[Federal Register Volume 78, Number 50 (Thursday, March 14, 2013)]
[Notices]
[Pages 16263-16265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05914]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Agency Information Collection Activities; Proposed Information 
Collection; Comment Request

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice and request for comment.

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SUMMARY: The Federal Deposit Insurance Corporation, as part of its 
continuing effort to reduce paperwork and respondent burden, invites 
the general public and other Federal agencies to take this opportunity 
to comment on a continuing information collection, as required by the 
Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act, 
Federal agencies are required to publish notice in the Federal Register 
concerning each proposed collection of information and to allow 60 days 
for public comment in response to the notice.
    An agency may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (``OMB'') control 
number. The FDIC is soliciting comment concerning its information 
collection titled, ``Annual Stress Test Reporting Template and 
Documentation for Covered Banks with Total Consolidated Assets of $10 
Billion to $50 Billion under the Dodd-Frank Wall Street Reform and 
Consumer Protection Act.''

DATES: Comments must be received by May 13, 2013.

ADDRESSES: You may submit written comments by any of the following 
methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments 
on the FDIC Web site.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include ``Annual Stress Test 
Reporting Template and Documentation for Covered Banks with Total 
Consolidated Assets of $10 Billion to $50 Billion'' on the subject line 
of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, FDIC, 550 17th Street NW., Washington, DC 20429.
     Hand Delivery/Courier: 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.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal/propose.html 
including any personal information provided. Comments may be inspected 
at the FDIC Public Information Center, 3501 North Fairfax Drive, Room 
E-1002, Arlington, VA 22226 between 9 a.m. and 4:30 p.m. on business 
days.
    Additionally, please send a copy of your comments to: By mail to 
the U.S. Office of Management and Budget, 725 17th Street NW., 
10235, Washington, DC 20503 or by facsimile to 202.395.6974, 
Attention: Federal Banking Agency Desk Officer.

FOR FURTHER INFORMATION CONTACT: You can request additional information 
from Gary Kuiper, 202.898.3877, Legal Division, Federal Deposit 
Insurance Corporation, 550 17th Street NW., NYA-5046, Washington, DC 
20429. In addition, copies of the templates referenced in this notice 
can be found on the FDIC's Web site (http://www.fdic.gov/regulations/laws/federal/propose.html).

SUPPLEMENTARY INFORMATION: The FDIC is requesting comment on the 
following new proposed information collection:
    Title: Annual Stress Test Reporting Template and Documentation for 
Covered Banks With Total Consolidated Assets of $10 Billion to $50 
Billion Under the Dodd-Frank Wall Street Reform and Consumer Protection 
Act.
    OMB Control Number: XXXXXXX.
    Description: Section 165(i)(2) of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act \1\ (Dodd-Frank Act) requires certain 
financial companies, including state nonmember banks and state savings 
associations, to conduct annual stress tests \2\ and requires the 
primary financial regulatory agency \3\ of those financial companies to 
issue regulations implementing the stress test requirements.\4\ A state 
nonmember bank or state savings association is a ``covered bank'' and 
therefore subject to the stress test requirements if its total 
consolidated assets are more than $10 billion. Under section 165(i)(2), 
a covered bank is required to submit to the Board of Governors of the 
Federal Reserve System (Board) and to its primary financial regulatory 
agency a report at such time, in such form, and containing such 
information as the primary financial regulatory agency may require.\5\ 
On October 15, 2012, the FDIC published in the Federal Register a final 
rule implementing the section 165(i)(2) annual stress test 
requirement.\6\ This notice describes the reports and information 
required to meet the reporting requirements under section 165(i)(2) for 
covered banks with average total consolidated assets of $10 billion to 
$50 billion. These information collections will be given confidential 
treatment (5 U.S.C. 552(b)(4)).
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    \1\ Public Law 111-203, 124 Stat. 1376, July 21, 2010.
    \2\ 12 U.S.C. 5365(i)(2)(A).
    \3\ 12 U.S.C. 5301(12).
    \4\ 12 U.S.C. 5365(i)(2)(C).
    \5\ 12 U.S.C. 5365(i)(2)(B).
    \6\ 77 FR 62417, October 15, 2012.
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    The FDIC intends to use the data collected through these proposed 
templates to assess the reasonableness of the stress test results of 
covered banks and to provide forward-looking information to the FDIC 
regarding a covered bank's capital adequacy. The FDIC also may use the 
results of the stress tests to determine whether additional analytical 
techniques and exercises could be appropriate to identify, measure, and 
monitor risks at the covered bank. The stress test results are expected 
to support ongoing improvement in a covered bank's stress testing 
practices with respect to its internal assessments of capital adequacy 
and overall capital planning.
    The Dodd-Frank Act stress testing requirements apply to all covered 
banks, but the FDIC recognizes that many covered banks with 
consolidated total assets of $50 billion or more have been subject to 
stress testing requirements by the Board. The FDIC also recognizes that 
these banks' stress tests will be applied to more complex portfolios 
and therefore warrant a broader set of reports to adequately capture 
the results of the stress tests. These reports will

[[Page 16264]]

necessarily require more detail than would be appropriate for smaller, 
less complex institutions. Therefore, the FDIC has decided to specify 
separate reporting templates for covered banks with total consolidated 
assets between $10 billion and $50 billion and for covered banks with 
total consolidated assets of $50 billion or more.\7\ While the general 
reporting categories are the same (income statement, balance sheet and 
capital), the level of granularity for individual reporting items is 
less for $10 billion to $50 billion covered banks. For example, 
accounting for provisions by category is not required, and less detail 
is required for commercial and industrial lending. Because smaller 
banks with assets of $10 billion to $50 billion generally have less 
complex balance sheets, the FDIC believes that highly detailed 
reporting is not warranted, and so the FDIC is not requiring 
supplemental schedules on such areas as retail balances, securities and 
trading, operational risk, and pre-provision net revenue (PPNR). 
However, where a covered bank with assets less than $50 billion is 
affiliated with an organization with assets of $50 billion or more, the 
FDIC reserves the authority to require that covered bank to use the 
reporting template for larger banks with total consolidated assets of 
$50 billion or more.
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    \7\ See 77 FR 52718 for the Paperwork Reduction Act Notice and 
the FDIC Web site at http://www.fdic.gov/regulations/laws/federal/2012/2012-ad91/2012-ad91_templates.html for the reporting templates 
for covered banks with total consolidated assets of $50 billion or 
more.
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    The FDIC has worked closely with the Board and the Office of the 
Comptroller of the Currency (OCC) to make the agencies' respective 
rules implementing annual stress testing under the Dodd-Frank Act 
consistent and comparable by requiring similar standards for scope of 
application, scenarios, data collection and reporting forms. The FDIC 
has worked to minimize any potential duplication of effort related to 
the annual stress test requirements. The reporting templates for 
covered banks with assets of $10 billion to $50 billion or more are 
described below.

Description of Reporting Templates for Covered Banks With $10 Billion 
to $50 Billion in Assets

    The ``Annual Stress Test Reporting Template and Documentation for 
Covered Banks with Total Consolidated Assets of $10 Billion to $50 
Billion under the Dodd-Frank Wall Street Reform and Consumer Protection 
Act'' ($10B-$50B results template) includes data collection worksheets 
necessary for the FDIC to assess the company-run stress test results 
for baseline, adverse and severely adverse scenarios as well as any 
other scenario specified in accordance with regulations specified by 
the FDIC. The $10B-$50B results template includes worksheets that 
collect information on the following areas:
    1. Income Statement;
    2. Balance Sheet; and
    3. Capital.
    Each $10 billion to $50 billion covered bank reporting to the FDIC 
using this form will be required to submit to the FDIC separate 
worksheets for each scenario provided to covered banks in accordance 
with regulations implementing Section 165(i)(2) as specified by the 
FDIC.

Worksheets: Income Statement

    The income statement worksheet collects data for the quarter 
preceding the planning horizon and for each quarter of the planning 
horizon for the stress test on projected losses and revenues in the 
following categories.
    1. Net charge-offs;
    2. Pre-provision net revenue;
    3. Provision for loan and lease losses;
    4. Realized gains (losses) on held to maturity (HTM) and available-
for-sale (AFS) securities;
    5. All other gains (losses);
    6. Taxes;
    Memoranda items:
    7. Net gains and losses on sales of other real estate owned; and
    8. Total other than temporary impairment (OTTI) losses.
    This schedule provides information used to assess losses that 
covered banks can sustain in baseline, adverse and severely adverse 
stress scenarios.

Worksheets: Balance Sheet

    The balance sheet worksheet collects data for the quarter preceding 
the planning horizon and for each quarter of the planning horizon for 
the stress test on projected equity capital, as well as on assets and 
liabilities in the following categories.
    1. Loans;
    2. HTM securities;
    3. AFS securities;
    4. Trading assets;
    5. Total intangible assets;
    6. Other real estate;
    7. All other assets;
    Memoranda items:
    8. Loans and leases guaranteed by other U.S. government or GSE 
guarantees (non-FDIC loss sharing agreements);
    9. Troubled debt relationships;
    10. Loans secured by 1-4 family in foreclosure;
    11. Retail funding (core deposits);
    12. Wholesale funding;
    13. Trading liabilities;
    14. All other liabilities;
    15. Perpetual preferred stock and related surplus;
    16. Common stock;
    17. Surplus;
    18. Retained earnings;
    19. Other equity capital components; and
    20. Additional Memoranda items: Average rates for loans, 
securities, retail funding, wholesale funding, interest-bearing 
deposits, trading and other liabilities.
    The FDIC intends to use this worksheet to assess the projected 
changes in assets and liabilities that a covered bank can sustain in an 
adverse and severely adverse stress scenario. This worksheet will also 
be used to assess the revenue and loss projections identified in the 
income statement worksheet.

Worksheets: Capital

    The capital worksheet, which is appended to the balance sheet 
worksheet, collects data for the quarter preceding the planning horizon 
and for each quarter of the planning horizon for the stress test on the 
following areas.
    1. Unrealized gains (losses) on AFS securities;
    2. Disallowed deferred tax asset;
    3. Tier 1 common capital elements;
    4. Tier 1 capital;
    5. Tier 2 capital;
    6. Total risk based capital;
    7. Total capital;
    8. Risk weighted assets;
    9. Total assets for leverage purposes;
    10. Tier 1 common equity ratio;
    11. Tier 1 risk based capital ratio;
    12. Tier 1 leverage ratio;
    13. Total risk based capital ratio; Memoranda items:
    14. Sale, conversion, acquisition or retirement of capital stock;
    15. Cash dividends declared on preferred stock; and
    16. Cash dividends declared on common stock.
    In addition to the information collected on the capital worksheet, 
the Summary Schedule captures projections for regulatory capital ratios 
over the planning horizon by scenario.
    The FDIC intends to use these worksheets to assess the impact on 
capital of the projected losses and projected changes in assets that 
the covered bank can sustain in a stressed scenario. In addition to 
reviewing the worksheet in the context of the balance sheet and income 
statement projections, the FDIC also intends to use this worksheet to 
assess the adequacy of the capital plans and capital planning processes 
for each covered bank.

[[Page 16265]]

Description of FDIC Dodd Frank Annual Stress Test (DFAST) Scenario 
Variables Template

    To conduct the stress test required under this rule, a covered bank 
may need to project additional economic and financial variables to 
estimate losses or revenues for some or all of its portfolios. In such 
a case, the covered bank is required to complete a DFAST Scenario 
Variables worksheet for each scenario where such additional variables 
are used to conduct the stress test. Each scenario worksheet collects 
the variable name (matching that reported on the Scenario Variable 
Definitions worksheet), the actual value of the variable during the 
third quarter of the reporting year, and the projected value of the 
variable for nine future quarters.

Description of Supporting Documentation

    Covered banks with total consolidated assets of $10 billion to $50 
billion must submit clear documentation of the projections included in 
the worksheets to support efficient and timely review of annual stress 
test results by the FDIC. The supporting documentation should be 
submitted electronically and is not expected to be reported in the 
workbooks used for required data reporting. This supporting 
documentation must describe the types of risks included in the stress 
test; describe clearly the methodology used to produce the stress test 
projections; describe the methods used to translate the macroeconomic 
factors into a covered bank's projections; and also include an 
explanation of the most significant causes for the changes in 
regulatory capital ratios. The supporting documentation also should 
address the impact of anticipated corporate events, including mergers, 
acquisitions or divestitures of business lines or entities, and changes 
in strategic direction, and should describe how such changes are 
reflected in stress test results, including the impact on estimates of 
losses, expenses and revenues, net interest margins, non-interest 
income items, and balance sheet amounts.
    Where company-specific assumptions are made that differ from the 
broad macroeconomic assumptions incorporated in stress scenarios 
provided by the FDIC, the documentation must also describe such 
assumptions and how those assumptions relate to reported projections. 
Where historical relationships are relied upon, the covered banks must 
describe the historical data and provide the basis for the expectation 
that these relationships would be maintained in each scenario, 
particularly under adverse and severely adverse conditions.
    Type of Review: New collection.
    Affected Public: State nonmember banks and state savings 
associations supervised by the FDIC with total consolidated assets of 
$10 billion to $50 billion.

Burden Estimates

    The FDIC estimates the burden of this collection of information as 
follows:
    Estimated Number of Respondents: 22.
    Estimated Annual Burden per Respondent: 464 hours.
    Estimated Total Annual Burden: 10,208 hours.
    The burden for each $10 billion to $50 billion covered bank that 
completes the $10B-$50B results template is estimated to be 440 hours 
for a total of 9,680 hours. This burden includes 20 hours to input 
these data and 420 hours for work related to modeling efforts. The 
estimated burden for each $10 billion to $50 billion covered bank that 
completes the annual DFAST Scenarios Variables Template is estimated to 
be 24 hours for a total of 528 hours. The start-up burden for new 
respondents is estimated to be 93,600 hours and ongoing revisions for 
existing firms, 4,160 hours.
    Comments submitted in response to this notice will be summarized 
and included in the request for OMB approval. All comments will be a 
matter of public record. Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the FDIC, including whether the 
information has practical utility;
    (b) The accuracy of the FDIC's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology;
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information; and
    (f) The ability of FDIC-supervised banks and thrifts with assets 
between $10 billion and $50 billion to provide the requested 
information to the FDIC by March 31, 2014.

    Dated at Washington, DC, this 7th day of March 2013.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2013-05914 Filed 3-13-13; 8:45 am]
BILLING CODE 6714-01-P