[Federal Register Volume 60, Number 138 (Wednesday, July 19, 1995)]
[Notices]
[Pages 37064-37066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17714]



=======================================================================
-----------------------------------------------------------------------

FEDERAL RESERVE SYSTEM


Agency Forms Under Review

Background

    Notice is hereby given of the final approval of proposed 
information collection(s) by the Board of Governors of the Federal 
Reserve System (Board) under OMB delegated authority, as per 5 C.F.R. 
1320.9 (OMB Regulations on Controlling Paperwork Burdens on the 
Public).
FOR FURTHER INFORMATION CONTACT:
Federal Reserve Board Clearance Officer--Mary M. McLaughlin--Division 
of Research and Statistics, Board of Governors of the Federal Reserve 
System, Washington, DC 20551 (202-452-3829).
OMB Desk Officer--Milo Sunderhauf--Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 3208, Washington, DC 20503 (202-395-7340).
    Final approval under OMB delegated authority of the extension, with 
revision of the following reports:
    1. Report title: Registration Statement for Persons who Extend 
Credit Secured by Margin Stock, Deregistration Statement for Persons 
Registered Pursuant to Regulation G, and Annual Report
Agency form numbers: FR G-1, FR G-2, and FR G-4
OMB Docket number: 7100-0011
Effective Date: August 18, 1995
Frequency: On occasion
Reporters: Individuals and businesses
Annual reporting hours: 1,478
Estimated average hours per response: 1.90
Number of respondents: 778
Small businesses are affected.
    General description of report: This information collection is 
mandatory (15 U.S.C. 78g). The FR G-1 and FR G-4 are given confidential 
treatment (5 U.S.C. 552(b)(4)). The FR G-2 does not request 
confidential information.
    Abstract: Regulation G was adopted in response to concerns of the 
Federal Reserve and the Securities Exchange Commission that unregulated 
lenders were circumventing the margin requirements of Regulations T and 
U. These reports are event-generated and are filed with the appropriate 
Federal Reserve Bank. The revisions include a further breakdown of an 
existing item regarding employee stock option, purchase, and ownership 
plans on the FR G-1 and FR G-4, the addition of the registrant's 
telephone number to the FR G-2, and clarifications to the existing 
reporting instructions for the FR G-1 and FR G-4. The revisions are 
expected to have no appreciable effect on respondent burden for these 
reports.
    Final approval under OMB delegated authority the extension, without 
revision, of the following reports:
    1. Report title: Statement of Purpose for an Extension of Credit 
Secured by Margin Stock by a Person Subject to Registration under 
Regulation G
Agency form number: FR G-3
OMB Docket number: 7100-0018
Frequency: On occasion
Reporters: Individuals and businesses
Annual reporting hours: 2,240
Estimated average hours per response: .16
Number of respondents: 700
Small businesses are affected.
    General description of report: This information collection is 
mandatory (15 U.S.C. 78g). Since the FR G-3 is not filed with the 
Federal Reserve, no issue of confidentiality arises.
    Abstract: Regulation G was adopted in response to concerns of the 
Federal Reserve and the Securities Exchange Commission that unregulated 
lenders were circumventing the margin requirements of Regulations T and 
U. This report is event-generated and is not filed with the Federal 
Reserve System but retained by the lender. The report is needed to 
ensure that a Regulation G lender does not extend credit to purchase or 
carry securities in excess of the amount permitted by the Federal 
Reserve Board pursuant to Regulation G and to ensure that a borrower 
does not violate Regulation X.
    2. Report title: Agreement of Domestic and Foreign Nonmember Banks
Agency form number: FR T-1, T-2
OMB Docket number: 7100-0191
Frequency: On occasion
Reporters: Nonmember Banks
Annual reporting hours: .50
Estimated average hours per response: .50
Number of respondents: 1
Small businesses are not affected.
    General description of report: This information collection is 
mandatory (15 U.S.C. 78h) and is not given confidential treatment.
    Abstract: The Federal Reserve adopted Regulation T, ``Credit by 
Brokers and Dealers,'' in 1934 to regulate extension of credit by and 
to brokers and dealers; it also covers related transactions within the 
Federal 

[[Page 37065]]
Reserve's authority under the act. It imposes, among other obligations, 
initial margin requirements and payment rules on securities 
transactions. Pursuant to Section 8 of the Securities Exchange Act of 
1934 and Regulation T, domestic and foreign banks that are not members 
of the Federal Reserve System are required to file a FR T-1, T-2 with 
the appropriate Federal Reserve Bank in the event that they wish to 
extend credit to brokers/dealers using exchange-traded securities as 
collateral. In addition, the form must be filed by foreign nonmember 
banks that issue letters of credit used as deposits against borrowings 
of securities by brokers-dealers. The FR T-1, T-2 requires a domestic 
or foreign nonmember bank to state that it is a ``bank'' as defined in 
section 3(a)(6) of the Securities Exchange Act of 1934, and list the 
state or country in which it was organized and the location of its 
principal place of business. No substantive changes are being made to 
the FR T-1, T-2. However, the phrase ``(indicate state for domestic 
bank or country for foreign bank)'' is added to explicitly state this 
requirement of Regulation T.
    3. Report title: Statement of Purpose of Extension of Credit by a 
Creditor (under Regulation T)
Agency form number: FR T-4
OMB Docket number: 7100-0019
Frequency: On occasion
Reporters: Individuals and businesses
Annual reporting hours: 42
Estimated average hours per response: .17
Number of respondents: 250
Small businesses are affected.
    General description of report: This information collection is 
mandatory (15 U.S.C. 78g). Because the FR T-4 is not filed with the 
Federal Reserve, no issue of confidentiality arises.
    Abstract: The Federal Reserve adopted Regulation T, ``Credit by 
Brokers and Dealers,'' in 1934 to regulate extension of credit by and 
to brokers and dealers; it also covers related transactions within the 
Federal Reserve's authority under the act. It imposes, among other 
obligations, initial margin requirements and payment rules on 
securities transactions. Regulation T presumes that any extension of 
credit by a broker/dealer to a customer is made for the purpose of 
purchasing, trading, or carrying securities, and thus is subject to the 
Board's margin requirements. Customers and creditors are required to 
complete and retain the FR T-4 in the event that the customer can rebut 
the presumption and the creditor is thereby permitted to extend credit 
in excess of the amount otherwise permitted under Regulation T. The FR 
T-4 solicits information from borrowers regarding the purpose of each 
loan, and from creditors identifying collateral. No changes are being 
made to the FR T-4 reporting form.
    4. Report title: Statement of Purpose for an Extension of Credit 
Secured by Margin Stock
Agency form number: FR U-1
OMB Docket number: 7100-0115
Frequency: On occasion
Reporters: Individuals and businesses
Annual reporting hours: 157,853
Estimated average hours per response: .07
Number of respondents: 10,637
Small businesses are not affected.
    General description of report: This information collection is 
mandatory (15 U.S.C. 78g). Since the FR U-1 is not filed with the 
Federal Reserve no issue of confidentiality arises.
    Abstract: In 1936, the Federal Reserve adopted Regulation U, 
``Credit by Banks for the Purpose of Purchasing or Carrying Margin 
Stock,'' as a companion to Regulation T which applies to securities 
credit extended by brokers/dealers. Regulation U imposes restrictions 
upon ``banks'' (as defined in section 221.2(b) of Regulation U) that 
extend credit for the purpose of buying or carrying margin stock if the 
credit is secured directly or indirectly by margin stock. Banks may not 
extend more than the minimum loan value of the collateral securing such 
credit, as set by the Federal Reserve in section 221.8 of Regulation U. 
Regulation U requires that a purpose statement be completed and 
retained in the event that a bank extends credit in an amount exceeding 
$100,000 secured directly or indirectly by margin stock.
    In all cases, the FR U-1 collects the following loan information 
from the borrower:
    (1) The amount of credit being obtained; and
    (2) Whether the loan is to purchase or carry margin stocks and, if 
not, the purpose of the loan. If the borrower affirms that the purpose 
of the loan is to purchase or carry margin stocks, the bank provides 
the following collateral information in Part II:
    (3) The number of shares of stock serving as collateral;
    (4) The name of the stock (issue);
    (5) The market price per share;
    (6) The date and source of valuation (not required if market value 
is obtained from regularly published information in a journal of 
general circulation or from an automated quotation system);
    (7) The total market value per issue; and
    (8) The amount of any other collateral securing the loan. No 
substantive changes are being made to the FR U-1 reporting form. 
However, (1) the phrase ``maximum loan value of margin stock is ... per 
cent'' for items 1 and 2 of Part II is revised to ``maximum loan value 
of margin stock is 50 per cent,'' and (2) the phrase ``or from an 
automated quotation system.'' is added to the note below item 3.
    5. Report title: Written Security Program for State Member Banks
Agency form number: FR 4004
OMB Docket number: 7100-0112
Frequency: Annual
Reporters: State member banks
Annual reporting hours: 484
Estimated average hours per response: 0.5
Number of respondents: 968
Small businesses are affected.
    General description of report: This recordkeeping requirement is 
mandatory (12 U.S.C. Secs.  1882(a), 248(a)(1), and 325). Because 
written security programs are maintained at state member banks, no 
issue of confidentiality under the Freedom of Information Act arises.
    Abstract: The Congress adopted the Bank Protection Act of 1968 (12 
U.S.C. 1882) to promulgate rules establishing minimum standards for 
banks as to the installation, maintenance, and operation of security 
devices and procedures to discourage robberies, burglaries, and 
larcenies and to assist in the identification and apprehension of 
persons who commit such acts.
    In response to the passage of the Bank Protection Act (Act), each 
of the federal financial institution supervisory agencies established 
minimum standards for security devices and procedures. The requirements 
established by the Board of Governors of the Federal Reserve System in 
1969 for state member banks are contained in Regulation P. In the 
regulation, the Federal Reserve requires the board of directors of each 
state member bank to designate a security officer to assume the 
responsibility for the development, administration, and maintenance of 
a written security program. The original Act also contained provisions 
requiring financial institutions to submit periodic reports to their 
primary federal supervisory agency with respect to the installation, 
maintenance, and operation of security devices and the development of 
security procedures.
    The Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (FIRREA) includes provisions that amend the Act: eliminating the 
requirement that each bank submit periodic reports to its regulator, 
but 

[[Page 37066]]
retaining the requirement that each bank maintain a written security 
program. The Federal Reserve amended Regulation P in 1991 to reflect 
this change. Each state member bank must maintain a written security 
program in its records. This program should include a requirement to 
install security devices and should establish procedures that satisfy 
minimum standards in the regulation, with the security officer 
determining the need for additional security devices and procedures 
based on the location of the banking office. No changes are being 
proposed to the recordkeeping requirement.
    6. Report title: Annual Report on Status of Disposition of Assets 
Acquired in Satisfaction of Debts Previously Contracted
Agency form number: FR 4006
OMB Docket number: 7100-0129
Frequency: Annual
Reporters: Bank holding companies that have acquired assets or shares 
through foreclosure in the ordinary course of collecting a debt 
previously contracted
Annual reporting hours: 3,000
Estimated average hours per response: 5
Number of respondents: 600
Small businesses are affected.
General description of report: This information collection is mandatory 
(12 U.S.C. 1843(c)(2) and 1844(c) and may be given confidential 
treatment upon request (5 U.S.C. 552(b)(4)).
Abstract: The Federal Reserve has statutory responsibility for 
regulation and supervision of bank holding companies (BHCs) under the 
Bank Holding Company Act of 1956, as amended (Act). Under the Act, the 
Federal Reserve must ensure that impermissible assets are divested in a 
manner consistent with the statute. The Act sets forth the time frame 
within which assets and shares acquired in collecting a debt previously 
contracted (DPC) must be divested.
    The Federal Reserve does not require BHCs to obtain prior approval 
for their acquisition of DPC shares or assets so long as they divest 
them within two years of the date of their initial acquisition. If the 
BHC is unsuccessful in divesting them within the two-year period, it 
must request and obtain approval to continue to hold them. The Board 
may extend the initial two-year period for up to three additional one-
year periods. Further, for real estate or other DPC assets that are 
demonstrated to have value and marketability characteristics similar to 
real estate, the Board may permit additional extensions for up to five 
years (for a total of ten years).
    The Federal Reserve does require that the BHC make good faith 
efforts to dispose of DPC shares or assets and notify it annually of 
the progress being made with respect to their disposition. Beginning 
two years after the date of acquisition of DPC assets or shares, the 
BHC must report annually to the Federal Reserve on its efforts to 
divest them.
    The Federal Reserve uses the information to determine:
    (1) Whether a BHC has made timely, good faith efforts to comply 
with the requirements of the Act; and
    (2) The effect that the sale or retention of the property will have 
on the organization. This report serves to identify potentially unsound 
situations and to encourage timely compliance with the divestiture 
requirement as contained in the statutes and regulation. The Federal 
Reserve monitors the BHC's efforts to effect an orderly divestiture, 
and may require divestiture before the end of the approved period if 
supervisory concerns warrant such action.
    The reporting requirement only applies to those BHCs that fail to 
divest DPC shares or assets within two years. They must file an annual 
report on their efforts to accomplish divestiture of the shares or 
assets. The report must describe the efforts made to date to effect 
divestiture (including reasons for any delay in the pace of 
divestiture), and must include financial and descriptive data with 
respect to assets as well as the sales price of divested assets.
    Affected BHCs file the annual report on their progress toward 
divestiture with their district Federal Reserve Bank. The due date for 
the report is based on the date the BHC acquired the DPC assets or 
shares. The BHC submits the information in a letter format, which is 
neither stored electronically nor published. No changes are being 
proposed to the FR 4006 reporting requirement.

    Board of Governors of the Federal Reserve System, July 13, 1995.
William W. Wiles,
Secretary of the Board.
[FR Doc. 95-17714 Filed 7-18-95; 8:45 am]
Billing Code 6210-01-F