpose.
52.2 Definitions.
52.3 Reduced reporting.
52.4 Reservation of authority.
Authority: 12 U.S.C. 93a, 161, 1463(a), 1464(v), and
1817(a)(12).
[[Page 29051]]
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 section;
(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 amends
12 CFR part 208 as follows:
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL
RESERVE SYSTEM (REGULATION H)
0
2. The authority citation of part 208 is revised 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),
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
3. Add subpart K to part 208 to read as follows:
Subpart K--Forms, Instructions and Reports
Sec.
208.120 Authority, purpose, and scope.
208.121 Definitions.
208.122 Reporting.
208.123 Reduced reporting.
208.124 Reservation of authority.
Sec. 208.120 Authority, purpose, and scope.
(a) Authority. This subpart 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 section;
(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.
[[Page 29052]]
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
For the reasons set forth in the preamble, the Federal Deposit
Insurance Corporation revises 12 CFR part 304 to read as follows:
PART 304--FORMS, INSTRUCTIONS, AND REPORTS
Subpart A--In General
Sec.
304.1 Purpose.
304.2 Where to obtain forms and instructions.
304.3 Reports.
304.4-304.10 [Reserved]
Subpart B--Implementation of Reduced Reporting Requirement
304.11 Authority, purpose, and scope.
304.12 Definitions.
304.13 Reduced reporting.
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.
This part 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 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/.
(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
[[Page 29053]]
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/.
(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 institutions by, or may be obtained upon
request from, the Division of Insurance and Research (DIR), FDIC, 550
17th Street NW, Washington, DC 20429.
(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 institutions 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 institution, 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 institution's main office
is located.
(Approved by the Office of Management and Budget under control
numbers 3064-0052, 7100-0032, 3064-0061, and 3064-0029,
respectively)
Sec. Sec. 304.4-304.10 [Reserved]
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 section 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 Sec. 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 section;
(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 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: June 3, 2019.
Joseph M. Otting,
Comptroller of the Currency.
By order of the Board of Governors of the Federal Reserve
System, June 13, 2019.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on June 7, 2019.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 2019-12985 Filed 6-20-19; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P
