[Federal Register Volume 73, Number 39 (Wednesday, February 27, 2008)]
[Notices]
[Pages 10442-10449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3646]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

    Summary: Background.
    Notice is hereby given of the final approval of proposed 
information collections by the Board of Governors of the Federal 
Reserve System (Board) under OMB delegated authority, as per 5 CFR 
1320.16 (OMB Regulations on Controlling Paperwork Burdens on the 
Public). Board-approved collections of information are incorporated 
into the official OMB inventory of currently approved collections of 
information. Copies of the Paperwork Reduction Act Submission, 
supporting statements and approved collection of information 
instrument(s) 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.
    For Further Information Contact:

Federal Reserve Board Clearance Officer--Michelle Shore--Division of 
Research and Statistics, Board of Governors of the Federal Reserve 
System, Washington, DC 20551 (202-452-3829)
OMB Desk Officer--Alexander T. Hunt--Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 10235, Washington, DC 20503.

    Final approval under OMB delegated authority of the extension for 
three years, with revision, of the following reports:
    1. Report title: Financial Statements for Bank Holding Companies.
    Agency form number: FR Y-9C, FR Y-9LP, and FR Y-9SP.
    OMB control number: 7100-0128.
    Frequency: Quarterly and semiannually.
    Reporters: Bank holding companies (BHCs).
    Annual reporting hours: FR Y-9C: 160,056; FR Y-9LP: 25,662; FR Y-
9SP: 47,135.
    Estimated average hours per response: FR Y-9C: 40.50; FR Y-9LP: 
5.25; FR Y-9SP: 5.25.
    Number of respondents: FR Y-9C: 988; FR Y-9LP: 1,222; FR Y-9SP: 
4,489.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c)). Confidential treatment is not routinely 
given to the data in these reports. However, confidential treatment for 
the reporting information, in whole or in part, can be requested in 
accordance with the instructions to the form, pursuant to sections 
(b)(4), (b)(6) and (b)(8) of the Freedom of Information Act (5 U.S.C. 
522(b)(4), (b)(6) and (b)(8)).
    Abstract: The FR Y-9C, FR Y-9LP, and FR Y-9SP are standardized 
financial statements for the consolidated BHC and its parent. The FR Y-
9 family of reports historically has been, and continues to be, the 
primary source of financial information on BHCs between on-site 
inspections. Financial information from these reports is used to detect 
emerging financial problems, to review performance and conduct pre-
inspection analysis, to monitor and evaluate capital adequacy, to 
evaluate BHC mergers and acquisitions, and to analyze a BHC's overall 
financial condition to ensure safe and sound operations.
    The FR Y-9C consists of standardized financial statements similar 
to the Federal Financial Institutions Examination Council (FFIEC) 
Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031 
& 041; OMB No. 7100-0036) filed by commercial banks. The FR Y-9C 
collects consolidated data from BHCs. The FR Y-9C is filed by top-tier 
BHCs with total consolidated assets of $500 million or more. (Under 
certain circumstances defined in the General Instructions, BHCs under 
$500 million may be required to file the FR Y-9C.)
    The FR Y-9LP includes standardized financial statements filed 
quarterly on a parent company only basis from each BHC that files the 
FR Y-9C. In addition, for tiered BHCs, a separate FR Y-9LP must be 
filed for each lower tier BHC.
    The FR Y-9SP is a parent company only financial statement filed by 
smaller BHCs. Respondents include BHCs with total consolidated assets 
of less than $500 million. This form is a simplified or abbreviated 
version of the more extensive parent company only financial statement 
for large BHCs (FR Y-9LP). This report is designed to obtain basic 
balance sheet and income information for the parent company, 
information on intangible assets, and information on intercompany 
transactions.
    Current Actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, with revision, of the 
Financial Statements for Bank Holding Companies. The comment period 
expired on January 8, 2008. The Federal Reserve received four comment 
letters on proposed revisions to the FR Y-9C: Three from banking 
organizations and one from a bankers' organization. The Federal Deposit 
Insurance Corporation, the Office of the Comptroller of the Currency, 
and the Board (the banking agencies) received five additional comment 
letters on proposed changes to the Call Reports that parallel proposed 
changes to the FR Y-9C: Four from banking organizations and one from a 
government agency. No comments were received on proposed changes to the 
FR Y-9LP or the FR Y-9SP.
    No comments were received on (1) the proposed data items for 
restructured troubled 1-4 family residential mortgages, (2) the fair 
value and unpaid principal balance by loan category of loans held for 
sale or investment that are measured at fair value, (3) the revised 
reporting threshold for the trading assets and liabilities schedule, 
(4) the revisions to the regulatory capital schedule and instructions 
for credit derivatives, and (5) the conformity changes for brokered 
deposits within the deposits schedule. Three banking organizations 
commented on the proposed modification of the trading account 
definition and expressed support for this definitional change. The 
revisions discussed in this paragraph will be implemented March 31, 
2008, as proposed.
    With respect to the remaining proposed revisions, the Federal 
Reserve approved certain modifications to them to address concerns 
expressed by

[[Page 10443]]

commenters. The Federal Reserve will move forward with the modified 
reporting changes on March 31, 2008, although the reporting of certain 
proposed new items will be optional for this initial report date and 
will be required beginning June 30, 2008. For the March 31, 2008, 
report date, institutions may provide reasonable estimates for any new 
or revised data item required to be reported as of that date for which 
the requested information is not readily available. For the new data 
items that are optional as of the March 31, 2008, report date, this 
same policy on the use of reasonable estimates will apply to these new 
items as of the June 30, 2008, report date.
    The Federal Reserve's responses to the comments received and a 
discussion of the related revisions are presented below.

Revisions Related to 1-4 Family Residential Mortgage Loans

1. Interest and Fee Income and Quarterly Average

    Currently, BHCs report the total amount of interest and fee income 
on their loans secured by real estate (in domestic offices) in the 
income statement (Schedule HI, data item 1.a.(1), Interest and fee 
income on loans: in domestic offices) and include the quarterly average 
for these loans (in domestic offices) in the quarterly averages 
schedule (Schedule HC-K, data item 3). The Federal Reserve proposed to 
split these existing income statement and quarterly average data items 
into separate data items for the interest and fee income on and the 
quarterly averages of ``Loans secured by 1-4 family residential 
properties,'' ``All other loans secured by real estate,'' and ``All 
other loans in domestic offices.''
    One banking organization commented on comparable additions to the 
Call Report. This bank noted that these additions will require changes 
to its loan processing and accounting systems, which will affect loan 
personnel, but that it is possible to implement these changes. The 
Federal Reserve will proceed to add these data items to the FR Y-9C as 
proposed.

2. Mortgages in Foreclosure

    The Federal Reserve proposed to add two new memoranda items for the 
amount of 1-4 family residential mortgage loans owned by the BHC and 
serviced by the BHC that are in foreclosure as of the quarter-end 
report date. Mortgage loans in foreclosure will be those for which the 
legal process of foreclosure has been initiated, but for which the 
foreclosure process has not yet been resolved at quarter-end.\1\ These 
memoranda items will be added to the loan schedule (Schedule HC-C) and 
the servicing, securitization, and asset sale activities schedule 
(Schedule HC-S), with the carrying amount (before any applicable 
allowance for loan and leases losses) reported in the former memorandum 
item and the outstanding principal amount reported in the latter 
memorandum item. Reporting mortgage loans as being in process of 
foreclosure will not exempt those loans owned by the BHC from being 
reported as past due or nonaccrual, as appropriate, in Schedule HC-N, 
and will not exempt those loans serviced by the BHC that are reported 
in Schedule HC-S, data item 1, from being reported as past due, as 
appropriate, in that schedule.
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    \1\ For banks that participate in the Mortgage Bankers 
Association's (MBA) National Delinquency Survey, the time at which 
mortgage loans would become reportable as being in process of 
foreclosure for FR Y-9C reporting purposes would be the same time at 
which mortgage loans become reportable as being in ``foreclosure 
inventory'' for MBA survey purposes (although the dollar amount of 
such loans would be reported in the FR Y-9C while the number of such 
loans are reported for MBA survey purposes).
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    The bankers' organization provided comments on these proposed data 
items and three banking organizations supported their comments. The 
commenters did not object to reporting these data items but requested 
that the data collection be delayed six months because the data are not 
readily available. The Federal Reserve will go forward with collecting 
the new data items as proposed because of the substantial increase in 
the number of foreclosures reported by the industry and the potentially 
higher number of foreclosures in the next couple of years. Given 
current conditions in the residential mortgage market, the Federal 
Reserve has a strong supervisory interest in being able to evaluate 
foreclosure data and obtain data needed as the starting point for trend 
analyses at the earliest possible date. As with all new FR Y-9C data 
items, BHCs may report reasonable estimates for the amounts of loans in 
foreclosure for the first reporting period (March 31, 2008) using the 
best information available.

3. Open-End 1-4 Family Residential Mortgage Banking Activities

    The Federal Reserve proposed to expand the scope of Schedule HC-P, 
1-4 Family Residential Mortgage Banking Activities in Domestic Offices, 
to include separate data items for originations, purchases, and sales 
of open-end 1-4 family residential mortgages during the quarter; the 
amount of such mortgages held for sale at quarter-end; and noninterest 
income for the quarter from the sale, securitization, and servicing of 
open-end residential mortgages. When reporting the originations, 
purchases, sales, and mortgages held for sale, BHCs will report both 
the total commitment under the line of credit and the principal amount 
funded under the line. For BHCs with less than $1 billion in total 
assets, the criteria used to determine whether Schedule HC-P must be 
completed will be modified to include both closed-end and open-end 1-4 
family residential mortgage banking activities.
    One banking organization and the bankers' organization provided 
comments on these proposed revisions and three other banking 
organizations supported the latter's comments. The bankers' 
organization did not object to reporting the new data items but 
requested that the data collection be delayed six months because of the 
time needed to identify and capture the unused commitment amounts and 
outstanding principal balances. The Federal Reserve agrees not to 
require the new open-end mortgage data to be reported until the June 
30, 2008, FR Y-9C, with optional reporting of these data in the March 
31, 2008, FR Y-9C, if the information is available.
    The banking organization encouraged the Federal Reserve to clearly 
define the terms ``total commitment under the lines of credit'' and the 
``principal amount funded under the lines of credit'' as they relate to 
originations of open-end 1-4 family residential mortgages during the 
quarter because different interpretations could result in the absence 
of clear instructions. The organization recommended that ``total 
commitment'' be defined as the initial committed balance made to 
customers on newly established open-end lines of credit and ``principal 
amount funded'' be defined as initial fundings made to customers on 
newly established lines. The Federal Reserve agrees on the necessity 
for clear definitions of these terms. Thus, the instructions for 
reporting the ``total commitment'' will define it as the total amount 
of the lines of credit granted to customers at the time the open-end 
credits were originated, which is consistent with the banking 
organization's recommendation. For retail and wholesale originations of 
such open-end loans, the instructions would define ``principal amount 
funded'' as the initial fundings made to customers on newly established 
lines of credit. In addition, for open-end loans purchased, sold, held 
for sale, and (as discussed in the following section) repurchased or

[[Page 10444]]

indemnified, the ``principal amount funded'' will be defined as the 
principal balance outstanding of loans extended under lines of credit 
at the transaction date or at quarter-end, as appropriate.

4. Mortgage Repurchases and Indemnifications

    The Federal Reserve proposed to add four new data items to Schedule 
HC-P to collect data on mortgage loan repurchases and indemnifications 
during the quarter. For both closed-end first lien and closed-end 
junior lien 1-4 family residential mortgages, BHCs will report the 
outstanding principal amount of mortgages repurchased or indemnified as 
of the date of repurchase or indemnification. For open-end 1-4 family 
residential mortgages, BHCs will report both the total commitment under 
the line of credit and the principal amount funded under the line for 
mortgages repurchased or indemnified.
    One banking organization and the bankers' organization commented on 
these comparable additions to the Call Report, with three other banking 
organizations supporting the bankers' organization's comments. The 
banking organization sought clarification as to the scope of 
indemnifications, particularly with respect to whether indemnifications 
that consisted of reimbursements of legal fees or administrative costs 
were expected to be reported. The Federal Reserve will clarify the FR 
Y-9C instructions to state that indemnifications are limited to 
reimbursements for credit losses, including reimbursements for losses 
arising from sales of real estate collateral. The bankers' organization 
also requested a clarification involving terminology, questioning 
whether, if there is a difference between the book value of a loan and 
its principal balance, which amount banks are expected to report. The 
amount to be reported for closed-end loans is the mortgages' 
outstanding principal amount as of the date of repurchase or 
indemnification, not the book value of these mortgages. For open-end 
residential mortgage loans, the concept of principal amount funded is 
discussed in the preceding section. Finally, the Federal Reserve will 
not require that the new data items on repurchases and indemnifications 
of open-end loans be reported until the June 30, 2008, report date, 
with optional reporting of these data as of the March 31, 2008, report 
date, if the information is available.

Trading Assets and Liabilities and Other Assets and Liabilities 
Accounted for Under a Fair Value Option

1. Reporting of Assets and Liabilities Under the Fair Value Option as 
Trading

    On February 15, 2007, the Financial Accounting Standards Board 
(FASB) issued Statement No. 159, The Fair Value Option for Financial 
Assets and Financial Liabilities (FAS 159), which is effective for 
fiscal years beginning after November 15, 2007. Earlier adoption of FAS 
159 was permitted as of the beginning of an earlier fiscal year, 
provided the BHC (i) also adopts all of the requirements of FASB 
Statement No. 157, Fair Value Measurements (FAS 157) at the early 
adoption date of FAS 159; (ii) has not yet issued a financial statement 
or submitted FR Y-9C data for any period of that fiscal year; and (iii) 
satisfies certain other conditions. Thus, a BHC with a calendar year 
fiscal year may have voluntarily adopted FAS 159 as of January 1, 2007. 
Changes in the fair value of financial assets and liabilities to which 
the fair value option is applied are reported in current earnings as is 
currently the case for trading assets and liabilities. Since the fair 
value option standard allows a BHC to elect fair value measurement 
through earnings for financial assets and financial liabilities, the 
Federal Reserve understands that some institutions would like to 
reclassify certain loans elected to be accounted for under the fair 
value option as trading assets. The FR Y-9C reporting instructions 
currently do not allow loans held for sale to be reported as trading 
assets.
    Under FAS 159, all securities within the scope of FASB Statement 
No. 115, Accounting for Certain Investments in Debt and Equity 
Securities (FAS 115), that a BHC has elected to report at fair value 
under a fair value option should be classified as trading securities. 
Recognizing the provisions of FAS 159, the Federal Reserve proposed the 
following clarification to the reporting instructions, including the 
Glossary entry for Trading Account. BHCs may classify assets (other 
than securities within the scope of FAS 115 for which a fair value 
option is elected) and liabilities as trading if the BHC applies fair 
value accounting, with changes in fair value reported in current 
earnings, and manages these assets and liabilities as trading 
positions, subject to the controls and applicable regulatory guidance 
related to trading activities.
    Three banking organizations provided comments in support of the 
proposed expanded definition of the trading account to permit the 
classification of certain loans as trading. The Federal Reserve will 
proceed with the revised definition of trading account as proposed.

2. Revision of Certain Fair Value Measurement and Fair Value Option 
Information

    The Federal Reserve proposed to add two columns to Schedule HC-Q, 
Financial Assets and Liabilities Measured at Fair Value, to allow BHCs 
to report any netting adjustments and Level 1 fair value measurements 
separately in a manner consistent with industry practice. The new 
columns will be captioned as column B, Amounts Netted in the 
Determination of Total Fair Value Reported on Schedule HC, and column 
C, Level 1 Fair Value Measurements. Existing column B, Level 2 Fair 
Value Measurements, and column C, Level 3 Fair Value Measurements, of 
Schedule HC-Q will be recaptioned as columns D and E, respectively. 
Column A will remain unchanged.
    One commenter, a banking organization, offered comments on 
comparable proposed changes to Schedule RC-Q of the Call Report. The 
commenter supported the addition of the two new columns to the 
schedule. The commenter also suggested amending the scope of Schedule 
RC-Q to collect information on all assets and liabilities measured at 
fair value pursuant to FAS 157 rather than the current scope, which 
collects information primarily based on an organization's election to 
measure assets at fair value under a fair value option and only 
includes some of the assets and liabilities covered by FAS 157. The 
Federal Reserve recognizes that a significant number of BHCs have only 
recently adopted FAS 157 and are working through a number of 
implementation issues. In addition, the FASB recently proposed a 1-year 
delay in the effective date of FAS 157 for all nonfinancial assets and 
nonfinancial liabilities, except those that are recognized or disclosed 
at fair value in the financial statements on a recurring basis. In 
light of these factors, the Federal Reserve believes that it would not 
be prudent, at this time, to modify the scope of the Schedule HC-Q to 
include all assets and liabilities covered by FAS 157 as suggested by 
the commenter, and will proceed with the addition of the two additional 
columns to Schedule HC-Q as proposed.
    The Federal Reserve also proposed to add data items to Schedule HC-
C, Loans and Leases, to collect data on the loans reported in this 
schedule that are measured at fair value under a fair value option: (1) 
The fair value of such loans

[[Page 10445]]

measured by major loan category, (2) the unpaid principal balance of 
such loans by major loan category, and (3) the aggregate amount of the 
difference between the fair value and the unpaid principal balance of 
such loans that is attributable (a) to changes in the credit risk of 
the loan since its origination and (b) to all other factors. Because 
Schedule HC-C only provides data on loans held for investment and for 
sale, the Federal Reserve proposed to add the same data items to 
Schedule HC-D, Trading Assets and Liabilities, for loans measured at 
fair value under a fair value option that are designated as held for 
trading. The Federal Reserve also proposed to add a new data item to 
Schedule HC-D for Other trading liabilities in recognition of a BHC's 
ability to elect to measure certain liabilities at fair value in 
accordance with FAS 159 and designate them as held for trading.
    The Federal Reserve proposed to add two data items to Schedule HC-
N, Past Due and Nonaccrual Loans, Leases, and Other Assets, to collect 
data on the fair value and unpaid principal balance of loans measured 
at fair value under a fair value option that are past due or in 
nonaccrual status. The data items will follow the existing three column 
breakdown on Schedule HC-N that BHCs utilize to report all other past 
due and nonaccrual loans. Since trading assets are not currently 
reported on Schedule HC-N, the Federal Reserve proposed to add similar 
data items to Schedule HC-D to collect the total fair value and unpaid 
principal balance of loans ninety days or more past due that are 
classified as trading. Finally, the Federal Reserve proposed to add 
data items to Schedule HI, Income Statement, to collect information on: 
(1) Net gains (losses) recognized in earnings on assets that are 
reported at fair value under a fair value option, (2) estimated net 
gains (losses) on loans attributable to changes in instrument-specific 
credit risk, (3) net gains (losses) recognized in earnings on 
liabilities that are reported at fair value under a fair value option, 
(4) estimated net gains (losses) on liabilities attributable to changes 
in the instrument-specific credit risk.
    Two banking organizations and the bankers' organization provided 
comments on the proposed changes. One banking organization opposed the 
proposal to collect information on Schedules HC-C and HC-D on the 
aggregate amount of the difference between the fair value and the 
unpaid principal balance of loans measured at fair value under a fair 
value option attributable to (a) changes in the credit risk of the loan 
since its origination and (b) all other factors. The banking 
organization indicated the proposed information may exist in theory but 
that BHCs do not have the ability to readily and reliably produce this 
information. The Federal Reserve reconsidered the proposal and concurs 
with the commenter's assessment of BHCs' ability to readily and 
reliably produce this information. As a result, the Federal Reserve 
will not implement the proposed change.
    One banking organization opposed the proposed breakouts on Schedule 
HC-D of the fair value and the unpaid principal balance of loans 
measured at fair value under a fair value option by major loan 
category. The organization indicated that the information was excessive 
and burdensome to collect for loans designated as trading and will 
require changes to the BHC's trading systems. The safety and soundness 
objective for collecting this information is to make comparisons among 
entities that elect a fair value option for loans and those that do 
not. This objective cannot be achieved if the information collected on 
Schedules HC-C and HC-D is not comparable. Since BHCs have considerable 
experience reporting information by major loan category as required by 
Schedule HC-C and are only now able to report loans under a fair value 
option on Schedule HC-D, the Federal Reserve believes it will be less 
burdensome to adapt the proposed loan breakouts on Schedule HC-D to the 
current breakouts on Schedule HC-C than to develop a unique format for 
reporting loans under a fair value option in both Schedules HC-C and 
HC-D as inferred by the commenter. The Federal Reserve will proceed 
with the breakouts for loans reported under a fair value option on 
Schedule HC-D as proposed.
    The banking organization also questioned whether the Federal 
Reserve should collect separate data items on Schedule HI for the net 
gains (losses) recognized in earnings on assets that are reported at 
fair value under a fair value option and the estimated net gains 
(losses) on loans attributable to changes in instrument-specific credit 
risk. Similarly, the commenter questioned whether the Federal Reserve 
should collect separate data items on Schedule HI for the net gains 
(losses) recognized in earnings on liabilities that are reported at 
fair value under a fair value option and the estimated net gains 
(losses) on liabilities attributable to changes in the instrument-
specific credit risk. The commenter suggested clarifying what changes, 
other than credit risk, will be reported in net gains (losses) on 
assets and liabilities reported at fair value under a fair value option 
that will warrant a separate breakout for net gains (losses) on loans 
and liabilities for instrument-specific credit risk. The content of the 
proposed data items for Schedule HI are the same as those mandated by 
the disclosure requirements of paragraphs 19(a), (c)(1), and (d)(1) of 
FAS 159. However, to reduce burden, the Federal Reserve grouped the 
requirements of paragraph (a) into net gains (losses) recognized in 
earnings on assets that are reported at fair value under a fair value 
option and net gains (losses) recognized in earnings on liabilities 
that are reported at fair value under a fair value option rather than 
requiring separate breakouts for the amount of gains and losses on fair 
value option data items for each data item on a BHC's balance sheet as 
required by paragraph 19(a). Thus, the rationale for collecting the 
separate breakouts on Schedule HI is the same as FAS 159, to facilitate 
comparisons between BHCs that adopt the fair value option and those 
that do not. The Federal Reserve will proceed with the breakouts on 
Schedule HI as proposed.
    The bankers' organization recommended a six-month delay in the 
effective date of the proposal to collect information on Schedule HC-N 
on the fair value and unpaid principal balance of loans measured at 
fair value under a fair value option that are past due or in nonaccrual 
status and Schedule HC-D on the total fair value and unpaid principal 
balance of loans ninety days or more past due. The commenter indicated 
the delay would give BHCs sufficient time to make changes to their 
systems to capture this information. The Federal Reserve agrees that a 
delay is advisable and will delay the implementation date of the 
proposed Schedule HC-N and HC-D data items to the June 30, 2008, report 
date. However, BHCs have the option of submitting this information 
effective for the March 31, 2008, report date, if the information is 
available.

3. Other Revisions to Information on Trading Assets and Liabilities

    The Federal Reserve proposed three revisions to Schedule HC-D to 
enhance the Federal Reserve's ability to assess BHC exposures to 
market, liquidity, credit, operational, and other risks posed by 
trading assets and liabilities and to appropriately assess the safety 
and soundness of BHCs with these exposures and BHCs with significant 
concentrations in trading assets and liabilities. First, the Federal 
Reserve proposed to eliminate the single data item for trading assets 
in foreign offices and revise the schedule to include separate columns 
for the consolidated bank holding company and for domestic

[[Page 10446]]

offices. Second, the Federal Reserve proposed to change the reporting 
threshold for Schedule HC-D. As proposed, Schedule HC-D will be 
completed for any quarter when the quarterly average for trading assets 
in Schedule HC-K, data item 4.a, was $2 million or more in any of the 
four preceding quarters. Third, the Federal Reserve proposed to require 
BHCs with average trading assets of $1 billion or more in any of the 
four preceding quarters to provide additional detail on trading assets 
and liabilities currently included in certain trading asset and 
liability categories. These BHCs will provide additional breakouts for 
asset-backed securities by major category, collateralized debt 
obligations (both synthetic and non-synthetic), retained interests in 
securitizations, equity securities (both with and without readily 
determinable fair values), and loans held pending securitization. In 
addition, these BHCs will be required to provide a description of and 
report the fair value of any type of trading asset or liability in the 
Other trading assets and Other trading liabilities categories that is 
greater than $25,000 and exceeds 25 percent of the amount reported in 
that trading category.
    One banking organization requested the Federal Reserve reconsider 
the proposed expansion of information for BHCs with average trading 
assets of $1 billion or more due to current systems limitations. The 
Federal Reserve assessed the systems challenges resulting from other 
regulatory initiatives at banking organizations with trading assets of 
$1 billion or more and determined a delay in the implementation date 
for these changes is reasonable. The Federal Reserve will delay the 
implementation date of the proposed expanded information on Schedule 
HC-D data items to the June 30, 2008, report date. However, BHCs will 
be allowed the option of submitting this information effective for the 
March 31, 2008 report date, if the information is available.

Reporting Credit Derivative Data for Risk-Based Capital Purposes

    The Federal Reserve proposed to modify the FR Y-9C instructions for 
Schedule HC-R to allow the reporting of the credit equivalent amount of 
credit derivatives subject to the counterparty credit risk charge in 
data item 54 of the schedule and to extend the existing 100 percent 
risk weight column in Schedule HC-R to data item 54, Derivative 
contracts. The Federal Reserve did not receive comments on the proposed 
changes for credit derivatives in Schedule HC-R. However, upon further 
consideration of the reporting of such derivatives in Schedule HC-R, 
data item 54, the Federal Reserve concluded that extending the 100 
percent risk weight column to this data item is not necessary. The 
instructions will indicate that credit derivatives entered into for 
trading purposes and subject to the market risk capital guidelines 
should be reported in data item 54.

Revision of Reporting Threshold for Other Noninterest Income and Other 
Noninterest Expense

    The Federal Reserve proposed to change the threshold for reporting 
detailed information on the components of other noninterest income and 
other noninterest expense as reported on Schedule HI, Memoranda items 6 
and 7. Specifically, the Federal Reserve proposed to change the 
threshold to require BHCs to separately disclose the description and 
amount of any data item included in Schedule HI, data item 5.l, Other 
noninterest income that exceeds 3 percent of other noninterest income 
and any data item included in Schedule HI, data item 7.d, Other 
noninterest expense that exceeds 3 percent of other noninterest 
expense.
    In addition, the Federal Reserve proposed to add one preprinted 
caption for other noninterest income and four preprinted captions for 
other noninterest expense to help BHCs comply with the disclosure 
requirements. As with the existing preprinted captions for other 
noninterest income and other noninterest expense, BHCs are only 
required to use these descriptions and provide the amounts for these 
components when the amounts included in other noninterest income or 
other noninterest expense exceed the reporting threshold. The new 
preprinted other noninterest income caption is bank card/credit card 
interchange fees. The new preprinted noninterest expense captions are 
accounting and auditing expenses, consulting and advisory expenses, 
automated teller machine (ATM) and interchange expenses, and 
telecommunication expenses.
    Two banking organizations and the government agency provided 
comments on comparable changes proposed to the Call Report. The agency 
supported the additional preprinted captions. One banking organization 
indicated the application of the new thresholds to the smaller base of 
other noninterest income or expense would result in their bank 
reporting amounts as small as $1,000 in the other noninterest income 
disclosures and $7,500 in the other noninterest expense disclosures. 
The commenter recommended establishing a $50,000 floor to the reporting 
threshold to eliminate the reporting of de minimis amounts. The Federal 
Reserve recognizes the merit of this request and will implement 
modified thresholds to require BHCs to separately disclose the 
description and amount of any data item in other noninterest income 
that is greater than $25,000 and exceeds 3 percent of other noninterest 
income and any data item included in other noninterest expense that is 
greater than $25,000 and exceeds 3 percent of other noninterest 
expense. The $25,000 amount is consistent with the threshold floors 
used on the Call Report for All other assets in Schedule RC-F, Other 
Assets, and All other liabilities in Schedule RC-G, Other Liabilities.
    Another banking organization also commented on these comparable 
changes to the Call Report that they would have difficulty breaking out 
expenses incurred for multiple services provided by a third party 
vendor where separate charges for specific services would be burdensome 
to identify. The commenter also suggested that a definition of 
telecommunications expenses be provided. To reduce reporting burden, 
the Federal Reserve will modify the instructions for Schedule HI, 
Memoranda item 7, Other noninterest expense, to indicate that BHCs 
should report expenses that reflect a single charge for grouped or 
``bundled'' services in the data item that most closely describes the 
predominant type of expense incurred, and that this categorization 
should be used consistently over time. Regarding the definition of 
telecommunications expenses, BHCs should include any expenses 
associated with telephone, cable, and internet services (including web 
page maintenance).
    2. Report title: Financial Statements for Nonbank Subsidiaries of 
U.S. Bank Holding Companies.
    Agency form number: FR Y-11 and FR Y-11S.
    OMB control number: 7100-0244.
    Frequency: Quarterly and annually.
    Reporters: Bank holding companies (BHCs).
    Annual reporting hours: FR Y-11 (quarterly): 10,752; FR Y-11 
(annual): 1,402; FR Y-11S (annual): 471.
    Estimated average hours per response: FR Y-11 (quarterly): 6.40; FR 
Y-11 (annual): 6.40; FR Y-11S (annual): 1.0.
    Number of respondents: FR Y-11 (quarterly): 420; FR Y-11 (annual): 
219; FR Y-11S (annual): 471.
    General description of report: This information collection is 
mandatory (12 U.S.C. Sec. Sec.  1844(c)). Confidential treatment is not 
routinely given to the data in these reports. However,

[[Page 10447]]

confidential treatment for the reporting information, in whole or in 
part, can be requested in accordance with the instructions to the form, 
pursuant to sections (b)(4), (b)(6) and (b)(8) of the Freedom of 
Information Act [5 U.S.C. 522(b)(4), (b)(6) and (b)(8)].
    Abstract: The FR Y-11 reports collect financial information for 
individual non-functionally regulated U.S. nonbank subsidiaries of 
domestic BHCs. BHCs file the FR Y-11 on a quarterly or annual basis 
according to filing criteria or file the FR Y-11S annually. The FR Y-11 
data are used with other BHC data to assess the condition of BHCs that 
are heavily engaged in nonbanking activities and to monitor the volume, 
nature, and condition of their nonbanking operations.
    Current Actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, with revision, of the 
Financial Statements for Nonbank Subsidiaries of U.S. Bank Holding 
Companies. The comment period expired on January 8, 2008. The Federal 
Reserve did not receive any comment letters. The Federal Reserve will 
eliminate reporting by subsidiaries that were created for the purposes 
of issuing trust preferred securities (trust preferred securities 
subsidiaries) to substantially reduce burden on the industry and, in 
this regard, make the report consistent with the revision to the other 
nonbank subsidiary reports, the Financial and Abbreviated Financial 
Statements of Foreign Subsidiaries of U.S. Banking Organizations (FR 
2314/S; OMB No. 7100-0073) and the Financial and Abbreviated Financial 
Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking 
Organizations (FR Y-7N/NS; OMB No. 7100-0125). The Federal Reserve will 
collect: (1) Certain data on the FR Y-11 from all institutions that 
choose, under generally accepted accounting principles, to apply a fair 
value option to one or more financial instruments and one or more 
classes of servicing assets and liabilities and (2) a new data item on 
the income statement to collect fees and commissions from annuity 
sales. On the FR Y-11S, the Federal Reserve will add a question to 
determine whether the subsidiary has adopted a fair value option. 
Lastly, the Federal Reserve will add clarifying language to the 
instructions for the reporting of trading revenue and noninterest 
income from related organizations. All reporting changes will be 
implemented effective with the March 31, 2008, report date.
    3. Report title: Financial Statements of Foreign Subsidiaries of 
U.S. Banking Organizations.
    Agency form number: FR 2314 and FR 2314S.
    OMB control number: 7100-0073.
    Frequency: Quarterly and annually.
    Reporters: Foreign subsidiaries of U.S. state member banks (SMBs), 
bank holding companies (BHCs), and Edge or agreement corporations.
    Annual reporting hours: FR 2314 (quarterly): 5,581; FR 2314 
(annual): 1,075; FR 2314S (annual): 272.
    Estimated average hours per response: FR 2314 (quarterly): 6.40; FR 
2314 (annual): 6.40; FR 2314S (annual): 1.0.
    Number of respondents: FR 2314 (quarterly): 218; FR 2314 (annual): 
168; FR 2314S (annual): 272.
    General description of report: This information collection is 
mandatory (12 U.S.C. 324, 602, 625, and 1844(c)). Confidential 
treatment is not routinely given to the data in these reports. However, 
confidential treatment for the reporting information, in whole or in 
part, can be requested in accordance with the instructions to the form, 
pursuant to sections (b)(4), (b)(6) and (b)(8) of the Freedom of 
Information Act [5 U.S.C. 522(b)(4), (b)(6) and (b)(8)].
    Abstract: The FR 2314 reports collect financial information for 
non-functionally regulated direct or indirect foreign subsidiaries of 
U.S. SMBs, Edge and agreement corporations, and BHCs. Parent 
organizations (SMBs, Edge and agreement corporations, or BHCs) file the 
FR 2314 on a quarterly or annual basis according to filing criteria or 
file the FR 2314S annually. The FR 2314 data are used to identify 
current and potential problems at the foreign subsidiaries of U.S. 
parent companies, to monitor the activities of U.S. banking 
organizations in specific countries, and to develop a better 
understanding of activities within the industry, in general, and of 
individual institutions, in particular.
    Current actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, with revision, of the 
Financial Statements of Foreign Subsidiaries of U.S. Banking 
Organizations. The comment period expired on January 8, 2008. The 
Federal Reserve did not receive any comment letters. The Federal 
Reserve will eliminate reporting by subsidiaries that were created for 
the purposes of issuing trust preferred securities (trust preferred 
securities subsidiaries) to substantially reduce burden on the industry 
and, in this regard, make the report consistent with the revision to 
the other nonbank subsidiary reports, the Financial and Abbreviated 
Financial Statements of U.S. Nonbank Subsidiaries of U.S. Bank Holding 
Companies (FR Y-11/S; OMB No. 7100-0244) and the Financial and 
Abbreviated Financial Statements of U.S. Nonbank Subsidiaries Held by 
Foreign Banking Organizations (FR Y-7N/NS; OMB No. 7100-0125). The 
Federal Reserve will collect: (1) Certain data on the FR 2314 from all 
institutions that choose, under generally accepted accounting 
principles, to apply a fair value option to one or more financial 
instruments and one or more classes of servicing assets and liabilities 
and (2) a new data item on the income statement to collect fees and 
commissions from annuity sales. On the FR 2314S, the Federal Reserve 
will add a question to determine whether the subsidiary has adopted a 
fair value option. Lastly, the Federal Reserve will add clarifying 
language to the instructions for the reporting of trading revenue and 
noninterest income from related organizations. All reporting changes 
will be implemented effective with the March 31, 2008, report date.
    4. Report title: Financial Reports of Foreign Banking 
Organizations.
    Agency form number: FR Y-7N and FR Y-7NS.
    OMB control number: 7100-0125.
    Frequency: Quarterly and annually.
    Reporters: Foreign banking organizations (FBOs).
    Annual reporting hours: FR Y-7N (quarterly): 4,889; FR Y-7N 
(annual): 1,065; FR Y-7NS: 229.
    Estimated average hours per response: FR Y-7N (quarterly): 6.3; FR 
Y-7N (annual): 6.3; FR Y-7NS.
    Number of respondents: FR Y-7N (quarterly): 194; FR Y-7N (annual): 
169; FR Y-7NS: 229.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c), 3106(c), and 3108). Confidential 
treatment is not routinely given to the data in these reports. However, 
confidential treatment for information, in whole or in part, on any of 
the reporting forms can be requested in accordance with the 
instructions to the form, pursuant to sections (b)(4) and (b)(6) of the 
Freedom of Information Act [5 U.S.C. 522(b)(4) and (b)(6)].
    Abstract: The FR Y-7N and FR Y-7NS collect financial information 
for non-functionally regulated U.S. nonbank subsidiaries held by FBOs 
other than through a U.S. bank holding company, U.S. financial holding 
company, or U.S. bank. FBOs file the FR Y-7N on a quarterly or annual 
basis or the FR Y-7NS annually based on size thresholds.

[[Page 10448]]

    Current actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, with revision, of the 
Financial Reports of Foreign Banking Organizations. The comment period 
expired on January 8, 2008. The Federal Reserve did not receive any 
comment letters. The Federal Reserve will eliminate reporting by 
subsidiaries that were created for the purposes of issuing trust 
preferred securities (trust preferred securities subsidiaries) on the 
FR Y-7N/NS to substantially reduce burden on the industry and, in this 
regard, make the report consistent with the revision to the other 
nonbank subsidiary reports, the Financial and Abbreviated Financial 
Statements of U.S. Nonbank Subsidiaries of U.S. Bank Holding Companies 
(FR Y-11/S; OMB No. 7100-0244) and the Financial and Abbreviated 
Financial Statements of Foreign Subsidiaries of U.S. Banking 
Organizations (FR 2314/S; OMB No. 7100-0073). On the FR Y-7N, the 
Federal Reserve will collect: (1) Certain data from all institutions 
that choose, under general accounting principles, to apply a fair value 
option to one or more financial instruments and one or more classes of 
servicing assets and liabilities and (2) a new data item on the income 
statement to collect fees and commissions from annuity sales. On the FR 
Y-7NS, the Federal Reserve will add a question to determine whether the 
nonbank subsidiary has adopted a fair value option.
    The Federal Reserve will make the following changes to make the FR 
Y-7N consistent with changes made previously to other nonbank 
subsidiary reports: (1) Add one new equity capital component on the 
balance sheet for reporting partnership interests and (2) add a new 
section, Notes to the Financial Statements. The Federal Reserve will 
also add clarifying language to the instructions for the reporting of 
trading revenue and noninterest income from related organizations. All 
reporting changes will be implemented effective with the March 31, 
2008, report date.
    5. Report title: Consolidated Report of Condition and Income for 
Edge and Agreement Corporations.
    Agency form number: FR 2886b.
    OMB control number: 7100-0086.
    Frequency: Quarterly.
    Reporters: Edge and agreement corporations.
    Annual reporting hours: 2,442.
    Estimated average hours per response: 14.85 banking corporations, 
8.65 investment corporations.
    Number of respondents: 12 banking corporations, 50 investment 
corporations.
    General description of report: This information collection is 
mandatory (12 U.S.C. 602 and 625). Schedules RC-M (except data item 3) 
and RC-V are held as confidential pursuant to section (b)(4) of the 
Freedom of Information Act (5 U.S.C. 552(b)(4)).
    Abstract: The mandatory FR 2886b comprises a balance sheet, income 
statement, two schedules reconciling changes in capital and reserve 
accounts, and ten supporting schedules, and it parallels the 
Consolidated Reports of Condition and Income (Call Report) (FFIEC 031 
and FFIEC 041; OMB No. 7100-0036) that commercial banks file. The 
Federal Reserve uses the data collected on the FR 2886b to supervise 
Edge corporations, identify present and potential problems, and monitor 
and develop a better understanding of activities within the industry.
    Current actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, with revision, of the 
Consolidated Report of Condition and Income for Edge and Agreement 
Corporations. The comment period expired on January 8, 2008. The 
Federal Reserve did not receive any comment letters. The Federal 
Reserve will collect certain data from all organizations that choose, 
under generally accepted accounting principles, to apply a fair value 
option to one or more financial instruments and one or more classes of 
servicing assets and liabilities. The Federal Reserve will revise the 
instructions for information collected on restructured loans and leases 
consistent with proposed changes to the Call Report. All reporting 
changes will be implemented effective with the March 31, 2008, report 
date.
    Final approval under OMB delegated authority of the extension for 
three years, without revision, of the following reports:
    1. Report title: Financial Statements for Bank Holding Companies.
    Agency form number: FR Y-9ES and FR Y-9CS.
    OMB control number: 7100-0128.
    Frequency: Quarterly and annually.
    Reporters: Bank holding companies (BHCs).
    Annual reporting hours: FR Y-9ES: 48; FR Y-9CS: 400.
    Estimated average hours per response: FR Y-9ES: 30 minutes; FR Y-
9CS: 30 minutes.
    Number of respondents: FR Y-9ES: 96; FR Y-9CS: 200.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c)). Confidential treatment is not routinely 
given to the data in these reports. However, confidential treatment for 
the reporting information, in whole or in part, can be requested in 
accordance with the instructions to the form, pursuant to sections 
(b)(4), (b)(6)and (b)(8) of the Freedom of Information Act (5 U.S.C. 
522(b)(4), (b)(6) and (b)(8)).
    Abstract: The FR Y-9ES collects financial information from employee 
stock ownership plans that are also BHCs on their benefit plan 
activities. It consists of four schedules: Statement of Changes in Net 
Assets Available for Benefits, Statement of Net Assets Available for 
Benefits, Memoranda, and Notes to the Financial Statements. The FR Y-
9CS is a supplemental report that may be utilized to collect additional 
information deemed to be critical and needed in an expedited manner 
from BHCs. The items of information included on the supplement may 
change as needed.
    Current actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, without revision, of the FR Y-
9ES and FR Y-9CS. The comment period expired on January 8, 2008. The 
Federal Reserve did not receive any comment letters.
    2. Report title: Financial Reports of Foreign Banking 
Organizations.
    Agency form number: FR Y-7Q.
    OMB control number: 7100-0125.
    Frequency: Quarterly and annually.
    Reporters: Foreign banking organizations (FBOs).
    Annual reporting hours: FR Y-7Q (quarterly): 325; FR Y-7Q (annual): 
118.
    Estimated average hours per response: FR Y-7Q (quarterly): 1.25; FR 
Y-7Q (annual): 1.0.
    Number of respondents: FR Y-7Q (quarterly): 65; FR Y-7Q (annual): 
118.
    General description of report: This information collection is 
mandatory (12 U.S.C. 1844(c), 3106(c), and 3108). Confidential 
treatment is not routinely given to the data in these reports. However, 
confidential treatment for information, in whole or in part, on any of 
the reporting forms can be requested in accordance with the 
instructions to the form, pursuant to sections (b)(4) and (b)(6) of the 
Freedom of Information Act [5 U.S.C. Sec. Sec.  522(b)(4) and (b)(6)].
    Abstract: The FR Y-7Q collects consolidated regulatory capital 
information from all FBOs either quarterly or annually. FBOs that have 
effectively elected to become financial holding companies (FHCs) file 
the FR

[[Page 10449]]

Y-7Q on a quarterly basis. All other FBOs (those that have not elected 
to become FHCs) file the FR Y-7Q annually.
    Current actions: On November 9, 2007, the Federal Reserve published 
a notice in the Federal Register (72 FR 63580) requesting public 
comment for sixty days on the extension, without revision, of the FR Y-
7Q. The comment period expired on January 8, 2008. The Federal Reserve 
did not receive any comment letters.

    Board of Governors of the Federal Reserve System, February 21, 
2008.
Jennifer J. Johnson,
Secretary of the Board.
 [FR Doc. E8-3646 Filed 2-26-08; 8:45 am]
BILLING CODE 6210-01-P