[Federal Register Volume 65, Number 151 (Friday, August 4, 2000)]
[Notices]
[Pages 48049-48056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19803]


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DEPARTMENT OF THE TREASURY

Office of Thrift Supervision


Proposed Agency Information Collection Activities

AGENCY: Office of Thrift Supervision, Treasury.

ACTION: Notice and request for comments.

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SUMMARY: The Department of the Treasury invites the general public and 
other Federal agencies to comment on proposed and continuing 
information collections, as required by the Paperwork Reduction Act of 
1995. Today, the Office of Thrift Supervision (OTS) within the 
Department of the Treasury solicits comments on proposed changes to the 
Thrift Financial Report (TFR), effective with the March 31, 2001 
report. The following subjects are discussed in more detail below:
    (1) Nontraditional lending, namely, high loan-to-value loans and 
subprime loans;
    (2) Mortgage-backed securities;
    (3) Asset-backed securities;
    (4) Definition of mortgage loans;
    (5) Junior liens;
    (6) Credit cards
    (7) Accumulated other comprehensive income;
    (8) Home equity lines of credit outstanding;
    (9) Nonmortgage loan activity;
    (10) Deposit information and deposit insurance premium assessment 
information;
    (11) Reciprocal balance accounts;
    (12) Adjustments to capital;
    (13) Average balance sheet data;
    (14) Board of directors' interest rate risk limits;
    (15) IRS Domestic Building and Loan Association (DBLA) Test;
    (16) Mutual fund and annuity sales;
    (17) Filings under the Securities and Exchange Act of 1934;
    (18) Savings association and subsidiary web-site addresses;
    (19) Holding company financial information;
    (20) Transactions with affiliates;
    (21) Fiduciary and related services;
    (22) Residual interests in financial assets sold;
    (23) Federal Home Loan Bank (FHLB) structured advances and other 
structured borrowings;
    (24) Schedule YD, Yields on Deposits;
    (25) Asset maturity data in Schedule SI;
    (26) Margin accounts;
    (27) Estimated market value rate shocks;
    (28) Multifamily mortgages;
    (29) Mortgage loan activity;
    (30) Hedging activity;
    (31) Eliminating confidential treatment for certain interest rate 
risk and past due data;
    (32) Reporting frequency of Schedule CSS (Subordinated Organization 
Schedule).
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which OTS should 
modify the proposed revisions prior to giving its final approval. OTS 
will then submit the

[[Page 48050]]

revisions to Office of Management and Budget (OMB) for review and 
approval.

DATES: Submit comments on or before October 3, 2000.

ADDRESSES: Send comments to Manager, Dissemination Branch, Information 
Management and Services Division, Office of Thrift Supervision, 1700 G 
Street, NW., Washington, DC 20552, Attention 1550-0023. Hand deliver 
comments to 1700 G Street, NW, from 9 A.M. to 5 P.M. on business days. 
Send facsimile transmissions to FAX Number (202) 906-7755 or (202) 906-
6956 (ifthe comment is over 25 pages). Send e-mails to 
public.info@ots.treas.gov">public.info@ots.treas.gov and include your name and telephone number. 
Interested persons may inspect comments at the Public Reference 
Room,1700 G Street, NW, from 10 A.M. until 4 P.M. on Tuesdays and 
Thursdays.

FOR FURTHER INFORMATION CONTACT: Trudy Reeves, Financial Reporting 
Division, Office of Thrift Supervision, 1700 G Street, NW., Washington, 
DC 20552, (202) 906-7317. Interested persons may also obtain additional 
information on the internet at www.ots.treas.gov/tfrpage.html, or by 
calling (202) 906-6078.

SUPPLEMENTARY INFORMATION:
    Title: Thrift Financial Report.
    OMB Number: 1550-0023.
    Form Number: OTS 1313.
    Abstract: All Office of Thrift Supervision (OTS) regulated savings 
associations must comply with the information collections described in 
this notice. OTS collects this information each calendar quarter, or 
less frequently if so stated. OTS needs this information to monitor and 
supervise the thrift industry.
    Current Actions: After reviewing its current supervisory and 
examination needs, OTS proposes to revise the Thrift Financial Report 
(TFR), effective with the March 31, 2001 report. These revised 
reporting requirements are also designed to complement the federal 
banking agencies' emphasis on risk-focused supervision. OTS had 
proposed on March 1, 2000 to collect additional information on high 
loan-to-value loans, trust assets, residual interests in financial 
assets sold, and structured liabilities beginning with the third 
quarter of 2000.
    However, after considering comments on the proposal and other 
factors, OTS decided to postpone any changes to the TFR until March 
2001. Comments received to the March 1, 2000 Federal Register Notice 
will also be considered as a response to this proposal.
    This proposal also addresses certain aspects of Sections 307(b) and 
(c) of the Riegle Community Development and Regulatory Improvement Act 
of 1994 (the Riegle Act). These sections direct the federal banking 
agencies to work jointly toward more uniform reporting, review the 
information that institutions currently report, and eliminate existing 
reporting requirements that are not warranted for safety and soundness 
or other public policy purposes.
    Several reporting changes being proposed will introduce more 
uniformity for savings associations, banks, and bank holding companies 
to certain aspects of regulatory reporting. In this regard, over the 
past several years, banking organizations have sought greater 
consistency among the reporting requirements imposed on savings 
associations, banks, and bank holding companies.
    Increasing the uniformity of reporting requirements, among the 
different types of institutions supervised by the federal financial 
institution regulators, is a necessary step toward achieving the goal 
of a single set of reporting requirements for the filing of core 
information that is set forth in Section 307(b) of the Riegle Act.

1. Nontraditional Lending

    OTS is proposing to add a schedule to the TFR comprised of 
memoranda data on high loan-to-value loans and subprime lending, 
Schedule NL, Nontraditional Lending. Only those savings associations 
making such loans would be required to file these data items.

a. High Loan-to-Value Loans

    OTS has considerable supervisory interest in high loan-to-value 
(LTV) lending. Currently, OTS expects associations to report loans with 
LTV ratios in excess of supervisory limits to their board of directors 
quarterly (12 CFR 560.101 (Appendix A, Interagency Guidelines for Real 
Estate Lending Policies)). However, OTS does not require associations 
to report LTV data on the TFR. Due to increased supervisory concern 
regarding high LTV lending, coupled with OTS's need to effectively 
monitor potential high risk lending, OTS proposes to collect balances, 
originations and purchases, sales, charge-off and recovery data, and 
delinquency data on permanent mortgage loans secured by 1-4 dwelling 
units with an LTV (1) between 90 and 100%, inclusive, and (2) greater 
than 100%. With this change, the TFR will be more useful in promptly 
identifying regulated savings associations involved in this activity. 
OTS invites comment on all aspects of the reporting of high LTV loans 
and particularly on whether the proposed TFR items on high LTV loans 
should be treated as confidential for a limited period of time in order 
to give associations time to resolve any issues surrounding the 
reporting of these loans?

b. Subprime Loans

    Subprime lending is a potentially high-risk activity that can pose 
increased risk to the saving associations involved and to the deposit 
insurance funds if appropriate safeguards are not in place. FDIC-
insured institutions have increasingly entered the subprime lending 
market in recent years, and industry analysts predict that many nonbank 
subprime specialists will seek to be acquired by FDIC-insured 
institutions to take advantage of the relatively less expensive, more 
stable funding source that insured deposits provide. The exact number 
of savings associations involved in subprime lending is not known with 
certainty; however, the Federal Deposit Insurance Corporation (FDIC) 
has estimated that approximately 150 insured institutions, of which 24 
are savings associations, currently have significant investment in the 
subprime lending business. Despite a favorable economic environment, a 
disproportionate number of insured institutions that engage in subprime 
lending are problem institutions. The estimated number of insured 
subprime lenders represents just over one percent of all insured 
institutions, yet they account for nearly 20 percent of all problem 
institutions. The actual extent of insured institutions' involvement in 
subprime lending is not known because there is no periodic reporting of 
this activity to the banking agencies. The estimates that have been 
made come from examination data, but the quality and timeliness of the 
subprime lending data gleaned from examination reports is constrained 
by inconsistent reporting and by the length of the examination cycle. 
The issue of timeliness is particularly troublesome from a safety and 
soundness perspective, since subprime lending tends to be a volume-
oriented business that encourages rapid portfolio growth. Consequently, 
there is no reliable way to regularly monitor individual institutions' 
subprime lending programs. In several instances, this has resulted in 
the unexpected and severe deterioration in the condition of an 
institution from one examination to the next. Accordingly, OTS and the 
other banking agencies are proposing to collect a number of new items 
on subprime lending. These proposed items would make possible the early 
detection and proper supervision of subprime lending programs through

[[Page 48051]]

offsite monitoring procedures. Associations involved in subprime 
lending would report quarter-end data for the following eight 
categories of subprime loans in their loan portfolios: (1) Revolving, 
open-end loans secured by 1-4 family residential properties extended 
under lines of credit, (2) closed-end loans secured by first liens on 
1-4 family residential properties, (3) closed-end loans secured by 
junior liens on 1-4 family residential properties, (4) loans secured by 
other properties, (5) credit cards to individuals for household, 
family, and other personal expenditures, (6) consumer loans secured by 
automobiles, (7) other consumer loans, and (8) other subprime loans. 
This information would be reported as memorandum items in the new 
Nontraditional Lending Schedule. Associations involved in subprime 
lending would also report their past due and nonaccrual subprime loans, 
along with charge-offs, recoveries, purchases, originations, and sales 
of these loans. In these areas, two broader loan categories would be 
used: loans secured by real estate and loans not secured by real 
estate.
    The quality and validity of the proposed subprime lending 
information to be collected in the TFR hinges on a workable definition 
of subprime lending. Subprime loans could be defined on the basis of 
either (a) loan portfolios or programs that possess certain 
characteristics or (b) individual loans with these characteristics. 
Whether the portfolio or program approach or the individual loan 
approach ultimately is adopted, OTS and the other banking regulatory 
agencies are proposing the following definition of subprime loans for 
purposes of financial reporting information to the regulatory agencies:
    Subprime loans are extensions of credit to borrowers who, at the 
time of the loan's origination, exhibit characteristics indicating a 
significantly higher risk of default than traditional bank lending 
customers. Risk of default may be measured by traditional credit risk 
measures, e.g., credit/repayment history and debt-to-income levels, or 
by alternative measures such as credit scores. Subprime borrowers 
represent a broad spectrum of debtors ranging from those who have 
exhibited repayment problems prior to origination of their loans due to 
an adverse event, such as job loss or medical emergency, to those who 
persistently mismanage their finances and debt obligations. Subprime 
lending does not include loans to borrowers who have had minor, 
temporary credit difficulties since the origination of their loans but 
are now current. Subprime loans may take the form of direct extensions 
of credit; loans purchased from other lenders, including delinquent or 
credit impaired loans purchased at a discount; and automobile or other 
financing paper purchased from other lenders or dealers.
    OTS invites comment on all aspects of the proposed new TFR items on 
subprime lending. In particular, OTS seeks comment on the proposed 
definition of subprime loans generally and on the following issues 
relating to this definition:
    (1) Should all individual subprime loans be reported in the 
proposed new TFR items or should only those subprime loans that are 
held in a segregated portfolio or program be reported? Do you foresee 
any difficulties in reporting individual subprime loans or segregated 
groups of subprime loans?
    (2) Based on the proposed definition of subprime loans above, 
approximately what percentage of your savings association's loan 
portfolio would currently be categorized as subprime? Using your 
association's own internal definition of a subprime loan, what 
percentage of your loan portfolio does your savings association 
currently classify as subprime? Please indicate whether these 
percentages are based on an individual subprime loan approach or a 
segregated portfolio or program approach. To the extent possible, 
provide percentages for your association's loan portfolio under both 
approaches.
    (3) What criteria does your association use to determine which 
loans are subprime? Are the criteria the same for all types of loans, 
e.g., mortgage, automobile, and credit cards? If not, how do they 
differ?
    (4) In defining subprime loans, which factor(s) listed below are 
the best indicators of a higher risk of default?
    (a) Higher loan fees.
    (b) Higher interest rates. For example, should all loans made at a 
contract rate 200 basis points above the rate that is offered to a 
traditional savings association customer for the same type of loan be 
included as subprime loans?
    (c) Debt-to-income ratios. For example, should a loan to a borrower 
with a specific debt-to-income ratio above a stipulated level 
automatically be a subprime loan?
    (d) Delinquency history. For example, if, at the time of the loan's 
origination, the customer had two or more payments that were 30 days 
past due in the last 12 months or had loans charged off in the last 12 
months, would the loan be subprime? What type of delinquency history 
would constitute a subprime borrower in your association's view?
    (e) Loan-to-value ratio. Is there a loan-to-value ratio above which 
a loan secured by real estate would be considered subprime?
    (f) Credit scores or other ratings. If your association uses credit 
scoring to determine whether a loan should be categorized as subprime, 
are the scores custom or generic bureau scores?
    (1) If generic bureau scores were used, below what score cutoff 
would a loan be considered subprime?
    (2) Does the score cutoff differ by loan type?
    (g) Bankruptcy status. For example, how far back in the customer's 
credit history would your association go to determine whether a 
bankruptcy should affect your categorization of a loan?
    (h) Lack of credit history.
    (i) Other factors. Please identify any other factor that should be 
considered an indicator of a higher risk of default and explain why it 
should be considered.
    (5) Should the definition of subprime be identical for all types of 
loans, or should it differ by type of loan, e.g., mortgage, automobile, 
and credit cards?
    (6) Can your association determine from its records whether 
borrowers with subprime characteristics have credit support (e.g., 
public or private guarantees, co-signers, and insurance) on specific 
loans? If yes, do you categorize loans with such credit support as 
subprime loans?
    (7) The proposed subprime loan definition relies on differences 
between traditional and ``higher risk'' borrowers? How should the 
agencies take into account shifts in that difference (e.g., what 
happens if ``traditional'' lending standards drop)?
    (8) Should the subprime loan definition distinguish between 
institutions that target higher risk borrowers as opposed to those 
institutions that serve a community in an economically disadvantaged 
area where the repayment ability of area borrowers can be or has been 
adversely affected?
    (9) Should there be a de minimus level of subprime loans below 
which reporting is not required?
    (10) Should smaller savings associations be treated differently 
from larger savings associations for reporting purposes?
    (11) What types of loans or lending programs, if any, should be 
excluded from the definition of subprime loans or, if included in the 
definition, reported separately from other subprime loans? Please 
explain the reasons for the exclusion or separate reporting.
    (12) Should the proposed TFR items on subprime loans be treated as

[[Page 48052]]

confidential for a limited period of time in order to give associations 
time to resolve issues surrounding which loans should and should not be 
reported as subprime?
    Although this proposal would create several new line items, the 
burden of reporting this information will fall only upon those savings 
associations engaged in subprime lending, as defined. If the number of 
associations involved in this activity is consistent with the current 
estimate, these proposed new reporting requirements would affect 
approximately two percent of the associations that file TFRs. OTS would 
welcome any additional information commenters can provide on the number 
of associations that are subprime lenders in order to improve OTS's 
assessment of the potential reporting burden of this proposal.

2. Mortgage-Backed Securities

    OTS proposes to combine mortgage-backed pass-through securities and 
mortgage derivatives into one section in the balance sheet (Schedule 
SC). Currently, mortgage derivative securities are reported on a line 
under investment securities, and mortgage pool securities are reported 
in a separate section between investment securities and loans. OTS 
proposes combining mortgage-backed securities into one section, which 
would replace the section on mortgage pool securities, and adding two 
lines under mortgage derivative securities to provide (1) those issued 
or guaranteed by FNMA, FHLMC, or GNMA, and (2) those collateralized by 
securities issued or guaranteed by FNMA, FHLMC, or GNMA. This would 
provide consistent information with the commercial bank Call Report, 
would be more consistent with the presentation of mortgage-backed 
securities in financial statements included with 34 Act filings, and 
would provide information on the degree of risk of the derivative 
investment. Consistent with the commercial bank Call Report, mortgage-
backed bonds would be reported with other investments in the balance 
sheet on SC185.

3. Asset-Backed Securities

    OTS proposes to add a line under ``Investment Securities'' on the 
balance sheet (Schedule SC) to collect securities collateralized by 
nonmortgage loans (asset-backed securities), including all securities 
backed by credit cards, other consumer loans, and commercial loans. 
Asset-backed securities are currently reported in the miscellaneous 
securities category, combined with other types of investment 
securities. The addition of this line item will provide important 
information concerning the holdings of these securities and, moreover, 
would facilitate reconciliation between Schedules SC and CMR. The other 
banking agencies have proposed collecting data on asset-backed 
securities on the March 2001 commercial bank Call Report.

4. Definition of Mortgage Loans

    OTS proposes to redefine mortgages for TFR reporting, consistent 
with the commercial bank Call Report, to include all loans predicated 
upon a security interest in real property. That is, a loan secured 
wholly or substantially by a lien on real property for which the lien 
is central to the extension of the credit. A lien is considered central 
to the extension of credit if the borrower would not have been extended 
credit in the same amount or on terms as favorable without the lien on 
real property. All loans satisfying this definition would be reported 
as mortgages, regardless of whether secured by first or junior liens, 
regardless of the department within the association or its subsidiary 
that originated the loan, regardless of how the loans are categorized 
in the savings association's records for HOLA investment limits, and 
regardless of the purpose of the financing. The only real estate 
secured loans that will be reported as nonmortgage loans are those that 
are otherwise substantially secured, where the mortgage was taken as an 
abundance of caution (for example, auto loans), and where the terms as 
a consequence have not been made more favorable than they would have 
been in the absence of the lien. That is, if the loan is substantially 
secured by a mortgage and that is the only security for the loan, the 
loan should be reported as a mortgage even if the loan was based 
primarily on the ``creditworthiness of the borrower.'' The current 
requirement for classification as a mortgage--that a loan be fully 
secured by the property and that an appraisal or other evaluation be 
performed--will no longer apply.
    This change will put virtually all mortgages together on the 
balance sheet and will make the TFR definition of mortgages clearer and 
consistent with the commercial bank Call Report. Data item SC340, 
Revolving Loans Secured by 1-4 Dwelling Units in Consumer Loans would 
be eliminated and all revolving loans would be reported with mortgage 
loans.

5. Junior Liens

    OTS proposes to add a breakdown between first liens and junior 
liens under ``Permanent Mortgages'' on 1-4 dwelling units in the 
balance sheet (Schedule SC) to better monitor the riskier junior lien 
market. Currently the TFR does not collect data on single-family 
residential junior liens. This change will make the TFR mortgage loan 
breakdown consistent with the commercial bank Call Report. This change 
will also be made to the breakdown of residential mortgages in the 
charge-off and recovery data on Schedule VA.

6. Credit Cards

    OTS proposes to break out credit cards separately under the heading 
``Consumer Loans.'' Currently credit cards are combined with other 
similar plans such as overdraft lines on checking accounts. These other 
similar plans would be reported with ``Other Consumer Loans.'' Because 
of the change in the definition of mortgage loans mentioned above and 
the elimination of revolving loans secured by 1-4 dwelling units from 
consumer loans, the distinction between closed-end and open-end 
consumer loans would be eliminated and the line for ``Other, Including 
Leases'' would contain both closed-end loans and open-end loans like 
those currently reported with credit cards. Credit cards would be 
broken out separately on the balance sheet (Schedule SC), charge-offs 
and recoveries (Schedule VA), and past due and nonaccrual (Schedule 
PD).

7. Accumulated Other Comprehensive Income

    OTS proposes to add a subsection in the equity section of the 
balance sheet (Schedule SC) for accumulated other comprehensive income 
to conform the TFR to generally accepted accounting principles (GAAP). 
This section would include the existing line for unrealized gains 
(losses) on available-for-sale securities and an additional line for 
``other'' that would include gains (losses) on cash flow hedges, 
foreign currency translation adjustments, and minimum pension liability 
adjustments.

8. Home Equity Lines of Credit Outstanding

    OTS proposes to add a line in Schedule CC (Commitment and 
Contingencies) to provide data on the balance of outstanding home 
equity lines of credit that have not yet been drawn down; currently 
these amounts are included with Open-end Consumer Lines on CC410.

9. Nonmortgage Loan Activity

    Because nonmortgage loans have become a larger, and, in most cases, 
riskier part of the industry's loan

[[Page 48053]]

portfolio, OTS proposes to add a line capturing sales of nonmortgage 
loans. Schedule CF currently reconciles the activity in mortgage loans, 
deposits, and mortgage pool securities; however, only one line for 
nonmortgage loan originations and purchases is available for 
nonmortgage loan activity. This line along with the proposed line would 
permit reconciliation of nonmortgage loans and would indicate the 
volume of nonmortgage loans that are originated and sold within the 
same quarter.

10. Deposit Information and Deposit Insurance Premium Assessment 
Information

    OTS proposes to move the deposit data and deposit insurance premium 
assessment information from Schedule SI to a new schedule, Schedule DI 
(Deposit Information). Schedule SI was designed to contain 
supplementary data not collected elsewhere in the TFR. Because the 
number of items collected for deposit insurance premium assessment 
purposes has increased substantially over the past ten years, we 
believe it is preferable to move these data items to a separate 
schedule.

11. Reciprocal Balance Data for Deposit Insurance Premium 
Assessments

    The FDIC Assessment Division has requested that OTS re-establish a 
line that was deleted in 1996 that collects reciprocal balance accounts 
deducted from insured deposits in calculating the deposit insurance 
premium. This line would be collected in the new Schedule DI and would 
be captioned: ``Adjustments to Demand Deposits for Reciprocal Demand 
Balances with Commercial Banks and Other Savings Associations.'' These 
reciprocal demand balances are currently collected along with other 
items in SI247. This new line item would be included in the new 
Schedule DI, mentioned above.

12. Adjustments to Capital

    Currently SI670, Other Adjustments to Equity Capital, is made up of 
various items, and for most savings associations this miscellaneous 
data item is the largest reconciling amount to capital. To provide a 
better breakout of this adjustment, OTS proposes adding the following 
three data items in the reconciliation of equity capital in Schedule 
SI: (1) Other comprehensive income; (2) other capital contributions 
(where no stock is issued); and (3) prior period adjustments.

13. Average Balance Sheet Data

    OTS proposes to add three new data items in Schedule SI to collect 
average asset and liability data. This information will produce more 
accurate data for use in ratio analysis, will avoid skewed data when 
restructuring and acquisitions occur, and will enable calculation of 
better yield/cost data. Savings associations will have the option of 
calculating these averages using either daily or weekly balances. The 
three proposed quarterly averages are average total assets, average 
interest-earning assets, and average interest-costing liabilities.

14. Board of Directors' IRR Limits

    OTS proposes to add two lines to collect the association's interest 
rate risk limits as set by their Board of Directors for the plus/minus 
200 basis point rate shock scenarios. This information will be used for 
off-site monitoring to identify saving associations that may be in 
excess of their Board limits. These lines will be added to Schedule SI. 
All savings associations would be required to complete these lines.

15. IRS Domestic Building and Loan Association (DBLA) Test

    OTS proposes to add a line for those savings associations that do 
not use the HOLA QTL test, but instead use the IRS Domestic Building 
and Loan Association (DBLA) Test. The addition of this line would more 
exactly identify savings associations that are using the IRS DBLA test 
and would enable the regions to better monitor the QTL status of those 
associations. This line would be added in Schedule SI following the 
lines for QTL. It would be required only of those associations using 
the DBLA test.

16. Mutual Fund and Annuity Sales

    OTS proposes to eliminate the collection of data on quarterly sales 
of annuities, mutual funds, and proprietary products, SI800 through 
SI850. In place of these items, each savings association would respond 
to a ``yes'' or ``no'' question asking whether it sells private label 
or third party mutual funds and annuities. In addition, savings 
associations would report the total assets under their management in 
proprietary mutual funds and annuities. The data item collecting fee 
income from the sale and servicing of mutual funds and annuities would 
be retained. For savings associations with proprietary mutual funds and 
annuities, reporting the amount of assets under management should be 
significantly less burdensome than reporting the quarterly sales volume 
for these proprietary products. run

17. Filings Under the Securities and Exchange Act of 1934

    Currently the OTS can determine the number of holding companies 
that file under the Securities and Exchange Act of 1934 only through 
the examination process. Because the Securities and Exchange Commission 
(SEC) does not maintain a listing of savings and loan holding companies 
that file with them, OTS proposes to add the following questions in the 
TFR to provide the user with immediate information on whether there is 
a filing available on this savings association or its holding company 
with the OTS or the SEC.
    Add the following two yes/no questions in Schedule SQ (Supplemental 
Questions):

    For the current quarter, is the reporting savings association 
required to file periodic securities disclosure documents (for 
example, Form 10-Q or 10-K) with the OTS, following the rules under 
the Securities Exchange Act of 1934? If the reporting association is 
in a holding company structure, for the current quarter, is the 
holding company required to file periodic securities disclosure 
documents (for example, Form 10-Q or 10-K) with the SEC, pursuant to 
the Securities Exchange Act of 1934?

18. Savings Association and Subsidiary Web Site Addresses

    OTS proposes the addition of Internet home page addresses to assist 
in monitoring the activities of savings associations on their web sites 
and the addition of a question asking if the savings association 
provides transactional Internet banking to its customers, as defined in 
12 CFR 555.300(b). The data item for the savings association's web site 
and question on transactional Internet banking will be collected in 
Schedule SQ (Supplementary Questions). We also propose adding a similar 
data item to collect web sites of subsidiaries in Schedule CSS 
(Subordinate Organization Schedule).

19. Holding Company Financial Information

    More complex business plans, advances in technology, increased 
merger and acquisition activity, and earnings pressures have changed 
the nature of the relationship of the thrift with its affiliates. With 
finite examination resources, OTS must fully leverage its ability to 
collect information for the purpose of off-site monitoring and more 
precisely scope for its onsite examinations. Therefore, OTS proposes to 
add a schedule to the TFR to collect data on thrift holding companies. 
In general, the ``top' owner (ownership

[[Page 48054]]

command can go no further) of the thrift would be required to file. 
Typically, one holding company report would be filed per savings 
association; however, more than one holding company report may be 
required when multiple top owners exist. Holding companies owning more 
than one savings association would be required to file only once. Bank 
holding companies would be excluded from reporting. In all of the above 
cases, the OTS Regional Director will specifically identify the holding 
company from which data is to be collected. The data collected would 
include: Total assets; total liabilities; total equity; intangible 
assets and deferred policy acquisition costs; debt maturing within the 
next 12 months (excluding deposits); all other debt (excluding 
deposits); net cash flow from operations; net income; and interest 
expense. The data will be based on holding company consolidated 
financial statements. The holding company would provide the data to the 
savings association, and the holding company schedule would be filed as 
part of the TFR, within the same timeframes as the TFR. As of March 31, 
2000, there were 531 thrifts owned by thrift holding companies; 
therefore, 48% of all savings associations filing a TFR would be 
required to file the proposed holding company schedule.

20. Transactions with Affiliates

    OTS proposes to add memoranda information in Schedule SI on certain 
transactions the savings association has with its affiliates. The term 
``affiliate'' is defined in 12 CFR 563.41(b)(1). For purposes of the 
collection of this data, ``affiliate'' is defined as the holding 
company(s), any holding company subsidiary(s), a bank or thrift 
subsidiary of the savings association, and any company controlled by or 
for the benefit of shareholders, or which shares a majority of the same 
directors with the savings association or holding company. These data 
generally will not include transactions with subsidiaries of the 
savings association. Additionally, any transaction by a savings 
association or its subsidiaries with any person or entity is a 
transaction with an affiliate if the proceeds of the transaction are 
used for the benefit of, or transferred to, an affiliate. The items to 
be collected are: (1) Fees/expenses paid by the thrift to affiliates 
during the quarter including interest, management and service fees, tax 
sharing payments, and other general and administrative expenses; (2) 
the amount of assets sold to affiliates during the quarter; (3) the 
outstanding balance at the end of the quarter of: (a) Assets purchased 
from affiliates, (b) commitments to purchase assets from affiliates, 
and (c) extensions of credit to affiliates; (4) the percentage of the 
thrift's directors who are also directors of affiliates; and (5) the 
percentage of the thrift's officers who are also officers of the 
affiliates.

21. Fiduciary and Related Services

    The OTS proposes to adopt the same schedule on trust activities 
that has been proposed by the other banking agencies. OTS and the other 
banking agencies propose to change the manner in which associations 
report information on their trust activities. The existing Annual 
Report of Trust Assets (FFIEC 001) and the quarterly TFR line SI350 
(Approximate Value of Trust Assets Administered) would be replaced with 
a quarterly Fiduciary and Related Services Schedule (TFR Schedule FS). 
This new schedule would become part of the TFR and would be filed 
within the same timeframe as the TFR. Under this proposal, associations 
that have total fiduciary assets greater than $100 million or fiduciary 
income greater than 10 percent of their combined net interest and 
noninterest income, as well as all nondeposit trust companies that file 
TFRs, would be required to report certain trust information in Schedule 
FS quarterly. Less than five percent of those associations reporting to 
OTS would be required to file this new trust schedule on a quarterly 
basis. All other associations involved in trust activities would report 
select information at calendar year end only. The information proposed 
includes the number of accounts and the market value of trust assets 
for eight categories of fiduciary activities and a fiduciary and 
related services income statement. These associations would 
additionally report, at calendar year-end, data on corporate trust 
activities, collective investment funds and common trust funds, 
fiduciary settlements and other losses, and types of assets held in 
personal trust and agency accounts. The fiduciary and related services 
income statement and the items on fiduciary settlements and other 
losses would be treated as confidential information on an individual 
association basis, which would maintain the treatment accorded this 
information in the Annual Report of Trust Assets. The agencies have 
applied confidential treatment to this trust income and loss 
information because these data generally pertain to only a portion of a 
reporting association's total operations and not to the savings 
association as a whole. Collecting certain data in the new fiduciary 
schedule from the savings associations with larger trust activities 
each quarter will provide OTS with critical supervisory information 
relating to fiduciary activities on a timelier basis. This will enable 
OTS to identify trends and changing risk profiles relating to fiduciary 
activities more quickly.
    Most of the 51 data items that would be reported quarterly in the 
fiduciary schedule are included in the current annual trust reports. 
Modifications have been made to some of the existing items to improve 
their value and usefulness. An additional 47 data items would only be 
collected annually in the December 31 report, which would be required 
of all associations with trust activities. The total number of 
separately reportable data items in the proposed fiduciary schedule 
represents a decrease of almost 40 percent in the number of reportable 
items in the current Annual Report of Trust Assets.
    Although roughly half of the associations currently reporting trust 
activities annually would have a new quarterly filing requirement, 
these associations should already have a reporting system in place to 
track this information. In addition, savings associations with small 
trust activities would, at most, have to provide trust data in 36 items 
once each year. Thus, OTS believes this proposal should not produce a 
significant overall increase in reporting burden for savings 
associations with trust activities. OTS is proposing to add the new 
fiduciary schedule to the TFR instead of retaining a separate trust 
report in order to facilitate the timely collection and processing of 
the information. Savings associations filing the current annual trust 
reports generally must submit their reports within 45 days after year-
end. Electronically submitted annual trust reports, first allowed for 
year-end 1998 reporting, have a 75-day filing deadline. By moving the 
reporting of fiduciary information into the TFR, the submission 
deadline for the TFR would apply to this reporting requirement. The 
length of time that savings associations with trust activities would 
have for completing the fiduciary schedule would be reduced from 75 
days to 30 days. OTS invites comment on all aspects of the proposed 
Fiduciary Schedule. In particular, we seek comment on the following 
issues relating to this schedule:
    (1) Do the proposed criteria for determining which savings 
associations should report quarterly adequately capture those savings 
associations that should report fiduciary activities more frequently 
than annually because of the extent of their involvement with these 
activities? If not, what should the criteria be?

[[Page 48055]]

    (2) What types of difficulties, if any, will associations encounter 
in complying with the proposed reduction in the amount of time for 
reporting trust information in spite of the significant decrease in the 
amount of data that savings associations would be required to report?
    (3) Are the categories of trust accounts for which asset and income 
information would be reported in the proposed Fiduciary Schedule an 
improvement over the current reporting structure of the Annual Report 
of Trust Assets (FFIEC 001) and are the proposed trust account 
categories clear? Is there an alternative categorization of trust 
accounts for asset and income reporting purposes that would increase 
the schedule's usefulness?
    (4) Is net fiduciary and related services income, as it would be 
reported in the proposed schedule, a useful performance measure? Is the 
proposed single item for ``Expenses'' too broad or restrictive to allow 
for meaningful peer analysis? Should intracompany income credits be 
included, as proposed, in computing net fiduciary and related services 
income?
    (5) Should individual association fiduciary income and loss 
information continue to be accorded confidential treatment with only 
aggregate income and loss data made available to the public, or should 
the agencies make some or all of this individual association data 
publicly available?
    (6) What fiduciary-related trends and ratios should be reported in 
the Uniform Thrift Performance Report and how should they be presented?
    (7) The FFIEC currently issues an annual publication, ``Trust 
Assets of Financial Institutions,'' containing data reported in the 
Annual Report of Trust Assets (FFIEC 001). Should the FFIEC continue to 
produce such a publication and, if so, which types of data from the 
proposed schedule should the publication contain and how often should 
the FFIEC publish the data?
    OTS recently issued Thrift Bulletin 48-16, which addressed how OTS 
will compute assessments under the complexity component for trust 
assets administered by a savings association. See 12 CFR 502.25. The 
Thrift Bulletin provides different assessment rates for trust assets 
administered in a fiduciary and non-fiduciary capacity. OTS will use 
the information reported on the proposed schedule to compute 
assessments.

22. Residual Interests in Financial Assets Sold

    OTS proposed the following in a Federal Register Notice, dated 
March 1, 2000, for implementation in September 2000. We received no 
comments responding to that proposal. OTS subsequently decided to defer 
implementation of the proposal until March 2001.
    Residual interests in financial assets sold (RIFAS) are certain 
financial assets retained after the transfer of loans, securities, or 
other financial assets, where the transfer is recorded as a sale under 
Statement of Financial Accounting Standards (SFAS) No. 125. RIFAS 
represent the right to receive ``residual'' cash flows from the 
transferred assets. The ``residual'' cash flows are those that are 
available after payment of all other contractual obligations to holders 
of other beneficial interests in the transferred assets, and after all 
payments for servicing fees and other costs. RIFAS may be acquired by 
either origination or purchase, and may be in either security or 
nonsecurity form. Examples of RIFAS include, but are not limited to, 
interest-only strips, spread accounts, and cash collateral accounts.
    Credit enhancement RIFAS are those that are structured, through 
subordination provisions or other credit enhancement techniques, to 
absorb more than a pro-rata share of credit loss in relation to the 
transferred assets.
    Depending on their form, RIFAS may be included in Schedule SC 
(Statement of Condition) in four lines: Mortgage Derivatives (SC150), 
Other Investment Securities (SC185), Interest-only Strip Receivables 
and Certain Other Instruments (SC655), and Other Assets (SC690). 
Because three of these lines (SC150, SC185, and SC690) may contain 
other instruments, OTS cannot currently determine the total residual 
interests retained or purchased by a savings association. Therefore, 
OTS proposes to add two memoranda lines in Schedule SI (Supplemental 
Information); one to collect credit enhancement residual interests in 
financial assets sold and one to collect other residual interests in 
financial assets sold. The addition of these two items will provide OTS 
with more complete information for monitoring and supervisory purposes.

23. Federal Home Loan Bank (FHLB) Structured Advances and Other 
Structured Borrowings

    OTS proposed the following in a Federal Register Notice, dated 
March 1, 2000, for implementation in September 2000. We received no 
comments responding to that proposal. OTS subsequently decided to defer 
implementation of the proposal until March 2001.
    In recent years, structured borrowings (especially FHLB structured 
advances) have become an increasingly popular funding source for 
savings associations. Because such borrowings often have complex 
embedded options, the use of these instruments can raise safety and 
soundness concerns. OTS proposes to change Schedule CMR (Consolidated 
Maturity/Rate) to collect estimates of the market value of structured 
borrowings to better evaluate the interest rate risk they pose. Market 
value data for structured borrowings may be provided at the option of 
the savings association, unless otherwise directed by OTS.
    A detailed description of the proposed changes follows:
    (1) Variable-rate, Fixed-maturity Liabilities, Schedule CMR form, 
page 32: Delete all existing cells under this heading. Outstanding 
balances for these instruments will be reported in new fields for 
deposits and borrowings as described below. Additionally, detailed 
information will be reported on these instruments on page 36 in 
Supplemental Reporting for Assets/Liabilities.
    (a) Delete: CMR721 through CMR748
    (b) Add:
Liabilities Reported in Supplemental Reporting for Assets and 
Liabilities
CMR749: Outstanding Balance of Variable-Rate, Fixed-Maturity Deposits 
(reported under liability code 200)
CMR751: Outstanding Balance of Variable-Rate, Fixed-Maturity Borrowings 
(reported under liability codes 220 or 229)
CMR753: Outstanding Balance of FHLB Structured Advances (reported under 
liability codes 280, 281, 282, 283 or 289)
CMR754: Outstanding Balance of Other Structured Borrowings (reported 
under liability code 290)

    (2) Delete the column for Options on Liabilities, which will be 
replaced by the new reporting of structured borrowings. Delete: CMR941 
through CMR950.
    (3) Optional Supplemental Reporting for Assets/Liabilities, 
Schedule CMR form, page 36:
    Rename this section as ``Supplemental Reporting for Assets/
Liabilities.'' The column headings in this schedule will be instrument-
specific. The instrument codes that are currently reported in the 
Supplemental Reporting for Assets/Liabilities Schedule will use the 
existing column headings. New codes will be added for reporting: (a) 
Internal valuations of nonmortgage servicing rights (as reported on 
SC644); (b) certain nonsecurity financial instruments (as

[[Page 48056]]

reported on SC655); (c) FHLB structured advances (as reported on 
SC720); and (d) other structured borrowings (as reported on SC730 
through SC760). For these new codes, the nine column headings will be 
the instrument's code, book value, and association-reported estimates 
of the instrument's value in the seven interest-rate scenarios (plus/
minus 300, plus/minus 200, plus/minus 100, and no change). These 
instrument-specific fields (rather than fixed column definitions) will 
improve the ability of savings associations to report financial 
information in a more detailed manner than is currently collected and 
will improve interest rate risk measures produced by the OTS model. 
This change to the form will also facilitate the addition of future 
codes for new instruments with customized cell content.

24. Yields on Deposits--Schedule YD

    Schedule YD contains compounded annual yields for certain new 
deposits. OTS proposes the deletion of this schedule in its entirety as 
it no longer provides sufficient use to OTS to justify its continuance.

25. Asset Maturity Data

    OTS proposes to delete five lines that collect data on asset 
maturities on Schedule SI (Supplemental Information). Currently, only 
savings associations that meet the Schedule CMR (Consolidated Maturity/
Rate) exemption criteria (assets less than $300 million and risk-based 
capital in excess of 12%) and that opt not to file Schedule CMR must 
provide these data. OTS no longer needs to collect these data.

26. Margin Accounts

    OTS proposes to delete CMR542, Margin Accounts, as it is no longer 
used.

27. Estimated Market Value Rate Shocks

    Thrift Bulletin 13a no longer requires associations to maintain 
interest rate risk limits for the plus and minus 400 basis point 
interest rate scenarios. Therefore, the OTS proposes deleting these 
fields from Schedule CMR on page 35 of the TFR form.

28. Multifamily Mortgages

    OTS proposes to rename ``5 or More Dwelling Units'' to 
``Multifamily (5 or more) Residential Properties'' throughout the TFR. 
The use of ``multifamily residential properties'' conforms to the 
wording in the OTS capital regulations, other OTS regulations, and in 
the commercial bank Call Report, clarifying that these are the same 
type of loans. Schedules CCR and CMR currently use the term 
``Multifamily Residential Mortgages.''

29. Mortgage Loan Activity

    OTS proposes to delete the breakdown of permanent mortgages between 
newly built and previously occupied residential property in Schedule CF 
(Cash Flow). OTS no longer uses this breakdown.

30. Hedging Activity

    As a result of the application of Statement of Financial Accounting 
Standards (SFAS) No. 133, ``Accounting for Derivative Instruments and 
Hedging Activities,'' the OTS proposes to delete two lines for 
amortization of deferred gains and losses and a line for the net cost 
of matched interest rate swaps in the income statement (Schedule SO). 
SFAS No. 133 will be effective for all associations during 2001.

31. Eliminating Confidential Treatment for Certain Interest Rate 
Risk and Past Due Data

    The TFR is widely used by securities analysts, rating agencies, and 
large institutional investors as sources of thrift-specific data. OTS 
currently accords confidential treatment to the information 
associations report in Schedule CMR on the maturity and rate 
information used in assessing interest rate risk and information 
reported in Schedule PD on the amounts of loans, leases, and other 
assets past due 30 through 89 days and still accruing. OTS publishes 
aggregate data derived from these confidential items but does not 
publish the individual association data. In contrast, the information 
associations report on the amounts of their loans, leases, and other 
assets that are 90 days or more past due and still accruing or that are 
in nonaccrual status has been publicly available since 1990. 
Nevertheless, OTS has not precluded associations from publicly 
disclosing the data that OTS treats as confidential, provided 
individual borrower information is not released. In order to give the 
public, including thrifts, more complete information on the level of 
and trends in interest rate risk and asset quality at individual 
associations, OTS proposes to eliminate the confidential treatment for 
Schedule CMR beginning with the amounts reported as of March 31, 2001. 
Comment is requested from both voluntary and required filers of 
Schedule CMR on whether it will pose a hardship on savings associations 
if all or part of the data is made publicly available.

32. Reporting Frequency of Schedule CSS (Subordinate Organization 
Schedule)

    In 1996, OTS reduced the reporting frequency of Schedule CSS from 
quarterly to annually in order to reduce reporting burden of the 
industry. While annual reporting of subordinate organizations was 
adequate at that time, we now have a need for more frequent reporting 
and propose to collect Schedule CSS on a semi-annual basis. In 
addition, as mentioned above, we propose to collect the web site 
addresses of subsidiaries in Schedule CSS to assist in monitoring the 
activities of subsidiaries on their web sites.
    Type of Review: Revision.
    Affected Public: Business or For Profit.
    Estimated Number of Respondents and Recordkeepers: 1100.
    Estimated Time Per Respondent: 33 hours average.
    Estimated Total Annual Burden Hours: 145,200 hours.
    Because these some of the proposed changes will not affect all 
savings associations that file the TFR, the burden hours reflected 
above are unchanged from the current burden. We invite comment on how 
savings associations think the burden will change given these form 
changes.
    Request for Comments: In addition to the issues presented above, 
comments are invited on: (a) Whether the proposed revisions to the TFR 
collections of information are necessary for the proper performance of 
the agency's functions, including whether the information has practical 
utility; (b) the accuracy of the agency?s estimate of the burden of the 
collection of information; (c) ways to enhance the quality, utility, 
and clarity of the information to be collected; (d) ways to minimize 
the burden of information collections on respondents, including through 
the use of automated collection techniques, the Internet, or other 
forms of information technology; and (e) estimates of capital or sta rt 
up costs and costs of operation, maintenance, and purchase of services 
to provide information. OTS will summarize or include comments 
submitted in response to this notice with the request for OMB approval, 
and will include these comments in the public record.

    Dated: July 31, 2000.
John E. Werner,
Director, Information Services.
[FR Doc. 00-19803 Filed 8-3-00; 8:45 am]
BILLING CODE 6720-01-P