[Federal Register Volume 71, Number 129 (Thursday, July 6, 2006)]
[Notices]
[Pages 38401-38402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6020]



[[Page 38401]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Effect of the Federal Deposit Insurance Reform Act on the 
Consolidated Reports of Condition and Income

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: Joint notice.

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SUMMARY: On May 8, 2006, the agencies, under the auspices of the 
Federal Financial Institutions Examination Council (FFIEC), published a 
joint notice, with a request for comment, announcing the effect of the 
Federal Deposit Insurance Reform Act on the reporting of certain 
deposit-related data in the Consolidated Reports of Condition and 
Income (Call Report; FFIEC 031 and 041). The notice described 
regulatory reporting revisions being made to the Call Report effective 
June 30, 2006, primarily in response to an increase in the deposit 
insurance coverage for certain retirement plan deposits from $100,000 
to $250,000. After considering the comments received on the agencies' 
notice, the agencies are providing additional information concerning 
the implementation of the regulatory reporting changes related to 
retirement plan deposits eligible for $250,000 in insurance coverage.

DATES: The regulatory reporting revisions related to certain retirement 
plan deposits take effect June 30, 2006, subject to transition 
guidance.

FOR FURTHER INFORMATION CONTACT:
    OCC: Mary Gottlieb, OCC Clearance Officer, or Camille Dickerson, 
(202) 874-5090, Legislative and Regulatory Activities Division, Office 
of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 
20219.
    Board: Michelle E. Long, Board Clearance Officer, (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 call (202) 263-
4869.
    FDIC: Steven F. Hanft, (202) 898-3907, Room MB-3064, Legal 
Division, Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    Banks file Call Report data 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 Report data 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 Report data are 
also used to calculate all banks' deposit insurance and Financing 
Corporation assessments and national banks' semiannual assessment fees.

II. Current Actions

    The Federal Deposit Insurance Reform Act of 2005 (Reform Act) (Pub. 
L. 109-171), enacted in February 2006, increased the deposit insurance 
limit for certain retirement plan deposit accounts from $100,000 to 
$250,000. The basic insurance limit for other depositor--individuals, 
joint accountholders, businesses, government entities, and trusts--
remains at $100,000. The FDIC issued an interim rule to implement this 
increase in coverage and other provisions of the Reform Act pertaining 
to deposit insurance coverage effective April 1, 2006 (71 FR 14629).
    Because the deposit insurance coverage for certain retirement plan 
deposits has increased while the insurance limit for deposit accounts 
in other ownership capacities has not changed, the agencies announced 
on May 8, 2006 (71 FR 26809), that data on the number and amount of 
retirement deposit accounts with balances within and in excess of the 
new $250,000 insurance limit will begin to be reported separately in 
the Call Report from data on the number and amount of other deposit 
accounts within and in excess of the $100,000 insurance limit (Schedule 
RC-O, Memorandum item 1). The agencies also stated that the Call Report 
instructions for reporting estimated uninsured deposits by banks with 
$1 billion or more in total assets (Schedule RC-O, Memorandum item 2) 
and for reporting fully insured brokered deposits (Schedule RC-E, 
Memorandum item 1.c) will be revised to reflect the new insurance limit 
for retirement deposit accounts. The agencies' announcement also 
advised that these reporting revisions would take effect June 30, 2006, 
the first report date following the effective date of the FDIC's 
interim rule and that, for the June 30 report date only, banks may 
provide reasonable estimates for any new or revised Call Report item 
for which the requested information is not readily available. After 
banks make any necessary changes to their systems and records, the 
agencies estimated that these deposit-related reporting changes would 
produce an average net increase of 0.5 hours per bank per year in the 
ongoing reporting burden of the Call Report.
    The agencies received comments on their notice from America's 
Community Bankers (ACB), the Independent Community Bankers of America 
(ICBA), and the American Bankers Association (ABA).
    ACB supported the Call Report revisions but expressed concern about 
the short amount of time for banks to implement the items. ACB urged 
the agencies to waive any penalties for reporting errors specific to 
the new or revised items in the June 30, 2006, Call Report. The 
agencies do not anticipate imposing monetary penalties on banks for 
such reporting errors in that Call Report.
    The ICBA commented that the reporting revisions are not overly 
burdensome and the ability to report reasonable estimates in the June 
30, 2006, Call Report is helpful. The ICBA added, however, that once 
necessary systems changes are made, the ongoing reporting burden from 
the revised reporting requirements would be 20 to 30 minutes per 
quarter rather than the 30 minutes per year that the agencies had 
estimated. The agencies will revise their estimate of the effect of the 
deposit-related reporting changes to an average net increase of 1.33 
hours per bank per year in the ongoing reporting burden of the Call 
Report.
    The ABA urged the agencies to delay the reporting revisions until 
the FDIC finalizes its interim rule on retirement deposit account 
insurance and banks have had time to make necessary systems changes. 
The ABA noted that the amount of time that banks have to prepare for 
these reporting revisions is shorter than usual and indicated that bank 
deposit records and systems do not clearly distinguish the types of 
retirement deposit accounts eligible for the higher insurance coverage 
from other accounts. It also asserted that there is uncertainty in the 
banking industry as to which retirement deposit accounts are eligible 
for the higher insurance coverage. To address these concerns, the 
agencies will implement the following transitional approach to

[[Page 38402]]

the Call Report revisions related to retirement deposit accounts.
    First, because banks have long reported the total amount of 
deposits held in Individual Retirement Accounts (IRAs) and Keogh Plan 
accounts in Call Report Schedule RC-E, Memorandum item 1.a, these two 
types of retirement deposit accounts should already be identified in 
banks' deposit records and systems. All deposits held in IRAs and those 
deposits held in Keogh Plan accounts that are ``self-directed'' are 
eligible for the $250,000 insurance coverage. For IRAs, banks may 
provide reasonable estimates for the information to be reported in the 
revised Schedule RC-O and Schedule RC-E Memorandum items in their June 
30 and September 30, 2006, Call Reports. For Keogh Plan accounts, banks 
may provide reasonable estimates of the portion of these accounts 
eligible for the $250,000 insurance coverage in the revised Schedule 
RC-O and Schedule RC-E Memorandum items in their June 30 and September 
30, 2006, Call Reports. If a bank's existing deposit records and 
systems for Keogh Plan accounts provide insufficient information to 
allow the bank to make a reasonable estimate, the bank may treat all 
deposits held in Keogh Plan accounts as eligible for the $250,000 
insurance coverage in these two Call Reports (even though some of these 
accounts may not be ``self-directed'' and, therefore, would not be 
eligible for the increased coverage).
    Second, banks should determine whether they have other retirement 
deposit accounts eligible for the $250,000 insurance coverage (i.e., 
accounts other than IRAs and Keogh Plan accounts). Banks may provide 
reasonable estimates for the information to be reported in the revised 
Schedule RC-O and Schedule RC-E Memorandum items in their June 30 and 
September 30, 2006, Call Reports. If a bank's existing deposit records 
and systems for these other retirement deposit accounts provide 
insufficient information to allow the bank to make a reasonable 
estimate, the bank may treat all of these deposit accounts as eligible 
for the $100,000 insurance coverage in these two Call Reports.
    For the December 31, 2006, Call Report, banks would be expected to 
have made appropriate systems changes to enable them to report 
reasonably accurate data on all types of retirement deposit accounts 
eligible for the $250,000 insurance coverage. Therefore, banks would no 
longer be permitted to elect to treat all Keogh Plan accounts as 
eligible for the $250,000 insurance coverage and all other retirement 
deposit accounts as eligible for the $100,000 insurance coverage in the 
revised Schedule RC-O and Schedule RC-E Memorandum items in their 
December 31, 2006, Call Report. Thereafter, banks' deposit records and 
systems should enable them to report information on all retirement 
deposit accounts in these Call Report items in accordance with the 
applicable instructions.
    In addition, the agencies have received inquiries concerning the 
reporting of brokered certificates of deposit issued in $1,000 amounts 
under a master certificate of deposit in the revised Schedule RC-O and 
Schedule RC-E Memorandum items. For these so-called ``retail brokered 
deposits,'' multiple purchases by individual depositors from an 
individual bank normally do not exceed the applicable deposit insurance 
limit (either $100,000 or $250,000), but under current deposit 
insurance rules the deposit broker is not required to provide 
information routinely on these purchasers and their account ownership 
capacity to the bank issuing the deposits. For purposes of reporting in 
the Call Report, these brokered certificates of deposit in $1,000 
amounts are rebuttably presumed to be fully insured brokered deposits 
and should be reported in Schedule RC-E, Memorandum item 1.c.(1), 
``Issued in denominations of less than $100,000.'' These deposits 
should also be included in Schedule RC-E, Memorandum item 2.b, ``Total 
time deposits of less than $100,000.'' For purposes of revised Schedule 
RCO, Memorandum item 1, the instructions state that multiple accounts 
of the same depositor should not be aggregated. Therefore, in the 
absence of information on account ownership capacity for retail 
brokered certificates of deposit in $1,000 amounts, which are 
rebuttably presumed to be fully insured brokered deposits, banks 
issuing these brokered deposits should include them in Schedule RC-O, 
Memorandum item 1, as ``Deposit accounts of $100,000 or less.''

    Dated: June 27, 2006.
James Gillespie,
Deputy Chief Counsel, Office of the Comptroller of the Currency.

    Board of Governors of the Federal Reserve System, June 29, 2006.
Jennifer J. Johnson,
Secretary of the Board.

    Dated at Washington, DC, this 27th day of June, 2006.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 06-6020 Filed 7-5-06; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P