[Federal Register Volume 67, Number 40 (Thursday, February 28, 2002)]
[Notices]
[Pages 9355-9358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4741]


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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 for OMB 
Review; Comment Request

AGENCIES: 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 OMB for 
review and approval under the Paperwork Reduction Act of 1995.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and the FDIC 
(the ``agencies'') may not conduct or sponsor, and the respondent is 
not required to respond to, an information collection unless it 
displays a currently valid Office of Management and Budget (OMB) 
control number. On October 18, 2001, the OCC, the Board, and the FDIC 
(the agencies) requested public comment for 60 days on proposed 
revisions to the Consolidated Reports of Condition and Income (Call 
Report), which are currently approved collections of information. After 
considering the comments the agencies received, the Federal Financial 
Institutions Examination Council (FFIEC), of which the agencies are 
members, adopted the proposed revisions after making certain 
modifications to them.

DATES: Comments must be submitted on or before April 1, 2002.

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, SW., 
Public Information Room, Mailstop 1-5, Attention: 1557-0081, 
Washington, DC 20219. Due to recent temporary disruptions in the OCC's 
mail service, commenters are encouraged to submit comments by fax or 
electronic mail. Comments may be sent by fax to (202) 874-4448, or by 
electronic mail to [email protected]. Comments will be 
available for inspection and photocopying at the OCC's Public 
Information Room, 250 E Street, SW., Washington, DC 20219. Appointments 
for inspection of comments may be made by calling (202) 874-5043.
    Board: Written comments should be addressed to Jennifer J. Johnson, 
Secretary, Board of Governors of the Federal Reserve System, 20th and C 
Streets, NW., Washington, DC 20551, submitted by electronic mail to 
[email protected], 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, NW. Comments received may be 
inspected in room M-P-500 between 9 a.m. and 5 p.m., except as provided 
in section 261.12 of the Board's Rules Regarding Availability of 
Information, 12 CFR 261.12(a).
    FDIC: Written comments should be addressed to Robert E. Feldman,

[[Page 9356]]

Executive Secretary, Attention: Comments/OES, Federal Deposit Insurance 
Corporation, 550 17th Street, NW., Washington, DC 20429. All comments 
should refer to ``Consolidated Reports of Condition and Income.'' 
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 a.m. and 5 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, NW., 
Washington, DC, between 9 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 T. Hunt, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Sample copies of the revised Call 
Report forms for March 31, 2002, can be obtained at the FFIEC's web 
site (www.ffiec.gov). Sample copies of the revised Call Report forms 
also may be requested from any of the agency clearance officers whose 
names appear below.
    OCC: Jessie Dunaway, OCC Clearance Officer, or Camille Dixon, (202) 
874-5090, Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
    Board: Mary M. West, Chief, Financial Reports Section, (202) 452-
3829, Division of Research and Statistics, Board of Governors of the 
Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551. 
Telecommunications Device for the Deaf (TDD) users may contact Diane 
Jenkins, (202) 452-3544, Board of Governors of the Federal Reserve 
System, 20th and C Streets, NW., Washington, DC 20551.
    FDIC: Tamara R. Manly, Management Analyst (Regulatory Analysis), 
(202) 898-7453, Office of the Executive Secretary, Federal Deposit 
Insurance Corporation, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: Request for OMB approval to extend, with 
revision, the following currently approved collections of information:
    Report Title: Consolidated Reports of Condition and Income.
    Form Number: FFIEC 031 (for banks with domestic and foreign 
offices) and FFIEC 041 (for banks with domestic offices only).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.

For OCC

    OMB Number: 1557-0081.
    Estimated Number of Respondents: 2,200 national banks.
    Estimated Time per Response: 42.02 burden hours.
    Estimated Total Annual Burden: 369,776 burden hours.

For Board

    OMB Number: 7100-0036.
    Estimated Number of Respondents: 978 state member banks.
    Estimated Time per Response: 48.00 burden hours.
    Estimated Total Annual Burden: 187,776 burden hours.

For FDIC

    OMB Number: 3064-0052.
    Estimated Number of Respondents: 5,480 insured state nonmember 
banks.
    Estimated Time per Response: 32.64 burden hours.
    Estimated Total Annual Burden: 715,503 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 550 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 selected items, this information collection is not given 
confidential treatment. Small businesses (i.e., small banks) are 
affected.

Abstract

    Banks file Call Reports with the agencies each quarter for the 
agencies' use in monitoring the condition, performance, and risk 
profile of reporting banks and the industry as a whole. In addition, 
Call Reports provide the most current statistical data available for 
evaluating bank corporate applications such as mergers, for identifying 
areas of focus for both on-site and off-site examinations, and for 
monetary and other public policy purposes. Call Reports are also used 
to calculate all banks' deposit insurance and Financing Corporation 
assessments and national banks' semiannual assessment fees.

Current Actions

    On October 18, 2001, the OCC, the Board, and the FDIC jointly 
published a notice soliciting comments for 60 days on proposed 
revisions to the Call Report (66 FR 52973). The notice described the 
specific changes that the agencies, with the approval of the FFIEC, 
were proposing to implement as of March 31, 2002. The proposed 
revisions included:
     Separating the existing balance sheet (Schedule RC) items 
for federal funds sold and securities resale agreements and for federal 
funds purchased and securities repurchase agreements into two asset and 
two liability items and adding a new item to Schedule RC-M, Memoranda, 
for the amount of overnight Federal Home Loan Bank advances included in 
federal funds purchased;
     Adding new items for:
     The fair value of credit derivatives to Schedule RC-L, 
Derivatives and Off-Balance Sheet Items;
     Year-to-date merchant credit card sales volume for 
acquiring banks and for agent banks with risk to Schedule RC-L; and
     Loans and leases held for sale that are past due 30-89 
days, past due 90 days or more, and in nonaccrual status to the past 
due and nonaccrual schedule (Schedule RC-N);
     Breaking down the existing items for past due and 
nonaccrual closed-end 1-4 family residential mortgages in Schedule RC-N 
and for the charge-offs and recoveries of such mortgages in Schedule 
RI-B, part I, into separate items for first lien and junior lien 
mortgages;
     Revising the manner in which banks report on the estimated 
amount of their uninsured deposits in the deposit insurance assessments 
schedule (Schedule RC-O) and, for banks with foreign offices, modifying 
the scope of the existing items for the number and amount of deposit 
accounts in domestic offices to include accounts in insured branches in 
Puerto Rico and U.S. territories and possessions;
     Inserting a subtotal in the Tier 1 capital computation in 
Schedule RC-R, Regulatory Capital, to facilitate the calculation of 
certain disallowed assets and adding a new item to the schedule in 
which banks with financial subsidiaries would report the adjustment 
they must make to Tier 1 capital for their investment in these 
subsidiaries;
     Splitting the existing income statement (Schedule RI) item 
for intangible asset amortization expense into separate items for 
impairment losses on goodwill and for the

[[Page 9357]]

amortization expense and impairment losses on other intangible assets 
on account of a new accounting standard; and
     Simplifying the disclosure of write-downs arising from 
transfers of loans to a held-for-sale account in the changes in 
allowance for loan and lease losses schedule (Schedule RI-B, part II).
    After considering the comments the agencies received, the FFIEC and 
the agencies decided to modify certain aspects of the proposal relating 
to the reporting of federal funds transactions and securities resale/
repurchase agreements and to proceed with all of the other revisions 
that had been proposed.
    In addition, on November 29, 2001, the agencies published a final 
rule revising the regulatory capital treatment of recourse arrangements 
and direct credit substitutes, including residual interests and credit-
enhancing interest-only strips, as well as asset-backed and mortgage-
backed securities (66 FR 59613). This final rule took effect on January 
1, 2002. Any transactions settled on or after that date are subject to 
the rule. However, for transactions settled before January 1, 2002, 
that result in increased capital requirements under the final rule, 
banks may delay the application of the final rule to those transactions 
until December 31, 2002. In response to this final rule, the FFIEC and 
the agencies are revising the instructions for reporting these types of 
exposures in Schedule RC-R, Regulatory Capital, so that the capital 
calculations in this schedule are consistent with the amended 
regulatory capital standards.
    Type of Review: Revisions of currently approved collections.

Comments

    In response to their October 18, 2001, notice, the agencies 
received two comment letters, one from the New York Clearing House 
(NYCH), an association of 11 major commercial banks, and another from 
the Federal Home Loan Bank (FHLB) of Atlanta. The agencies and the 
FFIEC have considered the comments received from these two respondents.

Federal Funds Transactions and Securities Resale/Repurchase Agreements

    As indicated above, the agencies originally proposed to separate 
the existing balance sheet (Schedule RC) items for ``Federal funds sold 
and securities purchased under agreements to resell'' and for ``Federal 
funds purchased and securities sold under agreements to repurchase'' 
into two asset and two liability items. As proposed, the reporting of 
amounts as ``Federal funds sold'' (the asset item) and ``Federal funds 
purchased'' (the liability item) would have been based on the 
longstanding definition of ``federal funds transactions,'' i.e., the 
lending and borrowing of immediately available funds for one business 
day or under a continuing contract, regardless of the nature of the 
contract or of the collateral, if any. Under this definition, 
securities resale/repurchase agreements involving the receipt of 
immediately available funds that mature in one business day or roll 
over under a continuing contract are considered federal funds 
transactions. In addition, because overnight advances that a bank 
obtains from a Federal Home Loan Bank also met the definition of 
federal funds purchased, the agencies further proposed to add a new 
item to Schedule RC-M, Memoranda, in order to identify the amount of 
these overnight Federal Home Loan Bank advances. All other Federal Home 
Loan Bank advances are reported as part of ``Other borrowed money.''
    The NYCH cited several concerns with this aspect of the agencies' 
proposal. The NYCH noted that the federal funds market, which generally 
involves transactions that are not collateralized, is different from 
the securities resale/repurchase markets, which involves collateralized 
transactions. As a result, its member banks typically manage these two 
types of transactions separately. Moreover, their member banks' 
existing data collection systems do not separately identify overnight 
securities resale/repurchase agreements and reclassify them as federal 
funds transactions, which the proposed Call Report change would require 
their systems to do. The NYCH also recommended that federal funds 
transactions should be limited to transactions in domestic offices, 
noting that if this were done, conforming changes would need to be made 
to the related items in Schedule RC-H, Selected Balance Sheet Items for 
Domestic Offices.
    The FHLB of Atlanta supported the agencies' proposal to have banks 
report federal funds transactions separately from securities resale/
repurchase agreements on the balance sheet and to add an item to 
Schedule RC-M for overnight Federal Home Loan Bank advances. However, 
the FHLB of Atlanta questioned the treatment of overnight Federal Home 
Loan Bank advances as federal funds purchased. Because all other 
Federal Home Loan Bank advances are reported as part of ``Other 
borrowed money'' on the Call Report balance sheet, the FHLB of Atlanta 
suggested that, at present, banks may be including overnight advances 
in ``Other borrowed money'' instead of reporting them as federal funds 
purchased. Therefore, the FHLB of Atlanta urged the agencies to clarify 
this matter in the Call Report instructions.
    After considering these comments, the FFIEC and the agencies have 
decided to modify their original proposal to address the concerns that 
were raised. The FFIEC and the agencies will proceed with the 
separation of the existing asset and liability items on Schedule RC, 
Balance Sheet, into federal funds items and securities resale/
repurchase agreement items. In so doing, however, the definition of 
``federal funds transactions'' in the Call Report instructions will be 
revised. As revised, federal funds sold and purchased will be limited 
to transactions in domestic offices only and will not include:
     Any securities resale/repurchase agreements,
     Overnight Federal Home Loan Bank advances, or
     Lending and borrowing transactions in foreign offices 
involving immediately available funds with an original maturity of one 
business day or under a continuing contract.
    This definitional revision eliminates the need for the proposed 
item for overnight Federal Home Loan Bank advances because they will be 
included in ``Other borrowed money'' on the balance sheet. As a 
consequence, these advances will also be reported in the existing 
maturity distribution of ``Other borrowed money'' in Schedule RC-M as 
Federal Home Loan Bank advances with a remaining maturity of one year 
or less.
    On the FFIEC 031 report form for banks with foreign offices, 
lending and borrowing transactions in foreign offices involving 
immediately available funds with an original maturity of one business 
day or under a continuing contract that are not securities resale/
repurchase agreements will begin to be reported on the Call Report 
balance sheet in ``Loans and leases, net of unearned income'' and 
``Other borrowed money,'' respectively. In addition, since federal 
funds transactions will include only transactions in domestic offices, 
the scope of two items on Schedule RC-H will be modified so that they 
exclude federal funds transactions. As a result, revised items 3 and 4 
of Schedule RC-H will cover only ``Securities purchased under 
agreements to resell'' and ``Securities sold under agreements to 
repurchase'' in domestic offices, respectively.

[[Page 9358]]

Merchant Credit Card Sales Volume

    The agencies proposed to add new items to the Call Report on year-
to-date merchant credit card sales volume. The NYCH indicated that it 
was uncertain as to how the agencies would use the data on merchant 
credit sales volume to assess risk, particularly with respect to 
capital, and urged the agencies ``not to jump to conclusions about the 
risks represented by the data.''
    The agencies recognize that the sales data are but one indicator of 
risk associated with the merchant acquiring business. The sales data 
are intended to provide information for off-site monitoring of the risk 
profiles of individual institutions and will enable the agencies to 
identify and monitor institutions involved in and entering this 
business. Significant changes in the sales volume at individual 
institutions would warrant supervisory follow-up to determine whether 
adequate risk management processes and controls are in place for the 
higher level of processing activity. Nevertheless, this follow-up 
activity, as well as assessments of capital adequacy, would consider a 
variety of factors besides the sales volume data. In addition, any 
changes to the agencies' regulatory capital standards to address the 
off-balance sheet risks arising from merchant processing activities 
would be subject to formal rulemaking.

Reporting Uninsured Deposits

    The agencies proposed to revise the approach by which banks report 
an estimate of their uninsured deposits in Call Report Schedule RC-O, 
Other Data for Deposit Insurance and FICO Assessments. Under the 
revised approach, all banks would be required to provide an estimate of 
these deposits subject to certain reporting criteria that are intended 
to permit banks to take advantage of automated systems to the extent 
that they are in place today and as they improve over time. As 
proposed, the caption for this item would have been changed from 
``Estimated amount of uninsured deposits of the bank'' to ``Uninsured 
deposits.''
    The NYCH stated that the amount banks report in the revised item 
should still be viewed as a ``best estimate'' and recommended that the 
current caption be maintained. The FFIEC and the agencies have agreed 
to retain the words ``estimated amount'' in the caption.
    The NYCH also observed that, although the reporting criteria for 
the estimation process for the revised item relate to specific types of 
deposits, ``different banks will have varying degrees of success in 
obtaining the information required and therefore the results may not be 
as consistently derived as intended.'' The NYCH added that this could 
lead to different levels of performance within an individual bank and 
across all banks as well as different levels of individual bank 
performance over time as banks improve their automated systems. The 
NYCH acknowledged that the proposal recognized that this would be a 
likely outcome. In this regard, the FDIC is more interested at present 
in obtaining uninsured deposit estimates from banks that are better 
than the estimates that are developed under the current reporting 
approach than about the consistency of the methods banks use to 
determine the estimate under the revised approach. Accordingly, the 
instructions for the revised item for estimated uninsured deposits will 
state that the agencies recognize that a bank may have multiple 
automated information systems for its deposits and that the 
capabilities of these systems to provide an estimate of uninsured 
deposits will differ from bank to bank at any point in time and, within 
an individual institution, may improve over time.

Request for Comment

    Comments are invited on:
    (a) Whether the proposed revisions to the Call Report collections 
of information are necessary for the proper performance of the 
agencies' 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 collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments submitted in response to this notice will be shared among 
the agencies. All comments will become a matter of public record. 
Written comments should address the accuracy of the burden estimates 
and ways to minimize burden as well as other relevant aspects of the 
information collection request.

    Dated: February 21, 2002.
Mark J. Tenhundfeld,
Assistant Director, Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency.

    Board of Governors of the Federal Reserve System, February 22, 
2002.
Jennifer J. Johnson,
Secretary of the Board.

    Dated at Washington, D.C., this 22nd day of February, 2002.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 02-4741 Filed 2-27-02; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P