Treatment of Certain Emergency Facilities in the Regulatory Capital Rule and the Liquidity Coverage Ratio Rule

Citation85 FR 68243
Record Number2020-21894
Published date28 October 2020
SectionRules and Regulations
CourtFederal Deposit Insurance Corporation,The Comptroller Of The Currency Office,Treasury Department
Federal Register, Volume 85 Issue 209 (Wednesday, October 28, 2020)
[Federal Register Volume 85, Number 209 (Wednesday, October 28, 2020)]
                [Rules and Regulations]
                [Pages 68243-68249]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-21894]
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                DEPARTMENT OF TREASURY
                Office of the Comptroller of the Currency
                12 CFR Parts 3 and 50
                [Docket ID OCC-2020-0017]
                RIN 1557-AE89; 1557-AE90; 1557-AE92]
                FEDERAL RESERVE SYSTEM
                12 CFR Parts 217 and 249
                [Docket Nos. R-1711; 1712; and 1717]
                RIN 7100-AF85; 7100-AF86: 7100-AF90
                FEDERAL DEPOSIT INSURANCE CORPORATION
                12 CFR Parts 324 and 329
                RIN 3064-AF41; 3064-AF49; 3064-AF51
                Treatment of Certain Emergency Facilities in the Regulatory
                Capital Rule and the Liquidity Coverage Ratio Rule
                AGENCY: The Office of the Comptroller of the Currency, Department of
                the Treasury; the Board of Governors of the Federal Reserve System; and
                the Federal Deposit Insurance Corporation.
                ACTION: Final rule.
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                SUMMARY: The Office of the Comptroller of the Currency, the Board of
                Governors of the Federal Reserve System, and the Federal Deposit
                Insurance Corporation are adopting as final the revisions to the
                regulatory capital rule and the liquidity coverage ratio (LCR) rule
                made under three interim final rules published in the Federal Register
                on March 23, April 13, and May 6, 2020. The agencies are adopting these
                interim final rules as final with no changes. Under this final rule,
                banking organizations may continue to neutralize the regulatory capital
                effects of participating in the Money Market Mutual Fund Liquidity
                Facility (MMLF) and the Paycheck Protection Program Liquidity Facility
                (PPPLF), and are required to continue to neutralize the LCR effects of
                participating in the MMLF and the PPPLF. In addition, Paycheck
                Protection Program loans will receive a zero percent risk weight under
                the agencies' regulatory capital rules.
                DATES: The final rule is effective December 28, 2020.
                [[Page 68244]]
                FOR FURTHER INFORMATION CONTACT:
                 OCC: Andrew Tschirhart, Risk Expert, Capital and Regulatory Policy,
                (202) 649-6370; James Weinberger, Technical Expert, Treasury & Market
                Risk Policy, (202) 649-6360; Henry Barkhausen, Counsel, Kevin
                Korzeniewski, Counsel, Rima Kundnani, Senior Attorney, or Daniel Perez,
                Senior Attorney, Chief Counsel's Office, (202) 649-5490, for persons
                who are deaf or hearing impaired, TTY, (202) 649-5597, Office of the
                Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.
                 Board: Anna Lee Hewko, Associate Director, (202) 530-6360;
                Constance M. Horsley, Deputy Associate Director, (202) 452-5239; Juan
                Climent, Assistant Director, (202) 872-7526; Kathryn Ballintine,
                Manager, (202) 452-2555; Kevin Littler, Lead Financial Institution
                Policy Analyst, (202) 475-6677; Devyn Jeffereis, Senior Financial
                Institution Policy Analyst, (202) 365-2467; or Brendan Rowan, Senior
                Financial Institution Policy Analyst, (202) 475-6685, Division of
                Supervision and Regulation; or Benjamin W. McDonough, Assistant General
                Counsel, (202) 452-2036; David W. Alexander, Senior Counsel, (202) 452-
                2877; Steve Bowne, Senior Counsel, (202) 452-3900; Jason Shafer, Senior
                Counsel, (202) 728-5811; Laura Bain, Counsel (202) 736-5546; or Jeffery
                Zhang, Attorney, (202) 736-1968, Legal Division, Board of Governors of
                the Federal Reserve System, 20th Street and Constitution Avenue NW,
                Washington, DC 20551. Users of Telecommunication Device for the Deaf
                (TDD) only, call (202) 263-4869.
                 FDIC: Bobby R. Bean, Associate Director, [email protected]; Benedetto
                Bosco, Chief, Capital Policy Section, [email protected]; Noah Cuttler,
                Senior Policy Analyst, [email protected]; Eric Schatten, Senior Policy
                Analyst, [email protected]; Andrew Carayiannis, Senior Policy Analyst,
                [email protected]; [email protected]; Capital Markets
                Branch, Division of Risk Management Supervision, (202) 898-6888; or
                Michael Phillips, Counsel, [email protected]; Catherine Wood, Counsel,
                [email protected]; Sue Dawley, Counsel, [email protected]; Gregory Feder,
                Counsel, [email protected]; Andrew B. Williams, II, Counsel,
                [email protected]; Supervision and Legislation Branch, Legal
                Division, Federal Deposit Insurance Corporation, 550 17th Street NW,
                Washington, DC 20429. For the hearing impaired only, Telecommunication
                Device for the Deaf (TDD), (800) 925-4618.
                SUPPLEMENTARY INFORMATION:
                Table of Contents
                I. Background
                 A. Capital Rule
                 B. LCR Rule
                II. Overview of the Interim Final Rules and Public Comments
                 A. MMLF Capital Interim Final Rule
                 B. PPPLF Capital Interim Final Rule
                 C. LCR Interim Final Rule
                 D. Public Comments
                III. Summary of the Final Rule
                IV. Administrative Law Matters
                 A. Congressional Review Act
                 B. Paperwork Reduction Act
                 C. Regulatory Flexibility Act
                 D. Riegle Community Development and Regulatory Improvement Act
                of 1994
                 E. Use of Plain Language
                 F. OCC Unfunded Mandates Reform Act of 1995
                I. Background
                 In light of recent disruptions in economic conditions caused by the
                outbreak of the coronavirus disease 2019 and the stress in U.S.
                financial markets, the Board of Governors of the Federal Reserve System
                (Board), with the approval of the U.S. Secretary of the Treasury,
                established certain liquidity facilities pursuant to section 13(3) of
                the Federal Reserve Act.\1\
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                 \1\ 12 U.S.C. 343(3).
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                 In order to prevent disruptions in the money markets from
                destabilizing the financial system, the Board authorized the Federal
                Reserve Bank of Boston to establish the Money Market Mutual Fund
                Liquidity Facility (MMLF). Under the MMLF, the Federal Reserve Bank of
                Boston may extend non-recourse loans to eligible borrowers to purchase
                assets from money market mutual funds. Assets purchased from money
                market mutual funds are posted as collateral to the Federal Reserve
                Bank of Boston.
                 In order to provide liquidity to small business lenders and the
                broader credit markets, and to help stabilize the financial system, the
                Board authorized each of the Federal Reserve Banks to extend credit
                under the Paycheck Protection Program Liquidity Facility (PPPLF).\2\
                Under the PPPLF, each of the Federal Reserve Banks may extend non-
                recourse loans to institutions that are eligible to make Paycheck
                Protection Program (PPP) covered loans as defined in section 7(a)(36)
                of the Small Business Act.\3\ Under the PPPLF, only PPP covered loans
                that are guaranteed by the Small Business Administration (SBA) with
                respect to both principal and accrued interest and that are originated
                by an eligible institution may be pledged as collateral to the Federal
                Reserve Banks. The maturity date of the extension of credit under the
                PPPLF equals the maturity date of the PPP covered loans pledged to
                secure the extension of credit.\4\
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                 \2\ The Paycheck Protection Program Liquidity Facility was
                previously known as the Paycheck Protection Program Lending
                Facility.
                 \3\ Congress created the PPP as part of the Coronavirus Aid,
                Relief, and Economic Security Act and in recognition of the exigent
                circumstances faced by small businesses. PPP covered loans are fully
                guaranteed as to principal and accrued interest by the Small
                Business Administration (SBA) and also afford borrower forgiveness
                up to the principal amount and accrued interest of the PPP covered
                loan, if the proceeds of the PPP covered loan are used for certain
                expenses. Under the PPP, eligible borrowers generally include
                businesses with fewer than 500 employees or that are otherwise
                considered to be small by the SBA. The SBA reimburses PPP lenders
                for any amount of a PPP covered loan that is forgiven. In general,
                PPP lenders are not held liable for any representations made by PPP
                borrowers in connection with a borrower's request for PPP covered
                loan forgiveness. For more information on the Paycheck Protection
                Program, see https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
                 \4\ The maturity date of the loan made under the PPPLF will be
                accelerated if the underlying PPP covered loan goes into default and
                the eligible borrower sells the PPP covered loan to the Small
                Business Administration (SBA) to realize the SBA guarantee. The
                maturity date of the loan made under the PPPLF also will be
                accelerated to the extent of any PPP covered loan forgiveness
                reimbursement received by the eligible borrower from the SBA.
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                 Eligible borrowers from the MMLF and PPPLF and holders of PPP
                covered loans include banking organizations supervised by the Office of
                the Comptroller of the Currency (OCC), the Board, and the Federal
                Deposit Insurance Corporation (FDIC) (together, the agencies) that are
                subject to the agencies' regulatory capital rule (capital rule) \5\ and
                that may be subject to the liquidity coverage ratio (LCR) rule.\6\ To
                facilitate the use of the MMLF and the PPPLF, the agencies adopted
                three interim final rules (interim final rules) to address the capital
                treatment of participation in the MMLF (MMLF capital interim final
                rule),\7\ the capital treatment of participation in the PPPLF (PPPLF
                capital interim final rule),\8\ and the LCR treatment of participation
                in the
                [[Page 68245]]
                MMLF and the PPPLF (LCR interim final rule),\9\ respectively.
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                 \5\ Banking organizations subject to the capital rule include
                national banks, state member banks, state nonmember banks, savings
                associations, and top-tier bank holding companies and savings and
                loan holding companies domiciled in the United States not subject to
                the Board's Small Bank Holding Company Policy Statement (12 CFR part
                225, appendix C), but exclude certain savings and loan holding
                companies that are substantially engaged in insurance underwriting
                or commercial activities or that are estate trusts, and bank holding
                companies and savings and loan holding companies that are employee
                stock ownership plans. See 12 CFR part 3 (OCC); 12 CFR part 217
                (Board); and 12 CFR part 324 (FDIC).
                 \6\ See 12 CFR part 50 (OCC); 12 CFR part 249 (Board); and 12
                CFR part 329 (FDIC).
                 \7\ 85 FR 16232 (Mar. 23, 2020).
                 \8\ 85 FR 20387 (Apr. 13, 2020).
                 \9\ 85 FR 26835 (May 6, 2020).
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                A. Capital Rule
                 The capital rule requires banking organizations to comply with
                risk-based and leverage capital requirements, which are expressed as a
                ratio of regulatory capital to assets and certain other exposures.
                Risk-based capital requirements are based on risk-weighted assets,
                whereas leverage capital requirements are based on a measure of average
                total consolidated assets or total leverage exposure. Participation in
                the MMLF or the PPPLF affects the balance sheet of a banking
                organization. To participate in the MMLF, a banking organization must
                acquire and hold assets (that is, eligible collateral pledged to the
                Federal Reserve Bank of Boston) on its balance sheet. Similarly, to
                participate in the PPPLF, a banking organization must hold PPP covered
                loans on its balance sheet. As a result, without the agencies' issuance
                of the MMLF capital and PPPLF capital interim final rules, a banking
                organization that participates in either facility could have been
                required to maintain increased regulatory capital.
                B. LCR Rule
                 The LCR rule requires covered companies \10\ to calculate and
                maintain an amount of high-quality liquid assets (HQLA) sufficient to
                cover their total net cash outflows over a 30-day stress period. A
                covered company's LCR is the ratio of its HQLA amount divided by its
                total net cash outflow amount. The total net cash outflow amount is
                calculated as the difference between outflow and inflow amounts, which
                are determined by applying a standardized set of outflow and inflow
                rates to the cash flows of various assets and liabilities, together
                with off-balance sheet items, as specified in sections __.32 and __.33
                of the LCR rule.\11\
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                 \10\ The applicability of the LCR rule is described in 12 CFR
                50.1 (OCC); 12 CFR 249.1 (Board); and 12 CFR 329.1 (FDIC).
                 \11\ See 12 CFR 50.32 and 50.33 (OCC); 12 CFR 249.32 and 249.33
                (Board); and 12 CFR 329.32 and 329.33 (FDIC). Section __.30 of the
                LCR rule also requires a covered company, as applicable, to include
                in its total net cash outflow amount a maturity mismatch add-on,
                which is calculated as the difference (if greater than zero) between
                the covered company's largest net cumulative maturity outflow amount
                for any of the 30 calendar days following the calculation date and
                the net day 30 cumulative maturity outflow amount. See 12 CFR 50.30
                (OCC); 12 CFR 249.30 (Board); and 12 CFR 329.30 (FDIC).
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                 Absent changes to the LCR rule, covered companies would have been
                required to recognize outflows for MMLF and PPPLF advances with a
                remaining maturity of 30 days or less and inflows for certain assets
                securing the MMLF and PPPLF advances. As a result, a covered company's
                participation in the MMLF or PPPLF could have affected its total net
                cash outflow amount, which potentially could have resulted in an
                inconsistent, unpredictable, and more volatile calculation of LCR
                requirements across covered companies.
                II. Overview of the Interim Final Rules and Public Comments
                A. MMLF Capital Interim Final Rule
                 On March 23, 2020, the agencies published in the Federal Register
                the MMLF capital interim final rule to neutralize the regulatory
                capital effect of participation in the MMLF. The MMLF capital interim
                final rule permits a banking organization to exclude exposures acquired
                as part of the MMLF from the banking organization's total leverage
                exposure, average total consolidated assets, advanced approaches total
                risk-weighted assets, and standardized total risk-weighted assets, as
                applicable. Because of the non-recourse nature of the Federal Reserve
                Bank of Boston's extension of credit to the banking organization, the
                organization is not exposed to credit or market risk from the assets
                purchased by the banking organization and pledged to the Federal
                Reserve Bank of Boston. The MMLF capital interim final rule reflects
                the agencies' determination that, prior to the MMLF capital interim
                final rule, the leverage and risk-based capital requirements in place
                in the capital rule for the assets acquired by a banking organization
                as part of the MMLF did not reflect the substantial protections
                provided to the organization by the Federal Reserve Bank of Boston in
                connection with the facility.
                B. PPPLF Capital Interim Final Rule
                 On April 13, 2020, the agencies published in the Federal Register
                the PPPLF capital interim final rule to neutralize the regulatory
                capital effect of participation in the PPPLF. The PPPLF capital interim
                final rule permits a banking organization to exclude exposures pledged
                as collateral to the PPPLF from the banking organization's total
                leverage exposure, average total consolidated assets, advanced
                approaches total risk-weighted assets, and standardized total risk-
                weighted assets, as applicable. Because of the non-recourse nature of
                each Federal Reserve Bank's extension of credit to the banking
                organization, the banking organization is not exposed to credit or
                market risk from the pledged PPP covered loans. The PPPLF capital
                interim final rule reflects the agencies' determination that, prior to
                the PPPLF capital interim final rule, the regulatory capital
                requirements in place in the capital rule for PPP covered loans pledged
                by a banking organization to a Federal Reserve Bank as part of the
                PPPLF did not reflect the substantial protections from risk provided to
                the banking organization in connection with the facility.
                 Additionally, the PPPLF capital interim final rule provides that a
                banking organization must apply a zero percent risk weight to PPP
                covered loans, as required by Section 1102 of the Coronavirus Aid,
                Relief, and Economic Security (CARES) Act. A banking organization must
                apply a zero percent risk weight to PPP covered loans regardless of
                whether they are pledged under the PPPLF.
                C. LCR Interim Final Rule
                 On May 6, 2020, the agencies published in the Federal Register the
                LCR interim final rule to require a banking organization subject to the
                LCR rule to neutralize the effect on its LCR of participation in the
                MMLF and PPPLF. The LCR interim final rule requires a covered company
                to neutralize the LCR effects of the advances made by the MMLF and
                PPPLF together with the assets securing these advances. Specifically,
                the LCR interim final rule adds a new definition to the LCR rule for
                ``Covered Federal Reserve Facility Funding'' to identify MMLF and PPPLF
                advances separately from other secured funding transactions under the
                LCR rule. The LCR interim final rule requires outflow amounts
                associated with Covered Federal Reserve Facility Funding and inflow
                amounts associated with the assets securing this funding to be excluded
                from a covered company's total net cash outflow amount under the LCR
                rule.\12\
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                 \12\ See 12 CFR 50.34 (OCC); 12 CFR 249.34 (Board); and 12 CFR
                329.34 (FDIC). Section __.34 does not apply to the extent the
                covered company secures Covered Federal Reserve Facility Funding
                with securities, debt obligations, or other instruments issued by
                the covered company or its consolidated entity.
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                 Advances from the MMLF and PPPLF facilities are non-recourse and
                the maturity of the advance generally aligns with the maturity of the
                collateral. Accordingly, a covered company is not exposed to credit or
                market risk from the collateral securing the MMLF or PPPLF advance that
                could otherwise affect the banking organization's ability to settle the
                loan and generally can use the value of cash received from the
                collateral to repay the advances at
                [[Page 68246]]
                maturity. For these reasons, the agencies issued the LCR interim final
                rule to better align the treatment of these advances and collateral
                under the LCR rule with the liquidity risk associated with funding
                exposures through these facilities, and to ensure consistent and
                predictable treatment of covered companies' participation in the
                facilities under the LCR rule.
                D. Public Comments
                Comments on the MMLF Capital Interim Final Rule
                 The agencies received two comment letters, from a trade association
                and an advocacy organization, addressing the MMLF capital interim final
                rule. These commenters supported the agencies' actions to encourage
                banking organizations' participation in the emergency lending facility.
                One commenter recommended broader considerations for money market
                mutual fund reform that are outside the scope of this rulemaking.
                Comments on the PPPLF Capital Interim Final Rule
                 The agencies received 14 comment letters from industry
                participants, advocacy groups, trade associations, and individuals
                addressing the PPPLF interim final rule. Several commenters expressed
                support for the agencies' actions under the PPPLF capital interim final
                rule, and two of these commenters further supported the agencies'
                determination that good cause existed to issue the interim final rules
                without notice and comment. Several commenters suggested that the
                agencies extend the zero percent risk weight to PPP covered loans
                purchased in secondary markets. The agencies note that, under the PPPLF
                capital interim final rule, the risk weight for all PPP covered loans
                is zero percent.
                 Several commenters asserted that the PPPLF capital interim final
                rule should extend the leverage exclusion to PPP covered loans that are
                not pledged to the PPPLF, arguing that the treatment could discourage
                banking organizations that are not using the PPPLF from making PPP
                covered loans. Notwithstanding these arguments, the agencies are
                adopting as final the PPPLF capital interim final rule. The CARES Act
                set the risk weight of these loans at zero percent and did not exclude
                these loans from the leverage capital requirements. The favorable
                leverage capital treatment in the PPPLF capital interim final rule
                reflects the non-recourse nature of the relevant Federal Reserve Bank's
                extension of credit to a banking organization only for PPP covered
                loans pledged by a banking organization to a Federal Reserve Bank.
                Comments on the LCR Interim Final Rule
                 The agencies received one comment letter, from a trade association,
                on the LCR interim final rule. The commenter supported the requirements
                under the LCR interim final rule, arguing that the requirements
                encourage participation in the facilities, which ultimately provides
                benefits to small businesses, households, and investors.
                III. Summary of the Final Rule
                 For the reasons discussed above, the agencies are adopting as final
                the revisions to the capital and LCR rules unchanged from the interim
                final rules. Accordingly, a banking organization may continue to
                exclude assets acquired as part of the MMLF and PPP covered loans
                pledged under the PPPLF from its total leverage exposure, average total
                consolidated assets, advanced approaches total risk-weighted assets,
                and standardized total risk-weighted assets, as applicable (and for
                purposes of the community bank leverage ratio).\13\ Further, a banking
                organization must continue to apply a zero percent risk weight to all
                PPP covered loans that are not pledged to the PPPLF (regardless of
                whether the banking organization originated the loan). In addition, a
                banking organization subject to the LCR rule is required to continue
                excluding from its total net cash outflow amount outflow amounts
                associated with advances from the MMLF and PPPLF and inflow amounts
                associated with collateral securing the advances.
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                 \13\ Assets acquired as part of the MMLF and PPP covered loans
                pledged to the PPPLF would continue to be included in a bank's
                measure of total consolidated assets, including for purposes of
                determining whether a banking organization is a qualifying community
                banking organization.
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                IV. Administrative Law Matters
                A. Congressional Review Act
                 For purposes of the Congressional Review Act, the Office of
                Management and Budget (OMB) makes a determination as to whether a final
                rule constitutes a ``major'' rule.\14\ If a rule is deemed a ``major
                rule'' by the OMB, the Congressional Review Act generally provides that
                the rule may not take effect until at least 60 days following its
                publication.\15\
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                 \14\ 5 U.S.C. 801 et seq.
                 \15\ 5 U.S.C. 801(a)(3).
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                 The Congressional Review Act defines a ``major rule'' as any rule
                that the Administrator of the Office of Information and Regulatory
                Affairs of the OMB finds has resulted in or is likely to result in (A)
                an annual effect on the economy of $100,000,000 or more; (B) a major
                increase in costs or prices for consumers, individual industries,
                Federal, State, or local government agencies or geographic regions; or
                (C) significant adverse effects on competition, employment, investment,
                productivity, innovation, or on the ability of United States-based
                enterprises to compete with foreign-based enterprises in domestic and
                export markets.\16\
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                 \16\ 5 U.S.C. 804(2).
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                 As required by the Congressional Review Act, the agencies will
                submit the final rule and other appropriate reports to Congress and the
                Government Accountability Office for review.
                B. Paperwork Reduction Act
                 The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA)
                states that no agency may conduct or sponsor, nor is the respondent
                required to respond to, an information collection unless it displays a
                currently valid OMB control number. This final rule does not contain
                any information collection requirements. However, in connection with
                the interim final rules, the Board temporarily revised the Financial
                Statements for Holding Companies (FR Y-9 reports; OMB No. 7100-0128)
                and the Complex Institution Liquidity Monitoring Report (FR 2052a; OMB
                No. 7100-0361) and invited comment on proposals to extend those
                collections of information for three years, with revision.\17\
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                 \17\ The Board published a separate Federal Register notice to
                make temporary revisions to the FR Y-9 reports in connection with
                the MMLF Capital Interim Final Rule. 85 FR 19944 (Apr. 9, 2020).
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                 Additionally, in connection with the interim final rules, the
                agencies made revisions to the Call Reports (OCC OMB Control No. 1557-
                0081; Board OMB Control No. 7100-0036; FDIC OMB Control No. 3064-0052),
                the Report of Assets and Liabilities of U.S. Branches and Agencies of
                Foreign Banks (FFIEC 002; OMB Control No. 7100-0032), and the
                Regulatory Capital Reporting for Institutions Subject to the Advanced
                Capital Adequacy Framework (FFIEC 101; OCC OMB Control No. 1557-0239;
                Board OMB Control No. 7100-0319; FDIC OMB Control No. 3064-0159). The
                changes to the Call Reports, FFIEC 002, and FFIEC 101 and their related
                instructions are addressed in a separate Federal Register notice.\18\
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                 \18\ See 85 FR 44361 (July 22, 2020).
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                Current Actions
                 The Board has extended the FR Y-9 and FR 2052a for three years,
                with
                [[Page 68247]]
                revision, as originally proposed. The updates to the FR Y-9 and FR
                2052a resulted in an estimated zero net change in hourly burden. No
                public comments were received regarding these proposals under the PRA.
                Revision, With Extension, of the Following Information Collections
                 (1) Report title: Financial Statements for Holding Companies.
                 Agency form numbers: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9ES, and FR
                Y-9CS.
                 OMB control number: 7100-0128.
                 Effective date: December 28, 2020.
                 Frequency: Quarterly, semiannually, and annually.
                 Affected public: Businesses or other for-profit.
                 Respondents: Bank holding companies (BHCs), savings and loan
                holding companies (SLHCs), securities holding companies (SHCs), and
                U.S. intermediate holding companies (IHCs) (collectively, holding
                companies (HCs)).\19\
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                 \19\ An SLHC must file one or more of the FR Y-9 family of
                reports unless it is: (1) A grandfathered unitary SLHC with
                primarily commercial assets and thrifts that make up less than five
                percent of its consolidated assets; or (2) a SLHC that primarily
                holds insurance-related assets and does not otherwise submit
                financial reports with the SEC pursuant to section 13 or 15(d) of
                the Securities Exchange Act of 1934.
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                 Estimated number of respondents:
                 FR Y-9C (non-advanced approaches (AA) HCs community bank leverage
                ratio (CBLR)) with less than $5 billion in total assets--71,
                 FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets--
                35,
                 FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total
                assets--84,
                 FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total
                assets--154,
                 FR Y-9C (AA HCs)--19,
                 FR Y-9LP--434,
                 FR Y-9SP--3,960,
                 FR Y-9ES--83,
                 FR Y-9CS--236.
                 Estimated average hours per response:
                Reporting
                 FR Y-9C (non AA HCs CBLR) with less than $5 billion in total
                assets--29.17,
                 FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets--
                35.14,
                 FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total
                assets--41.01,
                 FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total
                assets--46.98,
                 FR Y-9C (AA HCs)--48.80,
                 FR Y-9LP--5.27,
                 FR Y-9SP--5.40,
                 FR Y-9ES--0.50,
                 FR Y-9CS--0.50.
                Recordkeeping
                 FR Y-9C--1,
                 FR Y-9LP--1,
                 FR Y-9SP--0.50,
                 FR Y-9ES--0.50,
                 FR Y-9CS--0.50.
                 Estimated annual burden hours:
                Reporting
                 FR Y-9C (non AA HCs CBLR) with less than $5 billion in total
                assets--8,284,
                 FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets--
                4,920,
                 FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total
                assets--13,779,
                 FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total
                assets--28,940,
                 FR Y-9C (AA HCs)--3,709,
                 FR Y-9LP--9,149,
                 FR Y-9SP--42,768,
                 FR Y-9ES--42,
                 FR Y-9CS--472.
                Recordkeeping
                 FR Y-9C--1,452,
                 FR Y-9LP--1,736,
                 FR Y-9SP--3,960,
                 FR Y-9ES--42,
                 FR Y-9CS--472.
                 General description of report: The FR Y-9C consists of standardized
                financial statements similar to the Call Reports filed by banks and
                savings associations. The FR Y-9C collects consolidated data from HCs
                and is filed quarterly by top-tier HCs with total consolidated assets
                of $3 billion or more.\20\
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                 \20\ Under certain circumstances described in the FR Y-9C's
                General Instructions, HCs with assets under $3 billion may be
                required to file the FR Y-9C.
                ---------------------------------------------------------------------------
                 The FR Y-9LP, which collects parent company only financial data,
                must be submitted by each HC that files the FR Y-9C, as well as by each
                of its subsidiary HCs.\21\ The report consists of standardized
                financial statements.
                ---------------------------------------------------------------------------
                 \21\ A top-tier HC may submit a separate FR Y-9LP on behalf of
                each of its lower-tier HCs.
                ---------------------------------------------------------------------------
                 The FR Y-9SP is a parent company only financial statement filed
                semiannually by HCs with total consolidated assets of less than $3
                billion. In a banking organization with total consolidated assets of
                less than $3 billion that has tiered HCs, each HC in the organization
                must submit, or have the top-tier HC submit on its behalf, a separate
                FR Y-9SP. This report is designed to obtain basic balance sheet and
                income data for the parent company, and data on its intangible assets
                and intercompany transactions.
                 The FR Y-9ES is filed annually by each employee stock ownership
                plan (ESOP) that is also an HC. The report collects financial data on
                the ESOP's benefit plan activities. The FR Y-9ES consists of four
                schedules: A Statement of Changes in Net Assets Available for Benefits,
                a Statement of Net Assets Available for Benefits, Memoranda, and Notes
                to the Financial Statements.
                 The FR Y-9CS is a free-form supplemental report that the Board may
                utilize to collect critical additional data deemed to be needed in an
                expedited manner from HCs on a voluntary basis. The data are used to
                assess and monitor emerging issues related to HCs, and the report is
                intended to supplement the other FR Y-9 reports. The data items
                included on the FR Y-9CS may change as needed.
                 Legal authorization and confidentiality: The Board has the
                authority to impose the reporting and recordkeeping requirements
                associated with the FR Y-9 family of reports on BHCs pursuant to
                section 5 of the Bank Holding Company Act of 1956 (BHC Act) (12 U.S.C.
                1844); on SLHCs pursuant to section 10(b)(2) and (3) of the Home
                Owners' Loan Act (12 U.S.C. 1467a(b)(2) and (3)), as amended by
                sections 369(8) and 604(h)(2) of the Dodd-Frank Wall Street Reform and
                Consumer Protection Act (Dodd-Frank Act); on U.S. IHCs pursuant to
                section 5 of the BHC Act (12 U.S.C. 1844), as well as pursuant to
                sections 102(a)(1) and 165 of the Dodd-Frank Act (12 U.S.C. 511(a)(1)
                and 5365); and on SHCs pursuant to section 618 of the Dodd-Frank Act
                (12 U.S.C. 1850a(c)(1)(A)). The obligation to submit the FR Y-9 series
                of reports, and the recordkeeping requirements set forth in the
                respective instructions to each report, are mandatory, except for the
                FR Y-9CS, which is voluntary.
                 With respect to the FR Y-9C report, Schedule HI's data item 7(g),
                ``FDIC deposit insurance assessments,'' Schedule HC-P's data item 7(a),
                ``Representation and warranty reserves for 1-4 family residential
                mortgage loans sold to U.S. government agencies and government
                sponsored agencies,'' and Schedule HC-P's data item 7(b),
                ``Representation and warranty reserves for 1-4 family residential
                mortgage loans sold to other parties'' are considered confidential
                commercial and financial information. Such treatment is appropriate
                under exemption 4 of the Freedom of Information Act (FOIA) (5 U.S.C.
                552(b)(4)) because these data items reflect commercial and financial
                information that is both customarily and actually treated as private by
                the submitter, and which the Board has
                [[Page 68248]]
                previously assured submitters will be treated as confidential. It also
                appears that disclosing these data items may reveal confidential
                examination and supervisory information, and in such instances, this
                information would also be withheld pursuant to exemption 8 of the FOIA
                (5 U.S.C. 552(b)(8)), which protects information related to the
                supervision or examination of a regulated financial institution.
                 In addition, for both the FR Y-9C report, Schedule HC's memorandum
                item 2.b. and the FR Y-9SP report, Schedule SC's memorandum item 2.b.,
                the name and email address of the external auditing firm's engagement
                partner, is considered confidential commercial information and
                protected by exemption 4 of the FOIA (5 U.S.C. 552(b)(4)) if the
                identity of the engagement partner is treated as private information by
                HCs. The Board has assured respondents that this information will be
                treated as confidential since the collection of this data item was
                proposed in 2004.
                 Additionally, items on the FR Y-9C, Schedule HC-C for loans
                modified under Section 4013, data items Memorandum items 16.a, ``Number
                of Section 4013 loans outstanding''; and Memorandum items 16.b,
                ``Outstanding balance of Section 4013 loans'' are considered
                confidential. While the Board generally makes institution-level FR Y-9C
                report data publicly available, the Board is collecting Section 4013
                loan information as part of condition reports for the impacted HCs and
                the Board considers disclosure of these items at the HC level would not
                be in the public interest. Such information is permitted to be
                collected on a confidential basis, consistent with 5 U.S.C. 552(b)(8).
                In addition, holding companies may be reluctant to offer modifications
                under Section 4013 if information on these modifications made by each
                holding company is publicly available, as analysts, investors, and
                other users of public FR Y-9C report information may penalize an
                institution for using the relief provided by the CARES Act. The Board
                may disclose Section 4013 loan data on an aggregated basis, consistent
                with confidentiality considerations.
                 Aside from the data items described above, the remaining data items
                on the FR Y-9C report and the FR Y-9SP report are generally not
                accorded confidential treatment. The data items collected on FR Y-9LP,
                FR Y-9ES, and FR Y-9CS reports, are also generally not accorded
                confidential treatment. As provided in the Board's Rules Regarding
                Availability of Information (12 CFR part 261), however, a respondent
                may request confidential treatment for any data items the respondent
                believes should be withheld pursuant to a FOIA exemption. The Board
                will review any such request to determine if confidential treatment is
                appropriate, and will inform the respondent if the request for
                confidential treatment has been denied.
                 To the extent the instructions to the FR Y-9C, FR Y-9LP, FR Y-9SP,
                and FR Y-9ES reports each respectively direct the financial institution
                to retain the work papers and related materials used in preparation of
                each report, such material would only be obtained by the Board as part
                of the examination or supervision of the financial institution.
                Accordingly, such information is considered confidential pursuant to
                exemption 8 of the FOIA (5 U.S.C. 552(b)(8)). In addition, the
                financial institution's work papers and related materials may also be
                protected by exemption 4 of the FOIA, to the extent such financial
                information is treated as confidential by the respondent (5 U.S.C.
                552(b)(4)).
                 (2) Report title: Complex Institution Liquidity Monitoring Report.
                 Agency form number: FR 2052a.
                 OMB control number: 7100-0361.
                 Effective date: December 28, 2020.
                 Frequency: Monthly, and each business day (daily).
                 Affected public: Businesses or other for-profit.
                 Respondents: U.S. BHCs, U.S. SLHCs, and foreign banking
                organizations (FBOs) with U.S. assets.
                 Estimated number of respondents: Monthly, 26; daily, 16.
                 Estimated average hours per response: Monthly, 120; daily, 220.
                 Estimated annual burden hours: 917,440.
                 General description of report: The Board uses the FR 2052a to
                monitor the overall liquidity profile of supervised institutions. These
                data provide detailed information on the liquidity risks within
                different business lines (e.g., financing of securities positions,
                prime brokerage activities). In particular, these data serve as part of
                the Board's supervisory surveillance program in its liquidity risk
                management area and provide timely information on firm-specific
                liquidity risks during periods of stress. Analyses of systemic and
                idiosyncratic liquidity risk issues are then used to inform the Board's
                supervisory processes, including the preparation of analytical reports
                that detail funding vulnerabilities.
                 Legal authorization and confidentiality: The FR 2052a is authorized
                pursuant to section 5 of the BHC Act (12 U.S.C. 1844), section 8 of the
                International Banking Act (12 U.S.C. 3106), section 165 of the Dodd-
                Frank Act (12 U.S.C. 5365), and section 10 of the Home Owners' Loan Act
                (12 U.S.C. 1467(a)) and is mandatory. Section 5(c) of the BHC Act
                authorizes the Board to require BHCs to submit reports to the Board
                regarding their financial condition. Section 8(a) of the International
                Banking Act subjects FBOs to the provisions of the BHC Act. Section 165
                of the Dodd-Frank Act requires the Board to establish prudential
                standards for certain BHCs and FBOs, which include liquidity
                requirements. Section 10(g) of the Home Owners' Loan Act authorizes the
                Board to collect reports from SLHCs.
                 Financial institution information required by the FR 2052a is
                collected as part of the Board's supervisory process. Therefore, such
                information is entitled to confidential treatment under Exemption 8 of
                the FOIA (5 U.S.C. 552(b)(8)). In addition, the institution information
                provided by each respondent would not be otherwise available to the
                public and its disclosure could cause substantial competitive harm.
                Accordingly, it is entitled to confidential treatment under the
                authority of exemption 4 of the FOIA (5 U.S.C. 552(b)(4)), which
                protects from disclosure trade secrets and commercial or financial
                information.
                C. Regulatory Flexibility Act
                 The Regulatory Flexibility Act (RFA) requires an agency to consider
                whether the rules it proposes will have a significant economic impact
                on a substantial number of small entities. The RFA requires an agency
                to prepare a final regulatory flexibility analysis when it promulgates
                a final rule after being required to publish a general notice of
                proposed rulemaking. As discussed previously, the agencies have decided
                to adopt, without changes, revisions to the capital and LCR rules made
                under the interim final rules. There was no general notice of proposed
                rulemaking associated with the interim final rules or this final rule.
                Accordingly, the agencies have concluded that the RFA's requirements
                relating to initial and final regulatory flexibility analyses do not
                apply to the promulgation of this final rule.
                D. Riegle Community Development and Regulatory Improvement Act of 1994
                 Pursuant to section 302(a) of the Riegle Community Development and
                Regulatory Improvement Act (RCDRIA),\22\ in determining the effective
                date and administrative compliance requirements for new regulations
                that
                [[Page 68249]]
                impose additional reporting, disclosure, or other requirements on
                insured depository institutions (IDIs), each Federal banking agency
                must consider, consistent with the principle of safety and soundness
                and the public interest, any administrative burdens that the
                regulations would place on depository institutions, including small
                depository institutions and customers of depository institutions, as
                well as the benefits of the regulations. In addition, section 302(b) of
                RCDRIA requires new regulations and amendments to regulations that
                impose additional reporting, disclosures, or other new requirements on
                IDIs 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.\23\ Each Federal banking agency has determined that the
                final rule would not impose additional reporting, disclosure, or other
                requirements; therefore the requirements of the RCDRIA do not apply.
                ---------------------------------------------------------------------------
                 \22\ 12 U.S.C. 4802(a).
                 \23\ 12 U.S.C. 4802.
                ---------------------------------------------------------------------------
                E. Use of Plain Language
                 Section 722 of the Gramm-Leach-Bliley Act \24\ requires the Federal
                banking agencies to use ``plain language'' in all proposed and final
                rules published after January 1, 2000. In light of this requirement,
                the agencies have sought to present the final rule in a simple and
                straightforward manner. The agencies did not receive any comments on
                the use of plain language in the interim final rules.
                ---------------------------------------------------------------------------
                 \24\ 12 U.S.C. 4809.
                ---------------------------------------------------------------------------
                F. OCC Unfunded Mandates Reform Act of 1995
                 As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2
                U.S.C. 1531 et seq., requires the preparation of a budgetary impact
                statement before promulgating a rule that 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. However, the UMRA does not apply to
                final rules for which a general notice of proposed rulemaking was not
                published.\25\ Because there was no general notice of proposed
                rulemaking associated with the interim final rules or the final rule,
                the OCC concludes that the requirements of the UMRA do not apply to
                this final rule.
                ---------------------------------------------------------------------------
                 \25\ See 2 U.S.C. 1532(a).
                ---------------------------------------------------------------------------
                Authority and Issuance
                 For the reasons set forth in the joint SUPPLEMENTARY INFORMATION
                section, the interim final rules, which were published at 85 FR 16232,
                85 FR 20387, and 85 FR 26835 on March 23, April 13, and May 6, 2020,
                are adopted as a final rule by the OCC, Board, and FDIC without change.
                Brian P. Brooks,
                Acting Comptroller of the Currency.
                 By order of the Board of Governors of the Federal Reserve
                System.
                Ann E. Misback,
                Secretary of the Board.
                Federal Deposit Insurance Corporation.
                 By order of the Board of Directors.
                 Dated at Washington, DC, on or about September 15, 2020.
                James P. Sheesley,
                Assistant Executive Secretary.
                [FR Doc. 2020-21894 Filed 10-27-20; 8:45 am]
                BILLING CODE 4810-33-6210-01-6714-01-P
                

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