[Federal Register Volume 71, Number 177 (Wednesday, September 13, 2006)]
[Notices]
[Pages 54075-54078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-15123]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System
SUMMARY: Background
    On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board of Governors of the Federal Reserve System 
(Board) its approval authority under the Paperwork Reduction Act, as 
per 5 CFR 1320.16, to approve of and assign OMB control numbers to 
collection of information requests and requirements conducted or 
sponsored by the Board under conditions set forth in 5 CFR 1320

[[Page 54076]]

Appendix A.1. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. Copies of the OMB 83-Is and supporting 
statements and approved collection of information instruments are 
placed into OMB's public docket files. The Federal Reserve 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.

Request for comment on information collection proposals

    The following information collections, which are being handled 
under this delegated authority, have received initial Board approval 
and are hereby published for comment. At the end of the comment period, 
the proposed information collections, along with an analysis of 
comments and recommendations received, will be submitted to the Board 
for final approval under OMB delegated authority. Comments are invited 
on the following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. The accuracy of the Federal Reserve's estimate of the burden of 
the proposed information collection, including the validity of the 
methodology and assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    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.

DATES: Comments must be submitted on or before November 13, 2006.

ADDRESSES: You may submit comments, identified by structure proposal or 
an individual reporting form number (FR Y-10, FR Y-10F, FR Y-10S, FR 
2058, FR Y-6, or FR Y-7), by any of the following methods:
     Agency Web Site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include docket 
number in the subject line of the message.
     FAX: 202-452-3819 or 202-452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
N.W., Washington, DC 20551.
    All public comments are available from the Board's web site at 
www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room MP-500 
of the Board's Martin Building (20th and C Streets, N.W.) between 9:00 
a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: A copy of the proposed form and 
instructions, the Paperwork Reduction Act Submission (OMB 83-I), 
supporting statement, and other documents that will be placed into 
OMB's public docket files once approved may be requested from the 
agency clearance officer, whose name appears below.Michelle Long, 
Federal Reserve Board Clearance Officer (202-452-3829), Division of 
Research and Statistics, Board of Governors of the Federal Reserve 
System, Washington, DC 20551. Telecommunications Device for the Deaf 
(TDD) users may contact (202-263-4869), Board of Governors of the 
Federal Reserve System, Washington, DC 20551.

Proposal to approve under OMB delegated authority the extension for 
three years, with revision, of the following reports:

    Report titles: Report of Changes in Organizational Structure, 
Report of Changes in FBO Organizational Structure, Supplement to the 
Report of Changes in Organizational Structure, Notification of Foreign 
Branch Status, Annual Report of Bank Holding Companies, and Annual 
Report of Foreign Banking Organizations.
    Agency form numbers: FR Y-10 (formerly FR Y-10, FR Y-10F, FR Y-10S, 
and FR 2058), FR Y-10E, FR Y-6, and FR Y-7
    OMB control numbers: 7100-0297, 7100-0069, 7100-0124, and 7100-0125
    Frequency: Event-generated, annual
    Reporters: Bank holding companies (BHCs), foreign banking 
organizations (FBOs), member banks, Edge and agreement corporations
    Annual reporting hours: FR Y-10, 16,608 hours; FR Y-10E, 1,384 
hours; FR Y-6, 27,069 hours; FR Y-7, 900 hours
    Estimated average hours per response: FR Y-10, 1.00 hour; FR Y-10E, 
0.50 hours; FR Y-6, 5.25 hours; FR Y-7, 3.50 hours
    Number of respondents: FR Y-10 and FR Y-10E, 2,768; FR Y-6, 5,156; 
FR Y-7, 257
    General description of report: These information collections are 
mandatory under the Federal Reserve Act, the BHC Act, and the 
International Banking Act (12 U.S.C. 248 (a)(1), 321, 601, 602, 611a, 
615, 1843(k), 1844(c), 3106, and 3108(a)) and Regulations K and Y (12 
CFR 211.13(c), 225.5(b), and 225.87). Individual respondent data are 
not considered confidential; however, respondents may request 
confidential treatment pursuant to Sections (b)(4) and (b)(6) of the 
Freedom of Information Act (5 U.S.C. 552(b)(4) and (b)(6)).
    Abstract: The FR Y-10 is an event-generated information collection 
submitted by top-tier domestic BHCs, including financial holding 
companies (FHCs), and state member banks unaffiliated with a BHC, to 
capture changes in their regulated investments and activities. The 
Federal Reserve uses the data to monitor structure information on 
subsidiaries and regulated investments of these entities engaged in 
banking and nonbanking activities.
    The FR Y-10F is an event-generated information collection submitted 
by FBOs, including FHCs, to capture changes in their regulated 
investments and activities. The Federal Reserve uses the data to ensure 
compliance with U.S. banking laws and regulations and to determine the 
risk profile of the FBO.
    The FR Y-10S is a supplement to the FR Y-10. The Federal Reserve 
uses the data to assess the effectiveness of banking organizations' 
compliance with the Sarbanes-Oxley Act of 2002 and enhance the Federal 
Reserve's ability to evaluate regulatory data by reconciling it 
accurately with market data reported to shareholders.
    The FR 2058 is an event-generated information collection submitted 
by member banks, BHCs, and Edge and agreement corporations to notify 
the Federal Reserve of the opening, closing, or relocation of a foreign 
branch. The Federal Reserve needs the information to fulfill its 
statutory obligation to supervise foreign branches of U.S. banking 
organizations.
    The FR Y-6 is an annual information collection submitted by top-
tier BHCs and nonqualifying FBOs. It collects financial data, an 
organization chart, and information about shareholders. The Federal 
Reserve uses the data to monitor holding company operations and 
determine holding company

[[Page 54077]]

compliance with the provisions of the Bank Holding Company Act (BHC 
Act) and Regulation Y (12 CFR 225).
    The FR Y-7 is an annual information collection submitted by 
qualifying FBOs to update their financial and organizational 
information with the Federal Reserve. The Federal Reserve uses 
information to assess an FBO's ability to be a continuing source of 
strength to its U.S. operations and to determine compliance with U.S. 
laws and regulations.
Current actions:
    A copy of the draft reporting forms will be made available, within 
seven days after publication of this notice, on the Federal Reserve 
Board's public Web site at: http://www.federalreserve.gov/boarddocs/reportforms/review.cfm under ``Information Collections Out for Public 
Comment.''
    Revisions Effective December 31, 2006

SEC Reporting Status (FR Y-10S Schedule A) and Committee on Uniform 
Security Identification Procedures (CUSIP) Number (FR Y-10S Schedule B)

    The Federal Reserve proposes to revise Schedule A of the FR Y-10S 
(1) to require data as of December 31, 2006, for reportable entities 
established in 2006 and reportable entities that have experienced a 
change since December 31, 2005, and (2) to modify the option for 
suspension to include termination of reporting requirements. Also, 
instructional changes to both Schedule A and B would be made to address 
questions from respondents that arose during the first data collection. 
In particular, the instructions would be clarified with respect to 
CUSIP data for, acquired entities, and the largest nonbank subsidiary 
and the elimination of the reference to CUSIP data for Canadian 
Companies.

FR Y-6 and FR Y-7 Certification

    The Federal Reserve proposes to revise the certification to require 
the authorized official to attest that the data have been prepared in 
conformance with the instructions and the data are true and correct to 
the best of the authorized official's knowledge and belief. This 
proposed change is similar to recent changes to the Consolidated 
Financial Statements for Bank Holding Companies (FR Y-9C; OMB No. 7100-
0128).

FR Y-6 and FR Y-7 Public Web Address

    The Federal Reserve proposes to add to the cover page a requirement 
for BHCs and FBOs to provide their public web addresses. This contact 
information would be useful to the public and to the Federal Reserve. 
The Federal Reserve finds it helpful to review the web sites to verify 
certain data submitted by BHCs and FBOs (such as annual reports to 
shareholders, officer and director information, subsidiary information, 
branch information, and press releases). For FBOs and smaller BHCs, it 
is difficult to find the web addresses through Internet search engines 
due to institutions with similar names. Web addresses are collected on 
the FR Y-9C from BHCs, but the addresses reported are specific to the 
pages that display risk disclosures. Because of the limited purpose, 
only about forty BHCs currently submit this information on the FR Y-9C.

FR Y-6 Organization Chart

    The Federal Reserve proposes to add to Report Item 2: Organization 
Chart an annual requirement for institutions to verify a list of 
domestic branches that the Federal Reserve has on file for the 
institution. The list of domestic branches would include those of 
depository institutions and Edge and agreement corporations held 
directly or indirectly by the respondent. The Federal Reserve would 
provide the branch data to the institution and the institution would be 
required to annotate the data in the format provided. The Federal 
Reserve plans to develop an automated tool for institutions to verify 
and update their domestic branch data and specifically requests comment 
on whether this tool would be useful to respondents.
    Revisions Effective June 30, 2007

Combining the FR Y-10, FR Y-10F, FR Y-10S, and FR 2058 Reporting Forms

    The Federal Reserve proposes to combine the four existing reporting 
forms into one to streamline the data submission process. All report 
titles, form numbers, and OMB control numbers would be combined as the 
Report of Changes in Organizational Structure, FR Y-10, OMB No. 7100-
0297. In combining the reporting forms and instructions, the Federal 
Reserve intends to retain all data items not specifically mentioned in 
this notice. All data items would be collected on an event-generated 
basis, including data previously submitted annually on Schedule A of 
the FR Y-10S. The substantive proposed changes to the data submitted 
are described in detail below. Also, minor clarifications would be made 
to certain data items to address recurring questions from respondents. 
The Federal Reserve would request institutions to provide data on the 
FR Y-10 for any changes not previously reported, occurring between 
January 1, 2007 and June 30, 2007, by July 30, 2007. Any event-
generated transaction that occurs after June 30, 2007, would be 
submitted on the combined FR Y-10 within 30 days.

Proposed FR Y-10 Banking and Nonbanking Schedules

    Consolidation Question (current data item 8). The Federal Reserve 
proposes to delete the question regarding whether the company is 
consolidated in the respondent's financial statements.
    100% Owned Entities (proposed data item 11.a). On the Nonbanking 
Schedule only, the Federal Reserve proposes to add a box to collect 
data for wholly-owned entities. The current data item (9.a on the FR Y-
10F and 10.a on the FR Y-10) requires these entities to be identified 
as 80 percent or more owned. The Federal Reserve is unable to determine 
whether a particular subsidiary is wholly-owned, which has implications 
for the supervisory process.

Proposed FR Y-10 Domestic Branch Schedule

    The Federal Reserve proposes to add a schedule for data on domestic 
branches and offices of depository institutions held directly or 
indirectly and domestic branches of Edge and agreement corporations. 
Top-tier BHCs, state member banks that are not controlled by a BHC, and 
Edge and agreement corporations would be required to submit this 
information. Data would not be submitted by national and nonmember 
banks that are unaffiliated with a BHC.
    The Federal Reserve proposes to collect branch data on an event-
generated basis, parallel to the other schedules on the FR Y-10, within 
thirty calendar days. As noted above, BHCs would verify a list of 
domestic branches for each depository institution within their 
organization in the FR Y-6 report, beginning in December 2006. The 
Federal Reserve would request BHCs to provide data on the FR Y-10 for 
any branch openings, acquisitions, sales, closings or relocations, or 
changes to service type or popular name, occurring between January 1, 
2007 and June 30, 2007, by July 30, 2007. Thereafter, institutions 
would be required to report events within 30 days; however, they would 
be permitted to combine multiple transactions into a single monthly 
filing.
    Collecting domestic branch data on an event-generated basis would 
ensure that the Federal Reserve will be using data that accurately 
reflect current market conditions. In the analysis of proposed mergers, 
or when performing

[[Page 54078]]

Community Reinvestment Act examinations, the Federal Reserve will be 
able to assess banking presence in the relevant markets. Currently, 
such analysis is not possible.
    Data would be submitted for the following branches and offices:
    1. Full service (brick & mortar, retail) ' traditional offices.
    2. Electronic Banking ' offices where Internet and other similar 
deposits are booked.
    3. Limited service (military, drive-through, mobile or seasonal, 
and retail) - limited, but often take or include deposits.
    4. Loan production and consumer credit - limited, normally 
nondeposit, but extend credit.
    5. Trust - limited and nondeposit.
    6. Administrative (administrative, contractual, messenger) - all 
other limited and nondeposit.
    Competitive analysis is required by the BHC Act (sections 3(c) (1) 
and (2)) and the Bank Merger Act (section 18(c)). The purpose of 
collecting data in these six categories is to gain accurate information 
regarding the degree of each institution's market presence in local 
markets. Categories 1 and 3 are branches that take deposits and 
directly serve the area where they are located. Categories 2 and 5 are 
also deposit-taking branches but their deposits are likely to have 
originated from consumers in locations other than where the branch is 
located, implying that branch presence in the market may not indicate 
service in that market. The inclusion of a separate category for loan 
production and consumer credit offices is intended to capture retail 
bank activity, which may be substantial, in markets where the 
institution has no deposit-taking branches. The last category captures 
those locations not elsewhere classified. The proposal to classify all 
branches into six categories is based upon the current collection of 
branch data in the Federal Deposit Insurance Corporation's (FDIC's) 
Summary of Deposits (SOD) Report (OMB No. 3064-0061). Each of the 
current SOD classifications can be mapped directly into one of the 
proposed categories. This should reduce burden on respondents. The 
Federal Reserve requests specific comment on whether these categories 
are the best way to break out service level types.
    Branch data are essential for carrying out the Federal Reserve's 
statutory responsibility to analyze the competitive effects of proposed 
bank mergers and acquisitions. In many bank merger applications, 
applicants have argued that the competitive analysis should take into 
account the precise activities at a given branch. This includes cases 
where they have argued for the exclusion of deposits or branches on the 
grounds that the deposits are non-local in origin. Similarly, 
applicants have argued that other firms are competitors by virtue of 
the presence of loan production offices. The lack of data in these 
cases has hindered analysis.
    The Federal Reserve System relies heavily on domestic branch data 
for economic and market research as well as policy. Many research 
projects that use branch data are designed to enhance the Federal 
Reserve's understanding of the relationship between banking market 
structure (as measured by the number of firms operating in a market, 
market concentration, entry, and exit), firm behavior (prices and 
service quality), and performance (profitability). Branch data have 
been used for a variety of additional market studies, including several 
pertaining to lending patterns of banks. For the Survey of Small 
Business Finances (FR 3044; OMB No. 7100-0262), branch data are 
critical in determining distances between firms and their banks and for 
creating Herfindahl indexes (which measure industry concentration). 
Accurate address information is increasingly important as the 
technology for geocoding data improves.
    A recent example of using branch data for research and policy work 
was in evaluating the impact of Hurricane Katrina on the banking system 
immediately after the disaster. The Federal Reserve also provided 
geocoded maps of branches in the affected areas to the Red Cross. 
Although Hurricane Katrina happened in August 2005, the most current 
universe of branch data available for analysis was as of June 2004. 
Better branch data would have enabled economists to incorporate branch 
structure changes between June 2004 and August 2005 into their analysis 
and policy decisions.
    The Federal Reserve's Home Mortgage Disclosure Act (HMDA) system 
uses branch information to determine the reporting panel. In addition, 
HMDA (OMB No. 7100-0147) and CRA (OMB No. 7100-0197) data are geocoded 
and numerous studies and reports regarding fair lending practices are 
based on the HMDA files that include branch data.
    This proposal would replace most of the current process for 
gathering domestic branch structure data, which is inadequate. Branch 
data for domestic state member banks are communicated to the Federal 
Reserve primarily through the application process. Information for all 
other domestic bank branches (branches of national and nonmember banks) 
is obtained by searching FDIC and Office of the Comptroller of the 
Currency bulletins. The Federal Reserve needs a formal information 
collection to ensure that these data are consistent, complete, and 
updated on the same frequency.
    Collecting branch data for the institutions associated with top-
tier BHCs, state member banks unaffiliated with a BHC, and Edge and 
agreement corporations would cover 95 percent of the banking branches 
and 82 percent of banking and thrift branches.

Creating the FR Y-10E Supplement

    The Federal Reserve also proposes to create a free-form supplement 
that would be used to collect additional structural information deemed 
to be critical and needed in an expedited manner. This reporting form 
would be called the FR Y-10E. The Federal Reserve proposes to create a 
free-form supplement to the FR Y-10 so that, should there be an 
immediate need for certain critical organizational structural 
information, the necessary data could be collected on this supplement 
at the earliest practicable date. Such a need could arise, for example, 
because of a statutory change or an unexpected market event. Such a 
supplement currently exists for financial data on the FR Y-9C. The 
Federal Reserve expects to use this supplement infrequently and only 
when there is not sufficient time to take proposed changes through the 
full clearance process.

    Board of Governors of the Federal Reserve System, September 7, 
2006.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E6-15123 Filed 9-12-06; 8:45 am]
BILLING CODE 6210-01-S