[Federal Register Volume 79, Number 156 (Wednesday, August 13, 2014)]
[Notices]
[Pages 47457-47460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-19130]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Agency Information Collection Activities: Proposed Information 
Collection Revision; Comment Request (3064-0189)

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice and request for comment.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC), 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 revision of a continuing information 
collection, as

[[Page 47458]]

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 proposed information collection revisions 
and 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 Dodd-Frank'' (OMB Control No. 3064-0189).

DATES: Comments must be received by October 14, 2014.

ADDRESSES: You may submit written comments by any of the following 
methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/. 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'' on the subject line of the message.
     Mail: Gary A. Kuiper, Counsel, Executive Secretary 
Section, NYA-5046, 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 
7:00 a.m. and 5:00 p.m.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal/ including any 
personal information provided.
    Additionally, you may send a copy of your comments: By mail to the 
U.S. OMB, 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, FDIC, 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/).

SUPPLEMENTARY INFORMATION: The FDIC is requesting comment on the 
following revision of an information collection:

Annual Stress Test Reporting Template and Documentation for Covered 
Banks With Total Consolidated Assets of $10 Billion to $50 Billion 
Under Dodd-Frank

    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 exceed $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\ The final rule requires covered banks to meet specific 
reporting requirements under section 165(i)(2). In 2013, the FDIC first 
implemented the reporting templates for covered banks with total 
consolidated assets of $10 billion to $50 billion and provided 
instructions for completing the reports.\7\ This notice describes 
revisions by the FDIC to those reporting templates, the information 
required, and related instructions. This information collection will be 
given confidential treatment to the extent allowed by law (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).
    \7\ See 78 FR 16263 (March 14, 2013) and 78 FR 63470 (October 
24, 2013).
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    Consistent with past practice, the FDIC intends to use the data 
collected through these revised 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 FDIC recognizes that many covered banks with total consolidated 
assets of $10 billion to $50 billion are part of a holding company that 
is also required to submit relevant Dodd-Frank Annual Stress Test 
(DFAST) reports to the Board (FR Y-16, OMB No. 7100-0356). The FDIC, 
Office of Comptroller of the Currency, and Board have coordinated the 
preparation of stress testing templates in order to make the templates 
as similar as possible and thereby minimize the burden on affected 
institutions. These agencies have coordinated in a similar manner 
regarding these proposed modifications to the stress testing templates. 
Therefore, the revisions by the FDIC to its reporting requirements will 
remain consistent with the modifications that the Board proposes to 
make to the FR Y-16.

Description of Information Collection

    The FDIC DFAST 10-50 reporting form collects data through two 
primary schedules: (1) The Results Schedule (which includes the 
quantitative results of the stress tests under the baseline, adverse, 
and severely adverse scenarios for each quarter of the planning 
horizon) and (2) the Scenario Variables Schedule. In addition, 
respondents are required to submit a summary of the qualitative 
information supporting their quantitative projections. The qualitative 
supporting information must include:
     A description of the types of risks included in the stress 
test;
     A summary description of the methodologies used in the 
stress test;
     An explanation of the most significant causes for the 
changes in regulatory capital ratios, and
     The use of the stress test results.

Results Schedule

    For each of the three supervisory scenarios (baseline, adverse, and 
severely adverse), data are reported on two supporting schedules: (1) 
The Income Statement Schedule and (2) the Balance Sheet Schedule. 
Therefore, two supporting schedules for each scenario (baseline, 
adverse, and severely adverse) are completed. In addition, the Results 
Schedule includes a Summary Schedule, which summarizes key results from 
the Income Statement and Balance Sheet Schedules.

[[Page 47459]]

    Income statement data are collected on a projected quarterly basis 
showing projections of revenues and losses. For example, respondents 
project net charge-offs by loan type (stratified by twelve specific 
loan types), gains and losses on securities, pre-provision net revenue, 
and other key components of net income (i.e., provision for loan and 
lease losses, taxes, etc.).
    Balance sheet data are collected on a quarterly basis for 
projections of certain assets, liabilities, and capital. Capital data 
are also collected on a projected quarterly basis and include 
components of regulatory capital, including the projections of risk 
weighted assets and capital actions such as common dividends and share 
repurchases.

Scenario Variables Schedule

    To conduct the stress tests, an institution may choose to project 
additional economic and financial variables beyond the mandatory 
supervisory scenarios provided to estimate losses or revenues for some 
or all of its portfolios. In such cases, the institution would be 
required to complete the Scenario Variables Schedule for each scenario 
where the institution chooses to use additional variables. The Scenario 
Variables Schedule collects information on the additional scenario 
variables used over the planning horizon for each supervisory scenario.
    The proposed revisions to the FDIC DFAST reporting templates for 
covered banks with assets of $10 billion to $50 billion or more are 
described below.

Proposed Revisions to Reporting Templates for Banks With $10 Billion to 
$50 Billion in Assets

    On July 9, 2013, the FDIC approved an interim final rule that will 
revise and replace the FDIC's risk-based and leverage capital 
requirements to be consistent with agreements reached by the Basel 
Committee on Banking Supervision in ``Basel III: A Global Regulatory 
Framework for More Resilient Banks and Banking Systems'' (Basel 
III).\8\ The final rule was published in the Federal Register on May 1, 
2014.\9\ The revisions include implementation of a new definition of 
regulatory capital, a new common equity tier 1 minimum capital 
requirement, a higher minimum tier 1 capital requirement, and, for 
banking organizations subject to the Advanced Approaches capital rules, 
a supplementary leverage ratio that incorporates a broader set of 
exposures in the denominator measure. In addition, the rule will amend 
the methodologies for determining risk weighted assets. All banking 
organizations that are not subject to the Advanced Approaches Rule must 
begin to comply with the revised capital framework on January 1, 2015.
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    \8\ 78 FR 55340 (September 10, 2013).
    \9\ 79 FR 24528 (May 1, 2014).
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    Due to the timing of the Dodd-Frank Act stress test and the capital 
rulemaking, the FDIC considered several options for the timing and 
scope of this proposal to collect information related to the capital 
rulemaking. After careful consideration of the various options, the 
FDIC determined that the following revisions would enable the FDIC to 
collect these data while minimizing the burden to the industry.
    The FDIC proposes to revise the FDIC DFAST 10-50 Summary Schedule 
by adding a common equity tier 1 capital data item and the FDIC DFAST 
10-50 Balance Sheet Schedules (baseline, adverse, and severely adverse 
scenarios) by adding a common equity tier 1 risk based capital ratio 
data item in order to reflect the requirements of the revised capital 
framework. These revisions would be effective for the 2015 stress test 
cycle (with reporting in March 2015).
    In addition, the FDIC proposes to clarify the FDIC DFAST 10-50 
reporting form instructions to emphasize that a covered bank should 
transition to the revised capital framework requirements in its bank-
run stress test projections in the quarter in which the requirements 
become effective. Specifically, a covered bank would be required to 
transition to the revised capital framework and begin including the 
common equity tier 1 capital data item and common equity tier 1 risk 
based capital ratio data item in projected quarter 2 (1st quarter 2015) 
through projected quarter 9 (4th quarter 2016) for each supervisory 
scenario for the 2015 stress test cycle.
    The FDIC also proposes several clarifications to the FDIC DFAST 10-
50 reporting form instructions, including: Indicating that the Scenario 
Variables Schedule would be collected as a reporting form in Reporting 
Central (instead of as a file submitted in Adobe Acrobat PDF format); 
clarifying what covered banks should include in line items 32 and 33 
(retail and wholesale funding) on the Balance Sheet Schedule, with 
reference to relevant Reports of Condition and Income (Call Report) 
line items; and finally, clarifying how the supporting qualitative 
information should be organized. The current instructions do not 
clearly indicate where a covered bank should place this supporting 
qualitative information, which includes a description of the types of 
risk included in the stress test, a summary description of the 
methodologies used in the stress test, an explanation of the most 
significant causes for the changes in regulatory capital ratios, and 
the use of the stress test results. The proposed modifications to the 
instructions would direct covered banks to place this information in 
the summary and governance section of the summary of qualitative 
information document.

Burden Estimates

    The FDIC estimates the burden of this collection of information as 
follows:

Current

    Number of Respondents: 22.
    Annual Burden per Respondent: 464 hours.
    Total Annual Burden: 10,208 hours.

Proposed

    Estimated Number of Respondents: 22.
    Estimated Annual Burden per Respondent: 469 hours.
    Estimated Total Annual Burden: 10,318 hours.
    The burden for each $10 billion to $50 billion covered bank that 
completes the FDIC DFAST 10-50 Results Template and FDIC DFAST 10-50 
Scenario Variables Template is estimated to be 469 hours. The burden to 
complete the FDIC DFAST 10-50 Results Template is estimated to be 440 
hours, including 20 hours to input these data and 420 hours for work 
related to modeling efforts. The burden to complete the FDIC DFAST 10-
50 Scenario Variables Template is estimated to be 29 hours. The total 
burden for all 22 respondents to complete both templates is estimated 
to be 10,318 hours, or an increase to the total burden of 110 hours.
    Comments are invited on all aspects of the proposed changes to the 
information collection, particularly:
    (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

[[Page 47460]]

    (f) The ability of FDIC-supervised banks and savings associations 
with assets between $10 billion and $50 billion to provide the 
requested information to the FDIC by March 31, 2015.

    Dated at Washington, DC, this 8th day of August 2014.

Federal Deposit Insurance Corporation.
Ralph E. Frable,
Assistant Executive Secretary.
[FR Doc. 2014-19130 Filed 8-12-14; 8:45 am]
BILLING CODE 6714-01-P