[Federal Register Volume 78, Number 75 (Thursday, April 18, 2013)]
[Proposed Rules]
[Pages 23162-23171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09061]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 78, No. 75 / Thursday, April 18, 2013 /
Proposed Rules
[[Page 23162]]
FEDERAL RESERVE SYSTEM
12 CFR Part 246
[Regulation TT; Docket No. R-1457]
RIN 7100-AD-95
Supervision and Regulation Assessments for Bank Holding Companies
and Savings and Loan Holding Companies With Total Consolidated Assets
of $50 Billion or More and Nonbank Financial Companies Supervised by
the Federal Reserve
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Proposed rule.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
is inviting comments on a proposed rule to implement section 318 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank
Act), which directs the Board to collect assessments, fees, or other
charges equal to the total expenses the Board estimates are necessary
or appropriate to carry out the supervisory and regulatory
responsibilities of the Board for bank holding companies and savings
and loan holding companies with total consolidated assets of $50
billion or more and nonbank financial companies designated for Board
supervision by the Financial Stability Oversight Council (Council).
DATES: Comments should be received by June 15, 2013.
ADDRESSES: You may submit comments, identified by Docket No. 1457 and
RIN 7100-AD-95, 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.
Email: [email protected]. Include docket
and RIN numbers in the subject line of the message.
FAX: (202) 452-3819 or (202) 452-3102.
Mail: Robert deV. Frierson, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and Constitution Avenue NW.,
Washington, DC 20551.
All public comments are available from the Board's Web site at http://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 form in Room MP-
500 of the Board's Martin Building (20th and C Streets NW.) between
9:00 a.m. and 5:00 p.m. on weekdays.
FOR FURTHER INFORMATION CONTACT: Mark Greiner (202-452-5290), Nancy
Perkins (202-973-5006), or William Spaniel (202-452-3469), Division of
Banking Supervision and Regulation; Laurie Schaffer, Associate General
Counsel (202-452-2272) or Michelle Moss Kidd, Attorney (202-736-5554),
Legal Division; Board of Governors of the Federal Reserve System, 20th
and C Streets NW., Washington, DC 20551. Users of Telecommunication
Device for the Deaf (TTD) only, contact (202) 263-4869.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Overview of Proposed Rule
II. Description of the Proposal
A. Key Definitions
1. Assessed Companies
2. Total Assessable Assets
3. Assessment Periods
4. Assessment Basis
B. Apportioning the Assessment Basis to Assessed Companies
1. Apportionment Based on Size
2. Assessment Formula
C. Collection Procedures
1. Notice of Assessment and Appeal Procedure
2. Collection of Assessments
D. Revisions to the FR Y-7Q
III. Administrative Law Matters
A. Solicitation of Comments and Use of Plain Language
B. Paperwork Reduction Act Analysis
C. Regulatory Flexibility Act Analysis
I. Overview of Proposed Rule
Section 318 of the Dodd-Frank Act directs the Board to collect
assessments, fees, or other charges (assessments) from bank holding
companies and savings and loan holding companies with $50 billion or
more in total consolidated assets, and nonbank financial companies
designated by the Council pursuant to section 113 of the Dodd-Frank Act
for supervision by the Board \1\ (collectively, assessed companies)
equal to the expenses the Board estimates are necessary or appropriate
to carry out its supervision and regulation of those companies. This
proposed rule outlines the Board's assessment program, including how
the Board would: (a) Determine which companies would be subject to an
assessment for each calendar-year assessment period, (b) estimate the
total expenses that are necessary or appropriate to carry out the
supervisory and regulatory responsibilities to be covered by the
assessment, (c) determine the assessment for each of these companies,
and (d) bill for and collect the assessment from these companies.
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\1\ To date, the Council has not designated any nonbank
financial company for Board supervision under section 113 of the
Dodd-Frank Act.
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Under the proposal, each calendar year would be an assessment
period. Companies would be covered by this rule if the total
consolidated assets for the company meets or exceeds $50 billion or the
company has been designated for Board supervision by the Council during
the assessment period. The Board proposes to notify those companies of
the amount of their assessment no later than July 15 of the year
following each assessment period. After an opportunity for appeal,
assessed companies would be required to pay their assessments by
September 30 of the year following the assessment period. The Board is
proposing to collect assessments beginning with the 2012 assessment
period. The Board believes that initiating the assessment program with
the 2012 assessment period is appropriate as the Board has completed
the development of a framework for the estimation of appropriate
expenses and the collection of assessments. Additionally, the 2012
assessment period would be the first full calendar-year assessment
period subsequent to the effective date of section 318 of Dodd-Frank.
The Board is inviting comments on all aspects of this proposed
rulemaking.
[[Page 23163]]
II. Description of the Proposal
A. Key Definitions
1. Assessed Companies
The Board would make the determination for each calendar-year
period (the assessment period) that a company is a bank holding company
or savings and loan holding company with total consolidated assets
equal to or exceeding $50 billion, or a nonbank financial company
designated for Board supervision by the Council, based on information
reported by the company on regulatory or other reports as determined by
the Board.\2\ In general, for each assessment period, the proposal
would identify assessed companies as:
\2\ All organizational structure and financial information that
the Board would use for the purpose of determining whether a company
is an assessed company, including information with respect to
whether a company has control over a U.S. bank or savings
association, must have been received by the Board on or before June
30 following that assessment period and must reflect events that
were effective on or before December 31 of the assessment period.
A company that, on December 31 of the assessment
period, is a top-tier bank holding company, other than a foreign
bank holding company, as defined in section 2 of the Bank Holding
Company Act,\3\ that has total consolidated assets of $50 billion or
more as determined based on the average of the bank holding
company's total consolidated assets reported for the assessment
period on its Schedule HC--Consolidated Balance Sheet of the bank
holding company's Consolidated Financial Statements for Bank Holding
Companies (FR Y-9C) forms;
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\3\ 12 U.S.C. 1841(a).
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A company that, on December 31 of the assessment
period, is a top-tier savings and loan holding company, other than a
foreign savings and loan holding company, as defined in section 10
of the Home Owners' Loan Act,\4\ that has total consolidated assets
of $50 billion or more as determined based on the average of the
savings and loan holding company's total consolidated assets
reported for the assessment period on the savings and loan holding
company's FR Y-9C forms, or in column B (consolidated) of the
savings and loan holding company's Quarterly Savings and Loan
Holding Company Report (FR 2320) forms, as applicable; \5\
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\4\ 12 U.S.C. 1467.
\5\ Generally, for multi-tiered bank holding companies and
multi-tiered savings and loan holding companies in which a holding
company owns or controls, or is owned or controlled by, other
holding companies, the assessed company would be the top-tier,
regulated holding company. If a U.S.-domiciled company does not
report total consolidated assets in its public reports or uses a
financial reporting methodology other than U.S. GAAP, the Board may
use, at its discretion, any comparable financial information that
the Board may require from the company for this determination. In
situations where two or more unaffiliated companies control the same
U.S. bank or savings association and each company has average total
consolidated assets of $50 billion or more, each of the unaffiliated
companies would be designated an assessed company. Generally, a
company has control over a bank, savings association, or company if
the company has (a) ownership, control, or power to vote 25 percent
or more of the outstanding shares of any class of voting securities
of the bank, savings association, or company, directly or indirectly
or acting through one or more other persons; (b) control in any
manner over the election of a majority of the directors or trustees
of the bank, savings association, or company; or (c) the Board
determines the company exercises, directly or indirectly, a
controlling influence over the management or policies of the bank,
savings association, or company. See 12 U.S.C. 1841(a)(2) (bank
holding companies) and 12 U.S.C. 1467a(a)(2) (savings and loan
holding companies).
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A foreign company that, on December 31 of the
assessment period, is a top-tier bank holding company that has total
consolidated assets of $50 billion or more as determined based on
the average of the foreign banking organization's total consolidated
assets reported for the assessment period on the Capital and Asset
Report for Foreign Banking Organizations (FR Y-7Q) submissions; \6\
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\6\ For annual filers of the FR Y-7Q, the total consolidated
assets would be determined from the foreign banking organization's
FR Y-7Q annual submission for the calendar year of the assessment
period.
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A foreign company that, on December 31 of the
assessment period, is a savings and loan holding company that has
total consolidated assets of $50 billion or more as determined based
on the average of the foreign savings and loan holding company's
total consolidated assets reported for the assessment period on
regulatory reporting forms required for the foreign savings and loan
holding company; \7\ and
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\7\ At present, there are no foreign savings and loan holding
companies.
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A company that is a nonbank financial company
designated for supervision by the Board under section 113 of the
Dodd-Frank Act on December 31 of the assessment period.
Relying on the average assets reported in the financial reports
submitted over the entire yearly assessment period, where available,
would reduce volatility in an assessed company's assets over the year
and avoid overreliance on any particular quarter.\8\
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\8\ A four-quarter average of a company's total consolidated
assets also has been proposed for the definition of a covered
company in the notice of proposed rulemaking for ``Enhanced
Prudential Standards and Early Remediation Requirements for Covered
Companies'' published in the Federal Register 77 FR 594 (January 5,
2012). If an assessed company has not reported its total
consolidated assets to the Board pursuant to one of the reporting
forms named above, the Board may also use, at its discretion, other
financial or annual reports filed by the company to determine a
company's total consolidated assets. For example, the Board may use
the Savings Association Holding Company Report (FR H-(b)11), or any
filing filed with the Securities and Exchange Commission (SEC).
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Question 1: What alternative decision criteria or procedures should
the Board consider for determining whether a company is an assessed
company, such as considering a greater or lesser number of regulatory
reports, and why?
2. Total Assessable Assets
The term ``total assessable assets'' means the amount of assets
that will be used to calculate an assessed company's assessment. In
order to collect assessments that reflect the Board's role as the
consolidated supervisor of assessed companies, further described in
Section A.4, total assessable assets would include total assets for all
activities subject to the Board's supervisory authority as the
consolidated supervisor. For a U.S.-domiciled assessed company, total
assessable assets would be the company's total consolidated assets of
its entire worldwide operations, determined by using an average of the
total consolidated asset amounts reported in applicable regulatory
reports for the assessment period.\9\ For a nonbank financial company
supervised by the Board, total assessable assets would be the average
of the nonbank financial company's total consolidated assets as
reported during the assessment period on such regulatory or other
reports as determined by the Board.\10\ Similarly, at such time as any
foreign savings and loan holding company becomes an assessed company,
total assessable assets would be the average of the foreign savings and
loan holding company's total combined assets of U.S. operations as
reported during the assessment period on such regulatory reports as are
applicable to the foreign savings and loan holding company.\11\
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\9\ For assessed companies that are grandfathered unitary
savings and loan holding companies, the Board would only include
assets associated with its savings association subsidiary and its
other financial activities.
\10\ If the nonbank financial company supervised by the Board
under section 113 of the Dodd-Frank Act is a foreign company, its
assessable assets would be the average of the foreign nonbank
financial company's U.S. assets as reported during the assessment
period. As the Council begins to designate nonbank financial
companies under section 113, the Board's methodology for determining
the assessments for these companies would be reviewed and, as
needed, revised.
\11\ If any foreign savings and loan holding company becomes an
assessed company, the Board's methodology for determining the
assessments for these companies would be reviewed and, as needed,
revised.
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For a foreign bank holding company, total assessable assets would
be equal to the company's total combined assets of U.S. operations,\12\
including U.S. branches and agencies, as the Board has supervisory and
regulatory responsibilities for the company's U.S. activities. Foreign
bank holding companies do not currently submit a
[[Page 23164]]
single regulatory reporting form that reports the total combined assets
of their U.S. operations for which the Board has supervisory and
regulatory authority.\13\ In order to determine a foreign bank holding
company's total assessable assets for the 2012 and 2013 assessment
periods, a foreign bank holding company's total assessable assets would
be the average of the total combined assets of U.S. operations, net of
U.S. intercompany balances and transactions (as allowed \14\), from the
stand alone regulatory reporting form for, specifically: \15\
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\12\ A foreign bank holding company's total assessable assets
would not include the assets of section 2(h)(2) companies as defined
in section 2(h)2 of the Bank Holding Company Act (12 U.S.C.
1841(h)(2)).
\13\ Currently, foreign bank holding companies, as foreign
banking organizations, report total consolidated assets of worldwide
operations on the FR Y-7Q, which the proposal would use for
determining whether a foreign bank holding company is an assessed
company.
\14\ Net intercompany balances and transactions between a U.S.
entity and a foreign affiliate would not be eliminated, as such
balances and transactions would not result in double counting of
assets on a U.S.-combined basis. If any standalone regulatory
reporting form does not itemize intercompany balances and
transactions between U.S.-domiciled affiliates, branches or
agencies, this proposal would not eliminate intercompany balances
and transactions reported on that form from the calculation of total
assessable assets. For regulatory reporting forms that do not
distinguish between (i) balances and transactions between U.S.
affiliates, and (ii) balances and transactions between a U.S
affiliate and a foreign affiliate, the Board would not eliminate any
such balances or transactions between affiliates reported on the
form because it would be impossible to distinguish between assets
that would result in double counting and assets that would not
result in double counting.
\15\ The proposed approach would exclude from the sum the assets
of entities for which a stand-alone regulatory report has been
filed, but whose assets are reflected in the consolidated balance
sheet of a U.S.-domiciled higher-tier regulatory reporting form
filer.
A top-tier, U.S.-domiciled bank holding company or
U.S.-domiciled savings and loan holding company; \16\
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\16\ Total assets for each U.S.-domiciled, top-tier bank holding
company or savings and loan holding company would be the company's
total assets as reported on line item 12, Schedule HC of the FR Y-
9C, or as reported on line item 1, column B, of the FR 2320, as
applicable.
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U.S. branches and agencies; \17\
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\17\ Total assets for each branch or agency would be calculated
as total claims of nonrelated parties (line item 1.i from column A
on Schedule RAL) plus due from related institutions in foreign
countries (line items 2.a, 2.b(1), 2.b(2), and 2.c from column A,
part 1 on Schedule M), as reported on the Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC
002). Note that due from head office of parent bank (line item 2.a,
column A, part 1 on Schedule M) would be included net of due to head
office of parent bank (line item 2.a, column B, part 1 on Schedule
M) when there is a net due from position reported for line item 2.a.
A net due to position for line item 2.a would result in no addition
to total assets with respect to line item 2.a, part 1 on Schedule M.
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U.S.-domiciled nonbank subsidiaries; \18\
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\18\ For quarterly Financial Statements of U.S. Nonbank
Subsidiaries Held by Foreign Banking Organizations (FR Y-N) filers,
total assets for each nonbank subsidiary would be calculated as
total assets (line item 10, Schedule BS), minus balances due from
related institutions located in the United States, gross (line item
4.a of Schedule BS-M) of the FR Y-7N. For annual Abbreviated
Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign
Banking Organizations (FR Y-NS) filers, total assets for each
nonbank subsidiary would be as reported on line item 2 of the FR Y-
7NS. Until foreign assessed companies report on the revised form FR
Y-7Q described in this proposal, the Board would only include the
assets of affiliates for which the foreign assessed company is the
majority owner, as the Board would not have sufficient information
to accurately account for non-majority-owned affiliates.
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Edge Act and Agreement Corporations; \19\ U.S. banks
and U.S. savings associations; \20\ and broker-dealers that are not
reflected in the assets of a U.S. domiciled parent's regulatory
reporting form submission.\21\
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\19\ Total assets for each Edge Act or agreement corporation
would be the sum of claims on nonrelated organizations (line item 9,
``consolidated total'' column on Schedule RC of the Consolidated
Report of Condition and Income for Edge Act and agreement
corporations (FR 2886b)), and claims on related organizations
domiciled outside the United States (line items 2.a and 2.b, column
A on Schedule RC-M), as reported on FR 2886b.
\20\ Total assets for each bank or savings association that is
not a subsidiary of a U.S.-domiciled bank holding company or savings
and loan holding company would be the bank's or savings
association's total assets as reported on line item 12, Schedule RC
of the Balance Sheet of the Consolidated Reports of Condition and
Income (FFIEC 031 or FFIEC 041, as applicable).
\21\ Total assets for each broker-dealer would be the broker-
dealer's total assets as reported on the statement of financial
condition of the SEC's FOCUS Report, Part II (Form X-17A-5), FOCUS
Report, Part IIa (Form X-17A-5), or FOCUS Report, Part II CSE (Form
X-17A-5).
For assessment periods after 2013, the Board proposes to modify the
FR Y-7Q by adding a line item for reporting the total combined assets
of a foreign banking organization's U.S. operations, consistent with
the Board's supervisory and regulatory authority over foreign banking
organizations' U.S. operations.
Question 2: What, if any, challenges does the proposed approach
present for determining the total assessable assets of an assessed
company, foreign or domestic?
Question 3: What, if any, specific concerns arise for assessed
companies that are primarily non-depository firms, and what method of
determining total assessable assets should be considered for those
companies and why?
3. Assessment Periods
Under the proposed rule, each calendar year would be an assessment
period. For each assessment period, the Board would make a
determination as to whether an entity is an assessed company for that
assessment period. The Board anticipates that the population of
assessed companies will be relatively stable, and it is likely that an
entity that is an assessed company during one assessment period will be
an assessed company for following assessment periods. Nevertheless,
some entities with average total consolidated assets near the $50
billion threshold might be included in one assessment period and not in
another.
The Board would determine which companies, as of December 31 of the
prior calendar year, (i) were of the types of entities enumerated in
the rule (i.e., a bank holding company, savings and loan holding
company, or designated nonbank financial company subject to Board
supervision) and (ii) had average total consolidated assets equal to or
exceeding the $50 billion threshold, as reported on the relevant
reporting form(s) or based on other information as the Board may
consider. The Board would notify each company that it is an assessed
company by July 15 of each calendar year following the assessment
period.
Question 4: What, if any, burdens are created for assessed
companies by the Board's use of December 31 as the ``as of'' date for
determining assessed companies and notifying assessed companies on July
15 of the following year? What alternative dates or methodologies
should the Board consider and why?
Question 5: For companies near $50 billion in total consolidated
assets, what, if any, concerns are associated with not being certain
whether the company would be an assessed company from one assessment
period to another and what alternatives might mitigate those concerns?
4. Assessment Basis
The assessment basis means the applicable estimated expenses \22\
of the Board and the Reserve Banks (to which the Board has delegated
supervisory responsibility) as consolidated supervisor of assessed
companies. The assessment basis would include necessary or appropriate
expenses associated with consolidated regulation and supervision of all
assessed companies. In order to determine the assessment basis, the
Board would estimate its aggregate expenses for activities related to
the supervision and regulation of the entire population of assessed
companies. These expenses include, but are not limited to: conducting
onsite and offsite examinations, inspections, visitations and reviews;
providing ongoing supervision; meeting and corresponding regarding
supervision matters; conducting stress tests; assessing resolution
plans; developing, administering, interpreting and
[[Page 23165]]
explaining regulations, laws, and supervisory guidance adopted by the
Board; engaging in enforcement actions; processing and analyzing
applications and notices, including conducting competitive analyses and
financial stability analyses of proposed bank and bank holding company
mergers, acquisitions, and other similar transactions; processing
consumer complaints; and implementing a macro-prudential supervisory
approach.\23\ In addition, the estimated expenses for the assessment
basis would include a share of expenses associated with activities that
are integral to carry out the supervisory and regulatory
responsibilities of the Board, even when those expenses are not
directly attributable to specific companies.\24\ For those activities,
the Board would calculate the relative proportion of expenses that are
attributable to assessed companies divided by expenses for those
activities that are attributable to all companies and entities
supervised by the Board, and apply that proportion to the shared
expenses.
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\22\ Expenses include all direct operating expenses, including
support, overhead, and pension expenses.
\23\ The Board's costs with respect to supervising state member
banks and branches and agencies of foreign banking organizations are
excluded from the assessment basis because such costs are not
attributable to the Board's role as consolidated supervisor of the
parent company. However, as such assets and the assets of the
company's other depository institutions, nonbank subsidiaries, and
other similar entities contribute to the costs incurred by the Board
as the consolidated supervisor, such assets are therefore included
in total assessable assets.
\24\ These activities include (i) the Shared National Credit
(SNC) Program, which the Board and the other federal banking
agencies established in 1977 to promote the efficient and consistent
review and classification of shared national credits; (ii) the
training of staff in the supervision function; (iii) research,
analysis, and development of supervisory and regulatory policies,
procedures, and products of the Board; and (iv) collecting,
receiving, and processing regulatory reports received from
institutions supervised and regulated by the Board.
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For each assessment period, the Board's assessment basis would be
the Board's estimate of the total expenses necessary or appropriate to
carry out the supervisory and regulatory responsibilities of the Board
with respect to the population of assessed companies, based on an
average of estimated expenses over the current and prior two assessment
periods. For the 2012 assessment period, the Board estimates that the
assessment basis would be approximately $440 million. Thereafter, to
mitigate volatility in assessments and provide a more stable basis from
year to year, the Board would calculate a three-year average of its
estimated expenses, and would determine assessments for each year based
on that three-year average. Thus, as an example, the assessment basis
for 2015 would be the average of the Board's estimated expenses
relating to assessed companies from calendar years 2013, 2014, and
2015. For the assessment bases for calendar years 2012, 2013, and 2014,
the Board would use the estimate of its expenses for 2012, the first
year for which it will collect assessments.\25\ The Board expects to
evaluate the volatility in assessment fees resulting from its
methodology for determining the assessment basis on an ongoing basis
and may refine its methodology as appropriate through the rulemaking
process.
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\25\ As explained further in section B.2, the Board would also
use the 2012 assessment rate to calculate each assessed company's
assessment in 2013 and 2014.
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B. Apportioning the Assessment Basis to Assessed Companies
1. Apportionment Based On Size
In general, total expenses relating to the supervision of a company
are a function of the size and associated complexity of the company.
For example, for companies with assets of $50 billion or more,
supervision typically consists of onsite teams with a continuous
presence at the firm, offsite surveillance and monitoring, and a series
of targeted onsite examinations conducted throughout the year that
focus on individual areas of operations and risk. Larger companies are
often more complex companies, with associated risks that play a large
role in determining the supervisory resources needed for that company.
The largest companies, because of their increased complexity, risk and
geographic footprints, usually receive more supervisory attention. For
example, a number of regulations in development to implement provisions
of the Dodd-Frank Act are directed at financial institutions with total
consolidated assets of $50 billion or more and nonbank companies
designated for supervision by the Board, and some of these regulations
are tailored further based on the size of a company.\26\
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\26\ See, e.g., ``Capital Plans,'' final rule published in the
Federal Register 76 FR 231 (Dec. 1, 2011), ``Credit Risk
Retention,'' proposal published in the Federal Register 76 FR 83
(April 29, 2011), and ``Enhanced Prudential Standards and Early
Remediation Requirements for Covered Companies,'' proposal published
in the Federal Register 77 FR 594 (January 5, 2012).
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Apportioning the assessment basis based on the total consolidated
asset size of the assessed companies is generally reflective of the
amount of supervisory and regulatory expenses associated with a
particular company, and generally is information that is well
understood, objective, transparent, readily available, and comparable
among all types of assessed companies. As a result, the Board proposes
to determine assessments based on the assessed companies' total
assessable assets for the assessment period.
Question 6: What, if any, alternatives to a total consolidated
assets measure should the Board consider for apportioning the
assessment basis among assessed companies and why?
2. Assessment Formula
The proposal would apportion the assessment basis among assessed
companies by means of an assessment formula that uses the total
assessable asset size of each assessed company. For each assessment
period, the assessment formula applied to the assessed companies is
proposed to be:
Assessment = $50,000 + (Assessed Company's Total Assessable Assets x
Assessment Rate).
Each company's assessment would be computed using a base amount of
$50,000 for each assessed company. The Board believes that including
this base amount in each assessment is appropriate to ensure that the
nominal expenses related to the Board's supervision and regulation of
such companies, particularly for those companies that are near the $50
billion threshold, are covered. The ``assessment rate'' would be
determined each assessment period according to this formula:
[GRAPHIC] [TIFF OMITTED] TP18AP13.002
[[Page 23166]]
The assessment rate would be determined by dividing the assessment
basis (minus the base amount that covers nominal expenses times the
number of assessed companies) by the total assessable assets of all
assessed companies to determine a ratio of Board expenses to total
assets for each assessment period, and then multiplies an assessed
company's total assessable assets by the resulting assessment rate.
Thus, a company with higher total assessable assets would be charged a
higher assessment than a company with lower total assessable assets,
which generally reflects the greater supervisory and regulatory
attention and associated workloads and expenses associated with larger
companies. The assessment represents a cost to the assessed companies.
This cost, however, as mandated by section 318 of the Dodd-Frank Act,
is for the purpose of collecting the estimated expenses of supervising
and regulating assessed companies.
Over the first three years of the program, the assessment rate
would be fixed. After the Board determines the assessment rate for
2012, it would use that assessment rate for calculating the assessment
for the following two assessment periods, ending with the assessments
for 2014. Thereafter, for each assessment period, the Board would
calculate an assessment rate by averaging the Board's relevant expenses
for the past three years. Keeping the same assessment rate for the
first three years and the subsequent three-year average would reduce
year-to-year fluctuations in assessments.
Assessment Calculation Example
For purposes of illustration, using the methodologies set forth in
this proposal and based on information as of the date of this notice of
proposed rulemaking, the Board estimates that for 2012 there would be
approximately 70 assessed companies with aggregate total assessable
assets of about $20 trillion and that the assessment basis would be
about $440 million. Using these figures, a company with total
assessable assets of $50 billion \27\ would be required to pay an
assessment of approximately $1 million and a company with total
assessable assets of $1 trillion would be required to pay an assessment
of approximately $22 million.
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\27\ Total assessable assets could be less than $50 billion for
foreign companies with total consolidated worldwide assets of $50
billion or more, but total combined U.S. assets of less than $50
billion.
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Question 7: What alternatives should the Board consider for
differentiating assessments among assessed companies (for example, a
tiered fee structure), and why?
Question 8: What alternative approaches to the three-year average
should the Board consider for reducing volatility in assessments for
assessed companies, and why?
Question 9: Does the Board's proposal to use the same assessment
rate for the first three years permit adequate preparation for assessed
companies, and if not, what should the Board consider in initiating its
assessments system?
C. Collection Procedures
1. Notice of Assessment and Appeal Procedure
Under the proposal, the Board would send a notice of assessment to
each assessed company no later than July 15 of the year following the
assessment period stating that the Board had determined the company to
be an assessed company for the prior calendar year, stating the amount
of the company's total assessable assets and the amount the assessed
company must pay by September 30. The Board would also, no later than
July 15, publish on its Web site the assessment formula for that
assessment period. For the 2012 assessment period, the notice of
assessment and the date on which the assessment is due may be adjusted
depending on the date of the issuance of the final regulation.
Companies identified as assessed companies would have 30 calendar
days from July 15 to appeal the Board's determination of the company as
an assessed company or the Board's determination of the company's total
assessable assets. Under the proposal, companies choosing to appeal
must submit a request for redetermination in writing and include all
the pertinent facts the company believes would be relevant for the
Board to consider. Grounds for appeal would be limited to (i) whether
the assessed company was not properly considered an assessed company
(i.e., it is not a bank holding company, savings and loan holding
company, or nonbank financial company designated by the Council as of
December 31 of the assessment period), or (ii) review of the Board's
determination of the assessed company's total assessable assets. The
Board would consider the company's request and respond within 15
calendar days from the end of the appeal period with the results of its
review of any properly filed appeal. A successful appeal would not
change the assessment for any other company.
2. Collection of Assessments
Under the proposal, each assessed company would pay its assessments
using the Fedwire Funds Service (Fedwire) to the Federal Reserve Bank
of Richmond. The assessments will then be transferred to the U.S.
Treasury's General Account. Assessments must be credited to the Board
by September 30 of the year following the assessment period.\28\ In the
event that the Board does not receive the full amount of an assessed
company's assessment by the payment date for any reason that is not
attributable to an action of the Board, the assessment would be
considered delinquent and the Board would charge interest on the
delinquent assessment until the assessment and interest, calculated
daily from the collection date and based on the U.S. Treasury
Department's current value of funds rate percentage, is paid.
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\28\ As stated above, this date may be adjusted for the 2012
assessment period to accommodate the final rulemaking.
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Question 10: What alternative approaches or additional factors
should the Board consider for the billing and collection of assessments
and why?
Revisions to the FR Y-7Q
The FR Y-7Q requires each top-tier foreign banking organization to
file asset and capital information. Currently, Part 1 of the report
requires the filing of capital and asset information for the top-tier
foreign banking organization,\29\ while Part 2 requires capital and
asset information for lower-tier foreign banking organizations
operating a branch or an agency, or owning an Edge Act or Agreement
Corporation, a commercial lending company, or a commercial bank
domiciled in the United States.\30\ As explained in the reporting
instructions for the FR Y-7Q, both Part 1 and Part 2 of the reporting
form collect capital and asset information with respect to the foreign
banking organization's worldwide operations. However, neither Part 1 or
Part 2 collects capital and asset information with respect to only the
[[Page 23167]]
foreign banking organization's U.S. operations.
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\29\ This form is reported annually by each top-tier foreign
banking organization if it or any foreign banking organization in
its tiered structure has not elected to be a financial holding
company, and is reported quarterly by each top-tier foreign banking
organization if it or any foreign banking organization in its tiered
structure has elected to be a financial holding company.
\30\ Reported quarterly by each lower-tier foreign banking
organization (where applicable) operating a branch or an agency, or
owning an Edge Act or Agreement corporation, a commercial lending
company, or a commercial bank domiciled in the United States, if it
or any foreign banking organization in its tiered structure has
financial holding company status.
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For the purpose of determining a foreign assessed company's total
assessable assets, the Board believes that combining the assets of the
foreign assessed company's U.S. branches and agencies with the total
assets of all U.S. domiciled affiliates reported on other regulatory
reports on a standalone basis would likely not yield a result that is
comparable to the consolidated approach required of U.S.-domiciled
assessed companies, which report total consolidated assets on Schedule
HC of FR Y-9C according to standard rules of consolidation. That is,
not all standalone reports itemize separately the intercompany balances
and transactions between only U.S. affiliates that would be netted out
on a U.S. consolidated basis. Therefore, in order to improve parity
among all assessed companies with respect to the determination of total
assessable assets, the Board is proposing to revise Part 1 of the FR Y-
7Q to collect the top-tier foreign banking organization's total
combined assets of U.S. operations,\31\ net of intercompany balances
and transactions between U.S. domiciled affiliates, branches and
agencies.\32\ The instructions for the amended FR Y-7Q will closely
parallel, to all practicable extents, the instructions for the FR Y-9C
for consolidating assets of U.S. operations, including for accounting
for less-than-majority-owned affiliates.
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\31\ For purposes of the amended FR Y-7Q, total combined assets
would not include the assets of section 2(h)(2) companies as defined
in section 2(h)(2) of the Bank Holding Company Act (12 U.S.C.
1841(h)(2)).
\32\ For purposes of FR Y-7Q reporting, U.S.-domiciled
affiliates would be defined as subsidiaries, associated companies,
and entities treated as associated companies (e.g., corporate joint
ventures) as defined in the FR Y-9C.
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In addition, the Board is proposing to revise Part 1 of the FR Y-7Q
to collect information about certain foreign banking organizations more
frequently. As mentioned above, only top-tier foreign banking
organizations with financial holding company status file Part 1 of the
FR Y-7Q quarterly, while a top-tier foreign banking organization would
report annually if the foreign banking organization, or any foreign
banking organization in its tiered structure, has not effectively
elected to be a financial holding company. Accordingly, for purposes of
determining whether a foreign banking organization is an assessed
company and the amount of a foreign assessed company's total assessable
assets more frequent than annually, the Board is proposing to revise
the FR Y-7Q quarterly reporting requirements for Part 1 to include all
top-tier foreign banking organizations, regardless of financial holding
company designation, with total consolidated worldwide assets of $50
billion or more as reported on Part 1 of the FR Y-7Q. Once a foreign
banking organization has total consolidated assets of $50 billion or
more and begins to report quarterly, the foreign banking organization
must continue to report Part 1 quarterly unless and until the foreign
banking organization has reported total consolidated assets of less
than $50 billion for each of all four quarters in a full calendar year.
Thereafter, the foreign banking organization may revert to annual
reporting, in accordance with the FR Y-7Q reporting form's instructions
for annual reporting of Part 1. If at any time, after reverting to
annual reporting, a foreign banking organization has total consolidated
assets of $50 billion or more, the FBO must return to quarterly
reporting of Part 1. Regardless of size, all top-tier foreign banking
organizations that have elected to be financial holding companies at
the foreign banking organization's top tier or tiered structure would
continue to report quarterly.
Question 11: What changes, if any, should be made to the proposal
to ensure consistency and accuracy of determining foreign bank holding
company assets in a manner that is most comparable to U.S.-domiciled
bank holding companies?
Question 12: The Board requests comment on all aspects of the
proposed rule. Specifically, what aspects of the proposed rule present
implementation challenges and why? What, if any, alternative approaches
should the Board consider? Responses should be detailed as to the
nature and impact of these challenges and should address whether the
Board should consider implementing additional transitional arrangements
in the rule to address these challenges.
III. Administrative Law Matters
A. Solicitation of Comments and Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113
Stat. 1338, 1471, 12 U.S.C. 4809) requires the Federal banking agencies
to use plain language in all proposed and final rules published after
January 1, 2000. The Board invites comment on how to make the proposed
rule easier to understand. For example:
Is the material organized to suit your needs? If not,
how could the Board present the rule more clearly?
Are the requirements in the rule clearly stated? If
not, how could the rule be more clearly stated?
Do the regulations contain technical language or jargon
that is not clear? If so, which language requires clarification?
Would a different format (grouping and order of
sections, use of headings, paragraphing) make the regulation easier
to understand? If so, what changes would achieve that?
Is this section format adequate? If not, which of the
sections should be changed and how?
What other changes can the agencies incorporate to make
the regulation easier to understand?
B. Paperwork Reduction Act Analysis
In accordance with the Paperwork Reduction Act of 1995 (PRA) (44
U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the proposed
rule under the authority delegated to the Board by Office of Management
and Budget (OMB). The Board may not conduct or sponsor, and a
respondent is not required to respond to, an information collection
unless it displays a currently valid OMB control number.
The proposed rule contains requirements subject to the PRA. The
reporting requirements are found in sections 246.3(e)(3) and 246.5(b).
1. Reporting Requirements in 246.3(e)(3)
Section 318 of the Dodd-Frank Act directs the Board to collect
assessments, fees, or other charges, from assessed companies equal to
the expenses the Board estimates would be necessary and appropriate to
carry out its supervision and regulation of those companies. Section
318 describes these companies as (1) a bank holding company (BHC)
(other than a foreign bank holding company) with total consolidated
assets of $50 billion or more determined based on the average of the
BHC's total consolidated assets reported during the assessment period
on its Schedule HC--Consolidated Balance Sheet of the BHC's
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C)
(OMB No. 7100-0128) forms; (2) a savings and loan holding company
(SLHC) (other than a foreign savings and loan holding company) with
total consolidated assets of $50 billion or more, (3) a foreign company
that is a BHC or SLHC with $50 billion or more in total consolidated
assets determined based on the average of the foreign company's total
consolidated assets reported during the assessment period on the
Capital and Asset Report for Foreign Banking Organizations (FR Y-7Q;
OMB No. 7100-0125) and (4) a nonbank financial company designated for
supervision by the Board under section 113 of the Dodd-Frank Act. In
[[Page 23168]]
order to improve parity among all assessed companies with respect to
the determination of total assessable assets, the Board proposes to
revise Part 1 of the FR Y-7Q to collect a new data item from top-tier
FBO's--Total combined assets of U.S. operations, net of intercompany
balances and transactions between U.S. domiciled affiliates, branches
and agencies. In addition, the Board proposes to revise the reporting
panel for Part 1 of the FR Y-7Q to collect information about certain
FBOs more frequently (from annual reporting to quarterly reporting) for
purposes of determining whether a FBO is an assessed company. All top-
tier FBOs, regardless of financial holding company designation, with
total consolidated worldwide assets of $50 billion or more as reported
on Part 1 of the FR Y-7Q would be required to submit data quarterly.
The Board estimates that 71 FBOs would initially be required to change
from annual reporting to quarterly reporting.\33\ The Board estimates
that, upon implementation of the new data item, 109 FBOs would
initially submit the FR Y-7Q on a quarterly basis. In addition, the
Board estimates that 43 FBOs would initially submit the FR Y-7Q on an
annual basis upon implementation of the new data item. The Board
estimates that it would take, on average, 15 minutes per submission to
report the new data item. The total annual reporting burden associated
with the revisions to the FR Y-7Q is estimated to be 393 hours.
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\33\ Once an FBO reports total consolidated assets of $50
billion or more and begins to report quarterly, the FBO must
continue to report Part 1 quarterly unless and until the FBO has
reported total consolidated assets of less than $50 billion for each
of all four quarters in a full calendar year. Thereafter, the FBO
may revert to annual reporting.
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2. Reporting Requirements in 246.5(b)
Under section 246.5(b) upon the Federal Reserve issuing the notice
of assessment to each assessed company, the company would have 30
calendar days to submit a written statement to appeal the Board's
determination of the company as (i) a BHC, SLHC, foreign bank holding
company, or nonbank financial company supervised by the Board; (ii) the
Board's determination of the company's total consolidated assets, or
(iii) the Board's determination of the company's total assessable
assets, as set forth in 246.4(e) of this rule. This new collection
would be titled the Dodd-Frank Act Assessment Fees Request for
Redetermination (FR 4030; OMB No. 7100--to be assigned).
The Board estimates that 7 assessed companies would submit a
written request for appeal annually. The Board estimates that these
assessed companies would take, on average, 40 hours (one business week)
to write and submit the written request. The total annual PRA burden
for the new FR 4030 information collection is estimated to be 280
hours.
Comments are invited on: (1) Whether the proposed collection of
information is necessary for the proper performance of the Board's
functions, including whether the information has practical utility; (2)
the accuracy of the Board's estimate of the burden of the proposed
information collection, including the cost of compliance; (3) ways to
enhance the quality, utility, and clarity of the information to be
collected; and (4) ways to minimize the burden of information
collection on respondents, including through the use of automated
collection techniques or other forms of information technology.
Comments on the collection of information should be sent to Cynthia
Ayouch, Federal Reserve Board Clearance Officer, Division of Research
and Statistics, Mail Stop 95-A, Board of Governors of the Federal
Reserve System, Washington, DC 20551. Copies of such comments may also
be submitted to the Office of Management and Budget, 725 17th St. NW.,
10235 (Docket FRB Docket No. R-1457), Washington, DC 20503,
Attn: Federal Reserve Desk Officer.
C. Regulatory Flexibility Act
In accordance with Section 3(a) of the Regulatory Flexibility Act,
5 U.S.C. 601 et seq. (``RFA''), the Board is publishing an initial
regulatory flexibility analysis for the proposed rule. The RFA requires
an agency to provide an initial regulatory flexibility analysis with
the proposed rule or to certify that the proposed rule will not have a
significant economic impact on a substantial number of small entities.
Based on its analysis and for the reasons stated below, the Board
believes that this proposed rule would not have a significant economic
impact on a substantial number of small entities. A final regulatory
flexibility analysis will be conducted after consideration of comments
received during the public comment period if the Board determines that
the rule will have a significant economic impact on a substantial
number of small entities.
1. Statement of the objectives of the proposal. As required by
section 318 of the Dodd-Frank Act, the Board is proposing a rule to
assess bank holding companies and savings and loan holding companies
with assets of equal to or greater than $50 billion and nonbank
financial companies supervised by the Board for the total expenses the
Board estimates are necessary or appropriate to carry out the
supervisory and regulatory responsibilities of the Board with respect
to such companies.
2. Small entities affected by the proposal. Under regulations
issued by the Small Business Administration, a banking entity is
considered ``small'' if it has $175 million or less in assets for banks
and other depository institutions; and $7 million or less in revenues
for nonbank mortgage lenders.\34\ The proposed rule, by definition,
will affect bank holding companies and savings and loan holding
companies with assets of equal to or greater than $50 billion. The
proposed rule also will affect nonbank financial companies supervised
by the Board under section 113 of the Dodd-Frank Act but it is unlikely
that such an institution would be considered ``small'' by the Small
Business Administration. The Board invites comment on the effect of the
proposed rule on small entities.
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\34\ 13 CFR 121.201.
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3. Recordkeeping, reporting, and compliance requirements. The
Board's proposed rule is unlikely to impose any new recordkeeping,
reporting, or compliance requirements. As stated above, a small banking
entity is unlikely to be affected by the proposed rule. The Board seeks
information and comment on any changes in recordkeeping, reporting, and
compliance requirements arising from the application of the proposed
rule to small entities.
4. Other Federal rules. The Board has not identified any Federal
rules that duplicate, overlap, or conflict with the proposed revisions
of the proposed rule.
5. Significant alternatives to the proposed revisions. The Board
believes that no alternatives to the proposed rule are available for
consideration. The Board nevertheless welcomes comments on any
significant alternatives, consistent with the requirements of the Dodd-
Frank Act that would minimize the impact of the proposed rule on small
entities.
List of Subjects in 12 CFR Part 246
Administrative practice and procedure, Assessments, Banks, Banking,
Holding companies, Nonbank financial companies, Reporting and
recordkeeping requirements.
For the reasons stated in the preamble, the Board proposes to amend
12 CFR chapter II as follows:
0
1. Add new Part 246 to read as follows:
[[Page 23169]]
PART 246--SUPERVISION AND REGULATION ASSESSMENTS OF FEES
(REGULATION TT)
Sec.
246.1 Authority, purpose and scope.
246.2 Definitions.
246.3 Assessed Companies.
246.4 Assessments.
246.5 Notice of Assessment and Appe
246.6 Collection of Assessments; Payment of Interest.
Authority: Pub. L. 111-203, 124 Stat. 1376, 1526, and section
11(s) of the Federal Reserve Act (12 U.S.C. 248(s)).
Part A--In General
Sec. 246.1 Authority, purpose and scope.
(a) Authority. This part (Regulation TT) is issued by the Board of
Governors of the Federal Reserve System (Board) under section 318 of
Title III of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (the Dodd-Frank Act) (Pub. L. 111-203, 124 Stat. 1376, 1423-32, 12
U.S.C. 5365 and 5366) and section 11(s) of the Federal Reserve Act (12
U.S.C. 248(s)).
(b) Scope. This part applies to:
(1) Any bank holding company having total consolidated assets of
$50 billion or more, as defined below;
(2) Any savings and loan holding company having total consolidated
assets of $50 billion or more, as defined below; and
(3) Any nonbank financial company supervised by the Board, as
defined below.
(c) Purpose. This part implements provisions of section 318 of the
Dodd-Frank Act that direct the Board to collect assessments, fees, or
other charges from companies identified in subsection (b) that are
equal to the total expenses the Board estimates are necessary or
appropriate to carry out the supervisory and regulatory
responsibilities of the Board with respect to these assessed companies.
Sec. 246.2 Definitions.
(a) Bank holding company is defined as in section 2 of the Bank
Holding Company Act, as amended (12 U.S.C. Sec. 1841), and the Board's
Regulation Y (12 CFR part 225).
(b) Company means a corporation, partnership, limited liability
company, depository institution, business trust, special purpose
entity, association, or similar organization.
(c) Council means the Financial Stability Oversight Council
established by section 111 of the Dodd-Frank Act (12 U.S.C. Sec.
5321).
(d) Foreign bank holding company means a foreign bank or company
that is a bank holding company.
(e) Foreign savings and loan holding company means a foreign bank
or foreign company that is a savings and loan holding company.
(f) Grandfathered unitary savings and loan holding company means a
savings and loan holding company described in section 10(c)(9)(C) of
the Home Owners' Loan Act (``HOLA'') (12 U.S.C. Sec. 1467a(c)(9)(C).
(g) Notice of assessment means the notice in which the Board
informs a company that it is an assessed company and states the
assessed company's total assessable assets and the amount of its
assessment.
(h) Savings and loan holding company is defined as in section 10 of
HOLA (12 U.S.C. Sec. 1467a).
(i) Savings association means a savings association, as defined in
12 U.S.C. Sec. 1813 of this title.
Sec. 246.3 Assessed Companies
(a) Assessed companies. An assessed company is any company that:
(1) is a top-tier company that, on December 31 of the assessment
period:
(i) is a bank holding company, other than a foreign bank holding
company, with $50 billion or more in total consolidated assets, as
determined based on the average of the bank holding company's total
consolidated assets reported for the assessment period on the Federal
Reserve's Form FR Y-9C (``FR Y-9C''),
(ii) is a savings and loan holding company, other than a foreign
savings and loan holding company, with $50 billion or more in total
consolidated assets, as determined based on the average of the savings
and loan holding company's total consolidated assets as reported for
the assessment period on the FR Y-9C or on column B of the Quarterly
Savings and Loan Holding Company Report (FR 2320), as applicable,
(2) is a top-tier foreign bank holding company on December 31 of
the assessment period, with $50 billion or more in total consolidated
assets, as determined based on the average of the foreign bank holding
company's total consolidated assets reported for the assessment period
on the Federal Reserve's Form FR Y-7Q (``FR Y-7Q''),
(3) is a top-tier foreign savings and loan holding company on
December 31 of the assessment period, with $50 billion or more in total
consolidated assets, as determined based on the average of the foreign
savings and loan holding company's total consolidated assets reported
for the assessment period on the reporting forms applicable during the
assessment period, or
(4) the Council has determined under section 113 of the Dodd-Frank
Act (12 U.S.C. Sec. 5323) to be supervised by the Board and for which
such determination is in effect as of December 31 of the assessment
period.
(b) Assessment period means January 1 through December 31 of each
calendar year.
Sec. 246.4 Assessments.
(a) Assessment. Each assessed company shall pay to the Board an
assessment for any assessment period for which the Board determines the
company to be an assessed company.
(b) Assessment formula. The assessment will be calculated according
to the Assessment Formula, as follows:
----------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D
----------------------------------------------------------------------------------------------------------------
(Total assessable
Base amount + assets x Assessment rate) = Assessment
----------------------------------------------------------------------------------------------------------------
$50,000 + ($B x C) = $D
----------------------------------------------------------------------------------------------------------------
The assessed company's assessment would be comprised of the base
amount, plus the amount of the assessed company's total assessable
assets in Column B times the assessment rate in Column C.
(c) Assessment rate. Assessment rate means, with regard to a given
assessment period, the rate published by the Board for the calculation
of assessments for that period.
(1) The assessment rate will be calculated according to this
formula:
[[Page 23170]]
[GRAPHIC] [TIFF OMITTED] TP18AP13.003
(2) For the calculation set forth in (1), above, the number of
assessed companies and the total assessable assets of all assessed
companies will each be that of the relevant assessment period,
provided, however, that for the assessment periods corresponding to
2012, 2013 and 2014, the Board shall use the number of assessed
companies and the total assessable assets of the 2012 assessment period
to calculate the assessment rate.
(d) Assessment basis. Assessment basis means:
(1) For the 2012, 2013, and 2014 assessment periods, the assessment
basis is the amount of total expenses the Board estimates is necessary
or appropriate to carry out the supervisory and regulatory
responsibilities of the Board with respect to assessed companies for
2012.
(2) For the 2015 assessment period and for each assessment period
thereafter, the assessment basis is the average of the amount of total
expenses the Board estimates is necessary or appropriate to carry out
the supervisory and regulatory responsibilities of the Board with
respect to assessed companies for that assessment period and the two
prior assessment periods.
(e) Total assessable assets. Total assessable assets are calculated
in accordance with this section as follows:
(1) Bank holding companies. For any bank holding company, other
than a foreign bank holding company, total assessable assets will be
determined by the average of the bank holding company's total
consolidated assets as reported for the assessment period on the bank
holding company's FR Y-9C or such other reports as determined by the
Board as applicable to the bank holding company,
(2) Foreign bank holding companies and foreign savings and loan
holding companies.
(i) In general. For any foreign bank holding company or for any
foreign savings and loan holding company, with the exception of the
2012 and 2013 assessment periods, this amount will be the average of
the foreign bank holding company's or savings and loan holding
company's total combined assets of U.S. operations, net of intercompany
balances and transactions between U.S. domiciled affiliates, branches
and agencies, as reported for the assessment period on the Part 1 of
the FR Y-7Q or such other reports as determined by the Board as
applicable to the foreign bank holding company or foreign savings and
loan holding company,
(ii) 2012 and 2013 assessment periods. For the 2012 and 2013
assessment periods, for any foreign bank holding company, total
assessable assets will be the average of the sum of the respective line
items reported quarterly, plus any line items reported annually for the
assessment period on an applicable regulatory reporting form for the
assessment period for all majority-owned U.S.-domiciled affiliates,
branches and agencies of the foreign bank holding company, as set forth
in this section:
(A) Top-tier, U.S.-domiciled bank holding companies and savings and
loan holding companies,
(1) Total assets (line item 12) as reported on Schedule HC of the
FR Y-9C, as applicable, and
(2) Total assets (line item 1, column B) as reported on FR 2320.
(B) Related branches and agencies in the United States (line items
1.i, column A, on Schedule RAL of Report of Assets and Liabilities of
U.S. Branches and Agencies of Foreign Banks (FFIEC 002) plus due from
related institutions in foreign countries (line items 2.a, 2.b(1),
2.b(2), and 2.c from column A, part 1 on Schedule M), as reported on
FFIEC 002, provided however that due from head office of parent bank
(line item 2.a, column A, part 1 on Schedule M of FFIEC 002) would be
included net of due to head office of parent bank (line item 2.a,
column B, part 1 on Schedule M of FFIEC 002) when there is a net due
from position reported for line item 2.a., while a net due to position
for line item 2.a would result in no addition to total assets with
respect to line item 2.a, part 1 on Schedule M of FFIEC 002.
(C) U.S.-domiciled nonbank subsidiaries:
(1) For FR Y-7N filers: total assets (line item 10) as reported for
each nonbank subsidiary reported on Schedule BS--Balance Sheet of the
Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign
Banking Organizations (FR Y-7N); less balances due from related
institutions located in the United States, gross (line item 4.a), as
reported on Schedule BS-M--Memoranda.
(2) For FR Y-7NS (annual) filers: total assets (line item 2) as
reported for each nonbank subsidiary reported on abbreviated financial
statements (page 3) of the Abbreviated Financial Statements of U.S.
Nonbank Subsidiaries Held by Foreign Banking Organizations (FR Y-7NS).
(D) For Edge Act and agreement corporations that are not reflected
in the assets of a U.S.-domiciled parent's regulatory reporting form
submission, claims on nonrelated organizations (line item 9,
``consolidated total'' column on Schedule RC of the Consolidated Report
of Condition and Income for Edge and Agreement Corporations (FR
2886b)), plus claims on related organizations domiciled outside the
United States (line items 2.a and 2.b, column A on Schedule RC-M), as
reported on FR 2886b.
(E) For banks and savings associations that are not reflected in
the assets of a U.S.-domiciled parent's regulatory reporting form
submission, total assets (line item 12) as reported on Schedule RC--
Balance Sheet of the Consolidated Reports of Condition and Income for a
Bank with Domestic and Foreign Offices (FFIEC 031), or total assets
(line item 12) as reported on Schedule RC--Balance Sheet of the
Consolidated Reports of Condition and Income for a Bank with Domestic
Offices Only (FFIEC 041), as applicable.
(F) For broker-dealers that are not reflected in the assets of a
U.S.-domiciled parent's regulatory reporting form submission, total
assets (line item 16, ``total'' column) as reported on statement of
financial condition of the Securities and Exchange Commission's Form X-
17A-5 (FOCUS REPORT), Part II, Part IIa, or Part II CSE, as applicable.
(4) Savings and loan holding companies. For any savings and loan
holding company, other than a foreign savings and loan holding company,
total assessable assets will be determined by the average of the
savings and loan holding company's total consolidated assets as
reported for the assessment period on the regulatory reports on the
savings and loan holding company's Form FR Y-9C, column B of the
Quarterly Savings and Loan Holding Company Report (FR 2320), or other
reports as determined by the Board as applicable to the savings and
loan holding company. If the savings and loan holding company is a
grandfathered unitary savings and loan holding company, total
assessable assets will only include the assets associated with its
savings association subsidiary and its other financial activities.
(5) Nonbank financial companies supervised by the Board. For a
nonbank financial company supervised by the
[[Page 23171]]
Board, if the company is a U.S. company, this amount will be the
average of the nonbank financial company's total consolidated assets as
reported for the assessment period on such regulatory or other reports
as are applicable to the nonbank financial company determined by the
Board; if the company is a foreign company, this amount will be the
average of the nonbank financial company's total combined assets of
U.S. operations, net of intercompany balances and transactions between
U.S. domiciled affiliates, branches and agencies, as reported for the
assessment period on such regulatory or other reports as determined by
the Board as applicable to the nonbank financial company.
Sec. 246.5 Notice of Assessment and Appeal
(a) Notice of Assessment. The Board shall issue a notice of
assessment to each assessed company no later than July 15 of each
calendar year following the assessment period.
(b) Appeal Period.
(1) Each assessed company will have thirty calendar days from July
15 to submit a written statement to appeal the Board's determination
(i) that the company is an assessed company; or (ii) of the company's
total assessable assets.
(2) The Board will respond with the results of its consideration to
an assessed company that has submitted a written appeal within 15
calendar days from the end of the appeal period.
Sec. 246.6 Collection of Assessments; Payment of Interest.
(a) Collection date. Each assessed company shall remit to the
Federal Reserve the amount of its assessment using the Fedwire Funds
Service by September 30 of the calendar year following the assessment
period.
(b) Payment of interest.
(1) If the Board does not receive the total amount of an assessed
company's assessment by the collection date for any reason not
attributable to the Board, the assessment will be delinquent and the
assessed company shall pay to the Board interest on any sum owed to the
Board according to this rule (delinquent payments).
(2) Interest on delinquent payments will be assessed beginning on
the first calendar day after the collection date, and on each calendar
day thereafter up to and including the day payment is received.
Interest will be simple interest, calculated for each day payment is
delinquent by multiplying the daily equivalent of the applicable
interest rate by the amount delinquent. The rate of interest will be
the United State Treasury Department's current value of funds rate (the
``CVFR percentage''); issued under the Treasury Fiscal Requirements
Manual and published quarterly in the Federal Register. Each delinquent
payment will be charged interest based on the CVFR percentage
applicable to the quarter in which all or part of the assessment goes
unpaid.
By order of the Board of Governors of the Federal Reserve
System, April 12, 2013.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2013-09061 Filed 4-17-13; 8:45 am]
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