[Federal Register Volume 62, Number 139 (Monday, July 21, 1997)]
[Notices]
[Pages 39052-39055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19115]



[[Page 39052]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Agency Information Collection Activities: Submission of OMB 
Review; Comment Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); and Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Notice of information collection to be submitted to the Office 
of Management and Budget (OMB) for review and approval under the 
Paperwork Reduction Act of 1995.

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SUMMARY: On November 4, 1996, the OCC, the Board, and the FDIC (the 
agencies) requested public comment for 60 days on a proposed change in 
the method by which banks file their quarterly Reports of Condition and 
Income (Call Reports), which are currently approved collections of 
information. Under that proposal, the agencies would no longer accept 
Call Reports that banks file directly with the agencies in hard copy 
(paper) form. Instead, the only Call Reports that the agencies would 
accept would be those filed electronically or on computer diskette with 
the agencies' electronic collection agent. A bank could either file its 
reports directly with the agent or contract with another party for the 
conversion of its reports from hard copy (paper) to automated form and 
the filing of the reports with the agent. After considering the 
comments the agencies received, the Federal Financial Institutions 
Examination Council (FFIEC), of which the agencies are members, adopted 
certain modifications to the proposed change in filing method.
    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (44 U.S.C. chapter 35), the agencies may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection that has been extended, revised, or implemented 
on or after October 1, 1995, unless it displays a currently valid OMB 
control number. Comments are invited on: (a) Whether the proposed 
revisions to the following collections of information are necessary for 
the proper performance of the agencies's functions, including whether 
the information has practical utility; (b) the accuracy of the 
agencies' estimates of the burden of the information collections as 
they are proposed to be revised, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; (d) ways to 
minimize the burden of information collection on respondents, including 
through the use of automated collection techniques or other forms of 
information technology; and (e) estimates of capital or startup costs 
and costs of operational, maintenance, and purchase of services to 
provide information.

DATES: Comments must be submitted on or before August 20, 1997.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the OMB 
control number(s), will be shared among the agencies.
    OCC: Written comments should be submitted to the Communications 
Division, Office of the Comptroller of the Currency, 250 E Street, 
S.W., Third Floor, Washington, D.C. 20219; Attention: OMB Control No. 
1557-0081 (FAX number (202) 874-5274; Internet address: 
R[email protected]). Comments will be available for inspection 
and photocopying at the OCC's Public Reference Room, 250 E Street, 
S.W., Washington, D.C. 20219, between 9:00 a.m. and 5:00 p.m. on 
business days. Appointments for inspection of comments can be made by 
calling (202) 874-5043.
    Board: Written comments should be addressed to Mr. William W. 
Wiles, Secretary, Board of Governors of the Federal Reserve System, 
20th and C Streets, N.W., Washington, D.C.20551, Attention: OMB Control 
No. 7100-0036, or delivered to the Board's mail room between 8:45 a.m. 
and 5:15 p.m., and to the security control room outside of those hours. 
Both the mail room and the security control room are accessible from 
the courtyard entrance on 20th Street between Constitution Avenue and C 
Street, N.W. Comments received may be inspected in room M-P-500 between 
9:00 a.m. and 5:00 p.m., except as provided in section 261.8 of the 
Board's Rules regarding Availability of Information, 12 CFR 261.8(a).
    FDIC: Written comments should be sent to Robert E. Feldman, 
Executive Secretary, Attention: Comments/OES, Federal Deposit Insurance 
Corporation, 550 17th Street, N.W., Washington, D.C. 20429, Attention: 
OMB Control No. 3064-0052. Comments may be hand-delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7:00 a.m. and 5:00 p.m. (Fax number: 
202) 898-3838; Internet address: [email protected]). Comments may be 
inspected and photocopied in the FDIC Public Information Center, Room 
100, 801 17th Street, N.W., Washington, D.C. 20429, between 9:00 a.m. 
and 4:30 p.m. on business days.
    A copy of the comments may also be submitted to the OMB desk 
officer for the agencies: Alexander Hunt, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: A copy of an agency's submission to 
OMB for review and approval under the Paperwork Reduction Act of 1995 
may be requested from the agency clearance officer whose name appears 
below.
    OCC: John Ference, OCC Clearance Officer, or Jessie Gates (202) 
874-5090, Office of the Comptroller of the Currency, 250 E Street, 
S.W., Washington, D.C. 20219.
    Board: Mary M. McLaughlin, Board Clearance Officer, (202) 452-3829, 
Division of Research and Statistics, Board of Governors of the Federal 
Reserve System, 20th and C Streets, N.W., Washington, D.C. 20551. 
Telecommunications Device for the Deaf (TDD) users only, Diane Jenkins, 
(202) 452-3544, Board of Governors of the Federal Reserve System, 20th 
and C Streets, N.W., Washington, D.C. 20551.
    FDIC: Steven F. Hanft, FDIC Clearance Officer, (202) 898-3907, 
Office of the Executive Secretary, Federal Deposit Insurance 
Corporation, 550 17th Street N.W., Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION: Request for OMB approval to extend, with a 
revision to the filing method, the following currently approved 
collections of information:
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: FFIEC 031, 032, 033, 034.\1\
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    \1\ The FFIEC 031 report form is filed by banks with domestic 
and foreign offices. The FFIEC 032 report form is filed by banks 
with domestic offices only and total assets of $300 million or more. 
The FFIEC 033 report form is filed by banks with domestic offices 
only and total assets of $100 million or more but less than $300 
million. The FFIEC 034 report form is filed by banks with domestic 
offices only and total assets of less than $100 million.
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    Frequency of Response: Quarterly.

For OCC

    OMB Number: 1557-0081.
    Affected Public: National Banks.
    Estimated Number of Respondents: 2,800 national banks.
    Estimated Time per Response: 39.92 burden hours.

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    Estimated Total Annual Burden: 447,132 burden hours.

For Board

    OMB Number: 7100-0036.
    Affected Public: State Member Banks.
    Estimated Number of Respondents: 1,002 state member banks.
    Estimated Time per Response: 45.80 burden hours.
    Estimated Total Annual Burden: 183,566 burden hours.

For FDIC

    OMB Number: 3064-0052.
    Affected Public: Insured State Nonmember Commercial and Savings 
Banks.
    Estimated Number of Respondents: 6,374 insured state nonmember 
banks.
    Estimated Time per Response: 29.67 burden hours.
    Estimated Total Annual Burden: 756,511 burden hours.
    The estimated time per response is an average which varies by 
agency because of differences in the composition of the banks under 
each agency's supervision (e.g., size distribution of banks, types of 
activities in which they are engaged, and number of banks with foreign 
offices). The time per response for a bank is estimated to range from 
15 to 400 hours, depending on individual circumstances.
    General Description of Report: This information collection is 
mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 324 (for state 
member banks), and 12 U.S.C. 1817 (for insured state nonmember 
commercial and savings banks). Except for select sensitive items, this 
information collection is not given confidential treatment. Small 
businesses (i.e., small banks) are affected.
    Abstract: Call Reports are filed quarterly with the agencies for 
their use in monitoring the condition and performance of reporting 
banks and the industry as a whole. Call Reports also are used to 
calculate banks' deposit insurance and Financing Corporation 
assessments and for monetary policy and other public policy purposes.
    Current Actions: Under the auspices of the FFIEC, the agencies 
originally proposed that they would no longer accept Call Reports filed 
directly with them in hard copy (paper) form. The agencies proposed 
that the only Call Reports that they would accept would be those that 
are filed electronically or on computer diskette with the agencies' 
electronic collection agent, Electronic Data systems Corporation (EDS). 
A bank could either file its reports electronically or on computer 
diskette directly with EDS or arrange for a third party to convert its 
reports from hard copy (paper) form to automated form and then file 
them with EDS. The agencies proposed to phase out their acceptance of 
paper Call Report forms as of the June 30, September 30, And December 
31, 1997, report dates based on bank size. After considering the 
comments, the FFIEC approved certain modifications to the proposed 
change in filing method for Call Reports. The comments on the initial 
proposal and the changes made in response thereto are discussed below.
    Type of Review: Revision.
    On November 4, 1996, the agencies jointly published a notice 
soliciting comment for 60 days on a proposal to no longer accept Call 
Reports filed directly with them in paper form (61 FR 56737). The 
notice described the change in filing method that the agencies, with 
the approval of the FFIEC, were proposing to implement in three phases 
for their currently approved Call Report information collections. 
beginning with the reports for June 30, 1997.
    In response to this notice, the agencies collectively received 24 
comment letters, 17 from small banking organizations and 7 from trade 
groups, including the American Bankers Association (ABA), America's 
Community Bankers (ACB), the Independent Bankers Association of America 
(IBAA), and 4 state bankers associations (Illinois, Missouri, and 2 in 
Wisconsin).
    All but three of the bank commenters opposed the proposal. The one 
bank that supported the proposal (Which has $125 million in assets) 
indicated that it already purchases and uses Call Report preparation 
software, is satisfied with its ease of use, and would not be unduly 
burdened by having to file electronically. Two other banks (with $70 
and $30 million in assets) requested only that the implementation dates 
be delayed to give them more time to prepare for the change in filing 
method. The remaining banking organizations objected to the proposal 
because of the cost of purchasing Call Report preparation software, the 
time to learn how to use the software, and similar expense-related 
reasons. However, none of these bankers' comments acknowledged that the 
proposal contained an alternative which would not require them to 
purchase Call Report software, i.e, the agencies stated in the proposal 
that individual banks would be permitted to continue completing their 
reports on paper, provided that such a bank arranged for a third party, 
such as one of the Call Report software vendors, to convert the bank 
data from paper to electronic form.
    Of the trade groups, ACB supported the proposal, noting that the 
Office of Thrift Supervision (OTS) already requires savings 
associations to file their Thrift Financial Reports electronically 
(although OTS provides the necessary software directly to each savings 
association). The ABA stated that it no longer opposes mandatory 
electronic submission of Call Reports. In this regard, the ABA 
indicated that several of the bankers they consulted about the proposal 
``have reported that by switching to Call Report software they have 
decreased the amount of time their cashiers and other bank personnel 
spend on preparing the Call Report. As a result, they believe that the 
benefits that they have obtained by using the software have outweighed 
the initial costs and annual fees for maintaining the software.'' 
However, the ABA recommended that the FFIEC and the agencies should 
streamline the Call Report before making electronic filing mandatory. 
The ABA also stated that bankers were concerned that the agencies would 
find it easier to make unnecessary changes and add unnecessary items to 
the Call Report if the report had to be filed electronically. The IBAA 
stated that ``[t]he majority of community banks providing comments to 
the IBAA do not foresee any problems complying with'' an electronic 
filing requirement. The IBAA added that ``in the long run filing 
electronically should make the Call Report preparation and banking 
agencies' review processes more efficient and less burdensome for 
banks.'' The IBAA noted, however, that some community banks strongly 
believe the benefits do not outweigh the costs. The IBAA urged the 
agencies to explore ways to reduce the cost of the proposal to banks 
not currently filing electronically.
    The concerns raised by the state bankers associations were similar 
to those of other commenters, although the Illinois Bankers Association 
stated that ``paperwork for this quarterly report requirement * * * 
will be reduced with electronic filing'' and that ``the banking 
industry supports this proposal.'' Concerns expressed by these trade 
groups (including the Illinois Bankers Association) generally dealt 
with the costs that will be incurred by some banks, training on the use 
of Call Report software, and the amount of lead time until the 
effective date.
    In developing the proposed change in filing method for Call 
Reports, the FFIEC and the agencies recognized that some banks, 
especially smaller banks with limited experience with personal 
computers, would be concerned about the costs associated with 
purchasing

[[Page 39054]]

computer software \2\ and filing their reports electronically or on 
computer diskette with EDS, the agencies' collection agent. Thus, the 
proposal stated that the agencies would permit banks to continue 
completing their reports on paper. However, a bank preferring to take 
this approach would need to arrange for a third party to convert its 
completed Call Report from paper to electronic form. The proposal 
indicated that banks could contract with a Call Report software vendor 
or some other party for this data conversion. Despite the proposal's 
inclusion of this alternative, few of the commenters who objected to 
the proposed requirement that bank Call Reports be filed with EDS in an 
automated from acknowledged that the proposal contained the paper-based 
alternative which would enable them to file indirectly with EDS and 
avoid incurring Call Report software and other computer-related costs.
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    \2\ Call Report preparation software is available from:
    DBI Financial Systems, Inc., P.O. Box 1249, Cannon Beach, Oregon 
97110, Telephone: (800) 774-3279.
    DPSC Software, Inc., 23501 Park Sorrento, Suite 105, Calabasas, 
California 91302, Telephone: (800) 825-3772.
    Information Technology, Inc., 1345 Old Cheney Road, Lincoln, 
Nebraska 68512, Telephone: (402) 423-2682.
    Sheshunoff Information Services Inc., P.O. Box 13203 Capitol 
Station, Austin, Texas 78711-3203, Telephone: (800) 505-8333.
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    The FFIEC and the agencies continue to be cognizant of the cost 
considerations raised by several of the commenters. Nevertheless, the 
agencies believe that, after the initial adjustment period, the 
benefits to bankers from using Call Report software to prepare their 
reports compare favorably with the costs. This view is consistent with 
the previously cited comments by the ABA and IBAA. However, 
notwithstanding the benefits to both banks and the agencies from the 
use of Call Report software (discussed below), the agencies are 
retaining the paper-based filing alternative that they had proposed. 
Furthermore, to make it simpler for those banks choosing to prepare 
their reports in paper form, the FFIEC and the agencies will permit 
banks to contract directly from EDS, the agencies' electronic 
collection agent, to convert their paper reports to automated form. 
Banks may also contract with any other party (such as Call Report 
software vendor) for the conversation and electronic filing of their 
reports as originally proposed. When one of these parties converts a 
bank's data to automated form by keypunching or some other means, the 
bank would continue to be responsible for the accuracy of the data in 
its report. In addition, banks must ensure that EDS receives their 
completed Call Reports in automated form not later than 30 days after 
the Call Report date in accordance with existing Call Report submission 
standards.
    With respect to the benefits of Call Report software and electronic 
filing, the agencies have provided the software companies with a 
significant number of edits that the agencies normally use for 
validating the Call Report information submitted to them each quarter. 
As a result, while each bank is responsible for the quality of its Call 
Report data, a bank using a commercial software package can correct 
errors identified by the software package prior to filing the Call 
Report, and provide better quality data to the agencies. This procedure 
saves a bank time by reducing agency inquiries for data correction 
after the Call Report has been filed. The commercial software also 
provides immediate confirmation to a bank that files electronically 
that EDS has received its Call Report. In addition, electronic 
submission translates into lower costs for the agencies and for the 
insurance funds administered by the FDIC. Thus, because the use of Call 
Report software and the electronic submission of reports promotes the 
accuracy of and speeds the receipt and processing of Call Reports data, 
the FFIEC and the agencies may in the future propose to discontinue or 
otherwise modify the paper-based filing alternative.
    As proposed, the agencies would have required banks with assets of 
$50 million or more as of June 30, 1996, to file, or arrange for a 
third party to file, their Call Reports electronically or on computer 
diskette with EDS beginning with the reports for June 30, 1997. The 
requirement would have applied to banks with assets of $25 million or 
more beginning as of the September 30, 1997, report date. For all other 
banks, the requirement was scheduled to take effect with the reports 
for December 31, 1997. In response to requests from commenters for 
additional time to prepare for this change in filing method, the FFIEC 
has decided to adjust the implementation schedule. Accordingly, the 
revised timetable is as follows:
     For banks with assets of $50 million or more, the 
requirement would not take effect as of the September 30, 1997, report 
date.
     For all other banks, the requirements would take effect as 
of the December 31, 1997, report date.
    The FFIEC believes it is appropriate to fully implement the change 
in filing method during the final two quarters of the 1997 reporting 
year when no other changes to the Call Report are being introduced. 
Because any revisions to the reporting requirements for the Call Report 
itself normally take effect in the first quarter of the year, delaying 
the final phase of the electronic filing timetable until the March 31, 
1998, report date, might result in the smallest banks having to contend 
with reporting new or revised types of information in the Call Report 
in the same quarter that they are, for the first time, using Call 
Report software or arranging for a third party to convert their Call 
Report data from paper to electronic form.
    Moreover, the FFIEC does not believe that delaying electronic 
filing until after the FFIEC and the agencies have streamlined the Call 
Report in accordance with the mandate in Section 307 of the Riegle 
Community Development and Regulatory Improvement Act of 1994, as 
suggested by the ABA, is warranted. The FFIEC and the agencies remain 
committed to achieving the goals that Congress set for them in Section 
307 in an orderly and well thought out manner. After considering the 
comments received, the Agencies believe that the benefits of using 
software to prepare the Call Report in its current form outweighs the 
costs. Accordingly, the FFIEC sees no reason to postpone the date when 
the agencies receive all Call Reports in electronic form their 
collection agent beyond the filing period for the year-end 1997 
reports.
    The ABA expressed concern that an electronic filing requirement 
would make it easier for the agencies to make unnecessary changes to 
the Call Report. Revisions to the Call Report requirements remain 
subject to the Paperwork Reduction Act of 1995, which requires the 
agencies to issue proposed reporting changes for public comment, 
consider the comments received, and submit the final changes to OMB for 
review and approval. Therefore, the implementation of electronic filing 
for Call Report will not make it simpler for the agencies or the FFIEC 
to change the Call Report.
    One banker stated that he prepares his bank's Call Report using 
spreadsheet software of his own design and that this method is less 
costly for his bank than purchasing Call Report software from a 
software vender. He recommended that the agencies, in conjunction with 
EDS, develop a method that would enable banks that want to use 
internally-developed spreadsheets to transmit their spreadsheets to the 
agencies' electronic collection agent. The FFIEC and the agencies 
considered this suggestion, but concluded that having the agencies

[[Page 39055]]

design an additional electronic filing method would not be feasible and 
practicable. As the proposal noted, banks wishing to file 
electronically already have as an alternative to purchasing software 
the option of developing a spreadsheet or some other software program. 
In this regard, the agencies have for nearly 10 years permitted any 
bank to design its own Call Report preparation software, obtain 
information from the electronic collection agent about the features 
necessary for the bank to electronically transmit its Call Report and 
add these features to its software, and complete a certification 
process with the collection agent to ensure that the bank's software 
can successfully transmit the bank's Call Report data file. 
Furthermore, because a bank that uses internally-developed spreadsheet 
software to assist in the preparation of its Call Report would 
currently submit its completed report on the paper report forms, the 
proposal's previously mentioned paper-based alternative also would be 
available to the bank
    Finally, the Illinois Bankers Association mentioned that some 
bankers had questioned the security of the electronic transmission 
process and the potential for transmission errors that could render the 
Call Report data inaccurate. In this regard, EDS, the banking agencies' 
electronic collection agent, has established procedures to ensure that 
the electronically transmitted Call Report files are secure and that 
the data remains confidential. When a bank transmits its completed Call 
Report to EDS, it does so over a private packet-switching network. An 
individual bank's data file is transmitted to EDS in ``packets,'' which 
means that the complete file is broken into smaller files that are sent 
individually. This procedure adds security because a bank's Call Report 
data is never on the private network as a single complete file. In 
addition, EDS's private network is highly reliable because it is 
designed to reroute or ``switch'' transmission traffic when necessary 
to avoid transmission errors. Once a bank's multiple ``packets'' of 
Call Report data have been received by EDS, the packets are reassembled 
into the bank's Call Report data file and stored in secure, remote 
directories that deny access to unauthorized users because they employ 
appropriate usercode and password security. Before EDS makes its 
periodic transmissions of Call Report data files of the banking 
agencies, the files to be transmitted are reformatted into a bulk file 
format which is compressed and bears little resemblance to the original 
Call Report files. EDS then transmits the Call Report bulk data file 
over its private network to the Board's private network. Because these 
networks use private lines, they are protected from dial access by 
unauthorized users.

(This signature page pertains to the joint notice and request for 
comment, ``submission for OMB review; comment request'')

    Dated: July 15, 1997.
Karen Solomon,
Director, Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency.

    Board of Governors of the Federal Reserve System, July 7, 1997.
William W. Wiles,
Secretary of the Board.

(This signature page pertains to the joint notice and request for 
comment, ``agency information collection activities: submission for 
OMB review; comment request'')

    Dated at Washington, D.C., this 3rd day of July, 1997.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary (Operations).
[FR Doc. 97-19115 Filed 7-18-97; 8:45 am]
BILLING CODE 4810-33-M, 6210-01-M, 6714-01-M